----

|   |   |   |   |   |
|--------|--------|--------|--------|--------|

|   | x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|--------|-----------------------------------------------------------|

|   | SECURITIES EXCHANGE ACT OF 1934 |
|--------|---------------------------------|

|   | o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
|--------|------------------------------------------------------------|

|   | SECURITIES EXCHANGE ACT OF 1934 |
|--------|---------------------------------|

|   | GCI, INC.                                              |   |
|--------|--------------------------------------------------------|--------|
|   | (Exact name of registrant as specified in its charter) |   |

|   | State of Alaska                 |   | 91-1820757          |   |
|--------|---------------------------------|--------|---------------------|--------|
|   | (State or other jurisdiction of |   | (I.R.S Employer     |   |
|   | incorporation or organization)  |   | Identification No.) |   |

|   | 2550 Denali Street                      |   |       |   |
|--------|-----------------------------------------|--------|------------|--------|
|   | Suite 1000                              |   |       |   |
|   | Anchorage, Alaska                       |   | 99503      |   |
|   | (Address of principalexecutive offices) |   | (Zip Code) |   |

|   | Registrant’s telephone number, including area code: (907) 868-5600 |
|--------|--------------------------------------------------------------------------|

|   | Not Applicable                                                                         |   |
|--------|----------------------------------------------------------------------------------------|--------|
|   | Former name, former address and former fiscal year, if changed since last report  |   |

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

----

|                                                      |                                                 |                                                              |      |   | Page No.  |
|-----------------------------------------------------------|------------------------------------------------------|-------------------------------------------------------------------|-----------|--------|-----------|
|                                                      |                                                 |                                                              |      |   |      |
| Cautionary Statement Regarding Forward-Looking Statements |                                                 |
|                                                      |                                                 |                                                              |      |   |      |
| Part I.  FINANCIAL INFORMATION                  |                                                 |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      | Item I.                                              | Financial Statements                                              |      |   |      |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      |                                                 | Consolidated Balance Sheets (unaudited) as of June 30, 2009 and   |      |   |      |
|                                                      |                                                 |   December 31, 2008                                     |      |   |  4   |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      |                                                 | Consolidated Income Statement for the three and six months ended  |      |   |      |
|                                                      |                                                 |   June 30, 2009 (unaudited) and 2008 (unaudited)        |      |   |  6   |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      |                                                 | Consolidated Statements of Cash Flows for the six months          |      |   |      |
|                                                      |                                                 |   ended June 30, 2009 (unaudited) and 2008 (unaudited)  |      |   |  7   |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      |                                                 | Notes to Interim Consolidated Financial Statements (unaudited)    |      |   |      |
|                                                      |                                                 |                                                              |      |   |  8   |
|                                                      | Item 2.                                              | Management’s Discussion and Analysis of Financial Condition |      |   |      |
|                                                      |                                                 |   and Results of Operations                             |      |   |   25 |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      | Item 3.                                              | Quantitative and Qualitative Disclosures About Market Risk        |      |   |   47 |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      | Item 4.                                              | Controls and Procedures                                           |      |   |   47 |
|                                                      |                                                 |                                                              |      |   |      |
| Part II.  OTHER INFORMATION                     |                                                 |                                                              |      |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      | Item 1.                                              | Legal Proceedings                                                 |      |   |   49 |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      | Item 6.                                              | Exhibits                                                          |      |   |   49 |
|                                                      |                                                 |                                                              |      |   |      |
|                                                      | Other items are omitted, as they are not applicable. |                                                              |      |
|                                                      |                                                 |                                                              |      |   |      |
| SIGNATURES                                                |                                                 |                                                              |   50 |

----

Cautionary

----

PART

ITEM 
 FINANCIAL

| (Amounts in thousands)                                    |   | June 30, |      |   | December 31, |   |
|-----------------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
| ASSETS                                                    |   | 2009     |      |   | 2008         |   |
|                                                      |   |     |      |   |         |   |
| Current assets:                                           |   |     |      |   |         |   |
| Cash and cash equivalents                                 |   | $        | 26,821    |   |         |   | 29,693 |   |
|                                                      |   |     |      |   |         |   |   |   |
| Receivables                                               |   |     | 120,128   |   |         |   | 113,136 |   |
| Less allowance for doubtful receivables                   |   |     | 4,261     |   |         |   | 2,582 |   |
| Net receivables                                           |   |     | 115,867   |   |         |   | 110,554 |   |
|                                                      |   |     |      |   |         |   |   |   |
| Inventories                                               |   |     | 8,688     |   |         |   | 7,085 |   |
| Deferred income taxes                                     |   |     | 7,034     |   |         |   | 7,843 |   |
| Prepaid expenses                                          |   |     | 6,228     |   |         |   | 5,960 |   |
| Investment securities                                     |   |     | 883       |   |         |   | 1,563 |   |
| Other current assets                                      |   |     | 4,756     |   |         |   | 647 |   |
| Total current assets                                      |   |     | 170,277   |   |         |   | 163,345 |   |
|                                                      |   |     |      |   |         |   |   |   |
| Property and equipment in service, net of depreciation    |   |     | 806,020   |   |         |   | 793,051 |   |
| Construction in progress                                  |   |     | 36,746    |   |         |   | 54,098 |   |
| Net property and equipment                                |   |     | 842,766   |   |         |   | 847,149 |   |
|                                                      |   |     |      |   |         |   |   |   |
| Cable certificates                                        |   |     | 191,565   |   |         |   | 191,565 |   |
| Goodwill                                                  |   |     | 68,586    |   |         |   | 66,868 |   |
| Wireless licenses                                         |   |     | 25,967    |   |         |   | 25,967 |   |
| Other intangible assets, net of amortization              |   |     | 20,568    |   |         |   | 22,976 |   |
| Deferred loan and senior notes costs, net of amortization |   |     | 5,903     |   |         |   | 6,496 |   |
| Other assets                                              |   |     | 21,633    |   |         |   | 10,724 |   |
| Total other assets                                        |   |     | 334,222   |   |         |   | 324,596 |   |
| Total assets                                              |   | $        | 1,347,265 |   |         |   | 1,335,090 |   |

----

BALANCE

| (Amounts in thousands)                                                                                                        |   | June 30, |      |   | December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
| LIABILITIES AND STOCKHOLDER'S EQUITY                                                                                          |   | 2009     |      |   | 2008         |   |
|                                                                                                                          |   |     |      |   |         |   |
| Current liabilities:                                                                                                          |   |     |      |   |         |   |
| Current maturities of obligations under long-term debt and capital leases                                                     |   | $        | 13,088    |   |         |   | 12,857 |   |
| Accounts payable                                                                                                              |   |     | 32,371    |   |         |   | 40,497 |   |
| Deferred revenue                                                                                                              |   |     | 21,866    |   |         |   | 22,095 |   |
| Accrued payroll and payroll related obligations                                                                               |   |     | 19,911    |   |         |   | 22,632 |   |
| Accrued liabilities                                                                                                           |   |     | 10,872    |   |         |   | 11,043 |   |
| Accrued interest                                                                                                              |   |     | 9,616     |   |         |   | 10,224 |   |
| Subscriber deposits                                                                                                           |   |     | 1,368     |   |         |   | 1,262 |   |
| Total current liabilities                                                                                                     |   |     | 109,092   |   |         |   | 120,610 |   |
|                                                                                                                          |   |     |      |   |         |   |   |   |
| Long-term debt                                                                                                                |   |     | 724,200   |   |         |   | 708,406 |   |
| Obligations under capital leases, excluding current maturities                                                                |   |     | 91,698    |   |         |   | 94,029 |   |
| Obligation under capital lease due to related party, excluding current maturity                                               |   |     | 1,872     |   |         |   | 1,868 |   |
| Deferred income taxes                                                                                                         |   |     | 88,642    |   |         |   | 86,187 |   |
| Long-term deferred revenue                                                                                                    |   |     | 50,785    |   |         |   | 49,998 |   |
| Other liabilities                                                                                                             |   |     | 15,856    |   |         |   | 15,288 |   |
| Total liabilities                                                                                                             |   |     | 1,082,145 |   |         |   | 1,076,386 |   |
|                                                                                                                          |   |     |      |   |         |   |   |   |
| Commitments and contingencies                                                                                                 |   |     |      |   |         |   |   |   |
| Stockholder's equity:                                                                                                         |   |     |      |   |         |   |   |   |
| Common stock (no par):                                                                                                        |   |     |      |   |         |   |   |   |
| Class A common stock (no par). Authorized 10 shares; issued and outstanding 0.1 shares at June 30, 2009 and December 31, 2008 |   |     | 206,622   |   |         |   | 206,622 |   |
| Paid-in capital                                                                                                               |   |     | 49,200    |   |         |   | 45,468 |   |
| Retained earnings                                                                                                             |   |     | 9,298     |   |         |   | 6,614 |   |
| Total stockholder's equity                                                                                                    |   |     | 265,120   |   |         |   | 258,704 |   |
| Total liabilities and stockholder's equity                                                                                    |   | $        | 1,347,265 |   |         |   | 1,335,090 |   |

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

----

INCOME 

|                                                                                   |   | Three Months Ended |    |   | Six Months Ended |   |
|----------------------------------------------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                                                                   |   | June 30,           |    |   | June 30,         |   |
| (Amounts in thousands)                                                                 |   | 2009               |    |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Revenues                                                                               |   | $                  | 148,796 |   |             |   | 142,461 |   |   |   | 297,485 |   |   |   | 277,135 |   |
|                                                                                   |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Cost of goods sold (exclusive of depreciation and amortization shown separately below) |   |               | 47,348  |   |             |   | 52,448 |   |   |   | 95,205 |   |   |   | 103,759 |   |
| Selling, general and administrative expenses                                           |   |               | 51,719  |   |             |   | 48,260 |   |   |   | 108,305 |   |   |   | 94,666 |   |
| Depreciation and amortization expense                                                  |   |               | 31,170  |   |             |   | 27,708 |   |   |   | 61,904 |   |   |   | 54,951 |   |
| Operating income                                                                       |   |               | 18,559  |   |             |   | 14,045 |   |   |   | 32,071 |   |   |   | 23,759 |   |
|                                                                                   |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                                                                |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense (including amortization of deferred loan fees)                        |   |               | (13,273 | )      |             |   | (11,778 | ) |   |   | (25,920 | ) |   |   | (20,686 | ) |
| Interest income                                                                        |   |               | 11      |   |             |   | 402 |   |   |   | 19 |   |   |   | 483 |   |
| Other expense, net                                                                     |   |               | (13,262 | )      |             |   | (11,376 | ) |   |   | (25,901 | ) |   |   | (20,203 | ) |
| Income before income tax expense                                                       |   |               | 5,297   |   |             |   | 2,669 |   |   |   | 6,170 |   |   |   | 3,556 |   |
| Income tax expense                                                                     |   |               | 2,733   |   |             |   | 1,783 |   |   |   | 3,252 |   |   |   | 3,210 |   |
|                                                                                   |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                             |   |               | 2,564   |   |             |   | 886 |   |   |   | 2,918 |   |   |   | 346 |   |
|                                                                                   |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to the non-controlling interest                                |   |               | ---     |   |             |   | 946 |   |   |   | --- |   |   |   | 1,922 |   |
|                                                                                   |   |               |    |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income attributable to GCI, Inc.                                                   |   | $                  | 2,564   |   |             |   | 1,832 |   |   |   | 2,918 |   |   |   | 2,268 |   |

----

 CASH 

| (Amounts in thousands)                                                                                                       |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Cash flows from operating activities:                                                                                        |   |   |    |   |   |   |
| Net income                                                                                                                   |   | $      | 2,918   |   |   |   | 346 |   |
| Adjustments to reconcile net income to net cash provided  by operating activities (net of effects of acquisition): |   |   |    |   |   |   |   |   |
| Depreciation and amortization expense                                                                                        |   |   | 61,904  |   |   |   | 54,951 |   |
| Deferred income tax expense                                                                                                  |   |   | 3,252   |   |   |   | 2,470 |   |
| Share-based compensation expense                                                                                             |   |   | 3,229   |   |   |   | 2,853 |   |
| Other noncash income and expense items                                                                                       |   |   | 3,862   |   |   |   | 4,064 |   |
| Change in operating assets and liabilities, net of effect of acquisition                                                     |   |   | (32,418 | )      |   |   | 43,973 |   |
| Net cash provided by operating activities                                                                                    |   |   | 42,747  |   |   |   | 108,657 |   |
|                                                                                                                         |   |   |    |   |   |   |   |   |
| Cash flows from investing activities:                                                                                        |   |   |    |   |   |   |   |   |
| Purchases of property and equipment                                                                                          |   |   | (57,269 | )      |   |   | (113,491 | ) |
| Proceeds from sale of marketable securities                                                                                  |   |   | 613     |   |   |   | 800 |   |
| Purchase of marketable securities                                                                                            |   |   | (225    | )      |   |   | --- |   |
| Purchase of business, net of cash received                                                                                   |   |   | (108    | )      |   |   | (40,161 | ) |
| Purchases of other assets and intangible assets                                                                              |   |   | (2,066  | )      |   |   | (2,324 | ) |
| Net cash used in investing activities                                                                                        |   |   | (59,055 | )      |   |   | (155,176 | ) |
|                                                                                                                         |   |   |    |   |   |   |   |   |
| Cash flows from financing activities:                                                                                        |   |   |    |   |   |   |   |   |
| Borrowing on Senior Credit Facility                                                                                          |   |   | 20,000  |   |   |   | 132,100 |   |
| Repayment of debt and capital lease obligations                                                                              |   |   | (6,330  | )      |   |   | (1,999 | ) |
| Net (distribution to) contribution from General Communication, Inc.                                                          |   |   | (234    | )      |   |   | 59 |   |
| Payment of debt issuance costs                                                                                               |   |   | ---     |   |   |   | (1,626 | ) |
| Issuance of long-term debt                                                                                                   |   |   | ---     |   |   |   | 614 |   |
| Net cash provided by financing activities                                                                                    |   |   | 13,436  |   |   |   | 129,148 |   |
| Net increase (decrease) in cash and cash equivalents                                                                         |   |   | (2,872  | )      |   |   | 82,629 |   |
| Cash and cash equivalents at beginning of period                                                                             |   |   | 29,693  |   |   |   | 13,074 |   |
|                                                                                                                         |   |   |    |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                                                   |   | $      | 26,821  |   |   |   | 95,703 |   |

----

The

| (l) | Business and Summary of Significant Accounting Principles |
|-----|-----------------------------------------------------------|

|   | Basis of Presentation |
|--------|-----------------------|

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

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

|   | · | Cable television services throughout Alaska, |
|--------|--------|----------------------------------------------|

|   | · | Competitive local access services in Anchorage, Fairbanks, Juneau, Wasilla, Eagle River, Kodiak, Palmer, Kenai, Soldotna, Seward, Chugiak, Sitka, Valdez, Ketchikan, Nome, and Homer, Alaska, |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Incumbent local access services in rural Alaska, |
|--------|--------|--------------------------------------------------|

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

|   | · | Sale of postpaid and 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 commercial customers, |
|--------|--------|---------------------------------------------------|

|   | · | 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, Inc. 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 Accounting Research Bulletin (“ARB”) No. 51” throughAugust 17, 2008.  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 No. 71 have beeneliminated. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (c) | Recently Issued Accounting Pronouncements |
|--------|-----|-------------------------------------------|

| (d)   | Recently Adopted Accounting Pronouncements |
|-----------------|--------------------------------------------|

|   | On January 1, 2009, we fully adopted SFAS No. 157 “Fair Value Measurements,” to include 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). The full adoption of SFAS No. 157 did not have any effect on our consolidated financial statements. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | In April 2008, the FASB issued FASB Staff Position (“FSP”) No. 142-3, “Determination of the Useful Life of Intangible Assets.” FSP No. 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142, “Goodwill and Other Intangible Assets.”  FSP No. 142-3 appliesprospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP No. 142-3 became effective on January 1, 2009.  The adoption of FSP No. 142-3 effective January 1, 2009, did not have any effect on our consolidated financial statements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In October 2008, the FASB issued FSP No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active.”  FSP No. 157-3 clarifies the application of SFAS No. 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 marketis not active and the use of market quotes when assessing the relevance of observable and unobservable data. FSP No.157-3 is effective for all periods presented in accordance with SFAS No. 157. The adoption of FSP No. 157-3 did not have any effect on our consolidated financial statements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Acquisitions |
|--------|-----|--------------|

|   | Effective June 1, 2008, we acquired 100% of the outstanding stock of United Utilities, Inc. ("UUI") and Unicom, Inc. (“Unicom”).  Effective July 1, 2008, we acquired 100% of the ownership interests of Alaska Wireless, LLC ("Alaska Wireless").  On August 18, 2008, we acquired 18.1% of the equity interest and voting control of Alaska DigiTel, LLC ("Alaska DigiTel") giving us 100% ownership interestin this entity. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Assuming we had completed all of our acquisitions on January 1, 2008, our revenues and net income attributable to GCI, Inc. for the three and six months ended June  30, 2008 would have been as follows (amounts in thousands): |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                           |   | Three Months Ended June 30, |    |   | Six MonthsEnded June 30, |   |
|------------------------------------------------|--------|-----------------------------|---------|--------|--------------------------|--------|
|                                           |   | 2008                        |    |   | 2008                     |   |
| Pro forma consolidated revenue                 |   | $                           | 146,824 |   |                     |   | 288,185 |   |
| Pro forma net income attributable to GCI, Inc. |   | $                           | 1,944   |   |                     |   | 2,651 |   |

|   | (f) | Regulatory Accounting and Regulation |
|--------|-----|--------------------------------------|

|   | 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 livesapproved 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. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Revenue Recognition |
|--------|-----|---------------------|

|   | As an Eligible Telecommuncations Carrier ("ETC"), we receive subsidies from the Universal Service Fund ("USF") to support the provision of local access service in high-cost areas. On May 1, 2008, the Federal Communications Commission ("FCC") issued an order adopting the recommendation of the Federal State Joint Board on Universal Service ("Joint Board")to impose a state-by-state interim cap on high cost funds to be distributed to competitive ETCs. As part of the revised policy, the FCC adopted a limited exception from the cap for competitive ETCs serving tribal lands or Alaska Native regions. While the operation of the cap will generally reduce the high cost fund amounts available to competitive ETCs as new competitive ETCs are designated and as existing competitive ETCs acquire new customers, providers like us who serve tribal lands or Alaska Native regionswere provided some relief. On March 5, 2009, the FCC issued an additional order waiving a previously adopted limitation to the exception, the result of which is to provide uncapped support for all lines served by competitive ETCs for tribal lands or Alaska Native regions and the cap for all other regions will be in place until the FCC takes action on proposals for long time reform. In the first quarter 2009, we recognized $1.9 million of voice and wireless revenue from the Universal Service Administrative Company("USAC") related to services provided from August 2009 to December 2008 due to the March 2009 FCC order that provides uncapped support for all lines served by competitive ETCs for tribal lands or Alaska Native regions retroactive to August 2008. On April 8, 2009, the FCC issued a Notice of Inquiry to review aspects of its high cost support program. Comments were filed on May 8, 2009, and replies were filed on June 8, 2009. We cannot predict at this time the outcome of this proceeding or its affect on high costsupport available to us. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In the second quarter 2009, we recognized $3.1 million of wireless revenue from the USAC for interstate common line support for a new local access area for which we received ETC status in May 2009 of which $690,000 and $1.7 million were related to first quarter 2009 and the year ended December 31, 2008, respectively. Collectability was not reasonablyassured until we were awarded ETC status, therefore, we deferred revenue recognition until such status was confirmed. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|   | (i) | Investment Securities |
|--------|-----|-----------------------|

|   | We have investment securities of $883,000 at June 30, 2009, 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.  During the six monthsended June 30, 2009, the change in net unrealized holding gains/losses in the trading portfolio included in earnings was a net loss of $20,000. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (j) | Asset Retirement Obligations |
|--------|-----|------------------------------|

|   | Following is a reconciliation of the beginning and ending aggregate carrying amount of our asset retirement obligations at June 30, 2009 and 2008 (amounts in thousands): |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Balance at December 31, 2007                            |   | $      | 4,173  |   |
|---------------------------------------------------------|--------|--------|--------|--------|
| Liability incurred                                      |   |   | 18     |   |
| Accretion expense for the six months endedJune 30, 2008 |   |   | 124    |   |
| Additions upon acquisition of UUI and Unicom            |   |   | 6,211  |   |
| Liability settled                                       |   |   | (40    | )      |
| Balance at June 30, 2008                                |   | $      | 10,486 |   |
|                                                    |   |   |   |   |
| Balance at December 31, 2008                            |   | $      | 6,179  |   |
| Liability incurred                                      |   |   | 377    |   |
| Accretion expense for the six months endedJune 30, 2009 |   |   | 202    |   |
| Liability settled                                       |   |   | (20    | )      |
| Balance at June 30, 2009                                |   | $      | 6,738  |   |

|   | (k) | 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, derivative instruments areaccounted 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 reporting period. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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"). |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The following is a summary of the derivative contracts outstanding in the balance sheet at June 30, 2009 (dollar amounts in thousands): |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|               | Number of Contracts |   | Notional Value | Balance Sheet Location |   | Fair Value   |   |
|--------------------|---------------------|--------|----------------|------------------------|--------|--------------|--------|
| Interest rate caps | 2                   |   | $              | 180,000                |   | Other Assets |   | $ | 8 |   |

|                                                                  |                               |   | Amount of Gain (Loss) Recognized |   |
|-----------------------------------------------------------------------|------------------------------------|--------|----------------------------------|--------|
| Derivatives not designated as hedging instruments under SFAS No. 133: | Location of Gain (Loss) Recognized |   | Three Months Ended June 30, 2009 |   | Six Months Ended June 30, 2009 |   |
| Interest rate caps                                                    | Interest expense                   |   | $                                | 7      |   |   | $ | 1 |   |

|   | (l) | Use of Estimates |
|--------|-----|------------------|

|   | The preparation of financial statements in conformity with U.S. 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 doubtfulreceivables, 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, our effective tax rate, purchase price allocations, the accrual of cost of goods sold exclusive of depreciation and amortization ("Cost of Goods Sold"), and the accrualof contingencies and litigation. Actual results could differ from those estimates. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (m) | Income Taxes |
|--------|-----|--------------|

|   | GCI, Inc., as a wholly-owned subsidiary and member of the GCI controlled group of corporations, files its income tax returns as part of the consolidated group of corporations under GCI.  Accordingly, all discussions regarding income taxes reflect the consolidated group's activity.  Our income tax expense and deferred income tax assets and liabilities are presented herein using the separate-entity method. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (n) | Classification of Taxes Collected from Customers |
|--------|-----|--------------------------------------------------|

|                      |   | Three Months Ended |   | Six Months Ended |   |
|---------------------------|--------|--------------------|--------|------------------|--------|
|                      |   | June 30,           |   | June 30,         |   |
|                      |   | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| Surcharges reported gross |   |               | 1,067  |             |   | 1,062 |   |   | 1,983 |   |   | 2,012 |   |

|   | (o) | Reclassifications |
|--------|-----|-------------------|

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

|   | Change in operating assets and liabilities, net of effect of acquisition, consists of (amounts in thousands): |
|--------|---------------------------------------------------------------------------------------------------------------|

| Six month period ended June 30,                                  |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| (Increase) decrease in accounts receivable                       |   | $      | (6,948  | )      |   |   | 7,001 |   |
| Decrease in prepaid expenses                                     |   |   | 64      |   |   |   | 114 |   |
| Increase in inventories                                          |   |   | (1,537  | )      |   |   | (2,030 | ) |
| (Increase) decrease in other current assets                      |   |   | (4,180  | )      |   |   | 89 |   |
| Increase in other assets                                         |   |   | (11,251 | )      |   |   | --- |   |
| Increase (decrease) in accounts payable                          |   |   | (4,341  | )      |   |   | 1,979 |   |
| Increase (decrease) in deferred revenues                         |   |   | (325    | )      |   |   | 3,159 |   |
| Decrease in accrued payroll and payroll related obligations      |   |   | (2,890  | )      |   |   | (41 | ) |
| Increase (decrease) in accrued liabilities                       |   |   | (171    | )      |   |   | 1,314 |   |
| Increase (decrease) in accrued interest                          |   |   | (608    | )      |   |   | 324 |   |
| Increase in subscriber deposits                                  |   |   | 106     |   |   |   | 115 |   |
| Increase (decrease) in long-term deferred revenue                |   |   | (794    | )      |   |   | 36,893 |   |
| Increase (decrease) in components of other long-term liabilities |   |   | 457     |   |   |   | (4,944 | ) |
|                                                             |   | $      | (32,418 | )      |   |   | 43,973 |   |

----

|   | We paid $0 and $478,000 for income taxes during the six months ended June 30, 2009 and 2008, respectively.  We received $911,000 and $0 in income tax refunds during the six months ended June 30, 2009 and 2008, respectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During the six months ended June 30, 2009 and 2008, we capitalized interest of $368,000 and $2.1 million, respectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | During the six months ended June 30, 2008, we financed $98.6 million for the use of satellite transponders through a capital lease obligation.  We also financed $1.3 million in capital expenditures through the extension of a previously existing capital lease. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We received net cash of $110.6 million from the $145.0 million term loan that we obtained in May 2008. We used $30.0 million of the term loan to repay the revolver portion of our Senior Credit Facility and our loan proceeds were reduced by $2.9 million for an original issue discount and $1.5 million for bank and legal fees associated with the new term loan. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In June 2008 the Galaxy XR satellite was taken out of service resulting in the removal of the remaining $8.8 million net book value and the recognition of an $8.8 million warranty receivable. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We had $8.7 million and $13.0 million in non-cash additions to property and equipment due to unpaid purchases as of June 30, 2009 and 2008, respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Intangible Assets |
|-----|-------------------|

|                 |   | Three Months Ended |   | Six Months Ended |   |
|----------------------|--------|--------------------|--------|------------------|--------|
|                 |   | June 30,           |   | June 30,         |   |
|                 |   | 2009               |   | 2008             |   | 2009 |   | 2008 |   |
| Amortization expense | $      | 1,889              |   |             | 1,165  |   | 3,770 |   |   | 2,080 |   |

| Years Ending December 31, |   |   |   |
|---------------------------|--------|--------|--------|
| 2009                      |   | $      | 7,607  |   |
| 2010                      |   |   | 5,711  |   |
| 2011                      |   |   | 3,640  |   |
| 2012                      |   |   | 2,691  |   |
| 2013                      |   |   | 1,391  |   |

----

|   | For the period from January 1, 2009 to June 30, 2009, the U.S. economy has been experiencing the effects of a recession.  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 shouldother events occur indicating the carrying value of goodwill and intangible assets might be impaired , we would test our goodwill and 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. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Financial Instruments |
|-----|-----------------------|

|                                                     |   | June 30, 2009   |   |
|----------------------------------------------------------|--------|-----------------|--------|
|                                                     |   | Carrying Amount |   | Fair Value |   |
| Current and long-term debt and capital lease obligations | $      | 830,858         |   |   | 776,198 |   |
| Other liabilities                                        |   | 65,374          |   |   | 65,131 |   |

|   | 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 CoBank Mortgage Note Payable is valued at the discounted amount of future cashflows using our current incremental rate of borrowing on our Senior Credit Facility.  The fair value of the Rural Utilities Services Debt is valued at the discounted amount of future cash flows using a treasury rate that corresponds to the remaining term of the loan.  The fair value of our capital leases and capital lease 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 Credit Facility. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 CreditFacility interest rate at June 30, 2009. Our non-employee share-based compensation awards are reported at their fair value at each reporting period. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Fair Value Measurements |
|--------|-------------------------|

----

|                                                   |   |    |                        |   |    | Fair Value Measurement at Reporting Date Using                 |   |
|--------------------------------------------------------|--------|---------|-----------------------------|--------|---------|----------------------------------------------------------------|--------|
| Description                                            |   |    | Balance as of June 30, 2009 |   |    | Quoted Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Trading securities:                                    |   |    |                        |   |    |                                                           |   |   |   |   |   |   |   |
| Money market funds                                     |   | $  | 79                          |   | $  | 79                                                             |   | $  | --- |   | $  | --- |   |
| U.S. treasury notes                                    |   |    | 332                         |   |    | 332                                                            |   |   | --- |   |   | --- |   |
| U.S. government securities                             |   |    | 472                         |   |    | 472                                                            |   |   | --- |   |   | --- |   |
| Deferred compensation plan assets (money market funds) |   |    | 1,272                       |   |    | 1,272                                                          |   |   | --- |   |   | --- |   |
| Derivative financial instruments                       |   |    | 8                           |   |    | ---                                                            |   |   | 8 |   |   | --- |   |
| Total assets at fair value                             |   |  $ | 2,163                       |   | $  | 2,155                                                          |   | $  | 8 |   | $  | --- |   |

----

| (5) | Share-Based Compensation |
|-----|--------------------------|

|                                                                 |   | Shares(in thousands) |   |   | WeightedAverageExercise Price |   |
|----------------------------------------------------------------------|--------|----------------------|--------|--------|-------------------------------|--------|
| Outstanding options and restricted stock awards at December 31, 2008 |   |                 | 7,205  |   |                          | $      | 9.08 |   |
|                                                                 |   |                 |   |   |                          |   |   |   |
| Options granted                                                      |   |                 | 153    |   |                          | $      | 6.65 |   |
| Restricted stock awards granted                                      |   |                 | 32     |   |                          | $      | 7.15 |   |
| Options exercised                                                    |   |                 | (69    | )      |                          | $      | 5.76 |   |
| Restricted stock awards vested                                       |   |                 | (128   | )      |                          | $      | 11.23 |   |
| Options forfeited and retired                                        |   |                 | (13    | )      |                          | $      | 10.43 |   |
| Outstanding options and restricted stock awards at June 30, 2009     |   |                 | 7,180  |   |                          | $      | 9.02 |   |
|                                                                 |   |                 |   |   |                          |   |   |   |
| Available for grant at June 30, 2009                                 |   |                 | 779    |   |                          |   |   |   |

----

|                                               |   | Shares(in thousands) |   |   | WeightedAverageExercise Price |   |
|----------------------------------------------------|--------|----------------------|--------|--------|-------------------------------|--------|
| Outstanding at December 31, 2008 and June 30, 2009 |   |                 | 150    |   |                          | $      | 6.50 |   |
|                                               |   |                 |   |   |                          |   |   |   |
| Available for grant at June 30, 2009               |   |                 | ---    |   |                          |   |   |   |

| (6) | Industry Segments Data |
|-----|------------------------|

----

| Three months ended June 30, |   | Consumer |   |   | Network Access |   |   | Commercial |   |   | Managed Broadband |   |   | Regulated Operations |   |   | Total Reportable Segments |   |
|-----------------------------|--------|----------|--------|--------|----------------|--------|--------|------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|
| 2009                        |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Revenues:                   |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Intersegment                |   | $        | ---    |   |           |   | 156    |       |   |   | 1,482             |   |   |                 | ---    |   |                      |   | 52 |   |   |   | 1,690 |   |
| External                    |   |     | 73,399 |   |           |   | 31,120 |       |   |   | 26,911            |   |   |                 | 10,998 |   |                      |   | 6,368 |   |   |   | 148,796 |   |
| Total revenues              |   | $        | 73,399 |   |           |   | 31,276 |       |   |   | 28,393            |   |   |                 | 10,998 |   |                      |   | 6,420 |   |   |   | 150,486 |   |
| Adjusted EBITDA             |   | $        | 22,292 |   |           |   | 15,671 |       |   |   | 5,592             |   |   |                 | 5,358  |   |                      |   | 2,323 |   |   |   | 51,236 |   |
|                        |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| 2008                        |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Revenues:                   |   |     |   |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Intersegment                |   | $        | 17     |   |           |   | 167    |       |   |   | 1,569             |   |   |                 | ---    |   |                      |   | 116 |   |   |   | 1,869 |   |
| External                    |   |     | 62,113 |   |           |   | 41,891 |       |   |   | 27,444            |   |   |                 | 9,134  |   |                      |   | 1,879 |   |   |   | 142,461 |   |
| Total revenues              |   | $        | 62,130 |   |           |   | 42,058 |       |   |   | 29,013            |   |   |                 | 9,134  |   |                      |   | 1,995 |   |   |   | 144,330 |   |
| Adjusted EBITDA             |   | $        | 13,423 |   |           |   | 21,676 |       |   |   | 5,696             |   |   |                 | 3,138  |   |                      |   | 359 |   |   |   | 44,292 |   |

| Six months ended June 30, |   | Consumer |    |   | Network Access |   |   | Commercial |   |   | Managed Broadband |   |   | Regulated Operations |   |   | Total Reportable Segments |   |
|---------------------------|--------|----------|---------|--------|----------------|--------|--------|------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|
| 2009                      |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Revenues:                 |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |
| Intersegment              |   | $        | ---     |   |           |   | 383    |       |   |   | 2,938             |   |   |                 | ---    |   |                      |   | 104 |   |   |   | 3,425 |   |
| External                  |   |     | 144,118 |   |           |   | 64,319 |       |   |   | 54,903            |   |   |                 | 21,608 |   |                      |   | 12,537 |   |   |   | 297,485 |   |
| Total revenues            |   | $        | 144,118 |   |           |   | 64,702 |       |   |   | 57,841            |   |   |                 | 21,608 |   |                      |   | 12,641 |   |   |   | 300,910 |   |
| Adjusted EBITDA           |   | $        | 41,070  |   |           |   | 32,590 |       |   |   | 10,893            |   |   |                 | 9,276  |   |                      |   | 3,855 |   |   |   | 97,684 |   |
|                      |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| 2008                      |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Revenues:                 |   |     |    |   |           |   |   |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Intersegment              |   | $        | 17      |   |           |   | 468    |       |   |   | 2,918             |   |   |                 | ---    |   |                      |   | 116 |   |   |   | 3,519 |   |
| External                  |   |     | 123,496 |   |           |   | 81,065 |       |   |   | 54,035            |   |   |                 | 16,660 |   |                      |   | 1,879 |   |   |   | 277,135 |   |
| Total revenues            |   | $        | 123,513 |   |           |   | 81,533 |       |   |   | 56,953            |   |   |                 | 16,660 |   |                      |   | 1,995 |   |   |   | 280,654 |   |
| Adjusted EBITDA           |   | $        | 25,677  |   |           |   | 41,813 |       |   |   | 10,021            |   |   |                 | 5,615  |   |                      |   | 359 |   |   |   | 83,485 |   |

----

|                                                   |   | Three Months Ended |    |   | Six Months Ended |   |
|--------------------------------------------------------|--------|--------------------|---------|--------|------------------|--------|
|                                                   |   | June 30,           |    |   | June 30,         |   |
|                                                   |   | 2009               |    |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Reportable segment revenues                            |   | $                  | 150,486 |   |             |   | 144,330 |   |   |   | 300,910 |   |   |   | 280,654 |   |
| Less intersegment revenues eliminated in consolidation |   |               | 1,690   |   |             |   | 1,869 |   |   |   | 3,425 |   |   |   | 3,519 |   |
| Consolidated revenues                                  |   | $                  | 148,796 |   |             |   | 142,461 |   |   |   | 297,485 |   |   |   | 277,135 |   |

|                                                   |   | Three Months Ended |   |   | Six Months Ended |   |
|--------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                   |   | June 30,           |   |   | June 30,         |   |
|                                                   |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
| Reportable segment adjusted EBITDA                     |   | $                  | 51,236 |   |             |   | 44,292 |   |   |   | 97,684 |   |   |   | 83,485 |   |
| Less depreciation and amortization expense             |   |               | 31,170 |   |             |   | 27,708 |   |   |   | 61,904 |   |   |   | 54,951 |   |
| Less share-based compensation expense                  |   |               | 1,427  |   |             |   | 1,593 |   |   |   | 3,229 |   |   |   | 2,853 |   |
| Less non-cash contribution adjustment                  |   |               | 80     |   |             |   | --- |   |   |   | 480 |   |   |   | --- |   |
| Less net loss attributable to non-controlling interest |   |               | ---    |   |             |   | 946 |   |   |   | --- |   |   |   | 1,922 |   |
| Consolidated operating income                          |   |               | 18,559 |   |             |   | 14,045 |   |   |   | 32,071 |   |   |   | 23,759 |   |
| Less other expense, net                                |   |               | 13,262 |   |             |   | 11,376 |   |   |   | 25,901 |   |   |   | 20,203 |   |
| Consolidated income before income tax expense          |   | $                  | 5,297  |   |             |   | 2,669 |   |   |   | 6,170 |   |   |   | 3,556 |   |

|   |   |
|--------|--------|

| (7) | Commitments and Contingencies |
|-----|-------------------------------|

----

----

| (8) | Subsequent Event |
|-----|------------------|

----

----

2

MANAGEMENT’S 

----

|                       | 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 |

----

----

----

----

|                                         |               | Percent­age |             |     | Percent­age |
|----------------------------------------------|--------------------|------------------|------------------|----------|------------------|
|                                         | Three Months Ended | Change 1         | Six Months Ended | Change 1 |
|                                         | June 30,           | 2009             | June 30,         | 2009     |
|                                         | 2009               | 2008             | vs. 2008         | 2009     | 2008             | vs. 2008 |
| (Unaudited)                                  |               |             |             |     |             |   |
| Statements of Operations Data:               |               |             |             |     |             |   |
| Revenues:                                    |               |             |             |     |             |   |
| Consumer segment                             | 49.3%              | 43.6%            | 18.2%            | 48.4%    | 44.5%            | 16.7% |
| Network Access segment                       | 20.9%              | 29.4%            | (25.7%)          | 21.6%    | 29.3%            | (20.7%) |
| Commercial segment                           | 18.1%              | 19.3%            | (1.9%)           | 18.5%    | 19.5%            | 1.6% |
| Managed Broadband segment                    | 7.4%               | 6.4%             | 20.4%            | 7.3%     | 6.0%             | 29.7% |
| Regulated Operations segment                 | 4.3%               | 1.3%             | 238.9%           | 4.2%     | 0.7%             | 567.2% |
| Total revenues                               | 100.0%             | 100.0%           | 4.5%             | 100.0%   | 100.0%           | 7.3% |
| Selling, general and administrative expenses | 34.8%              | 33.9%            | 7.2%             | 36.4%    | 34.2%            | 14.4% |
| Depreciation and amortization expense        | 21.0%              | 19.5%            | 12.5%            | 20.8%    | 19.8%            | 12.7% |
| Operating income                             | 12.5%              | 9.9%             | 32.1%            | 10.8%    | 8.6%             | 35.0% |
| Other expense, net                           | 8.9%               | 8.0%             | 16.6%            | 8.7%     | 7.3%             | 28.2% |
| Income before income taxes                   | 3.6%               | 1.9%             | 98.5%            | 2.1%     | 1.3%             | 73.5% |
| Net income                                   | 1.7%               | 0.6%             | 189.4%           | 1.0%     | 0.1%             | 743.4% |
| Net income attributable to GCI, Inc.         | 1.7%               | 1.3%             | 40.0%            | 1.0%     | 0.8%             | 28.7% |

----

|                           |   | Second Quarter of |   |   | Percentage |   |
|--------------------------------|--------|-------------------|--------|--------|------------|--------|
|                           |   | 2009              |   |   | 2008       |   |   | Change |   |
| Voice                          |   | $                 | 12,988 |   |       |   | 12,117 |   |   |   | 7.2 | % |
| Video                          |   |              | 27,132 |   |       |   | 25,668 |   |   |   | 5.7 | % |
| Data                           |   |              | 12,166 |   |       |   | 10,386 |   |   |   | 17.1 | % |
| Wireless                       |   |              | 21,113 |   |       |   | 13,942 |   |   |   | 51.4 | % |
| Total Consumer segment revenue |   | $                 | 73,399 |   |       |   | 62,113 |   |   |   | 18.2 | % |

|                                      |   | Second Quarter of |   |   | Percentage |   |
|-------------------------------------------|--------|-------------------|--------|--------|------------|--------|
|                                      |   | 2009              |   |   | 2008       |   |   | Change |   |
| Voice                                     |   | $                 | 3,775  |   |       |   | 4,682 |   |   |   | (19.4 | %) |
| Video                                     |   |              | 11,037 |   |       |   | 9,936 |   |   |   | 11.1 | % |
| Data                                      |   |              | 1,014  |   |       |   | 1,877 |   |   |   | (46.0 | %) |
| Wireless                                  |   |              | 8,185  |   |       |   | 7,194 |   |   |   | 13.8 | % |
| Total Consumer segment Cost of Goods Sold |   | $                 | 24,011 |   |       |   | 23,689 |   |   |   | 1.4 | % |

|                             |   | Second Quarter of |   |   | Percentage |   |
|----------------------------------|--------|-------------------|--------|--------|------------|--------|
|                             |   | 2009              |   |   | 2008       |   |   | Change |   |
| Consumer segment adjusted EBITDA |   | $                 | 22,292 |   |       |   | 13,423 |   |   |   | 66.1 | % |

|                                             |   | June 30, |    |   | Percentage |   |
|--------------------------------------------------|--------|----------|---------|--------|------------|--------|
|                                             |   | 2009     |    |   | 2008       |   |   | Change |   |
| Voice:                                           |   |     |    |   |       |   |   |   |   |
| Long-distance subscribers1                       |   |     | 88,600  |   |       |   | 89,800 |   |   |   | (1.3 | %) |
| Long-distance minutes carried (in millions)      |   |     | 28.3    |   |       |   | 32.0 |   |   |   | (11.4 | %) |
| Total local access lines in service2             |   |     | 81,200  |   |       |   | 78,100 |   |   |   | 4.0 | % |
| Local access lines in service on GCI facilities2 |   |     | 70,300  |   |       |   | 60,500 |   |   |   | 16.2 | % |
|                                             |   |     |    |   |       |   |   |   |   |   |   |   |
| Video:                                           |   |     |    |   |       |   |   |   |   |   |   |   |
| Basic subscribers3                               |   |     | 129,700 |   |       |   | 130,300 |   |   |   | (0.5 | %) |
| Digital programming tier subscribers4            |   |     | 76,200  |   |       |   | 68,200 |   |   |   | 11.7 | % |
| HD/DVR converter boxes5                          |   |     | 74,400  |   |       |   | 56,900 |   |   |   | 30.8 | % |
| Homes passed                                     |   |     | 230,400 |   |       |   | 226,900 |   |   |   | 1.5 | % |
| Average monthly gross revenue per subscriber6    |   | $        | 69.59   |   |       | $      | 65.86 |   |   |   | 5.7 | % |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |    |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |    |   |   |   |   |   |   |   |   |   |
| Cable modem subscribers7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 94,900  |   |   |   | 91,000 |   |   |   | 4.3    | %      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |    |   |   |   |   |   |   |   |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |    |   |   |   |   |   |   |   |   |   |
| Wireless lines in service8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 103,600 |   |   |   | 77,000 |   |   |   | 34.6   | %      |
| Average monthly gross revenue per subscriber9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $      | 57.88   |   |   | $      | 57.39  |   |   |   | 0.9    | %      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
| 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. On January 1, 2009, our Consumer segment transferred 2,900 basic cable subscribers to our Commercialsegment.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 asubset 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 receiveservice.6 Quarter-to-date average monthly consumer video revenues divided by the average of consumer video basic subscribers at the beginning and end 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 alsobe video basic subscribers though basic cable service is not required to receive cable modem service. On January 1, 2009, our Consumer segment transferred 1,400 cable modem subscribers to our Commercial segment.8 A wireless line in service is defined as a revenue generating wireless device.9 Quarter-to-date average monthly consumer wireless revenues divided by the average of consumer wireless subscribers at the beginning and end of the period. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |

|   | · | A 4.7% increase in programming services revenue to $21.5 million in the second quarter of 2009 primarily resulting from an increase in digital programming tier subscribers in the second quarter of 2009, and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 11.3% increase in equipment rental revenue to $5.3 million in the second quarter of 2009 primarily resulting from our customers’ increased use of our HD/DVR converter boxes. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                 |   | Second Quarter of |   |   | Percentage |   |
|--------------------------------------|--------|-------------------|--------|--------|------------|--------|
|                                 |   | 2009              |   |   | 2008       |   |   | Change |   |
| Voice                                |   | $                 | 13,444 |   |       |   | 23,213 |   |   |   | (42.1 | %) |
| Data                                 |   |              | 16,073 |   |       |   | 17,988 |   |   |   | (10.7 | %) |
| Wireless                             |   |              | 1,603  |   |       |   | 690 |   |   |   | 132.3 | % |
| Total Network Access segment revenue |   | $                 | 31,120 |   |       |   | 41,891 |   |   |   | (25.7 | %) |

|                                            |   | Second Quarter of |   |   | Percentage |   |
|-------------------------------------------------|--------|-------------------|--------|--------|------------|--------|
|                                            |   | 2009              |   |   | 2008       |   |   | Change |   |
| Voice                                           |   | $                 | 4,464  |   |       |   | 8,226 |   |   |   | (45.7 | %) |
| Data                                            |   |              | 1,726  |   |       |   | 2,830 |   |   |   | (39.0 | %) |
| Wireless                                        |   |              | 366    |   |       |   | 473 |   |   |   | (22.6 | %) |
| Total Network Access segment Cost of Goods Sold |   | $                 | 6,556  |   |       |   | 11,529 |   |   |   | (43.1 | %) |

|                                   |   | Second Quarter of |   |   | Percentage |   |
|----------------------------------------|--------|-------------------|--------|--------|------------|--------|
|                                   |   | 2009              |   |   | 2008       |   |   | Change |   |
| Network Access segment adjusted EBITDA |   | $                 | 15,671 |   |       |   | 21,676 |   |   |   | (27.7 | %) |

----

|                                                                                                                                                                                   |   | June 30, |   | Percentage |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|------------|
|                                                                                                                                                                                   |   | 2009     |   | 2008       |   | Change |
| Voice:                                                                                                                                                                                 |   |     |   |       |   |   |
| Long-distance minutes carried (in millions)                                                                                                                                            |   | 215.6    |   | 326.2      |   | (33.9%) |
|                                                                                                                                                                                   |   |     |   |       |   |   |
| Data:                                                                                                                                                                                  |   |     |   |       |   |   |
| Total Internet service provider access lines in service1                                                                                                                               |   | 1,700    |   | 2,000      |   | (15.0%) |
|                                                                                                                                                                                   |   |
| 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. |
|                                                                                                                                                                                   |   |

|                             |   | Second Quarter of |   |   | Percentage |   |
|----------------------------------|--------|-------------------|--------|--------|------------|--------|
|                             |   | 2009              |   |   | 2008       |   |   | Change |   |
| Voice                            |   | $                 | 7,701  |   |       |   | 7,280 |   |   |   | 5.8 | % |
| Video                            |   |              | 2,221  |   |       |   | 2,149 |   |   |   | 3.4 | % |
| Data                             |   |              | 15,409 |   |       |   | 16,584 |   |   |   | (7.1 | %) |
| Wireless                         |   |              | 1,580  |   |       |   | 1,431 |   |   |   | 10.4 | % |
| Total Commercial segment revenue |   | $                 | 26,911 |   |       |   | 27,444 |   |   |   | (1.9 | %) |

----

|                                        |   | Second Quarter of |   |   |   |   |
|---------------------------------------------|--------|-------------------|--------|--------|--------|--------|
|                                        |   | 2009              |   |   | 2008   |   |   | Percentage Change |   |
| Voice                                       |   | $                 | 4,898  |   |   |   | 4,809 |   |   |   | 1.9 | % |
| Video                                       |   |              | 506    |   |   |   | 382 |   |   |   | 32.5 | % |
| Data                                        |   |              | 6,696  |   |   |   | 7,481 |   |   |   | (10.5 | %) |
| Wireless                                    |   |              | 877    |   |   |   | 1,240 |   |   |   | (29.3 | %) |
| Total Commercial segment Cost of Goods Sold |   | $                 | 12,977 |   |   |   | 13,912 |   |   |   | (6.7 | %) |

|                               |   | Second Quarter of |   |   | Percentage |   |
|------------------------------------|--------|-------------------|--------|--------|------------|--------|
|                               |   | 2009              |   |   | 2008       |   |   | Change |   |
| Commercial segment adjusted EBITDA |   | $                 | 5,592  |   |       |   | 5,696 |   |   |   | (1.8 | %) |

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | June 30, |   | Percentage |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 2009     |   | 2008       |   | Change |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |     |   |       |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 9,600    |   | 10,400     |   | (7.7%) |
| Total local access lines in service2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | 47,300   |   | 45,400     |   | 4.2% |
| Local access lines in service on GCI facilities 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 18,400   |   | 16,600     |   | 10.8% |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 31.8     |   | 32.9       |   | (3.4%) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |     |   |       |   |   |
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |     |   |       |   |   |
| Cable modem subscribers3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 10,400   |   | 9,000      |   | 15.6% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |     |   |       |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |     |   |       |   |   |
| Wireless lines in service4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | 8,900    |   | 7,100      |   | 25.4% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |     |   |       |   |   |
| 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. On January 1, 2009, ourConsumer segment transferred 1,400 cable modem subscribers to our Commercial segment. 4  A wireless line in service is defined as a revenue generating wireless device. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |

----

|                                                                                                                                                                                                                                                                                                                                           |   | June 30, |   | Percentage |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|------------|
|                                                                                                                                                                                                                                                                                                                                           |   | 2009     |   | 2008       |   | Change |
| Voice:                                                                                                                                                                                                                                                                                                                                         |   |     |   |       |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                     |   | 830      |   | 900        |   | (6.4%) |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                                                                                                                    |   | 0.3      |   | 0.1        |   | 172.5% |
| Total local access lines in service (all on GCI facilities)2                                                                                                                                                                                                                                                                                   |   | 11,600   |   | 12,200     |   | (5.2%) |
|                                                                                                                                                                                                                                                                                                                                           |   |     |   |       |   |   |   |
| 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. |

----

| ·   | A $1.8 million increase in labor costs, |
|--------------------|-----------------------------------------|

| ·   | $1.3 million in additional expense resulting from our June 1, 2008, acquisition of UUI and Unicom,  and |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | A $654,000 increase in our company-wide success sharing bonus accrual in 2009. |
|--------------------|--------------------------------------------------------------------------------|

| ·   | $1.1 million in additional interest expense resulting from the Galaxy 18 capital lease commencing in May 2008, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.8 million increase in interest expense on our Senior Credit Facility to $4.6 million resulting from additional debt from the Additional Incremental Term Loan agreement beginning in May 2008, the increased interest rate on our Senior Credit Facility beginning in May 2008, and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.2 million decrease in capitalized interest. |
|--------------------|--------------------------------------------------|

----

|                           |   |   |    |   | Percentage |   |
|--------------------------------|--------|--------|---------|--------|------------|--------|
|                           |   | 2009   |    |   | 2008       |   |   | Change |   |
| Voice                          |   | $      | 26,903  |   |       |   | 23,978 |   |   |   | 12.2 | % |
| Video                          |   |   | 54,502  |   |       |   | 51,315 |   |   |   | 6.2 | % |
| Data                           |   |   | 23,928  |   |       |   | 20,482 |   |   |   | 16.8 | % |
| Wireless                       |   |   | 38,785  |   |       |   | 27,721 |   |   |   | 39.9 | % |
| Total Consumer segment revenue |   | $      | 144,118 |   |       |   | 123,496 |   |   |   | 16.7 | % |

|                                      |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                      |   | 2009   |   |   | 2008   |   |   | Percentage Change |   |
| Voice                                     |   | $      | 7,492  |   |   |   | 9,735 |   |   |   | (23.0 | %) |
| Video                                     |   |   | 22,359 |   |   |   | 19,866 |   |   |   | 12.6 | % |
| Data                                      |   |   | 2,128  |   |   |   | 3,703 |   |   |   | (42.5 | %) |
| Wireless                                  |   |   | 15,435 |   |   |   | 15,087 |   |   |   | 2.3 | % |
| Total Consumer segment Cost of Goods Sold |   | $      | 47,414 |   |   |   | 48,391 |   |   |   | (2.0 | %) |

----

|                             |   |   |   |   | Percentage |   |
|----------------------------------|--------|--------|--------|--------|------------|--------|
|                             |   | 2009   |   |   | 2008       |   |   | Change |   |
| Consumer segment adjusted EBITDA |   | $      | 41,070 |   |       |   | 25,677 |   |   |   | 60.0 | % |

|                                                                                                                                                                                                                                                                                                                         |   | June 30, |   |   | Percentage |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                         |   | 2009     |   |   | 2008       |   |   | Change |   |
| Voice:                                                                                                                                                                                                                                                                                                                       |   |     |   |   |       |   |   |   |   |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                                                                                                  |   |     | 57.9   |   |       |   | 65.6 |   |   |   | (11.8 | %) |
|                                                                                                                                                                                                                                                                                                                         |   |     |   |   |       |   |   |   |   |   |   |   |
| Video:                                                                                                                                                                                                                                                                                                                       |   |     |   |   |       |   |   |   |   |   |   |   |
| Average monthly gross revenue per subscriber1                                                                                                                                                                                                                                                                                |   | $        | 69.28  |   |       | $      | 66.19 |   |   |   | 4.7 | % |
|                                                                                                                                                                                                                                                                                                                         |   |     |   |   |       |   |   |   |   |   |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                    |   |     |   |   |       |   |   |   |   |   |   |   |
| Average monthly gross revenue per subscriber2                                                                                                                                                                                                                                                                                |   | $        | 58.59  |   |       | $      | 58.25 |   |   |   | 0.6 | % |
|                                                                                                                                                                                                                                                                                                                         |   |
| 1 Year-to-date average monthly consumer video revenues divided by the average of consumer video basic subscribers at the beginning and end of the period.2 Year-to-date average monthly consumer wireless revenues divided by the average of consumer wireless subscribers at the beginning and end of the period. |   |
|                                                                                                                                                                                                                                                                                                                         |   |

|   | · | A 4.8% increase in programming services revenue to $43.2 million in 2009 primarily resulting from an increase in digital programming tier subscribers in 2009, and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 13.6% increase in equipment rental revenue to $10.6 million in 2009 primarily resulting from our customers’ increased use of our HD/DVR converter boxes. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $6.2 million or 212.8% increase in recognized support from the USAC primarily due to increased wireless subscribers and the FCC order issued in March 2009, the result of which provides uncapped support for all lines served by competitive ETCs for tribal lands or Alaska Native regions retroactive to August 2008.  The issuance of this order allowed usto recognize $810,000 in additional USAC support from August 2008 to December 2008 in 2009 that is included in the revenue increase discussed above |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Recognition of $3.1 million to be received from the USAC for interstate common line support for a new local access area for which we received ETC status in May 2009 of which $1.7 million was related to services provided during the year ended December 31, 2008.  Collectability was not reasonably assured until we were awarded ETC status, therefore, we deferredrevenue recognition until such status was confirmed, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An increase in the number of wireless subscribers. |
|--------------------|----------------------------------------------------|

----

|                                 |   |   |   |   | Percentage |   |
|--------------------------------------|--------|--------|--------|--------|------------|--------|
|                                 |   | 2009   |   |   | 2008       |   |   | Change |   |
| Voice                                |   | $      | 27,778 |   |       |   | 45,155 |   |   |   | (38.5 | %) |
| Data                                 |   |   | 34,027 |   |       |   | 34,827 |   |   |   | (2.3 | %) |
| Wireless                             |   |   | 2,514  |   |       |   | 1,083 |   |   |   | 132.1 | % |
| Total Network Access segment revenue |   | $      | 64,319 |   |       |   | 81,065 |   |   |   | (20.7 | %) |

|                                            |   |   |   |   | Percentage |   |
|-------------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                            |   | 2009   |   |   | 2008       |   |   | Change |   |
| Voice                                           |   | $      | 8,541  |   |       |   | 15,533 |   |   |   | (45.0 | %) |
| Data                                            |   |   | 4,212  |   |       |   | 5,556 |   |   |   | (24.2 | %) |
| Wireless                                        |   |   | 487    |   |       |   | 694 |   |   |   | (29.8 | %) |
| Total Network Access segment Cost of Goods Sold |   | $      | 13,240 |   |       |   | 21,783 |   |   |   | (39.2 | %) |

----

|                                   |   |   |   |   | Percentage |   |
|----------------------------------------|--------|--------|--------|--------|------------|--------|
|                                   |   | 2009   |   |   | 2008       |   |   | Change |   |
| Network Access segment adjusted EBITDA |   | $      | 32,590 |   |       |   | 41,813 |   |   |   | (22.1 | %) |

|                                        |   | June 30, |   | Percentage |
|---------------------------------------------|--------|----------|--------|------------|
|                                        |   | 2009     |   | 2008       |   | Change |
| Voice:                                      |   |     |   |       |   |   |
| Long-distance minutes carried (in millions) |   | 416.1    |   | 640.8      |   | (35.1%) |

----

|                             |   |   |   |   | Percentage |   |
|----------------------------------|--------|--------|--------|--------|------------|--------|
|                             |   | 2009   |   |   | 2008       |   |   | Change |   |
| Voice                            |   | $      | 15,685 |   |       |   | 14,494 |   |   |   | 8.2 | % |
| Video                            |   |   | 4,271  |   |       |   | 3,969 |   |   |   | 7.6 | % |
| Data                             |   |   | 31,924 |   |       |   | 32,793 |   |   |   | (2.7 | %) |
| Wireless                         |   |   | 3,023  |   |       |   | 2,779 |   |   |   | 8.8 | % |
| Total Commercial segment revenue |   | $      | 54,903 |   |       |   | 54,035 |   |   |   | 1.6 | % |

|                                        |   |   |   |   |   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                        |   | 2009   |   |   | 2008   |   |   | Percentage Change |   |
| Voice                                       |   | $      | 9,467  |   |   |   | 9,738 |   |   |   | (2.8 | %) |
| Video                                       |   |   | 1,003  |   |   |   | 770 |   |   |   | 30.3 | % |
| Data                                        |   |   | 14,261 |   |   |   | 15,061 |   |   |   | (5.3 | %) |
| Wireless                                    |   |   | 1,601  |   |   |   | 2,414 |   |   |   | (33.7 | %) |
| Total Commercial segment Cost of Goods Sold |   | $      | 26,332 |   |   |   | 27,983 |   |   |   | (5.9 | %) |

|                               |   |   |   |   | Percentage |   |
|------------------------------------|--------|--------|--------|--------|------------|--------|
|                               |   | 2009   |   |   | 2008       |   |   | Change |   |
| Commercial segment adjusted EBITDA |   | $      | 10,893 |   |       |   | 10,021 |   |   |   | 8.7 | % |

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

|                                        |   | June 30, |   | Percentage |
|---------------------------------------------|--------|----------|--------|------------|
|                                        |   | 2009     |   | 2008       |   | Change |
| Voice:                                      |   |     |   |       |   |   |
| Long-distance minutes carried (in millions) |   | 64.0     |   | 65.7       |   | (2.7%) |

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|                                        |   | June 30, |   | Percentage |
|---------------------------------------------|--------|----------|--------|------------|
|                                        |   | 2009     |   | 2008       |   | Change |
| Voice:                                      |   |     |   |       |   |   |
| Long-distance minutes carried (in millions) |   | 0.7      |   | 0.1        |   | 454.5% |

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| ·   | A $5.3 million increase in labor costs, |
|--------------------|-----------------------------------------|

| ·   | $4.3 million in additional expense resulting from our June 1, 2008, acquisition of UUI and Unicom, |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | $1.2 million in additional expense incurred in 2009 for the conversion of our customers' wireless phones to our facilities, and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.2 million increase in our company-wide success sharing bonus accrual in 2009. |
|--------------------|------------------------------------------------------------------------------------|

| ·   | $2.8 million in additional interest expense resulting from the Galaxy 18 capital lease commencing in May 2008, |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | A $3.8 million increase in interest expense on our Senior Credit Facility to $8.4 million resulting from additional debt from the Additional Incremental Term Loan agreement beginning in May 2008, the increased interest rate on our Senior Credit Facility beginning in May 2008, and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.7 million decrease in capitalized interest. |
|--------------------|--------------------------------------------------|

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|                                                 |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Operating activities                                 |   | $      | 42,747  |   |   |   | 108,657 |   |
| Investing activities                                 |   |   | (59,055 | )      |   |   | (155,176 | ) |
| Financing activities                                 |   |   | 13,436  |   |   |   | 129,148 |   |
| Net increase (decrease) in cash and cash equivalents |   | $      | (2,872  | )      |   |   | 82,629 |   |

----

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Item 3.
Quantitative 

Item 4
Controls 

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PART

1
Legal

6.
Exhibits

| Exhibit No. | Description                                                                                                                                                                                           |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1        | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by our President and Director                                                  |
| 31.2        | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by our Senior Vice President, Chief Financial Officer, Secretary and Treasurer |
| 32.1        | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by our President and Director                                                  |
| 32.2        | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by our Senior Vice President, Chief Financial Officer, Secretary and Treasurer |

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SIGNATURES

| Signature                   |   | Title                                        |   | Date                  |
|-----------------------------|--------|----------------------------------------------|--------|-----------------------|
|                        |   |                                         |   |                  |
|                        |   |                                         |   |                  |
|   /s/ Ronald A. Duncan |   | President and Director                       |   |   August 7, 2009 |
| Ronald A. Duncan            |   | (Principal Executive Officer)                |   |                  |
|                        |   |                                         |   |                  |
|   /s/ G. Wilson Hughes |   | Vice President and Director                  |   |   August 7, 2009 |
| G. Wilson Hughes            |   |                                         |   |                  |
|                        |   |                                         |   |                  |
|   /s/ John M. Lowber   |   | Secretary, Treasurer and Director            |   |   August 7, 2009 |
| John M. Lowber              |   | (Principal Financial and Accounting Officer) |   |                  |

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