Liberty Broadband(LBRDA) - 2025 Q1 - Quarterly Results

First Quarter 2025 Highlights This section summarizes key corporate developments and GCI's strong financial performance in the first quarter of 2025 Corporate Updates Liberty Broadband is undergoing acquisition by Charter, repurchasing shares, redeeming debentures, and planning a GCI spin-off - Liberty Broadband entered into a definitive agreement to be acquired by Charter on November 12, 2024. Holders of Liberty Broadband common stock will receive 0.236 of a share of Charter common stock per share[2] - Charter will repurchase $100 million of its Class A common stock from Liberty Broadband monthly until the completion of the proposed combination, subject to conditions[3] - Liberty Broadband issued a redemption notice for $860 million principal amount of its 3.125% exchangeable senior debentures due 2054, with cash settlement expected by May 2025[4] - Liberty Broadband is on track to complete the spin-off of its GCI business in the summer of 2025[4] GCI Business Performance Highlights GCI, Liberty Broadband's principal operating asset, reported strong first-quarter 2025 results with significant growth across key financial metrics GCI Q1 2025 Performance Highlights | Metric | 1Q25 (millions) | % Change YoY | | :--------------- | :-------------- | :----------- | | Revenue | $266 | 9% | | Operating Income | $56 | - | | Adjusted OIBDA | $111 | 23% | Balance Sheet Analysis This section analyzes Liberty Broadband's cash, public holdings, and debt structure, highlighting changes and refinancing activities Cash and Public Holdings Liberty Broadband's consolidated cash and restricted cash significantly increased in Q1 2025, primarily due to proceeds from Charter share sales. The fair value of its investment in Charter also saw an increase Cash and Public Holdings (amounts in millions) | Item | 12/31/2024 | 3/31/2025 | | :---------------------------------------------------------------- | :--------- | :-------- | | Total Liberty Broadband Consolidated Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $229 | $565 | | Fair Value of Public Holdings in Charter | $15,524 | $16,386 | - Liberty Broadband's cash and restricted cash increased by $336 million in the first quarter, primarily from Charter share sales proceeds. GCI's cash increased by $74 million due to cash from operations exceeding capital expenditures[8] - From February 1, 2025, through April 30, 2025, Liberty Broadband sold 830 thousand Charter Class A common stock shares to Charter for $300 million, intended for debt service[5] Debt Structure and Refinancing Liberty Broadband's debt increased due to GCI's credit facility refinancing and the redemption of exchangeable debentures Total Debt (amounts in millions) | Item | 12/31/2024 | 3/31/2025 | | :------------------------ | :--------- | :-------- | | Total Liberty Broadband Debt | $3,742 | $3,748 | | Total Liberty Broadband Debt (GAAP) | $3,756 | $3,813 | - Liberty Broadband's debt increased modestly in the first quarter due to net borrowing related to GCI's senior credit facility refinancing[9] - In March 2025, GCI refinanced its existing $550 million revolving credit facility (due Oct 2026) with a new $450 million facility maturing in March 2030, and its $250 million Term Loan A (due Oct 2027) with a new $300 million Term Loan A maturing in March 2031[9] - Liberty Broadband issued a redemption notice for all of its 3.125% exchangeable senior debentures due 2054 for cash, with redemptions occurring in April 2025 or exchanges settled in May 2025[10] GCI Operating and Financial Results This section details GCI's consolidated, consumer, and business segment performance, along with operating expenses and capital expenditures GCI Consolidated Performance GCI demonstrated strong consolidated financial performance in Q1 2025, with significant year-over-year growth in revenue, operating income, and Adjusted OIBDA, alongside improved margins GCI Consolidated Financial Metrics (amounts in millions) | Metric | 1Q24 | 1Q25 | % Change | | :---------------------- | :---- | :---- | :------- | | Total revenue | $245 | $266 | 9 % | | Operating income | $37 | $56 | 51 % | | Operating income margin (%) | 15.1% | 21.1% | 600 bps | | Adjusted OIBDA | $90 | $111 | 23 % | | Adjusted OIBDA margin (%) | 36.7% | 41.7% | 500 bps | GCI Consumer Segment GCI's Consumer segment experienced revenue growth, primarily driven by wireless services, including subsidies for high-cost areas. Data subscribers saw a slight decrease, while wireless lines in service increased GCI Consumer Financial Metrics (amounts in millions) | Revenue Type | 1Q24 | 1Q25 | % Change | | :----------- | :--- | :--- | :------- | | Data | $60 | $61 | 2 % | | Wireless | $47 | $50 | 6 % | | Other | $10 | $10 | — % | | Total revenue | $117 | $121 | 3 % | GCI Consumer Operating Metrics | Metric | 1Q24 | 1Q25 | % Change | | :------------------ | :-------- | :-------- | :------- | | Cable modem subscribers | 159,800 | 155,800 | (3)% | | Wireless lines in service | 199,000 | 202,300 | 2 % | - Consumer revenue increased 3%, primarily driven by growth in rural wireless, including subsidies that support high-cost areas[15] GCI Business Segment GCI's Business segment demonstrated robust revenue growth, largely fueled by a strong upgrade cycle in schools and healthcare corporations in remote Alaska, particularly in data services GCI Business Financial Metrics (amounts in millions) | Revenue Type | 1Q24 | 1Q25 | % Change | | :----------- | :--- | :--- | :------- | | Data | $108 | $128 | 19 % | | Wireless | $12 | $10 | (17)% | | Other | $8 | $7 | (13)% | | Total revenue | $128 | $145 | 13 % | - Business revenue increased 13%, driven by the continued strong upgrade cycle in schools and healthcare corporations in remote Alaska, which began in the third quarter of 2024[15] Operating Expenses and Capital Expenditures GCI's operating income and Adjusted OIBDA rose due to revenue growth and expense management, with significant capital expenditures planned for network expansion - Operating income increased $19 million and Adjusted OIBDA increased $21 million in the first quarter, driven by higher revenue and decreased operating expenses, partially offset by increased selling, general and administrative expenses[16] - Operating expenses decreased primarily due to lower distribution costs for healthcare, education, and consumer customers, including temporary cost savings from a fiber break on a third-party network[16] - Selling, general and administrative expenses grew due to increases in labor-related and software subscription costs[16] - GCI spent $49 million, net, on capital expenditures in Q1, primarily for wireless and data network improvements in rural Alaska[17] - Net capital expenditures for the full year 2025 are expected to be approximately $250 million, focusing on middle and last-mile connectivity and network expansion in rural Alaska, including the Bethel and AU-Aleutians fiber projects, largely to fulfill Alaska Plan build-out requirements[17] Liberty Broadband Consolidated Financial Metrics Liberty Broadband reported consolidated financial metrics for Q1 2025, showing an increase in total revenue, operating income, and Adjusted OIBDA compared to the prior year, primarily driven by the performance of GCI Holdings Liberty Broadband Consolidated Financial Metrics (amounts in millions) | Metric | 1Q24 | 1Q25 | | :------------------------- | :--- | :--- | | Total Liberty Broadband Revenue | $245 | $266 | | Total Liberty Broadband Operating Income | $28 | $43 | | Total Liberty Broadband Adjusted OIBDA | $85 | $99 | Non-GAAP Financial Measures This section defines Adjusted OIBDA and provides reconciliations for GCI Holdings and Liberty Broadband consolidated results Definition and Rationale of Adjusted OIBDA Adjusted OIBDA is a non-GAAP measure used to assess operational strength by adjusting operating income for non-cash and non-recurring items - Adjusted OIBDA is defined as operating income (loss) plus depreciation and amortization, stock-based compensation, separately reported litigation settlements, restructuring and impairment charges[21] - Adjusted OIBDA is considered an important indicator of operational strength and performance, identifying items not directly reflective of business performance or ongoing trends[22] - Adjusted OIBDA margin is defined as Adjusted OIBDA divided by revenue[21] GCI Holdings Adjusted OIBDA Reconciliation The reconciliation shows the calculation of GCI Holdings' Adjusted OIBDA from its operating income for the first quarters of 2024 and 2025, highlighting the impact of depreciation, amortization, and stock-based compensation GCI Holdings Adjusted OIBDA Reconciliation (amounts in millions) | Metric | 1Q24 | 1Q25 | | :-------------------------- | :--- | :--- | | GCI Holdings Operating Income | $37 | $56 | | Depreciation and amortization | $50 | $53 | | Stock-based compensation | $3 | $2 | | GCI Holdings Adjusted OIBDA | $90 | $111 | Liberty Broadband Adjusted OIBDA Reconciliation This reconciliation details the calculation of Liberty Broadband's consolidated Adjusted OIBDA from its operating income for the first quarters of 2024 and 2025, including adjustments for depreciation, amortization, and stock-based compensation Liberty Broadband Adjusted OIBDA Reconciliation (amounts in millions) | Metric | 1Q24 | 1Q25 | | :------------------------------ | :--- | :--- | | Liberty Broadband Operating Income | $28 | $43 | | Depreciation and amortization | $50 | $53 | | Stock-based compensation | $7 | $3 | | Liberty Broadband Adjusted OIBDA | $85 | $99 | Condensed Consolidated Financial Statements This section presents Liberty Broadband's condensed consolidated balance sheet, statement of operations, and statement of cash flows Condensed Consolidated Balance Sheet The condensed consolidated balance sheet provides a snapshot of Liberty Broadband's financial position as of March 31, 2025, compared to December 31, 2024, showing changes in assets, liabilities, and equity Condensed Consolidated Balance Sheet (amounts in millions) | Item | March 31, 2025 | December 31, 2024 | | :---------------------------------------------------------------- | :------------- | :---------------- | | Assets | | | | Total current assets | $797 | $423 | | Investment in Charter, accounted for using the equity method | $13,060 | $13,057 | | Total assets | $16,995 | $16,687 | | Liabilities and Equity | | | | Total current liabilities | $573 | $200 | | Long-term debt, net | $3,443 | $3,753 | | Total liabilities | $6,928 | $6,879 | | Total equity | $10,067 | $9,808 | Condensed Consolidated Statement of Operations The condensed consolidated statement of operations outlines Liberty Broadband's financial performance for the three months ended March 31, 2025, compared to the same period in 2024, detailing revenue, expenses, and net earnings Condensed Consolidated Statement of Operations (amounts in millions, except per share amounts) | Item | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :---------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue | $266 | $245 | | Operating income (loss) | $43 | $28 | | Share of earnings (losses) of affiliate | $318 | $280 | | Net earnings (loss) attributable to Liberty Broadband shareholders | $268 | $241 | | Basic net earnings (loss) per common share | $1.87 | $1.69 | | Diluted net earnings (loss) per common share | $1.87 | $1.69 | Condensed Consolidated Statement of Cash Flows The condensed consolidated statement of cash flows presents the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025, compared to the same period in 2024, showing a significant net increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (amounts in millions) | Item | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :---------------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $78 | $52 | | Net cash provided by (used in) investing activities | $257 | $18 | | Net cash provided by (used in) financing activities | $1 | $(132) | | Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | $336 | $(62) | | Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | $565 | $114 | Important Notices and Forward-Looking Statements This section provides conference call access and a cautionary note on forward-looking statements, emphasizing inherent risks and no update obligation - Liberty Broadband's earnings conference call was scheduled for 11:15 a.m. (E.T.) on May 7, 2025, accessible via dialing (877) 407-3944 or (412) 902-0038, passcode 13749437, or via webcast on their investor relations website[19] - The press release contains forward-looking statements concerning business strategies, financial prospects, capital expenditures, matters related to the Charter investment and combination, GCI divestiture, and other non-historical facts[20] - These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including market acceptance, competitive issues, regulatory matters, access to capital, changes in law, investment opportunities, and general market conditions[20] - Liberty Broadband expressly disclaims any obligation to disseminate updates or revisions to any forward-looking statement[20]