Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
 
 
 
FORM 8-K
 
CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 1, 2017

 
GENERAL COMMUNICATION, INC.
 
 
(Exact name of registrant as specified in its charter)
 

 
State of Alaska
 
0-15279
 
92-0072737
 
 
(State or other Jurisdiction of Incorporation or organization)
 
Commission File Number
 
(I.R.S Employer
Identification No.)
 
 
 
2550 Denali Street
 
 
 
 
Suite 1000
 
 
 
 
Anchorage, Alaska
 
99503
 
 
(Address of principal executive offices)
 
(Zip Code)
 
 
Registrant’s telephone number, including area code: (907) 868-5600
 
 
NONE
 
 
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
 
☒ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Section 2 - Financial Information

Item 2.02
Results of Operations and Financial Condition

On November 1, 2017, General Communication, Inc. ("GCI") issued a press release announcing earnings for the three and nine months ended September 30, 2017. A copy of the press release (the “Earnings Release”) is attached as Exhibit 99.1.

The information in this Item 2.02 of Form 8-K and Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall such Item 2.02 or Exhibit 99.1 be deemed incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.

The earnings release attached as Exhibit 99.1 discloses the non-GAAP financial measure of Adjusted EBITDA (defined as earnings plus imputed interest on financed devices before net interest expense, income taxes, depreciation and amortization expense, loss on extinguishment of debt, derivative instrument unrealized income (loss), share-based compensation expense, accretion expense, loss attributable to non-controlling interest resulting from New Markets Tax Credit transactions, gains and impairment losses on equity and cost method investments, and other non-cash adjustments) and Pro Forma EBITDA (defined as Adjusted EBITDA plus transaction costs relating to the previously announced agreement with Liberty Interactive Corporation to combine GCI with certain assets of the Liberty Ventures Group) for the three and nine months ended September 30, 2017 and 2016 and the three months ended June 30, 2017. Adjusted EBITDA and Pro Forma EBITDA have been reconciled to the closely related GAAP financial measure, net income (loss), within the earnings release.

Adjusted EBITDA and Pro Forma EBITDA are 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 Adjusted EBITDA and Pro Forma EBITDA to evaluate the operating performance of its business, and as a measure of performance for incentive compensation purposes. GCI believes Adjusted EBITDA and Pro Forma EBITDA are useful to investors and other users of our financial information in understanding and evaluating operating performance as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected Adjusted EBITDA and Pro Forma EBITDA are used to estimate current or prospective enterprise value. Adjusted EBITDA and Pro Forma EBITDA do not give effect to cash used for debt service requirements, and thus do not reflect funds available for investment or other discretionary uses. Adjusted EBITDA and Pro Forma EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies.

Section 8 - Other Events

Item 8.01 Other Events

The section of the Earnings Release that is set forth under the heading “Liberty Interactive Transaction Update” is being filed herewith as Exhibit 99.2 to this Current Report on Form 8-K in compliance with Rule 425 of the Securities Act, and is hereby incorporated by reference into this Item 8.01. The complete Earnings Release is archived on GCI’s website.

Section 9 - Financial Statements and Exhibits

Item 9.01
Financial Statements and Exhibits




(d) Exhibits
 
 
 
 
 
 
 
 
Exhibit
 
 
 
 
Number
 
 
Description
 
 
 
 
 
 
 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
GENERAL COMMUNICATION, INC.
 
 
 
(Registrant)
 
 
 
 
Date: November 2, 2017
 
 
 
 
 
 
 
 
 
By
/s/ Peter J. Pounds
 
 
 
Name: Peter J. Pounds
 
 
 
Title:  Senior Vice President,
 
 
 
Chief Financial Officer,
 
 
 
and Secretary
 
 
 
(Principal Financial Officer)



Exhibit
    
Exhibit 99.1

                    

GCI REPORTS THIRD QUARTER 2017 FINANCIAL RESULTS
Net Loss of $9 million
Consolidated Revenue of $231 million
Pro Forma EBITDA of $81 million

November 1, 2017, Anchorage, Alaska - General Communication, Inc. (“GCI”) (NASDAQ: GNCMA) announces its results for the third quarter of 2017.
Liberty Interactive Transaction Update:

As previously announced, GCI and Liberty Interactive Corporation signed an agreement to combine GCI with certain assets of the Liberty Ventures Group. The following summarizes our progress on outstanding closing related requirements:

Regulatory Approvals: As previously reported, we have made the required filings with each of the Federal Communications Commission ("FCC") and the Regulatory Commission of Alaska seeking approval of the transaction.

Shareholder vote: We are responding to additional requests from the SEC on the S-4.

We are now expecting to close the transaction in the first quarter of 2018 rather than the fourth quarter of 2017, subject to the satisfaction of customary closing conditions, including the regulatory and shareholder approvals.

Operating and Financial Highlights

Our third quarter revenues were $231 million, an increase of $7 million sequentially and a $5 million decrease from the third quarter of 2016. The year-over-year decline was due largely to a $5 million decline in wireless equipment revenue. Pro Forma EBITDA, which is Adjusted EBITDA plus $2 million of one-time Liberty transaction costs in the quarter, was $81 million. This is up $6 million from the previous quarter and $3 million year-over-year.
As we have stated previously, we are focusing on operating efficiencies and cost savings as we expect muted revenue growth in the context of the Alaska recession. This quarter we had Pro Forma EBITDA margins of 34.9 percent compared to 33.0 percent in the third quarter of 2016 and 33.4 percent in the second quarter of 2017.
Consumer
Consumer revenues of $110 million in the third quarter were up $4 million or 3.5 percent sequentially and down $5 million or 4.1 percent year-over-year. Wireless revenues were down $5 million year-over-year with the declines primarily from handset sales. During the




quarter we experienced subscriber declines of 1,900 cable modems, 2,300 video subscribers and 300 wireless subscribers. The recession in Alaska is a significant contributing factor in our subscriber headwinds. However, we also completed our rate plan simplification project effective September 30, 2017. This was an important project to complete as we move to our new billing system in 2018 although it did result in elevated customer churn throughout the process.
Business
GCI Business revenues of $121 million in the third quarter were up $3 million or 2.6 percent sequentially and down $1 million or 0.6 percent year-over-year. The year-over-year decline is due to declines in voice revenues. On a sequential basis, second quarter revenue was affected by a $5 million reduction from the Universal Services Rural Health Care adjustment. Excluding this adjustment, third quarter sequential revenues would have declined $2 million due to lower time and materials revenue.
SG&A

SG&A expenses were $91 million during the quarter. Excluding the one-time Liberty transaction costs of $2 million, expenses were level year-over-year and up $2 million or 2.0 percent sequentially.

Capital Expenditures

On a year to date basis we have made $120 million of capital expenditures excluding capitalized interest.

Leverage
After adding back the roaming adjustment and Liberty transaction costs, our net debt to trailing 12 months Adjusted EBITDA was 4.6x as of September 30, 2017.

2017 Guidance

We are affirming our Pro Forma EBITDA guidance to be between $300 million and $315 million in 2017, excluding costs related to the Liberty transaction.

Capital expenditures are expected to be approximately $165 million in 2017.

Use of Non-GAAP Measure

Pro-Forma and Adjusted EBITDA are presented herein and are non-GAAP measures. See our attached financials for a reconciliation of these non-GAAP measures to the nearest GAAP measure.





Pro-Forma EBITDA guidance is a forward-looking non-GAAP financial measure presented herein. Reconciliation to the most directly comparable GAAP financial measure is not provided because we are unable to provide such reconciliation without unreasonable effort.  The inability to provide a reconciliation is due to the uncertainty and inherent difficulty regarding the occurrence, the financial impact and the periods with respect to recognition of future GAAP financial measures.  We also believe that such a reconciliation would imply an inappropriate degree of precision.  For the same reasons, we are unable to address the probable significance of the unavailable information.

Conference Call

The company will hold a conference call to discuss the financial results on Thursday, November 2, at 2:00 p.m. (Eastern). To access the call, call the conference operator between 1:45-2:00 p.m. (Eastern) at 844-850-0551 (International callers should dial +1-412-902-4197) and identify your call as “GCI”.
In addition to dial-up access, GCI will make available net conferencing. To access the call via net conference, log on to ir.gci.com and follow the instructions.
After appropriate filings have been made with the SEC, a rebroadcast of the briefing will be available by logging onto our investor relations site at www.gci.com.
Forward-Looking Statement Disclosure

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 Forms 10-K and 10-Q filed with the Securities and Exchange Commission.
About GCI
GCI is the largest communications provider in Alaska, providing data, wireless, video, voice and managed services to consumer and business customers throughout Alaska and nationwide. Headquartered in Alaska, GCI has delivered services for nearly 40 years to some of the most remote communities and in some of the most challenging conditions in North America. Learn more about GCI at www.gci.com.

Contact:
Media / Investors: Heather Handyside, 907.868.6838, hhandyside@gci.com

#    #    #




GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands)
 
 
 
 
September 30,
 
December 31,
ASSETS
2017
 
2016
Current assets:
 
 
 
Cash and cash equivalents
$
19,203

 
19,297

 
 
 
 
Receivables
183,785

 
184,296

Less allowance for doubtful receivables
4,282

 
4,407

Net receivables
179,503

 
179,889

 
 
 
 
Prepaid expenses
23,162

 
18,599

Inventories
9,394

 
11,945

Other current assets
62

 
167

Total current assets
231,324

 
229,897

 
 
 
 
Property and equipment
2,714,782

 
2,614,875

Less accumulated depreciation
1,561,039

 
1,452,957

Net property and equipment
1,153,743

 
1,161,918

 
 
 
 
Goodwill
242,264

 
239,263

Cable certificates
191,635

 
191,635

Wireless licenses
93,753

 
92,347

Other intangible assets, net of amortization
74,371

 
74,444

Other assets
76,200

 
76,435

Total other assets
678,223

 
674,124

Total assets
$
2,063,290

 
2,065,939

 
 
 
 




GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Continued)
(Amounts in thousands)
 
 
 
 
September 30,
 
December 31,
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
2017
 
2016
Current liabilities:
 
 
 
  Current maturities of obligations under long-term debt,
capital leases, and tower obligation
$
13,756

 
13,229

Accounts payable
58,288

 
72,937

Deferred revenue
41,348

 
37,618

Accrued payroll and payroll related obligations
31,460

 
30,305

Accrued interest (including $3,714 and $5,132 to a related party at September 30, 2017 and December 31, 2016, respectively)
25,968

 
13,926

Accrued liabilities
13,988

 
14,729

Subscriber deposits
1,239

 
917

Total current liabilities
186,047

 
183,661

 
 
 
 
Long-term debt, net (including $58,177 and $56,640 to a related party at September 30, 2017 and December 31, 2016, respectively)
1,333,485

 
1,333,446

Obligations under capital leases, excluding current maturities (including $1,721 and $1,769 due to a related party at September 30, 2017 and December 31, 2016, respectively)
42,864

 
50,316

Deferred income taxes
133,610

 
137,982

Long-term deferred revenue
136,722

 
135,877

Tower obligation
93,842

 
87,653

Derivative stock appreciation rights with related party
83,670

 
29,700

Other liabilities
55,741

 
54,056

Total liabilities
2,065,981

 
2,012,691

 
 
 
 
Commitments and contingencies
 
 
 
Stockholders’ equity (deficit):
 

 
 

Common stock (no par):
 

 
 

Class A. Authorized 100,000 shares; issued 33,072 and 32,668 shares at September 30, 2017 and December 31, 2016, respectively; outstanding 33,046 and 32,642 shares at September 30, 2017 and December 31, 2016, respectively

 

Class B. Authorized 10,000 shares; issued and outstanding 3,052 and 3,153 shares at September 30, 2017 and December 31, 2016, respectively; convertible on a share-per-share basis into Class A common stock
2,578

 
2,663

Less cost of 26 Class A common shares held in treasury at September 30, 2017 and December 31, 2016
(249
)
 
(249
)
Paid-in capital
16,512

 
3,237

Retained earnings (deficit)
(54,417
)
 
17,068

Total General Communication, Inc. stockholders' equity (deficit)
(35,576
)
 
22,719

Non-controlling interests
32,885

 
30,529

Total stockholders’ equity (deficit)
(2,691
)
 
53,248

Total liabilities and stockholders’ equity (deficit)
$
2,063,290

 
2,065,939






GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
(Amounts in thousands, except per share amounts)
2017
 
2016
 
2017
 
2016
Revenues
$
231,214

 
236,655

 
683,675

 
701,519

Cost of goods sold (exclusive of depreciation and amortization shown separately below)
67,496

 
73,494

 
205,099

 
227,926

Selling, general and administrative expenses
90,691

 
88,974

 
280,478

 
264,642

Depreciation and amortization expense
48,853

 
47,819

 
147,547

 
143,033

Operating income
24,174

 
26,368

 
50,551

 
65,918

 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
Interest expense (including amortization of deferred loan fees)
(21,595
)
 
(19,666
)
 
(62,377
)
 
(58,199
)
Interest expense with related party
(1,953
)
 
(1,881
)
 
(5,745
)
 
(5,558
)
Derivative instrument unrealized income (loss) with related party
(12,270
)
 
4,800

 
(53,970
)
 
15,840

Other
(69
)
 
613

 
1,203

 
1,702

Other expense, net
(35,887
)
 
(16,134
)
 
(120,889
)
 
(46,215
)
 
 
 
 
 
 
 
 
Income (loss) before income taxes
(11,713
)
 
10,234

 
(70,338
)
 
19,703

Income tax (expense) benefit
2,864

 
(2,407
)
 
(2,757
)
 
(7,596
)
Net income (loss)
(8,849
)
 
7,827

 
(73,095
)
 
12,107

 
 
 
 
 
 
 
 
Net loss attributable to non-controlling interests
(118
)
 
(116
)
 
(353
)
 
(350
)
Net income (loss) attributable to General Communication, Inc.
$
(8,731
)
 
7,943

 
(72,742
)
 
12,457

 
 
 
 
 
 
 
 
Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share
$
(0.25
)
 
0.21

 
(2.12
)
 
0.33

Basic net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share
$
(0.25
)
 
0.21

 
(2.12
)
 
0.33

Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class A common share
$
(0.25
)
 
0.14

 
(2.12
)
 
0.08

Diluted net income (loss) attributable to General Communication, Inc. common stockholders per Class B common share
$
(0.25
)
 
0.14

 
(2.12
)
 
0.08

Common shares used to calculate Class A basic EPS
31,374

 
32,033

 
31,291

 
33,008

Common shares used to calculate Class A diluted EPS
34,426

 
35,478

 
34,385

 
36,793






GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
 
 
 
 
 
 
(Amounts in thousands)
Third Quarter 2017
 
Third Quarter 2016
 
Second Quarter 2017
Revenues
 
 
 
 
 
  Wireless
$
69,452

 
74,398

 
66,695

  Data
113,845

 
110,032

 
109,069

  Video
29,355

 
30,770

 
29,731

  Voice
18,562

 
21,455

 
18,851

    Total
231,214

 
236,655

 
224,346

 
 
 
 
 
 
Cost of goods sold
67,496

 
73,494

 
68,329

 
 
 
 
 
 
    Contribution
163,718

 
163,161

 
156,017

 
 
 
 
 
 
Less SG&A
(90,691
)
 
(88,974
)
 
(96,229
)
Plus share-based compensation
4,858

 
2,810

 
5,745

Plus imputed interest on financed devices
608

 
651

 
630

Plus accretion
425

 
406

 
437

Other
227

 
131

 
(533
)
    Adjusted EBITDA
79,145

 
78,185

 
66,067

Liberty transaction costs
1,620

 

 
8,943

Pro Forma EBITDA
$
80,765

 
78,185

 
75,010






GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES
(Unaudited)
 
 
 
 
 
Nine Months Ended
 
September 30,
(Amounts in thousands)
2017
 
2016
Revenues
 
 
 
  Wireless
$
201,609

 
214,506

  Data
337,068

 
325,010

  Video
88,147

 
95,824

  Voice
56,851

 
66,179

    Total
683,675

 
701,519

 
 
 
 
Cost of goods sold
205,099

 
227,926

 
 
 
 
    Contribution
478,576

 
473,593

 
 
 
 
Less SG&A
(280,478
)
 
(264,642
)
Plus share-based compensation
13,741

 
7,820

Plus imputed interest on financed devices
1,919

 
1,885

Plus accretion
1,352

 
1,240

Other
(1,089
)
 
435

    Adjusted EBITDA
214,021

 
220,331

Liberty transaction costs
14,771

 

Pro Forma EBITDA
$
228,792

 
220,331






General Communication, Inc.
 
 
 
 
 
 
 
 
Non-GAAP Financial Reconciliation Schedule
 
 
 
 
 
 
 
 
(Unaudited, Amounts in Thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
 
2017
 
2016
 
2017
 
2017
 
2016
Net income (loss)
 
$
(8,849
)
 
7,827

 
(9,000
)
 
(73,095
)
 
12,107

Income tax expense (benefit)
 
(2,864
)
 
2,407

 
(40,975
)
 
2,757

 
7,596

Income (loss) before income taxes
 
(11,713
)
 
10,234

 
(49,975
)
 
(70,338
)
 
19,703

 
 
 
 
 
 
 
 
 
 
 
Other (income) expense:
 
 
 
 
 
 
 
 
 
 
Interest expense (including amortization of deferred loan fees)
 
21,595

 
19,666

 
20,946

 
62,377

 
58,199

Related party interest expense
 
1,953

 
1,881

 
1,915

 
5,745

 
5,558

Derivative instrument unrealized (income) loss with related party
 
12,270

 
(4,800
)
 
38,790

 
53,970

 
(15,840
)
Other
 
69

 
(613
)
 
(645
)
 
(1,203
)
 
(1,702
)
Other expense, net
 
35,887

 
16,134

 
61,006

 
120,889

 
46,215

 
 
 
 
 
 
 
 
 
 
 
Operating income
 
24,174

 
26,368

 
11,031

 
50,551

 
65,918

Plus depreciation and amortization expense
 
48,853

 
47,819

 
48,757

 
147,547

 
143,033

Plus share-based compensation expense
 
4,858

 
2,810

 
5,745

 
13,741

 
7,820

Plus imputed interest on financed devices
 
608

 
651

 
630

 
1,919

 
1,885

Plus accretion expense
 
425

 
406

 
437

 
1,352

 
1,240

Other
 
227

 
131

 
(533
)
 
(1,089
)
 
435

Adjusted EBITDA (Note 1)
 
79,145

 
78,185

 
66,067

 
214,021

 
220,331

Liberty transaction costs
 
1,620

 

 
8,943

 
14,771

 

Pro Forma EBITDA (Note 2)
 
$
80,765

 
78,185

 
75,010

 
228,792

 
220,331

 
 
 
 
 
 
 
 
 
 
 
Note:
 
 
 
 
 
 
 
 
 
 
(1) Earnings plus imputed interest on financed devices before:
Net interest expense,
Income taxes,
Depreciation and amortization expense,
Loss on extinguishment of debt,
Derivative instrument unrealized income (loss),
Share-based compensation expense,
Accretion expense,
Loss attributable to non-controlling interest resulting from NMTC transactions,
Gains and impairment losses on equity and cost method investments, and
Other non-cash adjustments.
(2) Adjusted EBITDA plus Liberty transaction costs.

Adjusted and Pro Forma EBITDA are 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 Adjusted EBITDA and Pro Forma EBITDA to evaluate the operating performance of its business, and as a measure of performance for incentive compensation purposes. GCI believes Adjusted EBITDA and Pro Forma EBITDA are useful to investors and other users of our financial information in understanding and evaluating operating performance as an analytical indicator of income generated to service debt and fund capital expenditures. In addition, multiples of current or projected Adjusted EBITDA and Pro Forma EBITDA are used to estimate current or prospective enterprise value. Adjusted EBITDA and Pro Forma EBITDA do not give effect to cash used for debt service requirements, and thus do not reflect funds available for investment or other discretionary uses. Adjusted EBITDA and Pro Forma EBITDA as presented herein may not be comparable to similarly titled measures reported by other companies.





GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
SUPPLEMENTAL REVENUE SCHEDULES
(Unaudited)
(Amounts in thousands)
 
 
 
 
 
 
 
 
Third Quarter 2017
 
Third Quarter 2016
 
Consumer
Business
Total
 
Consumer
Business
Total
Revenues
 
 
 
 
 
 
 
  Wireless
$
42,224

27,228

69,452

 
46,900

27,498

74,398

  Data
36,991

76,854

113,845

 
35,255

74,777

110,032

  Video
24,991

4,364

29,355

 
26,134

4,636

30,770

  Voice
5,939

12,623

18,562

 
6,551

14,904

21,455

    Total
$
110,145

121,069

231,214

 
114,840

121,815

236,655

 
 
 
 
 
 
 
 
(Amounts in thousands)
 
 
 
 
 
 
 
 
Third Quarter 2017
 
Second Quarter 2017
 
Consumer
Business
Total
 
Consumer
Business
Total
Revenues
 
 
 
 
 
 
 
  Wireless
$
42,224

27,228

69,452

 
40,115

26,580

66,695

  Data
36,991

76,854

113,845

 
35,418

73,651

109,069

  Video
24,991

4,364

29,355

 
24,937

4,794

29,731

  Voice
5,939

12,623

18,562

 
5,910

12,941

18,851

    Total
$
110,145

121,069

231,214

 
106,380

117,966

224,346

 
 
 
 
 
 
 
 
(Amounts in thousands)
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2017
 
Nine Months Ended September 30, 2016
 
Consumer
Business
Total
 
Consumer
Business
Total
Revenues
 
 
 
 
 
 
 
  Wireless
$
122,439

79,170

201,609

 
134,449

80,057

214,506

  Data
108,497

228,571

337,068

 
105,033

219,977

325,010

  Video
74,867

13,280

88,147

 
81,294

14,530

95,824

  Voice
17,910

38,941

56,851

 
20,357

45,822

66,179

    Total
$
323,713

359,962

683,675

 
341,133

360,386

701,519

 
 
 
 
 
 
 
 






GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
KEY PERFORMANCE INDICATORS
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2017
 
September 30, 2017
 
 

 
as compared to
 
as compared to
 
 
September 30,
September 30,
June 30,
 
September 30,
June 30,
 
September 30,
June 30,
 
 
2017
2016
2017
 
2016
2017
 
2016
2017
Consumer
 
 
 
 
 
 
 
 
 
Data
 
 
 
 
 
 
 
 
 
 
Cable modem subscribers1
125,400

128,900

127,300

 
(3,500
)
(1,900
)
 
(2.7
)%
(1.5
)%
Video
 
 
 
 
 
 
 
 
 
 
Basic subscribers2
99,800

108,800

102,100

 
(9,000
)
(2,300
)
 
(8.3
)%
(2.3
)%
 
Homes passed
251,600

250,200

251,200

 
1,400

400

 
0.6
 %
0.2
 %
Voice
 
 
 
 
 
 
 
 
 
 
Local access lines in service3
50,200

53,800

51,700

 
(3,600
)
(1,500
)
 
(6.7
)%
(2.9
)%
Business
 
 
 
 
 
 
 
 
 
Data
 
 
 
 
 
 
 
 
 
 
Cable modem subscribers1
10,000

10,100

10,000

 
(100
)

 
(1.0
)%
 %
Voice
 
 
 
 
 
 
 
 
 
 
Local access lines in service3
39,600

41,300

40,200

 
(1,700
)
(600
)
 
(4.1
)%
(1.5
)%
Video
 
 
 
 
 
 
 
 
 
 
Hotel and mini-headend subscribers
17,200

17,100

19,100

 
100

(1,900
)
 
0.6
 %
(9.9
)%
 
Basic subscribers2
1,300

1,900

1,300

 
(600
)

 
(31.6
)%
 %
 
   Total basic subscribers
18,500

19,000

20,400

 
(500
)
(1,900
)
 
(2.6
)%
(9.3
)%
Consumer and Business Combined
Wireless
 
 
 
 
 
 
 
 
 
 
Consumer wireless lines in service4
200,900

203,000

201,200

 
(2,100
)
(300
)
 
(1.0
)%
(0.1
)%
 
Business wireless lines in service4
22,800

23,400

23,300

 
(600
)
(500
)
 
(2.6
)%
(2.1
)%
 
Total wireless lines in service
223,700

226,400

224,500

 
(2,700
)
(800
)
 
(1.2
)%
(0.4
)%
 
 
 
 
 
 
 
 
 
 
 
1  On January 1, 2017, we transferred 3,100 small business cable modem subscribers from Business to Consumer. We adjusted the previously reported subscriber numbers as of September 30, 2016 for the number of subscribers that were transferred on January 1, 2017 and for database cleanup in preparation for our new billing system.
2  On January 1, 2017, we transferred 500 small business basic subscribers from Business to Consumer. We adjusted the previously reported subscriber numbers as of September 30, 2016 for the number of subscribers that were transferred on January 1, 2017 and for database cleanup in preparation for our new billing system.
3  On January 1, 2017, we transferred 4,800 small business local access lines from Business to Consumer. We adjusted the previously reported subscriber numbers as of September 30, 2016 for the number of subscribers that were transferred on January 1, 2017.
4  On January 1, 2017, we transferred 3,700 small business wireless lines from Business to Consumer. We adjusted the previously reported subscriber numbers as of September 30, 2016 for the number of subscribers that were transferred on January 1, 2017.






Exhibit


Exhibit 99.2

Filed by General Communication, Inc.
Pursuant to Rule 425
Under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-6(b) of the
Securities Exchange Act of 1934

Subject Company: Liberty Interactive Corporation
Commission File No. 001-33982

Subject Company: General Communication, Inc.
Commission File No. 000-15279


Excerpts from the Earnings Press Release, Dated November 1, 2017, of General Communication, Inc.


Liberty Interactive Transaction Update:

As previously announced, GCI and Liberty Interactive Corporation signed an agreement
to combine GCI with certain assets of the Liberty Ventures Group. The following
summarizes our progress on outstanding closing related requirements:

Regulatory Approvals: As previously reported, we have made the required filings with
each of the Federal Communications Commission ("FCC") and the Regulatory
Commission of Alaska seeking approval of the transaction.

Shareholder vote: We are responding to additional requests from the SEC on the S-4.

We are now expecting to close the transaction in the first quarter of 2018 rather than the fourth quarter of 2017, subject to satisfaction of customary closing conditions, including the regulatory and shareholder approvals.
Forward-Looking Statements
The foregoing earnings release excerpts includes certain forward-looking statements, including statements about the proposed acquisition of General Communication, Inc. (“GCI”) by Liberty Interactive Corporation (“Liberty Interactive”) and the proposed split-off of Liberty Interactive’s interest in the combined company (“GCI Liberty”) (the “proposed split-off” and together with the proposed acquisition of GCI, the “proposed transactions”), the timing of the proposed transactions and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, the satisfaction of conditions to the proposed transactions. These forward-looking statements speak only as of the date of the earnings release, and each of Liberty Interactive and GCI expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Interactive’s or GCI’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Liberty Interactive and GCI,





including the most recent Forms 10-K and 10-Q, for additional information about Liberty Interactive and GCI and about the risks and uncertainties related to the business of each of Liberty Interactive and GCI which may affect the statements made in the foregoing excerpts.
Additional Information

Nothing in the foregoing earnings release excerpts shall constitute a solicitation to buy or an offer to sell shares of GCI Liberty, Inc. (“GCI Liberty”), GCI common stock or any tracking stocks of Liberty Interactive. The offer and issuance of shares in the proposed transactions will only be made pursuant to GCI Liberty’s effective registration statement. Liberty Interactive stockholders, GCI stockholders and other investors are urged to read the registration statement and the joint proxy statement/prospectus regarding the proposed transactions (a preliminary filing of which has been made with the SEC) and any other relevant documents filed with the Securities and Exchange Commission (“SEC”), as well as any amendments or supplements to those documents, because they contain important information about the proposed transactions. Copies of these SEC filings will be available free of charge at the SEC’s website (http://www.sec.gov). Copies of the filings together with the materials incorporated by reference therein will also be available, without charge, by directing a request to Liberty Interactive Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112, Attention: Investor Relations, Telephone: (720) 875- 5420. GCI investors can access additional information at ir.gci.com.

Participants in a Solicitation

The directors and executive officers of Liberty Interactive and GCI and other persons may be deemed to be participants in the solicitation of proxies in respect of proposals to approve the proposed transactions. Information regarding the directors and executive officers of Liberty Interactive is available in its definitive proxy statement, which was filed with the SEC on April 20, 2017. Information regarding the directors and executive officers of GCI is available as part of its Annual Report on Form 10-K filed with the SEC on March 2, 2017. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be available in the proxy materials regarding the foregoing to be filed with the SEC. Free copies of these documents may be obtained as described in the preceding paragraph.