|   | 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) |   |

|   | Class A      common stock |   | Class B      common stock |   |
|--------|---------------------------|--------|---------------------------|--------|
|   | (Title of      class)     |   | (Title of      class)     |   |

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| Large accelerated filer o                                                            | Accelerated filer x              |
|--------------------------------------------------------------------------------------|----------------------------------|
| Non-accelerated      filer o (Do not      check if a smaller reporting company) | Smaller reporting company      o |

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| Glossary                                                       |                                                                                                                               |   4        |
|----------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|----------------------|
|                                                           |                                                                                                                               |                 |
| Cautionary      Statement Regarding Forward-Looking Statements |        8                                                                                                                      |
|                                                           |                                                                                                                               |                 |
| Part      I                                                    |                                                                                                                               |        8        |
|                                                           |                                                                                                                               |                 |
|                                                           | Item 1.      Business                                                                                                              |        8        |
|                                                           | Item 1A. Risk      Factors                                                                                                         |  38             |
|                                                           | Item 1B.      Unresolved Staff Comments                                                                                            |  46             |
|                                                           | Item 2.      Properties                                                                                                            |  46             |
|                                                           | Item 3. Legal      Proceedings                                                                                                     |  47             |
|                                                           | Item 4.      Submissions of Matters to a Vote of Security Holders                                                                  |  48             |
|                                                           |                                                                                                                               |                 |
| Part      II                                                   |                                                                                                                               |  48             |
|                                                           | Item 5.      Market for the Registrant's Common Equity, Related Stockholder Matters and      Issuer Purchases of Equity Securities |  48             |
|                                                           | Item 6.      Selected Financial Data                                                                                               |  50             |
|                                                           | Item 7.      Management's Discussion and Analysis of Financial Condition and Results of      Operations                            |  51             |
|                                                           | Item 7A.      Quantitative and Qualitative Disclosures about Market Risk                                                           |  82             |
|                                                           | Item 8.      Consolidated Financial Statements and Supplementary Data                                                              |  82             |
|                                                           | Item 9.      Changes In and Disagreements With Accountants on Accounting and Financial      Disclosure                             |  82             |
|                                                           | Item 9A.      Controls and Procedures                                                                                              |  82             |
|                                                           | Item 9B.      Other Information                                                                                                    |  85             |
|                                                           |                                                                                                                               |                 |
| Part      III                                                  |                                                                                                                               |  85             |
|                                                           | Item 10.      Directors, Executive Officers and Corporate Governance                                                               |        85  |
|                                                           | Item 11.      Executive Compensation                                                                                               |        86  |
|                                                           | Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters                  |        86  |
|                                                           | Item 13.      Certain Relationships and Related Transactions, and Director      Independence                                       |        86  |
|                                                           | Item 14.      Principal Accountant Fees and Services                                                                               |  87             |
|                                                           |                                                                                                                               |                 |
| Part      IV                                                   |                                                                                                                               |  88             |
|                                                           | Item 15.      Exhibits, Consolidated Financial Statement Schedules                                                                 |  88             |
|                                                           |                                                                                                                               |  149            |
| SIGNATURES                                                     |                                                                                                                               |

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|                            |   | Reportable      Segments |   |
|---------------------------------|--------|--------------------------|--------|
| Services and      Products      |   | Consumer                 |   |   | Network      Access |   |   | Commercial |   |   | Managed      Broadband |   |   | Regulated      Operations |   |
| Voice:                          |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-distance                   |   |                     | X      |   |   |   | X |   |   |   | X |   |   |   |   |   |   | X |   |
| Local      Access               |   |                     | X      |   |   |   | X |   |   |   | X |   |   |   |   |   |   | X |   |
| Directories                     |   |                     |   |   |   |   |   |   |   |   | X |   |   |   |   |   |   |   |   |
|                            |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Video                           |   |                     | X      |   |   |   |   |   |   |   | X |   |   |   |   |   |   |   |   |
|                            |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Data:                           |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Internet                        |   |                     | X      |   |   |   | X |   |   |   | X |   |   |   | X |   |   |   | X |   |
| Data      Networks              |   |                     |   |   |   |   | X |   |   |   | X |   |   |   | X |   |   |   |   |   |
| Managed      Services           |   |                     |   |   |   |   |   |   |   |   | X |   |   |   | X |   |   |   |   |   |
| Managed      Broadband Services |   |                     |   |   |   |   |   |   |   |   |   |   |   |   | X |   |   |   |   |   |
|                            |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Wireless                        |   |                     | X      |   |   |   | X |   |   |   | X |   |   |   |   |   |   |   | X |   |

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|             |    | Year      Ended December 31, |
|------------------|--------------|-----------------------------------|
|             |    | 2008                              |    | 2007 |   | 2006 |
|             |    | (in      thousands)               |
| Total revenues 1 |    | $                                 | 255,632 |    | 223,502 |   | 178,951 |

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|   | · | Our Anchorage      facilities are connected to multiple Internet access points in Seattle      through multiple, diversely routednetworks; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We use      multiple routers on each end of the circuits to control the flow of data      and to provide resiliency; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | Our Anchorage      facility consists of routers, a bank of servers that perform support and      application functions, database servers providing authentication and user      demographic data, layer 2 gigabit switch networks for intercommunications      and broadband services (cable modem, wireless and DSL), and access servers      for dial-up users. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                        |          | Year      Ended December 31, |
|---------------------------------------------|--------------------|-----------------------------------|
|                                        |          | 2008                              |    | 2007 |    | 2006 |
| Consumer long-distance      minutes: 1 | (in      millions) |
|    Interstate                |               |                              | 100.0 |   |   | 105.0 |   |   | 109.1 |
|    Intrastate                |               |                              | 22.9 |   |   | 25.0 |   |   | 27.2 |
|    International             |               |                              | 5.7 |   |   | 5.8 |   |   | 5.6 |
|       Total   |          |                              | 128.6 |   |   | 135.8 |   |   | 141.9 |

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|             |   |                              |    |   |   |
|------------------|--------|-----------------------------------|---------|--------|--------|
|             |   | Year      Ended December 31, |    |   |
|             |   | 2008                              |    | 2007   |   | 2006 |   |   |
|             |   | (in      thousands)               |    |   |
| Total revenues 1 |   | $                                 | 153,821 |   |   |   | 163,377 |   |   |   | 166,471 |   |

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|                                              |          | Year      Ended December 31, |
|---------------------------------------------------|--------------------|-----------------------------------|
|                                              |          | 2008                              |    | 2007 |    | 2006 |
| Network Access long-distance      minutes: 1 | (in      millions) |
|    South-bound      Interstate     |               |                              | 545.9 |   |   | 690.2 |   |   | 662.0 |
|    North-bound      Interstate     |               |                              | 502.6 |   |   | 476.5 |   |   | 574.6 |
| Intrastate                                        |               |                              | 24.9 |   |   | 63.2 |   |   | 60.9 |
|    Other                           |               |                              | 20.6 |   |   | 20.7 |   |   | 19.1 |
|       Total         |          |                              | 1,094.0 |   |   | 1,250.6 |   |   | 1,316.6 |

----

|             |   |                              |    |   |   |
|------------------|--------|-----------------------------------|---------|--------|--------|
|             |   | Year      Ended December 31, |    |   |
|             |   | 2008                              |    | 2007   |   | 2006 |   |   |
|             |   | (in      thousands)               |    |   |
| Total revenues 1 |   | $                                 | 114,660 |   |   |   | 104,640 |   |   |   | 105,929 |   |

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|   | · | Anchorage,      Elmendorf Air Force Base, Fort Richardson, Bird, Girdwood, Hope, Indian,      Portage, Rainbow, Sunrise, Eagle River, Chugiak, Big Lake, Houston,      Palmer, Wasilla, Willow, Talkeetna, Anderson, Clear, Cantwell, Healy,      Denali National Park, Tyonek, Beluga, Kenai, North Kenai, Soldotna,      Kasilof, Clam Gulch, Sterling, Cooper Landing, Homer, Anchor Point,      Halibut Cove, Nanwalek, Ninilchik, Port Graham,  Seldovia; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Fairbanks,      North Pole, Eielson Air Force Base, Fort Wainwright, Delta Junction, Fort      Greeley, Nenana; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | Juneau, Auke      Bay, Douglas, Lemon Creek, MendenhallValley |
|--------|--------|---------------------------------------------------------------|

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|                                          |          | Year      Ended December 31, |
|-----------------------------------------------|--------------------|-----------------------------------|
|                                          |          | 2008                              |    | 2007 |    | 2006 |
| Commercial long-distance      minutes: 1 | (in      millions) |
|    Intrastate                  |               |                              | 78.2 |   |   | 79.4 |   |   | 79.7 |
|    Interstate                  |               |                              | 49.5 |   |   | 49.7 |   |   | 49.8 |
|    International               |               |                              | 1.8 |   |   | 2.2 |   |   | 2.3 |
|       Total     |          |                              | 129.5 |   |   | 131.3 |   |   | 131.8 |
|                                          |               |                              |   |   |   |   |   |   |   |

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|             |    | Year      Ended December 31, |
|------------------|--------------|-----------------------------------|
|             |    | 2008                              |    | 2007 |    | 2006 |
|             |    | (in      thousands)               |
| Total revenues 1 |    | $                                 | 37,047 |    |   | 28,792 |    |   | 26,131 |

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|   | · | In      communities where we have terrestrial interconnects or provide existing      service over regional earth stations, we have configured intermediate      distribution facilities. Schools that are within these service boundaries      are connected locally to one of those  facilities; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      communities where we have extended communications services via our DAMA      earth station program, SchoolAccess® is      provided via a satellite circuit to an intermediate distribution facility      at the Eagle River Earth Station;and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In      communities or remote locations where we have not extended communications      services, SchoolAccess® is      provided via a dedicated (usually on premise) VSAT satellite station. The      VSAT connects to an intermediate distribution facility located in      Anchorage. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | How radio      spectrum is used by licensees; |
|--------|--------|-----------------------------------------------|

|   | · | The nature of      the services that licensees may offer and how such services may be      offered; and |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | Resolution of      issues of interference between spectrumbands. |
|--------|--------|------------------------------------------------------------------|

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|   | · | Use of a      large portion of our cash flow to pay principal and interest on our senior      notes, the senior secured credit facility and our other debt, which will      reduce the availability of our cash flow to fund working capital, capital      expenditures, research and development expenditures and other business      activities; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increase our      vulnerability to general adverse economic and industry      conditions; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Limit our      flexibility in planning for, or reacting to, changes in our business and      the industry in which we operate; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | Restrict us      from making strategic acquisitions or exploiting business      opportunities; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Make it more      difficult for us to satisfy our obligations with respect to the senior      notes and our other debt; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | Place us at a      competitive disadvantage compared to our competitors that have less debt;      and |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | Limit, along      with the financial and other restrictive covenants in our debt, among      other things, our ability to borrow additional funds, dispose of assets or      pay cash dividends. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incur      additional debt and issue preferredstock; |
|--------|--------|------------------------------------------------------|

|   | · | Pay dividends      or make other restricted payments; |
|--------|--------|-------------------------------------------------------|

|   | · | Make certain      investments; |
|--------|--------|--------------------------------|

|   | · | Create      liens; |
|--------|--------|--------------------|

|   | · | Allow      restrictions on the ability of certain of our subsidiaries to pay      dividends or make other payments tous; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | Sell      assets; |
|--------|--------|-------------------|

|   | · | Merge or      consolidate with other entities;and |
|--------|--------|---------------------------------------------------|

|   | · | Enter into      transactions with affiliates. |
|--------|--------|-----------------------------------------------|

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|                                                                                                                                                              |   | 2008   |   |   | 2007   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Telephone distribution      systems                                                                                                                               |   |   | 60.1   | %      |   |   | 63.6   | % |
| Cable television distribution      systems                                                                                                                        |   |   | 14.4   | %      |   |   | 16.2   | % |
| Support      equipment                                                                                                                                            |   |   | 10.7   | %      |   |   | 10.8   | % |
| Property and equipment under      capital leases                                                                                                                  |   |   | 7.6    | %      |   |   | 0.3    | % |
| Construction in      progress                                                                                                                                     |   |   | 4.0    | %      |   |   | 6.9    | % |
| Land and      buildings                                                                                                                                           |   |   | 2.4    | %      |   |   | 1.4    | % |
| Transportation      equipment                                                                                                                                     |   |   | 0.8    | %      |   |   | 0.8    | % |
|                           Total |   |   | 100.0  | %      |   |   | 100.0  | % |

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| 2004 |   | $ | 112.6 |   |
|------|--------|---|-------|--------|
| 2005 |   | $ | 81.2  |   |
| 2006 |   | $ | 105.1 |   |
| 2007 |   | $ | 154.5 |   |
| 2008 |   | $ | 328.9 |   |

We expect our2009 expenditures for property and equipment for our core operations, includingconstruction in progress to total $115.0 million to $120.0 million, depending onavailable opportunities, available credit, and the amount of cash flow wegenerate during 2009.  We have made capital and operating purchasecommitments totaling $54.8 million at December 31, 2008. A majority of theexpenditures are expected to expand, enhance and modernize our current networks,facilities and operating systems, and to develop otherbusinesses.

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|                |   | Class      A |   |   | Class      B |   |
|---------------------|--------|--------------|--------|--------|--------------|--------|
|                |   | High         |   |   | Low          |   |   | High |   |   | Low |   |
| 2007:               |   |         |   |   |         |   |   |   |   |   |   |   |
| First      Quarter  |   | $            | 16.10  |   |         |   | 13.64 |   |   |   | 15.10 |   |   |   | 14.20 |   |
| Second      Quarter |   | $            | 15.20  |   |         |   | 12.42 |   |   |   | 14.80 |   |   |   | 12.00 |   |
| Third      Quarter  |   | $            | 14.00  |   |         |   | 11.03 |   |   |   | 14.05 |   |   |   | 12.10 |   |
| Fourth      Quarter |   | $            | 12.47  |   |         |   | 7.51 |   |   |   | 11.85 |   |   |   | 8.00 |   |
| 2008:               |   |         |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| First      Quarter  |   | $            | 8.44   |   |         |   | 5.09 |   |   |   | 8.75 |   |   |   | 4.50 |   |
| Second      Quarter |   | $            | 8.31   |   |         |   | 6.03 |   |   |   | 8.00 |   |   |   | 3.00 |   |
| Third      Quarter  |   | $            | 10.78  |   |         |   | 6.82 |   |   |   | 10.60 |   |   |   | 5.70 |   |
| Fourth      Quarter |   | $            | 8.87   |   |         |   | 5.32 |   |   |   | 8.60 |   |   |   | 3.00 |   |

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|  COMPARISON      OF FIVE-YEAR CUMULATIVE TOTAL RETURNS PERFORMANCE GRAPH FOR      GENERALCOMMUNICATION,      INC., NASDAQ STOCK MARKET INDEX FORUNITED      STATES COMPANIES, AND NASDAQ TELECOMMUNICATIONS STOCK1,2,3,4 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Measurement      Period(Fiscal Year      Covered)                                                                                                                                                                             |   | Company      ($) |   |   | Nasdaq Stock      MarketIndex for      U.S.Companies      ($) |   |   | NasdaqTelecommunicationsStock      ($) |   |
|                                                                                                                                                                                                                          |   |   |   |   |   |   |   |   |   |
| FYE      12/31/03                                                                                                                                                                                                             |   |   | 100.0 |   |   |   | 100.0 |   |   |   | 100.0 |   |
| FYE      12/31/04                                                                                                                                                                                                             |   |   | 126.9 |   |   |   | 108.8 |   |   |   | 106.6 |   |
| FYE      12/31/05                                                                                                                                                                                                             |   |   | 118.7 |   |   |   | 111.2 |   |   |   | 101.3 |   |
| FYE      12/31/06                                                                                                                                                                                                             |   |   | 180.8 |   |   |   | 122.1 |   |   |   | 133.3 |   |
| FYE      12/31/07                                                                                                                                                                                                             |   |   | 100.6 |   |   |   | 132.4 |   |   |   | 118.5 |   |
| FYE      12/31/08                                                                                                                                                                                                             |   |   | 93.0 |   |   |   | 63.8 |   |   |   | 68.1 |   |

|   | 1 | The lines      represent annual index levels derived from compounded daily returns that      include all dividends. |
|--------|---|---------------------------------------------------------------------------------------------------------------------|

|   | 2 | The indexes      are reweighted daily, using the market capitalization on the previous      trading day. |
|--------|---|----------------------------------------------------------------------------------------------------------|

|   | 3 | If the annual      interval, based on the fiscal year-end, is not a trading day, the      preceding trading day isused. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------|

|   | 4 | The index      level for all series was set to $100.00 on December 31,      2003. |
|--------|---|-----------------------------------------------------------------------------------|

|                                                                                                        | Years ended      December 31, |
|-------------------------------------------------------------------------------------------------------------|-------------------------------|
|                                                                                                        |                          | 2008 | 2007 | 2006 | 2005 | 2004 |
| (Amounts in      thousands except per share amounts)                                                        |
| Revenues                                                                                                    | $                             | 575,442 | 520,311 | 477,482 | 443,026 | 424,826 |
| Income (loss)      before income tax expense and cumulative effect of a change in accounting      principle |  $                       | (792) | 25,895 | 34,253 | 36,835 | 38,715 |
| Cumulative      effect of a change in accounting principal, net of income tax expense of      $44 in 2006   |  $                       | --- | --- | 64 | --- | --- |
| Net income      (loss)                                                                                      | $                             | (1,869) | 13,733 | 18,520 | 20,831 | 21,252 |
| Net income      (loss) available to common shareholders                                                     | $                             | (1,869) | 13,733 | 18,520 | 18,325 | 19,749 |
| Basic net      income (loss) available to common shareholders per common      share                         | $                             | (0.04) | 0.26 | 0.34 | 0.34 | 0.35 |
| Diluted net      income (loss) available to common shareholders per common      share                       | $                             | (0.04) | 0.23 | 0.33 | 0.33 | 0.34 |
| Total      assets                                                                                           | $                             | 1,335,301 | 984,233 | 914,659 | 873,775 | 849,191 |
| Long-term      debt, including current portion and net of unamortized      discount                         | $                             | 716,831 | 538,398 | 489,462 | 475,840 | 437,137 |
| Obligations      under capital leases, including current portion                                            |  $                       | 100,329 | 2,851 | 2,857 | 672 | 39,661 |

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| Redeemable      preferred stock:         |   |    |    |    |    |    |
|------------------------------------------|--------|---------|---------|---------|---------|---------|
|    Series      B          | $      | ---     | ---     | ---     | 4,249   | 4,249   |
|    Series      C          | $      | ---     | ---     | ---     | ---     | ---     |
| Total      stockholders’ equity    | $      | 258,915 | 252,955 | 245,473 | 243,620 | 234,270 |
| Dividends      declared per common share | $      | 0.00    | 0.00    | 0.00    | 0.00    | 0.00    |

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|                            |   | Reportable      Segments |   |
|---------------------------------|--------|--------------------------|--------|
| Services and      Products      |   | Consumer                 |   |   | Network      Access |   |   | Commercial |   |   | Managed      Broadband |   |   | Regulated      Operations |   |
| Voice:                          |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-distance                   |   |                     | X      |   |   |   | X |   |   |   | X |   |   |   |   |   |   | X |   |
| Local      Access               |   |                     | X      |   |   |   | X |   |   |   | X |   |   |   |   |   |   | X |   |
| Directories                     |   |                     |   |   |   |   |   |   |   |   | X |   |   |   |   |   |   |   |   |
|                            |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Video                           |   |                     | X      |   |   |   |   |   |   |   | X |   |   |   |   |   |   |   |   |
|                            |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Data:                           |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Internet                        |   |                     | X      |   |   |   | X |   |   |   | X |   |   | X |   |   |   | X |   |
| Data      Networks              |   |                     |   |   |   |   | X |   |   |   | X |   |   | X |   |   |   |   |   |
| Managed      Services           |   |                     |   |   |   |   |   |   |   |   | X |   |   | X |   |   |   |   |   |
| Managed      Broadband Services |   |                     |   |   |   |   |   |   |   |   |   |   |   | X |   |   |   |   |   |
|                            |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Wireless                        |   |                     | X      |   |   |   | X |   |   |   | X |   |   |   |   |   |   | X |   |

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|                                                                                                          |   |                         |   |   |   |   |   |   |   |   | Percent­age      Change 1 |   |   | Percent­age      Change 1                                                                                                                                        |   |
|---------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|-------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                          |   |                         |   |   |   |   |   |   |   |   | 2008                                |   |   | 2007                                                                                                                                                                       |   |
|                                                                                                          |   | Year      Ended December 31, |   |   | vs.    |   |   | vs.    |   |
| (Unaudited)                                                                                                   |   | 2008                         |   |   | 2007   |   |   | 2006   |   |   | 2007                                |   |   | 2006                                                                                                                                                                       |   |
| Statements      of Operations Data:                                                                           |   |                         |   |   |   |   |   |   |   |   |                                |   |   |                                                                                                                                                                       |   |
| Revenues:                                                                                                     |   |                         |   |   |   |   |   |   |   |   |                                |   |   |                                                                                                                                                                       |   |
| Consumer      segment                                                                                         |   |                         | 44.5   | %      |   |   | 43.0   | %      |   |   | 37.5                                | %      |   |                                                                                                                                                                       | 14.4   | % |   |   | 24.9 | % |
| Network      Access segment                                                                                   |   |                         | 26.7   | %      |   |   | 31.4   | %      |   |   | 34.9                                | %      |   |                                                                                                                                                                       | (5.9   | %) |   |   | (1.9 | %) |
| Commercial      segment                                                                                       |   |                         | 19.9   | %      |   |   | 20.1   | %      |   |   | 22.2                                | %      |   |                                                                                                                                                                       | 9.6    | % |   |   | (1.2 | %) |
| Managed      Broadband segment                                                                                |   |                         | 6.4    | %      |   |   | 5.5    | %      |   |   | 5.4                                 | %      |   |                                                                                                                                                                       | 28.7   | % |   |   | 10.2 | % |
| Regulated      Operations segment                                                                             |   |                         | 2.5    | %      |   |   | 0.0    | %      |   |   | 0.0                                 | %      |   |                                  NM |   |   |                                   NM |   |
| Total      revenues                                                                                           |   |                         | 100.0  | %      |   |   | 100.0  | %      |   |   | 100.0                               | %      |   |                                                                                                                                                                       | 10.6   | % |   |   | 9.0 | % |
| Selling,      general and administrative expenses                                                             |   |                         | 36.6   | %      |   |   | 33.8   | %      |   |   | 33.3                                | %      |   |                                                                                                                                                                       | 19.7   | % |   |   | 10.6 | % |
| Depreciation      and amortization expense                                                                    |   |                         | 19.9   | %      |   |   | 16.8   | %      |   |   | 17.2                                | %      |   |                                                                                                                                                                       | 30.5   | % |   |   | 6.7 | % |
| Operating      income                                                                                         |   |                         | 8.3    | %      |   |   | 11.8   | %      |   |   | 14.1                                | %      |   |                                                                                                                                                                       | (22.0  | %) |   |   | (9.2 | %) |
| Other      expense, net                                                                                       |   |                         | 8.4    | %      |   |   | 6.8    | %      |   |   | 6.9                                 | %      |   |                                                                                                                                                                       | 37.6   | % |   |   | 6.6 | % |
| Income (loss)      before income taxes and cumulative effect of a change in accounting      principle in 2006 |   |                         | (0.1   | %)     |   |   | 5.0    | %      |   |   | 7.2                                 | %      |   |                                                                                                                                                                       | (96.9  | %) |   |   | (24.4 | %) |
| Income (loss)      before cumulative effect of a change in accounting principle in      2006                  |   |                         | (0.3   | %)     |   |   | 2.6    | %      |   |   | 3.9                                 | %      |   |                                                                                                                                                                       | (113.6 | %) |   |   | (25.6 | %) |
| Net income      (loss)                                                                                        |   |                         | (0.3   | %)     |   |   | 2.6    | %      |   |   | 3.9                                 | %      |   |                                                                                                                                                                       | (113.6 | %) |   |   | (25.9 | %) |

----

|                                |   |   |    |   | Percentage |   |
|-------------------------------------|--------|--------|---------|--------|------------|--------|
|                                |   | 2008   |    |   | 2007       |   |   | Change |   |
| Voice                               |   | $      | 47,042  |   |       |   | 46,212 |   |   |   | 1.8 | % |
| Video                               |   |   | 105,238 |   |       |   | 96,327 |   |   |   | 9.3 | % |
| Data                                |   |   | 42,692  |   |       |   | 34,230 |   |   |   | 24.7 | % |
| Wireless                            |   |   | 60,660  |   |       |   | 46,733 |   |   |   | 29.8 | % |
| Total      Consumer segment revenue |   | $      | 255,632 |   |       |   | 223,502 |   |   |   | 14.4 | % |

|                                           |   |   |   |   |  Percentage |   |
|------------------------------------------------|--------|--------|--------|--------|------------------|--------|
|                                           |   | 2008   |   |   | 2007             |   |   | Change |   |
| Voice                                          |   | $      | 18,121 |   |             |   | 20,364 |   |   |   | (11.0 | %) |
| Video                                          |   |   | 40,279 |   |             |   | 34,301 |   |   |   | 17.4 | % |
| Data                                           |   |   | 6,554  |   |             |   | 5,313 |   |   |   | 23.4 | % |
| Wireless                                       |   |   | 24,899 |   |             |   | 28,721 |   |   |   | (13.3 | %) |
| Total      Consumer segment Cost of Goods Sold |   | $      | 89,853 |   |             |   | 88,699 |   |   |   | 1.3 | % |

|                                  |   |   |   |   | Percentage |   |
|---------------------------------------|--------|--------|--------|--------|------------|--------|
|                                  |   | 2008   |   |   | 2007       |   |   | Change |   |
| Consumer      segment adjusted EBITDA |   | $      | 58,949 |   |       |   | 46,808 |   |   |   | 25.9 | % |

|                                                  |   | December      31, |    |   | Percentage |   |
|-------------------------------------------------------|--------|-------------------|---------|--------|------------|--------|
|                                                  |   | 2008              |    |   | 2007       |   |   | Change |   |
| Voice:                                                |   |              |    |   |       |   |   |   |   |
| Long-distance subscribers1                            |   |              | 88,600  |   |       |   | 89,900 |   |   |   | (1.5 | %) |
| Long-distance      minutes carried (in millions)      |   |              | 128.6   |   |       |   | 135.8 |   |   |   | (5.3 | %) |
| Total local access lines in      service2             |   |              | 80,700  |   |       |   | 74,400 |   |   |   | 8.5 | % |
| Local access lines in service      on GCI facilities2 |   |              | 68,700  |   |       |   | 50,700 |   |   |   | 35.5 | % |
|                                                  |   |              |    |   |       |   |   |   |   |   |   |   |
| Video:                                                |   |              |    |   |       |   |   |   |   |   |   |   |
| Basic subscribers3                                    |   |              | 132,500 |   |       |   | 128,000 |   |   |   | 3.5 | % |
| Digital programming tier      subscribers4            |   |              | 71,900  |   |       |   | 65,800 |   |   |   | 9.3 | % |
| HD/DVR converter boxes5                               |   |              | 67,800  |   |       |   | 50,200 |   |   |   | 35.1 | % |
| Homes      passed                                     |   |              | 229,300 |   |       |   | 224,700 |   |   |   | 2.1 | % |
| Average monthly gross revenue      per subscriber6    |   | $                 | 67.40   |   |       | $      | 64.01 |   |   |   | 5.3 | % |
|                                                  |   |              |    |   |       |   |   |   |   |   |   |   |
| Data:                                                 |   |              |    |   |       |   |   |   |   |   |   |   |
| Cable modem subscribers7                              |   |              | 94,400  |   |       |   | 88,000 |   |   |   | 7.3 | % |
|                                                  |   |              |    |   |       |   |   |   |   |   |   |   |
| Wireless:                                             |   |              |    |   |       |   |   |   |   |   |   |   |
| Wireless lines in service8                            |   |              | 88,700  |   |       |   | 70,000 |   |   |   | 26.7 | % |

----

| Average monthly gross revenue      per subscriber9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $ | 55.23 |   |   | $ | 58.29 |   |   |   | (5.3 | %) |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---|-------|--------|--------|---|-------|--------|--------|--------|------|----|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
| 1 A      long-distance customer is defined as a customer account that is invoiced a      monthly long-distance plan fee or has made a long-distance call during the      month.2 A      local access line in service is defined as a revenue generating circuit or      channel connecting a customer to the public switched telephone      network.3 A      basic cable subscriber is defined as one basic tier of service delivered      to an address or separate subunits thereof regardless of the number of      outlets purchased.4 A      digital programming tier subscriber is defined as one digital programming      tier of service delivered to an address or separate subunits thereof      regardless of the number of outlets or digital programming tiers      purchased. Digital programming tier subscribers are a subset of basic      subscribers.5 A high      definition/digital video recorder (“HD/DVR”) converter box is defined as      one box rented by a digital programming or basic tier subscriber. A      digital programming or basic tier subscriber is not required to rent an      HD/DVR converter box to receive service.6 Year-to-date      average monthly consumer video revenues divided by the average of consumer      video basic subscribers at the beginning and ending of the      period.7 A      cable modem subscriber is defined by the purchase of cable modem service      regardless of the level of service purchased. If one entity purchases      multiple cable modem service access points, each access point is counted      as a subscriber. Cable modem subscribers may also be video basic      subscribers though basic cable service is not required to receive cable      modem service.8 A      wireless line in service is defined as a revenue generating wireless      device.9 Year-to-date      average monthly consumer wireless revenues divided by the average of      consumer wireless subscribers at the beginning and ending of the      period. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |

|   | · | A 7.4%      increase in programming services revenue to $84.5 million in 2008      primarily resulting from an increase in basic and digital programming tier      subscribers in 2008, and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 19.1%      increase in equipment rental revenue to $19.4 million in 2008 primarily      resulting from our customers’ increased use of our HD/DVR converter      boxes. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                      |   |   |    |   | Percentage |   |
|-------------------------------------------|--------|--------|---------|--------|------------|--------|
|                                      |   | 2008   |    |   | 2007       |   |   | Change |   |
| Voice                                     |   | $      | 79,744  |   |       |   | 96,896 |   |   |   | (17.7 | %) |
| Data                                      |   |   | 71,414  |   |       |   | 61,199 |   |   |   | 16.7 | % |
| Wireless                                  |   |   | 2,663   |   |       |   | 5,282 |   |   |   | (49.6 | %) |
| Total Network      Access segment revenue |   | $      | 153,821 |   |       |   | 163,377 |   |   |   | (5.9 | %) |

|                                                 |   |   |   |   | Percentage |   |
|------------------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                                 |   | 2008   |   |   | 2007       |   |   | Change |   |
| Voice                                                |   | $      | 27,149 |   |       |   | 31,042 |   |   |   | (12.5 | %) |
| Data                                                 |   |   | 11,539 |   |       |   | 12,081 |   |   |   | (4.5 | %) |
| Wireless                                             |   |   | 1,638  |   |       |   | 745 |   |   |   | 119.9 | % |
| Total Network      Access segment Cost of Goods Sold |   | $      | 40,326 |   |       |   | 43,868 |   |   |   | (8.1 | %) |

|                                        |   |   |   |   | Percentage |   |
|---------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                        |   | 2008   |   |   | 2007       |   |   | Change |   |
| Network      Access segment adjusted EBITDA |   | $      | 73,647 |   |       |   | 82,441 |   |   |   | (10.7 | %) |

|                                                                                                                                                                                            |   | December      31, |   |   | Percentage |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|------------|--------|
|                                                                                                                                                                                            |   | 2008              |   |   | 2007       |   |   | Change |   |
| Voice:                                                                                                                                                                                          |   |              |   |   |       |   |   |   |   |
| Long-distance      minutes carried (in millions)                                                                                                                                                |   |              | 1,094  |   |       |   | 1,251 |   |   |   | (12.5 | %) |
|                                                                                                                                                                                            |   |              |   |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                                           |   |              |   |   |       |   |   |   |   |   |   |   |
| Total Internet service      provider access lines in service1                                                                                                                                   |   |              | 1,800  |   |       |   | 2,600 |   |   |   | (30.8 | %) |
|                                                                                                                                                                                            |   |
| 1 An      Internet service provider access line in service is defined as a revenue      generating circuit or channel connecting a customer to the public switched      telephone network. |   |
|                                                                                                                                                                                            |   |

----

|                                  |   |   |    |   | Percentage |   |
|---------------------------------------|--------|--------|---------|--------|------------|--------|
|                                  |   | 2008   |    |   | 2007       |   |   | Change |   |
| Voice                                 |   | $      | 29,398  |   |       |   | 30,761 |   |   |   | (4.4 | %) |
| Video                                 |   |   | 9,604   |   |       |   | 8,018 |   |   |   | 19.8 | % |
| Data                                  |   |   | 70,068  |   |       |   | 61,052 |   |   |   | 14.8 | % |
| Wireless                              |   |   | 5,590   |   |       |   | 4,809 |   |   |   | 16.2 | % |
| Total      Commercial segment revenue |   | $      | 114,660 |   |       |   | 104,640 |   |   |   | 9.6 | % |

|                                             |   |   |   |   |  Percentage |   |
|--------------------------------------------------|--------|--------|--------|--------|------------------|--------|
|                                             |   | 2008   |   |   | 2007             |   |   | Change |   |
| Voice                                            |   | $      | 19,581 |   |             |   | 20,225 |   |   |   | (3.2 | %) |
| Video                                            |   |   | 1,551  |   |             |   | 1,616 |   |   |   | (4.0 | %) |
| Data                                             |   |   | 34,391 |   |             |   | 27,469 |   |   |   | 25.2 | % |
| Wireless                                         |   |   | 3,957  |   |             |   | 4,182 |   |   |   | (5.4 | %) |
| Total      Commercial segment Cost of Goods Sold |   | $      | 59,480 |   |             |   | 53,492 |   |   |   | 11.2 | % |

----

|                                    |   |   |   |   | Percentage |   |
|-----------------------------------------|--------|--------|--------|--------|------------|--------|
|                                    |   | 2008   |   |   | 2007       |   |   | Change |   |
| Commercial      segment adjusted EBITDA |   | $      | 20,710 |   |       |   | 16,164 |   |   |   | 28.1 | % |

|   | Selected key      performance indicators for our Commercial segment  follow: |
|--------|------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | December      31, |   | Percentage |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 2008              |   | 2007       |   | Change |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |              |   |       |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 9,700             |   | 10,500     |   | (7.6%) |
| Total local access lines in      service2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 46,200            |   | 43,100     |   | 7.2% |
| Local access lines in service      on GCI facilities      2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 18,700            |   | 12,500     |   | 49.6% |
| Long-distance      minutes carried (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 129.5             |   | 131.3      |   | (1.3%) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |              |   |       |   |   |
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |              |   |       |   |   |
| Cable modem subscribers3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | 8,900             |   | 8,500      |   | 4.7% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |              |   |       |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |              |   |       |   |   |
| Wireless lines in service4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 7,600             |   | 7,300      |   | 4.1% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |              |   |       |   |   |
| 1  A      long-distance customer is defined as a customer account that is invoiced a      monthly long-distance plan fee or has made a long-distance call during the      month.2  A      local access line in service is defined as a revenue generating circuit or      channel connecting a customer to the public switched telephone      network.3  A      cable modem subscriber is defined by the purchase of cable modem service      regardless of the level of service purchased. If one entity purchases      multiple cable modem service access points, each access point is counted      as a subscriber. 4  A      wireless line in service is defined as a revenue generating wireless      device. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |

----

|                              |   | December      31, |   |   | Percentage |   |
|-----------------------------------|--------|-------------------|--------|--------|------------|--------|
|                              |   | 2008              |   |   | 2007       |   |   | Change |   |
| Managed      Broadband segment:   |   |              |   |   |       |   |   |   |   |
| SchoolAccess®      customers |   |              | 54     |   |       |   | 51 |   |   |   | 5.9 | % |
| Rural health      customers       |   |              | 53     |   |       |   | 21 |   |   |   | 152.4 | % |

|                                                                                                                                                                                                                                                                                                                                                                                                       |   | December      31, |   | Percentage |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                       |   | 2008              |   | 2007       |   | Change |   |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                     |   |              |   |       |   |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                 |   | 900               |   | NA         |   | NA |   |
| Long-distance      minutes carried (in thousands)                                                                                                                                                                                                                                                                                                                                                          |   | 844               |   | NA         |   | NA |   |
| Total local access lines in      service2                                                                                                                                                                                                                                                                                                                                                                  |   | 12,100            |   | NA         |   | NA |   |
|                                                                                                                                                                                                                                                                                                                                                                                                       |   |              |   |       |   |   |   |   |
| 1  A      long-distance subscriber is defined as a customer account that is invoiced      a monthly long-distance plan fee or has made a long-distance call during      the month.2  A      local access line in service is defined as a revenue generating circuit or      channel connecting a customer to the public switched telephone      network.NA – Not      Applicable |   |

----

| ·   | A $15.8      million increase in labor costs, |
|--------------------|-----------------------------------------------|

| ·   | $7.5 million      in additional expense resulting from our June 1, 2008, acquisition of UUI      and Unicom, |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | A $2.3      million increase in our share-based compensation  expense, |
|--------------------|------------------------------------------------------------------------|

| ·   | Upon our      acquisition of the remaining 18% of Alaska DigiTel we paid $1.8 million to      terminate the management agreement entered into in January 2007, when we      acquired 82% of the outstanding shares of Alaska  DigiTel, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.8      million increase in our company-wide success sharing bonus accrual in      2008, |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | A $1.4      million increase in our facilities lease expense,  and |
|--------------------|--------------------------------------------------------------------|

| ·   | $1.2 million      in additional expense incurred in 2008 for the conversion of our      customers' wireless phones to ourfacilities. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | A $13.9      million increase in interest expense to $48.3 million in 2008 due to a      $6.4 million increase in interest expense on our Senior Credit Facility to      $17.7 million resulting from additional debt from the Additional      Incremental Term Loan agreement beginning in May 2008 and the increased      interest rate on our Senior Credit Facility beginning May      2008, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | $3.9 million      in additional interest expense resulting from the Galaxy 18 capital lease      commencing in May 2008, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

| ·   | A loss of      $921,000 relating to the fair value change on derivative instruments was      reported in interest expense, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | $906,000 of      additional interest expense as a result of our acquisition of UUI in June      2008. |
|--------------------|-------------------------------------------------------------------------------------------------------|

|                                |   |   |    |   | Percentage |   |
|-------------------------------------|--------|--------|---------|--------|------------|--------|
|                                |   | 2007   |    |   | 2006       |   |   | Change |   |
| Voice                               |   | $      | 46,212  |   |       |   | 45,625 |   |   |   | 1.3 | % |
| Video                               |   |   | 96,327  |   |       |   | 90,226 |   |   |   | 6.8 | % |
| Data                                |   |   | 34,230  |   |       |   | 29,406 |   |   |   | 16.4 | % |
| Wireless                            |   |   | 46,733  |   |       |   | 13,694 |   |   |   | 241.3 | % |
| Total      Consumer segment revenue |   | $      | 223,502 |   |       |   | 178,951 |   |   |   | 24.9 | % |

----

|                                           |   |   |   |   |  Percentage |   |
|------------------------------------------------|--------|--------|--------|--------|------------------|--------|
|                                           |   | 2007   |   |   | 2006             |   |   | Change |   |
| Voice                                          |   | $      | 20,364 |   |             |   | 22,165 |   |   |   | (8.1 | %) |
| Video                                          |   |   | 34,301 |   |             |   | 31,124 |   |   |   | 10.2 | % |
| Data                                           |   |   | 5,313  |   |             |   | 4,489 |   |   |   | 18.4 | % |
| Wireless                                       |   |   | 28,721 |   |             |   | 13,885 |   |   |   | 106.9 | % |
| Total      Consumer segment Cost of Goods Sold |   | $      | 88,699 |   |             |   | 71,663 |   |   |   | 23.8 | % |

|                                  |   |   |   |   | Percentage |   |
|---------------------------------------|--------|--------|--------|--------|------------|--------|
|                                  |   | 2007   |   |   | 2006       |   |   | Change |   |
| Consumer      segment adjusted EBITDA |   | $      | 46,808 |   |       |   | 32,550 |   |   |   | 43.8 | % |

|                                                                                                                                                                                             |   | December      31, |    |   | Percentage |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|------------|--------|
|                                                                                                                                                                                             |   | 2007              |    |   | 2006       |   |   | Change |   |
| Voice:                                                                                                                                                                                           |   |              |    |   |       |   |   |   |   |
| Long-distance      subscribers1                                                                                                                                                                  |   |              | 89,900  |   |       |   | 89,800 |   |   |   | 0.1 | % |
| Long-distance      minutes carried (in millions)                                                                                                                                                 |   |              | 135.8   |   |       |   | 141.9 |   |   |   | (4.3 | %) |
| Total local      access lines in service2                                                                                                                                                        |   |              | 74,400  |   |       |   | 66,200 |   |   |   | 12.4 | % |
| Local access      lines in service on GCI facilities2                                                                                                                                            |   |              | 50,700  |   |       |   | 31,400 |   |   |   | 61.5 | % |
|                                                                                                                                                                                             |   |              |    |   |       |   |   |   |   |   |   |   |
| Video:                                                                                                                                                                                           |   |              |    |   |       |   |   |   |   |   |   |   |
| Basic      subscribers3                                                                                                                                                                          |   |              | 128,000 |   |       |   | 124,000 |   |   |   | 3.2 | % |
| Digital      programming tier subscribers4                                                                                                                                                       |   |              | 65,800  |   |       |   | 58,700 |   |   |   | 12.1 | % |
| HD/DVR      converter boxes5                                                                                                                                                                     |   |              | 50,200  |   |       |   | 29,200 |   |   |   | 71.9 | % |
| Homes      passed                                                                                                                                                                                |   |              | 224,700 |   |       |   | 219,900 |   |   |   | 2.2 | % |
| Average      monthly gross revenue per subscriber6                                                                                                                                               |   | $                 | 64.01   |   |       | $      | 61.57 |   |   |   | 4.0 | % |
|                                                                                                                                                                                             |   |              |    |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                                            |   |              |    |   |       |   |   |   |   |   |   |   |
| Cable modem      subscribers7                                                                                                                                                                    |   |              | 88,000  |   |       |   | 78,500 |   |   |   | 12.1 | % |
|                                                                                                                                                                                             |   |              |    |   |       |   |   |   |   |   |   |   |
| Wireless:                                                                                                                                                                                        |   |              |    |   |       |   |   |   |   |   |   |   |
| Wireless      lines in service8                                                                                                                                                                  |   |              | 70,000  |   |       |   | 24,400 |   |   |   | 186.9 | % |
| Average      monthly gross revenue per subscriber9                                                                                                                                               |   | $                 | 58.29   |   |       | $      | 52.21 |   |   |   | 11.6 | % |
|                                                                                                                                                                                             |   |
| All footnote      references correspond to the footnotes in the table under "Year Ended      December 31, 2008 Compared to Year Ended December 31, 2007" – Consumer      Segment Overview. |   |
|                                                                                                                                                                                             |   |

|   | · | A 22.7%      increase in equipment rental revenue to $16.3 million in 2007 primarily      resulting from our customers’ increased use of HD/DVR converter boxes,      and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 4.1%      increase in programming services revenue to $78.6 million in 2007      primarily resulting from an increase in digital programming tier      subscribers in 2007 and increased rates charged for certain cable services      primarily effective in the fourth quarter of  2006. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                      |   |   |    |   | Percentage |   |
|-------------------------------------------|--------|--------|---------|--------|------------|--------|
|                                      |   | 2007   |    |   | 2006       |   |   | Change |   |
| Voice                                     |   | $      | 96,896  |   |       |   | 110,834 |   |   |   | (12.6 | %) |
| Data                                      |   |   | 61,199  |   |       |   | 55,637 |   |   |   | 10.0 | % |
| Wireless                                  |   |   | 5,282   |   |       |   | --- |   |   |            NM |   |
| Total Network      Access segment revenue |   | $      | 163,377 |   |       |   | 166,471 |   |   |   | (1.9 | %) |
|                                      |   |   |    |   |       |   |   |   |   |   |   |   |
| NM – Not      meaningful.           |   |   |    |   |       |   |   |   |   |   |   |   |

----

|                                                 |   |   |   |   | Percentage |   |
|------------------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                                 |   | 2007   |   |   | 2006       |   |   | Change |   |
| Voice                                                |   | $      | 31,042 |   |       |   | 30,390 |   |   |   | 2.1 | % |
| Data                                                 |   |   | 12,081 |   |       |   | 9,567 |   |   |   | 26.3 | % |
| Wireless                                             |   |   | 745    |   |       |   | --- |   |   |            NM |   |
| Total Network      Access segment Cost of Goods Sold |   | $      | 43,868 |   |       |   | 39,957 |   |   |   | 9.8 | % |
|                                                 |   |   |   |   |       |   |   |   |   |   |   |   |
| NM – Not      meaningful.                      |   |   |   |   |       |   |   |   |   |   |   |   |

|                                        |   |   |   |   | Percentage |   |
|---------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                        |   | 2007   |   |   | 2006       |   |   | Change |   |
| Network      Access segment adjusted EBITDA |   | $      | 82,441 |   |       |   | 93,450 |   |   |   | (11.8 | %) |

|                                                                                                                                                                                            |   | December      31, |   |   | Percentage |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|------------|--------|
|                                                                                                                                                                                            |   | 2007              |   |   | 2006       |   |   | Change |   |
| Voice:                                                                                                                                                                                          |   |              |   |   |       |   |   |   |   |
| Long-distance      minutes carried (in millions)                                                                                                                                                |   |              | 1,251  |   |       |   | 1,317 |   |   |   | (5.0 | %) |
|                                                                                                                                                                                            |   |              |   |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                                           |   |              |   |   |       |   |   |   |   |   |   |   |
| Total Internet service      provider access lines in service1                                                                                                                                   |   |              | 2,600  |   |       |   | 3,100 |   |   |   | (16.1 | %) |
|                                                                                                                                                                                            |   |
| 1 An      Internet service provider access line in service is defined as a revenue      generating circuit or channel connecting a customer to the public switched      telephone network. |   |
|                                                                                                                                                                                            |   |

----

|                                  |   |   |    |   | Percentage |   |
|---------------------------------------|--------|--------|---------|--------|------------|--------|
|                                  |   | 2007   |    |   | 2006       |   |   | Change |   |
| Voice                                 |   | $      | 30,761  |   |       |   | 32,162 |   |   |   | (4.4 | %) |
| Video                                 |   |   | 8,018   |   |       |   | 7,993 |   |   |   | 0.3 | % |
| Data                                  |   |   | 61,052  |   |       |   | 63,276 |   |   |   | (3.5 | %) |
| Wireless                              |   |   | 4,809   |   |       |   | 2,498 |   |   |   | 92.5 | % |
| Total      Commercial segment revenue |   | $      | 104,640 |   |       |   | 105,929 |   |   |   | (1.2 | %) |

|                                             |   |   |   |   |  Percentage |   |
|--------------------------------------------------|--------|--------|--------|--------|------------------|--------|
|                                             |   | 2007   |   |   | 2006             |   |   | Change |   |
| Voice                                            |   | $      | 20,225 |   |             |   | 21,640 |   |   |   | (6.6 | %) |
| Video                                            |   |   | 1,616  |   |             |   | 1,442 |   |   |   | 12.1 | % |
| Data                                             |   |   | 27,469 |   |             |   | 24,619 |   |   |   | 11.6 | % |
| Wireless                                         |   |   | 4,182  |   |             |   | 2,608 |   |   |   | 60.4 | % |
| Total      Commercial segment Cost of Goods Sold |   | $      | 53,492 |   |             |   | 50,309 |   |   |   | 6.3 | % |

|                                    |   |   |   |   | Percentage |   |
|-----------------------------------------|--------|--------|--------|--------|------------|--------|
|                                    |   | 2007   |   |   | 2006       |   |   | Change |   |
| Commercial      segment adjusted EBITDA |   | $      | 16,164 |   |       |   | 21,164 |   |   |   | (23.6 | %) |

|   | Selected key      performance indicators for our Commercial segment  follow: |
|--------|------------------------------------------------------------------------------|

|                                                                                                                                                                                               |   | December      31, |   | Percentage |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|------------|
|                                                                                                                                                                                               |   | 2007              |   | 2006       |   | Change |
| Voice:                                                                                                                                                                                             |   |              |   |       |   |   |
| Long-distance subscribers1                                                                                                                                                                         |   | 10,500            |   | 11,100     |   | (5.4%) |
| Total local access lines in      service2                                                                                                                                                          |   | 43,100            |   | 41,900     |   | 2.9% |
| Local access lines in service      on GCI facilities      2                                                                                                                                        |   | 12,500            |   | 8,400      |   | 48.8% |
| Long-distance      minutes carried (in millions)                                                                                                                                                   |   | 131.3             |   | 131.8      |   | (0.4%) |
|                                                                                                                                                                                               |   |              |   |       |   |   |
| Data:                                                                                                                                                                                              |   |              |   |       |   |   |
| Cable modem subscribers3                                                                                                                                                                           |   | 8,500             |   | 7,800      |   | 9.0% |
|                                                                                                                                                                                               |   |              |   |       |   |   |
| Wireless:                                                                                                                                                                                          |   |              |   |       |   |   |
| Wireless lines in service4                                                                                                                                                                         |   | 7,300             |   | 4,600      |   | 58.7% |
|                                                                                                                                                                                               |   |              |   |       |   |   |
| All footnote      references correspond to the footnotes in the table under "Year Ended      December 31, 2008 Compared to Year Ended December 31, 2007" – Commercial      Segment Overview. |
|                                                                                                                                                                                               |   |

----

|                              |   | December      31, |   |   | Percentage |   |
|-----------------------------------|--------|-------------------|--------|--------|------------|--------|
|                              |   | 2007              |   |   | 2006       |   |   | Change |   |
| Managed      Broadband segment:   |   |              |   |   |       |   |   |   |   |
| SchoolAccess®      customers |   |              | 51     |   |       |   | 48 |   |   |   | 6.3 | % |
| Rural health      customers       |   |              | 21     |   |       |   | 21 |   |   |   | 0.0 | % |

----

|   | · | Recognition      of $15.5 million in additional expense resulting from our January 1, 2007      acquisition of Alaska DigiTel, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | A $3.8      million increase in labor and benefits costs,  and |
|--------|--------|----------------------------------------------------------------|

|   | · | A $1.4      million increase in bad debt expense primarily due to the realization of      recoveries for certain Managed Broadband services customers and MCI, Inc.      (merged with Verizon Communications, Inc.) in 2006 through a reduction to      bad debt expense which did not recur in2007. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A $2.2      million decrease in certain promotion expenses,  and |
|--------|--------|------------------------------------------------------------------|

|   | · | A $658,000      decrease in our company-wide success sharing bonus accrual in      2007. |
|--------|--------|------------------------------------------------------------------------------------------|

| ·   | A $2.5      million or 7.2% increase in interest costs due to an increase in our      average outstanding debt balance in 2007 as compared to    2006, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.3      million or 70.5% decrease in interest income in 2007 resulting from a      decrease in our average cash and cash equivalents balance in 2007 as      compared to 2006, and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In the third      quarter of 2007, we substantially modified our Senior Credit Facility      resulting in loan fee expense of$611,000. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                    |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|---------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Line      extensions                                    |   | $      | 35,813  |   |   |   | 62,984  |   |   |   | 24,126 |   |
| Customer      premise equipment                         |   |   | 22,821  |   |   |   | 23,554  |   |   |   | 14,771 |   |
| Scalable      infrastructure                            |   |   | 2,985   |   |   |   | 4,749   |   |   |   | 1,062 |   |
| Upgrade/rebuild                                         |   |   | 2,705   |   |   |   | 1,451   |   |   |   | 4,145 |   |
| Commercial                                              |   |   | 2,206   |   |   |   | 392     |   |   |   | 138 |   |
| Support      capital                                    |   |   | 1,277   |   |   |   | 1,317   |   |   |   | 1,146 |   |
| Sub-total                                               |   |   | 67,807  |   |   |   | 94,447  |   |   |   | 45,388 |   |
| Remaining      reportable segments capital expenditures |   |   | 261,063 |   |   |   | 64,569  |   |   |   | 59,672 |   |
|                                                    |   | $      | 328,870 |   |   |   | 159,016 |   |   |   | 105,060 |   |

----

|                                                      |   | 2008   |     |   | 2007   |   |
|-----------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Operating      activities                                 |   | $      | 175,335  |   |   |   | 110,288 |   |
| Investing      activities                                 |   |   | (290,967 | )      |   |   | (175,087 | ) |
| Financing      activities                                 |   |   | 132,462  |   |   |   | 20,226 |   |
| Net increase      (decrease) in cash and cash equivalents |   | $      | 16,830   |   |   |   | (44,573 | ) |

| If redeemed      during the twelve month period commencing February 1 of the year      indicated: |   | Redemption      Price |    |
|---------------------------------------------------------------------------------------------------|--------|-----------------------|---------|
| 2009                                                                                              |   |                  | 103.625 | % |
| 2010                                                                                              |   |                  | 102.417 | % |
| 2011                                                                                              |   |                  | 101.208 | % |
| 2012 and      thereafter                                                                          |   |                  | 100.000 | % |

|   | · | $250.0      million, reduced by the amount of any prepayments,  or |
|--------|--------|--------------------------------------------------------------------|

|   | · | 3.0 times      earnings before interest, taxes, depreciation and amortization for the      last four full fiscal quarters of GCI, Inc. and its      subsidiaries. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Total      Leverage Ratio (as defined) |   | Applicable      Margin |   |
|----------------------------------------|--------|------------------------|--------|
| >3.75                               |   |                   | 4.25   | % |
| >3.25      but <3.75             |   |                   | 3.75   | % |
| >2.75      but <3.25             |   |                   | 3.25   | % |
| <2.75                               |   |                   | 2.75   | % |

| The      commitment fee we are required to pay on the unused portion of the      commitment is 0.5%. |
|------------------------------------------------------------------------------------------------------|

| Substantially      all of the Company's assets collateralize the Senior Credit      Facility. |
|-----------------------------------------------------------------------------------------------|

----

| Years ending      December 31,                                |   |   |    |
|---------------------------------------------------------------|--------|--------|---------|
| 2009                                                          |   | $      | 8,425   |   |
| 2010                                                          |   |   | 8,657   |   |
| 2011                                                          |   |   | 188,147 |   |
| 2012                                                          |   |   | 176,323 |   |
| 2013                                                          |   |   | 4,749   |   |
| 2014 and      thereafter                                      |   |   | 335,585 |   |
|                                                          |   |   | 721,886 |   |
| Less      unamortized discount paid on Senior Notes           |   |   | 2,589   |   |
| Less      unamortized discount paid on Senior Credit Facility |   |   | 2,466   |   |
| Less current      portion of long-term debt                   |   |   | 8,425   |   |
|                                                          |   | $      | 708,406 |   |

| The Intelsat      Galaxy 18 C-band and Ku-Band transponders are being leased over an      expected term of 14 years. The present value of the lease payments,      excluding telemetry, tracking and command services and back-up protection,      is $98.6 million. We have recorded a capital lease obligation and an      addition to our Property and Equipment at December 31,    2008. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Years ending      December 31:    |   |   |    |
|-----------------------------------|--------|--------|---------|
| 2009                              |   | $      | 11,160  |   |
| 2010                              |   |   | 11,160  |   |
| 2011                              |   |   | 11,160  |   |
| 2012                              |   |   | 11,160  |   |
| 2013                              |   |   | 11,160  |   |
| 2014 and      thereafter          |   |   | 93,930  |   |
| Total minimum      lease payments |   | $      | 149,730 |   |

----

| Years ending      December 31:    |   |   |   |
|-----------------------------------|--------|--------|--------|
| 2009                              |   | $      | 16,401 |   |
| 2010                              |   |   | 8,703  |   |
| 2011                              |   |   | 7,387  |   |
| 2012                              |   |   | 5,601  |   |
| 2013                              |   |   | 4,797  |   |
| 2014 and      thereafter          |   |   | 17,429 |   |
| Total minimum      lease payments |   | $      | 60,318 |   |

----

----

----

----

|   | · | 42% are      located in the Municipality ofAnchorage, |
|--------|--------|-------------------------------------------------------|

|   | · | 13% are      located in the Fairbanks North StarBorough, |
|--------|--------|----------------------------------------------------------|

|   | · | 12% are      located in the Matanuska-SusitnaBorough, |
|--------|--------|-------------------------------------------------------|

|   | · | 8% are      located in the Kenai PeninsulaBorough, |
|--------|--------|----------------------------------------------------|

|   | · | 5% are      located in the City and Borough of Juneau,and |
|--------|--------|-----------------------------------------------------------|

----

|                                               |   | Payments Due      by Period |      |
|----------------------------------------------------|--------|-----------------------------|-----------|
|                                               |   | Total                       |      |   | Less than 1      Year |   |   | 1 to      3Years |   |   | 4 to      5Years |   |   | More Than 5      Years |   |
|                                               |   | (Amounts in      thousands) |      |
| Long-term      debt                                |   | $                           | 721,886   |   |   |   | 8,424 |   |   |   | 196,804 |   |   |   | 181,072 |   |   |   | 335,586 |   |
| Interest on      long-term debt                    |   |                        | 195,987   |   |   |   | 44,037 |   |   |   | 87,324 |   |   |   | 53,026 |   |   |   | 11,600 |   |
| Capital lease      obligations, including interest |   |                        | 160,431   |   |   |   | 11,646 |   |   |   | 23,328 |   |   |   | 23,474 |   |   |   | 101,983 |   |
| Operating      lease commitments                   |   |                        | 60,318    |   |   |   | 16,401 |   |   |   | 16,089 |   |   |   | 10,399 |   |   |   | 17,429 |   |
| Purchase      obligations                          |   |                        | 54,826    |   |   |   | 25,134 |   |   |   | 24,412 |   |   |   | 5,280 |   |   |   | --- |   |
| Total      contractual obligations                 |   | $                           | 1,193,448 |   |   |   | 105,642 |   |   |   | 347,957 |   |   |   | 273,251 |   |   |   | 466,598 |   |

----

----

| ·   | Our      entity-level control related to the selection and application of      accounting policies in accordance with GAAP was not designed to include      policies and procedures to periodically review our accounting policies to      ensure ongoing GAAP compliance. This led to ineffective procedures for      recording depreciation expense which caused material errors in interim      financial reporting which were corrected through the restatement of our      2007 interim financial information. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The internal      control over financial reporting at Alaska DigiTel does not include      activities adequate to i) timely identify changes in financial reporting      risks, ii) monitor the continued effectiveness of controls, and iii) does      not include staff with adequate technical expertise to ensure that      policies and procedures necessary for reliable interim and annual      financial statements are selected and applied. Prior to August 18, 2008,      our control over the operations of Alaska DigiTel was limited as required      by the FCC upon their approval of our initial acquisition completed in      January 2007. These control deficiencies in our Alaska DigiTel business      represent material weaknesses in our internal control over financial      reporting and led to the failure to timely identify and respond to      triggering events which necessitated a change in useful life of      depreciable assets to ensure reporting in accordance with GAAP. These      material weaknesses led to errors in our interim financial reporting which      were corrected through the restatement of our interim financial      information for the March 31 and June 30, 2008 quarterly      periods. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We enhanced      the design of our detective monitoring control over of the recording of      receivables and revenues by: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

|   | 1) Performing      the monitoring at a level of precision to detect all transactions that      could aggregate to a material component of the account balances,      and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) Ensuring      differences identified during the monitoring process are resolved in a      timely manner. |
|--------|-------------------------------------------------------------------------------------------------------------|

| ·   | With regards      to our system development and change controls we incorporated more      thorough end-user testing of developments and changes to ensure the      outputs of transactions processed are recorded correctly in the general      ledger before the system changes are implemented,  and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      management review control over unreconciled transactions recorded in      accounts receivable general ledger accounts has been designed at the level      of precision to detect and correct errors that could be material to annual      or interim financial statements. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Independently      recalculating shared-based compensation expense on a sample of options and      restricted stock awards on a quarterly basis and comparing the expense to      the amounts reported by our stock option plan administration software to      validate correct settings were entered into the software. This independent      verification is reviewed and approved on a quarterly basis,      and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Requiring our      staff to continue to attend training related to the application of SFAS      No. 123(R), “Share-Based Payment,” and related interpretations and obtain      further training in using our stock option plan administration software as      appropriate. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We enhanced      the design of our detective monitoring control over of the recording of      receivables and revenues by: |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

|   | 1) Performing      the monitoring at a level of precision to detect all transactions that      could aggregate to a material component of the account balances,      and |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2) Ensuring      differences identified during the monitoring process are resolved in a      timely manner. |
|--------|-------------------------------------------------------------------------------------------------------------|

| ·   | With regards      to our system development and change controls we incorporated more      thorough end-user testing of developments and changes to ensure the      outputs of transactions processed are recorded correctly in the general      ledger before the system changes are implemented,  and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      management review control over unreconciled transactions recorded in      accounts receivable general ledger accounts has been designed at the level      of precision to detect and correct errors that could be material to annual      or interim financial statements. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | Audit (audit      of financial statements filed with the SEC, quarterly reviews, comfort      letters, consents, review of registration statements, accounting      consultations); |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Audit-related      (employee benefit plan audits and accounting consultation on proposed      transactions); and |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | Income tax      services (review of corporate and partnership income tax returns, and      consultations regarding income taxmatters). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|

----

----

| (l)      Consolidated Financial Statements          |                                                                                                                                                                                | Page      No.                                                  |
|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|
|                                                |                                                                                                                                                                                |                                                           |
| Included in      Part II of this Report:            |                                                                                                                                                                                |
|                                                |                                                                                                                                                                                |                                                           |
|                                                | Reports of      Independent Registered Public Accounting Firm                                                                                                                       |          89 - 91                                     |
|                                                |                                                                                                                                                                                |                                                           |
|                                                | Consolidated      Balance Sheets, December 31, 2008 and 2007                                                                                                                        |          92 - 93                                     |
|                                                |                                                                                                                                                                                |                                                           |
|                                                | Consolidated      Statements of  Operations, years ended December 31, 2008, 2007      and 2006                                                                            |                94      |
|                                                |                                                                                                                                                                                |                                                           |
|                                                | Consolidated      Statements of Stockholders’ Equity, years ended December 31, 2008, 2007      and 2006                                                                       |   95 -      96                                            |
|                                                |                                                                                                                                                                                |                                                           |
|                                                | Consolidated      Statements of Cash Flows, years ended December 31, 2008, 2007 and      2006                                                                                       |                97 |
|                                                |                                                                                                                                                                                |                                                           |
|                                                | Notes to      Consolidated Financial Statements                                                                                                                                     |   98 -      140                                           |
|                                                |                                                                                                                                                                                |                                                           |
| (2)      Consolidated Financial Statement Schedules |                                                                                                                                                                                |
|                                                |                                                                                                                                                                                |                                                           |
|                                                | Schedules are      omitted, as they are not required or are not applicable, or the required      information is shown in the applicable financial statements or notes      thereto. |                                                           |
|                                                |                                                                                                                                                                                |                                                           |
| (3)      Exhibits                                   |              141                                                                                                                                      |

----

----

| ·   | The      entity-level control related to the selection and application of      accounting policies in accordance with GAAP was not designed to include      policies and procedures to periodically review accounting policies to      ensure ongoing GAAP compliance. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      internal control over financial reporting at Alaska DigiTel (a      wholly-owned subsidiary) does not include activities adequate to i) timely      identify changes in financial reporting risks, ii)monitor the continued      effectiveness of controls, and iii) does not include staff with adequate      technical expertise to ensure that policies and procedures necessary for      reliable interim and annual financial statements are selected and      applied. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                                                                              |   |              |      |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|--------|--------|--------|
| (Amounts in      thousands)                                                                                                                       |   | December      31, |      |
| ASSETS                                                                                                                                            |   | 2008              |      |   | 2007   |   |
|                                                                                                                                              |   |              |      |   |   |   |
|        Current assets:                                                                                                                       |   |              |      |   |   |   |
|           Cash and cash equivalents                                                                                           |   | $                 | 29,904    |   |   |   | 13,074 |   |
|                                                                                                                                              |   |              |      |   |   |   |   |   |
|        Receivables                                                                                                                           |   |              | 113,136   |   |   |   | 97,913 |   |
|   Less      allowance for doubtful receivables                                                                                               |   |              | 2,582     |   |   |   | 1,657 |   |
|          Net receivables                                                                                                           |   |              | 110,554   |   |   |   | 96,256 |   |
|                                                                                                                                              |   |              |      |   |   |   |   |   |
|     Deferred      income taxes                                                                                                |   |              | 7,843     |   |   |   | 5,734 |   |
|          Inventories                                                                                                               |   |              | 7,085     |   |   |   | 2,541 |   |
|          Prepaid expenses                                                                                                          |   |              | 5,960     |   |   |   | 5,356 |   |
|          Investment securities                                                                                                          |   |              | 1,563     |   |   |   | --- |   |
|          Other current assets                                                                                                      |   |              | 647       |   |   |   | 717 |   |
|   Total      current assets                                                                                                                  |   |              | 163,556   |   |   |   | 123,678 |   |
|                                                                                                                                              |   |              |      |   |   |   |   |   |
|        Property and equipment in service, net of depreciation                                                                                |   |              | 793,051   |   |   |   | 504,273 |   |
|        Construction in progress                                                                                                              |   |              | 54,098    |   |   |   | 69,409 |   |
|   Net      property and equipment                                                                                                            |   |              | 847,149   |   |   |   | 573,682 |   |
|                                                                                                                                              |   |              |      |   |   |   |   |   |
| Cable      certificates                                                                                                                           |   |              | 191,565   |   |   |   | 191,565 |   |
| Goodwill                                                                                                                                          |   |              | 66,868    |   |   |   | 42,181 |   |
| Wireless      licenses                                                                                                                            |   |              | 25,967    |   |   |   | 25,757 |   |
| Other      intangible assets, net of amortization                                                                                                 |   |              | 22,976    |   |   |   | 11,769 |   |
|         Deferred loan and senior notes costs, net of amortization of $3,900 and      $2,787 at December 31, 2008 and 2007, respectively |   |              | 6,496     |   |   |   | 6,202 |   |
| Other      assets                                                                                                                                 |   |              | 10,724    |   |   |   | 9,399 |   |
| Total other      assets                                                                                                                           |   |              | 324,596   |   |   |   | 286,873 |   |
|  Total      assets                                                                                                                           |   | $                 | 1,335,301 |   |   |   | 984,233 |   |

----

|                                                                                                                                                                                                                                                                                        |   |              |      |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|--------|--------|--------|
| (Amounts in      thousands)                                                                                                                                                                                                                                                                 |   | December      31, |      |
| LIABILITIES,      MINORITY INTEREST AND STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                          |   | 2008              |      |   | 2007   |   |
|                                                                                                                                                                                                                                                                                        |   |              |      |   |   |   |
| Current      liabilities:                                                                                                                                                                                                                                                                   |   |              |      |   |   |   |
| Current      maturities of obligations under long-term debt and capital      leases                                                                                                                                                                                                         |   | $                 | 12,857    |   |   |   | 2,375 |   |
| Accounts      payable                                                                                                                                                                                                                                                                       |   |              | 40,497    |   |   |   | 35,747 |   |
| Accrued      payroll and payroll related obligations                                                                                                                                                                                                                                        |   |              | 22,632    |   |   |   | 16,329 |   |
| Deferred      revenue                                                                                                                                                                                                                                                                       |   |              | 22,095    |   |   |   | 16,600 |   |
| Accrued      liabilities                                                                                                                                                                                                                                                                    |   |              | 11,043    |   |   |   | 7,536 |   |
| Accrued      interest                                                                                                                                                                                                                                                                       |   |              | 10,224    |   |   |   | 8,927 |   |
| Subscriber      deposits                                                                                                                                                                                                                                                                    |   |              | 1,262     |   |   |   | 877 |   |
| Total current      liabilities                                                                                                                                                                                                                                                              |   |              | 120,610   |   |   |   | 88,391 |   |
|                                                                                                                                                                                                                                                                                        |   |              |      |   |   |   |   |   |
| Long-term      debt                                                                                                                                                                                                                                                                         |   |              | 708,406   |   |   |   | 536,115 |   |
| Obligations      under capital leases, excluding current maturities                                                                                                                                                                                                                         |   |              | 94,029    |   |   |   | 2,290 |   |
| Obligation      under capital lease due to related party, excluding current      maturity                                                                                                                                                                                                   |   |              | 1,868     |   |   |   | 469 |   |
| Deferred      income taxes                                                                                                                                                                                                                                                                  |   |              | 86,187    |   |   |   | 84,294 |   |
| Long-term      deferred revenue                                                                                                                                                                                                                                                             |   |              | 49,998    |   |   |   | 845 |   |
| Other      liabilities                                                                                                                                                                                                                                                                      |   |              | 15,288    |   |   |   | 12,396 |   |
| Total      liabilities                                                                                                                                                                                                                                                                      |   |              | 1,076,386 |   |   |   | 724,800 |   |
|                                                                                                                                                                                                                                                                                        |   |              |      |   |   |   |   |   |
| Minority      interest                                                                                                                                                                                                                                                                      |   |              | ---       |   |   |   | 6,478 |   |
|                                                                                                                                                                                                                                                                                        |   |              |      |   |   |   |   |   |
| Commitments      and contingencies                                                                                                                                                                                                                                                          |   |              |      |   |   |   |   |   |
| Stockholders’      equity:                                                                                                                                                                                                                                                            |   |              |      |   |   |   |   |   |
| Common stock      (no par):                                                                                                                                                                                                                                                                 |   |              |      |   |   |   |   |   |
| Class A.      Authorized 100,000 shares; issued 50,062 and 50,437 shares at      December 31, 2008 and 2007, respectively; outstanding 49,593 and 49,425 at      December 31, 2008 and 2007, respectively                                                                              |   |              | 151,262   |   |   |   | 155,980 |   |
| Class B.      Authorized 10,000 shares; issued 3,203 and 3,257 shares at December      31, 2008 and 2007, respectively; outstanding 3,201 and 3,255 at December      31, 2008 and 2007, respectively;  convertible on a      share-per-share basis into Class A common stock |   |              | 2,706     |   |   |   | 2,751 |   |
| Less cost of      471 and 473 Class A and Class B common shares held in treasury at December      31, 2008 and 2007, respectively                                                                                                                                                           |   |              | (2,462    | )      |   |   | (3,448 | ) |
| Paid-in      capital                                                                                                                                                                                                                                                                        |   |              | 27,233    |   |   |   | 20,132 |   |
| Retained      earnings                                                                                                                                                                                                                                                                      |   |              | 80,176    |   |   |   | 77,540 |   |
| Total      stockholders’ equity                                                                                                                                                                                                                                                       |   |              | 258,915   |   |   |   | 252,955 |   |
| Total      liabilities, minority interest and stockholders’ equity                                                                                                                                                                                                                    |   | $                 | 1,335,301 |   |   |   | 984,233 |   |

|   | See      accompanying notes to consolidated financial  statements. |
|--------|--------------------------------------------------------------------|

----

|   | GENERAL      COMMUNICATION, INC. ANDSUBSIDIARIES |
|--------|--------------------------------------------------|

|   | CONSOLIDATED      STATEMENTS OF OPERATIONS |
|--------|--------------------------------------------|

|   | YEARS      ENDED DECEMBER 31, 2008, 2007 AND2006 |
|--------|--------------------------------------------------|

| (Amounts in      thousands, except per share amounts)                                                       |   |   | 2008    |   |  2007 |   | 2006    |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|---------|--------|
| Revenues                                                                                                    |   | $      | 575,442 |   | 520,311    |   | 477,482 |   |
|                                                                                                        |   |   |    |   |       |   |    |   |
| Cost of goods      sold (exclusive of depreciation and amortization shown separately      below)            |   |   | 203,058 |   | 195,799    |   | 169,107 |   |
| Selling,      general and administrative expenses                                                           |   |   | 210,306 |   | 175,752    |   | 158,950 |   |
| Depreciation      and amortization expense                                                                  |   |   | 114,369 |   | 87,615     |   | 82,099  |   |
| Operating      income                                                                                       |   |   | 47,709  |   | 61,145     |   | 67,326  |   |
|                                                                                                        |   |   |    |   |       |   |    |   |
| Other income      (expense):                                                                                |   |   |    |   |       |   |    |   |
| Interest      expense                                                                                       |   |   | (48,303 | )      | (34,407    | )      | (34,413 | )      |
| Interest and      investment income                                                                         |   |   | 576     |   | 544        |   | 1,841   |   |
| Amortization      and write-off of loan fees                                                                |   |   | (2,060  | )      | (1,423     | )      | (964    | )      |
| Minority      interest                                                                                      |   |   | 1,503   |   | 36         |   | 463     |   |
| Other                                                                                                       |   |   | (217    | )      | ---        |   | ---     |   |
| Other      expense, net                                                                                     |   |   | (48,501 | )      | (35,250    | )      | (33,073 | )      |
| Income (loss)      before income tax expense and cumulative effect of a change in accounting      principle |   |   | (792    | )      | 25,895     |   | 34,253  |   |
| Income tax      expense                                                                                     |   |   | 1,077   |   | 12,162     |   | 15,797  |   |
| Income (loss)      before cumulative effect of a change in accounting    principle                          |   |   | (1,869  | )      | 13,733     |   | 18,456  |   |
| Cumulative      effect of a change in accounting principle, net of income tax expense      of $44      |   |   | ---     |   | ---        |   | 64      |   |
| Net income      (loss)                                                                                      |   | $      | (1,869  | )      | 13,733     |   | 18,520  |   |
|                                                                                                        |   |   |    |   |       |   |    |   |
| Basic net      income (loss) per share of Class A and Class B common    stock:                              |   |   |    |   |       |   |    |   |
| Income (loss)      before cumulative effect of a change in accounting    principle                          |   | $      | (0.04   | )      | 0.26       |   | 0.34    |   |
| Cumulative      effect of a change in accounting principle                                                  |   |   | ---     |   | ---        |   | ---     |   |
| Net income      (loss)                                                                                      |   | $      | (0.04   | )      | 0.26       |   | 0.34    |   |
|                                                                                                        |   |   |    |   |       |   |    |   |
| Diluted net      income (loss) per share of Class A and Class B common    stock:                            |   |   |    |   |       |   |    |   |
| Income (loss)      before cumulative effect of a change in accounting    principle                          |   | $      | (0.04   | )      | 0.23       |   | 0.33    |   |
| Cumulative      effect of a change in accounting principle                                                  |   |   | ---     |   | ---        |   | ---     |   |
| Net income      (loss)                                                                                      |   | $      | (0.04   | )      | 0.23       |   | 0.33    |   |

----

|     (Amounts in      thousands)                                                                    |   | Class A      Common Stock |    |   | Class B      Common Stock |   |   | Class A and B      Shares Held in Treasury |   |   | Paid-in      Capital |   |   | Notes      Receivable with Related Parties |   |   | Retained      Earnings |   |   | Total      Stockholders’ Equity |   |
|------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|---------------------------|--------|--------|--------------------------------------------|--------|--------|----------------------|--------|--------|--------------------------------------------|--------|--------|------------------------|--------|--------|---------------------------------------|--------|
| Balances at      January 1, 2006                                                                                       |   | $                         | 178,351 |   |                      |   | 3,247  |                                       |   |   | (1,730               | )      |   |                                       | 16,425 |   |                   |   | (1,722 | )                                     |   |   | 49,854 |   |   |   | 244,425 |   |
| SAB 108      cumulative adjustment, net of income tax expense                                                          |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | 1,104 |   |   |   | 1,104 |   |
| Net      income                                                                                                        |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | 18,520 |   |   |   | 18,520 |   |
| Cumulative      effect adjustments upon implementation of Statement of Financial      Accounting Standard No. 123(R)   |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | (108   | )      |                   |   | ---    |                                  |   |   | --- |   |   |   | (108 | ) |
| Common stock      repurchases                                                                                          |   |                      | ---     |   |                      |   | ---    |                                       |   |   | (3                   | )      |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | (34,672 | ) |   |   | (34,675 | ) |
| Common stock      retirements                                                                                          |   |                      | (32,571 | )      |                      |   | (369   | )                                          |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | 32,940 |   |   |   | --- |   |
| Shares issued      under stock option plan                                                                             |   |                      | 11,690  |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | --- |   |   |   | 11,690 |   |
| Class B      shares converted to Class A                                                                               |   |                      | 32      |   |                      |   | (32    | )                                          |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | --- |   |   |   | --- |   |
| Issuance of      service awards                                                                                        |   |                      | ---     |   |                      |   | ---    |                                       |   |   | 14                   |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | --- |   |   |   | 14 |   |
| Share-based      compensation expense                                                                                  |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | 4,407  |   |                   |   | ---    |                                  |   |   | --- |   |   |   | 4,407 |   |
| Payments      received on notes receivable with related parties issued upon stock option      exercise                 |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | 1,001  |                                  |   |   | --- |   |   |   | 1,001 |   |
| Reclassification      from treasury stock to be held for general corporate purposes to common      stock to be retired |   |                      | ---     |   |                      |   | ---    |                                       |   |   | 283                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | (283 | ) |   |   | --- |   |
| Other                                                                                                                  |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | (83    | )      |                   |   | (17    | )                                     |   |   | --- |   |   |   | (100 | ) |
| Balances at      December 31, 2006                                                                                     |   |                      | 157,502 |   |                      |   | 2,846  |                                       |   |   | (1,436               | )      |   |                                       | 20,641 |   |                   |   | (738   | )                                     |   |   | 67,463 |   |   |   | 246,278 |   |
| Net      income                                                                                                        |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | 13,733 |   |   |   | 13,733 |   |
| Common stock      repurchases                                                                                          |   |                      | ---     |   |                      |   | ---    |                                       |   |   | (2,000               | )      |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | (15,076 | ) |   |   | (17,076 | ) |
| Common stock      retirements                                                                                          |   |                      | (11,420 | )      |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | 11,420 |   |   |   | --- |   |
| Shares issued      under stock option plan                                                                             |   |                      | 3,311   |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | --- |   |   |   | 3,311 |   |
| Issuance of      restricted stock awards                                                                               |   |                      | 6,492   |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | (6,492 | )      |                   |   | ---    |                                  |   |   | --- |   |   |   | --- |   |
| Class B      shares converted to Class A                                                                               |   |                      | 95      |   |                      |   | (95    | )                                          |   |   | ---                  |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | --- |   |   |   | --- |   |
| Issuance of      service awards                                                                                        |   |                      | ---     |   |                      |   | ---    |                                       |   |   | 28                   |   |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | --- |   |   |   | 28 |   |
| Share-based      compensation expense                                                                                  |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | 5,983  |   |                   |   | ---    |                                  |   |   | --- |   |   |   | 5,983 |   |
| Payments      received on notes receivable with related parties issued upon stock option      exercise                 |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                                       | ---    |   |                   |   | 738    |                                  |   |   | --- |   |   |   | 738 |   |
| Other                                                                                                                  |   |                      | ---     |   |                      |   | ---    |                                       |   |   | (40                  | )      |   |                                       | ---    |   |                   |   | ---    |                                  |   |   | --- |   |   |   | (40 | ) |
| Balances at      December 31, 2007                                                                                     |   |                      | 155,980 |   |                      |   | 2,751  |                                       |   |   | (3,448               | )      |   |                                       | 20,132 |   |                   |   | ---    |                                  |   |   | 77,540 |   |   |   | 252,955 |   |

----

|     (Amounts in      thousands)                                                                    |   | Class A      Common Stock |    |   | Class B      Common Stock |   |   | Class A and B      Shares Held in Treasury |   |   | Paid-in      Capital |   |   | Retained      Earnings |   |   | Total      Stockholders’ Equity |   |
|------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|---------|--------|---------------------------|--------|--------|--------------------------------------------|--------|--------|----------------------|--------|--------|------------------------|--------|--------|---------------------------------------|--------|
| Balances at      December 31, 2007                                                                                     |   | $                         | 155,980 |   |                      |   | 2,751  |                                       |   |   | (3,448               | )      |   |                   | 20,132 |   |                                  |   | 77,540 |   |   |   | 252,955 |   |
| Net      loss                                                                                                          |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                   | ---    |   |                                  |   | (1,869 | ) |   |   | (1,869 | ) |
| Common stock      retirements                                                                                          |   |                      | (5,465  | )      |                      |   | ---    |                                       |   |   | ---                  |   |   |                   | ---    |   |                                  |   | 5,465 |   |   |   | --- |   |
| Shares issued      under stock option plan                                                                             |   |                      | 415     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                   | ---    |   |                                  |   | --- |   |   |   | 415 |   |
| Issuance of      restricted stock awards                                                                               |   |                      | 331     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                   | (331   | )      |                                  |   | --- |   |   |   | --- |   |
| Class B      shares converted to Class A                                                                               |   |                      | 45      |   |                      |   | (45    | )                                          |   |   | ---                  |   |   |                   | ---    |   |                                  |   | --- |   |   |   | --- |   |
| Issuance of      service awards                                                                                        |   |                      | ---     |   |                      |   | ---    |                                       |   |   | 28                   |   |   |                   | ---    |   |                                  |   | --- |   |   |   | 28 |   |
| Share-based      compensation expense                                                                                  |   |                      | ---     |   |                      |   | ---    |                                       |   |   | ---                  |   |   |                   | 7,432  |   |                                  |   | --- |   |   |   | 7,432 |   |
| Reclassification      from treasury stock to be held for general corporate purposes to common      stock to be retired |   |                      |    |   |                      |   | ---    |                                       |   |   | 960                  |   |   |                   | ---    |   |                                  |   | (960 | ) |   |   | --- |   |
| Other                                                                                                                  |   |                      | (44     | )      |                      |   | ---    |                                       |   |   | (2                   | )      |   |                   | ---    |   |                                  |   | --- |   |   |   | (46 | ) |
| Balances at      December 31, 2008                                                                                     |   | $                         | 151,262 |   |                      |   | 2,706  |                                       |   |   | (2,462               | )      |   |                   | 27,233 |   |                                  |   | 80,176 |   |   |   | 258,915 |   |

----

| (Amounts in      thousands)                                                                                                                  |   |   | 2008     |   | 2007     |   | 2006     |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|----------|--------|----------|--------|
| Cash flows      from operating activities:                                                                                                   |   |   |     |   |     |   |     |   |
| Net income      (loss)                                                                                                                       |   | $      | (1,869   | )      | 13,733   |   | 18,520   |   |
| Adjustments      to reconcile net income (loss) to net cash provided  by      operating activities, net of effect of acquisitions: |   |   |     |   |     |   |     |   |
| Depreciation      and amortization expense                                                                                                   |   |   | 114,369  |   | 87,615   |   | 82,099   |   |
| Deferred      income tax expense                                                                                                             |   |   | 1,077    |   | 11,649   |   | 15,384   |   |
| Other noncash      income and expense items                                                                                                  |   |   | 7,393    |   | 7,602    |   | 4,924    |   |
| Share-based      compensation expense                                                                                                        |   |   | 7,278    |   | 4,944    |   | 6,365    |   |
| Change in      operating assets and liabilities, net of effect of      acquisitions                                                          |   |   | 47,087   |   | (15,255  | )      | (4,510   | )      |
| Net cash      provided by operating activities                                                                                               |   |   | 175,335  |   | 110,288  |   | 122,782  |   |
|                                                                                                                                         |   |   |     |   |     |   |     |   |
| Cash flows      from investing activities:                                                                                                   |   |   |     |   |     |   |     |   |
| Purchases of      property and equipment, including construction period    interest                                                          |   |   | (221,458 | )      | (153,030 | )      | (95,998  | )      |
| Purchase of      businesses and minority interest, net of cash received                                                                      |   |   | (65,335  | )      | (19,530  | )      | ---      |   |
| Purchase of      software licenses and other assets                                                                                          |   |   | (8,974   | )      | (7,183   | )      | (4,751   | )      |
| Proceeds from      sale of marketable securities                                                                                             |   |   | 4,800    |   | ---      |   | ---      |   |
| Restricted      cash                                                                                                                         |   |   | ---      |   | 4,612    |   | (4,612   | )      |
| Other                                                                                                                                        |   |   | ---      |   | 44       |   | 3,326    |   |
| Net cash used      in investing activities                                                                                                   |   |   | (290,967 | )      | (175,087 | )      | (102,035 | )      |
|                                                                                                                                         |   |   |     |   |     |   |     |   |
| Cash flows      from financing activities:                                                                                                   |   |   |     |   |     |   |     |   |
| Borrowing on      long-term debt                                                                                                             |   |   | 114,486  |   | 10,000   |   | ---      |   |
| Borrowing on      revolving credit facility, net                                                                                             |   |   | 30,000   |   | 50,000   |   | 15,000   |   |
| Payment of      debt                                                                                                                         |   |   | (10,248  | )      | (27,152  | )      | (1,725   | )      |
| Payment of      debt issuance costs                                                                                                          |   |   | (2,118   | )      | (527     | )      | (44      | )      |
| Proceeds from      common stock issuance                                                                                                     |   |   | 415      |   | 3,311    |   | 11,472   |   |
| Purchase of      treasury stock to be held for general corporate purposes                                                                    |   |   | (3)      |   | (2,000   | )      | (3       | )      |
| Purchase of      treasury stock to be retired                                                                                                |   |   | ---      |   | (13,337  | )      | (32,561  | )      |
| Other                                                                                                                                        |   |   | (70      | )      | (69      | )      | 399      |   |
| Net cash      provided by (used in) financing activities                                                                                     |   |   | 132,462  |   | 20,226   |   | (7,462   | )      |
| Net increase      (decrease) in cash and cash equivalents                                                                                    |   |   | 16,830   |   | (44,573  | )      | 13,285   |   |
| Cash and cash      equivalents at beginning of period                                                                                        |   |   | 13,074   |   | 57,647   |   | 44,362   |   |
|                                                                                                                                         |   |   |     |   |     |   |     |   |
| Cash and cash      equivalents at end of period                                                                                              |   | $      | 29,904   |   | 13,074   |   | 57,647   |   |

----

|   | (a) | Business |
|--------|-----|----------|

|   | · | Origination      and termination of traffic in Alaska for certain common      carriers, |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Cable      television services throughoutAlaska, |
|--------|--------|--------------------------------------------------|

|   | · | Competitive      local access services in Anchorage, Fairbanks, Juneau, Wasilla, Eagle      River, Kodiak, Palmer, Kenai, Soldotna, Seward, Chugiak, Sitka, Valdez,      Ketchikan, Nome, and Homer, Alaska as of December 31, 2008 with on-going      expansion into additional Alaskacommunities, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incumbent      local access services in ruralAlaska, |
|--------|--------|------------------------------------------------------|

|   | · | Long-distance      telephone service between Alaska and the remaining United States and      foreign countries, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Sale and      resale of postpaid and sale of prepaid wireless telephone services and      sale of wireless telephone handsets and  accessories, |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Data network      services, |
|--------|--------|-----------------------------|

|   | · | Internet      access services, |
|--------|--------|--------------------------------|

|   | · | Broadband      services, including our SchoolAccess®      offering to rural school districts, our ConnectMD®      offering to rural hospitals and health clinics, and managed video      conferencing, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Managed      services to certain commercialcustomers, |
|--------|--------|-------------------------------------------------------|

|   | · | Sales and      service of dedicated communications systems and related      equipment, |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | Lease,      service arrangements and maintenance of capacity on our fiber optic cable      systems used in the transmission of interstate and intrastate data,      switched message long-distance and Internet services within Alaska and      between Alaska and the remaining United States and foreign countries,      and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Distribution      of white and yellow pages directories to residential and business      customers in certain markets we serve and on-line directory      products. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Principles      of Consolidation |
|--------|-----|----------------------------------|

|   | The      consolidated financial statements include the consolidated accounts of GCI      and its wholly-owned subsidiaries, as well as a variable interest entity      in which we were the primary beneficiary as defined by Financial      Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46R,      “Consolidation of Variable Interest Entities, an interpretation of ARB No.      51” through August 17, 2008.  We purchased the minority interest      of the variable interest entity on August 18, 2008 as further described in      note 1(c).  All significant intercompany transactions between      non-regulated affiliates of our company are      eliminated.  Statement of Financial Accounting Standard ("SFAS")      No. 71, "Accounting for the Effects of Certain Types of Regulation"      requires intercompany revenue and expenses generated between regulated and      non-regulated affiliates of the company not be eliminated on      consolidation.  Intercompany revenue and expenses with      affiliates not subject to SFAS 71 have been  eliminated. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Acquisitions |
|--------|-----|--------------|

|   | Effective      June 1, 2008, we closed on our purchase of 100% of the outstanding stock      of UUI and Unicom, which were subsidiaries of UCI.  UUI,      together with its subsidiary, United-KUC, provides local telephone service      to 60 rural communities in the Bethel, Alaska area.  Unicom      operates DeltaNet, a long-haul broadband microwave network ringing the      Yukon-Kuskokwim Delta.  We view this investment as an      opportunity to expand our Managed Broadband services in rural      Alaska.  The UUI and Unicom acquisition were stock purchases but      we elected to treat them as an asset purchase for income tax purposes,      resulting in goodwill being deductible for tax  purposes. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Effective      July 1, 2008, we closed on our purchase of 100% of the ownership interests      of Alaska Wireless, which provides wireless and Internet services in the      Dutch Harbor, Sand Point, Akutan, and Adak, Alaska areas.  Such      purchase was treated as an asset purchase for income tax      purposes.  We view this investment as an opportunity to expand      our wireless services in the Aleutian Chain region of rural      Alaska.  We consider this business combination to be immaterial      to our consolidated financialstatements. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On August 18,      2008, we exercised our option to acquire the remaining 18.1% of the equity      interest and voting control of Alaska DigiTel for $10.4      million.  Prior to August 18, 2008, our ability to control the      operations of Alaska DigiTel was limited as required by the FCC upon their      approval of our initial acquisition of 81.9% of the noncontrolling equity      interest obtained in January 2007.  Subsequent to the      acquisition of the minority interest, we own 100% of the outstanding      common ownership units and voting control of Alaska      DigiTel.  Such purchase was treated as an asset purchase for      income tax purposes.  We purchased Alaska DigiTel as a way to      participate in the future growth of the Alaska wireless      industry.  We consolidated 100% of Alaska DigiTel's assets and      liabilities at fair value beginning on January 1, 2007, when we determined      that Alaska DigiTel was a variable interest entity of which we were the      primary beneficiary.  Upon our acquisition of the minority      interest in Alaska DigiTel on August 18, 2008, we recorded 18.1% of the      change in fair value between the assets and liabilities on January 1, 2007      and the fair value of the assets and liabilities on August 18,      2008. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On the      closing date of the acquisition of UUI and Unicom, $8.0 million of the      purchase price was deposited in an escrow account to compensate us for any      indemnification claims we may have after the acquisition and was included      in the purchase price.  At this time, we are not aware of any      indemnification claims and expect the portion of the purchase price in the      escrow account to be paid to the seller in the  future. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We have      agreed to make additional payments for UUI and Unicom in each of the years      2009 through 2013 that are contingent on sequential year-over-year revenue      growth for specified customers.  We have agreed to make an      additional payment for Alaska Wireless in 2010 that is contingent on      meeting certain financial conditions.  The amount of the 2009      UUI and Unicom contingent payment is not expected to be significant and we      are unable to reasonably estimate the remaining contingent consideration      amounts that may be paid for either acquisition, but do not believe any      amount paid will be significant. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We recorded      our business acquisitions and the acquisition of the minority interest in      Alaska DigiTel based on the provisions of SFAS No. 141, "Business      Combinations," and accordingly, the purchase price has been allocated      based on the fair values of the assets acquired and liabilities      assumed.  In addition, the acquired companies' results of      operations are included since the effective date of each      acquisition. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The purchase      prices for our 2008 acquisitions, net of cash received of approximately      $1.7 million from UUI and Unicom, are as follows (amounts in      thousands): |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| UUI and      Unicom  |   | $ | 40,575 |   |
|----------------------|--------|---|--------|--------|
| Alaska      Wireless |   | $ | 14,508 |   |
| Alaska      DigiTel  |   | $ | 10,434 |   |

----

|   | We are in the      process of determining the fair value of goodwill and certain tax      liabilities for UUI and Unicom, therefore, the purchase price allocations      for UUI and Unicom have not been finalized at December 31, 2008 and the      goodwill and the tax liabilities associated with UUI and Unicom are      subject to refinement.  The purchase price for all acquisitions      except for UUI and Unicom have been finalized and allocated as of December      31, 2008 as follows (amounts inthousands): |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                            |   |                |   |
|-----------------------------------------------------------------|--------|---------------------|--------|
|                                                            |   | UUI and      Unicom |   |   | Alaska      DigiTel |   |
| Current      assets                                             |   | $                   | 15,008 |   |   |   | 2,220 |   |
| Property and      equipment, including construction in progress |   |                | 59,629 |   |   |   | 6,015 |   |
| Intangible      assets                                          |   |                | 8,175  |   |   |   | 1,468 |   |
| Wireless      licenses                                          |   |                | 100    |   |   |   | 4,396 |   |
| Goodwill                                                        |   |                | 9,102  |   |   |   | 4,534 |   |
| Other      assets                                               |   |                | 3,106  |   |   |   | 1 |   |
| Total assets      acquired                                      |   |                | 95,120 |   |   |   | 18,634 |   |
| Current      liabilities                                        |   |                | 4,916  |   |   |   | 2,588 |   |
| Long-term      debt, including current portion                  |   |                | 43,614 |   |   |   | 5,515 |   |
| Other      long-term liabilities                                |   |                | 4,335  |   |   |   | 97 |   |
| Total      liabilities assumed                                  |   |                | 52,865 |   |   |   | 8,200 |   |
| Net assets      acquired                                        |   | $                   | 42,255 |   |   |   | 10,434 |   |

|   | We modified      the initial preliminary UUI and Unicom purchase price allocation during      the third and fourth quarters of 2008 by increasing current assets      $548,000, decreasing property and equipment $8.5 million, increasing      intangible assets $1.7 million, increasing goodwill $3.1 million, increase      other assets $695,000, increasing current liabilities $464,000, increasing      long-term debt $910,000, and decreasing other long-term liabilities $3.9      million for adjustments due to the refinement of the estimated fair      value. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We modified      the initial preliminary Alaska DigiTel purchase price allocation for the      purchase of the minority interest during the fourth quarter of 2008 by      decreasing property and equipment $202,000, increasing intangible assets      $503,000, decreasing goodwill $88,000, and increasing liabilities $253,000      for adjustments to the fair value of the fixed assets and intangibles due      to refinement of the valuation.  An adjustment to the fair value      of the liabilities was due to refinement of the estimated fair      value. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | All of our      2008 acquisitions resulted in goodwill which is deductible over 15 years      for income tax purposes. |
|--------|------------------------------------------------------------------------------------------------------------------------|

|   | Revenues from      the date of acquisition, net of intercompany revenue, for our acquisitions      of UUI, Unicom and Alaska Wireless are allocated to our Consumer, Network      Access, Managed Broadband, and Regulated Operations      segments.  As a result of the acquisition of UUI and Unicom, we      have a new operating segment for our regulated  activities. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | UUI and      Unicom had outstanding debt of $38.9 million at December 31, 2008 that is      collateralized by substantially all of UUI's and Unicom's      assets.  UUI and Unicom's creditors do not have recourse to      GCI's assets. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The following      unaudited pro forma financial information is presented as if we had      acquired the companies as of the beginning of the periods      presented.  The pro forma results of operations as if the      acquisitions occurred on January 1, 2007 or 2008 for the years ended      December 31 are as follows (amount in  thousands): |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                |   | (unaudited) |    |
|-------------------------------------|--------|-------------|---------|
|                                |   | 2008        |    |   | 2007 |   |
| Pro forma      consolidated revenue |   | $           | 588,691 |   |   |   | 546,728 |   |
| Pro forma net      income (loss)    |   | $           | (2,932  | ) |   |   | 12,773 |   |
|                                |   |        |    |   |   |   |   |   |
| EPS:                                |   |        |    |   |   |   |   |   |
| Basic – pro      forma        |   | $           | (0.06   | ) |   |   | 0.24 |   |
| Diluted – pro      forma      |   | $           | (0.06   | ) |   |   | 0.22 |   |

|   | (d) | Regulatory      Accounting andRegulation |
|--------|-----|------------------------------------------|

|   | We account      for our regulated operations in accordance with the accounting principles      for regulated enterprises prescribed by SFAS No. 71.  This      accounting recognizes the economic effects of rate regulation by recording      cost and a return on investment as such amounts are recovered through      rates authorized by regulatory authorities.  Accordingly, under      SFAS No. 71, plant and equipment is depreciated over lives approved by      regulators and certain costs and obligations are deferred based upon      approvals received from regulators to permit recovery of such amounts in      future years.  Our cost studies and depreciation rates for our      regulated operations are subject to periodic audits that could result in      reductions of revenues.  Based upon the purchase price      allocation described in note 1(c), the effects of regulation for the year      ended December 31, 2008 are not material to the consolidated financial      statements. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) Earnings      per Common Share |
|--------|-----------------------------------------|

|   | We compute      net income (loss) per share of Class A and Class B common stock in      accordance with SFAS No. 128, "Earnings per Share" (“SFAS 128”) using the      two class method.  Under the provisions of SFAS 128, basic net      income (loss) per share is computed by dividing net income (loss)      applicable to common stockholders by the weighted average number of common      shares outstanding during the year.  Diluted net income (loss)      per share is computed by dividing net income (loss) applicable to common      stockholders by the weighted average number of common and dilutive common      equivalent shares outstanding during the period.  The      computation of the dilutive net income (loss) per share of Class A common      stock assumes the conversion of Class B common stock to Class A common      stock, while the dilutive net income (loss) per share of Class B common      stock does not assume the conversion of those  shares. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In accordance      with EITF 03-06, “Participating Securities and the Two Class Method under      FASB No. 128,” the undistributed earnings for each year are allocated      based on the contractual participation rights of Class A and Class B      common shares as if the earnings for the year had been      distributed.  Considering the terms of our Articles of      Incorporation which provides that, if and when dividends are declared on      our common stock in accordance with Alaska corporate law, equivalent      dividends shall be paid with respect to the shares of Class A common stock      and Class B common stock and that both classes of common stock have      identical dividend rights and would share equally in our net assets in the      event of liquidation, we have allocated undistributed earnings (losses) on      a proportionate basis. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | EPS and      common shares used to calculate basic and diluted EPS consist of the      following (amounts in thousands, except per share  amounts): |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|                                    |   | Year      Ended        |   |
|-----------------------------------------|--------|------------------------|--------|
|                                    |   | December 31,      2008 |   |
|                                    |   | Class      A           |   |   | Class      B |   |
| Basic      net loss per share:          |   |                   |   |   |   |   |
| Numerator:                              |   |                   |   |   |   |   |
| Allocation of      undistributed losses |   | $                      | (1,754 | ) |   |   | (115 | ) |
|                                    |   |                   |   |   |   |   |   |   |
| Denominator:                            |   |                   |   |   |   |   |   |   |

----

| Weighted      average common shares outstanding                                                            |   |   | 49,080 |   |   |   | 3,241  |   |
|------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Basic net      loss per share                                                                              |   | $      | (0.04  | )      |   |   | (0.04  | )      |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Diluted      net loss per share:                                                                      |   |   |   |   |   |   |   |   |
| Numerator:                                                                                                 |   |   |   |   |   |   |   |   |
| Allocation of      undistributed losses for basic computation                                         |   | $      | (1,754 | )      |   |   | (115   | )      |
| Reallocation      of undistributed losses as a result of conversion of Class B to Class      A shares |   |   | (115   | )      |   |   | ---    |   |
| Allocation of      undistributed losses                                                                    |   | $      | (1,869 | )      |   |   | (115   | )      |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Denominator:                                                                                               |   |   |   |   |   |   |   |   |
| Number of      shares used in basic computation                                                            |   |   | 49,080 |   |   |   | 3,241  |   |
| Conversion of      Class B to Class A common shares outstanding                                            |   |   | 3,241  |   |   |   | ---    |   |
| Number of      shares used in per share computations                                                       |   |   | 52,321 |   |   |   | 3,241  |   |
| Diluted net      loss per share                                                                       |   | $      | (0.04  | )      |   |   | (0.04  | )      |

|                                                                                                        |   | Years Ended      December 31, |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                                                        |   | 2007                          |   |   | 2006 |   |
|                                                                                                        |   | Class      A                  |   |   | Class      B |   |   | Class      A |   |   | Class      B |   |
| Basic      net income per share:                                                                            |   |                          |   |   |   |   |   |   |   |   |   |   |
| Numerator:                                                                                                  |   |                          |   |   |   |   |   |   |   |   |   |   |
| Allocation of      undistributed earnings before cumulative effect of a change in accounting      principle |   | $                             | 12,884 |   |   |   | 849 |   |   |   | 17,250 |   |   |   | 1,206 |   |
| Allocation of      undistributed earnings from cumulative effect of a change in accounting      principle   |   |                          | ---    |   |   |   | --- |   |   |   | 60 |   |   |   | 4 |   |
| Allocation of      undistributed earnings after cumulative effect of a change in accounting      principle  |   | $                             | 12,884 |   |   |   | 849 |   |   |   | 17,310 |   |   |   | 1,210 |   |
|                                                                                                        |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                                                                                |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding                                                             |   |                          | 49,678 |   |   |   | 3,273 |   |   |   | 50,260 |   |   |   | 3,517 |   |
| Basic net      income per share before cumulative effect of a change in accounting      policy              |   | $                             | 0.26   |   |   |   | 0.26 |   |   |   | 0.34 |   |   |   | 0.34 |   |
| Basic net      income per share from cumulative effect of a change in accounting      policy                |   |                          | ---    |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |
| Basic net      income per share after effect of a change in accounting    policy                            |   | $                             | 0.26   |   |   | $ | 0.26 |   |   | $ | 0.34 |   |   | $ | 0.34 |   |
|                                                                                                        |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      net income per share:                                                                          |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Numerator:                                                                                                  |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allocation of      undistributed earnings for basic computation                                             |   | $                             | 12,884 |   |   | $ | 849 |   |   |   | 17,250 |   |   |   | 1,206 |   |
| Reallocation      of undistributed earnings as a result of conversion of Class B to Class A      shares     |   |                          | 849    |   |   |   | --- |   |   |   | 1,206 |   |   |   | --- |   |

----

| Reallocation      of undistributed earnings due to conversion of Class B to Class A shares      outstanding |   |   | ---    |   |   |   | (96    | )      |   |   | ---    |   |   |   | (44    | )      |
|-------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Allocation of      effect of share based compensation that may be settled in cash or      shares            |   |   | (1,329 | )      |   |   | ---    |   |   |   | ---    |   |   |   | ---    |   |
| Allocation of      undistributed earnings before cumulative effect of a change in accounting      principle |   |   | 12,404 |   |   |   | 753    |   |   |   | 18,456 |   |   |   | 1,162  |   |
| Allocation of      undistributed earnings from cumulative effect of a change in accounting      principle   |   |   | ---    |   |   |   | ---    |   |   |   | 60     |   |   |   | 4      |   |
| Allocation of      undistributed earnings after cumulative effect of a change in accounting      principle  |   | $      | 12,404 |   |   |   | 753    |   |   |   | 18,516 |   |   |   | 1,166  |   |
|                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of      shares used in basic computation                                                             |   |   | 49,678 |   |   |   | 3,273  |   |   |   | 50,260 |   |   |   | 3,517  |   |
| Conversion of      Class B to Class A common shares outstanding                                             |   |   | 3,273  |   |   |   | ---    |   |   |   | 3,517  |   |   |   | ---    |   |
| Effect of      share based compensation that may be settled in cash or    shares                            |   |   | 318    |   |   |   | ---    |   |   |   | ---    |   |   |   | ---    |   |
| Unexercised      stock options, net                                                                         |   |   | 1,288  |   |   |   | ---    |   |   |   | 1,548  |   |   |   | ---    |   |
| Unvested      stock awards                                                                                  |   |   | 24     |   |   |   | ---    |   |   |   | ---    |   |   |   | ---    |   |
| Number of      shares used in per share computations                                                        |   |   | 54,581 |   |   |   | 3,273  |   |   |   | 55,325 |   |   |   | 3,517  |   |
| Diluted net      income per share before cumulative effect of a change in accounting      policy            |   | $      | 0.23   |   |   |   | 0.23   |   |   |   | 0.33   |   |   |   | 0.33   |   |
| Diluted net      income per share from cumulative effect of a change in accounting      policy              |   |   | ---    |   |   |   | ---    |   |   |   | 0.00   |   |   |   | 0.00   |   |
| Diluted net      income per share after effect of a change in accounting    policy                          |   | $      | 0.23   |   |   |   | 0.23   |   |   |   | 0.33   |   |   |   | 0.33   |   |

|                                                                             | 2008  |   | 2007  |   | 2006  |   |
|----------------------------------------------------------------------------------|-------|--------|-------|--------|-------|--------|
| Weighted      average shares associated with outstanding stock options           | 4,238 |   | 1,909 |   | 1,394 |   |
| Effect of      share-based compensation that may be settled in cash or    shares | 289   |   | ---   |   | 99    |   |
|                                                                             | 4,527 |   | 1,909 |   | 1,493 |   |

----

|   | (f) | Common      Stock |
|--------|-----|-------------------|

|                                       |   | Class      A |   |   | Class      B |   |
|--------------------------------------------|--------|--------------|--------|--------|--------------|--------|
| Balances at      January 1, 2006           |   |         | 51,200 |   |         |   | 3,843 |   |
| Shares      retired                        |   |         | (2,770 | )      |         |   | (435 | ) |
| Shares issued      under stock option plan |   |         | 1,706  |   |         |   | --- |   |
| Share awards      issued                   |   |         | 17     |   |         |   | --- |   |
| Class B      shares converted to Class A   |   |         | 38     |   |         |   | (38 | ) |
| Balances at      December 31, 2006         |   |         | 50,191 |   |         |   | 3,370 |   |
|                                       |   |         |   |   |         |   |   |   |
| Shares      retired                        |   |         | (843   | )      |         |   | --- |   |
| Shares issued      under stock option plan |   |         | 477    |   |         |   | --- |   |
| Share awards      issued                   |   |         | 499    |   |         |   | --- |   |
| Class B      shares converted to Class A   |   |         | 113    |   |         |   | (113 | ) |
| Balances at      December 31, 2007         |   |         | 50,437 |   |         |   | 3,257 |   |
|                                       |   |         |   |   |         |   |   |   |
| Shares      retired                        |   |         | (540   | )      |         |   | --- |   |
| Shares issued      under stock option plan |   |         | 71     |   |         |   | --- |   |
| Share awards      issued                   |   |         | 45     |   |         |   | --- |   |
| Class B      shares converted to Class A   |   |         | 54     |   |         |   | (54 | ) |
| Other                                      |   |         | (5     | )      |         |   | --- |   |
| Balances at      December 31, 2008         |   |         | 50,062 |   |         |   | 3,203 |   |

|   | GCI's Board      of Directors has authorized a common stock buyback program for the      repurchase of our Class A and Class B common stock in order to reduce our      outstanding shares of Class A and Class B common stock. The Additional      Incremental Term Loan agreement entered into in May 2008 and described in      note 6 allows for the repurchase of our common stock under our buyback      program when our total debt leverage is below 4.0 times earnings before      depreciation and amortization expense, net interest expense, income taxes,      share-based compensation expense, and non-cash contribution adjustment      (“adjusted EBITDA”). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Under the      buyback program we had made repurchases of $68.9 million through December      31, 2007.  During the year ended December 31, 2008 we      repurchased no shares of our Class A and B common stock. During the years      ended December 31, 2007 and 2006, we repurchased 1,252,000 and 2,858,000      shares of our Class A and B common stock at a cost of $15.1 million and      $34.7 million, respectively.  The cost of the repurchased common      stock is recorded in Retained Earnings on our Consolidated Balance      Sheets.  In 2008 we retired 540,000 shares of our Class A common      stock all of which we repurchased in 2007.  All shares of our      Class A common stock repurchased for retirement have been retired as of      December 31, 2008. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Investment      Securities |
|--------|-----|----------------------------|

|   | We have      investment securities of $1.6 million at December 31, 2008 that are      classified as trading under SFAS No. 115, "Accounting for Certain      Investments in Debt and Equity Securities."  Our investments      consist primarily of money market funds and U.S. government      securities.  Trading securities are recorded at fair value with      unrealized holding gains and losses included in net income      (loss).  In 2008, the change in net unrealized holding      gains/losses in the trading portfolio included in earnings was a net gain      of $43,000. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (h) Redeemable      PreferredStock |
|--------|-----------------------------------------|

|   | We have      1,000,000 shares of preferred stock authorized with no shares issued and      outstanding at December 31 2008, 2007 and2006. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (i)  Treasury      Stock |
|--------|-------------------------------|

|   | We account      for treasury stock purchased for general corporate purposes under the cost      method and include treasury stock as a component of Stockholders’      Equity.  Treasury stock purchased with an intent to retire      (whether or not the retirement is actually accomplished) is charged      entirely to Retained Earnings. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j)  Cash      Equivalents |
|--------|--------------------------------------|

|   | Cash      equivalents consist of overnight sweep investments and certificates of      deposit which have an original maturity of three months or less at the      date acquired and are readily convertible into  cash. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (k) Restricted      Cash |
|--------|-------------------------------|

|   | We had      provided a $4.6 million bank depository account as collateral for a term      loan from a bank to Alaska DigiTel as of December 31, 2006.  The      cash was released from the restriction in January 2007 subsequent to our      initial investment in AlaskaDigiTel. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (l)  Accounts      Receivable and Allowance for Doubtful      Receivables |
|--------|-------------------------------------------------------------------------------------|

|   | Trade      accounts receivable are recorded at the invoiced amount and do not bear      interest. The allowance for doubtful accounts is our best estimate of the      amount of probable credit losses in our existing accounts receivable. We      base our estimates on the aging of our accounts receivable balances,      financial health of specific customers, regional economic data, changes in      our collections process, regulatory requirements, and our customers’      compliance with USAC rules. We review our allowance for doubtful accounts      methodology at least annually. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Depending      upon the type of account receivable our allowance is calculated using a      pooled basis with an allowance for all accounts greater than 120 days past      due, a specific identification method, or a combination of the two      methods. When a specific identification method is used past due balances      over 90 days old and balances less than 90 days old but potentially      uncollectible due to bankruptcy or other issues are reviewed individually      for collectability. Account balances are charged off against the allowance      when we feel it is probable the receivable will not be recovered. We do      not have any off-balance-sheet credit exposure related to our      customers. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (m) Inventories |
|--------|-----------------|

|   | Wireless      handset inventories are stated at the lower of cost or market (net      realizable value). Cost is determined using the average cost method.      Handset costs in excess of the revenues generated from handset sales, or      handset subsidies, are expensed at the time of sale. We do not recognize      the expected handset subsidies prior to the time of sale because the      promotional discount decision is made at the point of sale and/or because      we expect to recover the handset subsidies through service      revenue. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Inventories      of other merchandise for resale and parts are stated at the lower of cost      or market. Cost is determined using the average cost    method. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |   | (n) Property      and Equipment |
|--|--------|--------------------------------------|

|   | Property and      equipment is stated at cost. Construction costs of 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 at inception of the lease. Construction in progress represents      distribution equipment and systems and support equipment and systems not      placed in service on December 31, 2008 that management intends to place in      service during 2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Depreciation      is computed using the straight-line method based upon the shorter of the      estimated useful lives of the assets or the lease term, if applicable, in      the following ranges: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Asset      Category                                      | Asset      Lives |
|----------------------------------------------------------|------------------|
| Telephony      distribution equipment                    | 12      years    |
| Fiber optic      cable systems                           | 12-30      years |
| Cable      television distribution equipment and systems | 10      years    |
| Support      equipment and systems                       | 3-5      years   |
| Transportation      equipment                            | 3      years     |
| Property and      equipment under capital leases         | 12-20      years |
| Buildings                                                | 20      years    |

|   | Amortization      of property and equipment under capital leases is included in Depreciation      and Amortization Expense on the Consolidated Statements of      Operations. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Repairs and      maintenance are charged to expense as incurred. Expenditures for major      renewals and betterments are capitalized. Accumulated depreciation is      removed and gains or losses are recognized at the time of retirements,      sales or other dispositions of property and  equipment. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (o)Long-lived      Assets to be Disposedof |
|--------|--------------------------------------------|

|   | Long-lived      assets to be disposed of, including those of discontinued operations, if      any, are measured at the lower of carrying amount or fair value less cost      to sell, if applicable. We classify a long-lived asset to be disposed of      other than by sale as held and used until it is disposed of. We classify a      long-lived asset to be sold as held for sale in the period in which the      criteria established by SFAS No. 144, “Accounting for the Impairment or      Disposal of Long-lived Assets” are met. We do not depreciate or amortize      long-lived assets to be sold. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A loss is      recognized for any initial or subsequent write-down to fair value less      cost to sell. A gain is recognized for any subsequent increase in fair      value less cost to sell, but not in excess of the cumulative loss      previously recognized (for a write-down to fair value less cost to sell).      The loss or gain adjusts only the carrying amount of a long-lived asset,      whether classified as held for sale individually or as part of a disposal      group. A gain or loss not previously recognized that results from the sale      of a long-lived asset (disposal group) is recognized at the date of      sale. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (p)Intangible      Assets      and Goodwill |
|--------|---------------------------------------------|

|   | Goodwill,      cable certificates (certificates of convenience and public necessity) and      wireless licenses are not amortized. Cable certificates represent certain      perpetual operating rights to provide cable services. Wireless licenses      represent the right to utilize certain radio frequency spectrum to provide      wireless communications services.  Goodwill represents the      excess of cost over fair value of net assets acquired in connection with a      business acquisition. Goodwill is not allocated to our segments as our      Chief Operating Decision Maker does not review a balance sheet by segment      to make decisions about resource allocation or evaluate segment      performance. Goodwill is allocated to all reporting segments for the sole      purpose of the annual impairmenttest. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | All other      amortizable intangible assets are being amortized over 1 to 20 year      periods using the straight-linemethod. |
|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | (q) Impairment      of Intangibles, Goodwill, and Long-lived      Assets |
|--------|--------------------------------------------------------------------------|

|   | Cable      certificate assets and wireless licenses are tested annually for      impairment, and are tested for impairment more frequently if events and      circumstances indicate that the asset might be impaired. The impairment      test consists of a comparison of the fair value of the asset with its      carrying amount. If the carrying amount of the assets exceeds its fair      value, an impairment loss is recognized in an amount equal to that excess.      After an impairment loss is recognized, the adjusted carrying amount of      the asset becomes its new accounting basis. Impairment testing of our      cable certificate assets and wireless licenses as of December 31, 2008 and      2007 used a direct value method. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Our goodwill      assets are tested annually for impairment, and are tested for impairment      more frequently if events and circumstances indicate that the assets might      be impaired. An impairment loss is recognized to the extent that the      carrying amount exceeds the asset’s fair value. This determination is made      at the reporting unit level and consists of two steps. First, we determine      the fair value of a reporting unit and compare it to its carrying amount.      Second, if the carrying amount of a reporting unit exceeds its fair value,      an impairment loss is recognized for any excess of the carrying amount of      the reporting unit’s goodwill asset over the implied fair value of that      asset. The implied fair value of goodwill is determined by allocating the      fair value of the reporting unit in a manner similar to a purchase price      allocation, in accordance with SFAS No. 141, “Business      Combinations.” |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Long-lived      assets, such as property, plant, and equipment, and purchased intangibles      subject to amortization, are reviewed for impairment whenever events or      changes in circumstances indicate that the carrying amount of an asset      group may not be recoverable. Recoverability of an asset group to be held      and used is measured by a comparison of the carrying amount of an asset      group to estimated undiscounted future cash flows expected to be generated      by the asset group. If the carrying amount of an asset group exceeds its      estimated undiscounted future cash flows, an impairment charge is      recognized by the amount by which the carrying amount of the asset group      exceeds the fair value of the assetgroup. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For the      period from January 1, 2008 to December 31, 2008, the U.S. financial      markets have been impacted by continued deterioration in economic      conditions. Should economic conditions in the State of Alaska and other      indicators deteriorate such that they impact our ability to achieve levels      of forecasted operating results and cash flows, should our stock price and      market capitalization decline below our book value for a sustained period      of time, or should other events occur indicating the carrying value of      goodwill and intangible assets might be impaired, we would test our      intangible assets for impairment and may recognize an impairment loss to      the extent that the carrying amount exceeds such asset’s fair value.       Any      future impairment charges could have a material adverse effect on our      results of operations. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (r) Amortization      and Write-off of LoanFees |
|--------|-------------------------------------------------|

|   | Debt issuance      costs are deferred and amortized using the effective interest method. If a      refinancing or amendment of a debt instrument is a substantial      modification, all or a portion of the applicable debt issuance costs are      written off.  If a debt instrument is repaid prior to the      maturity date we will write-off a proportional amount of debt issuance      costs. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (s)Other      Assets |
|--------|----------------------|

|   | Other Assets      primarily include long-term deposits, prepayments, and non-trade accounts      receivable. |
|--------|--------------------------------------------------------------------------------------------------------------|

|   | (t) Asset      RetirementObligations |
|--------|-------------------------------------------|

|   | We record the      fair value of a liability for an asset retirement obligation in the period      in which it is incurred in Other Liabilities on the Consolidated Balance      Sheets. Additionally, a conditional asset retirement obligation is      recognized as a liability if the fair value of the liability can be      reasonably estimated. When the liability is initially recorded, we      capitalize a cost by increasing the carrying amount of the related      long-lived asset. Over time, the liability is accreted to its present      value each period, and the capitalized cost is depreciated over the useful      life of the related asset. Upon settlement of the liability, we either      settle the obligation for its recorded amount or incur a gain or loss upon      settlement. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The majority      of our asset retirement obligation is the estimated cost to remove      telephony distribution equipment and support equipment from leased      property. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Following is      a reconciliation of the beginning and ending aggregate carrying amount of      our liability for asset retirement obligation (amounts in      thousands): |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Balance at      December 31, 2006                                                       |   | $      | 3,408 |   |
|-----------------------------------------------------------------------------------------|--------|--------|-------|--------|
| Liability      incurred                                                                 |   |   | 260   |   |
| Additions      upon consolidation of Alaska DigiTel                                     |   |   | 365   |   |
| Accretion      expense                                                                  |   |   | 144   |   |
| Liability      settled                                                                  |   |   | (4    | )      |
| Balance at      December 31, 2007                                                       |   |   | 4,173 |   |
| Liability      incurred                                                                 |   |   | 1,408 |   |
| Additions      upon acquisition of UUI, Unicom, Alaska Wireless and Alaska      DigiTel |   |   | 803   |   |
| Accretion      expense                                                                  |   |   | 396   |   |
| Liability      settled                                                                  |   |   | (601  | )      |
| Balance at      December 31, 2008                                                       |   | $      | 6,179 |   |

|   | During the      years ended December 31, 2008 and 2007 we recorded additional capitalized      costs of $1.4 million and $260,000, respectively, in Property and      Equipment in Service, Net ofDepreciation. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (u) | Derivatives |
|--------|-----|-------------|

|   | We enter into      derivative contracts to manage exposure to variability in cash flows from      floating-rate financial instruments, particularly on our long-term debt      instruments and credit facilities.  We do not apply hedge      accounting to our derivative instruments and therefore treat these      instruments as “economic hedges.”   Consistent with the      guidance in SFAS No. 133, “Accounting for Derivative Instruments and      Hedging Activities,” derivative instruments are accounted for at fair      value as either assets or liabilities on the balance      sheet.  Changes in the fair value of derivatives are recognized      in earnings each reportingperiod. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Derivative      financial instruments are subject to credit risk and market      risk.  Credit risk is the failure of the counterparty to perform      under the terms of the derivative contract.  We minimize the      credit risk in derivative instruments by entering into transactions with      high-quality counterparties. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Market risk      is the adverse effect on the value of a derivative instrument that results      from a change in interest rates or other market variables.  The      market risk associated with interest-rate contracts is managed by      establishing and monitoring parameters that limit the types and degree of      market risk that may be undertaken. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In the third      quarter of 2008, we entered into two interest rate caps with a combined      notional value of $180.0 million that mature on July 1,      2010.  The initial cost of the caps was      $928,000.  These derivative instruments are being used to manage      the interest rate risk on our Senior Credit Facility, which is indexed to      the London Interbank Offered Rate ("LIBOR").  In prior reporting      periods, we did not own any derivative  instruments. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The following      is a summary of the derivative contracts outstanding in the balance sheet      at December 31, 2008 (dollar amounts in  thousands): |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    | Number of      Contracts |   | Notional      Value |    | Balance Sheet      Location |              | Fair      Value |   |
|-------------------------|--------------------------|--------|---------------------|---------|-----------------------------|-------------------|-----------------|--------|
| Interest rate      caps | 2                        |   | $                   | 180,000 |                        | Other      Assets |            | $      | 7 |   |

|   | During the      year ended December 31, 2008, a loss of $921,000 relating to the fair      value change on derivative instruments was reported in interest      expense. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (v)Revenue      Recognition |
|--------|-----------------------------|

|   | All revenues      are recognized when the earnings process is complete in accordance with      SEC Staff Accounting Bulletins (“SAB”) No. 104, “Revenue Recognition” as      follows: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revenues      generated from long-distance service usage and plan fees, Internet service      excess usage, and managed services are recognized when the services are      provided, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We recognize      unbilled revenues when the service is provided based upon minutes of use      processed, and/or established rates, net of credits and      adjustments, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Cable      television service package fees, local access and Internet service plan      fees, and private line telecommunication revenues are billed in advance,      recorded as Deferred Revenue on the balance sheet, and are recognized as      the associated service is provided, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Certain of      our wireless services offerings have been determined to be revenue      arrangements with multiple deliverables. Revenues are recognized as each      element is earned based on objective evidence regarding the relative fair      value of each element and when there are no undelivered elements that are      essential to the functionality of the delivered elements. Revenues      generated from wireless service usage and plan fees are recognized when      the services are provided. Revenues generated from the sale of wireless      handsets and accessories are recognized when title to the handset and      accessories passes to the customer. As the non-refundable, up-front      activation fee charged to the customer does not meet the criteria as a      separate unit of accounting, we allocate the additional arrangement      consideration received from the activation fee to the handset (the      delivered item) to the extent that the aggregate handset and activation      fee proceeds do not exceed the fair value of the handset. Any activation      fees not allocated to the handset would be deferred upon activation and      recognized as service revenue on a straight-line basis over the expected      customer relationship period, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|               | ·       | The majority      of our equipment sale transactions involve the sale of communications      equipment with no other services involved. Such equipment is subject to      standard manufacturer warranties and we do not manufacture any of the      equipment we sell. In such instances the customer takes title to the      equipment generally upon delivery. We recognize revenue for such      transactions when title passes to the customer and the revenue is earned      and realizable pursuant to the provisions of SAB 104. On certain occasions      we enter into agreements to sell and satisfactorily install or integrate      telecommunications equipment for a fixed fee. Customers may have refund      rights if the installed equipment does not meet certain performance      criteria. We defer revenue recognition until we have received customer      acceptance per the contract or agreement, and all other required revenue      recognition elements have been achieved. Revenues from contracts with      multiple element arrangements, such as those including installation and      integration services, are recognized as each element is earned based on      objective evidence regarding the relative fair value of each element and      when there are no undelivered elements that are essential to the      functionality of the deliveredelements, |
|--------------------------------------------------|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Technical      services revenues are derived primarily from maintenance contracts on      equipment and are recognized on a prorated basis over the term of the      contracts, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revenues from      white and yellow page directories are recognized ratably during the period      following publication, which typically begins with distribution and is      complete in the month prior to publication of the next      directory, |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We account      for fiber capacity IRU agreements as an operating lease or service      arrangement and we defer the revenue and recognize it ratably over the      life of the IRU or as services arerendered, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Access      revenue is recognized when earned.  We participate in access      revenue pools with other telephone companies.  Such pools are      funded by toll revenue and/or access charges regulated by the RCA within      the intrastate jurisdiction and the FCC within the interstate      jurisdiction. Much of the interstate access revenue is initially recorded      based on estimates. These estimates are derived from interim financial      information, available separation studies and the most recent information      available about achieved rates of return. These estimates are subject to      adjustment in future accounting periods as additional information becomes      available. To the extent that a dispute arises over revenue settlements,      our policy is to defer revenue collected until the dispute is      resolved, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | As an      ETC, we receive subsidies from the USF to support the provision of      local access service in high-cost areas.  We accrue estimated      program revenue quarterly based on current line counts, the most current      rates paid to us, our assessment of the impact of current FCC regulations,      and our assessment of the potential outcome of FCC      proceedings.  Our estimated accrued revenue is subject to our      judgment regarding the outcome of many variables and is subject to upward      or downward adjustment in subsequent periods.  Our ability to      collect our accrued USF subsidies is contingent upon continuation of the      USF program and upon our eligibility to participate in that program, which      is subject to change by future regulatory, legislative or judicial      actions.  We adjust revenue and the account receivable in the      period the FCC makes a program change or we assess the likelihood that      such a change has increased or decreased revenue.  The payment      from the USF is generally received approximately nine months subsequent to      the services being performed.  At December 31, 2008 we have $8.7      million in accounts receivable related to the USF high-cost area      program, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We receive      refunds from time to time from Incumbent      Local Exchange Carriers (“ILECs”), with      which we do business in respect of their earnings that exceed regulatory      requirements. Telephone companies that are rate regulated by the FCC using      the rate of return method are required by the FCC to refund earnings from      interstate access charges assessed to long-distance carriers when their      earnings exceed their authorized rate of return. Such refunds are computed      based on the regulated carrier’s earnings in several access categories.      Uncertainties exist with respect to the amount of their earnings, the      refunds (if any), their timing, and their realization. We account for such      refundable amounts as gain contingencies, and, accordingly, do not      recognize them until realization is a certainty upon receipt,      and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other      revenues are recognized when the service is  provided. |
|--------|--------|-------------------------------------------------------------------|

|   | We recognized      $2.8 million of wireless revenue in July 2008 from USAC for interstate      common line support.  Due to the uncertainty in our ability to      retroactively claim reimbursement under the program, we accounted for this      payment as a gain contingency and, accordingly, recognized revenue only      upon receipt of payment when realization was  certain. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (w)Payments      Received fromSuppliers |
|--------|-----------------------------------------|

|   | Our Consumer      and Commercial segments occasionally receive reimbursements for video      services costs to promote suppliers’ services, called cooperative      advertising arrangements. The supplier payment is classified as a      reduction of selling, general and administrative expenses if it reimburses      specific, incremental and identifiable costs incurred to resell the      suppliers’ services. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Occasionally      our Consumer and Commercial segments enter into a binding arrangement with      a supplier in which we receive a rebate dependent upon us meeting a      specified goal. We recognize the rebate as a reduction of Cost of Goods      Sold systematically as we make progress toward the specified goal,      provided the amounts are probable and reasonably estimable. If earning the      rebate is not probable and reasonably estimable, it is recognized only      when the goal is met. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (x)Advertising      Expense |
|--------|-----------------------------|

|   | We expense      advertising costs in the year during which the first advertisement      appears. Advertising expenses were $5.6 million, $5.6 million and $3.5      million for the years ended December 31, 2008, 2007 and 2006,      respectively. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (y)Leases |
|--------|-----------|

|   | We account      for capital and operating leases as lessee as required by SFAS No. 13,      “Accounting for Leases” and in subsequently issued amendments and      interpretations of SFAS No. 13. Scheduled operating lease rent increases      are amortized over the lease term on a straight-line basis. Rent holidays      are recognized on a straight-line basis over the operating lease term      (including any rent holidayperiod). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Leasehold      improvements are amortized over the shorter of their economic lives or the      lease term. We may amortize a leasehold improvement over a term that      includes assumption of a lease renewal if the renewal is reasonably      assured. Leasehold improvements acquired in a business combination are      amortized over the shorter of the useful life of the assets or a term that      includes required lease periods and renewals that are deemed to be      reasonably assured at the date of acquisition. Leasehold improvements that      are placed in service significantly after and are not contemplated at or      near the beginning of the lease term are amortized over the shorter of the      useful life of the assets or a term that includes required lease periods      and renewals that are deemed to be reasonably assured at the date the      leasehold improvements are purchased. Leasehold improvements made by us      and funded by landlord incentives or allowances under an operating lease      are recorded as deferred rent and amortized as reductions to lease expense      over the lease term. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (z)Interest      Expense |
|--------|--------------------------|

|   | Material      interest costs incurred during the construction period of non-software      capital projects are capitalized. Interest costs incurred during the      development period of a software capital project are capitalized. Interest      is capitalized in the period commencing with the first expenditure for a      qualifying capital project and ending when the capital project is      substantially complete and ready for its intended use. We capitalized      interest cost of $4.2 million, $3.3 million and $820,000 during the years      ended December 31, 2008, 2007 and 2006,  respectively. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (aa)Income      Taxes |
|--------|-----------------------|

|   | Income taxes      are accounted for using the asset and liability method. Deferred tax      assets and liabilities are recognized for their 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. Deferred      tax assets recognized are reduced by a valuation allowance to the extent      that the benefits are more likely to be realized than  not. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We file      federal income tax returns in the U.S. and in various state      jurisdictions.  We are no longer subject to U.S. or state tax      examinations by tax authorities for years before 2005 except      that  certain U.S. federal income tax returns for years after      1997 are not closed by relevant statutes of limitations due to unused net      operating losses reported on those income tax  returns. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We recognize      accrued interest on unrecognized tax benefits in interest expense and      penalties in selling, general and administrative expenses.  We      did not have any unrecognized tax benefits as of December 31, 2008, 2007      and 2006, and, accordingly, we did not recognize any interest      expense.  Additionally, we recorded $0 in penalties during the      years ended December 31, 2008, 2007 and 2006,  respectively. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ab)Share-based      PaymentArrangements |
|--------|------------------------------------------|

|   | We apply the      provisions SFAS No. 123(R), “Shared-Based Payment,” in the measurement and      recognition of compensation expense for all share-based payment awards to      employees and directors based on estimated fair values. We currently use      the Black-Scholes-Merton option-pricing model to value stock options      granted to employees. We use these values to recognize stock compensation      expense for stock options in accordance with SFAS No.      123(R).  Among other things, SFAS 123(R) requires that      compensation expense be recognized in the financial statements for      share-based awards based on the grant date fair value of those awards.      Additionally, share-based compensation expense includes an estimate for      pre-vesting forfeitures and is recognized over the requisite service      periods of the awards on a straight-line basis, which is generally      commensurate with the vesting term. See note 9 for information on the      assumptions we used to calculate the fair value of share-based      compensation. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Additionally,      SFAS 123(R) requires the benefits associated with tax deductions in excess      of recognized compensation cost to be reported as a financing cash flow      rather than as an operating cashflow. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ac) | Stock      Options and Stock Warrants Issued for Non-employee      Services |
|--------|------|-----------------------------------------------------------------------------|

|   | Stock options      and warrants issued in exchange for non-employee services are accounted      for pursuant to the provisions of SFAS 123(R), Emerging Issues Task Force      ("EITF") 96-3 and EITF 96-18 based upon the fair value of the      consideration or services received or the fair value of the equity      instruments issued using the Black-Scholes-Merton method, whichever is      more reliably measurable. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The fair      value determined using these principles is charged to operating expense      over the shorter of the term for which non-employee services are provided,      if stated, or the stock option or warrant vesting  period. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ad) | Use      of Estimates |
|--------|------|-----------------------|

|   | The      preparation of financial statements in conformity with GAAP requires us to      make estimates and assumptions that affect the reported amounts of assets      and liabilities and disclosure of contingent assets and liabilities at the      date of the financial statements and the reported amounts of revenues and      expenses during the reporting period. Significant items subject to      estimates and assumptions include the allowance for doubtful receivables,      unbilled revenues, accrual of the USF high-cost area program subsidy,      share-based compensation, reserve for future customer credits, valuation      allowances for deferred income tax assets, depreciable and amortizable      lives of assets, the carrying value of long-lived assets including      goodwill, cable certificates and wireless licenses, purchase price      allocations, the accrual of Cost of Goods Sold, and the accrual of      contingencies and litigation. Actual results could differ from those      estimates. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ae) | Concentrations      of Credit Risk |
|--------|------|------------------------------------|

|   | Financial      instruments that potentially subject us to concentrations of credit risk      are primarily cash and cash equivalents and accounts receivable. Excess      cash is invested in high quality short-term liquid money instruments      issued by highly rated financial institutions. At December 31, 2008 and      2007, substantially all of our cash and cash equivalents were invested in      short-term liquid money instruments at two highly rated financial      institutions. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We have one      major customer, (see note 10).  Our remaining customers are      located primarily throughout Alaska. Because of this geographic      concentration, our growth and operations depend upon economic conditions      in Alaska. The economy of Alaska is dependent upon the natural resources      industries, and in particular oil production, as well as tourism,      government, and United States military spending. Any deterioration in      these markets could have an adverse impact on us.  Though      limited to one geographical area and except for our major customer, the      concentration of credit risk with respect to our receivables is minimized      due to the large number of customers, individually small balances, and      short payment terms. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (af) | Software      Capitalization Policy |
|--------|------|-------------------------------------|

|   | Internally      used software, whether purchased or developed, is capitalized and      amortized using the straight-line method over an estimated useful life of      five years. We capitalize certain costs associated with internally      developed software such as payroll costs of employees devoting time to the      projects and external direct costs for materials and services. Costs      associated with internally developed software to be used internally are      expensed until the point the project has reached the development stage.      Subsequent additions, modifications or upgrades to internal-use software      are capitalized only to the extent that they allow the software to perform      a task it previously did not perform. Software maintenance and training      costs are expensed in the period in which they are incurred. The      capitalization of software requires judgment in determining when a project      has reached the developmentstage. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ag) | Guarantees |
|--------|------|------------|

|   | Certain of      our customers have guaranteed levels of service. We accrue for any      obligations under these guarantees as they become probable and      estimable. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ah) | Classification      of Taxes Collected fromCustomers |
|--------|------|------------------------------------------------------|

|   | We report      sales, use, excise, and value added taxes assessed by a governmental      authority that is directly imposed on a revenue-producing transaction      between us and a customer on a net basis in our statements of      operations.  We report a certain surcharge on a gross basis in      our statement of operations of $4.1 million, $4.2 million and $4.6 million      for the years ended December 31, 2008, 2007 and 2006,      respectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ai) | Changes      in Accounting Policy |
|--------|------|-----------------------------------|

|   | Effective      January 1, 2008, we prospectively changed our accounting policy for      recording depreciation on our property and equipment placed in service.      For assets placed in service on or after January 1, 2008, we are using a      mid-month convention to recognize depreciation expense. Previous to this      change we used the half-year convention to recognize depreciation expense      in the year an asset was placed in service, regardless of the month the      property and equipment was placed in service. We believe the mid-month      convention is preferable because it results in more precise recognition of      depreciation expense over the estimated useful life of the asset. No      retroactive adjustment has been made.  The following table sets      forth the impact of this accounting change on depreciation and      amortization expense, operating income and net loss for the year ended      December 31, 2008 (amounts in thousands, except per share      amounts): |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year Ended      December 31,               |   | 2008   |   |
|--------------------------------------------|--------|--------|--------|
| Depreciation      and amortization expense |   | $      | (521   | ) |
| Operating      income                      |   |   | 521    |   |
| Net      loss                              |   |   | 214    |   |
| Basic      EPS                             |   |   | 0.00   |   |
| Diluted      EPS                           |   |   | 0.00   |   |

|   | In December      2007, the FASB issued SFAS No. 141(R), "Business Combinations" which      requires the acquiring entity in a business combination to record all      assets acquired and liabilities assumed at their respective      acquisition-date fair values, changes the recognition of assets acquired      and liabilities assumed arising from contingencies, changes the      recognition and measurement of contingent consideration, and requires the      expensing of acquisition-related costs as incurred.  SFAS 141(R)      also requires additional disclosure of information surrounding a business      combination, such that users of the entity's financial statements can      fully understand the nature and financial impact of the business      combination.  We will implement SFAS No. 141(R) on January 1,      2009 and we will apply it to any business combinations after the effective      date. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In December      2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in      Consolidated Financial Statements" which establishes accounting and      reporting standards for ownership interests in subsidiaries held by      parties other than the parent, the amount of consolidated net income      attributable to the parent and to the noncontrolling interest, changes in      a parent's ownership interest and the valuation of retained noncontrolling      equity investments when a subsidiary is deconsolidated.  SFAS      No. 160 also established reporting requirements that provide sufficient      disclosures that clearly identify and distinguish between the interests of      the parent and the interests of the noncontrolling owner.  We      will implement SFAS No. 160 on January 1, 2009.  We do not      expect the adoption of this standard to have a material impact on our      statement of operations, financial position or cash  flows. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | In March      2008, the FASB issued SFAS No. 161, "Disclosures about Derivative      Instruments and Hedging Activities." This statement requires companies to      provide enhanced disclosures about (a) how and why they use derivative      instruments, (b) how derivative instruments and related hedged items are      accounted for under SFAS No. 133 and its related interpretations, and (c)      how derivative instruments and related hedged items affect a company’s      financial position, financial performance, and cash flows.  We      will implement SFAS No. 161 on January 1, 2009.  We do not      expect the adoption of this standard to have a material impact on our      statement of operations, financial position or cash  flows. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In April      2008, FASB issued FSP No. 142-3, “Determination of the Useful Life of      Intangible Assets”, which amends the factors that must be considered in      developing renewal or extension assumptions used to determine the useful      life over which to amortize the cost of a recognized intangible asset      under SFAS 142, “Goodwill and Other Intangible Assets”. FSP 142-3 requires      an entity to consider its own assumptions about renewal or extension of      the term of the arrangement, consistent with its expected use of the      asset. FSP 142-3 also requires the disclosure of the weighted-average      period prior to the next renewal or extension for each major intangible      asset class, the accounting policy for the treatment of costs incurred to      renew or extend the term of recognized intangible assets and for      intangible assets renewed or extended during the period, if renewal or      extension costs are capitalized, the costs incurred to renew or extend the      asset and the weighted-average period prior to the next renewal or      extension for each major intangible asset class. FSP 142-3 is effective      for financial statements for fiscal years beginning after December 15,      2008. The adoption of FSP 142-3 is not expected to have a material impact      on our statement of operations, financial position or cash      flows. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On January 1,      2008, we partially adopted SFAS No. 157 “Fair Value Measurements,” which      did not have a material impact on our consolidated financial statements.      We partially adopted SFAS No. 157 due to the issuance of FSP FASB 157-2,      “Effective Date of FASB Statement No. 157.”  SFAS No. 157      defines fair value, establishes a common framework for measuring fair      value under U.S. GAAP, and expands disclosures about fair value      measurements for assets and liabilities. SFAS No. 157 does not require      additional assets or liabilities to be accounted for at fair value beyond      that already required under other U.S. GAAP accounting standards. FSP No.      157-2 deferred the effective date of SFAS No. 157 for all nonfinancial      assets and nonfinancial liabilities that are not recognized or disclosed      at fair value in the financial statements on a recurring basis (at least      annually). Included in the scope of FSP No. 157-2 are nonfinancial assets      and liabilities acquired in business combinations and impaired assets. The      effective date for nonfinancial assets and nonfinancial liabilities has      been delayed by one year to fiscal years beginning after November 15,      2008, and interim periods within those fiscal years. We continue to assess      the deferred portion of SFAS No.157. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In June 2008,      the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments      Granted in Share-Based Payment Transactions Are Participating Securities.”      FSP EITF 03-6-1 requires that unvested share-based payment awards      containing nonforfeitable rights to dividends or dividend equivalents      (whether paid or unpaid) be considered participating securities and      included in the computation of EPS pursuant to the two-class method of      SFAS No. 128.  We will implement FSP EITF 03-6-1 on January 1,      2009.  All prior-period EPS data presented shall be adjusted      retrospectively to conform to this FSP. This FSP is not anticipated to      have a material impact on our EPS attributable to common      stockholders. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In October      2008, the FASB issued FSP 157-3, “Determining the Fair Value of a      Financial Asset When the Market for That Asset Is Not      Active.”  FSP 157-3 clarifies the application of SFAS 157 in a      market that is not active and addresses application issues such as the use      of internal assumptions when relevant observable data does not exist, the      use of observable market information when the market is not active and the      use of market quotes when assessing the relevance of observable and      unobservable data. FSP 157-3 is effective for all periods presented in      accordance with SFAS No. 157. The guidance in FSP 157-3 is effective      immediately and did not have an impact on the Company upon      adoption.  See note 11 for information and related disclosures      regarding the Company’s fair valuemeasurements. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (ak) | SAB      No. 108 |
|--------|------|------------------|

|   | SAB No. 108      “Considering the Effects of Prior Year Misstatements when Quantifying      Misstatements in Current Year Financial Statements” requires a dual      approach for quantifying misstatements using both a method that quantifies      a misstatement based on the amount of misstatement originating in the      current year statement of operations, as well as a method that quantifies      a misstatement based on the effects of correcting the misstatement      existing in the balance sheet. Prior to the adoption of SAB No. 108, we      quantified any misstatements in our consolidated financial statements      using the income statement method in addition to evaluating qualitative      characteristics.  As this method focuses solely on the statement      of operations, this can lead to the accumulation of misstatements in the      balance sheet that may become material if recorded in a particular      period. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Prior to      January 1, 2006, only the interest costs incurred during the construction      period of significant capital projects, such as construction of an      undersea fiber optic cable system, were capitalized.  Beginning      January 1, 2006, we modified our interest capitalization policy resulting      in the capitalization of material interest costs incurred during the      construction period of non-software capital projects and the      capitalization of interest costs incurred during the development period of      a software capital project. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | These      misstatements accumulated over several years and were immaterial when      quantifying the misstatements using the income statement method. Upon      adoption of SAB No. 108 on January 1, 2006, we recorded a $3.5 million      increase to property and equipment in service and $1.6 million increase to      accumulated depreciation for the cumulative misstatement as of December      31, 2005.  Accordingly, we increased retained earnings by $1.1      million and recorded $772,000 as a long-term deferred tax      liability. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (al) | Reclassifications |
|--------|------|-------------------|

|   | Reclassifications      have been made to the 2007 and 2006 financial statements to make them      comparable with the 2008presentation. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | We      reclassified $16.7 million and $12.7 million of network maintenance and      operations expense from selling, general and administrative expense to      Cost of Goods Sold for 2007 and 2006, respectively.  We believe      this change in classification more closely aligns our maintenance and      operations components to the nature of expenses included in our financial      statement captions, and will improve the comparability of our financial      statement presentation with our industrypeers. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2) |      Consolidated      Statements of Cash Flows Supplemental    Disclosures |
|-----|------------------------------------------------------------------------------------------------------|

| Year ended      December 31,                                                   |   | 2008   |   |   | 2007   |   |    | 2006   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
| Increase in      accounts receivable                                           |   | $      | (5,209 | )      |   |   | (19,713 | )      |   |   | (5,649 | ) |
| Decrease in      prepaid expenses                                              |   |   | 488    |   |   |   | 949     |   |   |   | 863 |   |
| (Increase)      decrease in inventories                                        |   |   | (3,336 | )      |   |   | 1,455   |   |   |   | (1,732 | ) |
| (Increase)      decrease in other current assets                               |   |   | (69    | )      |   |   | 1,089   |   |   |   | 1,965 |   |
| Increase      (decrease) in accounts payable                                   |   |   | (4,198 | )      |   |   | 2,738   |   |   |   | 3,790 |   |
| Increase      (decrease) in accrued payroll and payroll related    obligations |   |   | 5,437  |   |   |   | 620     |   |   |   | (3,397 | ) |
| Increase      (decrease) in deferred revenue                                   |   |   | 4,543  |   |   |   | (2,000  | )      |   |   | (998 | ) |
| Increase      (decrease) in accrued interest                                   |   |   | 1,226  |   |   |   | 217     |   |   |   | (878 | ) |
| Increase      (decrease) in accrued liabilities                                |   |   | 2,695  |   |   |   | (1,330  | )      |   |   | 804 |   |
| Increase in      subscriber deposits                                           |   |   | 84     |   |   |   | 194     |   |   |   | 128 |   |
| Increase in      long-term deferred revenue                                    |   |   | 49,153 |   |   |   | ---     |   |   |   | --- |   |
| Increase      (decrease) in components of other long-term liabilities          |   |   | (3,727 | )      |   |   | 526     |   |   |   | 594 |   |
|                                                                           |   | $      | 47,087 |   |   |   | (15,255 | )      |   |   | (4,510 | ) |

----

| (3) | Receivables      and Allowance for Doubtful  Receivables |
|-----|----------------------------------------------------------|

|                   |   | 2008   |    |   | 2007   |   |
|------------------------|--------|--------|---------|--------|--------|--------|
| Trade                  |   | $      | 109,835 |   |   |   | 95,941 |   |
| Employee               |   |   | 243     |   |   |   | 198 |   |
| Other                  |   |   | 3,058   |   |   |   | 1,774 |   |
| Total      Receivables |   | $      | 113,136 |   |   |   | 97,913 |   |

----

|                   |   |                              |   |   | Additions                          |   |   | Deductions                     |   |   |                              |   |
|------------------------|--------|-----------------------------------|--------|--------|------------------------------------|--------|--------|--------------------------------|--------|--------|-----------------------------------|--------|
| Description            |   | Balance at      beginning of year |   |   | Charged to      costs and expenses |   |   | Charged to      Other Accounts |   |   | Write-offs      net of recoveries |   |   | Balance at      end of year |   |
| December 31,      2008 |   | $                                 | 1,657  |   |                               |   | 3,471  |                           |   |   | ---                               |   |   |   | 2,546 |   |   |   | 2,582 |   |
|                   |   |                              |   |   |                               |   |   |                           |   |   |                              |   |   |   |   |   |   |   |   |   |
| December 31,      2007 |   | $                                 | 2,922  |   |                               |   | 4,822  |                           |   |   | ---                               |   |   |   | 6,087 |   |   |   | 1,657 |   |
|                   |   |                              |   |   |                               |   |   |                           |   |   |                              |   |   |   |   |   |   |   |   |   |
| December 31,      2006 |   | $                                 | 5,317  |   |                               |   | 3,057  |                           |   |   | ---                               |   |   |   | 5,452 |   |   |   | 2,922 |   |

| (4) | Net      Property and Equipment inService |
|-----|-------------------------------------------|

|                                             |   | 2008   |      |   | 2007   |   |
|--------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Land and      buildings                          |   | $      | 32,134    |   |   |   | 14,424 |   |
| Telephony      distribution systems              |   |   | 809,356   |   |   |   | 640,001 |   |
| Cable      television distribution systems       |   |   | 194,616   |   |   |   | 161,934 |   |
| Support      equipment                           |   |   | 144,457   |   |   |   | 110,619 |   |
| Transportation      equipment                    |   |   | 10,550    |   |   |   | 8,102 |   |
| Property and      equipment under capital leases |   |   | 102,972   |   |   |   | 3,086 |   |
|                                             |   |   | 1,294,085 |   |   |   | 938,166 |   |
| Less      accumulated depreciation               |   |   | 495,953   |   |   |   | 432,829 |   |
| Less      amortization                           |   |   | 5,081     |   |   |   | 1,064 |   |
| Net property      and equipment in service       |   | $      | 793,051   |   |   |   | 504,273 |   |

| (5)  | Intangible      Assets andGoodwill |
|-----------|------------------------------------|

----

|                             |   | 2008   |   |   | 2007   |   |
|----------------------------------|--------|--------|--------|--------|--------|--------|
| Software      license fees       |   | $      | 18,377 |   |   |   | 12,094 |   |
| Customer      relationships      |   |   | 11,467 |   |   |   | 4,528 |   |
| Customer      contracts          |   |   | 3,538  |   |   |   | --- |   |
| Right-of-way                     |   |   | 783    |   |   |   | 783 |   |
| Other                            |   |   | 803    |   |   |   | 261 |   |
|                             |   |   | 34,968 |   |   |   | 17,666 |   |
| Less      amortization           |   |   | 11,992 |   |   |   | 5,897 |   |
| Net other      intangible assets |   | $      | 22,976 |   |   |   | 11,769 |   |

| Balance at      December 31, 2006                                                                                       |   | $      | 7,011  |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Asset      additions upon consolidation of Alaska DigiTel                                                               |   |   | 4,469  |   |
| Asset      additions                                                                                                    |   |   | 3,738  |   |
| Less      amortization expense                                                                                          |   |   | 3,332  |   |
| Less asset      write-off                                                                                               |   |   | 117    |   |
| Balance at      December 31, 2007                                                                                       |   |   | 11,769 |   |
| Asset      additions upon acquisition of UUI, Unicom, Alaska Wireless, and the      minority interest in Alaska DigiTel |   |   | 10,861 |   |
| Asset      additions                                                                                                    |   |   | 6,303  |   |
| Less      amortization expense                                                                                          |   |   | 5,948  |   |
| Less asset      write-off                                                                                               |   |   | 9      |   |
| Balance at      December 31, 2008                                                                                       |   | $      | 22,976 |   |

|                                                        |   | Years Ended      December 31, |   |
|-------------------------------------------------------------|--------|-------------------------------|--------|
|                                                        |   | 2008                          |   | 2007 |   | 2006 |   |
| Amortization      expense for amortizable intangible assets | $      | 5,948                         |   | 3,332 |   | 1,804 |   |

----

| Years Ending      December 31, |   |   |   |
|--------------------------------|--------|--------|--------|
| 2009                           |   | $      | 7,364  |   |
| 2010                           |   |   | 5,494  |   |
| 2011                           |   |   | 3,422  |   |
| 2012                           |   |   | 2,421  |   |
| 2013                           |   |   | 1,092  |   |

| (6) | Long-term      Debt |
|-----|---------------------|

|                                                          |   | December      31, |    |
|---------------------------------------------------------------|--------|-------------------|---------|
|                                                          |   | 2008              |    |   | 2007 |   |
| Senior Credit      Facility (a)                               |   |  $           | 362,529 |   |   |   | 220,760 |   |
| Senior Notes      (b)                                         |   |              | 320,000 |   |   |   | 320,000 |   |
| Rural      Utilities Services Debt (c)                        |   |              | 35,328  |   |   |   | -- |   |
| CoBank      Mortgage Note Payable (c)                         |   |              | 3,539   |   |   |   | -- |   |
| Mortgage                                                      |   |              | 490     |   |   |   | 529 |   |
| Note      Payable                                             |   |              | --      |   |   |   | 100 |   |
| Debt                                                          |   |              | 721,886 |   |   |   | 541,389 |   |
| Less      unamortized discount paid on the Senior Notes       |   |              | 2,589   |   |   |   | 2,991 |   |
| Less      unamortized discount paid on Senior Credit Facility |   |              | 2,466   |   |   |   | --- |   |
| Less current      portion of long-term debt                   |   |              | 8,425   |   |   |   | 2,283 |   |
| Long-term      debt, net of unamortized discount              |   | $                 | 708,406 |   |   |   | 536,115 |   |

----

|   | (a) | The Senior      Credit Facility includes a $360.0 million term loan, including the      Additional Incremental Term Loan discussed below, and a $100.0 million      revolving credit facility with a $25.0 million sublimit for letters of      credit. Our term loan is fully drawn and becomes due in stages between      2011 and 2012. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Total      Leverage Ratio (as defined) |   | Applicable      Margin |   |
|----------------------------------------|--------|------------------------|--------|
| >3.75                               |   |                   | 4.25   | % |
| >3.25      but <3.75             |   |                   | 3.75   | % |
| >2.75      but <3.25             |   |                   | 3.25   | % |
| <2.75                               |   |                   | 2.75   | % |

----

| Year      Ended:         |   | Maximum      Capital Expenditure Amount |    |
|--------------------------|--------|-----------------------------------------|---------|
| 2008                     |   | $                                       | 240,000 |   |
| 2009                     |   | $                                       | 125,000 |   |
| 2010                     |   | $                                       | 125,000 |   |
| 2011 and      thereafter |   | $                                       | 100,000 |   |

|   | (b) | We pay      interest of 7.25% on Senior Notes that are due in 2014. The Senior Notes      are an unsecured senior obligation of GCI, Inc. The Senior Notes are      carried on our Consolidated Balance Sheet net of the unamortized portion      of the discount based on an effective interest rate of 7.50%, which is      being amortized to Interest Expense over the term of the Senior Notes      using the effective interestmethod. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| If redeemed      during the twelve month period commencing February 1 of the year      indicated: |   | Redemption      Price |    |
|---------------------------------------------------------------------------------------------------|--------|-----------------------|---------|
| 2009                                                                                              |   |                  | 103.625 | % |
| 2010                                                                                              |   |                  | 102.417 | % |
| 2011                                                                                              |   |                  | 101.208 | % |
| 2012 and      thereafter                                                                          |   |                  | 100.000 | % |

----

|   | · | $250.0      million, reduced by the amount of any prepayments,  or |
|--------|--------|--------------------------------------------------------------------|

|   | · | 3.0 times      earnings before interest, taxes, depreciation and amortization for the      last four full fiscal quarters of GCI, Inc. and its      subsidiaries. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | We acquired      long-term debt of $43.6 million upon our acquisition of UUI and Unicom      effective June 1, 2008.  As of December 31, 2008, the long-term      debt consists of $35.3 million from the Rural Utility Services (“RUS”) and      $3.5 million mortgage note payable due to CoBank.  The long-term      debt is due in monthly installments of principal based on a fixed rate      amortization schedule.  The interest rates on the various loans      to which this debt relates range from 2.0% to 6.76%.  Through      UUI and Unicom, we have $9.9 million available for borrowing for specific      capital expenditures under existing borrowing arrangements.       Substantially all of the assets of our subsidiaries, UUI and Unicom are      collateral for the amounts due to RUS and  CoBank. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Years ending      December 31,                                |   |   |    |
|---------------------------------------------------------------|--------|--------|---------|
| 2009                                                          |   | $      | 8,425   |   |
| 2010                                                          |   |   | 8,657   |   |
| 2011                                                          |   |   | 188,147 |   |
| 2012                                                          |   |   | 176,323 |   |
| 2013                                                          |   |   | 4,749   |   |
| 2014 and      thereafter                                      |   |   | 335,585 |   |
|                                                          |   |   | 721,886 |   |
| Less      unamortized discount paid on Senior Notes           |   |   | 2,589   |   |
| Less      unamortized discount paid on Senior Credit Facility |   |   | 2,466   |   |
| Less current      portion of long-term debt                   |   |   | 8,425   |   |
|                                                          |   | $      | 708,406 |   |

| (7) | Comprehensive      Income (Loss) |
|-----|----------------------------------|

----

| (8) | Income      Taxes |
|-----|-------------------|

|                                                                               |   | Years ended      December 31, |   |
|------------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                               |   | 2008                          |   | 2007 |   | 2006 |   |
| Income (loss)      before cumulative effect of a change in accounting    principle | $      | (792                          | )      | 12,162 |   | 15,797 |   |
| SAB 108      cumulative adjustment                                                 |   | ---                           |   | --- |   | 772 |   |
| Cumulative      effect of a change in accounting principle                         |   | ---                           |   | --- |   | 44 |   |
| Net income      (loss)                                                             | $      | (792                          | )      | 12,162 |   | 16,613 |   |

|                                |   | Years ended      December 31, |   |
|-------------------------------------|--------|-------------------------------|--------|
|                                |   | 2008                          |   | 2007 |   | 2006 |   |
| Current tax      expense (benefit): |   |                          |   |   |   |   |   |
| Federal      taxes                  | $      | ---                           |   | 436 |   | (278 | ) |
| State      taxes                    |   | ---                           |   | 77 |   | (81 | ) |
|                                |   | ---                           |   | 513 |   | (359 | ) |

----

|                       |   |   |   |   |   |   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|--------|
| Deferred tax      expense: |   |   |   |   |   |   |   |
| Federal      taxes         |   | 922    |   | 9,785  |   | 12,514 |   |
| State      taxes           |   | 155    |   | 1,864  |   | 3,642  |   |
|                       |   | 1,077  |   | 11,649 |   | 16,156 |   |
|                       | $      | 1,077  |   | 12,162 |   | 15,797 |   |

|                                                                          |   | Years ended      December 31, |   |
|-------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                          |   | 2008                          |   |   | 2007 |   |   | 2006 |   |
| “Expected”      statutory tax expense (benefit)                   |   | $                             | (277   | ) |   |   | 9,063 |   |   |   | 11,988 |   |
| State income      taxes, net of federal expense (benefit)                     |   |                          | (48    | ) |   |   | 1,585 |   |   |   | 2,529 |   |
| Income tax      effect of nondeductible entertainment expenses                |   |                          | 725    |   |   |   | 569 |   |   |   | 423 |   |
| Income tax      effect of nondeductible lobbying expenses                     |   |                          | 424    |   |   |   | 468 |   |   |   | 409 |   |
| Income tax      effect of nondeductible expenditures and otheritems,      net |   |                          | 247    |   |   |   | 500 |   |   |   | 60 |   |
| Other,      net                                                               |   |                          | 6      |   |   |   | (23 | ) |   |   | 388 |   |
|                                                                          |   | $                             | 1,077  |   |   |   | 12,162 |   |   |   | 15,797 |   |

|                                                                                                                           |   | 2008   |   |   | 2007   |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Current      deferred tax assets, net of current deferred taxliability:                                                        |   |   |   |   |   |   |
| Compensated      absences, accrued for financial reporting purposes                                                            |   | $      | 2,771  |   |   |   | 2,196 |   |
| Net operating      loss carryforwards                                                                                          |   |   | ---    |   |   |   | 2,033 |   |
| Workers      compensation and self insurance health reserves, principally due to      accrual for financial reporting purposes |   |   | 869    |   |   |   | 694 |   |
| Accounts      receivable, principally due to allowance for doubtful    accounts                                                |   |   | 980    |   |   |   | 629 |   |
| Deferred      compensation expense for tax purposes in excess of amounts recognized for      financial reporting purposes      |   |   | 966    |   |   |   | (401 | ) |
| Other                                                                                                                          |   |   | 2,257  |   |   |   | 583 |   |
| Total current      deferred tax assets                                                                                         |   | $      | 7,843  |   |   |   | 5,734 |   |

----

|                                                                                                                         |   | 2008   |    |   | 2007   |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Long-term      deferred tax assets:                                                                                          |   |   |    |   |   |   |
| Net operating      loss carryforwards                                                                                        |   | $      | 65,890  |   |   |   | 45,518 |   |
| IRU revenue      deferred for financial reporting purposes                                                                   |   |   | 20,658  |   |   |   | --- |   |
| Alternative      minimum tax credits                                                                                         |   |   | 3,055   |   |   |   | 3,160 |   |
| Deferred      compensation expense for financial reporting purposes in excess of amounts      recognized for tax purposes    |   |   | 1,274   |   |   |   | 2,690 |   |
| Asset      retirement obligations in excess of amounts recognized for tax      purposes                                      |   |   | 1,812   |   |   |   | 1,444 |   |
| Share-based      compensation expense for financial reporting purposes in excess of amounts      recognized for tax purposes |   |   | 2,079   |   |   |   | --- |   |
| Other                                                                                                                        |   |   | 115     |   |   |   | 222 |   |
| Total      long-term deferred tax assets                                                                                     |   |   | 94,883  |   |   |   | 53,034 |   |
|                                                                                                                         |   |   |    |   |   |   |   |   |
| Long-term      deferred tax liabilities                                                                                      |   |   |    |   |   |   |   |   |
| Plant and      equipment, principally due to differences in depreciation                                                     |   |   | 108,015 |   |   |   | 68,278 |   |
| Intangible      assets                                                                                                       |   |   | 73,000  |   |   |   | 68,588 |   |
| Other                                                                                                                        |   |   | 55      |   |   |   | 462 |   |
| Total      long-term deferred tax liabilities                                                                                |   |   | 181,070 |   |   |   | 137,328 |   |
| Net long-term      deferred tax liabilities                                                                                  |   | $      | 86,187  |   |   |   | 84,294 |   |

| Years ending      December 31,                  |   | Federal |    |   | State  |   |
|-------------------------------------------------|--------|---------|---------|--------|--------|--------|
| 2011                                            |   | $       | 759     |   |   |   | 759 |   |
| 2019                                            |   |    | 25,942  |   |   |   | 25,552 |   |
| 2020                                            |   |    | 44,744  |   |   |   | 43,797 |   |
| 2021                                            |   |    | 29,614  |   |   |   | 28,987 |   |
| 2022                                            |   |    | 14,081  |   |   |   | 13,788 |   |
| 2023                                            |   |    | 3,968   |   |   |   | 3,903 |   |
| 2024                                            |   |    | 544     |   |   |   | --- |   |
| 2025                                            |   |    | 1,342   |   |   |   | --- |   |
| 2026                                            |   |    | 337     |   |   |   | --- |   |
| 2027                                            |   |    | 116     |   |   |   | --- |   |
|            2028        |   |    | 39,400  |   |   |   | 43,663 |   |
| Total tax net      operating loss carryforwards |   | $       | 160,847 |   |   |   | 160,449 |   |

----

| (9) | Stockholders’      Equity |
|-----|---------------------------------|

----

|                         |   | 2008   |                    |   | 2007   |   |                    | 2006   |   |
|------------------------------|--------|--------|-------------------------|--------|--------|--------|-------------------------|--------|--------|
| Expected term      (years)   |   |   | 5.2 –      6.8    |   |   |   | 5.2 –      6.8    |   |   |   | 5.4 –      8.0 |   |
| Volatility                   |   |   | 47.6% –      55.4 | %      |   |   | 41.5% –      54.3 | %      |   |   | 43.3% –      61.4 | % |
| Risk-free      interest rate |   |   | 1.6% –      3.4   | %      |   |   | 3.5% –      4.7   | %      |   |   | 4.7% –      5.0 | % |

|   | SFAS 123(R)      requires us to estimate pre-vesting option forfeitures at the time of      grant and periodically revise those estimates in subsequent periods if      actual forfeitures differ from those estimates. We record share-based      compensation expense only for those awards expected to vest using an      estimated forfeiture rate based on our historical pre-vesting forfeiture      data. Previously, we accounted for forfeitures as they occurred under the      pro forma disclosure provisions of SFAS 123 for periods prior to 2006. The      transition impact of adopting SFAS No. 123(R), attributed to accruing for      expected forfeitures on outstanding share-based awards, totaled $108,000,      which was reduced by income tax expense of $44,000 and is reported as      cumulative effect of a change in accounting principle in the accompanying      Consolidated Statement of Operations for the year ended December 31,      2006. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During the      year ended December 31, 2008, we modified the option price of several      performance based stock options as consideration for a modification of the      performance target.  SFAS No. 123(R) requires that we recognize      incremental compensation expense based on the difference between the fair      value of the modified option as compared to the original option as of the      modification date.  The modification resulted in $372,000      incremental expense that is expected to be recognized over the weighted      average period of 1.0 years. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The weighted      average grant date fair value of options granted during the years ended      December 31, 2008, 2007 and 2006 was $3.10 per share, $7.03 per share and      $6.92 per share, respectively. The total fair value of options vesting      during the years ended December 31, 2008, 2007 and 2006 was $3.3 million,      $3.3 million and $3.6 million,respectively. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We have      recorded share-based compensation expense of $7.3 million for the year      ended December 31, 2008, which consists of $7.3 million for employee      share-based compensation expense and a $4,000 decrease in the fair value      of liability-classified share-based compensation.  We recorded      share-based compensation expense of $4.9 million for the year ended      December 31, 2007, which consists of $6.2 million for employee share-based      compensation expense and a $1.3 million decrease for liability-classified      share-based compensation.  We recorded share-based compensation      expense of $6.4 million for the year ended December 31, 2006, which      consists of $4.8 million for employee share-based compensation expense and      $1.6 million for liability-classified share-based      compensation.  Share-based compensation expense is classified as      selling, general and administrative expense in our consolidated Statements      of Operations.  Unrecognized share-based compensation expense      was $2.8 million relating to 413,000 restricted stock awards and $9.7      million relating to 2.5 million unvested stock options as of December 31,      2008. We expect to recognize share-based compensation expense over a      weighted average period of 2.7 years for stock options and 1.7 years for      restricted stock awards. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                      |   | Shares |   |   | WeightedAverageExercise      Price |   |
|---------------------------------------------------------------------------|--------|--------|--------|--------|------------------------------------|--------|
| Outstanding      at December 31, 2005                                     |   |   | 6,543  |   |                               | $      | 7.27 |   |
|                                                                      |   |   |   |   |                               |   |   |   |
| Options      granted                                                      |   |   | 1,003  |   |                               | $      | 12.11 |   |
| Options      exercised                                                    |   |   | (1,606 | )      |                               | $      | 6.74 |   |
| Options      forfeited and retired                                        |   |   | (73    | )      |                               | $      | 8.83 |   |
| Outstanding      at December 31, 2006                                     |   |   | 5,867  |   |                               | $      | 8.22 |   |
|                                                                      |   |   |   |   |                               |   |   |   |
| Options      granted                                                      |   |   | 983    |   |                               | $      | 12.85 |   |
| Restricted      stock awards granted                                      |   |   | 499    |   |                               | $      | 13.04 |   |
| Options      exercised                                                    |   |   | (477   | )      |                               | $      | 6.93 |   |
| Restricted      stock awards vested                                       |   |   | (23    | )      |                               | $      | 13.34 |   |
| Options      forfeited and retired                                        |   |   | (98    | )      |                               | $      | 9.69 |   |
| Outstanding      at December 31, 2007                                     |   |   | 6,751  |   |                               | $      | 9.37 |   |
|                                                                      |   |   |   |   |                               |   |   |   |
| Options      granted                                                      |   |   | 751    |   |                               | $      | 7.80 |   |
| Restricted      stock awards granted                                      |   |   | 45     |   |                               | $      | 7.36 |   |
| Options      exercised                                                    |   |   | (71    | )      |                               | $      | 5.77 |   |
| Restricted      stock awards vested                                       |   |   | (131   | )      |                               | $      | 12.05 |   |
| Options      forfeited and retired                                        |   |   | (140   | )      |                               | $      | 9.57 |   |
| Outstanding      options and restricted stock awards at December 31, 2008 |   |   | 7,205  |   |                               | $      | 9.08 |   |
|                                                                      |   |   |   |   |                               |   |   |   |
| Available for      grant at December 31, 2008                             |   |   | 918    |   |                               |   |   |   |

|                                                  |   | Shares |   |   | WeightedAverageExercise      Price |   |
|-------------------------------------------------------|--------|--------|--------|--------|------------------------------------|--------|
| Outstanding      at December 31, 2006, 2007, and 2008 |   |   | 150    |   |                               | $      | 6.50 |   |
|                                                  |   |   |   |   |                               |   |   |   |
| Available for      grant at December 31, 2008         |   |   | ---    |   |                               |   |   |   |

----

| Options      Outstanding |         |
|--------------------------|--------------|
|                     |         |   |   |   |   | Weighted      Average |   |   |   |   |   |   |   |
|                     |         |   |   |   |   | Remaining |   |   |   |   |   | Aggregate |   |
| Range      of            |         |   | Shares |   |   | Contractual      Life |   |   | Weighted      Average |   |   | Intrinsic      Value |   |
| Exercise      Prices     |         |   | (thousands) |   |   | (years) |   |   | Exercise      Price |   |   | (thousands) |   |
| $                        | 3.11-$6.00   |   |   |   | 664 |   |   |   | 3.40 |   |   | $ | 5.50 |   |   | $ | 1,721 |   |
| $                        | 6.01-$6.35   |   |   |   | 41 |   |   |   | 2.01 |   |   | $ | 6.12 |   |   | $ | 81 |   |
| $                        | 6.36-$6.50   |   |   |   | 747 |   |   |   | 1.85 |   |   | $ | 6.50 |   |   | $ | 1,188 |   |
| $                        | 6.51-$7.12   |   |   |   | 108 |   |   |   | 2.08 |   |   | $ | 7.09 |   |   | $ | 108 |   |
| $                        | 7.13-$7.25   |   |   |   | 1,050 |   |   |   | 3.10 |   |   | $ | 7.25 |   |   | $ | 882 |   |
| $                        | 7.26-$8.40   |   |   |   | 1,422 |   |   |   | 7.29 |   |   | $ | 8.04 |   |   | $ | 189 |   |
| $                        | 8.41-$9.86   |   |   |   | 705 |   |   |   | 5.65 |   |   | $ | 9.54 |   |   | $ | --- |   |
| $                        | 9.87-$12.99  |   |   |   | 1,680 |   |   |   | 7.90 |   |   | $ | 11.91 |   |   | $ | --- |   |
| $                        | 13.00-$15.31 |   |   |   | 394 |   |   |   | 7.47 |   |   | $ | 13.21 |   |   | $ | --- |   |
| $                        | 15.32-$15.48 |   |   |   | 1 |   |   |   | 8.08 |   |   | $ | 15.48 |   |   | $ | --- |   |
| $                        | 3.11-$15.48  |   |   |   | 6,812 |   |   |   | 5.54 |   |   | $ | 8.88 |   |   | $ | 4,169 |   |

| Options      Exercisable |         |
|--------------------------|--------------|
|                     |         |   |   |   |   | Weighted      Average |   |   |   |   |   |   |   |
|                     |         |   |   |   |   | Remaining |   |   |   |   |   | Aggregate |   |
| Range      of            |         |   | Shares |   |   | Contractual      Life |   |   | Weighted      Average |   |   | Intrinsic      Value |   |
| Exercise      Prices     |         |   | (thousands) |   |   | (years) |   |   | Exercise      Price |   |   | (thousands) |   |
| $                        | 3.11-$6.00   |   |   |   | 664 |   |   |   | 3.40 |   |   | $ | 5.50 |   |   | $ | 1,721 |   |
| $                        | 6.01-$6.35   |   |   |   | 41 |   |   |   | 2.01 |   |   | $ | 6.12 |   |   | $ | 81 |   |
| $                        | 6.36-$6.50   |   |   |   | 747 |   |   |   | 1.85 |   |   | $ | 6.50 |   |   | $ | 1,188 |   |
| $                        | 6.51-$7.12   |   |   |   | 108 |   |   |   | 2.08 |   |   | $ | 7.09 |   |   | $ | 108 |   |
| $                        | 7.13-$7.25   |   |   |   | 1,008 |   |   |   | 3.10 |   |   | $ | 7.25 |   |   | $ | 847 |   |
| $                        | 7.26-$8.40   |   |   |   | 518 |   |   |   | 4.65 |   |   | $ | 8.17 |   |   | $ | 70 |   |
| $                        | 8.41-$9.86   |   |   |   | 501 |   |   |   | 5.36 |   |   | $ | 9.48 |   |   | $ | --- |   |
| $                        | 9.87-$12.99  |   |   |   | 525 |   |   |   | 7.34 |   |   | $ | 11.48 |   |   | $ | --- |   |
| $                        | 13.00-$15.31 |   |   |   | 163 |   |   |   | 7.48 |   |   | $ | 13.24 |   |   | $ | --- |   |
| $                        | 15.32-$15.48 |   |   |   | 0 |   |   |   | 8.08 |   |   | $ | 15.48 |   |   | $ | --- |   |
| $                        | 3.11-$15.48  |   |   |   | 4,275 |   |   |   | 4.03 |   |   | $ | 7.95 |   |   | $ | 4,015 |   |

----

| (10) | Industry      Segments Data |
|------|-----------------------------|

----

|                          |   | Consumer |    |   | Network      Access |   |    | Commercial |   |   | Managed      Broadband |   |   | Regulated      Operations |   |   | Total      Reportable Segments |   |
|-------------------------------|--------|----------|---------|--------|---------------------|--------|---------|------------|--------|--------|------------------------|--------|--------|---------------------------|--------|--------|--------------------------------|--------|
| 2008                          |   |     |    |   |                |   |    |       |   |   |                   |   |   |                      |   |   |                           |   |
| Revenues:                     |   |     |    |   |                |   |    |       |   |   |                   |   |   |                      |   |   |                           |   |
| Intersegment                  |   | $        | 84      |   |                |   | 916     |       |   |   | 5,808                  |   |   |                      | ---    |   |                           |   | 157 |   |   |   | 6,965 |   |
| External                      |   |     | 255,632 |   |                |   | 153,821 |       |   |   | 114,660                |   |   |                      | 37,047 |   |                           |   | 14,282 |   |   |   | 575,442 |   |
| Total      revenues           |   |     | 255,716 |   |                |   | 154,737 |       |   |   | 120,468                |   |   |                      | 37,047 |   |                           |   | 14,439 |   |   |   | 582,407 |   |
| Cost of Goods      Sold:      |   |     |    |   |                |   |    |       |   |   |                   |   |   |                      |   |   |                           |   |   |   |   |   |   |   |
| Intersegment                  |   |     | 656     |   |                |   | 685     |       |   |   | 2,821                  |   |   |                      | 125    |   |                           |   | 97 |   |   |   | 4,384 |   |
| External                      |   |     | 89,853  |   |                |   | 40,326  |       |   |   | 59,480                 |   |   |                      | 10,265 |   |                           |   | 3,134 |   |   |   | 203,058 |   |
| Total Cost of      Goods Sold |   |     | 90,509  |   |                |   | 41,011  |       |   |   | 62,301                 |   |   |                      | 10,390 |   |                           |   | 3,231 |   |   |   | 207,442 |   |
| Contribution:                 |   |     |    |   |                |   |    |       |   |   |                   |   |   |                      |   |   |                           |   |   |   |   |   |   |   |
| Intersegment                  |   |     | (572    | )      |                |   | 231     |       |   |   | 2,987                  |   |   |                      | (125   | )      |                           |   | 60 |   |   |   | 2,581 |   |
| External                      |   |     | 165,779 |   |                |   | 113,495 |       |   |   | 55,180                 |   |   |                      | 26,782 |   |                           |   | 11,148 |   |   |   | 372,384 |   |
| Total      contribution       |   |     | 165,207 |   |                |   | 113,726 |       |   |   | 58,167                 |   |   |                      | 26,657 |   |                           |   | 11,208 |   |   |   | 374,965 |   |

----

| Less      SG&A                      |   |   | 110,364 |   |   |   | 43,057    |   |   |   | 36,191    |   |   |   | 13,132 |   |   |   | 7,562     |   |   |   | 210,306 |   |
|-----------------------------------------|--------|--------|---------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|---------|--------|
| Plus      share-based compensation      |   |   | 2,891   |   |   |   | 2,443     |   |   |   | 1,392     |   |   |   | 552    |   |   |   | ---       |   |   |   | 7,278   |   |
| Plus non-cash      contribution expense |   |   | 199     |   |   |   | 177       |   |   |   | 76        |   |   |   | 28     |   |   |   | ---       |   |   |   | 480     |   |
| Plus minority      interest             |   |   | 661     |   |   |   | 589       |   |   |   | 253       |   |   |   | ---    |   |   |   | ---       |   |   |   | 1,503   |   |
| Plus other      expense                 |   |   | (217    | )      |   |   | ---  |   |   |   | ---  |   |   |   | ---    |   |   |   |  --- |   |   |   | (217    | )      |
| Adjusted      EBITDA                    |   | $      | 58,949  |   |   |   | 73,647    |   |   |   | 20,710    |   |   |   | 14,230 |   |   |   | 3,586     |   |   |   | 171,122 |   |
|                                    |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| 2007                                    |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Revenues:                               |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Intersegment                            |   | $      | ---     |   |   |   | 2,978     |   |   |   | 5,471     |   |   |   | ---    |   |   |   | ---       |   |   |   | 8,449   |   |
| External                                |   |   | 223,502 |   |   |   | 163,377   |   |   |   | 104,640   |   |   |   | 28,792 |   |   |   | ---       |   |   |   | 520,311 |   |
| Total      revenues                     |   |   | 223,502 |   |   |   | 166,355   |   |   |   | 110,111   |   |   |   | 28,792 |   |   |   | ---       |   |   |   | 528,760 |   |
| Cost of Goods      Sold:                |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Intersegment                            |   |   | 2,067   |   |   |   | 1,303     |   |   |   | 2,487     |   |   |   | ---    |   |   |   | ---       |   |   |   | 5,857   |   |
| External                                |   |   | 88,699  |   |   |   | 43,868    |   |   |   | 53,492    |   |   |   | 9,740  |   |   |   | ---       |   |   |   | 195,799 |   |
| Total Cost of      Goods Sold           |   |   | 90,766  |   |   |   | 45,171    |   |   |   | 55,979    |   |   |   | 9,740  |   |   |   | ---       |   |   |   | 201,656 |   |
| Contribution:                           |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Intersegment                            |   |   | (2,067  | )      |   |   | 1,675     |   |   |   | 2,984     |   |   |   | ---    |   |   |   | ---       |   |   |   | 2,592   |   |
| External                                |   |   | 134,803 |   |   |   | 119,509   |   |   |   | 51,148    |   |   |   | 19,052 |   |   |   | ---       |   |   |   | 324,512 |   |
| Total      contribution                 |   |   | 132,736 |   |   |   | 121,184   |   |   |   | 54,132    |   |   |   | 19,052 |   |   |   | ---       |   |   |   | 327,104 |   |
| Less      SG&A                      |   |   | 89,723  |   |   |   | 38,859    |   |   |   | 36,060    |   |   |   | 11,110 |   |   |   | ---       |   |   |   | 175,752 |   |
| Plus      share-based compensation      |   |   | 1,715   |   |   |   | 1,775     |   |   |   | 1,069     |   |   |   | 385    |   |   |   | ---       |   |   |   | 4,944   |   |
| Plus other      income                  |   |   | 13      |   |   |   | 16        |   |   |   | 7         |   |   |   | ---    |   |   |   | ---       |   |   |   | 36      |   |
| Adjusted      EBITDA                    |   | $      | 46,808  |   |   |   | 82,441    |   |   |   | 16,164    |   |   |   | 8,327  |   |   |   | ---       |   |   |   | 153,740 |   |
|                                    |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| 2006                                    |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Revenues:                               |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Intersegment                            |   | $      | ---     |   |   |   | ---       |   |   |   | 5,335     |   |   |   | ---    |   |   |   | ---       |   |   |   | 5,335   |   |
| External                                |   |   | 178,951 |   |   |   | 166,471   |   |   |   | 105,929   |   |   |   | 26,131 |   |   |   | ---       |   |   |   | 477,482 |   |
| Total      revenues                     |   |   | 178,951 |   |   |   | 166,471   |   |   |   | 111,264   |   |   |   | 26,131 |   |   |   | ---       |   |   |   | 482,817 |   |
| Cost of Goods      Sold:                |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Intersegment                            |   |   | ---     |   |   |   | 636       |   |   |   | 2,353     |   |   |   | ---    |   |   |   | ---       |   |   |   | 2,989   |   |
| External                                |   |   | 71,663  |   |   |   | 39,957    |   |   |   | 50,309    |   |   |   | 7,178  |   |   |   | ---       |   |   |   | 169,107 |   |
| Total Cost of      Goods Sold           |   |   | 71,663  |   |   |   | 40,593    |   |   |   | 52,662    |   |   |   | 7,178  |   |   |   | ---       |   |   |   | 172,096 |   |
| Contribution:                           |   |   |    |   |   |   |      |   |   |   |      |   |   |   |   |   |   |   |      |   |   |   |    |   |
| Intersegment                            |   |   | ---     |   |   |   | (636      | )      |   |   | 2,982     |   |   |   | ---    |   |   |   | ---       |   |   |   | 2,346   |   |
| External                                |   |   | 107,288 |   |   |   | 126,514   |   |   |   | 55,620    |   |   |   | 18,953 |   |   |   | ---       |   |   |   | 308,375 |   |
| Total      contribution                 |   |   | 107,288 |   |   |   | 125,878   |   |   |   | 58,602    |   |   |   | 18,953 |   |   |   | ---       |   |   |   | 310,721 |   |
| Less      SG&A                      |   |   | 76,819  |   |   |   | 35,542    |   |   |   | 35,793    |   |   |   | 10,796 |   |   |   | ---       |   |   |   | 158,950 |   |
| Plus      share-based compensation      |   |   | 2,081   |   |   |   | 2,478     |   |   |   | 1,337     |   |   |   | 469    |   |   |   | ---       |   |   |   | 6,365   |   |
| Plus other      income                  |   |   | ---     |   |   |   | ---       |   |   |   | ---       |   |   |   | 463    |   |   |   | ---       |   |   |   | 463     |   |
| Adjusted      EBITDA                    |   | $      | 32,550  |   |   |   | 93,450    |   |   |   | 21,164    |   |   |   | 9,089  |   |   |   | ---       |   |   |   | 156,253 |   |

----

| Years ended      December 31,                               |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|-------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Reportable      segment revenues                            |   | $      | 582,407 |   |   |   | 528,760 |   |   |   | 482,817 |   |
| Less      intersegment revenues eliminated in consolidation |   |   | 6,965   |   |   |   | 8,449   |   |   |   | 5,335 |   |
| Consolidated      revenues                                  |   | $      | 575,442 |   |   |   | 520,311 |   |   |   | 477,482 |   |

| Years ended      December 31,                                                                                      |   | 2008   |    |   | 2007   |   |    | 2006   |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Reportable      segment adjusted EBITDA                                                                            |   | $      | 171,122 |   |   |   | 153,740 |   |   |   | 156,253 |   |
| Less      depreciation and amortization expense                                                                    |   |   | 114,369 |   |   |   | 87,615  |   |   |   | 82,099 |   |
| Less      share-based compensation expense                                                                         |   |   | 7,278   |   |   |   | 4,944   |   |   |   | 6,365 |   |
| Less non-cash      contribution expense                                                                            |   |   | 480     |   |   |   | ---     |   |   |   | --- |   |
| Less other      income                                                                                             |   |   | 1,503   |   |   |   | 36      |   |   |   | 463 |   |
| Plus other      expense                                                                                       |   |   | 217     |   |   |   | ---     |   |   |   | --- |   |
| Consolidated      operating income                                                                                 |   |   | 47,709  |   |   |   | 61,145  |   |   |   | 67,326 |   |
| Less other      expense, net                                                                                       |   |   | 48,501  |   |   |   | 35,250  |   |   |   | 33,073 |   |
| Consolidated      income (loss) before income taxes and cumulative effect of a change in      accounting principle |   | $      | (792    | )      |   |   | 25,895  |   |   |   | 34,253 |   |

| (11) | Financial      Instruments |
|------|----------------------------|

----

|                                                          |   | 2008                 |   | 2007            |    |
|---------------------------------------------------------------|--------|----------------------|--------|-----------------|---------|
|                                                          |   | Carrying      Amount |   | Fair      Value |    | Carrying      Amount |   | Fair      Value |   |
| Current and      long-term debt and capital lease obligations | $      | 817,160              |   |            | 723,403 |   | 541,249 |   |   | 512,853 |   |
| Other      liabilities                                        |   | 63,867               |   |            | 63,727  |   | 11,596 |   |   | 11,380 |   |

|   | Current and      long-term debt and capital lease obligations:  The fair value of      our Senior Notes is estimated based on the quoted market price for the      same issue. The fair value of our Senior Credit Facility is estimated to      approximate the carrying value because these instruments are subject to      variable interest rates. The fair value of the Rural Utilities Services      Debt and CoBank Mortgage Note Payable are valued at the discounted amount      of future cash flows using our current incremental rate of borrowing on      our Senior Credit Facility.  The fair value of our capital      leases and capital leases due to related party are estimated based upon      the discounted amount of future cash flows using our current incremental      rate of borrowing on our Senior CreditFacility. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Other      Liabilities:  Deferred compensation liabilities have no defined      maturity dates therefore the fair value is the amount payable on demand as      of the balance sheet date. Asset retirement obligations are recorded at      their fair value and, over time, the liability is accreted to its present      value each period. Lease escalation liabilities are valued at the      discounted amount of future cash flows using the Senior Credit Facility      interest rate at December 31, 2008. Our non-employee share-based      compensation awards are reported at their fair value at each reporting      period. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                   |   | Observable      Inputs Level 1                                                                                  |   | Other      Observable Inputs Level 2                                                                                                  |   | Unobservable      Inputs Level 3 |   | Total                                                                                                          |   |
|--------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|----------------------------------------------------------------------------------------------------------------|--------|
|  Assets                                           |   |                                                                                                            |   |                                                                                                                                  |   |                             |   |                                                                                                           |   |
| Money market      funds and U.S. government securities | $      |                1,563                 |   |                        ---                       |   | ---                              |   |                1,563                |   |
| Derivative      financial instruments                  |   |                   --- |   |                            7 |   | ---                              |   |                         7 |   |
| Total assets      at fair value                        | $      |                1,563                 |   |                           7       |   | ---                              |   |                1,570                |   |

| (12) | Related      Party Transactions |
|------|---------------------------------|

| (13) | Commitments      and Contingencies |
|------|------------------------------------|

----

|   | The Intelsat      Galaxy 18 C-band and Ku-Band transponders are being leased over an      expected term of 14 years. The present value of the lease payments,      excluding telemetry, tracking and command services and back-up protection,      is $98.6 million. We have recorded a capital lease obligation and an      addition to our Property and Equipment at December 31,    2008. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Years ending      December 31:                                                 |   | Operating |   |   | Capital |   |
|--------------------------------------------------------------------------------|--------|-----------|--------|--------|---------|--------|
| 2009                                                                           |   | $         | 16,401 |   |    |   | 11,646 |   |
| 2010                                                                           |   |      | 8,703  |   |    |   | 11,656 |   |
| 2011                                                                           |   |      | 7,387  |   |    |   | 11,672 |   |
| 2012                                                                           |   |      | 5,601  |   |    |   | 11,732 |   |
| 2013                                                                           |   |      | 4,797  |   |    |   | 11,742 |   |
| 2014 and      thereafter                                                       |   |      | 17,429 |   |    |   | 101,983 |   |
| Total minimum      lease payments                                              |   | $         | 60,318 |   |    |   | 160,431 |   |
| Less amount      representing interest                                         |   |      |   |   |    |   | 60,102 |   |
| Less current      maturity of obligations under capital leases                 |   |      |   |   |    |   | 4,432 |   |
| Long-term      obligations under capital leases, excluding current    maturity |   |      |   |   |    | $      | 95,897 |   |

----

| Years ending      December 31,             |   |   |   |
|--------------------------------------------|--------|--------|--------|
| 2009                                       |   | $      | 18,902 |   |
| 2010                                       |   |   | 7,356  |   |
| 2011                                       |   |   | 5,399  |   |
| 2012                                       |   |   | 4,940  |   |
| 2013                                       |   |   | 4,936  |   |
| 2014 and      thereafter                   |   |   | 46,586 |   |
| Total minimum      future service revenues |   | $      | 88,119 |   |

|   | · | $3.4 million      to secure payment of certain access charges associated with our provision      of telecommunications services within the State of  Alaska, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $529,000 to      meet obligations associated with our insurance arrangements,      and |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | $100,000 to      secure right of way access. |
|--------|--------|----------------------------------------------|

----

----

|   | (14)  Fluctuations      in Fourth Quarter Results of Operations      (Unaudited) |
|--------|--------------------------------------------------------------------------------------------|

|                                     |   | FirstQuarter |    |   | Second      Quarter |   |    | ThirdQuarter |   |   | FourthQuarter |   |
|------------------------------------------|--------|--------------|---------|--------|---------------------|--------|---------|--------------|--------|--------|---------------|--------|
| 2008                                     |   |         |    |   |                |   |    |         |   |   |          |   |
| Total      revenues                      |   | $            | 134,674 |   |                |   | 142,461 |         |   |   | 151,660       |   |   |   | 146,647 |   |
| Operating      income                    |   | $            | 9,714   |   |                |   | 14,045  |         |   |   | 15,980        |   |   |   | 7,970 |   |
| Net income      (loss)                   |   | $            | 436     |   |                |   | 1,832   |         |   |   | 265           |   |   |   | (4,402 | ) |
| Basic net      income (loss) per share   |   | $            | 0.01    |   |                |   | 0.04    |         |   |   | 0.01          |   |   |   | (0.08 | ) |
| Diluted net      income (loss) per share |   | $            | 0.00    |   |                |   | 0.03    |         |   |   | 0.00          |   |   |   | (0.08 | ) |
|                                     |   |         |    |   |                |   |    |         |   |   |          |   |   |   |   |   |
| 2007                                     |   |         |    |   |                |   |    |         |   |   |          |   |   |   |   |   |
| Total      revenues                      |   | $            | 125,031 |   |                |   | 129,890 |         |   |   | 134,090       |   |   |   | 131,300 |   |
| Operating      income                    |   | $            | 12,570  |   |                |   | 19,444  |         |   |   | 15,172        |   |   |   | 13,959 |   |
| Net      income                          |   | $            | 2,306   |   |                |   | 5,918   |         |   |   | 2,956         |   |   |   | 2,553 |   |
| Basic net      income per share          |   | $            | 0.04    |   |                |   | 0.11    |         |   |   | 0.06          |   |   |   | 0.05 |   |
| Diluted net      income per share        |   | $            | 0.04    |   |                |   | 0.11    |         |   |   | 0.05          |   |   |   | 0.04 |   |

----

| Exhibit      No. | Description                                                                                                                                                                                             |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1              | Restated      Articles of Incorporation of the Company dated August 20, 2007      (37)                                                                                                                  |
| 3.2              | Amended and      Restated Bylaws of the Company dated August 20, 2007  (36)                                                                                                                             |
| 4.1              | Certified      copy of the General Communication, Inc. Amendment No. 1, dated as of June      25, 2007, to the Amended and Restated 1986 Stock Option Plan      (33)                                    |
| 10.3             | Westin      Building Lease (3)                                                                                                                                                                          |
| 10.4             | Duncan and      Hughes Deferred Bonus Agreements (4)                                                                                                                                                    |
| 10.5             | Compensation      Agreement between General Communication, Inc. and William C. Behnke dated      January 1, 1997 (13)                                                                                   |
| 10.6             | Order      approving Application for a Certificate of Public Convenience and      Necessity to operate as a Telecommunications (Intrastate Interexchange      Carrier) Public Utility within Alaska (2) |
| 10.13            | MCI Carrier      Agreement between MCI Telecommunications Corporation and General      Communication, Inc. dated January 1, 1993 (5)                                                                    |
| 10.14            | Contract for      Alaska Access Services Agreement between MCI Telecommunications      Corporation and General Communication, Inc. dated January 1, 1993      (5)                                       |
| 10.15            | Promissory      Note Agreement between General Communication, Inc. and Ronald A. Duncan,      dated August 13, 1993 (6)                                                                                 |
| 10.16            | Deferred      Compensation Agreement between General Communication, Inc. and Ronald A.      Duncan, dated August 13, 1993 (6)                                                                           |
| 10.17            | Pledge      Agreement between General Communication, Inc. and Ronald A. Duncan, dated      August 13, 1993 (6)                                                                                          |
| 10.20            | The GCI      Special Non-Qualified Deferred Compensation Plan (7)                                                                                                                                       |
| 10.21            | Transponder      Purchase Agreement for Galaxy X between Hughes Communications Galaxy, Inc.      and GCI Communication Corp. (7)                                                                        |
| 10.25            | Licenses:      (3)                                                                                                                                                                                      |
| 10.25.1          | 214      Authorization                                                                                                                                                                                  |
| 10.25.2          | International      Resale Authorization                                                                                                                                                                 |
| 10.25.3          | Digital      Electronic Message Service Authorization                                                                                                                                                   |
| 10.25.11         | Certificate      of Convenience and Public Necessity – Telecommunications Service (Local      Exchange) dated July 7, 2000  (29)                                                        |
| 10.26            | ATU      Interconnection Agreement between GCI Communication Corp. and Municipality      of Anchorage, executed January 15, 1997 (12)                                                                   |
| 10.29            | Asset      Purchase Agreement, dated April 15, 1996, among General Communication,      Inc., ACNFI, ACNJI and ACNKSI (8)                                                                                |
| 10.30            | Asset      Purchase Agreement, dated May 10, 1996, among General Communication, Inc.,      and Alaska Cablevision, Inc. (8)                                                                             |
| 10.31            | Asset      Purchase Agreement, dated May 10, 1996, among General Communication, Inc.,      and McCaw/Rock Homer Cable System, J.V. (8)                                                                  |
| 10.32            | Asset      Purchase Agreement, dated May 10, 1996, between General Communication,      Inc., and McCaw/Rock Seward Cable System, J.V. (8)                                                               |
| 10.33            | Amendment No.      1 to Securities Purchase and Sale Agreement, dated October 31, 1996, among      General Communication, Inc., and the Prime Sellers Agent    (9)                                      |
| 10.34            | First      Amendment to Asset Purchase Agreement, dated October 30, 1996, among      General Communication, Inc., ACNFI, ACNJI and ACNKSI(9)                                                            |
| 10.36            | Order      Approving Arbitrated Interconnection Agreement as Resolved and Modified by      Order U-96-89(5) dated January 14, 1997 (12)                                                                 |
| 10.37            | Amendment to      the MCI Carrier Agreement executed April 20, 1994 (12)                                                                                                                                |
| 10.38            | Amendment No.      1 to MCI Carrier Agreement executed July 26, 1994 (11)                                                                                                                               |
| 10.39            | MCI Carrier      Addendum—MCI 800 DAL Service effective February 1, 1994    (11)                                                                                                                  |
| 10.40            | Third      Amendment to MCI Carrier Agreement dated as of October 1, 1994      (11)                                                                                                                     |

----

| 10.41 | Fourth      Amendment to MCI Carrier Agreement dated as of September 25, 1995      (11)                                                                                                                                                                                                            |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.42 | Fifth      Amendment to the MCI Carrier Agreement executed April 19, 1996      (12)                                                                                                                                                                                                                |
| 10.43 | Sixth      Amendment to MCI Carrier Agreement dated as of March 1, 1996      (11)                                                                                                                                                                                                                  |
| 10.44 | Seventh      Amendment to MCI Carrier Agreement dated November 27, 1996      (14)                                                                                                                                                                                                                  |
| 10.45 | First      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and MCI Telecommunications Corporation dated April 1,      1996 (14)                                                                                                                          |
| 10.46 | Service Mark      License Agreement between MCI Communications Corporation and General      Communication, Inc. dated April 13, 1994 (13)                                                                                                                                                          |
| 10.47 | Radio Station      Authorization (Personal Communications Service License), Issue Date June      23, 1995 (13)                                                                                                                                                                                     |
| 10.50 | Contract No.      92MR067A Telecommunications Services between BP Exploration (Alaska), Inc.      and GCI Network Systems dated April 1, 1992 (14)                                                                                                                                                 |
| 10.51 | Amendment No.      03 to BP Exploration (Alaska) Inc. Contract No. 92MRO67A effective August      1, 1996 (14)                                                                                                                                                                                     |
| 10.52 | Lease      Agreement dated September 30, 1991 between RDB Company and General      Communication, Inc. (2)                                                                                                                                                                                         |
| 10.54 | Order      Approving Transfer Upon Closing, Subject to Conditions, and Requiring      Filings dated September 23, 1996 (13)                                                                                                                                                                        |
| 10.55 | Order      Granting Extension of Time and Clarifying Order dated October 21, 1996      (13)                                                                                                                                                                                                        |
| 10.58 | Employment      and Deferred Compensation Agreement between General Communication, Inc.      and John M. Lowber dated July 1992 (13)                                                                                                                                                               |
| 10.59 | Deferred      Compensation Agreement between GCI Communication Corp. and Dana L. Tindall      dated August 15, 1994 (13)                                                                                                                                                                           |
| 10.60 | Transponder      Lease Agreement between General Communication Incorporated and Hughes      Communications Satellite Services, Inc., executed August 8, 1989      (6)                                                                                                                              |
| 10.61 | Addendum to      Galaxy X Transponder Purchase Agreement between GCI Communication Corp.      and Hughes Communications Galaxy, Inc. dated August 24, 1995      (13)                                                                                                                               |
| 10.62 | Order      Approving Application, Subject to Conditions; Requiring Filing; and      Approving Proposed Tariff on an Inception Basis, dated February 4, 1997      (13)                                                                                                                              |
| 10.66 | Supply      Contract Between Submarine Systems International Ltd. And GCI      Communication Corp. dated as of July 11, 1997. (15)                                                                                                                                                                 |
| 10.67 | Supply      Contract Between Tyco Submarine Systems Ltd. And Alaska United Fiber      System Partnership Contract Variation No. 1 dated as of December 1, 1997.      (15)                                                                                                                          |
| 10.71 | Third      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and MCI Telecommunications Corporation dated February      27, 1998 (16)                                                                                                                      |
| 10.80 | Fourth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI WorldCom. (17)                                                                                                         |
| 10.89 | Fifth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI WorldCom Network Services, Inc., formerly known as MCI      Telecommunications Corporation dated August 7, 2000 #  (18) |

----

| 10.90  | Sixth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI WorldCom Network Services, Inc., formerly known as MCI      Telecommunications Corporation dated February 14, 2001 #    (18)                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.91  | Seventh      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI WorldCom Network Services, Inc., formerly known as MCI      Telecommunications Corporation dated March 8, 2001 #  (18)                                                     |
| 10.100 | Contract for      Alaska Access Services between Sprint Communications Company L.P. and      General Communication, Inc. and its wholly owned subsidiary GCI      Communication Corp. dated March 12, 2002 # (21)                                                                                                                                       |
| 10.102 | First      Amendment to Lease Agreement dated as of September 2002 between RDB      Company and GCI Communication Corp. as successor in interest to General      Communication, Inc. (22)                                                                                                                                                               |
| 10.103 | Agreement and      plan of merger of GCI American Cablesystems, Inc. a Delaware corporation      and GCI Cablesystems of Alaska, Inc. an Alaska corporation each with and      into GCI Cable, Inc. an Alaska corporation, adopted as of December 10,      2002  (22)                                                                         |
| 10.104 | Articles of      merger between GCI Cablesystems of Alaska, Inc. and GCI Cable, Inc.,      adopted as of December 10, 2002  (22)                                                                                                                                                                                                              |
| 10.105 | Aircraft      lease agreement between GCI Communication Corp., and Alaska corporation      and 560 Company, Inc., an Alaska corporation, dated as of January 22, 2001      (22)                                                                                                                                                                         |
| 10.106 | First      amendment to aircraft lease agreement between GCI Communication Corp., and      Alaska corporation and 560 Company, Inc., an Alaska corporation, dated as      of February 8, 2002  (22)                                                                                                                                           |
| 10.108 | Bonus      Agreement between General Communication, Inc. and Wilson Hughes      (23)                                                                                                                                                                                                                                                                    |
| 10.109 | Eighth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI WorldCom Network Services, Inc. # (23)                                                                                                                                      |
| 10.110 | Settlement      and Release Agreement between General Communication, Inc. and WorldCom,      Inc. (23)                                                                                                                                                                                                                                                  |
| 10.112 | Waiver letter      agreement dated as of February 13, 2004 for Credit, Guaranty, Security and      Pledge Agreement  (24)                                                                                                                                                                                                                     |
| 10.113 | Indenture      dated as of February 17, 2004 between GCI, Inc. and The Bank of New York,      as trustee  (24)                                                                                                                                                                                                                                |
| 10.114 | Registration      Rights Agreement dated as of February 17, 2004, among GCI,      Inc.,  and Deutsche Bank Securities Inc., Jefferies &      Company, Inc., Credit Lyonnais Securities (USA), Inc., Blaylock &      Partners, L.P., Ferris, Baker Watts, Incorporated, and TD Securities      (USA), Inc., as Initial Purchasers (24) |
| 10.121 | First      amendment to contract for Alaska Access Services between Sprint      Communications Company L.P. and General Communication, Inc. and its wholly      owned subsidiary GCI Communication Corp. dated July 24, 2002      # (26)                                                                                                           |
| 10.122 | Second      amendment to contract for Alaska Access Services between Sprint      Communications Company L.P. and General Communication, Inc. and its wholly      owned subsidiary GCI Communication Corp. dated December 31, 2003      (26)                                                                                                             |
| 10.123 | Third      amendment to contract for Alaska Access Services between Sprint      Communications Company L.P. and General Communication, Inc. and its wholly      owned subsidiary GCI Communication Corp. dated February 19, 2004      # (26)                                                                                                       |
| 10.124 | Fourth      amendment to contract for Alaska Access Services between Sprint      Communications Company L.P. and General Communication, Inc. and its wholly      owned subsidiary GCI Communication Corp. dated June 30, 2004      # (26)                                                                                                          |   |
| 10.126 | Audit      Committee Charter (as revised by the board of directors of General      Communication, Inc. effective as of February 3,      2005)  (27)                                                                                                                                                                                           |   |
| 10.127 | Nominating      and Corporate Governance Committee Charter (as revised by the board of      directors of General Communication, Inc. effective as of February 3,      2005)  (27)                                                                                                                                                             |   |
| 10.128 | Fifth      amendment to contract for Alaska Access Services between Sprint      Communications Company L.P. and General Communication, Inc. and its wholly      owned subsidiary GCI Communication Corp. dated January 22, 2005      # (27)                                                                                                        |   |
| 10.129 | Ninth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI WorldCom Network Services, Inc. # (28)                                                                                                                                  |   |

----

| 10.130 | Amended and      Restated Credit Agreement among GCI Holdings, Inc. and Calyon New York      Branch as Administrative Agent, Sole Lead Arranger, and Co-Bookrunner, The      Initial Lenders and Initial Issuing Bank Named Herein as Initial Lenders      and Initial Issuing Bank, General Electric Capital Corporation as      Syndication Agent, and Union Bank of California, N.A., CoBank, ACB, CIT      Lending Services Corporation and Wells Fargo Bank, N.A. as      Co-Documentation Agents, dated as of August 31, 2005       (28) |   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 10.131 | Amended and      Restated 1986 Stock Option Plan of General Communication, Inc. as of June      7, 2005  (28)                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |
| 10.132 | Amendment No.      1 to $150 Million EBITDA Incentive Program dated December 30, 2005      (29)                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
| 10.134 | Full-time      Transponder Capacity Agreement with PanAmSat Corporation dated March 31,      2006 #  (30)                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| 10.135 | Tenth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI Communications Services, Inc. d/b/a Verizon Business      Services (successor-in-interest to MCI Network Services, Inc., which was      formerly known as MCI WorldCom Network Services)      #  (31)                                                                                                                                                          |   |
| 10.136 | Reorganization      Agreement among General Communication, Inc., Alaska DigiTel, LLC, The      Members of Alaska DigiTel, LLC, AKD Holdings, LLC and The Members of      Denali PCS, LLC dated as of June 16, 2006 (Nonmaterial schedules and      exhibits to the Reorganization Agreement have been omitted pursuant to      Item 601b.2 of Regulation S-K. We agree to furnish supplementally to the      Commission upon request a copy of any omitted schedule or exhibit.)      #  (32)                                             |   |
| 10.137 | Second      Amended and Restated Operating Agreement of Alaska DigiTel, LLC dated as      of January 1, 2007 (We agree to furnish supplementally to the Commission      upon request a copy of any omitted schedule or exhibit.)      #  (32)                                                                                                                                                                                                                                                                                             |   |
| 10.138 | Sixth      amendment to contract for Alaska Access Services between Sprint      Communications Company L.P. and General Communication, Inc. and its wholly      owned subsidiary GCI Communication Corp. dated September 20, 2006      (33)                                                                                                                                                                                                                                                                                                         |   |
| 10.139 | Seventh      amendment to contract for Alaska Access Services between Sprint      Communications Company L.P. and General Communication, Inc. and its wholly      owned subsidiary GCI Communication Corp. dated January 17, 2007 #      (33)                                                                                                                                                                                                                                                                                                       |   |
| 10.140 | General      Communication, Inc. Director Compensation Plan dated June 29, 2006      (33)                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
| 10.141 | Eleventh      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI Communications Services, Inc. d/b/a Verizon Business      Services (successor-in-interest to MCI Network Services, Inc., which was      formerly known as MCI WorldCom Network Services) # (35)                                                                                                                                                                       |   |
| 10.142 | Third      Amendment to the Amended and Restated Credit Agreement among GCI Holdings,      Inc., GCI Communication Corp., GCI Cable, Inc., GCI Fiber Communication      Co., Potter View Development Co., Inc., and Alaska United Fiber System      Partnership, GCI, Inc., the banks, financial institutions, and other      lenders party hereto and Calyon New York Branch as Administrative Agent,      dated as of September 14, 2007 (36)                                                                                                     |   |
| 10.143 | Joinder      Agreement dated as of September 28, 2007 among BNP Paribas, U.S. Bank      National Association, GCI Holdings, Inc., GCI Communication Corp., GCI      Cable, Inc., GCI Fiber Communication Co., Potter View Development Co.,      Inc., and Alaska United Fiber System Partnership, GCI, Inc., and Calyon      New York Branch as Administrative Agent (36)                                                                                                                                                                           |   |
| 10.144 | Strategic      Roaming Agreement dated as of October 30, 2007 between Alaska DigiTel,      LLC. And WirelessCo L.P. # (37)                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| 10.145 | CDMA      Build-out Agreement dated as of October 30, 2007 between Alaska DigiTel,      LLC. and WirelessCo L.P. (Nonmaterial schedules and exhibits to the      Reorganization Agreement have been omitted pursuant to Item 601b.2 of      Regulation S-K. We agree to furnish supplementally to the Commission upon      request a copy of any omitted schedule or exhibit.) # (37)                                                                                                                                                               |   |

----

| 10.146 | Long-term de      Facto Transfer Spectrum Leasing agreement between Alaska DigiTel,      LLC. and SprintCom, Inc. # (37)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 10.147 | Twelfth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI Communications Services, Inc. d/b/a Verizon Business      Services (successor-in-interest to MCI Network Services, Inc., which was      formerly known as MCI WorldCom Network Services) dated November 19, 2007      (Nonmaterial schedules and exhibits to the Reorganization Agreement have      been omitted pursuant to Item 601b.2 of Regulation S-K. We agree to      furnish supplementally to the Commission upon request a copy of any      omitted schedule or exhibit.) # (37) |   |
| 10.148 | Stock      Purchase Agreement dated as of October 12, 2007 among GCI Communication      Corp., United Companies, Inc., Sea Lion Corporation and Togiak Natives      LTD. (Nonmaterial schedules and exhibits to the Reorganization Agreement      have been omitted pursuant to Item 601b.2 of Regulation S-K. We agree to      furnish supplementally to the Commission upon request a copy of any      omitted schedule or exhibit.) (37)                                                                                                                                                                                                                             |   |
| 10.149 | Fourth      Amendment to the Amended and Restated Credit Agreement dated as of May 2,      2008 by and among GCI Holdings, Inc., the other parties thereto and Calyon      New York Branch, as administrative agent, and the other Lenders party      thereto (38)                                                                                                                                                                                                                                                                                                                                                                                                      |   |
| 10.150 | Second      Amendment to Lease Agreement dated as of April 8, 2008 between RDB Company      and GCI Communication Corp. as successor in interest to General      Communication, Inc. (39)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| 10.151 | Audit      Committee Charter (as revised by the board of directors of General      Communication, Inc. effective as of April 27, 2007) (39)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| 10.152 | Nominating      and Corporate Governance Committee Charter (as revised by the board of      directors of General Communication, Inc. effective as of April 27, 2007)      (39)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| 10.153 | Thirteenth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI Communications Services, Inc. d/b/a Verizon Business      Services (successor-in-interest to MCI Network Services, Inc., which was      formally known as MCI WorldCom Network Services) dated January 16, 2008 #      (39)                                                                                                                                                                                                                                                             |   |
| 10.154 | Fourteenth      Amendment to Contract for Alaska Access Services between General      Communication, Inc. and its wholly owned subsidiary GCI Communication      Corp., and MCI Communications Services, Inc. d/b/a Verizon Business      Services (successor-in-interest to MCI Network Services, Inc., which was      formally known as MCI WorldCom Network Services) dated May 15, 2008      (40)                                                                                                                                                                                                                                                                   |   |
| 10.155 | Contract for      Alaska Access Services between the Company and Verizon, dated January 1,      1993 (41)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| 10.156 | Third      Amendment to Contract for Alaska Access Services between the Company and      Verizon, dated February 27, 1998 (41)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |
| 10.157 | Fourth      Amendment to Contract for Alaska Access Services between the Company and      Verizon, dated January 1, 1999 (41)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
| 10.158 | Fifth      Amendment to the Amended and Restated Credit Agreement dated as of October      17, 2008 by and among Holdings, Inc. the other parties thereto and Calyon      New York Branch, as administrative agent, and the other Lenders party      thereto (42)                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| 10.159 | Amendment to      Deferred Bonus Agreement dated December 31, 2008 by and among the Company,      the Employer and Mr. Duncan (43)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
| 10.160 | Amendment to      Deferred Compensation Agreement dated December 31, 2008 by and among the      Company, the Employer and Mr. Duncan (43)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| 14     | Code Of      Business Conduct and Ethics (originally reported as exhibit 10.118)      (25)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
| 18.1   | Letter      regarding change in accounting principle (39)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
| 21.1   | Subsidiaries      of the Registrant  *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |

----

| 23.1  | Consent of      KPMG LLP (Independent Public Accountant for      Company)  *                                              |   |
|-------|-------------------------------------------------------------------------------------------------------------------------------------|--------|
| 31    | Certifications      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*                                                      |   |
| 32    | Certifications      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of 2002 * |   |
| 99    | Additional      Exhibits:                                                                                                           |   |
| 99.1  | The Articles      of Incorporation of GCI Communication Corp. (1)                                                                   |   |
| 99.2  | The Bylaws of      GCI Communication Corp. (1)                                                                                      |   |
| 99.7  | The Bylaws of      GCI Cable, Inc. (10)                                                                                             |   |
| 99.8  | The Articles      of Incorporation of GCI Cable, Inc. (10)                                                                          |   |
| 99.15 | The Bylaws of      GCI Holdings, Inc. (13)                                                                                          |   |
| 99.16 | The Articles      of Incorporation of GCI Holdings, Inc. (13)                                                                       |   |
| 99.17 | The Articles      of Incorporation of GCI, Inc. (12)                                                                                |   |
| 99.18 | The Bylaws of      GCI, Inc. (12)                                                                                                   |   |
| 99.27 | The      Partnership Agreement of Alaska United Fiber System (15)                                                                   |   |
| 99.28 | The Bylaws of      Potter View Development Co., Inc. (19)                                                                           |   |
| 99.29 | The Articles      of Incorporation of Potter View Development Co., Inc. (19)                                                        |   |
| 99.34 | The Bylaws of      GCI Fiber Communication, Co., Inc. (20)                                                                          |   |
| 99.35 | The Articles      of Incorporation of GCI Fiber Communication, Co., Inc.(20)                                                        |   |

| ________________ |
|------------------|
| #                | CONFIDENTIAL      PORTION has been omitted pursuant to a request for confidential treatment      by us to, and the material has been separately filed with, the Securities      and Exchange Commission.  Each omitted Confidential Portion is      marked by three asterisks. |
|  *          | Filed      herewith. |
|             |   |
| ________________ |

| Exhibit      Reference | Description                                                                                                                                                                                 |
|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1                      | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1990                                                                  |
| 2                      | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1991                                                                  |
| 3                      | Incorporated      by reference to The Company’s Registration Statement on Form 10 (File No.      0-15279), mailed to the Securities and Exchange Commission on December 30,      1986 |
| 4                      | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1989.                                                                 |
| 5                      | Incorporated      by reference to The Company’s Current Report on Form 8-K dated June 4,      1993.                                                                                   |
| 6                      | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1993.                                                                 |
| 7                      | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1995.                                                                 |
| 8                      | Incorporated      by reference to The Company’s Form S-4 Registration Statement dated      October 4, 1996.                                                                           |
| 9                      | Incorporated      by reference to The Company’s Current Report on Form 8-K dated November      13, 1996.                                                                              |
| 10                     | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1996.                                                                 |

----

| 11 | Incorporated      by reference to The Company’s Current Report on Form 8-K dated March 14,      1996, filed March 28, 1996.                         |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| 12 | Incorporated      by reference to The Company’s Form S-3 Registration Statement (File No.      333-28001) dated May 29, 1997.                       |
| 13 | Incorporated      by reference to The Company’s Amendment No. 1 to Form S-3/A Registration      Statement (File No. 333-28001) dated July 8, 1997.  |
| 14 | Incorporated      by reference to The Company’s Amendment No. 2 to Form S-3/A Registration      Statement (File No. 333-28001) dated July 21, 1997. |
| 15 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1997.                               |
| 16 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 1998.                               |
| 17 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 1999.                              |
| 18 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended March 31, 2001.                             |
| 19 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 2001.                              |
| 20 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 2001.                               |
| 21 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 2002.                              |
| 22 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 2002.                               |
| 23 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 2003.                              |
| 24 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 2003.                               |
| 25 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended March 31, 2004.                             |
| 26 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 2004.                              |
| 27 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended March 31, 2005.                             |
| 28 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended September 30, 2005.                         |
| 29 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 2005 filed March 16, 2006.          |
| 30 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended March 31, 2006.                             |
| 31 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 2006.                              |
| 32 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 2006 filed March 19, 2007.          |
| 33 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended March 31, 2007.                             |
| 34 | Incorporated      by reference to The Company’s Form S-8 filed with the SEC on July 27,      2007.                                                  |
| 35 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 2007.                              |
| 36 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended September 30, 2007.                         |
| 37 | Incorporated      by reference to The Company’s Annual Report on Form 10-K for the year      ended December 31, 2007 filed March 7,2008.            |
| 38 | Incorporated      by reference to the Company's Report on Form 8-K for the period May 2,      2008 filed May 8, 2008.                  |
|----|----------------------------------------------------------------------------------------------------------------------------------------|
| 39 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended March 31, 2008.          |
| 40 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended June 30, 2008.           |
| 41 | Incorporated      by reference to The Company's Report on Form 8-K for the period September      19, 2008 filed on September 22, 2008. |
| 42 | Incorporated      by reference to The Company’s Quarterly Report on Form 10-Q for the period      ended September 30, 2008.      |
| 43 | Incorporated      by reference to The Company's Report on Form 8-K for the period December      31, 2008 filed January 6, 2009.        |

----

|   | By:    | /s/ Ronald A.      Duncan        |   |
|--------|--------|----------------------------------|--------|
|   |   | Ronald A.      Duncan, President |   |
|   |   | (Chief      Executive Officer)   |   |

| Date: |   March      20, 2009 |   |
|-------|----------------------------|--------|

----

| Signature                   |   | Title                                                                   |   | Date                       |
|-----------------------------|--------|-------------------------------------------------------------------------|--------|----------------------------|
|                        |   |                                                                    |   |                       |
| /s/ Stephen      M. Brett   |   | Chairman of      Board and Director                                     |   |   March      20, 2009 |
| Stephen M.      Brett       |   |                                                                    |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ Ronald A.      Duncan   |   | President and      Director                                             |   |   March      20, 2009 |
| Ronald A.      Duncan       |   | (Principal      Executive Officer)                                      |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ Jerry A.      Edgerton  |   | Director                                                                |   |   March      11, 2009 |
| Jerry A.      Edgerton      |   |                                                                    |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ Scott M.      Fisher    |   | Director                                                                |   |   March      3, 2009  |
| Scott M.      Fisher        |   |                                                                    |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ William      P. Glasgow |   | Director                                                                |   |   March      20, 2009 |
| William P.      Glasgow     |   |                                                                    |   |                       |
|                        |   |                                                                    |   |                       |
|                        |   | Director                                                                |   |                       |
| Mark W.      Kroloff        |   |                                                                    |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ Stephen      R. Mooney  |   | Director                                                                |   |   March      20, 2009 |
| Stephen R.      Mooney      |   |                                                                    |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ James M.      Schneider |   | Director                                                                |   |   March      20, 2009 |
| James M.      Schneider     |   |                                                                    |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ John M.      Lowber     |   | Senior Vice      President, Chief Financial                             |   |   March      20, 2009 |
| John M.      Lowber         |   | Officer,      Secretary and Treasurer(Principal      Financial Officer) |   |                       |
|                        |   |                                                                    |   |                       |
| /s/ Lynda L.      Tarbath   |   | Vice      President, Chief Accounting                                   |   |   March      20, 2009 |
| Lynda L.      Tarbath       |   | Officer(Principal      Accounting Officer)                              |   |                       |

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