UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File No. 0-15279
GENERAL COMMUNICATION, INC.
(Exact name of registrant as specified in its charter)
STATE OF ALASKA 92-0072737
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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) 265-5600
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (l) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No .
The number of shares outstanding of the registrant's classes
of common stock, as of April 30, 1995 was:
19,648,113 shares of Class A common stock; and
4,177,520 shares of Class B common stock.
<PAGE>
INDEX
GENERAL COMMUNICATION, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1995
PAGE NO
PART I. FINANCIAL INFORMATION
Item l. Consolidated Financial Statements............................1
Consolidated Balance Sheets..................................1
Consolidated Statements of Operations........................3
Consolidated Statements of Stockholders'
Equity....................................................4
Consolidated Statements of Cash Flows........................5
Notes to Consolidated Financial Statements...................6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations.............................................19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................24
Item 6. Exhibits and Reports on Form 8-K.............................24
SIGNATURES....................................................................25
<PAGE>
<TABLE>
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION>
(Unaudited)
March 31, December 31,
ASSETS 1995 1994
------ ---- ----
(Amounts in thousands)
<S> <C> <C>
Current assets:
Cash and cash equivalents (note 2) .................................................. $ 3,023 1,649
------- ------
Receivables:
Trade ....................................................................... 14,862 17,036
Other ....................................................................... 239 221
------- ------
15,101 17,257
Less allowance for doubtful receivables ............................................. 347 409
------- ------
Net receivables ............................................................. 14,754 16,848
------- ------
Prepaid and other current assets .................................................... 1,296 1,275
Deferred income taxes, net (note 6) ................................................. 808 884
Inventory ........................................................................... 525 596
Notes receivable (note 3) ........................................................... 113 200
------- ------
Total current assets ........................................................ 20,519 21,452
------- ------
Property and equipment, at cost (notes 5 and 9)
Land ................................................................................ 73 73
Distribution systems ................................................................ 63,691 62,549
Support equipment ................................................................... 11,204 10,946
Property and equipment under capital leases ......................................... 2,030 2,030
------- ------
76,998 75,598
Less amortization and accumulated depreciation...................................... 29,589 28,085
------- ------
Net property and equipment .................................................. 47,409 47,513
------- ------
Notes receivable (note 3) ............................................................. 772 767
Investment securities available for sale (note 4) ..................................... 785 785
Other assets, at cost, net of amortization ............................................ 2,907 3,732
------- ------
Total assets ................................................................ $72,392 74,249
======= ======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Continued)
<CAPTION>
(Unaudited)
March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
------------------------------------ ---- ----
(Amounts in thousands)
<S> <C> <C>
Current liabilities:
Current maturities of long-term debt (note 5) ............................................. $ 1,565 1,585
Current maturities of obligations under
capital leases (note 9) ................................................................. 258 249
Accounts payable .......................................................................... 9,664 11,841
Accrued liabilities ....................................................................... 740 711
Accrued payroll and payroll related obligations ........................................... 2,190 4,036
Accrued income taxes (note 6) ............................................................. 866 217
Accrued interest .......................................................................... 80 101
Deferred revenues ......................................................................... 1,136 1,097
-------- ------
Total current liabilities 16,499 19,837
Long-term debt, excluding current maturities (note 5) ....................................... 10,583 10,969
Obligations under capital leases, excluding
current maturities (note 9) ............................................................... 201 257
Obligations under capital leases due to related parties,
excluding current maturities (note 9) ..................................................... 779 791
Deferred income taxes, net (note 6) ......................................................... 6,713 6,522
Other liabilities ........................................................................... 860 780
------- ------
Total liabilities 35,635 39,156
------- ------
Common stock (no par):
Class A. Authorized
50,000,000 shares; issued and
outstanding 19,647,594 and 19,616,614
shares at March 31, 1995 and December 31,
1994, respectively ................................................................ 13,875 13,830
Class B. Authorized
10,000,000 shares; issued and
outstanding 4,178,039 and 4,179,019
shares at March 31, 1995 and December 31,
1994, respectively ................................................................ 3,432 3,432
Less cost of 105,111 Class A common
shares held in treasury ................................................................... (328) (328)
Paid-in capital ............................................................................. 3,653 3,641
Retained earnings ........................................................................... 16,125 14,518
------- ------
Total stockholders' equity 36,757 35,093
------- ------
Commitments and contingencies (notes 9 & 10)
Total liabilities and stockholders' equity $ 72,392 74,249
======= ======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
<CAPTION>
(Unaudited)
Three Months Ended
March 31,
1995 1994
---- ----
(Amounts in thousands
except per share amounts)
<S> <C> <C>
Revenues:
Transmission services (note 8) ........... $ 27,029 25,072
Systems sales and service ................ 1,871 2,321
Other .................................... 793 798
--------- ------
Total revenues ................... 29,693 28,191
Cost of sales .............................. 16,017 15,294
--------- ------
Contribution ..................... 13,676 12,897
--------- ------
Operating costs and expenses:
Operating and engineering ................ 2,158 1,839
Service .................................. 1,053 1,000
Sales and communications ................. 1,917 1,359
General and administrative ............... 3,322 3,249
Legal and regulatory ..................... 405 267
Bad debt ................................. 283 262
Depreciation and amortization ............ 1,580 1,797
--------- ------
Total operating costs and expenses 10,718 9,773
--------- ------
Operating income ................. 2,958 3,124
--------- ------
Other income (expense):
Interest expense (notes 2 and 5) ......... (362) (456)
Interest income .......................... 150 39
--------- ------
Total other income (expense) ..... (212) (417)
--------- ------
Earnings before income taxes ..... 2,746 2,707
Income tax expense (note 6) ................ 1,139 1,009
--------- ------
Net earnings ..................... $ 1,607 1,698
========= ======
Net earnings per common share .... $ .07 .07
========= ======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
<CAPTION>
(Unaudited) (Unaudited)
Shares of Class A Class B Class A
Common Stock Common Common Shares Held Paid-in Retained
Class A Class B Stock Stock in Treasury Capital Earnings
------- ------- ----- ----- ----------- ------- --------
(Amounts in thousands) (Amounts in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1993 ......... 19,001 4,114 $13,470 3,432 (328) 3,252 7,384
Net earnings .......................... -- -- -- -- -- -- 1,698
Class B shares converted to Class A ... 4 (4) -- -- -- -- --
Tax effect of excess stock compensation
expense for tax purposes over amounts
recognized for financial reporting
purposes ............................ -- -- -- -- -- 116 --
Shares issued under stock option plan . 1 -- 1 -- -- -- --
Shares issued and issuable under
officer stock option agreements ..... 45 -- 10 -- -- 9 --
------ ----- ------- ----- ---- ----- ------
Balances at March 31, 1994 ............ 19,051 4,110 $13,481 3,432 (328) 3,377 9,082
====== ===== ======= ===== ==== ===== ======
Balances at December 31, 1994 ......... 19,617 4,179 $13,830 3,432 (328) 3,641 14,518
Net earnings .......................... -- -- -- -- -- -- 1,607
Class B shares converted to Class A ... 1 (1) -- -- -- -- --
Tax effect of excess stock compensation
expense for tax purposes over amounts
recognized for financial reporting
purposes ............................ -- -- -- -- -- 11 --
Shares issued under stock option plan . 30 -- 45 -- -- -- --
Shares issued and issuable under
officer stock option agreements ..... -- -- -- -- -- 1 --
------ ----- ------- ----- ---- ----- ------
Balances at March 31, 1995 ............ 19,648 4,178 $13,875 3,432 (328) 3,653 16,125
====== ===== ======= ===== ==== ===== ======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<CAPTION>
(Unaudited)
Three Months Ended
March 31,
1995 1994
---- ----
(Amounts in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net earnings ............................................ $ 1,607 1,698
Adjustments to reconcile net earnings
to net cash provided (used) by operating activities:
Depreciation and amortization ..................... l,580 1,797
Provision for deferred income taxes ............... 278 329
Other items not requiring cash (note 2) ........... 11 110
Change in operating assets and liabilities (note 2) (1,119) 1,253
------- ------
Net cash provided by operating activities ....... 2,357 5,187
------- ------
Cash flows from investing activities:
Purchase of property and equipment ...................... (1,408) (896)
Refund of long-term deposits and purchases of other
assets, net ........................................... 755 311
Notes receivable payments ............................... 90 3
------- ------
Net cash used by investing activities ........... (563) (582)
------- ------
Cash flows from financing activities:
Repayments of long-term borrowings ...................... (465) (1,827)
Proceeds from stock issuance ............................ 45 11
------- ------
Net cash used by financing activities ........... (420) (1,816)
------- ------
Increase in cash and cash equivalents ........... 1,374 2,789
Cash and cash equivalents at beginning of period .......... 1,649 2,623
------- ------
Cash and cash equivalents at end of period ................ $ 3,023 5,412
======= ======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
GENERAL COMMUNICATION, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(l) Summary of Significant Accounting Principles
(a) General
General Communication, Inc. ("GCI"), an Alaska corporation, was
incorporated in 1979. GCI Communication Corp. ("GCC") , an Alaska
corporation, is a wholly owned subsidiary of GCI and was incorporated
in 1990. GCI Communication Services, Inc. ("Communication Services"),
an Alaska corporation, is a wholly-owned subsidiary of GCI and was
incorporated in 1992. GCI Leasing Co., Inc. ("Leasing Company"), an
Alaska corporation, is a wholly-owned subsidiary of Communication
Services and was incorporated in 1992. GCI and GCC are engaged in the
transmission of interstate and intrastate private line and switched
message long distance telephone service between Anchorage, Fairbanks,
Juneau, and other communities in Alaska and the remaining United
States and foreign countries. GCC also provides northbound services
to certain common carriers terminating traffic in Alaska and sells
and services dedicated communications systems and related equipment.
Communication Services provides private network point-to-point data
and voice transmission services between Alaska, Hawaii and the
western contiguous United States. Leasing Company owns and leases
capacity on an undersea fiber optic cable used in the transmission of
interstate private line and switched message long distance services
between Alaska and the remaining United States and foreign countries.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended
March 31, 1995 is not necessarily indicative of the results that may
be expected for the year ended December 31, 1995. For further
information, refer to the financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the year
ended December 31, 1994.
(b) Principles of Consolidation
The consolidated financial statements include the accounts of GCI,
its wholly-owned subsidiaries GCC and Communication Services, and
Communication Services wholly owned subsidiary Leasing Company. All
significant intercompany balances and transactions have been
eliminated in consolidation.
<PAGE>
(c) Net Earnings Per Common Share
<TABLE>
Primary earnings per common share are determined by dividing net
earnings by the weighted number of common and common equivalent
shares outstanding (amounts in thousands):
<CAPTION>
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
Weighted average common
shares outstanding ......... 23,712 23,028
Common equivalent shares
outstanding ................ 672 1,514
------ ------
Shares used in computing primary
earnings per share ......... 24,384 24,542
====== ======
</TABLE>
The difference between shares for primary and fully diluted earnings
per share was not significant in any period presented.
(d) Cash and Cash Equivalents
Cash equivalents consist of short-term, highly liquid investments
which are readily convertible into cash.
(e) Inventory
Inventory of merchandise for resale and parts is stated at the lower
of cost or market. Cost is determined using the first-in, first-out
method for parts and the specific identification method for equipment
held for resale.
(f) Property and Equipment
Property and equipment is stated at cost. Construction costs of
transmission facilities are capitalized. Equipment financed under
capital leases is recorded at the lower of fair market value or the
present value of future minimum lease payments.
Depreciation and amortization is computed on a straight-line basis
based upon the shorter of the lease term or the estimated useful
lives of the assets ranging from 3 to 20 years for distribution
systems and 5 to 10 years for support equipment. Amortization of
equipment financed under capitalized leases is included in
depreciation expense.
Repairs and maintenance are charged to operations, and renewals and
additions are capitalized. Gains or losses are recognized at the time
of ordinary retirements, sales or other dispositions of property.
<PAGE>
(g) Marketable Securities
Effective January 1, 1994, GCI and subsidiaries ("the Company")
adopted Statement of Financial Accounting Standards No. 115 ("SFAS
No. 115"), "Accounting for Certain Investments in Debt and Equity
Securities". Under SFAS No. 115, securities when purchased, are
classified in either the trading account securities portfolio, the
securities available for sale portfolio, or the securities held to
maturity portfolio. Securities are classified as trading account
securities when the intent is profit maximization through market
appreciation and resale. Securities are classified as available for
sale when management intends to hold the securities for an indefinite
period of time. Securities are classified as held to maturity when it
is management's intent to hold these securities until maturity.
Unrealized gains or losses on securities available for sale are
excluded from earnings and reported as a net amount in a separate
component of stockholders' equity. There was no cumulative effect on
the financial statements from the adoption of SFAS No. 115.
Securities available for sale are stated at fair market value which
approximates cost.
(h) Other Assets
Other assets, excluding deferred loan costs and goodwill, are
recorded at cost and are amortized on a straight-line basis over 5 to
10 years. Deferred loan costs are recorded at cost and are amortized
on a straight-line basis over the life of the associated loan.
Goodwill totaled approximately $1,362,000 and $1,387,000 at March 31,
1995 and December 31, 1994, respectively, net of amortization of
approximately $621,000 and $596,000, respectively. Goodwill
represents the excess of cost over fair value of net assets acquired
and is being amortized on a straight-line basis over twenty years.
(i) Revenue From Services and Products
Revenues generated from long distance telecommunication services are
recognized when the services are provided. System sales from the sale
of equipment are recognized at the time the equipment is delivered or
installed. Service revenues are derived primarily from maintenance
contracts on equipment and are recognized on a prorated basis over
the term of the contract. Other revenues are recognized when the
service is provided.
(j) Income Taxes
In February, 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 109 ("SFAS No. 109"),
"Accounting for Income Taxes". SFAS No. 109 requires a change from
the deferred method of accounting for income taxes of APB Opinion 11
to the asset and liability method of accounting for income taxes.
Under the asset and liability method of SFAS No. 109, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable earnings in the years in which
those temporary differences are expected to be recovered or settled.
Under SFAS No. 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in earnings in the period that
includes the enactment date. The Company adopted SFAS No. 109
effective January 1, 1993.
<PAGE>
(k) Reclassifications
Reclassifications have been made to the 1994 financial statements to
make them comparable with the 1995 presentation.
(2) Consolidated Statements of Cash Flows Supplemental Disclosures
For purposes of the Statement of Cash Flows, the Company's cash
equivalents includes cash and all invested assets with original
maturities of less than three months.
<TABLE>
Other items not providing or requiring cash consist of (in
thousands):
<CAPTION>
(Unaudited)
Three-month period ended March 31, 1995 1994
---- ----
<S> <C> <C>
Bad debt expense, net of write-offs ....................... $ (62) 31
Deferred compensation and compensatory
stock options .......................................... 81 79
Other non-cash income and expense items.................... (8) --
------ ---
$ 11 110
====== ===
</TABLE>
<TABLE>
Changes in operating assets and liabilities consist of (amounts in
thousands):
(Unaudited)
<CAPTION>
Three-month period ended March 31, 1995 1994
---- ----
<S> <C> <C>
(Increase) decrease in accounts receivable ................ $ 2,174 (25)
(Increase) in other receivables ........................... (18) (24)
(Increase) decrease in inventory .......................... 71 (224)
(Increase) decrease in prepaid and other
current assets .......................................... (19) 143
(Increase) in restricted cash ............................. -- (4)
Increase (decrease) in accounts payable ................... (2,177) 1,493
Increase in accrued liabilities ........................... 29 388
(Decrease) in accrued payroll
and payroll related obligations ......................... (1,846) (858)
(Decrease) in accrued interest ............................ (21) (21)
Increase (decrease) in deferred revenue ................... 39 (121)
Increase in accrued income taxes .......................... 649 506
------- -----
$(1,119) 1,253
======= =====
</TABLE>
Income taxes paid totaled approximately $212,000 and $175,000 during
the quarters ended March 31, 1995 and 1994, respectively.
Interest paid totaled approximately $383,000 and $468,000 during the
quarters ended March 31, 1995 and 1994, respectively.
The Company recorded $11,000 and $116,000 during the quarters ended
March 31, 1995 and 1994, respectively, as paid-in capital in
recognition of the income tax effect of excess
<PAGE>
stock compensation expense for tax purposes over amounts recognized
for financial reporting purposes.
(3) Notes Receivable
<TABLE>
A summary of notes receivable follows:
<CAPTION>
(Unaudited)
March 31, December 31,
1995 1994
---- ----
(Amounts in thousands)
<S> <C> <C>
Note receivable from officer bearing interest
at the rate paid by the Company on its
senior indebtedness, secured by GCI Class A
common stock, due on the 90th day after
termination of employment or July 30, 1998,
whichever is earlier .................................... $ 500 500
Note receivable from officer bearing interest
at 10%, secured by Company stock; payable
in equal annual installments of $36,513 through
August 26, 2004.......................................... 224 224
Notes receivable from officers and others bearing
interest at 8% to 10%, secured by Company common
stock, shares of various common stock and equipment;
due December 31, 1995 through October 13, 1999 ......... 104 194
----- ----
Total notes receivable ................................ 828 918
Less current portion .................................. (113) (200)
Plus long-term accrued interest ....................... 57 49
----- ----
$ 772 767
===== ====
</TABLE>
(4) Investment Securities Available for Sale
As of January 1, 1994 the Company adopted SFAS No. 115. Accordingly,
the Company's marketable equity securities have been classified as
available for sale securities and are reported at fair market value
which approximates cost. The Company held no trading account
investment securities at March 31, 1995.
<PAGE>
(5) Long-term Debt
<TABLE>
Long-term debt is summarized as follows:
<CAPTION>
(Unaudited)
March 31, December 31,
1995 1994
---- ----
(Amounts in thousands)
<S> <C> <C>
Credit Agreement (a) ....... $ 2,000 2,000
Undersea Fiber and Equipment
Loan Agreement (b) ....... 9,197 9,500
Financing Obligation (c) ... 951 1,054
--------- ------
12,148 12,554
Less current maturities .... 1,565 1,585
--------- ------
Long-term debt, excluding
current maturities ....... $ 10,583 10,969
========= ======
</TABLE>
(a) GCI completed a refinancing of its senior indebtedness on
May 14, 1993. The new senior facility is a reducing revolver
that is amortized in quarterly payments or reductions of
$650,000 beginning June 30, 1993 through December 31, 1996
and $812,500 per quarter thereafter through its expiration
on December 31, 1997. The credit agreement provides for
interest (8.44% at March 31, 1995), among other options, at
the corporate base rate plus a margin of one to one and
one-half percent depending on the Company's leverage ratio
as defined in the agreement. A fee of .50% per annum is
assessed on the unused portion of the facility.
The credit agreement contains, among others, covenants
requiring maintenance of specific levels of operating cash
flow to indebtedness, to interest expense, to fixed charges,
and to pro forma debt service. The credit agreement includes
limitations on acquisitions, additional indebtedness and
capital expenditures, and prohibits payment of dividends,
other than stock dividends. The Company was in compliance
with all credit agreement covenants during the period
commencing May 14, 1993 (date of the refinancing) through
March 31, 1995.
Security for the credit agreement includes a pledge of the
stock of the operating subsidiary, GCC, and a first lien on
substantially all of its assets. GCI and its subsidiaries,
Communication Services and Leasing Company, are liable as
guarantors.
$2.25 million of the facility has been used to provide a
letter of credit to secure payment of certain access charges
associated with the Company's provision of
telecommunications services within the state of Alaska.
In June, 1993, the Company entered into a two-year interest
rate swap agreement with a Bank whereby the rate on
$18,200,000 of debt (reduced by $422,500 per quarter
beginning July 1, 1993) was fixed at 4.45 percent plus
applicable margins. The interest effect of the difference
between the fixed rate and the three-month LIBOR
<PAGE>
rate will either be added to or serve to reduce interest
expense depending on the relative interest rates.
(b) On December 31, 1992, Leasing Company entered into a
$12,000,000 loan agreement, of which approximately
$9,000,000 of the proceeds were used to acquire capacity on
the undersea fiber optic cable linking Seward, Alaska and
Pacific City, Oregon. Concurrently, Leasing Company leased
the capacity under a ten year all events, take or pay,
contract to MCI, who subleased the capacity back to the
Company. The lease and sublease agreements provide for
equivalent terms of 10 years and identical monthly payments
of $200,000. The proceeds of the lease agreement with MCI
were pledged as primary security for the financing. The loan
agreement provides for monthly payments of $170,000
including principal and interest through the earlier of
January 1, 2003, or until repaid. The loan agreement
provides for interest at the prime rate plus one-quarter
percent. Additional collateral includes substantially all of
the assets of Leasing Company including the fiber capacity
and a security interest in all of its outstanding stock. MCI
has a second position security interest in the assets of
Leasing Company.
(c) As consideration for MCI's role in enabling Leasing Company
to finance and acquire the undersea fiber optic cable
capacity described at note 5(b) above, Leasing Company
agreed to pay MCI $2,040,000 in sixty monthly payments of
$34,000. For financial statement reporting purposes, the
obligation has been recorded at its remaining present value,
using a discount rate of 10% per annum. The agreement is
secured by a second position security interest in the assets
of Leasing Company.
<TABLE>
As of March 31, 1995 maturities of long-term debt were as follows (in
thousands):
<CAPTION>
Year ending
March 31,
---------
<S> <C>
1996 $ 1,565
1997 1,723
1998 3,754
1999 1,635
2000 1,793
2001 and thereafter 1,678
--------
$ 12,148
========
</TABLE>
<PAGE>
(6) Income Taxes
<TABLE>
Total income tax expense for the quarters ended March 31, 1995 and
1994 were allocated as follows (amounts in thousands):
<CAPTION>
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
Earnings from continuing operations $ 1,139 1,009
Stockholders' equity, for stock option
compensation expense for tax purposes
in excess of amounts recognized for
financial reporting purposes (11) (116)
------- -----
$ 1,128 893
======= =====
</TABLE>
<TABLE>
Income tax expense for the quarters ended March 31, 1995 and 1994
consists of the following (amounts in thousands):
<CAPTION>
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
Current tax expense:
Federal taxes $ 641 603
State taxes 220 77
------ -----
861 680
------ -----
Deferred tax expense:
Federal taxes 120 148
State taxes 158 181
------ -----
278 329
------ -----
$1,139 1,009
====== =====
</TABLE>
<TABLE>
Total income tax expense (benefit) differed from the "expected"
income tax expense (benefit) determined by applying the statutory
federal income tax rate of 34% for the quarters ended March 31, 1995
and 1994 as follows (amounts in thousands):
<CAPTION>
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
"Expected" statutory tax expense $ 934 920
State income taxes, net of federal benefit 175 170
Income tax effect of goodwill
amortization, nondeductible
expenditures and other items, net 30 (81)
------ -----
$1,139 1,009
====== =====
</TABLE>
<PAGE>
<TABLE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at March 31, 1995 and December 31, 1994 are presented
below (amounts in thousands).
<CAPTION>
March 31, December 31,
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
Net current deferred tax assets:
Accounts receivable, principally due to allowance for
for doubtful accounts ..................................... $ 193 199
Compensated absences, accrued for financial reporting purposes 344 333
Federal and state alternative minimum tax credit carryforwards 248 330
Workers compensation and self insurance health reserves,
principally due to accrual for financial reporting purposes 188 185
Other ........................................................ 25 36
------ -----
Total gross current deferred tax assets ............... 998 1,083
Less valuation allowance .............................. (190) (199)
------ -----
Net current deferred tax assets ....................... $ 808 884
====== =====
Net long-term deferred tax assets:
Deferred compensation expense for financial
reporting purposes in excess of amounts recognized
for tax purposes .......................................... $ 536 511
Employee stock option compensation expense for financial
reporting purposes in excess of amounts recognized
for tax purposes .......................................... 235 234
Capital loss carryforwards ................................... 168 168
Other ........................................................ 321 311
------ -----
Total gross long-term deferred tax assets ............. 1,260 1,224
Less valuation allowance .............................. (235) (226)
------ -----
Net long-term deferred tax assets ..................... 1,025 998
------ -----
Net long-term deferred tax liabilities:
Plant and equipment, principally due to differences in
depreciation .............................................. 7,724 7,507
Other ........................................................ 14 13
------ -----
Total gross long-term deferred tax liabilities ........ 7,738 7,520
------ -----
Net combined long-term deferred tax liabilities ....... $6,713 6,522
====== =====
</TABLE>
The valuation allowance for deferred tax assets was $425,000 as of
March 31, 1995 and December 31, 1994.
Tax benefits associated with recorded deferred tax assets, net of
valuation allowances, are considered to be more likely than not
realizable through future reversals of existing taxable temporary
differences and future taxable income exclusive of reversing
temporary differences and carryforwards.
For income tax reporting purposes, the Company has available an
alternative minimum tax credit carryforward of approximately $248,000
which is available to reduce future federal regular income taxes, if
any, over an indefinite period. In addition, the Company has capital
loss carryovers totaling approximately $415,000 which expire in 1996
and 1997.
<PAGE>
(7) Stockholders' Equity
Common Stock
GCI's Class A common stock and Class B common stock are identical in
all respects, except that each share of Class A common stock has one
vote per share and each share of Class B common stock has ten votes
per share. In addition, each share of Class B common stock
outstanding is convertible, at the option of the holder, into one
share of Class A common stock.
On December 31, 1992, the Company entered into a letter of intent
with MCI outlining the general terms and conditions of several
proposed arrangements between them. Under the arrangements, MCI paid
a total of $13,280,000 for 6,251,509 shares of Class A and 1,275,791
shares of Class B common stock of the Company which on a fully
diluted basis represented approximately 31 and 30 percent of the
issued and outstanding shares of the respective class.
Stock Warrants
On May 18, 1994 an officer of the Company exercised warrants. In
exchange for $114, the Company issued 160,297 and 74,028 shares of
GCI Class A and Class B common stock, respectively.
Pursuant to the terms of a stock appreciation right granted in 1988,
the Company issued to its former senior lender warrants to acquire
1,021,373 shares of GCI Class A common stock for $.85669 per share.
Warrants to purchase 600,000 shares of Class A common stock were
exercised in April and May, 1991, an additional 168,085 were
exercised in September, 1991 and the remaining warrants to purchase
253,288 shares were exercised in September and October, 1994.
Stock Option Plan
In December 1986, GCI adopted a Stock Option Plan (the "Option Plan")
in order to provide a special incentive to officers, non-employee
directors, and employees by offering them an opportunity to acquire
an equity interest in GCI. The Option Plan provides for the grant of
options for a maximum of 2,350,000 shares of GCI Class A common
stock, subject to adjustment upon the occurrence of stock dividends,
stock splits, mergers, consolidations or certain other changes in
corporate structure or capitalization. If an option expires or
terminates, the shares subject to the option will be available for
further grants of options under the Option Plan. The Option Plan is
administered by GCI's Board of Directors or a committee of
disinterested persons.
Employees of GCI (including officers and directors), employees of
affiliated companies and non-employee directors of GCI are eligible
to participate in the Option Plan. The Option Plan provides that no
options may be granted after December 20, 1996, and that all options
granted under the Option Plan must expire not later than ten years
after the date of grant. The exercise price may be less than, equal
to, or greater than the fair market value of the shares on the date
of grant. Options granted pursuant to the Option Plan are only
exercisable if at the time of exercise the option holder is an
employee or non-employee director of GCI.
<PAGE>
<TABLE>
Information for the periods ended March 31, 1995 and 1994 with
respect to the Plan follows:
<CAPTION>
Shares Option Price
------ ------------
<S> <C> <C>
Outstanding at December 31, 1993 1,823,658 $0.75-$4.00
Granted --- ---
Exercised (5,459) $0.75-$2.25
Forfeited --- ---
---------
Outstanding at March 31, 1994 1,818,199 $0.75-$4.00
=========
Outstanding at December 31, 1994 1,729,699 $0.75-$4.00
Granted --- ---
Exercised (20,000) $2.25
Forfeited (11,500) $4.00
---------
Outstanding at March 31, 1995 1,698,199 $0.75-$4.00
=========
Available for grant at March 31, 1995 109,553
=========
Exercisable at March 31, 1995 673,599
=========
</TABLE>
The options expire at various dates through June 2003.
Stock Options Not Pursuant to a Plan
In June 1989, officer John Lowber was granted options to acquire
100,000 Class A common shares at $.75 per share. The options vested
in equal annual increments over a five-year period and expire
February, 1999.
The Company entered into an incentive agreement in June 1989 with Mr.
Behnke, an officer of the Company. The incentive agreement provides
for the acquisition of 95,190 remaining shares of Class A common
stock of the Company for $.001 per share exercisable through June 16,
1997. The shares under the incentive agreement vested in equal annual
increments over a three-year period.
Class A Common Shares Held in Treasury
The Company acquired 105,111 shares of its class A common stock in
1989 for approximately $328,000 to fund a deferred bonus agreement
with Mr. Duncan, an officer of the Company. The agreement provides
that the balance is payable after the later of a) termination of
employment or b) six months after the effective date of the
agreement.
<PAGE>
Employee Stock Purchase Plan
In December 1986, GCI adopted an Employee Stock Purchase Plan (the
"Plan") qualified under Section 401 of the Internal Revenue Code of
1986 (the "Code"). The Plan provides for acquisition of the Company's
Class A and Class B common stock at market value. The Plan permits
each employee of GCI and affiliated companies who has completed one
year of service to elect to participate in the Plan. Eligible
employees may elect to reduce their compensation in any even dollar
amount up to 10 percent of such compensation up to a maximum of
$9,240 in 1995; they may contribute up to 10 percent of their
compensation with after-tax dollars, or they may elect a combination
of salary reductions and after-tax contributions.
GCI may match employee salary reductions and after tax contributions
in any amount, elected by GCI each year, but not more than 10 percent
of any one employee's compensation will be matched in any year. The
combination of salary reductions, after tax contributions and GCI
matching contributions cannot exceed 25 percent of any employee's
compensation (determined after salary reduction) for any year. GCI's
contributions will vest over six years. The employees' and GCI's
contributions are currently invested primarily in GCI common stock.
The Company's matching contributions allocated to participant
accounts totaled approximately $301,000 and $221,000 for the quarters
ended March 31, 1995 and 1994, respectively. The Plan may, at its
discretion, purchase shares of common stock from the Company at
market value or may purchase GCI common stock on the open market.
Effective for Plan years beginning on or after January 1, 1995, the
Plan was amended in December, 1994 to allow diversification of
investments into selected securities or funds. Management anticipates
that revisions to the Plan will be implemented during the third
quarter of 1995. Employee contributions invested in the Company's
Class A and Class B common stock will continue to receive up to 100%
matching, as determined by the Company each year, in the Company's
Class A and Class B common stock. Employee contributions invested in
other than the Company's Class A and Class B common stock will
receive up to 50% matching, as determined by the Company each year,
in the Company's Class A and Class B common stock.
(8) Sales to Major Customers
The Company provides message telephone service to MCI and U.S. Sprint
("Sprint"), major customers. Pursuant to the terms of a contract with
MCI, the Company earned revenues of approximately $5.1 million and
$4.7 million for the three-month periods ended March 31, 1995 and
1994, respectively. The Company earned revenues pursuant to a
contract with Sprint totaling approximately $3.4 million and $2.8
million for the three-month periods ended March 31, 1995 and 1994,
respectively.
(9) Leases
The Company leases business offices, has entered into site lease
agreements and uses certain equipment and satellite transponder
capacity pursuant to operating lease arrangements. Rental costs under
such arrangements amounted to approximately $1,658,000 and $997,000
for the quarters ended March 31, 1995 and 1994, respectively.
The Company entered into a long-term capital lease agreement in 1991
with the wife of the Company's president for property occupied by the
Company. Such lease is guaranteed by the Company. The lease term is
15 years with monthly payments of $14,400, increasing in
<PAGE>
$800 increments at each two year anniversary of the lease. Monthly
lease costs increased to $15,200 effective October 1993 and will
increase to $16,000 effective October 1995. If the owner sells the
premises prior to the end of the tenth year of the lease, the owner
will rebate to the Company one-half of the net sales price received
in excess of $900,000. If the property is not sold prior to the tenth
year of the lease, the owner will pay the Company the greater of
one-half of the appreciated value of the property over $900,000, or
$500,000. The leased asset was capitalized in 1991 at the owner's
cost of $900,000 and the related obligation was recorded in the
accompanying financial statements.
The leases generally provide that the Company pay the taxes,
insurance and maintenance expenses related to the leased assets.
It is expected that in the normal course of business, leases that
expire will be renewed or replaced by leases on other properties.
(10) Commitments and Contingencies
In the normal course of the Company's operations, it and GCC are
involved in various legal and regulatory matters before the FCC and
the APUC. While the Company does not anticipate that the ultimate
disposition of such matters will result in abrupt changes in the
competitive structure of the Alaska market or of the business of the
Company, no assurances can be given that such changes will not occur
and that such changes would not be materially adverse to GCI.
Pursuant to the terms of a contract with one of its officers, in the
event of his death or under certain other conditions the Company is
obligated to make a payment of $450,000 to the officer or his estate.
The Company acquired life insurance in 1993 to provide for this
obligation.
The Company was named by the FCC in March 1995 as the high bidder for
one of the two 30 megahertz blocks of spectrum, with Alaska statewide
coverage. Acquisition of the license for a cost of $1.65 million will
allow GCI to introduce new PCS services in Alaska. The Company will
be developing plans for PCS deployment throughout 1995 with
construction of the system expected to begin in 1996 and service to
be offered as early as 1997 or 1998.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Company's liquidity (ability to generate adequate amounts of cash
to meet the Company's need for cash) was affected by a net increase
in the Company's cash and cash equivalents of approximately
$1,374,000 from December 31, 1994 to March 31, 1995. Sources of cash
in 1995 included the Company's operating activities which generated
positive cash flow of approximately $2.4 million, and receipt of a
partial refund of a PCS spectrum bid deposit totaling approximately
$800,000. Uses of cash during the first quarter of 1995 included
repayment of approximately $465,000 of long-term borrowings and
capital lease obligations, and investment of approximately $1.4
million in distribution and support equipment.
Net accounts receivable decreased $2.1 million from December 31, 1994
to March 31, 1995 resulting primarily from receipt of payments from
several major customers in March 1995, in advance of the dates the
payments are normally received.
Payments of approximately $4 million of accounts payable, accrued
payroll and payroll related obligations resulted in reduced balances
at March 31, 1995 as compared to December 31, 1994.
Working capital totaled $4,020,000 and $1,615,000 at March 31, 1995
and December 31, 1994, respectively. Working capital generated by
operations and the deposit refund exceeded expenditures for property,
equipment and other assets, repayment of long-term borrowings and
capital lease obligations resulting in the increase of approximately
$2.4 million at March 31, 1995 as compared to December 31, 1994.
Cash flow from operating activities, as depicted in the Consolidating
Statements of Cash Flows decreased approximately $2.8 million during
the first quarter of 1995 as compared to the same period of 1994.
Cash flow resulting from revenue growth and operating activities was
offset by reductions in current obligations.
The Company's expenditures for property and equipment totaled $1.4
million and $896,000 during the first quarter of 1995 and 1994,
respectively. Management's capital expenditures plan for 1995
includes approximately $8.5 million in capital necessary to maintain
the network and enhance transmission capacity to meet projected
traffic demands.
The two wideband transponders the Company owned reached the end of
their expected useful life in August, 1994, at which time the Company
leased temporary replacement capacity. The cost of the leased
capacity and the transition to a different satellite resulted in an
increase in distribution costs associated with transponder usage
during the first quarter of 1995 as compared to the same period of
1994. The Company leased replacement transponder capacity on a
long-term basis at a reduced rate subsequent to the transition
period.
The Company continues to evaluate the most effective means to
integrate its telecommunications network with that of MCI. Such
integration will require capital expenditures by the Company in an
amount yet to be determined. Any investment in such capital
expenditures is expected to be recovered by increased revenues from
expanded service offerings and reductions in costs resulting from
integration of the networks.
<PAGE>
The FCC concluded an auction of spectrum to be used for the provision
of PCS in March, 1995. The Company was named by the FCC as the high
bidder for one of the two 30 megahertz blocks of spectrum, with
Alaska statewide coverage. Acquisition of the license for a cost of
$1.65 million will allow GCI to introduce new PCS services in Alaska.
The Company will be developing plans for PCS deployment throughout
1995 with construction of the system expected to begin in 1996 and
service to be offered as early as 1997 or 1998. Expenditures for PCS
deployment could total $50 to $100 million over the next 10 year
period. The estimated cost for PCS deployment is expected to be
funded through income from operations and additional debt and
perhaps, equity financing.
In anticipation of the auction of PCS spectrum by the FCC beginning
in December, 1994, the Company obtained a commitment from its senior
lender to amend its existing credit agreement to provide additional
financing. The amendment would have increased the size of the
facility to $25 million with repayment terms extending to December
31, 1999. At the Company's request, the commitment was terminated in
April 1995. The Company expects to pursue additional debt or perhaps
equity financing in late 1995 or 1996 depending on its needs. The
Company's ability to deploy PCS services will be dependent on its
ability to raise the necessary resources.
Expenditures of approximately $2.5 million were made in 1994
developing new DAMA satellite communication technology. A four-module
demonstration system was constructed in 1994 and will be integrated
into the Company's telecommunication network in 1995. The digital
DAMA system allows calls to be made between remote villages using
only one satellite hop thereby reducing satellite delay and capacity
requirements while improving quality. Deployment expenditures in 1995
are expected to be funded with cash generated from operations.
Management expects that cash flow generated by the Company will be
sufficient to meet no less than the minimum required for maintenance
level capital expenditures and scheduled debt repayment. The
Company's ability to invest in discretionary capital and other
projects will depend upon its future cash flows and access to
additional debt and/or equity financing.
Results of Operations
Quarter ended March 31, 1995 ("1995"), compared with quarter ended
March 31, 1994 ("1994").
The Company's message data and transmission services industry segment
provides interstate and intrastate long distance telephone service to
all communities within the state of Alaska through use of its
facilities and interconnect agreements with other carriers. The
Company's average rate per minute for message transmission services
remained relatively constant during 1995 and 1994 at 18.7(cent) and
18.2(cent), respectively. Total revenues for 1995 were $29.7 million,
an approximate 5.3 percent increase over 1994 revenues of $28.2
million. Revenue growth is attributed to three fundamental factors,
as follows:
(1) Growth in interstate telecommunication services which resulted in
billable minutes of traffic carried totaling 105 and 99 million
minutes in 1995 and 1994, respectively, or 83 percent of total 1995
minutes and 84 percent of total 1994 minutes, respectively.
(2)Provision of intrastate telecommunication services which resulted
in billable minutes of traffic carried totaling 21 and 19 million
minutes in 1995 and 1994, respectively, or 17 percent of total 1995
and 16 percent of total 1994 minutes, respectively.
<PAGE>
(3) Increases in revenues derived from other common carriers ("OCC")
including MCI and Sprint. OCC traffic accounted for $8.5 million or
28.6% and $7.5 million or 26.6% of total revenues in 1995 and 1994,
respectively. Both MCI and Sprint are major customers of the Company.
Loss of one or both of these customers would have a significant
detrimental effect on revenues and on contribution. There are no
other individual customers, the loss of which would have a material
impact on the Company's revenues or gross profit.
System sales and service revenues totaled $1.9 million and $2.3
million in 1995 and 1994, respectively. The decrease in system sales
and service revenues is primarily attributed to fewer larger dollar
equipment sales orders received during the first quarter of 1995 as
compared to the same period of 1994.
Transmission access and distribution costs, which represent cost of
sales for transmission services, amounted to approximately 58.2
percent and 58.9 percent of transmission revenues during 1995 and
1994, respectively. The decrease in distribution costs as a
percentage of transmission revenues during 1995 as compared to 1994
results from proportionate increases in revenues as compared to costs
and decreases in access tariff charges commencing July 1994, offset
by increases in costs associated with the Company's lease of
replacement transponder capacity as previously described. Changes in
distribution costs as a percentage of revenues will occur as the
Company's traffic mix changes. The Company is unable to predict if or
when access charge rates will change in the future and the impact of
such changes on the Company's distribution costs.
Total operating costs and expenses increased 9.7 percent during 1995
as compared to 1994. Marketing costs were increased during the
quarter in response to the marked increase in advertising and
telemarketing activity of the Company's competitor in advance of its
anticipated acquisition by AT&T during the summer of 1995.
Non-recurring costs associated with demonstration of the Company's
prototype rural telecommunication technology in the Senate Russell
building during the quarter resulted in increased costs as compared
to the prior year. Operating and Engineering costs increased in
relation to the increase in minutes of traffic carried and in part,
in anticipation of the Company's expansion efforts. In general, the
Company has dedicated additional resources in certain areas to pursue
longer term opportunities. It must balance the desire to pursue such
opportunities with the need to continue to improve current
performance.
Interest expense decreased 20.6 percent during 1995 as compared to
1994. The decrease resulted from reduction of the Company's
outstanding indebtedness.
Income tax expense totaled $1,139,000 and $1,009,000 in 1995 and
1994, respectively, resulting from the application of statutory
income tax rates to net earnings before income taxes. The Company has
available alternative minimum tax credits of approximately $248,000
which are available to reduce future federal regular income taxes, if
any, over an indefinite period. In addition, the Company has capital
loss carryovers totaling approximately $415,000 which expire in 1996
and 1997. Tax benefits associated with recorded deferred tax assets,
net of valuation allowances, are considered to be more likely than
not realizable through future reversals of existing taxable temporary
differences, and future taxable income exclusive of reversing
temporary differences and carryforwards.
The Alaska economy is supported in large part by the oil and gas
industry. ARCO announced a 715 person downsizing in July 1994.
Similar downsizing was announced by other companies operating in the
oil and gas industry in Alaska for late 1994 and 1995.
<PAGE>
The military presence in the state of Alaska provides a significant
source of revenues to the economy of the state. A reduction in
federal military spending or closure of a major facility in Alaska
would have a substantial adverse impact on the state and would both
directly and indirectly affect the Company. A reduction in the number
of military personnel served by the Company and a reduction in the
number of private lines required by the armed forces would have a
direct effect on revenues. Indirect effects would include a reduction
of services provided across the state in support of the military
community and as a result, a reduction in the number of customers
served by the Company and volume of traffic carried.
The Pentagon released its recommendations for military base closings
and realignments in March 1995 for the fourth and possibly final
round of base closings since 1988. A review again within three or
four years is possible. The recommendations propose closure and
realignment of 146 of them for lack of need and realignment of
functions for the more efficient use of that inventory.
The following military installations located in Alaska were
recommended for closure or realignment in the report: Fort Greely
(realign, estimated loss of 438 military and 286 civilian jobs), Fort
Wainwright (realign, estimated gain of 205 military and 56 civilian
jobs), NAF Adak (closure, estimated loss of 540 military and 138
civilian jobs). If the proposed closures and realignments are
approved, the loss of jobs and associated revenues is not expected to
have a material effect on the Company's operations.
No assurance can be given that funding for existing military
installations in Alaska will not be adversely affected by
reprioritization of needs for military installations or federal
budget cuts in the future.
In December 1991, the Financial Accounting Standards Board issued
Statement of Financial Standards No. 107, "Disclosures about Fair
Value of Financial Instruments" ("SFAS No. 107"). SFAS No. 107
extends existing fair value disclosure practices for some instruments
by requiring all entities to disclose the fair value of financial
instruments, both assets and liabilities recognized and not
recognized, in the statement of financial position. The Company
anticipates that the adoption of SFAS No. 107 in 1996 will not have a
material effect on the consolidated financial statements.
Effective January 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115 ("SFAS No. 115"), "Accounting for
Certain Investments in Debt and Equity Securities". Under SFAS No.
115, securities when purchased, are classified in either the trading
account securities portfolio, the securities available for sale
portfolio, or the securities held to maturity portfolio. Unrealized
gains or losses on securities available for sale are excluded from
earnings and reported as a net amount in a separate component of
stockholders' equity. There was no cumulative effect on the financial
statements from the adoption of SFAS No. 115. The Company's
marketable equity securities have been classified as available for
sale securities and are reported at their fair market value which
approximates cost. The Company held no trading account investment
securities at December 31, 1994.
In October 1994, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 119, "Disclosure about
Derivative Financial Instruments and Fair Value of Financial
Instrument" ("SFAS No. 119"). SFAS No. 119 requires disclosures
regarding amount, nature and terms of derivative financial
instruments, for instance futures, forward, swap and option contracts
and other instruments with similar characteristics. The Company
anticipates that the adoption of SFAS No. 119 in 1996 will not have a
material effect on consolidated financial statements.
<PAGE>
The Company generally has experienced increased costs in recent years
due to the effect of inflation on the cost of labor, material and
supplies, and plant and equipment. A portion of the increased labor
and material and supplies costs directly affects income through
increased maintenance and operating costs. The cumulative impact of
inflation over a number of years has resulted in higher depreciation
expense and increased costs for current replacement of productive
facilities. However, operating efficiencies have partially offset
this impact, as have price increases, although the latter have
generally not been adequate to cover increased costs due to
inflation. Competition and other market factors limit the Company's
ability to price services and products based upon inflation's effect
on costs.
<PAGE>
II. OTHER INFORMATION
(l) Legal Proceedings
Information regarding pending legal proceedings to which the Company
is a party is included in Notes 9 and 10 of Notes to Consolidated
Financial Statements and is incorporated herein by reference.
(6) Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K filed during the quarter ended March 31,
1995 - None
<PAGE>
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 thereunto duly authorized.
GENERAL COMMUNICATION, INC.
May 10, 1995 By: /s/ Ronald A. Duncan
- ------------ --------------------
(Date) Ronald A. Duncan, President
and Director
(Principal Executive Officer)
May 10, 1995 By: /s/ John M. Lowber
- ------------ ------------------
(Date) John M. Lowber, Senior Vice
President and Chief Financial
Officer
(Principal Financial Officer)
May 10, 1995 By: /s/ Alfred J. Walker
- ------------ -------------------
(Date) Alfred J. Walker, Vice
President and Chief
Accounting Officer
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 3,023
<SECURITIES> 0
<RECEIVABLES> 15,101
<ALLOWANCES> 347
<INVENTORY> 525
<CURRENT-ASSETS> 20,519
<PP&E> 76,998
<DEPRECIATION> 29,589
<TOTAL-ASSETS> 72,392
<CURRENT-LIABILITIES> 16,499
<BONDS> 0
<COMMON> 17,307
0
0
<OTHER-SE> 19,450
<TOTAL-LIABILITY-AND-EQUITY> 72,392
<SALES> 29,693
<TOTAL-REVENUES> 29,693
<CGS> 16,017
<TOTAL-COSTS> 16,017
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 283
<INTEREST-EXPENSE> 362
<INCOME-PRETAX> 2,746
<INCOME-TAX> 1,139
<INCOME-CONTINUING> 1,607
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,607
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
