As filed with the Securities and Exchange Commission on November 14, 2001.

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

                                    FORM 10-Q

                                   (Mark One)

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2001

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         For the transition period from        to

                           Commission File No. 0-5890

                                    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)

       Registrant's telephone number, including area code: (907) 265-5600


Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .

        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:

                 $180,000,000 9.75% Senior Notes due August 2007


                                       1
<PAGE>
<TABLE>
                                              INDEX

                                             GCI, INC.
                      A WHOLLY OWNED SUBSIDIARY OF GENERAL COMMUNICATION, INC.

                                             FORM 10-Q

                               FOR THE QUARTER ENDED SEPTEMBER 30, 2001
<CAPTION>

                                                                                                    Page No.
                                                                                                    --------
<S>                                                                                                       <C>
Cautionary Statement Regarding Forward-Looking Statements.................................................3

PART I.  FINANCIAL INFORMATION

         Item l.    Consolidated Balance Sheets as of September 30, 2001
                       (unaudited) and December 31, 2000..................................................5

                    Consolidated Statements of Operations for the
                       three and nine months ended September 30, 2001
                       (unaudited) and 2000 (unaudited)...................................................7

                    Consolidated Statements of Stockholder's Equity
                       for the nine months ended September 30, 2001
                       (unaudited) and 2000 (unaudited)...................................................8

                    Consolidated Statements of Cash Flows for the nine
                       months ended September 30, 2001 (unaudited)
                       and 2000 (unaudited)...............................................................9

                    Notes to Interim Condensed Consolidated Financial
                       Statements.........................................................................10

         Item 2.    Management's Discussion and Analysis of Financial
                    Condition and Results of Operations...................................................17

         Item 3.    Quantitative and Qualitative Disclosures About
                    Market Risk...........................................................................33

PART II.  OTHER INFORMATION

         Item 1.    Legal Proceedings.....................................................................34

         Item 6.    Exhibits and Reports on Form 8-K......................................................34

         Other items are omitted, as they are not applicable.

SIGNATURES................................................................................................35
</TABLE>

                                       2
<PAGE>
            Cautionary Statement Regarding Forward-Looking Statements

You should carefully review the information contained in this Quarterly Report,
but should particularly consider any risk factors that we set forth in this
Quarterly Report and in other reports or documents that we file from time to
time with the Securities and Exchange Commission. In this Quarterly Report, in
addition to historical information, we state our beliefs of future events and of
our future operating results, financial position and cash flows. In some cases,
you can identify those so-called "forward-looking statements" by words such as
"may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue" or the negative of those
words and other comparable words. You should be aware that those statements are
only our predictions and are subject to risks and uncertainties. Actual events
or results may differ materially. In evaluating those statements, you should
specifically consider various factors, including those outlined below. Those
factors may cause our actual results to differ materially from any of our
forward-looking statements. For these statements, we claim the protection of the
safe harbor for forward-looking statements provided by the Private Securities
Litigation Reform Act of 1995.

   - Material adverse changes in the economic conditions in the markets we serve
     and in general economic conditions;
   - The efficacy of the rules and regulations to be adopted by the Federal
     Communications Commission ("FCC") and state public regulatory agencies to
     implement the provisions of the Telecommunications Act of 1996; the outcome
     of litigation relative thereto; and the impact of regulatory changes
     relating to access reform;
   - Our responses to competitive products, services and pricing, including
     pricing pressures, technological developments, alternative routing
     developments, and the ability to offer combined service packages that
     include local, cable and Internet services; the extent and pace at which
     different competitive environments develop for each segment of our
     business; the extent and duration for which competitors from each segment
     of the communications industry are able to offer combined or full service
     packages prior to our being able to do so; the degree to which we
     experience material competitive impacts to our traditional service
     offerings prior to achieving adequate local service entry in new markets;
     and competitor responses to our products and services and overall market
     acceptance of such products and services;
   - The outcome of our ongoing negotiations with Incumbent Local Exchange
     Carriers ("ILECs") and state regulatory arbitrations and approvals with
     respect to new interconnection agreements; and our ability to purchase
     unbundled network elements or wholesale services from ILECs at a price
     sufficient to permit the profitable offering of local exchange service at
     competitive rates;
   - Success and market acceptance for new initiatives, some of which are
     untested; the level and timing of the growth and profitability of new
     initiatives, particularly local access services expansion, Internet
     (consumer and business) services expansion and wireless services; start-up
     costs associated with entering new markets, including advertising and
     promotional efforts; successful deployment of new systems and applications
     to support new initiatives; and local conditions and obstacles;
   - Uncertainties inherent in new business strategies, new product launches and
     development plans, including local access services, Internet services,
     wireless services, digital video services, cable modem services, digital
     subscriber line services, and transmission services;
   - Rapid technological changes;
   - Development and financing of telecommunication, local access, wireless,
     Internet and cable networks and services;
   - Future financial performance, including the availability, terms and
     deployment of capital; the impact of regulatory and competitive
     developments on capital outlays, and the ability to achieve cost savings
     and realize productivity improvements;


                                       3
<PAGE>
   - Availability of qualified personnel;
   - Changes in, or failure, or inability, to comply with, government
     regulations, including, without limitation, regulations of the FCC, the
     Regulatory Commission of Alaska, and adverse outcomes from regulatory
     proceedings;
   - Uncertainties in federal military spending levels and military base
     closures in markets in which we operate;
   - Industry consolidation and mergers;
   - Economic and other uncertainties arising from the events beginning
     September 11, 2001;
   - Other risks detailed from time to time in our periodic reports filed with
     the Securities and Exchange Commission.

These forward-looking statements (and such risks, uncertainties and other
factors) are made only as of the date of this report and we expressly disclaim
any obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained in this document to reflect any change in
our expectations with regard to those statements or any other change in events,
conditions or circumstances on which any such statement is based, except as
required by law. Readers are cautioned not to put undue reliance on such
forward-looking statements.


                                       4
<PAGE>
PART I.  FINANCIAL INFORMATION
ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
                                            GCI, INC. AND SUBSIDIARIES
                                            CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                                                  (Unaudited)
                                                                                 September 30,    December 31,
                            ASSETS                                                   2001             2000
---------------------------------------------------------------------------    ---------------- ---------------
                                                                                    (Amounts in thousands)
<S>                                                                          <C>                    <C>
Current assets:
    Cash and cash equivalents                                                $      15,186            5,962
                                                                               --------------- ----------------
    Receivables:
        Trade                                                                       58,176           49,872
        Employee and other                                                             896              378
                                                                               --------------- ----------------
                                                                                    59,072           50,250
        Less allowance for doubtful receivables                                      4,991            2,864
                                                                               --------------- ----------------
           Net receivables                                                          54,081           47,386
                                                                               --------------- ----------------

    Prepaid and other current assets                                                 5,134            2,505
    Deferred income taxes, net                                                       4,550            3,221
    Inventories                                                                      3,598            5,717
    Property held for sale                                                             ---           10,877
    Notes receivable with related parties                                              338              241
                                                                               --------------- ----------------
           Total current assets                                                     82,887           75,909
                                                                               --------------- ----------------

Property and equipment in service, net of depreciation                             379,439          347,802
Construction in progress                                                             9,583            8,097
                                                                               --------------- ----------------
           Net property and equipment                                              389,022          355,899
                                                                               --------------- ----------------

Cable franchise agreements, net of amortization of $25,389,000 and $21,509,000
   at September 30, 2001 and December 31, 2000, respectively                       181,504          184,983
Goodwill, net of amortization of $6,889,000 and $5,952,000 at September
   30, 2001 and December 31, 2000, respectively                                     38,890           40,002
Other intangible assets, net of amortization of $1,155,000 and $729,000 at
   September 30, 2001 and December 31, 2000, respectively                            3,946            3,936
Property held for sale                                                               1,555            1,550
Deferred loan and senior notes costs, net of amortization of $5,205,000
   and $4,166,000 at September 30, 2001 and December 31, 2000, respectively          7,493            8,402
Notes receivable with related parties                                                2,903            3,235
Other assets, at cost, net of amortization of $68,000 and $63,000 at
   September 30, 2001 and December 31, 2000, respectively                            3,288            5,091
                                                                               --------------- ----------------
           Total other assets                                                      239,579          247,199
                                                                               --------------- ----------------
           Total assets                                                      $     711,488          679,007
                                                                               =============== ================

See accompanying notes to interim condensed consolidated financial statements.
</TABLE>

                                       5                             (Continued)
<PAGE>
<TABLE>
                                       GCI, INC. AND SUBSIDIARIES
                                       CONSOLIDATED BALANCE SHEETS
                                               (Continued)
<CAPTION>
                                                                                  (Unaudited)
                                                                                 September 30,    December 31,
             LIABILITIES AND STOCKHOLDERS' EQUITY                                    2001             2000
--------------------------------------------------------------------------     --------------- ----------------
                                                                                   (Amounts in thousands)
<S>                                                                          <C>                    <C>
Current liabilities:
    Current maturities of obligations under capital leases                  $        1,608            1,600
    Accounts payable                                                                36,794           29,094
    Accrued payroll and payroll related obligations                                 13,206           10,385
    Deferred revenue                                                                10,648            9,477
    Accrued interest                                                                 5,129            9,256
    Accrued liabilities                                                              5,096            4,134
    Due to related party                                                             4,767            1,569
    Subscriber deposits and other current liabilities                                2,450            1,362
                                                                              ---------------- ----------------
        Total current liabilities                                                   79,698           66,877

Long-term debt, excluding current maturities                                       332,700          334,400
Obligations under capital leases, excluding current maturities                      45,695           46,882
Obligations under capital leases due to related party, excluding
  current maturities                                                                   146              214
Deferred income taxes, net of deferred income tax benefit                           24,713           22,057
Other liabilities                                                                    4,412            3,755
                                                                              ---------------- ----------------
        Total liabilities                                                          487,364          474,185
                                                                              ---------------- ----------------
Stockholder's equity:
  Class A common stock. Authorized 10,000 shares; issued and outstanding 100
    shares at September 30, 2001 and December 31, 2000                             206,622          206,622
  Paid-in capital                                                                   45,216           29,941
  Retained deficit                                                                 (27,625)         (31,741)
  Accumulated other comprehensive loss                                                 (89)             ---
                                                                              ---------------- ----------------
        Total stockholder's equity                                                 224,124          204,822
  Commitments and contingencies
                                                                              ---------------- ----------------
        Total liabilities and stockholder's equity                          $      711,488          679,007
                                                                              ================ ================
See accompanying notes to interim condensed consolidated financial statements.
</TABLE>

                                       6
<PAGE>
<TABLE>
                                               GCI, INC. AND SUBSIDIARIES
                                           CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                                             (Unaudited)                        (Unaudited)
                                                          Three Months Ended                 Nine Months Ended
                                                             September 30,                     September 30,
                                                          2001           2000               2001            2000
                                                     -------------- --------------     --------------- --------------
                                                                          (Amounts in thousands)
<S>                                                 <C>                 <C>                <C>             <C>

Revenues                                            $    88,019         75,906             270,471         215,609

Cost of sales and services                               32,743         29,948             108,660          89,243
Selling, general and administrative expenses             30,957         27,052              88,399          77,439
Depreciation and amortization expense                    14,127         13,296              41,767          38,890
                                                     -------------- --------------     --------------- --------------
     Operating income                                    10,192          5,610              31,645          10,037
                                                     -------------- --------------     --------------- --------------

Interest expense                                          7,510          9,760              24,467          29,172
Interest income                                              35            196                 297             554
                                                     -------------- --------------     --------------- --------------
     Interest expense, net                                7,475          9,564              24,170          28,618
                                                     -------------- --------------     --------------- --------------

     Net income (loss) before income taxes                2,717         (3,954)              7,475         (18,581)

Income tax (expense) benefit                             (1,190)         1,602              (3,359)          7,205
                                                     -------------- --------------     --------------- --------------
     Net income (loss)                              $     1,527         (2,352)              4,116         (11,376)
                                                     ============== ==============     =============== ==============

See accompanying notes to interim condensed consolidated financial statements.
</TABLE>

                                       7
<PAGE>
<TABLE>
                                                        GCI, INC. AND SUBSIDIARIES
                                              CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
                                               NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

<CAPTION>
                                                        Shares of                                         Accumulated
                                                         Class A      Class A                                Other
(Unaudited)                                              Common       Common      Paid-in    Retained    Comprehensive
(Amounts in thousands)                                    Stock       Stock       Capital     Deficit        Loss           Total
                                                       -----------------------------------------------------------------------------
<S>                                                        <C>      <C>            <C>        <C>             <C>          <C>
Balances at December, 1999                                 100      $ 206,622      25,503     (18,507)        ---          213,618
Net loss                                                   ---            ---         ---     (11,376)        ---          (11,376)
Contribution from General Communication, Inc.              ---            ---       3,055         ---         ---            3,055
                                                       -----------------------------------------------------------------------------
Balances at September 30, 2000                             100      $ 206,622      28,558     (29,883)        ---          205,297
                                                       =============================================================================

Balances at December 31, 2000                              100      $ 206,622      29,941     (31,741)        ---          204,822

Net income                                                 ---            ---         ---       4,116         ---            4,116
Fair value of cash flow hedge, net of income tax
  benefit of $59                                           ---            ---         ---         ---         (89)             (89)
Comprehensive income                                                                                          ---            4,027
Contribution from General Communication, Inc.              ---            ---      15,275         ---         ---           15,275
                                                       -----------------------------------------------------------------------------
Balances at September 30, 2001                             100      $ 206,622      45,216     (27,625)        (89)         224,124
                                                       =============================================================================

See accompanying notes to interim condensed consolidated financial statements.
</TABLE>

                                       8
<PAGE>
<TABLE>
                                           GCI, INC. AND SUBSIDIARIES
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                                                             (Unaudited)
                                                                                          Nine Months Ended
                                                                                            September 30,
                                                                                         2001           2000
                                                                                    -------------- --------------
                                                                                        (Amounts in thousands)
        <S>                                                                        <C>                 <C>
        Operating activities:
          Net income (loss)                                                        $     4,116        (11,376)
            Adjustments to reconcile net income (loss) to net cash provided
              by operating activities:
                Depreciation and amortization                                           41,767         38,890
                Amortization charged to selling, general and administrative                 26            534
                Non-cash cost of sale                                                   10,877            ---
                Deferred income tax expense (benefit)                                    3,359         (7,205)
                Bad debt expense, net of write-offs                                      2,127          1,204
                Deferred compensation and compensatory stock options                     1,081            484
                Employee Stock Purchase Plan expense funded with issuance of
                  General Communication, Inc. Class A common stock                         ---          2,115
                Write-off of capitalized interest                                          170          1,955
                Other noncash income and expense items                                       2           (251)
                Change in operating assets and liabilities                                  96          8,650
                                                                                    -------------- --------------
                  Net cash provided by operating activities                             63,621         35,000
                                                                                    -------------- --------------
        Investing activities:
           Purchases of property and equipment                                         (46,663)       (33,362)
          Advances and billings to Kanas Telecom, Inc.                                  (5,632)           ---
          (Payment) refund of deposit                                                   (1,200)         8,806
           Purchases of property held for sale                                             ---         (1,550)
           Purchases of other assets                                                    (1,154)        (1,385)
          Payments received on notes receivable with related parties                       772            617
          Notes receivable issued to related parties                                      (525)        (1,022)
          Cash received upon acquisition of Kanas Telecom, Inc.                            228            ---
                                                                                    -------------- --------------
                  Net cash used by investing activities                                (54,174)       (27,896)
                                                                                    -------------- --------------
        Financing activities:
          Repayments of long-term borrowings and capital lease obligations             (13,000)       (10,714)
          Long-term borrowings - bank debt                                              10,000            ---
          Cash contribution from General Communication, Inc.                             2,907          1,423
          Payment of debt issuance costs                                                  (130)          (127)
                                                                                    -------------- --------------
                  Net cash used by financing activities                                   (223)        (9,418)
                                                                                    -------------- --------------
                  Net increase (decrease) in cash and cash equivalents                   9,224         (2,314)

                  Cash and cash equivalents at beginning of period                       5,962         13,734
                                                                                    -------------- --------------
                  Cash and cash equivalents at end of period                       $    15,186         11,420
                                                                                    ============== ==============

        See accompanying notes to interim condensed consolidated financial statements.
</TABLE>

                                       9
<PAGE>
                           GCI, INC. AND SUBSIDIARIES
          Notes to Interim Condensed Consolidated Financial Statements
                                   (Unaudited)

(1)    General
       In the following discussion, GCI, Inc. and its direct and indirect
       subsidiaries are referred to as "we," "us" and "our."

       Basis of Presentation
       We were incorporated in 1997 to effect the issuance of senior notes. As a
       wholly owned subsidiary of General Communication, Inc. ("GCI"), we
       received through our initial capitalization all ownership interests in
       subsidiaries previously held by GCI.

       (a)   Business
             We offer the following services:
             - Long-distance telephone service between Anchorage, Fairbanks,
               Juneau, and other communities in Alaska and the remaining United
               States and foreign countries
             - Cable television services throughout Alaska
             - Facilities-based competitive local access services in Anchorage
               and Fairbanks, Alaska
             - Internet access services
             - Termination of traffic in Alaska for certain common carriers
             - Private line services
             - Managed services to certain commercial customers
             - Broadband services, including our SchoolAccess(TM) offering to
               rural school districts and a similar offering to rural hospitals
               and health clinics
             - Sales and service of dedicated communications systems and related
               equipment
             - Private network point-to-point data and voice transmission
               services between Alaska and the western contiguous United States
             - Lease and sell capacity on two undersea fiber optic cables used
               in the transmission of interstate and intrastate private line,
               switched message long-distance and Internet services between
               Alaska and the remaining United States and foreign countries

       (b)   Principles of Consolidation
             The consolidated financial statements include the accounts of GCI,
             Inc., GCI, Inc.'s wholly-owned subsidiary GCI Holdings, Inc., GCI
             Holdings, Inc.'s wholly-owned subsidiaries GCI Communication Corp.,
             GCI Cable, Inc., and GCI Transport Co., Inc., GCI Holdings, Inc.'s
             85% controlling interest in GCI Fiber Communication Co., Inc., GCI
             Communication Corp.'s wholly-owned subsidiary Potter View
             Development Co., Inc., GCI Transport Co., Inc.'s wholly-owned
             subsidiaries GCI Satellite Co., Inc., GCI Fiber Co., Inc. and Fiber
             Hold Co., Inc. and GCI Fiber Co., Inc.'s and Fiber Hold Co., Inc.'s
             wholly-owned partnership Alaska United Fiber System Partnership
             ("Alaska United").

       (c)   Earnings Per Share and Common Stock
             We are a wholly owned subsidiary of GCI and, accordingly, we are
             not required to present earnings per share. Our common stock is not
             publicly traded.

       (d)   Accounting for Derivative Instruments and Hedging Activities
             Effective January 1, 2001, we adopted Statement of Financial
             Accounting Standard No. 133, "Accounting for Derivative Instruments
             and Hedging Activities" ("SFAS No. 133"), as amended. SFAS No. 133
             requires companies to record derivatives on the balance sheet as
             assets or liabilities, measured at fair value.


                                       10                            (Continued)
<PAGE>
                           GCI, INC. AND SUBSIDIARIES
          Notes to Interim Condensed Consolidated Financial Statements
                                   (Unaudited)

             Effective January 3, 2001, we entered into an interest rate swap
             agreement to convert $50 million of 9.75% fixed rate debt to a
             variable interest rate equal to the 90 day Libor rate plus 334
             basis points. The interest rate swap terms mirror the underlying
             fixed rate debt, except the interest rate swap extends through
             August 1, 2007 and is cancelable at the option of the counterparty
             beginning August 1, 2002. We entered into the transaction to take
             advantage of an anticipated decline in interest rates. Under SFAS
             No. 133, the interest rate swap is accounted for as a fair value
             hedge. The differential to be paid or received is recorded as an
             increase or decrease in interest expense in the consolidated
             statements of operations in the period in which it is recognized.
             During the nine month period ended September 30, 2001 we recognized
             approximately $579,000 as a decrease to interest expense. As of
             September 30, 2001, the amount of change in the fair value of debt
             approximates the change in the fair value of the interest rate
             swap.

             Effective September 21, 2001, we entered into an interest rate swap
             agreement to convert $25 million of variable interest rate debt
             equal to the 90 day Libor rate plus 334 basis points to 3.98% fixed
             rate debt. The interest rate swap terms mirror the underlying
             variable rate debt, except the interest rate swap terminates on
             September 21, 2004. We entered into the transaction to help
             insulate us from future increases in interest rates. Under SFAS No.
             133, the interest rate swap is accounted for as a cash flow hedge.
             The initial fair value of the interest rate swap of approximately
             $148,000 ($89,000 after deducting income taxes) is recorded in
             other comprehensive income in the consolidated statements of
             stockholder's equity. The change in the fair value of the interest
             rate swap net of income taxes will be recorded as an increase or
             decrease in other comprehensive income in the Consolidated
             Statements of Stockholder's Equity in the period in which it is
             recognized. The accrual of interest income or expense is recognized
             in Interest Expense in the Consolidated Statements of Operations.
             During the nine month period ended September 30, 2001 we had
             recognized approximately $9,000 in incremental interest expense
             resulting from this transaction.

       (e)   Sale of Fiber Capacity
             During the first quarter of 2001 we completed a $19.5 million sale
             of long-haul capacity in the Alaska United undersea fiber optic
             cable system ("fiber capacity sale") in a cash transaction. The
             sale included both capacity within Alaska, and between Alaska and
             the lower 48 states. We used the proceeds from the fiber capacity
             sale to repay $11.7 million of the Fiber Facility debt and to fund
             capital expenditures and working capital.

             We account for the sale of fiber capacity as sales type leases if
             substantially all of the benefits and risks of ownership have been
             transferred to the purchaser. The accounting for the sale of fiber
             capacity is currently evolving and accounting guidance may become
             available in the future which could affirm our policy or require us
             to change it. If we are required to change our policy, it is likely
             the effect would be to recognize the gain from the sale of fiber
             capacity over the term the capacity is provided. Such a change
             would have a material effect on our statement of operations.


                                       11                            (Continued)
<PAGE>
                           GCI, INC. AND SUBSIDIARIES
          Notes to Interim Condensed Consolidated Financial Statements
                                   (Unaudited)

       (f)   Comprehensive Income (Loss)
             Statement of Financial Accounting Standard No. 130, "Reporting
             Comprehensive Income" requires us to report and display
             comprehensive income or loss and its components in a financial
             statement that is displayed with the same prominence as other
             financial statements. During the three and nine months ended
             September 30, 2001 we had other comprehensive loss of approximately
             ($89,000) as a result of the cash flow hedge discussed in note
             1(d). Total comprehensive income at September 30, 2001 was
             $4,027,000. There were no components of other comprehensive income
             during the three or nine months ended September 30, 2000.

       (g)   Reclassifications
             Reclassifications have been made to the 2000 financial statements
             to make them comparable with the 2001 presentation.

       (h)   Other
             The accompanying unaudited interim condensed consolidated financial
             statements have been prepared in accordance with generally accepted
             accounting principles for interim financial information and with
             the instructions to Form 10-Q and Article 10 of Regulation S-X.
             Accordingly, they do not include all of the information and
             footnotes required by generally accepted accounting principles for
             complete financial statements. The interim condensed consolidated
             financial statements include the consolidated accounts of GCI and
             its wholly owned subsidiaries with all significant intercompany
             transactions eliminated. In the opinion of management, all
             adjustments (consisting of normal recurring accruals) considered
             necessary for a fair presentation have been included. Operating
             results for the three and nine month periods ended September 30,
             2001 are not necessarily indicative of the results that may be
             expected for the year ended December 31, 2001. For further
             information, refer to the financial statements and footnotes
             thereto included in our annual report on Form 10-K for the year
             ended December 31, 2000.

(2)    Consolidated Statements of Cash Flows Supplemental Disclosures
       Changes in operating assets and liabilities consist of (amounts in
       thousands):
<TABLE>
       Changes in operating assets and liabilities consist of (amounts in
       thousands):
<CAPTION>
             Nine-month periods ended September 30,                                        2001          2000
                                                                                       ------------- ------------
              <S>                                                                     <C>               <C>
              (Increase) decrease in receivables                                      $   (8,819)        3,677
              (Increase) decrease in inventory                                             2,119        (1,126)
              Increase in prepaid and other current assets                                (1,517)         (580)
              Increase in accounts payable                                                 7,134         5,704
              Increase in accrued payroll and payroll related obligations                  2,821         2,302
              Increase in deferred revenues                                                1,038           535
              Decrease in accrued interest                                                (4,127)       (3,112)
              Increase in accrued liabilities                                              1,397           671
              Increase in subscriber deposits and other current liabilities                  150           116
              Increase (decrease) in components of other long-term liabilities              (100)          463
                                                                                       ------------- ------------
                                                                                      $       96         8,650
                                                                                       ============= ============
</TABLE>
       We paid income taxes totalling approximately $61,000 and $0 during the
       nine month periods ended September 30, 2001 and 2000, respectively.

       We paid interest totalling approximately $28,594,000 and $31,130,000
       during the nine month periods ended September 30, 2001 and 2000,
       respectively.


                                       12                            (Continued)
<PAGE>
                           GCI, INC. AND SUBSIDIARIES
          Notes to Interim Condensed Consolidated Financial Statements
                                   (Unaudited)

       We recorded $1,881,000 and $206,000 during the nine months ended
       September 30, 2001 and 2000, respectively, in paid-in capital in
       recognition of the income tax effect of excess stock compensation expense
       for tax purposes over amounts recognized for financial reporting
       purposes.

       During the nine months ended September 30, 2000 we funded the employer
       matching portion of Employee Stock Purchase Plan contributions by GCI's
       issuance of its Class A common stock valued at $2,115,000. We purchased
       such shares on the open market during the nine months ended September 30,
       2001.

       We financed the purchase of satellite transponder capacity pursuant to a
       long-term capital lease arrangement with a leasing company during the
       nine month period ended September 30, 2000 at a cost of $48.2 million.

       Effective March 31, 2001 we acquired the assets and customer base of G.C.
       Cablevision, Inc. The seller received 238,199 unregistered shares of GCI
       Class A common stock with a future payment in additional shares
       contingent upon certain conditions.

       Effective June 30, 2001 we acquired from WorldCom, Inc. ("WorldCom")
       their 85% controlling interest in Kanas (see note 3) in exchange for
       $10.0 million of Series C preferred stock issued by GCI.

  (3)  Acquisition of Kanas
       Effective June 30, 2001 we completed the acquisition of WorldCom's 85%
       controlling interest in Kanas, which owns the 800-mile fiber optic cable
       system that extends from Prudhoe Bay to Valdez via Fairbanks. On June 30,
       2001 GCI issued to WorldCom, a related party, shares its of Series C
       preferred stock (see note 1(e)) valued at $10.0 million. The corporation
       owning the fiber optic system is now operated as GCI Fiber Communication
       Co., Inc. ("GFCC").

  (4)  Industry Segments Data
       Our reportable segments are business units that offer different products.
       The reportable segments are each managed separately because they manage
       and offer distinct products with different production and delivery
       processes.

       We have four reportable segments as follows:

         Long-distance services. We offer a full range of common-carrier
         long-distance services to commercial, government, other
         telecommunications companies and residential customers, through our
         networks of fiber optic cables, digital microwave, and fixed and
         transportable satellite earth stations and our SchoolAccess(TM)
         offering to rural school districts and a similar offering to rural
         hospitals and health clinics.

         Cable services. We provide cable television services to residential,
         commercial and government users in the State of Alaska. Our cable
         systems serve 31 communities and areas in Alaska, including the state's
         three largest urban areas, Anchorage, Fairbanks and Juneau. We offer
         digital cable television services in Anchorage and Fairbanks and retail
         cable modem service (through our Internet services segment) in
         Anchorage, Fairbanks, Juneau, Sitka and Valdez. We plan to expand our
         product offerings as plant upgrades are completed in other communities
         in Alaska.


                                       13                            (Continued)
<PAGE>
                           GCI, INC. AND SUBSIDIARIES
          Notes to Interim Condensed Consolidated Financial Statements
                                   (Unaudited)

         Local access services. We offer facilities based competitive local
         exchange services in Anchorage and Fairbanks and plan to provide
         similar competitive local exchange services in Juneau during 2002.

         Internet services. We offer wholesale and retail Internet services. We
         offer cable modem service in Anchorage, Fairbanks, Juneau, Sitka and
         Valdez and plan to provide cable modem service in other areas in 2002.
         Our undersea fiber optic cable allows us to offer enhanced services
         with high-bandwidth requirements.

       Included in the "All Other" category in the tables that follow are our
       managed services, product sales, cellular telephone services, and
       management services for Kanas, a related party (see note 3). None of
       these business units have ever met the quantitative thresholds for
       determining reportable segments. Also included in the All Other category
       are corporate related expenses including marketing, customer service,
       management information systems, accounting, legal and regulatory, human
       resources and other general and administrative expenses. In 2001 the All
       Other category includes revenues and costs associated with a sale of
       undersea fiber optic cable system capacity (see note 1(g)).

       We evaluate performance and allocate resources based on (1) earnings or
       loss from operations before depreciation, amortization, net interest
       expense and income taxes, and (2) operating income or loss. 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 of America. All of our long-lived assets are located within
       the United States of America.

<TABLE>
       Summarized financial information for our reportable segments for the nine
       month periods ended September 30, 2001 and 2000 follows (amounts in
       thousands):
<CAPTION>
                                                     Reportable Segments
                                     --------------------------------------------------------
                                         Long-               Local                  Total
                                        Distance    Cable    Access   Internet    Reportable      All
                                        Services   Services Services  Services     Segments      Other     Total
                                     ------------------------------------------------------------------------------
       <S>                             <C>           <C>      <C>      <C>         <C>          <C>        <C>
            2001
       Revenues:
         Intersegment                  $  14,982      1,189    6,024    4,264       26,459          169     26,628
         External                        149,979     56,032   18,538    8,772      233,321       37,150    270,471
                                     ------------------------------------------------------------------------------
            Total revenues             $ 164,961     57,221   24,562   13,036      259,780       37,319    297,099
                                     ==============================================================================

       Earnings (loss) from
         operations before
         depreciation,
         amortization, net interest
         expense and income taxes      $  70,544     27,853    6,873   (7,008)      98,262      (24,137)    74,125
                                     ==============================================================================

       Operating income (loss)         $  53,213     12,814    4,334   (9,067)      61,294      (28,936)    32,358
                                     ==============================================================================
</TABLE>

                                       14                            (Continued)
<PAGE>
                           GCI, INC. AND SUBSIDIARIES
          Notes to Interim Condensed Consolidated Financial Statements
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     Reportable Segments
                                     --------------------------------------------------------
                                         Long-               Local                  Total
                                        Distance    Cable    Access   Internet    Reportable      All
                                        Services   Services Services  Services     Segments      Other     Total
                                     ------------------------------------------------------------------------------
       <S>                             <C>           <C>      <C>      <C>         <C>          <C>        <C>
            2000
       Revenues:
         Intersegment                  $  11,148      1,108    4,885    2,156       19,297          ---     19,297
         External                        136,660     49,298   14,545    5,919      206,422        9,187    215,609
                                     ------------------------------------------------------------------------------
            Total revenues             $ 147,808     50,406   19,430    8,075      225,719        9,187    234,906
                                     ==============================================================================

       Earnings (loss) from
         operations before
         depreciation,
         amortization, net interest
         expense and income taxes      $  57,775     23,873    2,808   (7,123)      77,333      (28,167)    49,166
                                     ==============================================================================

       Operating income (loss)         $  39,769      9,967     (596)  (8,446)      40,694      (30,418)    10,276
                                     ==============================================================================
</TABLE>
<TABLE>
       A reconciliation of reportable segment revenues to consolidated revenues
       follows:
<CAPTION>
                 Nine months ended September 30,                                    2001           2000
                                                                               ------------- --------------
                 <S>                                                           <C>               <C>
                 Reportable segment revenues                                   $  259,780        225,719
                 Plus All Other revenues                                           37,319          9,187
                 Less intersegment revenues eliminated in consolidation           (26,628)       (19,297)
                                                                               ------------- --------------
                      Consolidated revenues                                    $  270,471        215,609
                                                                               ============= ==============
</TABLE>
<TABLE>
       A reconciliation of reportable segment earnings from operations before
       depreciation, amortization, net interest expense and income taxes to
       consolidated net income (loss) before income taxes follows:
<CAPTION>
                 Nine months ended September 30,                                    2001           2000
                                                                               ------------- --------------
                 <S>                                                           <C>               <C>
                 Reportable segment earnings from operations before
                   depreciation, amortization, net interest expense and
                   income taxes                                                $   98,262         77,333
                 Less All Other loss from operations before depreciation,
                   amortization, net interest expense and income taxes            (24,137)       (28,167)
                 Less intersegment contribution eliminated in consolidation          (713)          (239)
                                                                               -------------- --------------
                      Consolidated earnings from operations before
                        depreciation, amortization, net interest expense
                        and income taxes                                           73,412         48,927
                 Less depreciation and amortization expense                       (41,767)       (38,890)
                                                                               -------------- --------------
                      Consolidated operating income                                31,645         10,037
                 Less interest expense, net                                       (24,170)       (28,618)
                                                                               -------------- --------------
                      Consolidated net income (loss) before income taxes       $    7,475        (18,581)
                                                                               ============== ==============
</TABLE>
                                       15                            (Continued)
<PAGE>
                           GCI, INC. AND SUBSIDIARIES
          Notes to Interim Condensed Consolidated Financial Statements
                                   (Unaudited)

<TABLE>
       A reconciliation of reportable segment operating income to consolidated
       net income (loss) before income taxes follows:
<CAPTION>
                 Nine months ended September 30,                                    2001           2000
                                                                               ------------- --------------
                 <S>                                                           <C>               <C>
                 Reportable segment operating income                           $   61,294         40,694
                 Less All Other operating loss                                    (28,936)       (30,418)
                 Less intersegment contribution eliminated in consolidation          (713)          (239)
                                                                               -------------- -------------
                      Consolidated operating income                                31,645         10,037
                 Less interest expense, net                                       (24,170)       (28,618)
                                                                               -------------- -------------
                      Consolidated net income (loss) before income taxes       $    7,475        (18,581)
                                                                               ============== =============
</TABLE>
  (5)  Commitments and Contingencies

       Acquisition
       On June 15, 2001 we signed an agreement with Rogers Cable, Inc. to
       acquire all of the stock of Rogers American Cablesystems, Inc.
       ("Rogers"), a cable television service provider in Palmer and Wasilla,
       Alaska for $19.0 million in cash. The acquisition has received regulatory
       approval and is expected to be finalized in November 2001.

       Litigation and Disputes
       We are routinely involved in various lawsuits, billing disputes, legal
       proceedings and regulatory matters that have arisen in the normal course
       of business. While the ultimate results of these items cannot be
       predicted with certainty, we do not expect at this time the resolution of
       them to have a material adverse effect on our financial position, results
       of operations or our liquidity.

       Internal Revenue Service Examination
       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. The GCI consolidated group
       U.S. income tax return for 1999 was selected for examination by the
       Internal Revenue Service during 2001. The examination commenced during
       the third quarter of 2001. We believe this examination will not have a
       material adverse effect on our financial position, results of operations
       or our liquidity.


                                       16
<PAGE>
PART I.
ITEM 2.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
                                   (Unaudited)

In the following discussion, GCI, Inc. and its direct and indirect subsidiaries
are referred to as "we," "us" and "our."

The following discussion and analysis should be read in conjunction with our
Interim Condensed Consolidated Financial Statements and the notes thereto. See -
Cautionary Statement Regarding Forward-Looking Statements.

GCI, Inc. was incorporated in 1997 to effect the issuance of senior notes. GCI,
Inc., a wholly owned subsidiary of GCI, received through its initial
capitalization all ownership interests in subsidiaries previously held by GCI.
Shares of GCI's Class A common stock are traded on the Nasdaq National Market
tier of the Nasdaq Stock Market under the symbol GNCMA. Shares of GCI's Class B
common stock are traded on the Over-the-Counter market

Overview
We have experienced significant growth in recent years through strategic
acquisitions, deploying new business lines and expansion of our existing
businesses. We have historically met our cash needs for operations and
maintenance capital expenditures through our cash flows from operating
activities. Cash requirements for acquisitions and other capital expenditures
have been provided largely through our financing activities.

Long-Distance Services
During the third quarter of 2001 long-distance services revenue represented
61.2% of consolidated revenues. Our provision of interstate and intrastate
long-distance services to residential, commercial and governmental customers and
to other common carriers (principally WorldCom and Sprint), and provision of
private line and leased dedicated capacity services accounted for 95.6% of our
total long-distance services revenues during the third quarter of 2001. Factors
that have the greatest impact on year-to-year changes in long-distance services
revenues include the rate per minute charged to customers, usage volumes
expressed as minutes of use, and the number of private line and leased dedicated
service products in use.

Revenues from private line and other data services sales increased 9.6% to $8.1
million during the third quarter of 2001 as compared to the third quarter of
2000 due primarily to increasing demand for our data services by commercial and
governmental customers.

We introduced a broadband product offering to hospitals and health clinics in
2000, supplementing broadband revenues derived from our SchoolAccess(TM)
offering to rural school districts. Total broadband revenues increased 228.9% to
$4.5 million during the third quarter of 2001 as compared to the third quarter
of 2000. SchoolAccess(TM) services to nine school districts in Arizona and New
Mexico began in July 2001.

Our long-distance cost of sales and services has consisted principally of direct
costs of providing services, including local access charges paid to Local
Exchange Carriers ("LECs") for originating and terminating long-distance calls
in Alaska, and fees paid to other long-distance carriers to carry calls
terminating in areas not served by our network (principally the lower 49 states,
most of which calls are carried over WorldCom's network, and international
locations, which calls are carried principally over Sprint's network). During
the third quarter of 2001, local access charges accounted for 66.0% of
long-distance cost of sales and services,


                                       17
<PAGE>
fees paid to other long-distance carriers represented 25.2%, satellite
transponder lease and undersea fiber maintenance costs represented 3.3%, and
other costs represented 5.5% of long-distance cost of sales and services.

Our long-distance selling, general, and administrative expenses have consisted
of operating and engineering, customer service, sales and communications,
management information systems, general and administrative, and legal and
regulatory expenses. Most of these expenses consist of salaries, wages and
benefits of personnel and certain other indirect costs (such as rent, travel,
utilities, insurance and property taxes). A significant portion of long-distance
selling, general, and administrative expenses, 33.9% during the third quarter of
2001, represents operating and engineering costs.

Long-distance services face significant competition from AT&T Alascom, Inc.,
long-distance resellers, and from local telephone companies that have entered
the long-distance market. We believe our approach to developing, pricing, and
providing long-distance services and bundling different business segment
services will continue to allow us to be competitive in providing those
services.

Revenues derived from other common carriers increased 27.5% to $22.3 million
during the third quarter of 2001 as compared to the third quarter of 2000. The
average rate charged other common carriers increased 4.5% during the same period
due to the discontinued carriage of certain low-margin wholesale minutes and
total minutes carried increased 8.8%. In conjunction with our purchase of a
controlling interest in Kanas (see note 3 to the accompanying Notes to Interim
Condensed Consolidated Financial Statements) we negotiated a contract amendment
with WorldCom in March 2001. The amendment extended the contract term to March
2006 and reduced the rate charged by us for certain WorldCom traffic over the
extended term of the contract. The Sprint contract was also amended in March
2001 extending its term to March 2004 with two one-year automatic extensions to
March 2006. The amendment reduced the rate to be charged by us for certain
Sprint traffic over the extended term of the contract.

Other common carrier traffic routed to us for termination in Alaska is largely
dependent on traffic routed to WorldCom and Sprint by their customers. Pricing
pressures, new program offerings and market consolidation continue to evolve in
the markets served by WorldCom and Sprint. If, as a result, their traffic is
reduced, or if their competitors' costs to terminate or originate traffic in
Alaska are reduced, our traffic will also likely be reduced, and our pricing may
be reduced to respond to competitive pressures. We are unable to predict the
effect on us of such changes, however given the materiality of other common
carrier revenues to us, a significant reduction in traffic or pricing could have
a material adverse effect on our financial position, results of operations and
liquidity.

Cable Services
During the third quarter of 2001, cable television revenues represented 21.7% of
consolidated revenues. The cable systems serve 31 communities and areas in
Alaska, including the state's three largest population centers, Anchorage,
Fairbanks and Juneau.

On March 31, 2001 we acquired the assets and customer base of G.C. Cablevision,
Inc., with approximately 1,000 subscribers in Fairbanks and North Pole, Alaska.

On June 15, 2001 we signed an agreement with Rogers Cable, Inc. to acquire all
of the stock of Rogers American Cablesystems, Inc., a cable television service
provider in Palmer and Wasilla, Alaska for $19.0 million in cash. The
acquisition has received regulatory approval and is expected to be finalized in
November 2001. This acquisition will allow our facilities to pass an additional
10,000 homes and will add more than 7,000 subscribers.


                                       18
<PAGE>
We generate cable services revenues from four primary sources: (1) digital and
analog programming services, including monthly basic or premium subscriptions
and pay-per-view movies or other one-time events, such as sporting events; (2)
equipment rentals or installation; (3) advertising sales; and (4) cable modem
services (shared with our Internet services segment). During the third quarter
of 2001 programming services generated 79.6% of total cable services revenues,
equipment rental and installation fees accounted for 9.7% of such revenues,
cable modem services accounted for 6.9% of such revenues, advertising sales
accounted for 3.4% of such revenues, and other services accounted for the
remaining 0.4% of total cable services revenues. The primary factors that
contribute to year-to-year changes in cable services revenues are average
monthly subscription and pay-per-view rates, the mix among basic, premium and
pay-per-view services and digital and analog services, the average number of
cable television and cable modem subscribers during a given reporting period,
and revenues generated from new product offerings.

The cable systems' cost of sales and selling, general and administrative
expenses have consisted principally of programming and copyright expenses,
labor, maintenance and repairs, marketing and advertising and equipment rental
expense. During the third quarter of 2001 programming and copyright expenses
represented 46.7% of total cable cost of sales and selling, general and
administrative expenses, and general and administrative costs represented 45.0%
of such total. Marketing and advertising costs represented approximately 8.3% of
such total expenses.

Cable services face competition from alternative methods of receiving and
distributing television signals and from other sources of news, information and
entertainment. We believe our cable television services will continue to be
competitive by providing, at reasonable prices, a greater variety of programming
and other communication services than are available off-air or through other
alternative delivery sources and upon superior technical performance and
customer service.

Local Access Services
We generate local access services revenues from three primary sources: (1)
business and residential basic dial tone services; (2) business private line and
special access services; and (3) business and residential features and other
charges, including voice mail, caller ID, distinctive ring, inside wiring and
subscriber line charges. Local exchange services revenues totaled $6.4 million
in the third quarter of 2001 representing 7.3% of consolidated revenues. The
primary factors that contribute to year-to-year changes in local access services
revenues are the average number of business and residential subscribers to our
services during a given reporting period, the average monthly rates charged for
non-traffic sensitive services and the number and type of additional premium
features selected.

Local access cost of sales represented approximately 52.5% of total local access
services cost of sales and selling, general and administrative expenses during
the third quarter of 2001. General and administrative and customer service costs
represented approximately 35.6% of such total expenses, marketing and
advertising costs represented approximately 9.1% of such total expenses, and
operating and engineering expenses represented approximately 2.8% of such total
expenses.

Our local access services segment faces significant competition in Anchorage
from the Incumbent Local Exchange Carrier ("ILEC") Alaska Communications
Systems, Inc. ("ACS") and AT&T Alascom, Inc. We believe our approach to
developing, pricing, and providing local access services and bundling different
business segment services will allow us to be competitive in providing those
services.

Internet Services
We generate Internet services revenues from three primary sources: (1) access
product services, including commercial, Internet service provider, and retail
dial-up access; (2) network management services; and (3) cable modem services (a
portion of cable modem revenue is also recognized by our cable services
segment). Internet services segment revenues totaled $3.0 million representing
3.4% of total revenues in the third


                                       19
<PAGE>
quarter of 2001. The primary factors that contribute to year-to-year changes in
Internet services revenues are the average number of subscribers to our services
during a given reporting period, the average monthly subscription rates, and the
number and type of additional premium features selected.

Operating and general and administrative expenses represented approximately
50.3% of total Internet services cost of sales and selling, general and
administrative expenses during the third quarter of 2001. Internet cost of sales
represented approximately 37.4% of such total expenses and marketing and
advertising represented approximately 12.3% of such total expenses.

Marketing campaigns continue to be deployed targeting residential and commercial
customers featuring bundled Internet products. Our Internet offerings are
coupled with our long-distance and local access services offerings and provide
free basic Internet services or discounted premium Internet services if certain
long-distance or local access services plans are selected. Value-added premium
Internet features are available for additional charges.

We compete with a number of Internet service providers in our markets. We
believe our approach to developing, pricing, and providing Internet services
allows us to be competitive in providing those services.

Other Services and Other Expenses
Telecommunications services revenues reported in the All Other category as
described in note 4 in the accompanying Notes to Interim Condensed Consolidated
Financial Statements include corporate network management contracts,
telecommunications equipment sales and service, management services for Kanas
through June 30, 2001 (see note 3 in the accompanying Notes to Interim Condensed
Consolidated Financial Statements), and other miscellaneous revenues (including
revenues from cellular resale services, prepaid and debit calling card sales,
and installation and leasing of customer's very small aperture terminal ("VSAT")
equipment).

Revenues included in the All Other category represented 6.4% of total revenues
in the third quarter of 2001 and included network solutions and outsourcing
revenues totalling $4.7 million and communications equipment sales, cellular
resale and other revenues totalling $885,000.

Depreciation, amortization and net interest expense on a consolidated basis
decreased $1.3 million in the third quarter of 2001 as compared to the third
quarter of 2000 resulting primarily from decreased interest rates in 2001 on our
variable rate debt, the effect of an interest rate swap agreement described
below, and decreased average outstanding long-term debt balances during the
first six months of 2001. Partially offsetting these decreases was an increase
in our depreciation expense due to our $48.9 million investment in equipment and
facilities placed into service during 2000 for which a full year of depreciation
will be recorded during the year ended December 31, 2001, the $46.7 million
investment in other equipment and facilities during the first nine months of
2001 for which a partial year of depreciation will be recorded during 2001, and
an increase in average outstanding indebtedness in the third quarter of 2001.


                                       20
<PAGE>
                              RESULTS OF OPERATIONS

<TABLE>
The following table sets forth selected Statement of Operations data as a
percentage of total revenues for the periods indicated and the percentage
changes in such data as compared to the corresponding prior year period:

(Underlying data rounded to the nearest thousands)
<CAPTION>
                                                         Three Months Ended                   Nine Months Ended
                                                            September 30,                       September 30,
                                                                         Percentage                          Percentage
                                                                           Change                              Change
                                                                          2001 vs.                            2001 vs.
      (Unaudited)                                    2001       2000        2000         2001       2000        2000
                                                     ----       ----        ----         ----       ----        ----
      <S>                                          <C>        <C>          <C>         <C>        <C>           <C>
      Statement of Operations Data:
      Revenues
          Long-distance services                     61.2%      63.5%       11.8%        55.5%      63.4%         9.7%
          Cable services                             21.7%      22.0%       14.4%        20.7%      22.9%        13.7%
          Local access services                       7.3%       6.9%       22.2%         6.9%       6.7%        27.5%
          Internet services                           3.4%       2.9%       38.0%         3.2%       2.7%        48.2%
          Other services                              6.4%       4.7%       56.0%        13.7%       4.3%       304.4%
                                                 -----------------------------------------------------------------------
             Total revenues                                                 16.0%                                25.5%

      Cost of sales and services                     37.2%      39.5%        9.3%        40.2%      41.4%        21.8%
      Selling, general and administrative
        expenses                                     35.2%      35.6%       14.4%        32.7%      35.9%        14.2%
      Depreciation and amortization                  16.0%      17.5%        6.2%        15.4%      18.0%         7.4%
                                                 -----------------------------------------------------------------------
             Operating income                        11.6%       7.4%        81.7%        11.7%      4.7%       215.3%
             Net income (loss) before income
               taxes                                  3.1%      (5.2%)     168.7%         2.8%      (8.6%)      140.2%
             Net income (loss)                        1.7%      (3.1%)     164.9%         1.5%      (5.3%)      136.2%

      Other Operating Data (1):
      Cable services operating income (2)            22.6%      18.5%       39.6%        22.9%      20.2%        28.6%
      Local services operating income (loss) (3)     25.0%      12.4%      146.3%        23.3%      (4.1%)      827.2%
      Internet services operating loss (4)         (106.9%)   (132.4%)     (11.4%)     (103.4%)   (142.7%)       (7.4%)
<FN>
   --------------------------
   (1)Includes customer service, marketing and advertising costs.
   (2)Computed as a percentage of total cable services revenues.
   (3)Computed as a percentage of total local services revenues.
   (4)Computed as a percentage of total Internet services revenues.
</FN>
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 2001 ("2001") COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2000 ("2000")

Revenues
Total revenues increased 16.0% from $75.9 million in 2000 to $88.0 million in
2001.

                                       21
<PAGE>
Long-distance revenues from residential, commercial, governmental, and other
common carrier customers increased 11.8% to $53.9 million in 2001. The increase
was largely due to the following:

   - An increase of 27.5% in revenues from other common carriers (principally
     WorldCom and Sprint) to $22.3 million in 2001,
   - An increase of 9.6% in private line and private network transmission
     services revenues to $8.1 million in 2001 due to an increased number of
     leased circuits in service,
   - An increase of 228.9% to $4.5 million in 2001 revenues from our packaged
     telecommunications offering to rural hospitals and health clinics and our
     SchoolAccess(TM) offering to rural school districts. The increase is
     primarily due to an increase in circuits and services sold to rural
     hospitals and health clinics from 10 circuits at September 30, 2000 to 51
     circuits at September 30, 2001, and
   - An increase of 5.6% in total minutes of use to 290.6 million minutes
     primarily due to a 8.8% increase in wholesale minutes carried for other
     common carriers. After excluding certain low-margin wholesale minutes no
     longer carried on our network in 2001, comparable total minutes of use over
     the prior year increased 17.1% and wholesale minutes carried for other
     common carriers increased 27.3% over the prior year.

Long-distance revenue increases were partially offset by the following:

   - A 2.0% decrease in our average rate billed per minute on long-distance
     traffic to $0.119 per minute in 2001 attributed to our promotion of and
     customers' enrollment in calling plans offering discounted rates and length
     of service rebates, such plans being prompted in part by our long-distance
     competitors reducing their rates, off-set by a 4.5% increase in the average
     rate per minute on minutes carried for other common carriers due to the
     discontinued carriage of certain low-margin wholesale minutes, and
   - A decrease of 4.0% in the number of active residential, small business and
     commercial customers billed to 87,500 at September 30, 2001 as compared to
     September 30, 2000 primarily due to competitors' promotional offerings.

Cable revenues increased 14.4% to $19.1 million in 2001. Programming services
revenues increased 15.9% to $15.2 million in 2001 and average gross revenue per
average basic subscriber per month increased $5.02 or 10.4% in 2001 due to the
following:

   - Basic subscribers served increased approximately 4,500 to approximately
     123,000 (of which approximately 1,000 basic subscribers were acquired from
     G.C. Cablevision, Inc. on March 31, 2001),
   - Rates charged to subscribers in most systems increased as of February 2001,
   - New facility construction efforts in 2000 and 2001 and the acquisition of
     GC Cablevision, Inc. subscribers resulted in approximately 4,600 additional
     homes passed which contributed to additional subscribers and revenues in
     2001, and
   - Digital subscriber counts increased 95.4% to approximately 21,300 at
     September 30, 2001 as compared to September 30, 2000.

The cable services segment's share of cable modem revenue (offered through our
Internet services segment) increased $441,000 to $1.3 million in 2001.

Local access services revenues increased 22.2% in 2001 to $6.4 million. At
September 30, 2001 approximately 73,300 lines were in service as compared to
approximately 57,900 lines in service at September 30, 2000.


                                       22
<PAGE>
Internet services revenues increased 38.0% to $3.0 million in 2001 primarily due
to growth in the average number of customers served. We had approximately 67,900
active residential, commercial and small business retail dial-up Internet
subscribers at September 30, 2001 as compared to approximately 59,000 at
September 30, 2000. We had approximately 21,500 active residential, commercial
and small business retail cable modem subscribers at September 30, 2001 as
compared to approximately 13,000 at September 30, 2000.

The 56% increase in other services revenues to $5.6 million in 2001 is primarily
due to increased revenues from managed services.

Cost of Sales and Services
Total cost of sales and services increased 9.3% to $32.7 million in 2001. As a
percentage of total revenues, total cost of sales and services decreased from
39.5% in 2000 to 37.2% in 2001.

Long-distance cost of sales and services increased 1.8% to $19.9 million in
2001. Long-distance cost of sales as a percentage of long-distance revenues
decreased from 40.6% in 2000 to 36.9% in 2001 primarily due to the effect of
reassigning traffic carried by satellite transponders and fiber optic cable from
leased to owned capacity, reductions in access costs due to distribution and
termination of our traffic on our own local services network instead of paying
other carriers to distribute and terminate our traffic, and a $450,000
non-recurring refund in 2001 from a local exchange carrier in respect of its
earnings that exceeded regulatory requirements. Offsetting the 2001 decrease as
compared to 2000 is a decrease in the average rate per minute billed to
customers without a comparable decrease in access charges paid by us. We expect
cost savings to occur when traffic carried on our own facilities grows.

Cable cost of sales and services increased 16.1% to $5.2 million in 2001. Cable
cost of sales and services as a percentage of cable revenues, which is less as a
percentage of revenues than are long-distance, local access and Internet
services cost of sales and services, increased from 26.8% in 2000 to 27.2% in
2001. Cable services rate increases did not keep pace with increases in
programming costs in 2001. Programming costs increased for most of our cable
services offerings, and we incurred additional costs on new programming
introduced in 2000 and 2001.

Local access services cost of sales and services increased 20.9% to $3.5 million
in 2001. Local access services cost of sales and services as a percentage of
local access services revenues decreased from 56.0% in 2000 to 55.4% in 2001. As
local access services revenues increase, economies of scale and more efficient
network utilization continue to result in reduced local access services cost of
sales and services as a percentage of local access services revenues.

Internet services cost of sales and services increased 13.5% to $1.2 million in
2001. Internet services costs of sales as a percentage of Internet services
revenues totaled 39.5% and 48.0% in 2001 and 2000, respectively. The Internet
services costs of sales decrease as a percentage of Internet services revenues
is primarily due to a $1.2 million increase in Internet's allocable portion of
cable modem revenue which generally has higher margins than do other Internet
products. As Internet revenues increase, economies of scale and more efficient
network utilization continue to result in reduced Internet cost of sales and
services as a percentage of Internet revenues.

Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 14.4% to $31.0 million in
2001 and, as a percentage of total revenues, decreased from 35.6% in 2000 to
35.2% in 2001. The increased expense in 2001 is due to increased health
insurance and labor costs, increased accrual of a company-wide success sharing
bonus, and costs to operate GFCC (see note 3 to the accompanying Notes to
Interim Condensed Consolidated Financial Statements).


                                       23
<PAGE>
Depreciation and Amortization
Depreciation and amortization expense increased 6.2% to $14.1 million in 2001.
The increase is attributable to our $48.9 million investment in equipment and
facilities placed into service during 2000 for which a full year of depreciation
will be recorded during the year ended December 31, 2001 and the $46.7 million
investment in other equipment and facilities during the first nine months of
2001 for which a partial year of depreciation will be recorded during 2001.

Interest Expense, Net
Interest expense, net of interest income, decreased 21.8% to $7.5 million in
2001. This decrease resulted primarily from decreased interest rates in 2001 on
our variable rate debt and approximately $294,000 earned from an interest rate
swap agreement (further described in note 1(d) to the accompanying Notes to
Interim Condensed Consolidated Financial Statements).

As described in note 1(d) to the accompanying Notes to Interim Condensed
Consolidated Financial Statements, effective September 21, 2001, we entered into
an interest rate swap agreement to convert $25 million of variable interest rate
debt equal to the 90 day Libor rate plus 334 basis points to 3.98% fixed rate
debt.

Income Tax Benefit (Expense)
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, the following discussion of income tax
benefit reflects the consolidated group's activity. Income tax benefit (expense)
was $1.6 million in 2000 and ($1.2) million in 2001. The change was due to net
income before income taxes in 2001 as compared to net loss before income taxes
in 2000. Our effective income tax rate increased from 40.5% in 2000 to 43.8% in
2001 due to the effect of items that are nondeductible for income tax purposes.

NINE MONTHS ENDED SEPTEMBER 30, 2001 ("2001") COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2000 ("2000")

Revenues
Total revenues increased 25.5% from $215.6 million in 2000 to $270.5 million in
2001. Excluding the fiber optic cable capacity sale in 2001 as described in note
1(g) in the accompanying Notes to Interim Condensed Consolidated Financial
Statements, total revenues increased 16.4%.

Long-distance revenues from residential, commercial, governmental, and other
common carrier customers increased 9.7% to $150.0 million in 2001. The increase
was largely due to the following:

   - An increase of 31.3% in private line and private network transmission
     services revenues to $26.6 million in 2001 due to an increased number of
     leased circuits in service,
   - An increase of 10.5% in revenues from other common carriers (principally
     WorldCom and Sprint) to $59.5 million in 2001,
   - An increase of 83.4% to $10.9 million in 2001 revenues from our packaged
     telecommunications offering to rural hospitals and health clinics and our
     SchoolAccess(TM) offering to rural school districts. The increase is
     primarily due to an increase in circuits and services sold to rural
     hospitals and health clinics from 10 circuits at September 30, 2000 to 51
     circuits at September 30, 2001, and
   - An increase of 0.6% in total minutes of use to 795.1 million minutes
     primarily due to a 2.2% increase in wholesale minutes carried for other
     common carriers. After excluding certain low-margin wholesale minutes no
     longer carried for other common carriers, comparable total minutes over the
     prior year increased 13.9% and wholesale minutes carried for other common
     carriers increased 24.1% over the prior year.


                                       24
<PAGE>
Long-distance revenue increases were partially offset by the following:

   - A 3.4% decrease in our average rate per minute on long-distance traffic to
     $0.118 per minute in 2001 attributed to our promotion of and customers'
     enrollment in calling plans offering discounted rates and length of service
     rebates, such plans being prompted in part by our long-distance competitors
     reducing their rates, off-set by a 8.1% increase in the average rate per
     minute on minutes carried for other common carriers due to the discontinued
     carriage of certain low-margin wholesale minutes, and
   - A decrease of 4.0% in the number of active residential, small business and
     commercial customers billed to 87,500 at September 30, 2001 as compared to
     September 30, 2000 primarily due to competitors' promotional offerings.

Cable revenues increased 13.7% to $56.0 million in 2001. Programming services
revenues increased 10.6% to $45.0 million in 2001 and average gross revenue per
average basic subscriber per month increased $5.02 or 10.4% in 2001 resulting
from the following:

   - Basic subscribers served increased approximately 4,500 to approximately
     123,000 (of which approximately 1,000 basic subscribers were acquired from
     G.C. Cablevision, Inc. on March 31, 2001),
   - Rates charged to subscribers in most systems increased as of February 2001,
   - New facility construction efforts in 2000 and 2001 and the acquisition of
     GC Cablevision, Inc. subscribers resulted in approximately 4,600 additional
     homes passed which contributed to additional subscribers and revenues in
     2001, and
   - Digital subscriber counts increased 95.4% to approximately 21,300 at
     September 30, 2001 as compared to September 30, 2000.

The cable services segment's share of cable modem revenue (offered through our
Internet services segment) increased $1.9 million to $3.5 million in 2001.

Local access services revenues increased 27.5% in 2001 to $18.5 million. At
September 30, 2001 approximately 73,300 lines were in service as compared to
approximately 57,900 lines in service at September 30, 2000.

Internet services revenues increased 48.2% to $8.8 million in 2001 primarily due
to growth in the average number of customers served. We had approximately 67,900
active residential, commercial and small business retail dial-up Internet
subscribers at September 30, 2001 as compared to approximately 59,000 at
September 30, 2000. We had approximately 21,500 active residential, commercial
and small business retail cable modem subscribers at September 30, 2001 as
compared to approximately 13,000 at September 30, 2000.

The 304.4% increase in other services revenues to $37.2 million in 2001 is
primarily due to the $19.5 million fiber capacity sale in 2001 as previously
described and increased revenues from managed services.

Cost of Sales and Services
Total cost of sales and services increased 21.8% to $108.7 million in 2001. As a
percentage of total revenues, total cost of sales and services decreased from
41.4% in 2000 to 40.2% in 2001. Excluding the fiber capacity sale in 2001, total
cost of sales and services as a percentage of total revenues decreased from
41.4% in 2000 to 39.0% in 2001.

Long-distance cost of sales and services decreased 2.8% to $57.8 million in
2001. Long-distance cost of sales as a percentage of long-distance revenues
decreased from 43.5% in 2000 to 38.5% in 2001 primarily


                                       25
<PAGE>
due to the effect of reassigning traffic carried by satellite transponders and
fiber optic cable from leased to owned capacity, reductions in access costs due
to distribution and termination of our traffic on our own local services network
instead of paying other carriers to distribute and terminate our traffic, and a
$450,000 non-recurring refund in 2001 from a local exchange carrier in respect
of its earnings that exceeded regulatory requirements. Offsetting the 2001
decrease as compared to 2000 is a decrease in the average rate per minute billed
to customers without a comparable decrease in access charges paid by us. We
expect cost savings to occur when traffic carried on our own facilities grows.

Cable cost of sales and services increased 15.7% to $15.2 million in 2001. Cable
cost of sales and services as a percentage of cable revenues, which is less as a
percentage of revenues than are long-distance, local access and Internet
services cost of sales and services, increased from 26.7% in 2000 to 27.1% in
2001. Cable services rate increases did not keep pace with increases in
programming costs in 2001. Programming costs increased for most of our cable
services offerings, and we incurred additional costs on new programming
introduced in 2000 and 2001.

Local access services cost of sales and services increased 22.4% to $10.2
million in 2001. Local access services cost of sales and services as a
percentage of local access services revenues decreased from 57.2% in 2000 to
54.9% in 2001. As local access services revenues increase, economies of scale
and more efficient network utilization continue to result in reduced local
access services cost of sales and services as a percentage of local access
services revenues.

Internet services cost of sales and services increased 14.5% to $3.6 million in
2001. Internet services costs of sales as a percentage of Internet services
revenues totaled 41.2% and 53.3% in 2001 and 2000, respectively. The Internet
services costs of sales decrease as a percentage of Internet services revenues
is primarily due to a $3.4 million increase in Internet's allocable portion of
cable modem revenue which generally has higher margins than do other Internet
products. As Internet revenues increase, economies of scale and more efficient
network utilization continue to result in reduced Internet cost of sales and
services as a percentage of Internet revenues.

Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 14.2% to $88.4 million in
2001 and, as a percentage of total revenues, decreased from 35.9% in 2000 to
32.7% in 2001. Excluding the fiber capacity sale in 2001, selling, general and
administrative expenses, as a percentage of total revenues, decreased from 35.9%
in 2000 to 34.7% in 2001. The increase in 2001 is due to increased health
insurance and labor costs, increased accrual of a company-wide success sharing
bonus, and incremental new costs to operate GFCC (see note 3 to the accompanying
Notes to Interim Condensed Consolidated Financial Statements).

Depreciation and Amortization
Depreciation and amortization expense increased 7.4% to $41.8 million in 2001.
The increase is attributable to our $48.9 million investment in equipment and
facilities placed into service during 2000 for which a full year of depreciation
will be recorded during the year ended December 31, 2001 and the $46.7 million
investment in other equipment and facilities during the first nine months of
2001 for which a partial year of depreciation will be recorded during 2001.

Interest Expense, Net
Interest expense, net of interest income, decreased 15.5% to $24.2 million in
2001. This decrease resulted primarily from decreased interest rates in 2001 on
our variable rate debt, approximately $579,000 earned from an interest rate swap
agreement (further described in note 1(d) to the accompanying Notes to Interim
Condensed Consolidated Financial Statements), and decreased average outstanding
long-term debt balances during the first six months of 2001. Partially
offsetting these decreases was an increase in our average outstanding capital
lease obligation balances resulting from the lease of satellite transponder
capacity.


                                       26
<PAGE>
As described in note 1(d) to the accompanying Notes to Interim Condensed
Consolidated Financial Statements, effective September 21, 2001, we entered into
an interest rate swap agreement to convert $25 million of variable interest rate
debt equal to the 90 day Libor rate plus 334 basis points to 3.98% fixed rate
debt.

Income Tax Benefit (Expense)
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, the following discussions of income tax
benefit and net operating loss carryforwards reflect the consolidated group's
activity and balances.

Income tax benefit (expense) was $7.2 million in 2000 and ($3.4) million in
2001. The change was due to our generation of net income before income taxes in
2001 as compared to a net loss before income taxes in 2000. Our effective income
tax rate increased from 38.8% in 2000 to 44.9% in 2001 due to the effect of
items that are nondeductible for income tax purposes.

At September 30, 2001, we have (1) tax net operating loss carryforwards of
approximately $143.6 million that will begin expiring in 2007 if not utilized,
and (2) alternative minimum tax credit carryforwards of approximately $2.6
million available to offset regular income taxes payable in future years. Our
utilization of remaining net operating loss carryforwards is subject to certain
limitations pursuant to Internal Revenue Code section 382.

Tax benefits associated with recorded deferred tax assets are considered to be
more likely than not realizable through future reversals of existing taxable
temporary differences and future taxable income exclusive of reversing temporary
differences and carryforwards. The amount of deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced. We estimate that our
effective income tax rate for financial statement purposes will be approximately
45% to 50% in 2001.

The GCI consolidated group U.S. income tax return for 1999 was selected for
examination by the Internal Revenue Service during 2001. The examination
commenced during the third quarter of 2001. We believe this examination will not
have a material adverse effect on our financial position, results of operations
or our liquidity.

                                       27
<PAGE>
                 FLUCTUATIONS IN QUARTERLY RESULTS OF OPERATIONS
<TABLE>
The following chart provides selected unaudited statement of operations data
from our quarterly results of operations during 2001 and 2000:
<CAPTION>
                                                            (Amounts in thousands, except per share amounts)
                                                      -------------------------------------------------------------
                                                       First         Second       Third       Fourth        Total
                                                       Quarter       Quarter     Quarter     Quarter         Year
                                                      -------------------------------------------------------------
     <S>                                             <C>              <C>         <C>         <C>          <C>
     2001
     ----
     Revenues:
       Long-distance services                        $  46,236        49,851      53,892                   149,979
       Cable services                                   18,046        18,873      19,113                    56,032
       Local access services                             5,958         6,183       6,397                    18,538
       Internet services                                 2,619         3,134       3,019                     8,772
       Other services                                   24,058         7,494       5,598                    37,150
                                                      -------------------------------------------------------------
          Total revenues                                96,917        85,535      88,019                   270,471
     Operating income                                   13,042         8,411      10,192                    31,645
     Net income before income taxes                      4,322           436       2,717                     7,475
     Net income                                          2,423           166       1,527                     4,116

     2000
     ----
     Revenues:
       Long-distance services                        $  43,620        44,855      48,185      46,016       182,676
       Cable services                                   15,930        16,660      16,708      18,600        67,898
       Local access services                             4,520         4,789       5,236       5,660        20,205
       Internet services                                 1,713         2,018       2,188       2,506         8,425
       Other services                                    2,494         3,104       3,589       4,214        13,401
                                                      -------------------------------------------------------------
          Total revenues                                68,277        71,426      75,906      76,996       292,605
     Operating income                                      877         3,550       5,610       5,966        16,003
     Net loss before income taxes                       (8,962)       (5,665)     (3,954)     (3,068)      (21,649)
     Net loss                                           (5,498)       (3,526)     (2,352)     (1,858)      (13,234)
</TABLE>
Revenues
Total revenues for the quarter ended September 30, 2001 ("third quarter") were
$88.0 million, representing a 2.9% increase from $85.5 million for the quarter
ended June 30, 2001 ("second quarter"). The third quarter increase resulted from
a 8.1% increase in long-distance services revenue to $53.9 million primarily due
to a 16.5% increase in revenues from other common carriers to $22.3 million.
Long distance minutes increased 11.3% to 290.6 million minutes, primarily due to
a 28.4% increase in other common carrier minutes (principally WorldCom and
Sprint) off-set by a 14.6% decrease in minutes of traffic carried for customers
other than other common carriers. The long-distance average rate per minute was
$.117 and $.119 in the second and third quarters, respectively. The increase in
long-distance services revenue is off-set by a $1.9 million decrease in other
services revenue primarily due to a decrease in non-recurring project management
services revenue.

Long-distance revenues have historically been highest in the summer months as a
result of temporary population increases attributable to tourism and increased
seasonal economic activity such as construction, commercial fishing, and oil and
gas activities. Cable television revenues, on the other hand, are higher in the
winter months because consumers spend more time at home and tend to watch more
television during these months. Local service and Internet access services are
not expected to exhibit significant seasonality. Our ability to implement
construction projects is also hampered during the winter months because of cold
temperatures, snow and short daylight hours.


                                       28
<PAGE>
Cost Of Sales and Services
Cost of sales and services decreased from $33.8 million in the second quarter to
$32.7 million in the third quarter. As a percentage of revenues, second and
third quarter cost of sales and services totaled 39.6% and 37.2%, respectively.
The third quarter decrease as a percentage of revenues results from reductions
in access costs due to distribution and termination of traffic on our own
long-distance and local services networks instead of paying other carriers to
distribute and terminate our traffic, a 1.9% increase to $.119 in the average
rate per minute billed to customers, and a $450,000 non-recurring refund in the
third quarter from a local exchange carrier in respect of its earnings that
exceeded regulatory requirements. Partially off-setting the third quarter
decrease is an increase in cable programming costs without a corresponding
revenue increase. We expect cost savings to continue as traffic carried on our
own facilities grows.

Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $1.4 million in the third
quarter as compared to the second quarter. As a percentage of revenues, third
quarter selling, general and administrative expenses were 35.2% as compared to
34.6% for the second quarter. The increase in selling, general and
administrative expenses in the third quarter as compared to the second quarter
is primarily due to incremental new costs to operate GFCC (see note 3 to the
accompanying Notes to Interim Condensed Consolidated Financial Statements).

Net Income
We reported net income of $1.5 million for the third quarter as compared to a
$166,000 for the second quarter. The increase is due to increased operating
income and reduced net interest expense, offset by increased income tax expense.

                         LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities totaled $63.6 million in the nine month
period ended September 30, 2001 ("2001") as compared to $35.0 million in the
nine month period ended September 30, 2000 ("2000"), net of changes in the
components of working capital. The increase in 2001 is primarily due to the
fiber capacity sale in 2001 and increased cash flow from all service offerings.
Expenditures for property and equipment, including construction in progress,
totaled $46.7 million in 2001. Other uses of cash during 2001 included repayment
of $13.0 million of long-term borrowings and capital lease obligations, advances
to Kanas and payments on Kanas' behalf of approximately $5.6 million (see note 3
to the accompanying Notes to Interim Condensed Consolidated Financial
Statements), payment of a $1.2 million equipment lease deposit, and payment of
$1.0 million in Series B preferred stock dividends. Other sources of cash in
2001 include $10.0 million in long-term borrowings and a $2.9 million
contribution from GCI.

Trade receivables increased $8.3 million from December 31, 2000 to September 30,
2001 primarily due to an increase in other common carrier trade receivables and
broadband trade receivables related to our services to hospitals and health
clinics.

Working capital totaled $3.2 million at September 30, 2001, a $5.8 million
decrease from working capital of $9.0 million as of December 31, 2000. The
decrease is primarily attributed to our use of proceeds from the fiber capacity
sale to purchase long-term capital assets and repay long-term debt.

On October 25, 2000, March 23, 2001 and October 31, 2001 we amended the Holdings
$150,000,000 and $50,000,000 credit facilities. The amendments provided for our
acquisition of Kanas and Rogers, and contain, among other things, provision for
payment of a one-time amendment fees of $433,000, changes in certain financial
covenants and ratios, and a limit of $70 million and $60 million for 2001 and
2000,


                                       29
<PAGE>
respectively, for capital expenditures (excluding capital expenditures by
certain subsidiaries). Under these amendments, Holdings may not permit the ratio
of:

   - senior debt to annualized operating cash flow (as defined) of Holdings and
     certain of its subsidiaries to exceed 2.50 to 1.0 through September 30,
     2003 and must maintain a ratio of annualized operating cash flow to fixed
     charges of at least 1.0 to 1.0 effective January 1, 2002 (which adjusts to
     1.05 to 1.0 in April, 2003 and thereafter) and,
   - fixed charges coverage ratio (as defined) of Holdings and certain of its
     subsidiaries to exceed 1.00 to 1.00 from January 1, 2003 through March 31,
     2004 (which adjusts to 1.05 to 1.0 in April, 2004 and thereafter).

We were in compliance with all loan covenants at September 30, 2001.

Our expenditures for property and equipment, including construction in progress,
totaled $46.7 million and $33.4 million during the first nine months of 2001 and
2000, respectively. We expect our expenditures for property and equipment,
including construction in progress, for our core operations to total
approximately $60.0 million during the year ended December 31, 2001. Planned
capital expenditures over the next five years include those necessary for
continued expansion of our long-distance, local exchange and Internet
facilities, continuing development of our PCS network and upgrades to our cable
television plant.

The long-distance, local access, cable, Internet and wireless services
industries are experiencing increasing competition and rapid technological
changes. Our future results of operations will be affected by our ability to
react to changes in the competitive environment and by our ability to fund and
implement new technologies. We are unable to determine how competition and
technological changes will affect our ability to obtain financing.

We believe that we will be able to meet our current and long-term liquidity and
capital requirements and fixed charges through our cash flows from operating
activities, existing cash, cash equivalents, short-term investments, credit
facilities, and other external financing and equity sources. We plan to fund the
acquisition of Rogers through our senior credit facility. Should cash flows be
insufficient to support additional borrowings, capital expenditures will likely
be reduced.

                          New Accounting Pronouncements

In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No.
141, "Business Combinations." SFAS No. 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001.
Use of the pooling-of-interests method will be prohibited on a prospective basis
only. We do not expect that the adoption of SFAS No. 141 will have a significant
impact on our financial condition or results of operations.

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 provides accounting and reporting standards for intangible
assets acquired individually, with a group of other assets, or as part of a
business combination. This statement addresses how acquired goodwill and other
intangible assets are recorded upon their acquisition as well as how they are to
be accounted for after they have been initially recognized in the financial
statements. Under this statement, goodwill and other intangibles with indefinite
useful lives, on a prospective basis, will no longer be amortized, however will
be tested for impairment at least annually, based on a fair value comparison.
Intangibles that have finite useful lives will continue to be amortized over
their respective useful lives. This statement also requires expanded disclosure
for goodwill and other intangible assets. We will be required to adopt this
statement no later than January 1, 2002. At the date of adoption, we will be
required to complete a transitional intangible asset impairment test. Any
resulting impairment loss will be recognized as a cumulative effect of a change
in


                                       30
<PAGE>
accounting principle. In connection with the adoption of this standard, our
unamortized goodwill balance will no longer be amortized, but will continue to
be tested for impairment. We estimate that 2002 amortization expense of goodwill
will be reduced by approximately $1.2 million. We are assessing which other
intangible assets should be categorized as having indefinite useful lives and
the total impact of such standard on our results of operations, financial
position and cash flows.

In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". SFAS No. 143 provides accounting and reporting standards for costs
associated with the retirement of long-lived assets. This statement requires
entities to record the fair value of a liability for an asset retirement
obligation in the period in which it is incurred. When the liability is
initially recorded, the entity capitalizes 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, an entity
either settles the obligation for its recorded amount or incurs a gain or loss
upon settlement. We will be required to adopt this statement no later than
January 1, 2003 and do not expect this statement to have a material effect on
our results of operations, financial position and cash flows.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". SFAS No. 144 replaces SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of. However it retains the fundamental provisions of SFAS No. 121 for
recognition and measurement of the impairment of long-lived assets to be held
and used and for measurement of long-lived assets to be disposed of by sale.
This statement applies to all long-lived assets, including discontinued
operations, and replaces the provisions of APB Opinion No. 30, Reporting Results
of Operations-Reporting the Effects of Disposal of a Segment of a Business, for
the disposal of segments of a business. This statement requires that those
long-lived assets be measured at the lower of carrying amount or fair value less
cost to sell, whether reported in continuing operations or in discontinued
operations. We will be required to adopt this statement no later than January 1,
2002 and are currently assessing the impact of this statement on our results of
operations, financial position and cash flows.

                               The Alaska Economy

We offer voice and data telecommunication and video services to customers
primarily throughout Alaska. As a result of this geographic concentration,
growth of our business and of our operations depends upon economic conditions in
Alaska. The economy of Alaska is dependent upon the natural resource industries,
and in particular oil production, as well as investment earnings, tourism,
government, and United States military spending. Any deterioration in these
markets could have an adverse impact on us. In fiscal 2001 the state's
preliminary final results indicate that Alaska's oil revenues and federal
funding supplied 44% and 35%, respectively, of the state's total revenues.
Investment earning supplied only 0.2% of the state's total revenues in fiscal
2001 due to the recent decline in stock market investments. All of the federal
funding is dedicated for specific purposes, however, leaving oil revenues as the
primary funding source of general operating expenditures. In fiscal 2002 the
state forecasts that Alaska's investment earnings, federal funding and oil
revenues will supply 31%, 28% and 27%, respectively, of the state's total
projected revenues.

The volume of oil transported by the TransAlaska Oil Pipeline System ("TAPS")
over the past 20 years has been as high as 2.0 million barrels per day in fiscal
1988. Production has been declining over the last several years with an average
of 1.0 million barrels produced per day in fiscal 2001. The state forecasts the
production of 1.1 million barrels per day in fiscal 2002. The state forecasts a
temporary reversal of the production rate decline through fiscal 2006 due to new
developments at the Alpine, Nanuq, Northstar and Meltwater fields and new
Prudhoe Bay satellite production.


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<PAGE>
Market prices for North Slope oil averaged $27.92 in fiscal 2001 and is
forecasted to average $24.54 in fiscal 2002. The state forecasts the average
price of North Slope oil to decline to $21.41 in fiscal 2003. The closing price
per barrel was $23.17 on November 5, 2001.

The state believes the crude oil demand growth will slow in 2001 and 2002 as the
result of slower economic growth and in response to the higher energy prices of
the past two years. The state also believes that much of the current volatility
in oil prices revolves around the issue of whether or not the Organization of
Petroleum Exporting Countries ("OPEC") takes steps to increase or decrease
production. The production policy of OPEC and its ability to continue to act in
concert represents a key uncertainty in the state's revenue forecast.

The state of Alaska maintains the Constitutional Budget Reserve Fund that is
intended to fund budgetary shortfalls. If the state's current projections are
realized, the Constitutional Budget Reserve Fund will be depleted in 2005. If
the fund is depleted, aggressive state action will be necessary to increase
revenues and reduce spending in order to balance the budget. The Governor of the
state of Alaska and the Alaska Legislature continue to pursue cost cutting and
revenue enhancing measures.

Tourism, air cargo, and service sectors have helped offset the prevailing
pattern of oil industry downsizing that has occurred during much of the last
several years. Funds from federal sources of $1.8 billion are expected to be
distributed to the state of Alaska for highways and other federally supported
projects in fiscal 2001.

Should new oil discoveries or developments not materialize or the price of oil
become depressed, the long term trend of continued decline in oil production
from the Prudhoe Bay field area is inevitable with a corresponding adverse
impact on the economy of the state, in general, and on demand for
telecommunications and cable television services, and, therefore, on us, in
particular. In the past year there has been a renewed effort to allow
exploration and development in the Arctic National Wildlife Refuge ("ANWR"). On
August 2, 2001 the U.S. House of Representatives voted in favor of opening ANWR
and now the bill must go before the Senate.

Deployment of a natural gas pipeline from Alaska's North Slope to the lower 48
states has been proposed to supplement natural gas supplies. A competing natural
gas pipeline through Canada has also been proposed. The economic viability of a
natural gas pipeline depends upon the price of and demand for natural gas.
Either project could have a positive impact on the state of Alaska's revenues
and the Alaska economy. According to their public comments, neither Exxon Mobil,
BP or Phillips Petroleum, Alaska's large natural gas owners, believe either
natural gas pipeline makes financial sense based upon their preliminary
analysis. The governor of the State of Alaska and certain natural gas
transportation companies continue to support a natural gas pipeline.

We have, since our entry into the telecommunication marketplace, aggressively
marketed our services to seek a larger share of the available market. The
customer base in Alaska is limited, however, with a population of approximately
627,000 people. 42% of the State's population is located in the Municipality of
Anchorage, 13% is located in the Fairbanks North Star Borough, and 5% is located
in the City and Borough of Juneau. The rest is spread out over the vast reaches
of Alaska. No assurance can be given that the driving forces in the Alaska
economy, and in particular, oil production, will continue at levels to provide
an environment for expanded economic activity.

No assurance can be given that oil companies doing business in Alaska will be
successful in discovering new fields or further developing existing fields which
are economic to develop and produce oil with access to the pipeline or other
means of transport to market, even with a reduced level of royalties. We are not
able to predict the effect of changes in the price and production volumes of
North Slope oil on Alaska's economy or on us.


                                       32
<PAGE>
                                   Seasonality

Our long-distance revenues have historically been highest in the summer months
as a result of temporary population increases attributable to tourism and
increased seasonal economic activity such as construction, commercial fishing,
and oil and gas activities. Our cable television revenues, on the other hand,
are higher in the winter months because consumers tend to watch more television,
and spend more time at home, during these months. Our local service and Internet
operations are not expected to exhibit significant seasonality, with the
exception of SchoolAccess(TM) Internet services that are reduced during the
summer months. Our ability to implement construction projects is also reduced
during the winter months because of cold temperatures, snow and short daylight
hours.


PART I.
ITEM 3.
           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various types of market risk in the normal course of business,
including the impact of interest rate changes. We do not hold derivatives for
trading purposes.

Our Senior Holdings Loan carries interest rate risk. Amounts borrowed under this
Agreement bear interest at either Libor plus 1.0% to 2.5%, depending on the
leverage ratio of Holdings and certain of its subsidiaries, or at the greater of
the prime rate or the federal funds effective rate (as defined) plus 0.05%, in
each case plus an additional 0.0% to 1.375%, depending on the leverage ratio of
Holdings and certain of its subsidiaries. Should the Libor rate, the lenders'
base rate or the leverage ratios change, our interest expense will increase or
decrease accordingly. As of September 30, 2001, we have borrowed $92.7 million
subject to interest rate risk. On this amount, a 1% increase in the interest
rate would cost us $927,000 in additional gross interest cost on an annualized
basis.

On January 3, 2001 we entered into an interest rate swap agreement to convert
$50 million in 9.75% fixed rate debt to a variable interest rate equal to the 90
day Libor rate plus 334 basis points. The swap agreement carries interest rate
risk. Should the Libor rate change, our interest expense will increase or
decrease accordingly. A 1% change in the variable interest rate will change the
annualized benefit of the swap by $500,000. As of September 30, 2001, the
interest rate spread between the fixed and swapped variable rate is 2.73%, an
annualized reduction in interest expense of approximately $1,365,000. As of
November 1, 2001, the interest rate spread between the fixed and swapped
variable rate is 4.18%, an annualized reduction in interest expense of
approximately $2,090,000.

On September 21, 2001, we entered into an interest rate swap agreement to
convert $25 million of variable interest rate debt equal to the 90 day Libor
rate plus 334 basis points to 3.98% fixed rate debt. The swap agreement carries
interest rate risk. Should the Libor rate change, our interest expense will
increase or decrease accordingly. A 1% change in the variable interest rate will
change the annualized benefit of the swap by $250,000. As of September 30, 2001,
the interest rate spread between the variable rate and swapped fixed rate is
1.19%, an annualized increase in interest expense of approximately $298,000. As
of October 22, 2001, the interest rate spread between the fixed and swapped
variable rate is 1.52%, an annualized increase in interest expense of
approximately $380,000.

Our Fiber Facility carries interest rate risk. Amounts borrowed under this
Agreement bear interest at either Libor plus 2.5%-2.75%, or at our choice, the
lender's prime rate plus 1.25%-1.5%. Should the Libor rate, the lenders' base
rate or the leverage ratios change, our interest expense will increase or
decrease accordingly. As of September 30, 2001, we have borrowed $60.0 million
subject to interest rate risk. On this amount, a


                                       33
<PAGE>
1% increase in the interest rate would cost us $600,000 in additional gross
interest cost on an annualized basis.

Our Satellite Transponder Capital Lease carries interest rate risk. Amounts
borrowed under this Agreement bear interest at Libor plus 3.25%. Should the
Libor rate change, our interest expense will increase or decrease accordingly.
As of September 30, 2001, we have borrowed $47.0 million subject to interest
rate risk. On this amount, a 1% increase in the interest rate would cost us
$470,000 in additional gross interest cost on an annualized basis.

PART II.   OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS

Information regarding pending legal proceedings to which we are a party is
included in note 5 to the Interim Condensed Consolidated Financial Statements
and is incorporated herein by reference.

ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K

                (a)  Exhibits:

                     Exhibit 10.89 - Seventh Amendment to $50,000,000 Amended
                                     and Restated Credit Agreements

                     Exhibit 10.90 - Seventh Amendment to $200,000,000 Amended
                                     and Restated Credit Agreements

                (b)  Reports on Form 8-K filed during the quarter ended
                     September 30, 2001 - None


                                       34
<PAGE>
                                   SIGNATURES


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


                                                   GCI, INC.

                 Signature                                     Title                              Date
--------------------------------------      ----------------------------------------      ----------------------
<S>                                         <C>                                              <C>
/s/                                         President and Director                           November 12, 2001
--------------------------------------      (Principal Executive Officer)                 ----------------------
Ronald A. Duncan

/s/                                         Vice President and Director                      November 12, 2001
--------------------------------------                                                    ----------------------
G. Wilson Hughes

/s/                                         Secretary, Treasurer and Director                November 12, 2001
--------------------------------------      (Principal Financial and Accounting           ----------------------
John M. Lowber                              Officer)
</TABLE>


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