Liberty Broadband(LBRDA) - 2024 Q4 - Annual Report

Ownership and Control - Liberty Broadband controls 25.01% of the aggregate voting power of Charter Communications, Inc. [457] - As of December 31, 2024, Liberty Broadband owned approximately 45.3 million shares of Charter Class A common stock, representing an approximate 31.9% economic ownership interest in Charter [467] Debt and Financial Obligations - As of November 12, 2024, Liberty Broadband had existing debt of $2.6 billion, which will be repaid or assumed by Charter prior to the closing of the Combination [463] - Total material cash requirements amount to $6,445 million, with $3,666 million in debt due, and $2,138 million for interest expense and preferred stock dividends [547] - As of December 31, 2024, GCI Holdings had $451 million in variable rate debt with a weighted average interest rate of 6.3% and $600 million in fixed rate debt with a weighted average interest rate of 4.8% [583] Combination and Divestiture - The Combination is expected to close on June 30, 2027, subject to the completion of the GCI Divestiture and other customary closing conditions [462] - Liberty Broadband will divest the GCI business prior to the closing of the Combination, which is expected to be taxable to Liberty Broadband and its stockholders [460] - The GCI Divestiture is expected to result in a net decrease of approximately 11.5 million shares of Charter Class A common stock outstanding [463] - Charter will issue approximately 34.0 million shares of Charter Class A common stock to holders of Liberty Broadband common stock at the closing of the Combination [463] GCI Holdings Performance - GCI Holdings reported a revenue increase of $35 million for the year ended December 31, 2024, reaching $1,016 million compared to $981 million in 2023 [508] - Operating income for GCI Holdings increased by $27 million to $144 million for the year ended December 31, 2024, compared to $117 million in 2023 [510] - Adjusted OIBDA for GCI Holdings was $362 million for the year ended December 31, 2024, slightly up from $361 million in 2023 [508] - GCI Holdings reported total revenue of $1,016 million for the year ended December 31, 2024, an increase from $981 million in 2023 [569] - Consumer data revenue increased by $5 million to $238 million in 2024, driven by higher recurring monthly charges [570] - Business data revenue increased by $42 million for the year ended December 31, 2024, driven by increased sales to health care and education customers [573] Compliance and Legal Matters - GCI Holdings recognized an estimated liability of $27 million related to RHC Program compliance issues, including a $15 million settlement expense recorded in 2022 [489] - The company entered into a final settlement agreement with the FCC and DOJ, resulting in a total cash payment of $41 million in 2023 [492] - GCI Holdings is unable to estimate potential losses related to ongoing compliance issues identified in the third quarter of 2022 [491] Charter Communications Performance - Charter lost 508,000 Internet customers in 2024, attributed to the end of the FCC's Affordable Connectivity Program and competitive pressures [500] - Charter added 2,117,000 mobile lines in 2024, benefiting from its pricing and packaging strategy [500] - Charter's revenue increased by $478 million to $55,085 million in 2024, primarily due to growth in mobile lines and average revenue per customer [522] - Charter's Adjusted OIBDA increased by $495 million to $22,442 million in 2024 compared to 2023 [524] Cash Flow and Financial Activities - Net cash provided by operating activities increased by $88 million to $104 million in 2024 compared to 2023, driven by timing differences in working capital accounts [538] - Net cash used in financing activities decreased by $209 million to $181 million in 2024 compared to 2023 [538] - Net cash flows used in financing activities included repurchase of approximately $1,415 million in exchangeable senior debentures and issuance of $1,265 million in 3.125% Debentures due 2053 [543] Taxation - The effective income tax rate decreased to 20% in 2024 from 23% in 2023, primarily due to federal tax credits and non-taxable proceeds [531][532] Operating Expenses and Other Financial Metrics - Operating expenses for GCI Holdings were $257 million in 2024, compared to $245 million in 2023 [569] - Selling, general and administrative expenses increased by $22 million for the year ended December 31, 2024, primarily due to increased labor-related costs [578] - Stock-based compensation decreased by $3 million for the year ended December 31, 2024, due to lower value of new awards granted [579] - Depreciation and amortization decreased by $23 million for the year ended December 31, 2024, as certain assets became fully depreciated [580] Future Plans - The company expects corporate cash and other available sources of liquidity to cover corporate expenses for the foreseeable future [544] - The company plans to exit the video business in 2025, subject to regulatory approvals [572][576]