8-K/A: Current report
Published on November 13, 2008
UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
8-K/A
(Amendment No.
1)
CURRENT
REPORT
Pursuant to Section
13 OR 15(d) of The
Securities Exchange
Act of 1934
Date of report
(Date of earliest event reported): November 5, 2008
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GENERAL
COMMUNICATION, INC.
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(Exact name
of registrant as specified in its charter)
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State
of Alaska
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0-15279
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92-0072737
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(State or
other Jurisdiction of
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Commission
File Number
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(I.R.S
Employer
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Incorporation
or organization)
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Identification
No.)
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2550
Denali Street
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Suite
1000
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Anchorage,
Alaska
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99503
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(Address of
Principal Executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (907) 868-5600
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NONE
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(Former name
or former address, if changed since last report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions:
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o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item
4.02(a)
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Non-Reliance
of Previously Issued Financial Statements or a Related Audit Report or
Completed Internal Review
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Explanatory Note:
General Communication, Inc. (the "Company") previously filed a Form 8-K on
November 6, 2008 that contained preliminary information in Item 4.02(a) of such
Form 8-K regarding the amount deprecation expense was understated for the first
and second quarters of 2008. This Amendment No. 1 to such Form 8-K
amends and restates the information contained in such Form 8-K Item 4.02(a) in
its entirety. Additionally, this Amendment No. 1 adds additional
information to disclose the effect of the restatement on our balance sheets as
of March 31 and June 30, 2008 as well the impact on net income and earnings per
share for the three months ended March 31, 2008 and the three and six months
ended June 30, 2008, and statement of cash flows for the three and six months
ended March 31 and June 30, 2008, respectively. While the company
believes that the financial information included in this Form 8-K/A is
materially correct, the company's auditors have not yet concluded all aspects of
their review of our financial statements. Accordingly, the financial
information included herein should be considered preliminary and may be subject
to change following the conclusion of the review. The information in
Items 2.02 and 9.01 was preliminary and, therefore, will not be updated in this
Form 8-K/A.
On November 5, 2008, management of the Company,
after discussions with the Audit Committee of the Board of Directors of the
Company and the Company’s independent registered public accounting firm, KPMG
LLP, determined that it was necessary to restate the Company’s consolidated
financial statements for the quarters ended March 31, 2008 and June 30, 2008 in
order to correct the error in such financial statements described
below. Accordingly, the Company’s consolidated interim financial
statements previously filed for those periods should no longer be relied
upon.
In
late December 2007, a subsidiary of the Company, Alaska DigiTel, LLC (“Alaska
DigiTel”), committed to a substantial upgrade of its wireless network during
2008 and expected to decommission certain assets at or near the end of 2008. As
a result of this decision the estimated useful life of these assets changed, and
the net book value at the date the decision was determined should have been
depreciated over the remaining period the assets were expected to be used. The
Company has recently determined that Alaska DigiTel’s depreciation expense was
understated by $4.5 million and $4.0 million in the first and second quarters of
2008, respectively.
In
light of the disclosure provided in this report, management of the Company is
assessing the impact on its internal controls over financial
reporting.
The Company intends to provide all restated
financial information referred to in this Item 4.02(a), including explanatory
information, in an amendment to its Quarterly Report on Form 10-Q for the fiscal
quarters ended March 31, 2008 and June 30, 2008.
The expected impact
of the restatement follows (amounts in thousands, except per share
amounts):
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Three months
ended March 31, 2008
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As previously
reported1
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Adjustments
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As
restated
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Consolidated
Income Statement:
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Revenues
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$ | 134,674 | --- | 134,674 | ||||||||
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Cost of goods
sold (exclusive of depreciation and amortization shown separately
below)
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51,311 | --- | 51,311 | |||||||||
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Selling,
general and administrative expenses
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46,406 | --- | 46,406 | |||||||||
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Depreciation
and amortization expense
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22,782 | 4,461 | 27,243 | |||||||||
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Operating
income
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14,175 | (4,461 | ) | 9,714 | ||||||||
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Other income
(expense):
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Interest
expense
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(8,685 | ) | --- | (8,685 | ) | |||||||
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Loan and
senior note fees
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(223 | ) | --- | (223 | ) | |||||||
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Interest
income
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81 | --- | 81 | |||||||||
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Minority
interest
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(50 | ) | 1,026 | 976 | ||||||||
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Other
expense, net
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(8,877 | ) | 1,026 | (7,851 | ) | |||||||
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Income before
income tax expense
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5,298 | (3,435 | ) | 1,863 | ||||||||
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Income tax
expense
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2,769 | (248 | ) | 2,521 | ||||||||
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Net income
(loss)
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$ | 2,529 | (3,187 | ) | (658 | ) | ||||||
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Basic net
income (loss) per common share
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$ | 0.05 | (0.06 | ) | (0.01 | ) | ||||||
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Diluted net
income (loss) per common share
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$ | 0.04 | (0.06 | ) | (0.02 | ) | ||||||
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Consolidated
Condensed Statement of Cash Flow:
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Cash provided
by operating activities
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$ | 35,524 | --- | 35,524 | ||||||||
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Cash used in
investing activities
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(50,830 | ) | --- | (50,830 | ) | |||||||
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Cash used in
financing activities
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19,397 | --- | 19,397 | |||||||||
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1 As
reported on Form 10-Q for the quarter ended March 31, 2008
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March 31,
2008
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Consolidated
Condensed Balance Sheet
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As previously
reported1
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Adjustments
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As
restated
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Assets
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Total current
assets
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$ | 140,694 | --- | 140,694 | ||||||||
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Property and
equipment in service, net of depreciation
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519,675 | (4,461 | ) | 515,214 | ||||||||
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Construction
in progress
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84,950 | --- | 84,950 | |||||||||
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Net property
and equipment
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604,625 | (4,461 | ) | 600,164 | ||||||||
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Total other
assets
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286,869 | --- | 286,869 | |||||||||
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Total
assets
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$ | 1,032,188 | (4,461 | ) | 1,027,727 | |||||||
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Liabilities,
Minority Interest, and Stockholders' Equity
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Total current
liabilities
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89,235 | --- | 89,235 | |||||||||
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Long-term
debt
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555,667 | --- | 555,667 | |||||||||
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Obligations
under capital leases, excluding current maturities
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2,306 | --- | 2,306 | |||||||||
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Obligation
under capital lease due to related party, excluding current
maturity
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441 | --- | 441 | |||||||||
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Deferred
income taxes
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103,207 | (248 | ) | 102,959 | ||||||||
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Other
liabilities
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17,175 | --- | 17,175 | |||||||||
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Total
liabilities
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768,031 | (248 | ) | 767,783 | ||||||||
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Minority
interest
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6,528 | (1,026 | ) | 5,502 | ||||||||
| Stockholders' equity: | ||||||||||||
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Class A
common stock
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150,616 | --- | 150,616 | |||||||||
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Class B
common stock
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2,750 | --- | 2,750 | |||||||||
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Less cost of
Class A and Class B common shares held in treasury
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(3,450 | ) | --- | (3,450 | ||||||||
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Paid-in
capital
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22,180 | --- | 22,180 | |||||||||
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Retained
earnings
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85,533 | (3,187 | ) | 82,346 | ||||||||
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Total
stockholders’ equity
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257,629 | (3,187 | ) | 254,442 | ||||||||
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Total
liabilities, minority interest, and stockholders’ equity
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1,032,188 | (4,461 | ) | 1,027,727 | ||||||||
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1 As
reported on Form 10-Q for the quarter ended March 31, 2008
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Three Months
Ended June 30, 2008
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As previously
reported1
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Adjust-ments
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As
restated
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Consolidated
Income Statement:
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Revenues
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$ | 142,461 | --- | 142,461 | ||||||||
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Cost of goods
sold (exclusive of depreciation and amortization shown separately
below)
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52,448 | --- | 52,448 | |||||||||
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Selling,
general and administrative expenses
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48,260 | --- | 48,260 | |||||||||
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Depreciation
and amortization expense
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23,707 | 4,001 | 27,708 | |||||||||
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Operating
income
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18,046 | (4,001 | ) | 14,045 | ||||||||
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Other income
(expense):
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Interest
expense
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(10,899 | ) | --- | (10,899 | ) | |||||||
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Loan and
senior note fees
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(879 | ) | --- | (879 | ) | |||||||
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Interest
income
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402 | --- | 402 | |||||||||
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Minority
interest
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26 | 920 | 946 | |||||||||
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Other
expense, net
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(11,350 | ) | 920 | (10,430 | ) | |||||||
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Income before
income tax expense
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6,696 | (3,081 | ) | 3,615 | ||||||||
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Income tax
expense
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3,191 | (2,502 | ) | 689 | ||||||||
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Net
income
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$ | 3,505 | (579 | ) | 2,926 | |||||||
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Basic net
income per common share
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$ | 0.07 | (0.01 | ) | 0.06 | |||||||
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Diluted net
income per common share
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$ | 0.07 | (0.01 | ) | 0.06 | |||||||
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1 As
reported on Form 10-Q for the quarter ended June 30, 2008
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Six Months
Ended June 30, 2008
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As previously
reported1
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Adjust-ments
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As
restated
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Consolidated
Income Statement:
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Revenues
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$ | 277,135 | --- | 277,135 | ||||||||
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Cost of goods
sold (exclusive of depreciation and amortization shown separately
below)
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103,759 | --- | 103,759 | |||||||||
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Selling,
general and administrative expenses
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94,666 | --- | 94,666 | |||||||||
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Depreciation
and amortization expense
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46,489 | 8,462 | 54,951 | |||||||||
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Operating
income
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32,221 | (8,462 | ) | 23,759 | ||||||||
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Other income
(expense):
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Interest
expense
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(19,584 | ) | --- | (19,584 | ) | |||||||
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Loan and
senior note fees
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(1,102 | ) | --- | (1,102 | ) | |||||||
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Interest
income
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483 | --- | 483 | |||||||||
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Minority
interest
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(24 | ) | 1,946 | 1,922 | ||||||||
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Other
expense, net
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(20,227 | ) | 1,946 | (18,281 | ) | |||||||
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Income before
income tax expense
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11,994 | (6,516 | ) | 5,478 | ||||||||
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Income tax
expense
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5,960 | (2,750 | ) | 3,210 | ||||||||
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Net
income
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$ | 6,034 | (3,766 | ) | 2,268 | |||||||
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Basic net
income per common share
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$ | 0.12 | (0.08 | ) | 0.04 | |||||||
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Diluted net
income per common share
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$ | 0.11 | (0.07 | ) | 0.04 | |||||||
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Consolidated
Condensed Statement of Cash Flow:
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Cash provided
by operating activities
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$ | 109,457 | --- | 109,457 | ||||||||
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Cash used in
investing activities
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(155,977 | ) | --- | (155,977 | ) | |||||||
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Cash used in
financing activities
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129,149 | --- | 129,149 | |||||||||
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1 As
reported on Form 10-Q for the quarter ended June 30, 2008
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June 30,
2008
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Consolidated
Condensed Balance Sheet
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As previously
reported1
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Adjust-ments
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As
restated
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Assets
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Total current
assets
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$ | 225,213 | --- | 225,213 | ||||||||
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Property and
equipment in service, net of depreciation
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692,561 | (8,462 | ) | 684,099 | ||||||||
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Construction
in progress
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115,809 | --- | 115,809 | |||||||||
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Net property
and equipment
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808,370 | (8,462 | ) | 799,908 | ||||||||
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Total other
assets
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301,174 | --- | 301,174 | |||||||||
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Total
assets
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$ | 1,334,757 | (8,462 | ) | 1,326,295 | |||||||
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Liabilities,
Minority Interest, and Stockholders' Equity
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Total current
liabilities
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117,772 | --- | 117,772 | |||||||||
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Long-term
debt
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702,952 | --- | 702,952 | |||||||||
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Obligations
under capital leases, excluding current maturities
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96,254 | --- | 96,254 | |||||||||
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Obligation
under capital lease due to related party, excluding current
maturity
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1,864 | --- | 1,864 | |||||||||
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Deferred
income taxes
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89,315 | (2,750 | ) | 86,565 | ||||||||
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Long-term
deferred revenue
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37,738 | --- | 37,738 | |||||||||
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Other
liabilities
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19,766 | --- | 19,766 | |||||||||
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Total
liabilities
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1,065,661 | (2,750 | ) | 1,062,911 | ||||||||
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Minority
interest
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6,502 | (1,946 | ) | 4,556 | ||||||||
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Stockholders’
equity:
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Class A
common stock
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150,706 | --- | 150,706 | |||||||||
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Class B
common stock
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2,750 | --- | 2,750 | |||||||||
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Less cost of
Class A and Class B common shares held in treasury
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(3,422 | ) | --- | (3,422 | ||||||||
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Paid-in
capital
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23,522 | --- | 23,522 | |||||||||
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Retained
earnings
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89,038 | (3,766 | ) | 85,272 | ||||||||
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Total
stockholders’ equity
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262,594 | (3,766 | ) | 258,828 | ||||||||
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Total
liabilities, minority interest, and stockholders’ equity
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1,334,757 | (8,462 | ) | 1,326,295 | ||||||||
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1 As
reported on Form 10-Q for the quarter ended June 30, 2008
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SIGNATURE
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 hereunto duly
authorized.
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GENERAL
COMMUNICATION, INC.
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(Registrant)
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Date:
November 13, 2008
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By
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/s/ John M. Lowber | ||
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Name: John M.
Lowber
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Title: Senior
Vice President,
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Chief
Financial Officer,
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Secretary and
Treasurer
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(Principal
Financial Officer)
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