Liberty Broadband(LBRDA) - 2024 Q3 - Quarterly Report

Financial Performance - GCI Holdings reported revenue of $262 million for Q3 2024, an increase of $22 million compared to Q3 2023, and $753 million for the nine months ended September 30, 2024, up from $731 million in the same period last year [123][124]. - Operating income for GCI Holdings increased to $42 million in Q3 2024 from $30 million in Q3 2023, and for the nine months, it rose to $109 million from $91 million [123][125]. - Adjusted OIBDA for GCI Holdings was $100 million in Q3 2024, up from $89 million in Q3 2023, and $276 million for the nine months, compared to $271 million in the prior year [123][127]. - Charter's revenue increased by $211 million and $263 million for the three and nine months ended September 30, 2024, respectively, driven by growth in mobile lines, average revenue per customer, and advertising sales [135]. - Operating income for the three months ended September 30, 2024, was $3,335 million, an increase from $3,126 million in the prior year, while for the nine months, it rose to $9,729 million from $9,292 million [135]. - Net income for the three months ended September 30, 2024, was $1,474 million, compared to $1,436 million in the prior year, while for the nine months, it increased to $4,177 million from $4,032 million [135]. - Total revenue for the nine months ended September 30, 2024, was $753 million, an increase from $731 million in 2023, with adjusted OIBDA rising to $276 million from $271 million [161][162]. Customer Trends - Charter lost 110,000 Internet customers in Q3 2024 but added 545,000 mobile lines, indicating a shift in customer demand [117]. - Charter's mobile line growth was supported by new offerings such as Spectrum One and Anytime Upgrade, enhancing customer retention and service flexibility [118]. - Consumer data revenue increased by $2 million and $4 million for the three and nine months ended September 30, 2024, respectively, driven by higher recurring monthly charges [164]. - Business data revenue rose by $20 million and $25 million for the three and nine months ended September 30, 2024, respectively, primarily due to increased sales to healthcare and education customers [167]. Operating Expenses - Operating expenses increased by $5 million and $8 million for the three and nine months ended September 30, 2024, respectively, mainly due to higher distribution costs [170]. - Selling, general, and administrative expenses rose by $6 million and $9 million for the three and nine months ended September 30, 2024, respectively, primarily due to increased labor-related costs [171]. - Other expenses, net increased by $134 million and $200 million for the three and nine months ended September 30, 2024, respectively, primarily due to increased interest expense and losses on financial instruments [140]. Debt and Liquidity - As of September 30, 2024, GCI Holdings had variable rate debt of $427 million with a weighted average interest rate of 7.0% and fixed rate debt of $600 million with a weighted average interest rate of 4.8% [177]. - The company expects corporate cash and other available sources of liquidity to cover corporate expenses for the foreseeable future [156]. - GCI Holdings is in compliance with all debt maintenance covenants as of September 30, 2024 [157]. Economic and Regulatory Environment - The Alaska economy's dependence on the oil industry poses risks to GCI Holdings, particularly in the face of potential recessionary pressures and inflation [111]. - GCI Holdings is closely monitoring inflation-sensitive costs, which could impact margins if not offset by pricing adjustments or cost reductions [113]. - The company continues to face uncertainties related to regulatory changes affecting USF programs, which could materially impact revenue and accounts receivable [114]. Cash Flow and Investments - Cash flow from operating activities provided $103 million for the nine months ended September 30, 2024, compared to a use of $46 million in the prior year, driven by increased operating income [152]. - For the nine months ended September 30, 2024, net cash flows from investing activities included capital expenditures of $183 million, compared to $149 million in 2023, with a net outflow offset by the sale of Charter Class A common stock for $226 million in 2024 and $42 million in 2023 [153]. - During the same period, net cash flows used in financing activities were approximately $300 million for repurchasing 3.125% Debentures due 2053 and net repayments of approximately $670 million on the Margin Loan Agreement, partially offset by the issuance of $860 million in 3.125% Exchangeable Senior Debentures due 2054 [154]. Interest and Tax - Interest expense decreased by $8 million and $2 million during the three and nine months ended September 30, 2024, respectively, due to lower amounts outstanding on the Margin Loan Facility and lower interest rates [131]. - The effective income tax rate for the three and nine months ended September 30, 2024, was 22%, consistent with the prior year for the three months and slightly lower than 23% for the nine months [145].