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|   | 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 principal executive offices) |   | (Zip Code) |   |

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

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| Cautionary Statement Regarding Forward-Looking Statements |                                                                                                                     |   |   |   4   |
|-----------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|
|                                                      |                                                                                                                     |   |   |       |   |
| Part I                                                    |                                                                                                                     |   |   |       |   4 |
|                                                      |                                                                                                                     |   |   |       |   |
|                                                      | Item 1. Business                                                                                                         |   |   |       |   4 |
|                                                      | Item 1A. Risk Factors                                                                                                    |   |   |       |   25 |
|                                                      | Item 1B. Unresolved Staff Comments                                                                                       |   |   |       |   32 |
|                                                      | Item 2. Properties                                                                                                       |   |   |       |   32 |
|                                                      | Item 3. Legal Proceedings                                                                                                |   |   |       |   32 |
|                                                      | Item 4. Omitted per General Instruction I(1)(a) and (b) of Form 10-K                                                     |   |   |       |   32 |
|                                                      |                                                                                                                     |   |   |       |   |
| Part II                                                   |                                                                                                                     |   |   |       |   33 |
|                                                      | Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |   |   |       |   33 |
|                                                      | Item 6. Selected Financial Data                                                                                          |   |   |       |   33 |
|                                                      | Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations                            |   |   |       |   34 |
|                                                      | Item 7A. Quantitative and Qualitative Disclosures about Market Risk                                                      |   |   |       |   56 |
|                                                      | Item 8. Consolidated Financial Statements and Supplementary Data                                                         |   |   |       |   56 |
|                                                      | Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                             |   |   |       |   56 |
|                                                      | Item 9A. Controls and Procedures                                                                                         |   |   |       |   56 |
|                                                      | Item 9B. Other Information                                                                                               |   |   |       |   58 |
|                                                      |                                                                                                                     |   |   |       |   |
| Part III                                                  |                                                                                                                     |   |   |       |   58 |
|                                                      | Items 10, 11, 12, 13 and 14 are omitted per General Instruction I(1)(a) and (b) of Form 10-K                             |   |   |       |   58 |
|                                                      |                                                                                                                     |   |   |       |   |
| Part IV                                                   |                                                                                                                     |   |   |       |   59 |
|                                                      | Item 15. Exhibits, Consolidated Financial Statement Schedules                                                            |   |   |       |   59 |
|                                                      |                                                                                                                     |   |   |       |   |
| SIGNATURES                                                |                                                                                                                     |   |   |   114 |

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

|             |   | Year Ended December 31, |    |
|------------------|--------|-------------------------|---------|
|             |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
| Total revenues 1 |   | $                       | 294,925 |   |   |   | 255,632 |   |   |   | 223,502 |   |

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| ·   | Alaska United East was placed into service in 1999 and connects Whittier, Valdez and Juneau, Alaska and Seattle, Washington, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

| ·   | Alaska United West was placed into service in 2004 and connects Seward, Alaska to Warrenton, Oregon, and |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | Alaska United Southeast was placed into service in 2008 and connects Ketchikan, Wrangell, Petersburg, Angoon and Sitka, Alaska to Alaska United West. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

|   | · | Our Anchorage facility consists of routers, a bank of servers that perform support and application functions, database servers providing authentication and user demographic data, layer 2 gigabit switch networks for intercommunications and broadband services. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|             |   | Year Ended December 31, |    |
|------------------|--------|-------------------------|---------|
|             |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
| Total revenues 1 |   | $                       | 122,072 |   |   |   | 153,821 |   |   |   | 163,377 |   |

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|             |   | Year Ended December 31, |    |
|------------------|--------|-------------------------|---------|
|             |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
| Total revenues 1 |   | $                       | 110,135 |   |   |   | 114,660 |   |   |   | 104,640 |   |

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|             |   | Year Ended December 31, |   |
|------------------|--------|-------------------------|--------|
|             |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
| Total revenues 1 |   | $                       | 44,875 |   |   |   | 37,047 |   |   |   | 28,792 |   |

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

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

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

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| ·   | We acquired a LMDS license in 1998 for use of a 150 MHz block of spectrum in the 28 GHz Ka-band for providing wireless services. The LMDS license was renewed in 2008 for an additional 10-year term, following the grant of an extension until June 1, 2012 of the requirement to provide “substantial service” in the service region, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Two licenses for use of a 30 MHz block of spectrum, which together authorize provision of PCS services in Alaska. Both licenses have an expiration date of June 23, 2015.  Licenses may be revoked and license renewal applications may be denied for cause. We expect the PCS license will be renewed in due course, when, at the end of the license period, a renewal application will be filed, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A cellular A license 25 MHz for sites located in the Bethel AK-2 B2 portion of RSA 316, serving the Aleutians West Census Area, and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Several cellular B licenses 25 MHz are held by our subsidiary Unicom for sites located in the Wade Hampton AK-1 portion of CMA 315 and the Bethel AK-2 portion of CMA 316, throughout the Yukon-Kuskokwim Delta. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | 42% are located in the Municipality of Anchorage, |
|--------|--------|---------------------------------------------------|

|   | · | 14% are located in the Fairbanks North Star Borough, |
|--------|--------|------------------------------------------------------|

|   | · | 12% are located in the Matanuska-Susitna Borough, |
|--------|--------|---------------------------------------------------|

|   | · | 8% are located in the Kenai Peninsula Borough, |
|--------|--------|------------------------------------------------|

|   | · | 4% are located in the City and Borough of Juneau, and |
|--------|--------|-------------------------------------------------------|

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

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

|   | · | Resolution of issues of interference between spectrum bands. |
|--------|--------|--------------------------------------------------------------|

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

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

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

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

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

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

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

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|                                                                                              |   | Years ended December 31, |      |
|---------------------------------------------------------------------------------------------------|--------|--------------------------|-----------|
|   (Amounts in Thousands)                                                                     |   | 2009                     |      |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Revenues                                                                                          |   | $                        | 595,811   |   |   |   | 575,442 |   |   |   | 520,311 |   |   |   | 477,482 |   |   |   | 443,026 |   |
| Income (loss) before income tax expense and cumulative effect of a change in accounting principle |   | $                        | 7,452     |   |   |   | (2,295 | ) |   |   | 25,859 |   |   |   | 34,253 |   |   |   | 36,835 |   |
| Cumulative effect of a change in accounting principal, net of income tax expense of $44 in 2006   |   | $                        | ---       |   |   |   | --- |   |   |   | --- |   |   |   | 64 |   |   |   | --- |   |
| Net income (loss)                                                                                 |   | $                        | 3,516     |   |   |   | (3,372 | ) |   |   | 13,697 |   |   |   | 18,520 |   |   |   | 20,831 |   |
| Net loss attributable to the non-controlling interest                                             |   | $                        | ---       |   |   |   | 1,503 |   |   |   | 36 |   |   |   | --- |   |   |   | --- |   |
| Net income (loss) attributable to GCI, Inc. common stockholders                                   |   | $                        | 3,516     |   |   |   | (1,869 | ) |   |   | 13,733 |   |   |   | 18,520 |   |   |   | 20,831 |   |
| Total assets                                                                                      |   | $                        | 1,417,763 |   |   |   | 1,335,090 |   |   |   | 984,233 |   |   |   | 914,659 |   |   |   | 873,775 |   |
| Long-term debt, including current portion and net of unamortized discount                         |   | $                        | 776,380   |   |   |   | 716,831 |   |   |   | 538,398 |   |   |   | 489,462 |   |   |   | 475,840 |   |
| Obligations under capital leases, including current portion                                       |   | $                        | 95,914    |   |   |   | 100,329 |   |   |   | 2,851 |   |   |   | 2,857 |   |   |   | 672 |   |
| Total GCI, Inc. stockholder’s equity                                                        |   | $                        | 266,683   |   |   |   | 258,704 |   |   |   | 252,955 |   |   |   | 240,395 |   |   |   | 243,620 |   |
| Dividends declared per common share                                                               |   | $                        | 0.00      |   |   |   | 0.00 |   |   |   | 0.00 |   |   |   | 0.00 |   |   |   | 0.00 |   |

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|                                                  |   |                    |   |   |   |   |   |   |   |   | Percent­age Change 1 |   |   | Percent­age Change 1 |   |
|-------------------------------------------------------|--------|-------------------------|--------|--------|--------|--------|--------|--------|--------|--------|---------------------------|--------|--------|---------------------------|--------|
|                                                  |   |                    |   |   |   |   |   |   |   |   | 2009                      |   |   | 2008                      |   |
|                                                  |   | Year Ended December 31, |   |   | vs.    |   |   | vs.    |   |
| (Unaudited)                                           |   | 2009                    |   |   | 2008   |   |   | 2007   |   |   | 2008                      |   |   | 2007                      |   |
| Statements of Operations Data:                        |   |                    |   |   |   |   |   |   |   |   |                      |   |   |                      |   |
| Revenues:                                             |   |                    |   |   |   |   |   |   |   |   |                      |   |   |                      |   |
| Consumer segment                                      |   |                    | 49     | %      |   |   | 45     | %      |   |   | 43                        | %      |   |                      | 15     | % |   |   | 14 | % |
| Network Access segment                                |   |                    | 21     | %      |   |   | 27     | %      |   |   | 31                        | %      |   |                      | (20    | %) |   |   | (6 | %) |
| Commercial segment                                    |   |                    | 18     | %      |   |   | 20     | %      |   |   | 20                        | %      |   |                      | (4     | %) |   |   | 10 | % |
| Managed Broadband segment                             |   |                    | 8      | %      |   |   | 6      | %      |   |   | 6                         | %      |   |                      | 21     | % |   |   | 29 | % |
| Regulated Operations segment                          |   |                    | 4      | %      |   |   | 2      | %      |   |   | 0                         | %      |   |                      | 68     | % |   |                         NM |   |
| Total revenues                                        |   |                    | 100    | %      |   |   | 100    | %      |   |   | 100                       | %      |   |                      | 4      | % |   |   | 11 | % |
| Selling, general and administrative expenses          |   |                    | 36     | %      |   |   | 37     | %      |   |   | 34                        | %      |   |                      | 1      | % |   |   | 20 | % |
| Depreciation and amortization expense                 |   |                    | 21     | %      |   |   | 20     | %      |   |   | 17                        | %      |   |                      | 8      | % |   |   | 31 | % |
| Operating income                                      |   |                    | 11     | %      |   |   | 8      | %      |   |   | 12                        | %      |   |                      | 39     | % |   |   | (22 | %) |
| Other expense, net                                    |   |                    | 10     | %      |   |   | 9      | %      |   |   | 7                         | %      |   |                      | 17     | % |   |   | 42 | % |
| Income (loss) before income taxes                     |   |                    | 1      | %      |   |   | 0      | %      |   |   | 5                         | %      |   |                      | 425    | % |   |   | (109 | %) |
| Net income (loss)                                     |   |                    | 1      | %      |   |   | (1     | %)     |   |   | 3                         | %      |   |                      | 204    | % |   |   | (125 | %) |
| Net loss attributable to the non-controlling interest |   |                    | 0      | %      |   |   | 0      | %      |   |   | 0                         | %      |   |                      | 100    | % |   |   | 4,075 | % |
| Net income (loss) attributable to GCI, Inc.           |   |                    | 1      | %      |   |   | 0      | %      |   |   | 3                         | %      |   |                      | 288    | % |   |   | (114 | %) |

|                           |   |   |    |   | Percentage |   |
|--------------------------------|--------|--------|---------|--------|------------|--------|
|                           |   | 2009   |    |   | 2008       |   |   | Change |   |
| Voice                          |   | $      | 52,654  |   |       |   | 47,042 |   |   |   | 12 | % |
| Video                          |   |   | 110,986 |   |       |   | 105,238 |   |   |   | 5 | % |
| Data                           |   |   | 50,327  |   |       |   | 42,692 |   |   |   | 18 | % |
| Wireless                       |   |   | 80,958  |   |       |   | 60,660 |   |   |   | 33 | % |
| Total Consumer segment revenue |   | $      | 294,925 |   |       |   | 255,632 |   |   |   | 15 | % |

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|                                      |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                      |   | 2009   |   |   | 2008   |   |   | Percentage Change |   |
| Voice                                     |   | $      | 14,952 |   |   |   | 18,121 |   |   |   | (17 | %) |
| Video                                     |   |   | 45,350 |   |   |   | 40,279 |   |   |   | 13 | % |
| Data                                      |   |   | 4,367  |   |   |   | 6,554 |   |   |   | (33 | %) |
| Wireless                                  |   |   | 32,225 |   |   |   | 24,899 |   |   |   | 29 | % |
| Total Consumer segment Cost of Goods Sold |   | $      | 96,894 |   |   |   | 89,853 |   |   |   | 8 | % |

|                             |   |   |   |   | Percentage |   |
|----------------------------------|--------|--------|--------|--------|------------|--------|
|                             |   | 2009   |   |   | 2008       |   |   | Change |   |
| Consumer segment adjusted EBITDA |   | $      | 86,587 |   |       |   | 58,949 |   |   |   | 47 | % |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | December 31, |    |   | Percentage |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | 2009         |    |   | 2008       |   |   | Change |   |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |         |    |   |       |   |   |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |         | 90,500  |   |       |   | 88,600 |   |   |   | 2 | % |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |         | 114.7   |   |       |   | 128.6 |   |   |   | (11 | %) |
| Total local access lines in service2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         | 84,200  |   |       |   | 80,700 |   |   |   | 4 | % |
| Local access lines in service on GCI facilities2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |         | 75,200  |   |       |   | 68,700 |   |   |   | 9 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |    |   |       |   |   |   |   |   |   |   |
| Video:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |         |    |   |       |   |   |   |   |   |   |   |
| Basic subscribers3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 130,500 |   |       |   | 132,500 |   |   |   | (2 | %) |
| Digital programming tier subscribers4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | 79,600  |   |       |   | 71,900 |   |   |   | 11 | % |
| HD/DVR converter boxes5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         | 81,500  |   |       |   | 67,800 |   |   |   | 20 | % |
| Homes passed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |         | 232,400 |   |       |   | 229,300 |   |   |   | 1 | % |
| Average monthly gross revenue per subscriber6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $            | 70.36   |   |       | $      | 67.40 |   |   |   | 4 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |    |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |    |   |       |   |   |   |   |   |   |   |
| Cable modem subscribers7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         | 100,200 |   |       |   | 94,400 |   |   |   | 6 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |    |   |       |   |   |   |   |   |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         |    |   |       |   |   |   |   |   |   |   |
| Wireless lines in service8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |         | 115,100 |   |       |   | 88,700 |   |   |   | 30 | % |
| Average monthly gross revenue per subscriber9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $            | 58.23   |   |       | $      | 55.23 |   |   |   | 5 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |
| 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 Commercial segment.4 A digital programming tier subscriber is defined as one digital programming tier of service delivered to an address or separate subunits thereof regardless of the number of outlets or digital programming tiers purchased. Digital programming tier subscribers are a subset of basic subscribers.5 A HD/DVR converter box is defined as one box rented by a digital programming or basic tier subscriber. A digital programming or basic tier subscriber is not required to rent an HD/DVR converter box to receive service.6 Year-to-date average monthly consumer video revenues divided by the average of consumer video basic subscribers at the beginning and ending of the period.7 A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased. If one entity purchases multiple cable modem service access points, each access point is counted as a subscriber. Cable modem subscribers may also be video basic subscribers though basic cable service is not required to receive cable modem service.8 A wireless line in service is defined as a revenue generating wireless device.9 Year-to-date average monthly consumer wireless revenues divided by the average of consumer wireless subscribers at the beginning and ending of the period. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |

----

|   | · | A 4% increase in programming services revenue to $88.1 million in 2009 primarily resulting from an increase in digital programming tier subscribers in 2009 and a rate increase on certain cable service offerings beginning in August 2009, and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 12% increase in equipment rental revenue to $21.6 million in 2009 primarily resulting from our customers’ increased use of our HD/DVR converter boxes. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | An $11.9 million or 162% increase in recognized support from the USAC primarily due to the following: |
|--------------------|-------------------------------------------------------------------------------------------------------|

| o   | Increased wireless subscribers in areas that receive USAC support, |
|---------------|--------------------------------------------------------------------|

| o   | 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 2008.  Collectability was not reasonably assured until we were awarded ETC status, therefore, we deferred revenue recognition until such status was confirmed, |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | Recognition of $1.1 million upon a change in our estimate of support to be received from the USAC for interstate common line support of which $77,000 was related to 2008.  We accrue estimated program revenue quarterly and adjust our revenue as we obtain new information that changes the variables used to calculate our estimate, and |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| o   | 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 us to recognize $810,000 in additional USAC support from August 2008 to December 2008 in 2009 that is included in the revenue increase discussed above. |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

|                                 |   |   |    |   | Percentage |   |
|--------------------------------------|--------|--------|---------|--------|------------|--------|
|                                 |   | 2009   |    |   | 2008       |   |   | Change |   |
| Voice                                |   | $      | 49,837  |   |       |   | 79,744 |   |   |   | (38 | %) |
| Data                                 |   |   | 63,862  |   |       |   | 71,414 |   |   |   | (11 | %) |
| Wireless                             |   |   | 8,373   |   |       |   | 2,663 |   |   |   | 214 | % |
| Total Network Access segment revenue |   | $      | 122,072 |   |       |   | 153,821 |   |   |   | (21 | %) |
|                                 |   |   |    |   |       |   |   |   |   |   |   |   |

|                                            |   |   |   |   | Percentage |   |
|-------------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                            |   | 2009   |   |   | 2008       |   |   | Change |   |
| Voice                                           |   | $      | 16,522 |   |       |   | 27,149 |   |   |   | (39 | %) |
| Data                                            |   |   | 9,444  |   |       |   | 11,539 |   |   |   | (18 | %) |
| Wireless                                        |   |   | 1,287  |   |       |   | 1,638 |   |   |   | (21 | %) |
| Total Network Access segment Cost of Goods Sold |   | $      | 27,253 |   |       |   | 40,326 |   |   |   | (32 | %) |
|                                            |   |   |   |   |       |   |   |   |   |   |   |   |

----

|                                   |   |   |   |   | Percentage |   |
|----------------------------------------|--------|--------|--------|--------|------------|--------|
|                                   |   | 2009   |   |   | 2008       |   |   | Change |   |
| Network Access segment adjusted EBITDA |   | $      | 57,563 |   |       |   | 73,647 |   |   |   | (22 | %) |

|                                                                                                                                                                             |   | December 31, |   |   | Percentage |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|--------|------------|--------|
|                                                                                                                                                                             |   | 2009         |   |   | 2008       |   |   | Change |   |
| Voice:                                                                                                                                                                           |   |         |   |   |       |   |   |   |   |
| Long-distance minutes carried (in millions)                                                                                                                                      |   |         | 840    |   |       |   | 1,094 |   |   |   | (23 | %) |
|                                                                                                                                                                             |   |         |   |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                            |   |         |   |   |       |   |   |   |   |   |   |   |
| Total Internet service provider access lines in service1                                                                                                                         |   |         | 1,700  |   |       |   | 1,800 |   |   |   | (6 | %) |
|                                                                                                                                                                             |   |
| 1 An Internet service provider access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network. |   |
|                                                                                                                                                                             |   |

----

|                             |   |   |    |   | Percentage |   |
|----------------------------------|--------|--------|---------|--------|------------|--------|
|                             |   | 2009   |    |   | 2008       |   |   | Change |   |
| Voice                            |   | $      | 30,830  |   |       |   | 29,398 |   |   |   | 5 | % |
| Video                            |   |   | 9,175   |   |       |   | 9,604 |   |   |   | (4 | %) |
| Data                             |   |   | 63,383  |   |       |   | 70,068 |   |   |   | (10 | %) |
| Wireless                         |   |   | 6,747   |   |       |   | 5,590 |   |   |   | 21 | % |
| Total Commercial segment revenue |   | $      | 110,135 |   |       |   | 114,660 |   |   |   | (4 | %) |

|                                        |   |   |   |   |   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                        |   | 2009   |   |   | 2008   |   |   | Percentage Change |   |
| Voice                                       |   | $      | 18,563 |   |   |   | 19,581 |   |   |   | (5 | %) |
| Video                                       |   |   | 1,956  |   |   |   | 1,551 |   |   |   | 26 | % |
| Data                                        |   |   | 28,661 |   |   |   | 34,391 |   |   |   | (17 | %) |
| Wireless                                    |   |   | 3,065  |   |   |   | 3,957 |   |   |   | (23 | %) |
| Total Commercial segment Cost of Goods Sold |   | $      | 52,245 |   |   |   | 59,480 |   |   |   | (12 | %) |

|                               |   |   |   |   | Percentage |   |
|------------------------------------|--------|--------|--------|--------|------------|--------|
|                               |   | 2009   |   |   | 2008       |   |   | Change |   |
| Commercial segment adjusted EBITDA |   | $      | 23,174 |   |       |   | 20,710 |   |   |   | 12 | % |

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | December 31, |   | Percentage |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2009         |   | 2008       |   | Change |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |   |       |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 9,500        |   | 9,700      |   | (2%) |
| Total local access lines in service2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 47,700       |   | 46,200     |   | 3% |
| Local access lines in service on GCI facilities 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 19,600       |   | 18,700     |   | 5% |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 123.2        |   | 129.5      |   | (5%) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |       |   |   |
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |   |       |   |   |
| Cable modem subscribers3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 10,500       |   | 8,900      |   | 18% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |       |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         |   |       |   |   |
| Wireless lines in service4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 10,300       |   | 7,600      |   | 36% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |       |   |   |
| 1  A long-distance customer is defined as a customer account that is invoiced a monthly long-distance plan fee or has made a long-distance call during the month.2  A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network.3  A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased. If one entity purchases multiple cable modem service access points, each access point is counted as a subscriber. 4  A wireless line in service is defined as a revenue generating wireless device. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |

----

----

|                                                                                                                                                                                                                                                                                                                                           |   | December 31, |   | Percentage |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|------------|
|                                                                                                                                                                                                                                                                                                                                           |   | 2009         |   | 2008       |   | Change |
| Voice:                                                                                                                                                                                                                                                                                                                                         |   |         |   |       |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                     |   | 600          |   | 900        |   | (33%) |
| Long-distance minutes carried (in thousands)                                                                                                                                                                                                                                                                                                   |   | 1,107        |   | 844        |   | 31% |
| Total local access lines in service2                                                                                                                                                                                                                                                                                                           |   | 11,100       |   | 12,100     |   | (8%) |
|                                                                                                                                                                                                                                                                                                                                           |   |         |   |       |   |   |   |
| 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 $4.5 million increase in labor costs, |
|--------------------|-----------------------------------------|

| ·   | $4.1 million in additional expense resulting from our June 1, 2008, acquisition of UUI and Unicom, |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | A $1.4 million increase in our company-wide success sharing bonus accrual in 2009, |
|--------------------|------------------------------------------------------------------------------------|

| ·   | $1.1 million in additional expense incurred in 2009 for the conversion of our customers' wireless phones to our facilities, and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.1 million increase in lease related expense. |
|--------------------|---------------------------------------------------|

| ·   | A $4.9 million decrease in contract labor costs, |
|--------------------|--------------------------------------------------|

| ·   | A $4.5 million decrease in share-based compensation expense primarily due to the reversal of expense properly recognized in previous periods for certain performance-based stock options and restricted stock awards that are not expected to vest, and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The absence of $1.8 million to terminate a management agreement that was paid in 2008 upon the acquisition of our non-controlling interest in Alaska DigiTel. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | A $3.7 million decrease in capitalized interest in 2009 compared to 2008, |
|--------------------|---------------------------------------------------------------------------|

| ·   | $2.7 million in additional interest expense resulting from the Galaxy 18 capital lease commencing in May 2008, and |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | A $1.9 million increase in interest expense resulting from the write-off of the original issue discount on our Senior Credit Facility. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

----

|                           |   |   |    |   | Percentage |   |
|--------------------------------|--------|--------|---------|--------|------------|--------|
|                           |   | 2008   |    |   | 2007       |   |   | Change |   |
| Voice                          |   | $      | 47,042  |   |       |   | 46,212 |   |   |   | 2 | % |
| Video                          |   |   | 105,238 |   |       |   | 96,327 |   |   |   | 9 | % |
| Data                           |   |   | 42,692  |   |       |   | 34,230 |   |   |   | 25 | % |
| Wireless                       |   |   | 60,660  |   |       |   | 46,733 |   |   |   | 30 | % |
| Total Consumer segment revenue |   | $      | 255,632 |   |       |   | 223,502 |   |   |   | 14 | % |

|                                      |   | 2008   |   |   | 2007   |   |   | Percentage Change |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|-------------------|--------|
| Voice                                     |   | $      | 18,121 |   |   |   | 20,364 |              |   |   | (11 | %) |
| Video                                     |   |   | 40,279 |   |   |   | 34,301 |              |   |   | 17 | % |
| Data                                      |   |   | 6,554  |   |   |   | 5,313  |              |   |   | 23 | % |
| Wireless                                  |   |   | 24,899 |   |   |   | 28,721 |              |   |   | (13 | %) |
| Total Consumer segment Cost of Goods Sold |   | $      | 89,853 |   |   |   | 88,699 |              |   |   | 1 | % |

|                             |   |   |   |   | Percentage |   |
|----------------------------------|--------|--------|--------|--------|------------|--------|
|                             |   | 2008   |   |   | 2007       |   |   | Change |   |
| Consumer segment adjusted EBITDA |   | $      | 58,949 |   |       |   | 46,808 |   |   |   | 26 | % |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | December 31, |    |   | Percentage |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|---------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 2008         |    |   | 2007       |   |   | Change |   |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |    |   |       |   |   |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         | 88,600  |   |       |   | 89,900 |   |   |   | (2 | %) |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         | 128.6   |   |       |   | 135.8 |   |   |   | (5 | %) |
| Total local access lines in service2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         | 80,700  |   |       |   | 74,400 |   |   |   | 9 | % |
| Local access lines in service on GCI facilities2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |         | 68,700  |   |       |   | 50,700 |   |   |   | 36 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         |    |   |       |   |   |   |   |   |   |   |
| Video:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |    |   |       |   |   |   |   |   |   |   |
| Basic subscribers3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |         | 132,500 |   |       |   | 128,000 |   |   |   | 4 | % |
| Digital programming tier subscribers4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         | 71,900  |   |       |   | 65,800 |   |   |   | 9 | % |
| HD/DVR converter boxes5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         | 67,800  |   |       |   | 50,200 |   |   |   | 35 | % |
| Homes passed                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |         | 229,300 |   |       |   | 224,700 |   |   |   | 2 | % |
| Average monthly gross revenue per subscriber6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $            | 67.40   |   |       | $      | 64.01 |   |   |   | 5 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         |    |   |       |   |   |   |   |   |   |   |
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |         |    |   |       |   |   |   |   |   |   |   |
| Cable modem subscribers7                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         | 94,400  |   |       |   | 88,000 |   |   |   | 7 | % |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |         |    |   |       |   |   |   |   |   |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |         |    |   |       |   |   |   |   |   |   |   |
| Wireless lines in service8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |         | 88,700  |   |       |   | 70,000 |   |   |   | 27 | % |
| Average monthly gross revenue per subscriber9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $            | 55.23   |   |       | $      | 58.29 |   |   |   | (5 | %) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |
| 1 A long-distance customer is defined as a customer account that is invoiced a monthly long-distance plan fee or has made a long-distance call during the month.2 A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network.3 A basic cable subscriber is defined as one basic tier of service delivered to an address or separate subunits thereof regardless of the number of outlets purchased.4 A digital programming tier subscriber is defined as one digital programming tier of service delivered to an address or separate subunits thereof regardless of the number of outlets or digital programming tiers purchased. Digital programming tier subscribers are a subset of basic subscribers.5 An HD/DVR converter box is defined as one box rented by a digital programming or basic tier subscriber. A digital programming or basic tier subscriber is not required to rent an HD/DVR converter box to receive service.6 Year-to-date average monthly consumer video revenues divided by the average of consumer video basic subscribers at the beginning and ending of the period.7 A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased. If one entity purchases multiple cable modem service access points, each access point is counted as a subscriber. Cable modem subscribers may also be video basic subscribers though basic cable service is not required to receive cable modem service.8 A wireless line in service is defined as a revenue generating wireless device.9 Year-to-date average monthly consumer wireless revenues divided by the average of consumer wireless subscribers at the beginning and ending of the period. |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |

----

|   | · | A 7% increase in programming services revenue to $84.5 million in 2008 primarily resulting from an increase in basic and digital programming tier subscribers in 2008, and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A 19% increase in equipment rental revenue to $19.4 million in 2008 primarily resulting from our customers’ increased use of our HD/DVR converter boxes. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                 |   |   |    |   | Percentage |   |
|--------------------------------------|--------|--------|---------|--------|------------|--------|
|                                 |   | 2008   |    |   | 2007       |   |   | Change |   |
| Voice                                |   | $      | 79,744  |   |       |   | 96,896 |   |   |   | (18 | %) |
| Data                                 |   |   | 71,414  |   |       |   | 61,199 |   |   |   | 17 | % |
| Wireless                             |   |   | 2,663   |   |       |   | 5,282 |   |   |   | (50 | %) |
| Total Network Access segment revenue |   | $      | 153,821 |   |       |   | 163,377 |   |   |   | (6 | %) |
|                                 |   |   |    |   |       |   |   |   |   |   |   |   |

|                                            |   |   |   |   | Percentage |   |
|-------------------------------------------------|--------|--------|--------|--------|------------|--------|
|                                            |   | 2008   |   |   | 2007       |   |   | Change |   |
| Voice                                           |   | $      | 27,149 |   |       |   | 31,042 |   |   |   | (13 | %) |
| Data                                            |   |   | 11,539 |   |       |   | 12,081 |   |   |   | (5 | %) |
| Wireless                                        |   |   | 1,638  |   |       |   | 745 |   |   |   | 120 | % |
| Total Network Access segment Cost of Goods Sold |   | $      | 40,326 |   |       |   | 43,868 |   |   |   | (8 | %) |
|                                            |   |   |   |   |       |   |   |   |   |   |   |   |

|                                   |   |   |   |   | Percentage |   |
|----------------------------------------|--------|--------|--------|--------|------------|--------|
|                                   |   | 2008   |   |   | 2007       |   |   | Change |   |
| Network Access segment adjusted EBITDA |   | $      | 73,647 |   |       |   | 82,441 |   |   |   | (11 | %) |

|                                                                                                                                                                                   |   | December 31, |   | Percentage |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|------------|
|                                                                                                                                                                                   |   | 2008         |   | 2007       |   | Change |
| Voice:                                                                                                                                                                                 |   |         |   |       |   |   |
| Long-distance minutes carried (in millions)                                                                                                                                            |   | 1,094        |   | 1,251      |   | (13%) |
|                                                                                                                                                                                   |   |         |   |       |   |   |
| Data:                                                                                                                                                                                  |   |         |   |       |   |   |
| Total Internet service provider access lines in service1                                                                                                                               |   | 1,800        |   | 2,600      |   | (31%) |
|                                                                                                                                                                                   |   |
| 1  An Internet service provider access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network. |
|                                                                                                                                                                                   |   |

----

|                             |   |   |    |   | Percentage |   |
|----------------------------------|--------|--------|---------|--------|------------|--------|
|                             |   | 2008   |    |   | 2007       |   |   | Change |   |
| Voice                            |   | $      | 29,398  |   |       |   | 30,761 |   |   |   | (4 | %) |
| Video                            |   |   | 9,604   |   |       |   | 8,018 |   |   |   | 20 | % |
| Data                             |   |   | 70,068  |   |       |   | 61,052 |   |   |   | 15 | % |
| Wireless                         |   |   | 5,590   |   |       |   | 4,809 |   |   |   | 16 | % |
| Total Commercial segment revenue |   | $      | 114,660 |   |       |   | 104,640 |   |   |   | 10 | % |

|                                        |   |   |   |   |   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                        |   | 2008   |   |   | 2007   |   |   | Percentage Change |   |
| Voice                                       |   | $      | 19,581 |   |   |   | 20,225 |   |   |   | (3 | %) |
| Video                                       |   |   | 1,551  |   |   |   | 1,616 |   |   |   | (4 | %) |
| Data                                        |   |   | 34,391 |   |   |   | 27,469 |   |   |   | 25 | % |
| Wireless                                    |   |   | 3,957  |   |   |   | 4,182 |   |   |   | (5 | %) |
| Total Commercial segment Cost of Goods Sold |   | $      | 59,480 |   |   |   | 53,492 |   |   |   | 11 | % |

----

|                               |   |   |   |   | Percentage |   |
|------------------------------------|--------|--------|--------|--------|------------|--------|
|                               |   | 2008   |   |   | 2007       |   |   | Change |   |
| Commercial segment adjusted EBITDA |   | $      | 20,710 |   |       |   | 16,164 |   |   |   | 28 | % |

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

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | December 31, |   | Percentage |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 2008         |   | 2007       |   | Change |
| Voice:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |         |   |       |   |   |
| Long-distance subscribers1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 9,700        |   | 10,500     |   | (8%) |
| Total local access lines in service2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 46,200       |   | 43,100     |   | 7% |
| Local access lines in service on GCI facilities 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 18,700       |   | 12,500     |   | 50% |
| Long-distance minutes carried (in millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 129.5        |   | 131.3      |   | (1%) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |       |   |   |
| Data:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |         |   |       |   |   |
| Cable modem subscribers3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | 8,900        |   | 8,500      |   | 5% |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |         |   |       |   |   |
| Wireless:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |         |   |       |   |   |
| Wireless lines in service4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 7,600        |   | 7,300      |   | 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. 4  A wireless line in service is defined as a revenue generating wireless device. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |

----

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

----

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

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

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

| ·   | $1.8 million paid to terminate a management agreement upon the acquisition of our non-controlling interest in Alaska DigiTel, |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

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

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

----

|                                      |   | 2009   |     |   | 2008   |   |
|-------------------------------------------|--------|--------|----------|--------|--------|--------|
| Operating activities                      |   | $      | 100,919  |   |   |   | 175,335 |   |
| Investing activities                      |   |   | (125,877 | )      |   |   | (290,967 | ) |
| Financing activities                      |   |   | 43,407   |   |   |   | 132,251 |   |
| Net increase in cash and cash equivalents |   | $      | 18,449   |   |   |   | 16,619 |   |

----

|                                          |   | Payments Due by Period |      |
|-----------------------------------------------|--------|------------------------|-----------|
|                                          |   | Total                  |      |   | Less than 1 Year |   |   | 1 to 3Years |   |   | 4 to 5Years |   |   | More Than 5 Years |   |
|                                          |   | (Amounts in thousands) |      |
| Long-term debt                                |   | $                      | 781,998   |   |   |   | 5,133 |   |   |   | 9,966 |   |   |   | 330,126 |   |   |   | 436,773 |   |
| Interest on long-term debt                    |   |                   | 487,273   |   |   |   | 63,144 |   |   |   | 124,383 |   |   |   | 112,159 |   |   |   | 187,587 |   |
| Capital lease obligations, including interest |   |                   | 148,786   |   |   |   | 11,656 |   |   |   | 23,405 |   |   |   | 23,494 |   |   |   | 90,231 |   |
| Operating lease commitments                   |   |                   | 145,889   |   |   |   | 19,785 |   |   |   | 31,874 |   |   |   | 25,485 |   |   |   | 68,745 |   |
| Purchase obligations                          |   |                   | 49,325    |   |   |   | 25,995 |   |   |   | 22,554 |   |   |   | 776 |   |   |   | --- |   |
| Total contractual obligations                 |   | $                      | 1,613,271 |   |   |   | 125,713 |   |   |   | 212,182 |   |   |   | 492,040 |   |   |   | 783,336 |   |

----

| ·   | A non-cancelable commitment to purchase hardware and software capable of providing wireless service to small markets in rural Alaska of $18.9 million, |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Cancelable open purchase orders for goods and services for capital projects and normal operations totaling $11.7 million which are not included in our Consolidated Balance Sheets at December 31, 2009, because the goods had not been received or the services had not been performed at December 31, 2009, and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A $5.2 million contingent payment for Alaska Wireless made in February 2010. |
|--------------------|------------------------------------------------------------------------------|

----

|   | ·         For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ·         A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| (l) Consolidated Financial Statements          |                                                                                                                                                                 |   |   |           | Page No.      |
|------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------|---------------|
|                                           |                                                                                                                                                                 |   |   |           |          |
| Included in Part II of this Report:            |                                                                                                                                                                 |   |   |           |
|                                           |                                                                                                                                                                 |   |   |           |          |
|                                           | Reports of Independent Registered Public Accounting Firms                                                                                                            |   |   |           |   60-61  |
|                                           |                                                                                                                                                                 |   |   |           |          |
|                                           | Consolidated Balance Sheets, December 31, 2009 and 2008                                                                                                              |   |   |           |   62-63  |
|                                           |                                                                                                                                                                 |   |   |           |          |
|                                           | Consolidated Statements of  Operations, years ended December 31, 2009, 2008 and 2007                                                                       |   |   |           |   64     |
|                                           |                                                                                                                                                                 |   |   |           |          |
|                                           | Consolidated Statements of Stockholder's Equity, years ended December 31, 2009, 2008 and 2007                                                                        |   |   |           |   65     |
|                                           |                                                                                                                                                                 |   |   |           |          |
|                                           | Consolidated Statements of Cash Flows, years ended December 31, 2009, 2008 and 2007                                                                                  |   |   |           |   66     |
|                                           |                                                                                                                                                                 |   |   |           |          |
|                                           | Notes to Consolidated Financial Statements                                                                                                                           |   |   |           |   67-105 |
|                                           |                                                                                                                                                                 |   |   |           |          |
| (2) Consolidated Financial Statement Schedules |                                                                                                                                                                 |   |   |           |
|                                           |                                                                                                                                                                 |   |   |           |          |
|                                           | Schedules are omitted, as they are not required or are not applicable, or the required information is shown in the applicable financial statements or notes thereto. |   |   |           |          |
|                                           |                                                                                                                                                                 |   |   |           |          |
| (3) Exhibits                                   |                                                                                                                                                                 |   |   |   106-113 |

----

----

----

|                                                                                                                       |   |         |      |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------|--------|
| (Amounts in thousands)                                                                                                     |   | December 31, |      |
| ASSETS                                                                                                                     |   | 2009         |      |   | 2008   |   |
|                                                                                                                       |   |         |      |   |   |   |
| Current assets:                                                                                                            |   |         |      |   |   |   |
| Cash and cash equivalents                                                                                                  |   | $            | 48,142    |   |   |   | 29,693 |   |
|                                                                                                                       |   |         |      |   |   |   |   |   |
| Receivables                                                                                                                |   |         | 147,859   |   |   |   | 113,136 |   |
| Less allowance for doubtful receivables                                                                                    |   |         | 7,060     |   |   |   | 2,582 |   |
| Net receivables                                                                                                            |   |         | 140,799   |   |   |   | 110,554 |   |
|                                                                                                                       |   |         |      |   |   |   |   |   |
| Deferred income taxes                                                                                                      |   |         | 17,618    |   |   |   | 7,843 |   |
| Inventories                                                                                                                |   |         | 9,278     |   |   |   | 7,085 |   |
| Prepaid expenses                                                                                                           |   |         | 4,491     |   |   |   | 5,960 |   |
| Investment securities                                                                                                      |   |         | 895       |   |   |   | 1,563 |   |
|  Other current assets                                                                                                 |   |         | 4,977     |   |   |   | 647 |   |
| Total current assets                                                                                                       |   |         | 226,200   |   |   |   | 163,345 |   |
|                                                                                                                       |   |         |      |   |   |   |   |   |
| Property and equipment in service, net of depreciation                                                                     |   |         | 823,080   |   |   |   | 793,051 |   |
| Construction in progress                                                                                                   |   |         | 26,161    |   |   |   | 54,098 |   |
| Net property and equipment                                                                                                 |   |         | 849,241   |   |   |   | 847,149 |   |
|                                                                                                                       |   |         |      |   |   |   |   |   |
| Cable certificates                                                                                                         |   |         | 191,565   |   |   |   | 191,565 |   |
| Goodwill                                                                                                                   |   |         | 73,452    |   |   |   | 66,868 |   |
| Wireless licenses                                                                                                          |   |         | 25,967    |   |   |   | 25,967 |   |
| Other intangible assets, net of amortization                                                                               |   |         | 19,561    |   |   |   | 22,976 |   |
| Deferred loan and senior notes costs, net of amortization of $4,662 and $3,900 at December 31, 2009 and 2008, respectively |   |         | 13,168    |   |   |   | 6,496 |   |
| Other assets                                                                                                               |   |         | 18,609    |   |   |   | 10,724 |   |
| Total other assets                                                                                                         |   |         | 342,322   |   |   |   | 324,596 |   |
| Total assets                                                                                                               |   | $            | 1,417,763 |   |   |   | 1,335,090 |   |

----

|                                                                                                                 |   |         |      |   |   |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------------|-----------|--------|--------|--------|
| (Amounts in thousands)                                                                                               |   | December 31, |      |
| LIABILITIES AND STOCKHOLDER'S EQUITY                                                                                 |   | 2009         |      |   | 2008   |   |
|                                                                                                                 |   |         |      |   |   |   |
| Current liabilities:                                                                                                 |   |         |      |   |   |   |
| Current maturities of obligations under long-term debt and capital leases                                            |   | $            | 9,892     |   |   |   | 12,857 |   |
| Accounts payable                                                                                                     |   |         | 30,697    |   |   |   | 40,497 |   |
| Accrued payroll and payroll related obligations                                                                      |   |         | 21,874    |   |   |   | 22,632 |   |
| Deferred revenue                                                                                                     |   |         | 21,404    |   |   |   | 22,095 |   |
| Accrued liabilities                                                                                                  |   |         | 15,037    |   |   |   | 11,043 |   |
| Accrued interest                                                                                                     |   |         | 14,821    |   |   |   | 10,224 |   |
| Subscriber deposits                                                                                                  |   |         | 1,549     |   |   |   | 1,262 |   |
| Total current liabilities                                                                                            |   |         | 115,274   |   |   |   | 120,610 |   |
|                                                                                                                 |   |         |      |   |   |   |   |   |
| Long-term debt, net                                                                                                  |   |         | 771,247   |   |   |   | 708,406 |   |
| Obligations under capital leases, excluding current maturities                                                       |   |         | 89,279    |   |   |   | 94,029 |   |
| Obligation under capital lease due to related party                                                                  |   |         | 1,876     |   |   |   | 1,868 |   |
| Deferred income taxes                                                                                                |   |         | 100,386   |   |   |   | 86,187 |   |
| Long-term deferred revenue                                                                                           |   |         | 52,342    |   |   |   | 49,998 |   |
| Other liabilities                                                                                                    |   |         | 21,676    |   |   |   | 15,288 |   |
| Total liabilities                                                                                                    |   |         | 1,152,080 |   |   |   | 1,076,386 |   |
|                                                                                                                 |   |         |      |   |   |   |   |   |
| Commitments and contingencies                                                                                        |   |         |      |   |   |   |   |   |
| Stockholder's equity:                                                                                                |   |         |      |   |   |   |   |   |
| Class A common stock (no par). Authorized 10 shares; issued and outstanding 0.1 shares at December 31, 2009 and 2008 |   |         | 206,622   |   |   |   | 206,622 |   |
| Paid-in capital                                                                                                      |   |         | 49,165    |   |   |   | 45,468 |   |
| Retained earnings                                                                                                    |   |         | 9,896     |   |   |   | 6,614 |   |
| Total stockholder's equity                                                                                           |   |         | 265,683   |   |   |   | 258,704 |   |
| Total liabilities and stockholder's equity                                                                           |   | $            | 1,417,763 |   |   |   | 1,335,090 |   |

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

----

|   | GCI, INC. AND SUBSIDIARIES |
|--------|----------------------------|

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

|   | YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 |
|--------|----------------------------------------------|

| (Amounts in thousands)                                                                 |   |   | 2009    |   |  2008 |   | 2007    |   |
|----------------------------------------------------------------------------------------|--------|--------|---------|--------|------------|--------|---------|--------|
| Revenues                                                                               |   | $      | 595,811 |   | 575,442    |   | 520,311 |   |
|                                                                                   |   |   |    |   |       |   |    |   |
| Cost of goods sold (exclusive of depreciation and amortization shown separately below) |   |   | 193,676 |   | 203,058    |   | 195,799 |   |
| Selling, general and administrative expenses                                           |   |   | 212,671 |   | 210,306    |   | 175,752 |   |
| Depreciation and amortization expense                                                  |   |   | 123,362 |   | 114,369    |   | 87,615  |   |
| Operating income                                                                       |   |   | 66,102  |   | 47,709     |   | 61,145  |   |
|                                                                                   |   |   |    |   |       |   |    |   |
| Other income (expense):                                                                |   |   |    |   |       |   |    |   |
| Interest expense (including amortization and write-off of deferred loan fees)          |   |   | (58,761 | )      | (50,363    | )      | (35,830 | )      |
| Interest and investment income                                                         |   |   | 111     |   | 576        |   | 544     |   |
| Other                                                                                  |   |   | ---     |   | (217       | )      | ---     |   |
| Other expense, net                                                                     |   |   | (58,650 | )      | (50,004    | )      | (35,286 | )      |
| Income (loss) before income tax expense                                                |   |   | 7,452   |   | (2,295     | )      | 25,859  |   |
| Income tax expense                                                                     |   |   | 3,936   |   | 1,077      |   | 12,162  |   |
| Net income (loss)                                                                      |   |   | 3,516   |   | (3,372     | )      | 13,697  |   |
| Net loss attributable to the non-controlling interest                                  |   |   | ---     |   | 1,503      |   | 36      |   |
| Net income (loss) attributable to GCI, Inc.                                            |   | $      | 3,516   |   | (1,869     | )      | 13,733  |   |

----

|     (Amounts in thousands, except share amounts) |   | Shares of Class A Common Stock |   |   | Class A Common Stock |   |    | Paid-in Capital |   |   | Retained Earnings |   |   | Non-controlling Interest |    |   | Total  |   |
|----------------------------------------------------------------------|--------|--------------------------------|--------|--------|----------------------|--------|---------|-----------------|--------|--------|-------------------|--------|--------|--------------------------|---------|--------|--------|--------|
| Balances at January 1, 2007                                          |   |                           | 100    |   |                 | $      | 206,622 |            |   |   | 27,744            |   |   |                     | 6,834   |   |   |   | --- |   |   |   | 241,200 |   |
| Non-controlling interest attributable to acquired subsidiary         |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | ---     |   |   |   |  6,514 |   |   |   | 6,514 |   |
| Net income                                                           |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | 13,733  |   |   |   | (36 | ) |   |   | 13,697 |   |
| Distribution to General Communication, Inc.                          |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | (12,038 | )      |   |   |  --- |   |   |   | (12,038 | ) |
| Contribution from General Communication, Inc.                        |   |                           | ---    |   |                 |   | ---     |            |   |   | 10,060            |   |   |                     | ---     |   |   |   |  --- |   |   |   | 10,060 |   |
| Balances at December 31, 2007                                        |   |                           | 100    |   |                 | $      | 206,622 |            |   |   | 37,804            |   |   |                     | 8,529   |   |   |   | 6,478 |   |   |   | 259,433 |   |
| Net loss                                                             |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | (1,869  | )      |   |   | (1,503 | ) |   |   | (3,372 | ) |
| Acquisition of remaining shares of non-controlling interest          |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | ---     |   |   |   | (4,975 | ) |   |   | (4,975 | ) |
| Distribution to General Communication, Inc.                          |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | (46     | )      |   |   | --- |   |   |   | (46 | ) |
| Contribution from General Communication, Inc.                        |   |                           | ---    |   |                 |   | ---     |            |   |   | 7,664             |   |   |                     | ---     |   |   |   | --- |   |   |   | 7,664 |   |
| Balances at December 31, 2008                                        |   |                           | 100    |   |                 | $      | 206,622 |            |   |   | 45,468            |   |   |                     | 6,614   |   |   |   | --- |   |   |   | 258,704 |   |
| Net loss                                                             |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | 3,516   |   |   |   | --- |   |   |   | 3,516 |   |
| Distribution to General Communication, Inc.                          |   |                           | ---    |   |                 |   | ---     |            |   |   | ---               |   |   |                     | (234    | )      |   |   | --- |   |   |   | (234 | ) |
| Contribution from General Communication, Inc.                        |   |                           | ---    |   |                 |   | ---     |            |   |   | 3,697             |   |   |                     | ---     |   |   |   | --- |   |   |   | 3,697 |   |
| Balances at December 31, 2009                                        |   |                           | 100    |   |                 | $      | 206,622 |            |   |   | 49,165            |   |   |                     | 9,896   |   |   |   | --- |   |   |   | 265,683 |   |

----

| (Amounts in thousands)                                                                                                             |   |   | 2009     |   | 2008     |   | 2007     |   |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|----------|--------|----------|--------|
| Cash flows from operating activities:                                                                                              |   |   |     |   |     |   |     |   |
| Net income (loss)                                                                                                                  |   | $      | 3,516    |   | (3,372   | )      | 13,697   |   |
| Adjustments to reconcile net income (loss) to net cash provided  by operating activities, net of effect of acquisitions: |   |   |     |   |     |   |     |   |
| Depreciation and amortization expense                                                                                              |   |   | 123,362  |   | 114,369  |   | 87,615   |   |
| Deferred income tax expense                                                                                                        |   |   | 3,936    |   | 1,077    |   | 11,649   |   |
| Other noncash income and expense items                                                                                             |   |   | 14,919   |   | 8,896    |   | 7,651    |   |
| Share-based compensation expense                                                                                                   |   |   | 2,804    |   | 7,278    |   | 4,944    |   |
| Change in operating assets and liabilities, net of effect of acquisitions                                                          |   |   | (47,618  | )      | 47,087   |   | (15,045  | )      |
| Net cash provided by operating activities                                                                                          |   |   | 100,919  |   | 175,335  |   | 110,511  |   |
|                                                                                                                               |   |   |     |   |     |   |     |   |
| Cash flows from investing activities:                                                                                              |   |   |     |   |     |   |     |   |
| Purchases of property and equipment, including construction period interest                                                        |   |   | (120,983 | )      | (221,458 | )      | (153,030 | )      |
| Purchase of businesses and non-controlling interest, net of cash received                                                          |   |   | (109     | )      | (65,335  | )      | (19,530  | )      |
| Purchase of software licenses and other assets                                                                                     |   |   | (5,093   | )      | (8,974   | )      | (7,471   | )      |
| Proceeds from sale of marketable securities                                                                                        |   |   | 613      |   | 4,800    |   | ---      |   |
| Purchase of marketable securities                                                                                                  |   |   | (305     | )      | ---      |   | ---      |   |
| Other                                                                                                                              |   |   | ---      |   | ---      |   | 44       |   |
| Net cash used in investing activities                                                                                              |   |   | (125,877 | )      | (290,967 | )      | (179,987 | )      |
|                                                                                                                               |   |   |     |   |     |   |     |   |
| Cash flows from financing activities:                                                                                              |   |   |     |   |     |   |     |   |
| Borrowing on long-term debt                                                                                                        |   |   | 3,884    |   | 114,486  |   | 10,000   |   |
| Borrowing on Senior Credit Facility                                                                                                |   |   | 30,000   |   | 30,000   |   | 50,000   |   |
| Issuance of 2019 Senior Notes                                                                                                      |   |   | 421,473  |   | ---      |   | ---      |   |
| Repayment of debt and capital lease obligations                                                                                    |   |   | (402,710 | )      | (10,248  | )      | (27,152  | )      |
| Payment of debt issuance costs                                                                                                     |   |   | (9,006   | )      | (2,118   | )      | (527     | )      |
| Net contribution (distribution) to General Communication, Inc.                                                                     |   |   | (234     | )      | 157      |   | (7,349   | )      |
| Other                                                                                                                              |   |   | ---      |   | (26      | )      | (69      | )      |
| Net cash provided by financing activities                                                                                          |   |   | 43,407   |   | 132,251  |   | 24,903   |   |
| Net increase (decrease) in cash and cash equivalents                                                                               |   |   | 18,449   |   | 16,619   |   | (44,573  | )      |
| Cash and cash equivalents at beginning of period                                                                                   |   |   | 29,693   |   | 13,074   |   | 57,647   |   |
|                                                                                                                               |   |   |     |   |     |   |     |   |
| Cash and cash equivalents at end of period                                                                                         |   | $      | 48,142   |   | 29,693   |   | 13,074   |   |

----

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

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

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

|   | · | Competitive local access services throughout 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, |
|--------|--------|---------------------------|

|   | · | Wireless roaming for certain wireless carriers, |
|--------|--------|-------------------------------------------------|

|   | · | 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 prior to August 18, 2008 when we acquired the remaining 18.1% equity interest and voting control of Alaska DigiTel, LLC (“Alaska DigiTel”). All significant intercompany transactions between non-regulated affiliates of our company are eliminated.   Intercompany revenue and expenses generated between regulated and non-regulated affiliates of the company are not eliminated in consolidation. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

----

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

|   | We have agreed to make additional payments for UUI and Unicom in each of the years 2009 through 2013 that are contingent on sequential year-over-year revenue growth for specified customers.  We have agreed to make an additional payment for Alaska Wireless in 2010 that is contingent on meeting certain financial conditions.  During the year ended December 31, 2009, we paid an additional $109,000 to UUI. As of December 31, 2009, we have recorded an accrual of $388,000 and $5.2 million for contingent payments to UUI and to Alaska Wireless, respectively.  We are unable to reasonably estimate the remaining contingent consideration amounts that may be paid for the UUI acquisition, but do not believe any amount paid will be significant. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Our business acquisitions and the acquisition of the non-controlling interest in Alaska DigiTel were recorded with the purchase price allocated based on the fair values of the assets acquired and liabilities assumed.  In addition, the acquired companies' results of operations are included since the effective date of each acquisition. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|            |   | As Originally Reported at December 31, 2008 |   |   | Adjustments |   |   | Revised Purchase Price at December 31, 2009 |   |
|-----------------|--------|---------------------------------------------|--------|--------|-------------|--------|--------|---------------------------------------------|--------|
| UUI and Unicom  |   | $                                           | 40,575 |   |        |   | 497    |                                        |   |   | 41,072 |   |
| Alaska Wireless |   | $                                           | 14,508 |   |        |   | 5,157  |                                        |   |   | 19,665 |   |
| Alaska DigiTel  |   | $                                           | 10,434 |   |        |   | ---    |                                        |   |   | 10,434 |   |

----

|   | The purchase price for the UUI and Unicom acquisition has been finalized and allocated as of December 31, 2009 as follows (amounts in thousands): |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                       |   |                                     |   |   |        |   |   |                                 |   |
|------------------------------------------------------------|--------|------------------------------------------|--------|--------|-------------|--------|--------|--------------------------------------|--------|
|                                                       |   | Originally Recorded at December 31, 2008 |   |   | Adjustments |   |   | Revised Balance at December 31, 2009 |   |
| Current assets                                             |   | $                                        | 15,008 |   |        |   | ---    |                                 |   |   | 15,008 |   |
| Property and equipment, including construction in progress |   |                                     | 59,629 |   |        |   | 68     |                                 |   |   | 59,697 |   |
| Intangible assets                                          |   |                                     | 8,175  |   |        |   | ---    |                                 |   |   | 8,175 |   |
| Wireless licenses                                          |   |                                     | 100    |   |        |   | ---    |                                 |   |   | 100 |   |
| Goodwill                                                   |   |                                     | 9,102  |   |        |   | 1,427  |                                 |   |   | 10,529 |   |
| Deferred income taxes                                      |   |                                     | ---    |   |        |   | 679    |                                 |   |   | 679 |   |
| Other assets                                               |   |                                     | 3,106  |   |        |   | ---    |                                 |   |   | 3,106 |   |
| Total assets acquired                                      |   |                                     | 95,120 |   |        |   | 2,174  |                                 |   |   | 97,294 |   |
| Current liabilities                                        |   |                                     | 4,916  |   |        |   | 96     |                                 |   |   | 5,012 |   |
| Long-term debt, including current portion                  |   |                                     | 43,614 |   |        |   | ---    |                                 |   |   | 43,614 |   |
| Other long-term liabilities                                |   |                                     | 4,335  |   |        |   | 1,581  |                                 |   |   | 5,916 |   |
| Total liabilities assumed                                  |   |                                     | 52,865 |   |        |   | 1,677  |                                 |   |   | 54,542 |   |
| Net assets acquired                                        |   | $                                        | 42,255 |   |        |   | 497    |                                 |   |   | 42,752 |   |

|   | The purchase price for the Alaska DigiTel acquisition has been finalized and allocated as of December 31, 2008 as follows (amounts in thousands): |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                       |   | Alaska DigiTel |   |
|------------------------------------------------------------|--------|----------------|--------|
| Current assets                                             |   | $              | 2,220  |   |
| Property and equipment, including construction in progress |   |           | 6,015  |   |
| Intangible assets                                          |   |           | 1,468  |   |
| Wireless licenses                                          |   |           | 4,396  |   |
| Goodwill                                                   |   |           | 4,534  |   |
| Other assets                                               |   |           | 1      |   |
| Total assets acquired                                      |   |           | 18,634 |   |
| Current liabilities                                        |   |           | 2,588  |   |
| Long-term debt, including current portion                  |   |           | 5,515  |   |
| Other long-term liabilities                                |   |           | 97     |   |
| Total liabilities assumed                                  |   |           | 8,200  |   |
| Net assets acquired                                        |   | $              | 10,434 |   |

----

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

|   | Revenues from the date of acquisition, net of intercompany revenue, for our acquisitions of UUI, Unicom and Alaska Wireless are allocated to our Consumer, Network Access, Managed Broadband, and Regulated Operations segments. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|                           |   | (unaudited) |    |
|--------------------------------|--------|-------------|---------|
|                           |   | 2008        |    |   | 2007 |   |
| Pro forma consolidated revenue |   | $           | 588,691 |   |   |   | 546,728 |   |
| Pro forma net income (loss)    |   | $           | (2,932  | ) |   |   | 12,773 |   |

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

|   | We account for our regulated operations in accordance with the accounting principles for regulated enterprises.  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, plant and equipment is depreciated over lives approved by regulators and certain costs and obligations are deferred based upon approvals received from regulators to permit recovery of such amounts in future years.  Our cost studies and depreciation rates for our regulated operations are subject to periodic audits that could result in a change to recorded revenues. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (f) | Investment Securities |
|--------|-----|-----------------------|

|   | We have investment securities of $895,000 and $1.6 million at December 31, 2009 and 2008, respectively that are classified as trading securities.  Our investments consist primarily of money market funds and U.S. government securities.  Trading securities are recorded at fair value with unrealized holding gains and losses included in net income (loss) attributable to GCI, Inc.  During the years ended December 31, 2009 and 2008, the change in net unrealized holding gains and losses included in earnings was a net gain (loss) of $(24,000) and $43,000, respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (g) | Cash Equivalents |
|--------|-----|------------------|

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

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

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

----

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

|   | (i) | Inventories |
|--------|-----|-------------|

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

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

|   | (j) | Property and Equipment |
|--------|-----|------------------------|

|   | Property and equipment is stated at cost. Construction costs of facilities are capitalized. Equipment financed under capital leases is recorded at the lower of fair market value or the present value of future minimum lease payments at inception of the lease. Construction in progress represents distribution equipment and systems and support equipment and systems not placed in service on December 31, 2009 that management intends to place in service during 2010. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

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

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

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

|   | Cable certificates and wireless license assets are the right to solicit and service potential customers and the right to deploy and market new services, such as interactivity, wireless broadband and video, in the service areas covered by currently held cable certificate and wireless licenses.  Cable certificates and wireless license assets are treated as indefinite-lived intangible assets and are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. The impairment test consists of a comparison of the fair value of the asset with its carrying amount. If the carrying amount of the assets exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the asset becomes its new accounting basis. Impairment testing of our cable certificate and wireless license assets as of October 31, 2009 and December 31, 2008 used a direct value method. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Our goodwill is tested annually for impairment, and is tested for impairment more frequently if events and circumstances indicate that the assets might be impaired. We use an income approach to determine the fair values used in the goodwill impairment test.  In addition, a market-based approach is used where possible to corroborate the fair values determined by the income approach. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | During the third quarter of 2009, we changed the date of our annual impairment test from the last day of the fiscal year to the last day of the tenth month of the fiscal year for all of our indefinite-lived intangibles. As we grew, it became increasingly difficult to complete the various impairment analyses in a timely manner, therefore, we believed the change in accounting principle related to the annual testing date was preferable as it provided us additional time to complete the impairment test and report the results of that test in our annual filing on Form 10-K. We believe that the change to the annual testing date did not delay, accelerate or avoid an impairment charge. We determined that this change in accounting principle was preferable under the circumstances and it did not result in adjustments to our financial statements when applied retrospectively. The annual impairment test was performed as of December 31, 2008 and was performed again as of October 31, 2009, therefore, less than 12 months elapsed between impairment tests.  We completed our annual review and no impairment charge was recorded in 2009. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (m) | Amortization and Write-off of Loan Fees |
|--------|-----|-----------------------------------------|

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

----

|   | (n) | Other Assets |
|--------|-----|--------------|

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

|   | (o) | Asset Retirement Obligations |
|--------|-----|------------------------------|

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

|   | The majority of our asset retirement obligation is the estimated cost to remove telephony distribution equipment and support equipment from leased property.  Following is a reconciliation of the beginning and ending aggregate carrying amount of our liability for asset retirement obligation (amounts in thousands): |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Balance at December 31, 2007                                                  |   | $      | 4,173  |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|
| Liability incurred                                                            |   |   | 1,408  |   |
| Additions upon acquisition of UUI, Unicom, Alaska Wireless and Alaska DigiTel |   |   | 803    |   |
| Accretion expense                                                             |   |   | 396    |   |
| Liability settled                                                             |   |   | (601   | )      |
| Balance at December 31, 2008                                                  |   |   | 6,179  |   |
| Liability incurred                                                            |   |   | 5,764  |   |
| Accretion expense                                                             |   |   | 634    |   |
| Liability settled                                                             |   |   | (63    | )      |
| Balance at December 31, 2009                                                  |   | $      | 12,514 |   |

|   | During the years ended December 31, 2009 and 2008 we recorded additional capitalized costs of $5.8 million and $1.4 million, respectively, in Property and Equipment in Service, Net of Depreciation. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (p) | Derivatives |
|--------|-----|-------------|

----

|   | The following is a summary of the derivative contracts outstanding in the balance sheet at December 31, 2009 (dollar amounts in thousands): |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|               |   |                |   |           |   |                   |    | Fair Value as of December 31, |
|--------------------|--------|---------------------|--------|----------------|--------|------------------------|---------|-------------------------------|
|               |   | Number of Contracts |   | Notional Value |   | Balance Sheet Location |    | 2009                          |  2008 |   |
| Interest rate caps |   |                | 2      |           |   | $                      | 180,000 |                          | Other Assets |   | $ | --- |   |   | $ |  7 |

|                                              |                               |   | Amount of Gain (Loss Recognized) |   |   |
|---------------------------------------------------|------------------------------------|--------|----------------------------------|--------|--------|
|                                              |                               |   | December 31,                     |
| Derivatives not designated as hedging instruments | Location of Gain (Loss) Recognized |   | 2009                             |   |   | 2008 |
| Interest rate caps                                | Interest expense                   |   | $                                | (7     | )      |   |   | (921 | ) |

|   | (q) | Revenue Recognition |
|--------|-----|---------------------|

|   | All revenues are recognized when the earnings process is complete. Revenue recognition is as follows: |
|--------|-------------------------------------------------------------------------------------------------------|

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

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

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

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

----

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

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

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

|   | · | We account for fiber capacity Indefeasible Rights to Use ("IRU") agreements as an operating lease or service arrangement and we defer the revenue and recognize it ratably over the life of the IRU or as service is rendered, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | As an Eligible Telecommunications Carrier ("ETC"), we receive support from the Universal Service Fund ("USF") to support the provision of local access service in high-cost areas.  We accrue estimated program revenue quarterly based on current line counts, the most current rates paid to us, our assessment of the impact of current FCC regulations, and our assessment of the potential outcome of FCC proceedings. Our estimated accrued revenue is subject to our judgment regarding the outcome of many variables and is subject to upward or downward adjustment in subsequent periods. Our ability to collect our accrued USF support is contingent upon continuation of the USF program and upon our eligibility to participate in that program, which is subject to change by future regulatory, legislative or judicial actions. We adjust revenue and the account receivable in the period the FCC makes a program change or we assess the likelihood that such a change has increased or decreased revenue. The payment from the USF is generally received approximately nine months subsequent to the services being performed. At December 31, 2009 we have $28.5 million in accounts receivable related to the USF high-cost area program.  We do not recognize revenue until our ETC status has been approved by the RCA, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

|   | · | We receive grant revenue for the purpose of building communication infrastructure in rural areas.  We defer the revenue and recognize it over the life of the asset that was constructed using grant funds, and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (r) | Payments Received from Suppliers |
|--------|-----|----------------------------------|

|   | Our Consumer segment occasionally receives reimbursements for video services costs to promote suppliers’ services, called cooperative advertising arrangements. The supplier payment is classified as a reduction of selling, general and administrative expenses if it reimburses specific, incremental and identifiable costs incurred to resell the suppliers’ services.  Recognition occurs upon receipt of the payment because collection is not assured. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (s) | Advertising Expense |
|--------|-----|---------------------|

|   | We expense advertising costs in the year during which the first advertisement appears. Advertising expenses were $4.1 million, $5.6 million and $5.6 million for the years ended December 31, 2009, 2008 and 2007, respectively. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (t) | Leases |
|--------|-----|--------|

|   | Scheduled operating lease rent increases are amortized over the expected lease term on a straight-line basis. Rent holidays are recognized on a straight-line basis over the operating lease term (including any rent holiday period). |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (u) | Interest Expense |
|--------|-----|------------------|

|   | Material interest costs incurred during the construction period of non-software capital projects are capitalized. Interest costs incurred during the development period of a software capital project are capitalized. Interest is capitalized in the period commencing with the first expenditure for a qualifying capital project and ending when the capital project is substantially complete and ready for its intended use. We capitalized interest cost of $548,000, $4.2 million and $3.3 million during the years ended December 31, 2009, 2008 and 2007, respectively. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (v) | 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 are presented herein using the separate-entity method. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for their future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable earnings in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax asset will not be realized. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We file federal income tax returns in the U.S. and in various state jurisdictions.  We are no longer subject to U.S. or state tax examinations by tax authorities for years before 2006 except that  certain U.S. federal income tax returns for years after 1997 are not closed by relevant statutes of limitations due to unused net operating losses reported on those income tax returns. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We recognize accrued interest on unrecognized tax benefits in interest expense and penalties in selling, general and administrative expenses.  We did not have any unrecognized tax benefits as of December 31, 2009, 2008 and 2007, and, accordingly, we did not recognize any interest expense.  Additionally, we recorded no penalties during the years ended December 31, 2009, 2008 and 2007, respectively. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (w) | Share-based Payment Arrangements |
|--------|-----|----------------------------------|

|   | We currently use the Black-Scholes-Merton option-pricing model to value stock options granted to employees. We use these values to recognize stock compensation expense for stock options.  Compensation expense is recognized in the financial statements for share-based awards based on the grant date fair value of those awards. Share-based compensation expense includes an estimate for pre-vesting forfeitures and is recognized over the requisite service periods of the awards on a straight-line basis, which is generally commensurate with the vesting term. See note 8 for information on the assumptions we used to calculate the fair value of share-based compensation. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We are required to report the benefits associated with tax deductions in excess of recognized compensation cost as a financing cash flow rather than as an operating cash flow. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | Stock options and warrants issued in exchange for non-employee services are accounted for based upon the fair value of the consideration or services received or the fair value of the equity instruments issued using the Black-Scholes-Merton method, whichever is more reliably measurable. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | (y) | Use of Estimates |
|--------|-----|------------------|

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

----

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

|   | We have one major customer (see note 9).  Our remaining customers are located primarily throughout Alaska. Because of this geographic concentration, our growth and operations depend upon economic conditions in Alaska. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (aa) | Software Capitalization Policy |
|--------|------|--------------------------------|

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

|   | (ab) | Guarantees |
|--------|------|------------|

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

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

|   | We report sales, use, excise, and value added taxes assessed by a governmental authority that is directly imposed on a revenue-producing transaction between us and a customer on a net basis in our statements of operations.  We report a certain surcharge on a gross basis in our statement of operations of $4.4 million, $4.1 million and $4.2 million for the years ended December 31, 2009, 2008 and 2007, respectively. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

| ·   | For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|   | Effective January 1, 2008, we prospectively changed our accounting policy for recording depreciation on our property and equipment placed in service. For assets placed in service on or after January 1, 2008, we are using a mid-month convention to recognize depreciation expense. Previous to this change we used the half-year convention to recognize depreciation expense in the year an asset was placed in service, regardless of the month the property and equipment was placed in service. We believe the mid-month convention is preferable because it results in more precise recognition of depreciation expense over the estimated useful life of the asset. No retroactive adjustment was made.  The following table sets forth the impact of this accounting change on depreciation and amortization expense, operating income (loss) and net income (loss) for the years ended December 31, 2009 and 2008 (amounts in thousands): |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Year Ended December 31,                     |   | 2009   |   |   | 2008   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|
| Depreciation and amortization expense       |   | $      | 321    |   |   |   | (521 | ) |
| Operating income (loss)                     |   |   | (321   | )      |   |   | 521 |   |
| Net income (loss) attributable to GCI, Inc. |   |   | (189   | )      |   |   | 214 |   |

|   | (ag) | Reclassifications |
|--------|------|-------------------|

----

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

| Year ended December 31,                                                |   | 2009   |    |   | 2008   |   |   | 2007   |   |
|------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|
| Increase in accounts receivable                                        |   | $      | (33,555 | )      |   |   | (5,209 | )      |   |   | (19,713 | ) |
| Decrease in prepaid expenses                                           |   |   | 1,923   |   |   |   | 488    |   |   |   | 949 |   |
| (Increase) decrease in inventories                                     |   |   | (2,109  | )      |   |   | (3,336 | )      |   |   | 1,455 |   |
| (Increase) decrease in other current assets                            |   |   | (4,272  | )      |   |   | (69    | )      |   |   | 1,089 |   |
| Increase in other assets                                               |   |   | (10,742 | )      |   |   | ---    |   |   |   | --- |   |
| Increase (decrease) in accounts payable                                |   |   | (1,889  | )      |   |   | (4,198 | )      |   |   | 2,738 |   |
| Increase (decrease) in accrued payroll and payroll related obligations |   |   | (752    | )      |   |   | 5,437  |   |   |   | 620 |   |
| Increase (decrease) in deferred revenue                                |   |   | (787    | )      |   |   | 4,543  |   |   |   | (2,000 | ) |
| Increase in accrued interest                                           |   |   | 4,597   |   |   |   | 1,226  |   |   |   | 217 |   |
| Increase (decrease) in accrued liabilities                             |   |   | (1,608  | )      |   |   | 2,695  |   |   |   | (1,330 | ) |
| Increase in subscriber deposits                                        |   |   | 287     |   |   |   | 84     |   |   |   | 194 |   |
| Increase in long-term deferred revenue                                 |   |   | 763     |   |   |   | 49,153 |   |   |   | --- |   |
| Increase (decrease) in components of other long-term liabilities       |   |   | 526     |   |   |   | (3,727 | )      |   |   | 526 |   |
|                                                                   |   | $      | (47,618 | )      |   |   | 47,087 |   |   |   | (15,255 | ) |

| Net cash paid (received):           |   | 2009 |   |   | 2008   |   |   | 2007   |   |
|-------------------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Interest, net of amount capitalized |   | $    | 51,161 |   |   |   | 46,781 |   |   |   | 34,046 |   |
| Income taxes paid                   |   | $    | ---    |   |   |   | 884    |   |   |   | 293 |   |
| Income taxes received               |   | $    | (911   | )      |   |   | (83    | )      |   |   | (213 | ) |

|                                                               |   | 2009  | 2008   | 2007  |   |
|--------------------------------------------------------------------|--------|-------|--------|-------|--------|
| Non-cash additions for purchases of property and equipment         | $      | 4,427 | 12,124 | 8,965 |   |
| Asset retirement obligation additions to property and equipment    | $      | 5,764 | 1,408  | 260   |   |
| Assets acquired in acquisition                                     | $      | 6,475 | ---    | ---   |   |
| Capital lease obligation incurred                                  | $      | ---   | 99,873 | ---   |   |
| Warranty receivable applied to capital lease obligation            | $      | 465   | 8,415  | ---   |   |
| Stock tender in lieu of cash on note receivable with related party | $      | ---   | ---    | 1,740 |   |
| Satellite warranty receivable                                      | $      | ---   | 8,880  | ---   |   |

|   | Additional Non-cash Financing Activities |
|--------|------------------------------------------|

|   | We received cash proceeds 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. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

|              |   | 2009   |    |   | 2008   |   |
|-------------------|--------|--------|---------|--------|--------|--------|
| Trade             |   | $      | 145,220 |   |   |   | 109,835 |   |
| Employee          |   |   | 315     |   |   |   | 243 |   |
| Other             |   |   | 2,324   |   |   |   | 3,058 |   |
| Total Receivables |   | $      | 147,859 |   |   |   | 113,136 |   |

|              |   |                         |   |   | Additions                     |   |   | Deductions                |   |   |                         |   |
|-------------------|--------|------------------------------|--------|--------|-------------------------------|--------|--------|---------------------------|--------|--------|------------------------------|--------|
| Description       |   | Balance at beginning of year |   |   | Charged to costs and expenses |   |   | Charged to Other Accounts |   |   | Write-offs net of recoveries |   |   | Balance at end of year |   |
| December 31, 2009 |   | $                            | 2,582  |   |                          |   | 3,818  |                      |   |   | 1,734                        |   |   |   | 1,074 |   |   |   | 7,060 |   |
|              |   |                         |   |   |                          |   |   |                      |   |   |                         |   |   |   |   |   |   |   |   |   |
| December 31, 2008 |   | $                            | 1,657  |   |                          |   | 3,471  |                      |   |   | ---                          |   |   |   | 2,546 |   |   |   | 2,582 |   |
|              |   |                         |   |   |                          |   |   |                      |   |   |                         |   |   |   |   |   |   |   |   |   |
| December 31, 2007 |   | $                            | 2,922  |   |                          |   | 4,822  |                      |   |   | ---                          |   |   |   | 6,087 |   |   |   | 1,657 |   |

| (4) | Net Property and Equipment in Service |
|-----|---------------------------------------|

|                                        |   | 2009   |      |   | 2008   |   |
|---------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Land and buildings                          |   | $      | 33,033    |   |   |   | 32,134 |   |
| Telephony distribution systems              |   |   | 925,395   |   |   |   | 809,356 |   |
| Cable television distribution systems       |   |   | 208,478   |   |   |   | 194,616 |   |
| Support equipment                           |   |   | 153,248   |   |   |   | 144,457 |   |
| Transportation equipment                    |   |   | 11,004    |   |   |   | 10,550 |   |
| Property and equipment under capital leases |   |   | 102,972   |   |   |   | 102,972 |   |
|                                        |   |   | 1,434,130 |   |   |   | 1,294,085 |   |
| Less accumulated depreciation               |   |   | 598,687   |   |   |   | 495,953 |   |
| Less amortization                           |   |   | 12,363    |   |   |   | 5,081 |   |
| Net property and equipment in service       |   | $      | 823,080   |   |   |   | 793,051 |   |

----

|                          |   | 2009   |   |   | 2008   |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|
| Software license fees         |   | $      | 22,459 |   |   |   | 18,377 |   |
| Customer relationships        |   |   | 11,217 |   |   |   | 11,467 |   |
| Customer contracts            |   |   | 3,538  |   |   |   | 3,538 |   |
| Right-of-way                  |   |   | 783    |   |   |   | 783 |   |
| Other                         |   |   | 529    |   |   |   | 803 |   |
|                          |   |   | 38,526 |   |   |   | 34,968 |   |
| Less accumulated amortization |   |   | 18,965 |   |   |   | 11,992 |   |
| Net other intangible assets   |   | $      | 19,561 |   |   |   | 22,976 |   |

| Balance at December 31, 2007                                                                                  |   | $      | 11,769 |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|
| Asset additions upon acquisition of UUI, Unicom, Alaska Wireless, and the minority interest in Alaska DigiTel |   |   | 10,861 |   |
| Asset additions                                                                                               |   |   | 6,303  |   |
| Less amortization expense                                                                                     |   |   | 5,948  |   |
| Less asset write-off                                                                                          |   |   | 9      |   |
| Balance at December 31, 2008                                                                                  |   |   | 22,976 |   |
| Asset additions                                                                                               |   |   | 4,772  |   |
| Less amortization expense                                                                                     |   |   | 7,628  |   |
| Less asset write-off                                                                                          |   |   | 559    |   |
| Balance at December 31, 2009                                                                                  |   | $      | 19,561 |   |

----

|                                                   |   | Years Ended December 31, |   |
|--------------------------------------------------------|--------|--------------------------|--------|
|                                                   |   | 2009                     | 2008   | 2007 |   |
| Amortization expense for amortizable intangible assets | $      | 7,628                    | 5,948  |   | 3,332 |   |

| Years Ending December 31, |   |   |   |   |   |   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|--------|
| 2010                      |   |   |   |   |   | $      | 6,048  |   |
| 2011                      |   |   |   |   |   |   | 3,980  |   |
| 2012                      |   |   |   |   |   |   | 3,032  |   |
| 2013                      |   |   |   |   |   |   | 1,756  |   |
| 2014                      |   |   |   |   |   |   | 851    |   |

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

|                                                     |   | December 31, |    |
|----------------------------------------------------------|--------|--------------|---------|
|                                                     |   | 2009         |    |   | 2008 |   |
| 2019 Notes (a)                                           |   | $            | 425,000 |   |   |   | --- |   |
| 2014 Notes (b)                                           |   |         | 320,000 |   |   |   | 320,000 |   |
| Senior Credit Facility (c)                               |   |         | ---     |   |   |   | 362,529 |   |
| Rural Utilities Services debt (d)                        |   |         | 34,721  |   |   |   | 35,328 |   |
| CoBank Mortgage note payable (d)                         |   |         | 2,277   |   |   |   | 3,539 |   |
| Mortgage                                                 |   |         | ---     |   |   |   | 490 |   |
| Debt                                                     |   |         | 781,998 |   |   |   | 721,886 |   |
| Less unamortized discount paid on the 2019 Notes         |   |         | 3,460   |   |   |   | --- |   |
| Less unamortized discount paid on the 2014 Notes         |   |         | 2,158   |   |   |   | 2,589 |   |
| Less unamortized discount paid on Senior Credit Facility |   |         | ---     |   |   |   | 2,466 |   |
| Less current portion of long-term debt                   |   |         | 5,133   |   |   |   | 8,425 |   |
| Long-term debt, net of unamortized discount              |   | $            | 771,247 |   |   |   | 708,406 |   |

|   | (a) | On November 3, 2009 (“Closing Date”), we completed an offering of $425.0 million in aggregate principal amount of its 8 5/8% 2019 Notes at an issue price of 99.17% ("2019 Notes") to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to persons outside the United States in accordance with Regulation S under the Securities Act. We used the net proceeds from this offering to repay and retire the outstanding amount of $389.8 million under our Senior Credit Facility and for general corporate purposes. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

----

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

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

|   | (c) | In November 2009, we completed our offering of the 2019 Notes and used the net proceeds from this offering to repay the outstanding amount of $389.8 million under our Senior Credit Facility, including $349.8 million outstanding on the term loan and $40.0 million outstanding on the revolving portion of the Senior Credit Facility.  The term loan was retired upon the repayment but the revolving portion was still available to us at December 31, 2009. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

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

|   | (d) | We acquired long-term debt upon our acquisition of UUI and Unicom effective June 1, 2008, from the Rural Utility Services (“RUS”) and CoBank.  The long-term debt is due in monthly installments of principal based on a fixed rate amortization schedule.  The interest rates on the various loans to which this debt relates range from 2.0% to 6.8%.  Through UUI and Unicom, we have $17.0 million available for borrowing for specific capital expenditures under existing borrowing arrangements.  Substantially all of the assets of UUI and Unicom are collateral for the amounts due to RUS and CoBank. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Years ending December 31,                    |   |   |    |
|----------------------------------------------|--------|--------|---------|
| 2010                                         |   | $      | 5,133   |   |
| 2011                                         |   |   | 5,004   |   |
| 2012                                         |   |   | 4,962   |   |
| 2013                                         |   |   | 5,218   |   |
| 2014                                         |   |   | 324,908 |   |
| 2015 and thereafter                          |   |   | 436,773 |   |
|                                         |   |   | 781,998 |   |
| Less unamortized discount paid on 2019 Notes |   |   | 3,460   |   |
| Less unamortized discount paid on 2014 Notes |   |   | 2,158   |   |
| Less current portion of long-term debt       |   |   | 5,133   |   |
|                                         |   | $      | 771,247 |   |

| (7) | Income Taxes |
|-----|--------------|

|                 |   | Years ended December 31, |   |
|----------------------|--------|--------------------------|--------|
|                 |   | 2009                     | 2008   | 2007 |   |
| Current tax expense: |   |                     |   |   |   |   |
| Federal taxes        | $      | ---                      | ---    |   | 436 |   |
| State taxes          |   | ---                      | ---    |   | 77 |   |
|                 |   | ---                      | ---    |   | 513 |   |

----

|                  |   |   |   |   |   |   |
|-----------------------|--------|--------|--------|--------|--------|--------|
| Deferred tax expense: |   |   |   |   |   |   |
| Federal taxes         |   | 3,494  | 922    |   | 9,785  |   |
| State taxes           |   | 442    | 155    |   | 1,864  |   |
|                  |   | 3,936  | 1,077  |   | 11,649 |   |
|                  | $      | 3,936  | 1,077  |   | 12,162 |   |

|                                                                     |   | Years ended December 31, |   |
|--------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                     |   | 2009                     |   |   | 2008 |   |   | 2007 |   |
| “Expected” statutory tax expense (benefit)                   |   | $                        | 2,608  |   |   |   | (803 | ) |   |   | 9,050 |   |
| State income taxes, net of federal expense (benefit)                     |   |                     | 456    |   |   |   | (48 | ) |   |   | 1,585 |   |
| Income tax effect of nondeductible entertainment expenses                |   |                     | 703    |   |   |   | 725 |   |   |   | 569 |   |
| Impact of non-controlling interest attributable to non-tax paying entity |   |                     | ---    |   |   |   | 526 |   |   |   | 13 |   |
| Income tax effect of nondeductible lobbying expenses                     |   |                     | 380    |   |   |   | 424 |   |   |   | 468 |   |
| Other, net                                                               |   |                     | (211   | ) |   |   | 253 |   |   |   | 477 |   |
|                                                                     |   | $                        | 3,936  |   |   |   | 1,077 |   |   |   | 12,162 |   |

|                                                                                                                 |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Current deferred tax assets, net of current deferred tax liability:                                                  |   |   |   |   |   |   |
| Compensated absences, accrued for financial reporting purposes                                                       |   | $      | 2,565  |   |   |   | 2,771 |   |
| Net operating loss carryforwards                                                                                     |   |   | 8,354  |   |   |   | --- |   |
| Workers compensation and self insurance health reserves, principally due to accrual for financial reporting purposes |   |   | 580    |   |   |   | 869 |   |
| Accounts receivable, principally due to allowance for doubtful accounts                                              |   |   | 2,981  |   |   |   | 980 |   |
| Deferred compensation expense for tax purposes in excess of amounts recognized for financial reporting purposes      |   |   | (270   | )      |   |   | 966 |   |
| Other                                                                                                                |   |   | 3,408  |   |   |   | 2,257 |   |
| Total current deferred tax assets                                                                                    |   | $      | 17,618 |   |   |   | 7,843 |   |

----

|                                                                                                               |   | 2009   |    |   | 2008   |   |
|--------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Long-term deferred tax assets:                                                                                     |   |   |    |   |   |   |
| Net operating loss carryforwards                                                                                   |   | $      | 74,345  |   |   |   | 65,890 |   |
| Deferred revenue for financial reporting purposes                                                                  |   |   | 22,422  |   |   |   | 20,658 |   |
| Alternative minimum tax credits                                                                                    |   |   | 1,892   |   |   |   | 3,055 |   |
| Deferred compensation expense for financial reporting purposes in excess of amounts recognized for tax purposes    |   |   | 1,093   |   |   |   | 1,274 |   |
| Asset retirement obligations in excess of amounts recognized for tax purposes                                      |   |   | 1,775   |   |   |   | 1,812 |   |
| Share-based compensation expense for financial reporting purposes in excess of amounts recognized for tax purposes |   |   | 3,026   |   |   |   | 2,079 |   |
| Other                                                                                                              |   |   | 4,132   |   |   |   | 115 |   |
| Total long-term deferred tax assets                                                                                |   |   | 108,685 |   |   |   | 94,883 |   |
|                                                                                                               |   |   |    |   |   |   |   |   |
| Long-term deferred tax liabilities                                                                                 |   |   |    |   |   |   |   |   |
| Plant and equipment, principally due to differences in depreciation                                                |   |   | 170,260 |   |   |   | 108,015 |   |
| Intangible assets                                                                                                  |   |   | 38,811  |   |   |   | 73,000 |   |
| Other                                                                                                              |   |   | ---     |   |   |   | 55 |   |
| Total long-term deferred tax liabilities                                                                           |   |   | 209,071 |   |   |   | 181,070 |   |
| Net long-term deferred tax liabilities                                                                             |   | $      | 100,386 |   |   |   | 86,187 |   |

| Years ending December 31,                  |   | Federal |    |   | State  |   |
|--------------------------------------------|--------|---------|---------|--------|--------|--------|
| 2011                                       |   | $       | 759     |   |   |   | 759 |   |
| 2018                                       |   |    | 1,937   |   |   |   | 1,911 |   |
| 2019                                       |   |    | 25,942  |   |   |   | 25,391 |   |
| 2020                                       |   |    | 44,744  |   |   |   | 43,797 |   |
| 2021                                       |   |    | 29,614  |   |   |   | 28,987 |   |
| 2022                                       |   |    | 14,081  |   |   |   | 13,788 |   |
| 2023                                       |   |    | 3,968   |   |   |   | 3,903 |   |
| 2024                                       |   |    | 544     |   |   |   | --- |   |
| 2025                                       |   |    | 1,342   |   |   |   | --- |   |
| 2026                                       |   |    | 337     |   |   |   | --- |   |
| 2027                                       |   |    | 116     |   |   |   | --- |   |
| 2028                                       |   |    | 39,535  |   |   |   | 39,097 |   |
| 2029                                       |   |    | 48,370  |   |   |   | 47,570 |   |
| Total tax net operating loss carryforwards |   | $       | 211,289 |   |   |   | 205,203 |   |

----

| (8) | Stockholder's Equity |
|-----|----------------------|

----

|                    | 2009                | 2008                | 2007                |
|-------------------------|---------------------|---------------------|---------------------|
| Expected term (years)   | 5.2 – 6.8     | 5.2 – 6.8     | 5.2 – 6.8     |
| Volatility              | 53.6% – 59.1% | 47.6% – 55.4% | 41.5% – 54.3% |
| Risk-free interest rate | 1.7% – 3.2%   | 1.6% – 3.4%   | 3.5% – 4.7%   |

|   | We estimate pre-vesting option forfeitures at the time of grant and periodically revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We record share-based compensation expense only for those awards expected to vest using an estimated forfeiture rate based on our historical pre-vesting forfeiture data. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Options                                  |   | Shares |   |   | WeightedAverageExercise Price |    |   | Weighted Average Remaining Contractual Term |   |   | Aggregate Intrinsic Value |   |
|------------------------------------------|--------|--------|--------|--------|-------------------------------|---------|--------|---------------------------------------------|--------|--------|---------------------------|--------|
| Outstanding at January 1, 2009           |   |   | 6,815  |   |                          | $       | 8.88   |                                        |   |   |                      |   |   |   |
| Granted                                  |   |   | 153    |   |                          | $  | 6.65   |                                        |   |   |                      |   |   |   |
| Exercised                                |   |   | (77    | )      |                          | $  | 5.52   |                                        |   |   |                      |   |   |   |
| Forfeited and retired                    |   |   | (5,264 | )      |                          | $  | 9.34   |                                        |   |   |                      |   |   |   |
| Outstanding at December 31, 2009         |   |   | 1,627  |   |                          | $       | 7.35   |                                        |   |   | 4.8                       |   |   | $ | 365 |   |
| Exercisable at December 31, 2009         |   |   | 1,051  |   |                          | $       | 7.04   |                                        |   |   | 3.3                       |   |   | $ | 363 |   |
| Available for grant at December 31, 2009 |   |   | 4,121  |   |                          |    |   |                                        |   |   |                      |   |   |   |   |   |

|   | The weighted average grant date fair value of options granted during the years ended December 31, 2009, 2008 and 2007 was $3.49 per share, $3.10 per share and $7.03 per share, respectively. The total fair value of options vested during the years ended December 31, 2009, 2008 and 2007 was $110,000, $3.3 million and $3.3 million, respectively. The total intrinsic values, determined as of the date of exercise, of options exercised in the years ended December 31, 2009, 2008 and 2007 were $120,000, $214,000 and $3.5 million, respectively. We received $423,000, $416,000 and $3.3 million in cash from stock option exercises in the years ended December 31, 2009, 2008 and 2007, respectively. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | A summary of the status of nonvested shares under the Stock Option Plan as of December 31, 2009, and changes during the year ended December 31, 2009, is presented below (share amounts in thousands): |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Nonvested Restricted Stock Awards |   | Shares |   |   | Weighted AverageGrant Date Fair Value |    |
|-----------------------------------|--------|--------|--------|--------|---------------------------------------|---------|
| Nonvested at January 1, 2009      |   |   | 390    |   |                                  | $       | 12.38 |   |
| Granted                           |   |   | 1,964  |   |                                  | $  | 4.63 |   |
| Vested                            |   |   | (128   | )      |                                  | $  | 11.23 |   |
| Forfeited                         |   |   | (1     | )      |                                  | $  | 1.26 |   |
| Nonvested at December 31, 2009    |   |   | 2,225  |   |                                  | $       | 5.69 |   |

|   | The following is a summary of our share-based compensation expense for the years ended December 31, 2009, 2008, and 2007 (in thousands): |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                    |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Employee share-based compensation expense                                               |   | $      | 5,709  |   |   |   | 7,282  |   |   |   | 6,273 |   |
| Expense reversal for performance based options and awards that are not expected to vest |   |   | (2,134 | )      |   |   | ---    |   |   |   | --- |   |
| Adjustment to fair value of liability classified awards                                 |   |   | (771   | )      |   |   | (4     | )      |   |   | (1,329 | ) |
| Total share-based compensation expense                                                  |   | $      | 2,804  |   |   |   | 7,278  |   |   |   | 4,944 |   |

|                                             |   | Shares |   |   | Weighted AverageExercise Price |   |
|--------------------------------------------------|--------|--------|--------|--------|--------------------------------|--------|
| Outstanding at December 31, 2007, 2008, and 2009 |   |   | 150    |   |                           | $      | 6.50 |   |
|                                             |   |   |   |   |                           |   |   |   |
| Available for grant at December 31, 2009         |   |   | ---    |   |                           |   |   |   |

----

----

|   | Corporate related expenses including engineering, information technology, accounting, legal and regulatory, human resources, and other general and administrative expenses for the years ended December 31, 2009, 2008, and 2007 are allocated to our Consumer, Network Access, Commercial, and Managed Broadband segments using segment margin for the years ended December 31, 2008, 2007, and 2006, respectively.  Bad debt expense for the years ended December 31, 2009, 2008, and 2007 is allocated to our Consumer, Network Access, Commercial and Managed Broadband segments using a combination of specific identification and allocations based upon segment revenue for the years ended December 31, 2009, 2008 and 2007, respectively.  Corporate related expenses and bad debt expense are specifically identified for our Regulated Operations segment and therefore, are not included in the allocations. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We evaluate performance and allocate resources based on adjusted EBITDA. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies in note 1. Intersegment sales are recorded at cost plus an agreed upon intercompany profit. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | We earn all revenues through sales of services and products within the United States. All of our long-lived assets are located within the United States of America, except 82% of our undersea fiber optic cable systems which transit international waters and all of our satellite transponders. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Summarized financial information for our reportable segments for the years ended December 31, 2009, 2008 and 2007 follows (amounts in thousands): |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|                     |   | Consumer |    |   | Network Access |   |    | Commercial |   |   | Managed Broadband |   |   | Regulated Operations |   |   | Total Reportable Segments |   |
|--------------------------|--------|----------|---------|--------|----------------|--------|---------|------------|--------|--------|-------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|
| 2009                     |   |     |    |   |           |   |    |       |   |   |              |   |   |                 |   |   |                      |   |
| Revenues:                |   |     |    |   |           |   |    |       |   |   |              |   |   |                 |   |   |                      |   |
| Intersegment             |   | $        | ---     |   |           |   | 419     |       |   |   | 5,729             |   |   |                 | ---    |   |                      |   | 192 |   |   |   | 6,340 |   |
| External                 |   |     | 294,925 |   |           |   | 122,072 |       |   |   | 110,135           |   |   |                 | 44,875 |   |                      |   | 23,804 |   |   |   | 595,811 |   |
| Total revenues           |   |     | 294,925 |   |           |   | 122,491 |       |   |   | 115,864           |   |   |                 | 44,875 |   |                      |   | 23,996 |   |   |   | 602,151 |   |
| Cost of Goods Sold:      |   |     |    |   |           |   |    |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Intersegment             |   |     | 419     |   |           |   | 600     |       |   |   | 2,694             |   |   |                 | ---    |   |                      |   | 192 |   |   |   | 3,905 |   |
| External                 |   |     | 96,894  |   |           |   | 27,253  |       |   |   | 52,245            |   |   |                 | 11,135 |   |                      |   | 6,149 |   |   |   | 193,676 |   |
| Total Cost of Goods Sold |   |     | 97,313  |   |           |   | 27,853  |       |   |   | 54,939            |   |   |                 | 11,135 |   |                      |   | 6,341 |   |   |   | 197,581 |   |
| Contribution:            |   |     |    |   |           |   |    |       |   |   |              |   |   |                 |   |   |                      |   |   |   |   |   |   |   |
| Intersegment             |   |     | (419    | )      |           |   | (181    | )          |   |   | 3,035             |   |   |                 | ---    |   |                      |   | --- |   |   |   | 2,435 |   |

----

| External                           |   |   | 198,031 |   |   |   | 94,819  |   |   |   | 57,890  |   |   |   | 33,740 |   |   |   | 17,655 |   |   |   | 402,135 |   |
|------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
| Total contribution                 |   |   | 197,612 |   |   |   | 94,638  |   |   |   | 60,925  |   |   |   | 33,740 |   |   |   | 17,655 |   |   |   | 404,570 |   |
| Less SG&A                      |   |   | 112,883 |   |   |   | 38,348  |   |   |   | 35,363  |   |   |   | 14,450 |   |   |   | 11,627 |   |   |   | 212,671 |   |
| Plus share-based compensation      |   |   | 1,145   |   |   |   | 891     |   |   |   | 549     |   |   |   | 219    |   |   |   | ---    |   |   |   | 2,804   |   |
| Plus non-cash contribution expense |   |   | 294     |   |   |   | 201     |   |   |   | 98      |   |   |   | 47     |   |   |   | ---    |   |   |   | 640     |   |
| Adjusted EBITDA                    |   | $      | 86,587  |   |   |   | 57,563  |   |   |   | 23,174  |   |   |   | 19,556 |   |   |   | 6,028  |   |   |   | 192,908 |   |
|                               |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| 2008                               |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Revenues:                          |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Intersegment                       |   | $      | 84      |   |   |   | 916     |   |   |   | 5,808   |   |   |   | ---    |   |   |   | 157    |   |   |   | 6,965   |   |
| External                           |   |   | 255,632 |   |   |   | 153,821 |   |   |   | 114,660 |   |   |   | 37,047 |   |   |   | 14,282 |   |   |   | 575,442 |   |
| Total revenues                     |   |   | 255,716 |   |   |   | 154,737 |   |   |   | 120,468 |   |   |   | 37,047 |   |   |   | 14,439 |   |   |   | 582,407 |   |
| Cost of Goods Sold:                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Intersegment                       |   |   | 656     |   |   |   | 685     |   |   |   | 2,821   |   |   |   | 125    |   |   |   | 97     |   |   |   | 4,384   |   |
| External                           |   |   | 89,853  |   |   |   | 40,326  |   |   |   | 59,480  |   |   |   | 10,265 |   |   |   | 3,134  |   |   |   | 203,058 |   |
| Total Cost of Goods Sold           |   |   | 90,509  |   |   |   | 41,011  |   |   |   | 62,301  |   |   |   | 10,390 |   |   |   | 3,231  |   |   |   | 207,442 |   |
| Contribution:                      |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Intersegment                       |   |   | (572    | )      |   |   | 231     |   |   |   | 2,987   |   |   |   | (125   | )      |   |   | 60     |   |   |   | 2,581   |   |
| External                           |   |   | 165,779 |   |   |   | 113,495 |   |   |   | 55,180  |   |   |   | 26,782 |   |   |   | 11,148 |   |   |   | 372,384 |   |
| Total contribution                 |   |   | 165,207 |   |   |   | 113,726 |   |   |   | 58,167  |   |   |   | 26,657 |   |   |   | 11,208 |   |   |   | 374,965 |   |
| Less SG&A                      |   |   | 110,364 |   |   |   | 43,057  |   |   |   | 36,191  |   |   |   | 13,132 |   |   |   | 7,562  |   |   |   | 210,306 |   |
| Plus share-based compensation      |   |   | 2,891   |   |   |   | 2,443   |   |   |   | 1,392   |   |   |   | 552    |   |   |   | ---    |   |   |   | 7,278   |   |
| Plus non-cash contribution expense |   |   | 199     |   |   |   | 177     |   |   |   | 76      |   |   |   | 28     |   |   |   | ---    |   |   |   | 480     |   |
| Plus non-controlling interest      |   |   | 661     |   |   |   | 589     |   |   |   | 253     |   |   |   | ---    |   |   |   | ---    |   |   |   | 1,503   |   |
| Plus other expense                 |   |   | (217    | )      |   |   | ---     |   |   |   | ---     |   |   |   | ---    |   |   |   | ---    |   |   |   | (217    | )      |
| Adjusted EBITDA                    |   | $      | 58,949  |   |   |   | 73,647  |   |   |   | 20,710  |   |   |   | 14,230 |   |   |   | 3,586  |   |   |   | 171,122 |   |
|                               |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| 2007                               |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Revenues:                          |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Intersegment                       |   | $      | ---     |   |   |   | 2,978   |   |   |   | 5,471   |   |   |   | ---    |   |   |   | ---    |   |   |   | 8,449   |   |
| External                           |   |   | 223,502 |   |   |   | 163,377 |   |   |   | 104,640 |   |   |   | 28,792 |   |   |   | ---    |   |   |   | 520,311 |   |
| Total revenues                     |   |   | 223,502 |   |   |   | 166,355 |   |   |   | 110,111 |   |   |   | 28,792 |   |   |   | ---    |   |   |   | 528,760 |   |
| Cost of Goods Sold:                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Intersegment                       |   |   | 2,067   |   |   |   | 1,303   |   |   |   | 2,487   |   |   |   | ---    |   |   |   | ---    |   |   |   | 5,857   |   |
| External                           |   |   | 88,699  |   |   |   | 43,868  |   |   |   | 53,492  |   |   |   | 9,740  |   |   |   | ---    |   |   |   | 195,799 |   |
| Total Cost of Goods Sold           |   |   | 90,766  |   |   |   | 45,171  |   |   |   | 55,979  |   |   |   | 9,740  |   |   |   | ---    |   |   |   | 201,656 |   |
| Contribution:                      |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |
| Intersegment                       |   |   | (2,067  | )      |   |   | 1,675   |   |   |   | 2,984   |   |   |   | ---    |   |   |   | ---    |   |   |   | 2,592   |   |
| External                           |   |   | 134,803 |   |   |   | 119,509 |   |   |   | 51,148  |   |   |   | 19,052 |   |   |   | ---    |   |   |   | 324,512 |   |
| Total contribution                 |   |   | 132,736 |   |   |   | 121,184 |   |   |   | 54,132  |   |   |   | 19,052 |   |   |   | ---    |   |   |   | 327,104 |   |
| Less SG&A                      |   |   | 89,723  |   |   |   | 38,859  |   |   |   | 36,060  |   |   |   | 11,110 |   |   |   | ---    |   |   |   | 175,752 |   |
| Plus share-based compensation      |   |   | 1,715   |   |   |   | 1,775   |   |   |   | 1,069   |   |   |   | 385    |   |   |   | ---    |   |   |   | 4,944   |   |
| Plus non-controlling interest      |   |   | 13      |   |   |   | 16      |   |   |   | 7       |   |   |   | ---    |   |   |   | ---    |   |   |   | 36      |   |
| Adjusted EBITDA                    |   | $      | 46,808  |   |   |   | 82,441  |   |   |   | 16,164  |   |   |   | 8,327  |   |   |   | ---    |   |   |   | 153,740 |   |

----

| Years ended December 31,                               |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|--------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Reportable segment revenues                            |   | $      | 602,151 |   |   |   | 582,407 |   |   |   | 528,760 |   |
| Less intersegment revenues eliminated in consolidation |   |   | 6,340   |   |   |   | 6,965   |   |   |   | 8,449 |   |
| Consolidated revenues                                  |   | $      | 595,811 |   |   |   | 575,442 |   |   |   | 520,311 |   |

| Years ended December 31,                               |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|--------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Reportable segment adjusted EBITDA                     |   | $      | 192,908 |   |   |   | 171,122 |   |   |   | 153,740 |   |
| Less depreciation and amortization expense             |   |   | 123,362 |   |   |   | 114,369 |   |   |   | 87,615 |   |
| Less share-based compensation expense                  |   |   | 2,804   |   |   |   | 7,278   |   |   |   | 4,944 |   |
| Less non-cash contribution expense                     |   |   | 640     |   |   |   | 480     |   |   |   | --- |   |
| Less net loss attributable to non-controlling interest |   |   | ---     |   |   |   | 1,503   |   |   |   | 36 |   |
| Plus other expense                                     |   |   | ---     |   |   |   | 217     |   |   |   | --- |   |
| Consolidated operating income                          |   |   | 66,102  |   |   |   | 47,709  |   |   |   | 61,145 |   |
| Less other expense, net                                |   |   | 58,650  |   |   |   | 50,004  |   |   |   | 35,286 |   |
| Consolidated income (loss) before income taxes         |   | $      | 7,452   |   |   |   | (2,295  | )      |   |   | 25,859 |   |

----

| (10) | Financial Instruments |
|------|-----------------------|

|                                                     |    | 2009            |   | 2008       |    |
|----------------------------------------------------------|---------|-----------------|--------|------------|---------|
|                                                     |    | Carrying Amount |   | Fair Value |    | Carrying Amount |   | Fair Value |   |
| Current and long-term debt and capital lease obligations |  $ | 872,294         |   |       | 834,152 |   | 817,160 |   |   | 723,403 |   |
| Other liabilities                                        |    | 72,770          |   |       | 71,623  |   | 63,867 |   |   | 63,727 |   |

|   | Current and long-term debt and capital lease obligations:  The fair value of our 2019 Notes, 2014 Notes, RUS debt, CoBank mortgage note payable, and capital leases are valued based on quoted market prices on the same or similar issues or on the current rates offered to us of the same remaining maturities.  The fair value of our Senior Credit Facility is estimated to approximate the carrying value because the instrument is subject to variable interest rates. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Other Liabilities:  Deferred compensation liabilities are carried at fair value, which is the amount payable 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 quoted market prices on current rates offered to us. Our non-employee share-based compensation awards are reported at their fair value at each reporting period. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                   |   | Fair Value Measurement at Reporting Date Using               |   |
|----------------------------------------|--------|--------------------------------------------------------------|--------|
| December 31, 2009 Assets               |   | Quoted Prices in Active Marketsfor IdenticalAssets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Money market funds                     |   | $                                                            | 12     |   |   |   | --- |   |   |   | --- |   |
| U.S. government and agency obligations |   |                                                         | 883    |   |   |   | --- |   |   |   | --- |   |

----

| Deferred compensation plan assets (money market funds)   |   |   | 1,522  |   |   |   | ---    |   |   |   | ---                                     |                            |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------------------------------------|---------------------------------|
| Derivative financial instruments                         |   |   | ---    |   |   |   | ---    |   |   |   | ---                                     |                            |
| Total assets at fair value                               |   | $      | 2,417  |   |   |   | ---    |   |   |   | ---                                     |                            |
|                                                     |   |   |   |   |   |   |   |   |   |   |                                    |                            |
| December 31, 2008 Assets                                 |   |   |   |   |   |   |   |   |   |   |                                    |                            |
| Money market funds                                       |   | $      | 590    |   |   |   | ---    |   |   |   | ---       |        |
|    U.S. government and agency obligations |   |   | 973    |   |   |   | ---    |   |   |   | ---                                     |                            |
| Derivative financial instruments                         |   |   | ---    |   |   |   | 7      |   |   |   | ---                                     |                            |
| Total assets at fair value                               |   | $      | 1,563  |   |   |   | 7      |   |   |   | ---                                     |                            |

| (11) | Related Party Transactions |
|------|----------------------------|

| (12) | Commitments and Contingencies |
|------|-------------------------------|

----

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

| Years ending December 31:                                              |   | Operating |    |   | Capital |   |
|------------------------------------------------------------------------|--------|-----------|---------|--------|---------|--------|
| 2010                                                                   |   | $         | 19,785  |   |    |   | 11,656 |   |
| 2011                                                                   |   |      | 17,152  |   |    |   | 11,672 |   |
| 2012                                                                   |   |      | 14,722  |   |    |   | 11,732 |   |
| 2013                                                                   |   |      | 13,402  |   |    |   | 11,742 |   |
| 2014                                                                   |   |      | 12,083  |   |    |   | 11,752 |   |
| 2015 and thereafter                                                    |   |      | 68,745  |   |    |   | 90,232 |   |
| Total minimum lease payments                                           |   | $         | 145,889 |   |    |   | 148,786 |   |
| Less amount representing interest                                      |   |      |    |   |    |   | 52,872 |   |
| Less current maturity of obligations under capital leases              |   |      |    |   |    |   | 4,759 |   |
| Long-term obligations under capital leases, excluding current maturity |   |      |    |   |    | $      | 91,155 |   |

----

| Years ending December 31,             |   |   |   |
|---------------------------------------|--------|--------|--------|
| 2010                                  |   | $      | 7,006  |   |
| 2011                                  |   |   | 6,753  |   |
| 2012                                  |   |   | 6,142  |   |
| 2013                                  |   |   | 6,075  |   |
| 2014                                  |   |   | 5,581  |   |
| 2015 and thereafter                   |   |   | 41,770 |   |
| Total minimum future service revenues |   | $      | 73,327 |   |

|   | · | $2.4 million to secure payment of certain access charges associated with our provision of telecommunications services within the State of Alaska, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $282,000 to meet obligations associated with our insurance arrangements, and |
|--------|--------|------------------------------------------------------------------------------|

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

----

----

| (13) | Non-controlling Interest |
|------|--------------------------|

----

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

|                                        |   | FirstQuarter |    |   | Second Quarter |   |    | ThirdQuarter |   |   | FourthQuarter |   |
|---------------------------------------------|--------|--------------|---------|--------|----------------|--------|---------|--------------|--------|--------|---------------|--------|
| 2009                                        |   |         |    |   |           |   |    |         |   |   |          |   |
| Total revenues                              |   | $            | 148,689 |   |           |   | 148,796 |         |   |   | 150,816       |   |   |   | 147,510 |   |
| Operating income                            |   | $            | 13,512  |   |           |   | 18,559  |         |   |   | 20,730        |   |   |   | 13,301 |   |
| Net income (loss) attributable to GCI, Inc. |   | $            | 354     |   |           |   | 2,564   |         |   |   | 4,336         |   |   |   | (3,738 | ) |
|                                        |   |         |    |   |           |   |    |         |   |   |          |   |   |   |   |   |
| 2008                                        |   |         |    |   |           |   |    |         |   |   |          |   |   |   |   |   |
| Total revenues                              |   | $            | 134,674 |   |           |   | 142,461 |         |   |   | 151,660       |   |   |   | 146,647 |   |
| Operating income                            |   | $            | 9,714   |   |           |   | 14,045  |         |   |   | 15,980        |   |   |   | 7,970 |   |
| Net income (loss) attributable to GCI, Inc  |   | $            | 436     |   |           |   | 1,832   |         |   |   | 265           |   |   |   | (4,402 | ) |

| (15) | Subsequent Events |
|------|-------------------|

----

----

|   |   |   | Exhibit No. |      | Description |
|--------|--------|--------|-------------|-----------|-------------|
|   |   |   |        | 3.1       |        | Restated Articles of Incorporation (12) |
|   |   |   |        | 3.2       |        | Amended and Restated Bylaws (12) |
|   |   |   |        | 4.1       |        | Certified copy of the General Communication, Inc. Amendment No. 1, dated as of June 25, 2007, to the Amended and Restated 1986 Stock Option Plan (33) |
|   |   |   |        | 4.2  |        |    Indenture for 8 5/8% Senior Notes due 2019 dated as of November 3, 2009, between The Company, as Issuer, and Union Bank, N.A., as Trustee (45)  |
|   |   |   |        | 4.3  |        |    Form of 8 5/8% Senior Notes due 2019 (included in Exhibit 4.2) |
|   |   |   |        | 10.3      |        | Westin Building Lease (3) |
|   |   |   |        | 10.4      |        | Duncan and Hughes Deferred Bonus Agreements (4) |
|   |   |   |        | 10.5      |        | Compensation Agreement between General Communication, Inc. and William C. Behnke dated January 1, 1997 (13) |
|   |   |   |        | 10.6      |        | Order approving Application for a Certificate of Public Convenience and Necessity to operate as a Telecommunications (Intrastate Interexchange Carrier) Public Utility within Alaska (2) |
|   |   |   |        | 10.13     |        | MCI Carrier Agreement between MCI Telecommunications Corporation and General Communication, Inc. dated January 1, 1993 (5) |
|   |   |   |        | 10.14     |        | Contract for Alaska Access Services Agreement between MCI Telecommunications Corporation and General Communication, Inc. dated January 1, 1993 (5) |
|   |   |   |        | 10.15     |        | Promissory Note Agreement between General Communication, Inc. and Ronald A. Duncan, dated August 13, 1993 (6) |
|   |   |   |        | 10.16     |        | Deferred Compensation Agreement between General Communication, Inc. and Ronald A. Duncan, dated August 13, 1993 (6) |
|   |   |   |        | 10.17     |        | Pledge Agreement between General Communication, Inc. and Ronald A. Duncan, dated August 13, 1993 (6) |
|   |   |   |        | 10.20     |        | The GCI Special Non-Qualified Deferred Compensation Plan (7) |
|   |   |   |        | 10.21     |        | Transponder Purchase Agreement for Galaxy X between Hughes Communications Galaxy, Inc. and GCI Communication Corp. (7) |
|   |   |   |        | 10.25     |        | Licenses: (3) |
|   |   |   |        | 10.25.1   |        | 214 Authorization |
|   |   |   |        | 10.25.2   |        | International Resale Authorization |
|   |   |   |        | 10.25.3   |        | Digital Electronic Message Service Authorization |
|   |   |   |        | 10.25.11  |        | Certificate of Convenience and Public Necessity – Telecommunications Service (Local Exchange) dated July 7, 2000  (29) |
|   |   |   |        | 10.26     |        | ATU Interconnection Agreement between GCI Communication Corp. and Municipality of Anchorage, executed January 15, 1997 (12) |
|   |   |   |        | 10.29     |        | Asset Purchase Agreement, dated April 15, 1996, among General Communication, Inc., ACNFI, ACNJI and ACNKSI (8) |
|   |   |   |        | 10.30     |        | Asset Purchase Agreement, dated May 10, 1996, among General Communication, Inc., and Alaska Cablevision, Inc. (8) |
|   |   |   |        | 10.31     |        | Asset Purchase Agreement, dated May 10, 1996, among General Communication, Inc., and McCaw/Rock Homer Cable System, J.V. (8) |
|   |   |   |        | 10.32     |        | Asset Purchase Agreement, dated May 10, 1996, between General Communication, Inc., and McCaw/Rock Seward Cable System, J.V. (8) |
|   |   |   |        | 10.33     |        | Amendment No. 1 to Securities Purchase and Sale Agreement, dated October 31, 1996, among General Communication, Inc., and the Prime Sellers Agent (9) |
|   |   |   |        | 10.34     |        | First Amendment to Asset Purchase Agreement, dated October 30, 1996, among General Communication, Inc., ACNFI, ACNJI and ACNKSI (9) |
|   |   |   |        | 10.36     |        | Order Approving Arbitrated Interconnection Agreement as Resolved and Modified by Order U-96-89(5) dated January 14, 1997 (12) |
|   |   |   |        | 10.37     |        | Amendment to the MCI Carrier Agreement executed April 20, 1994 (12) |

----

|   |   |   |   | 10.38 |   | Amendment No. 1 to MCI Carrier Agreement executed July 26, 1994 (11)                                                                                                                                                                                                             |
|--------|--------|--------|--------|-------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   | 10.39 |   | MCI Carrier Addendum—MCI 800 DAL Service effective February 1, 1994 (11)                                                                                                                                                                                                   |
|   |   |   |   | 10.40 |   | Third Amendment to MCI Carrier Agreement dated as of October 1, 1994 (11)                                                                                                                                                                                                        |
|   |   |   |   | 10.41 |   | Fourth Amendment to MCI Carrier Agreement dated as of September 25, 1995 (11)                                                                                                                                                                                                    |
|   |   |   |   | 10.42 |   | Fifth Amendment to the MCI Carrier Agreement executed April 19, 1996 (12)                                                                                                                                                                                                        |
|   |   |   |   | 10.43 |   | Sixth Amendment to MCI Carrier Agreement dated as of March 1, 1996 (11)                                                                                                                                                                                                          |
|   |   |   |   | 10.44 |   | Seventh Amendment to MCI Carrier Agreement dated November 27, 1996 (14)                                                                                                                                                                                                          |
|   |   |   |   | 10.45 |   | First Amendment to Contract for Alaska Access Services between General Communication, Inc. and MCI Telecommunications Corporation dated April 1, 1996 (14)                                                                                                                       |
|   |   |   |   | 10.46 |   | Service Mark License Agreement between MCI Communications Corporation and General Communication, Inc. dated April 13, 1994 (13)                                                                                                                                                  |
|   |   |   |   | 10.47 |   | Radio Station Authorization (Personal Communications Service License), Issue Date June 23, 1995 (13)                                                                                                                                                                             |
|   |   |   |   | 10.50 |   | Contract No. 92MR067A Telecommunications Services between BP Exploration (Alaska), Inc. and GCI Network Systems dated April 1, 1992 (14)                                                                                                                                         |
|   |   |   |   | 10.51 |   | Amendment No. 03 to BP Exploration (Alaska) Inc. Contract No. 92MRO67A effective August 1, 1996 (14)                                                                                                                                                                             |
|   |   |   |   | 10.52 |   | Lease Agreement dated September 30, 1991 between RDB Company and General Communication, Inc. (2)                                                                                                                                                                                 |
|   |   |   |   | 10.54 |   | Order Approving Transfer Upon Closing, Subject to Conditions, and Requiring Filings dated September 23, 1996 (13)                                                                                                                                                                |
|   |   |   |   | 10.55 |   | Order Granting Extension of Time and Clarifying Order dated October 21, 1996 (13)                                                                                                                                                                                                |
|   |   |   |   | 10.58 |   | Employment and Deferred Compensation Agreement between General Communication, Inc. and John M. Lowber dated July 1992 (13)                                                                                                                                                       |
|   |   |   |   | 10.59 |   | Deferred Compensation Agreement between GCI Communication Corp. and Dana L. Tindall dated August 15, 1994 (13)                                                                                                                                                                   |
|   |   |   |   | 10.60 |   | Transponder Lease Agreement between General Communication Incorporated and Hughes Communications Satellite Services, Inc., executed August 8, 1989 (6)                                                                                                                           |
|   |   |   |   | 10.61 |   | Addendum to Galaxy X Transponder Purchase Agreement between GCI Communication Corp. and Hughes Communications Galaxy, Inc. dated August 24, 1995 (13)                                                                                                                            |
|   |   |   |   | 10.62 |   | Order Approving Application, Subject to Conditions; Requiring Filing; and Approving Proposed Tariff on an Inception Basis, dated February 4, 1997 (13)                                                                                                                           |
|   |   |   |   | 10.66 |   | Supply Contract Between Submarine Systems International Ltd. And GCI Communication Corp. dated as of July 11, 1997. (15)                                                                                                                                                         |
|   |   |   |   | 10.67 |   | Supply Contract Between Tyco Submarine Systems Ltd. And Alaska United Fiber System Partnership Contract Variation No. 1 dated as of December 1, 1997. (15)                                                                                                                       |
|   |   |   |   | 10.71 |   | Third Amendment to Contract for Alaska Access Services between General Communication, Inc. and MCI Telecommunications Corporation dated February 27, 1998 (16)                                                                                                                   |
|   |   |   |   | 10.80 |   | Fourth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI WorldCom. (17)                                                                                                      |
|   |   |   |   | 10.89 |   | Fifth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI WorldCom Network Services, Inc., formerly known as MCI Telecommunications Corporation dated August 7, 2000 # (18)    |
|   |   |   |   | 10.90 |   | Sixth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI WorldCom Network Services, Inc., formerly known as MCI Telecommunications Corporation dated February 14, 2001 # (18) |
|   |   |   |   | 10.91 |   | Seventh Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI WorldCom Network Services, Inc., formerly known as MCI Telecommunications Corporation dated March 8, 2001 # (18)   |

----

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

|   |   |   |    10.129  | Ninth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp.,        and MCI WorldCom Network Services, Inc. # (28)                                                                                                                                                                                                                                                               |
|--------|--------|--------|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |  10.130         | Amended and Restated Credit Agreement among GCI Holdings, Inc. and Calyon New York Branch as Administrative Agent, Sole Lead Arranger, and Co-Bookrunner, The Initial Lenders and Initial Issuing Bank Named Herein as Initial Lenders and Initial Issuing Bank, General Electric Capital Corporation as Syndication Agent, and Union Bank of California, N.A., CoBank, ACB, CIT Lending Services Corporation and Wells Fargo Bank, N.A. as Co-Documentation Agents, dated as of August 31, 2005 (28) |

----

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

----

|   |   |   |   |   | 10.146 |   | Long-term de Facto Transfer Spectrum Leasing agreement between Alaska DigiTel, LLC. and SprintCom, Inc. # (37)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------|--------|--------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |   | 10.147 |   | Twelfth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI Communications Services, Inc. d/b/a Verizon Business Services (successor-in-interest to MCI Network Services, Inc., which was formerly known as MCI WorldCom Network Services) dated November 19, 2007 (Nonmaterial schedules and exhibits to the Reorganization Agreement have been omitted pursuant to Item 601b.2 of Regulation S-K. We agree to furnish supplementally to the Commission upon request a copy of any omitted schedule or exhibit.) # (37) |
|   |   |   |   |   | 10.148 |   | Stock Purchase Agreement dated as of October 12, 2007 among GCI Communication Corp., United Companies, Inc., Sea Lion Corporation and Togiak Natives LTD. (Nonmaterial schedules and exhibits to the Reorganization Agreement have been omitted pursuant to Item 601b.2 of Regulation S-K. We agree to furnish supplementally to the Commission upon request a copy of any omitted schedule or exhibit.) (37)                                                                                                                                                                                                              |
|   |   |   |   |   | 10.149 |   | Fourth Amendment to the Amended and Restated Credit Agreement dated as of May 2, 2008 by and among GCI Holdings, Inc., the other parties thereto and Calyon New York Branch, as administrative agent, and the other Lenders party thereto (38)                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |   |   |   | 10.150 |   | Second Amendment to Lease Agreement dated as of April 8, 2008 between RDB Company and GCI Communication Corp. as successor in interest to General Communication, Inc. (39)                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |   |   |   | 10.151 |   | Audit Committee Charter (as revised by the board of directors of General Communication, Inc. effective as of April 27, 2007) (39)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |   |   |   | 10.152 |   | Nominating and Corporate Governance Committee Charter (as revised by the board of directors of General Communication, Inc. effective as of April 27, 2007) (39)                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |   |   |   | 10.153 |   | Thirteenth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI Communications Services, Inc. d/b/a Verizon Business Services (successor-in-interest to MCI Network Services, Inc., which was formally known as MCI WorldCom Network Services) dated January 16, 2008 # (39)                                                                                                                                                                                                                                              |
|   |   |   |   |   | 10.154 |   | Fourteenth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI Communications Services, Inc. d/b/a Verizon Business Services (successor-in-interest to MCI Network Services, Inc., which was formally known as MCI WorldCom Network Services) dated May 15, 2008 (40)                                                                                                                                                                                                                                                    |
|   |   |   |   |   | 10.155 |   | Contract for Alaska Access Services between the Company and Verizon, dated January 1, 1993 (41)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |   |   |   | 10.156 |   | Third Amendment to Contract for Alaska Access Services between the Company and Verizon, dated February 27, 1998 (41)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |   |   |   | 10.157 |   | Fourth Amendment to Contract for Alaska Access Services between the Company and Verizon, dated January 1, 1999 (41)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |   |   |   |   | 10.158 |   | Fifth Amendment to the Amended and Restated Credit Agreement dated as of October 17, 2008 by and among Holdings, Inc. the other parties thereto and Calyon New York Branch, as administrative agent, and the other Lenders party thereto (42)                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |   |   |   | 10.159 |   | Amendment to Deferred Bonus Agreement dated December 31, 2008 by and among the Company, the Employer and Mr. Duncan (43)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |   |   |   |   | 10.160 |   | Amendment to Deferred Compensation Agreement dated December 31, 2008 by and among the Company, the Employer and Mr. Duncan (43)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   |   |   |   | 10.161 |   | First Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated February 15, 2008 # (46)                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |   |   |   | 10.162 |   | Second Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated April 9, 2008 # (46)                                                                                                                                                                                                                                                                                                                                                                                                                  |

----

|   |   |   |   |   | 10.163     |   | Third Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated June 4, 2008 # (46)                                                                                                                                                                     |
|--------|--------|--------|--------|--------|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |   |   | 10.164     |   | Fourth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated June 4, 2008 # (46)                                                                                                                                                                    |
|   |   |   |   |   | 10.165     |   | Fifth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated September 30, 2008 # (46)                                                                                                                                                               |
|   |   |   |   |   | 10.166     |   | Sixth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated October 31, 2008 # (46)                                                                                                                                                                 |
|   |   |   |   |   | 10.167     |   | Seventh Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated November 6, 2008 # (46)                                                                                                                                                               |
|   |   |   |   |   | 10.168     |   | Eighth Amendment to the Full-Time Transponder Capacity Agreement (Pre-Launch) between Intelsat Corporation, formerly known as PanAmSat Corporation and GCI Communication Corp. dated June 8, 2009 # (46)                                                                                                                                                                    |
|   |   |   |   |   | 10.169     |   | Fifteenth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI Communications Services, Inc. d/b/a Verizon Business Services (successor-in-interest to MCI Network Services, Inc., which was formally known as MCI WorldCom Network Services) dated May 5, 2009 # (46)     |
|   |   |   |   |   | 10.170     |   | Second Amended and Restated Credit Agreement dated as of January 29, 2010 by and among GCI Holdings, Inc., the other parties thereto and Calyon New York Branch, as administrative agent, and the other Lenders party thereto (47)                                                                                                                                          |
|   |   |   |   |   | 10.171     |   | Sixteenth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI Communications Services, Inc. d/b/a Verizon Business Services (successor-in-interest to MCI Network Services, Inc., which was formally known as MCI WorldCom Network Services) dated October 13, 2009 # *   |
|   |   |   |   |   | 10.172     |   | Seventeenth Amendment to Contract for Alaska Access Services between General Communication, Inc. and its wholly owned subsidiary GCI Communication Corp., and MCI Communications Services, Inc. d/b/a Verizon Business Services (successor-in-interest to MCI Network Services, Inc., which was formally known as MCI WorldCom Network Services) dated December 8, 2009 # * |
|   |   |   |   |   | 14         |   | Code Of Business Conduct and Ethics (originally reported as exhibit 10.118) (25)                                                                                                                                                                                                                                                                                            |
|   |   |   |   |   | 16.1  |   |       Letter from KPMG LLP to the Securities and Exchange Commission dated August 17, 2009 (44)                                                                                                                                                                                                                                                    |
|   |   |   |   |   | 18.1       |   | Letter regarding change in accounting principle (39)                                                                                                                                                                                                                                                                                                                        |
|   |   |   |   |   | 18.1       |   |       Letter regarding change in accounting principle (46)                                                                                                                                                                                                                                                                                         |
|   |   |   |   |   | 21.1       |   | Subsidiaries of the Registrant  *                                                                                                                                                                                                                                                                                                                                 |
|   |   |   |   |   | 31         |   | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *                                                                                                                                                                                                                                                                                                  |
|   |   |   |   |   | 32         |   | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *                                                                                                                                                                                                                                                   |
|   |   |   |   |   | 99         |   | Additional Exhibits:                                                                                                                                                                                                                                                                                                                                                        |
|   |   |   |   |   | 99.1       |   | The Articles of Incorporation of GCI Communication Corp. (1)                                                                                                                                                                                                                                                                                                                |
|   |   |   |   |   | 99.2       |   | The Bylaws of GCI Communication Corp. (1)                                                                                                                                                                                                                                                                                                                                   |
|   |   |   |   |   | 99.7       |   | The Bylaws of GCI Cable, Inc. (10)                                                                                                                                                                                                                                                                                                                                          |
|   |   |   |   |   | 99.8       |   | The Articles of Incorporation of GCI Cable, Inc. (10)                                                                                                                                                                                                                                                                                                                       |
|   |   |   |   |   | 99.15      |   | The Bylaws of GCI Holdings, Inc. (13)                                                                                                                                                                                                                                                                                                                                       |
|   |   |   |   |   | 99.16      |   | The Articles of Incorporation of GCI Holdings, Inc. (13)                                                                                                                                                                                                                                                                                                                    |
|   |   |   |   |   | 99.18      |   | The Bylaws of GCI, Inc. (12)                                                                                                                                                                                                                                                                                                                                                |
|   |   |   |   |   | 99.27      |   | The Partnership Agreement of Alaska United Fiber System (15)                                                                                                                                                                                                                                                                                                                |
|   |   |   |   |   | 99.28      |   | The Bylaws of Potter View Development Co., Inc. (19)                                                                                                                                                                                                                                                                                                                        |

----

|   |   |   |   |   | 99.29 |   | The Articles of Incorporation of Potter View Development Co., Inc. (19)  |
|--------|--------|--------|--------|--------|-------|--------|--------------------------------------------------------------------------|
|   |   |   |   |   | 99.34 |   | The Bylaws of GCI Fiber Communication, Co., Inc. (20)                    |
|   |   |   |   |   | 99.35 |   | The Articles of Incorporation of GCI Fiber Communication, Co., Inc. (20) |

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

| Exhibit Reference | Description                                                                                                                                                    |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1                 | Incorporated by reference to GCI's Annual Report on Form 10-K for the year ended December 31, 1990                                                             |
| 2                 | Incorporated by reference to GCI's Annual Report on Form 10-K for the year ended December 31, 1991                                                             |
| 3                 | Incorporated by reference to GCI's Registration Statement on Form 10 (File No. 0-15279), mailed to the Securities and Exchange Commission on December 30, 1986 |
| 4                 | Incorporated by reference to GCI's Annual Report on Form 10-K for the year ended December 31, 1989.                                                            |
| 5                 | Incorporated by reference to GCI's Current Report on Form 8-K dated June 4, 1993.                                                                              |
| 6                 | Incorporated by reference to GCI's Annual Report on Form 10-K for the year ended December 31, 1993.                                                            |
| 7                 | Incorporated by reference to GCI's Annual Report on Form 10-K for the year ended December 31, 1995.                                                            |
| 8                 | Incorporated by reference to GCI's Form S-4 Registration Statement dated October 4, 1996.                                                                      |
| 9                 | Incorporated by reference to GCI's Current Report on Form 8-K dated November 13, 1996.                                                                         |
| 10                | Incorporated by reference to GCI's Annual Report on Form 10-K for the year ended December 31, 1996.                                                            |
| 11                | Incorporated by reference to GCI's Current Report on Form 8-K dated March 14, 1996, filed March 28, 1996.                                                      |
| 12                | Incorporated by reference to GCI's Form S-3 Registration Statement (File No. 333-28001) dated May 29, 1997.                                                    |
| 13                | Incorporated by reference to GCI's Amendment No. 1 to Form S-3/A Registration Statement (File No. 333-28001) dated July 8, 1997.                               |
| 14                | Incorporated by reference to GCI's Amendment No. 2 to Form S-3/A Registration Statement (File No. 333-28001) dated July 21, 1997.                              |
| 15                | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 1997.                                              |
| 16                | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 1998.                                              |
| 17                | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1999.                                             |
| 18                | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2001.                                            |
| 19                | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2001.                                             |
| 20                | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 2001.                                              |

----

| 21       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2002.                                   |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| 22       | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 2002.                                    |
| 23       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2003.                                   |
| 24       | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 2003.                                    |
| 25       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2004.                                  |
| 26       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2004.                                   |
| 27       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2005.                                  |
| 28       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2005.                              |
| 29       | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 2005 filed March 16, 2006.               |
| 30       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2006.                                  |
| 31       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2006.                                   |
| 32       | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 2006 filed March 19, 2007.               |
| 33       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2007.                                  |
| 34       | Incorporated by reference to The Company’s Form S-8 filed with the SEC on July 27, 2007.                                                       |
| 35       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007.                                   |
| 36       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007.                              |
| 37       | Incorporated by reference to The Company’s Annual Report on Form 10-K for the year ended December 31, 2007 filed March 7, 2008.                |
| 38       | Incorporated by reference to the Company's Report on Form 8-K for the period May 2, 2008 filed May 8, 2008.                                          |
| 39       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2008.                                  |
| 40       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2008.                                   |
| 41       | Incorporated by reference to The Company's Report on Form 8-K for the period September 19, 2008 filed on September 22, 2008.                         |
| 42       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2008.                              |
| 43       | Incorporated by reference to The Company's Report on Form 8-K for the period December 31, 2008 filed January 6, 2009.                                |
|  44 |    Incorporated by reference to The Company's Report on Form 8-K for the period August 11, 2009 filed on August 17, 2009.        |
|  45 |    Incorporated by reference to The Company's Report on Form 8-K for the period November 3, 2009 filed on November 5, 2009. |
| 46       | Incorporated by reference to The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2009.                              |
| 47       | Incorporated by reference to The Company's Report on Form 8-K for the period January 29, 2010 filed February 3, 2010.                                |

----

|   | By:    |   /s/ G. Wilson Hughes |   |
|--------|--------|-----------------------------|--------|
|   |   | G. Wilson Hughes, President |   |
|   |   | (Chief Executive Officer)   |   |

| Date: |   March 12, 2010 |   |
|-------|-----------------------|--------|

| Signature                   |   | Title                                        |   | Date                  |
|-----------------------------|--------|----------------------------------------------|--------|-----------------------|
|                        |   |                                         |   |                  |
|   /s/ G. Wilson Hughes |   | President and Director                       |   |   March 12, 2010 |
| G. Wilson Hughes            |   | (Principal Executive Officer)                |   |                  |
|                        |   |                                         |   |                  |
|   /s/ John M. Lowber   |   | Secretary, Treasurer and Director            |   |   March 12, 2010 |
| John M. Lowber              |   | (Principal Financial and Accounting Officer) |   |                  |

----