GCI Divestiture - Liberty Broadband completed the GCI Divestiture on July 14, 2025, resulting in GCI Liberty becoming an independent, publicly traded company [145]. - Following the GCI Divestiture, Liberty Broadband's primary asset is its equity method investment in Charter, controlling 25.01% of Charter's voting power [146]. - The GCI Divestiture involved a distribution of 0.20 shares of GCI Liberty's common stock for each share of Liberty Broadband common stock held as of June 30, 2025 [156]. - Liberty Broadband expects the GCI Divestiture to be taxable, with potential corporate level tax liabilities exceeding $420 million [150]. - The company anticipates that the GCI Divestiture will be presented as a discontinued operation from the date of the divestiture [159]. Financial Performance - GCI Holdings reported a revenue increase of $15 million (6.1%) for Q2 2025 compared to Q2 2024, totaling $261 million, and a $36 million (7.3%) increase for the first half of 2025, totaling $527 million [175]. - Consolidated operating income rose by $20 million (95.2%) for Q2 2025, reaching $41 million, and increased by $35 million (71.4%) for the first half of 2025, totaling $84 million [176]. - Adjusted OIBDA increased by $19 million (23.8%) for Q2 2025, totaling $99 million, and by $33 million (20.0%) for the first half of 2025, totaling $198 million [180]. - For the three months ended June 30, 2025, the company reported net earnings of $383 million, compared to $195 million for the same period in 2024, reflecting a significant increase [198]. - Revenue for GCI Holdings increased to $261 million for the three months ended June 30, 2025, up from $246 million in the same period of 2024, representing a growth of 6.1% [213]. - Operating income for GCI Holdings improved to $51 million for the three months ended June 30, 2025, compared to $30 million for the same period in 2024, indicating a 70% increase [213]. - Cash flow from operating activities increased to $169 million for the six months ended June 30, 2025, compared to $79 million in the prior year, marking a 113.9% increase [203]. Charter Performance - Charter's revenue increased by $81 million (0.6%) for Q2 2025, totaling $13.766 billion, and by $137 million (0.5%) for the first half of 2025, totaling $27.501 billion [187]. - Operating income for Charter increased by $16 million (0.5%) for Q2 2025, reaching $3.279 billion, and by $122 million (1.9%) for the first half of 2025, totaling $6.516 billion [190]. - Charter's share of earnings from affiliates increased by $48 million (16.2%) for Q2 2025, totaling $345 million, and by $86 million (14.9%) for the first half of 2025, totaling $663 million [184]. - Charter added 500,000 mobile lines in Q2 2025, with improved Internet and video losses compared to the prior year [169]. - Charter activated approximately 123,000 subsidized rural passings in Q2 2025, with a total investment of $545 million in rural construction initiatives [172]. - Charter's operating expenses, excluding stock-based compensation, increased by $55 million (0.7%) for Q2 2025, totaling $8.154 billion, driven by higher mobile service costs and labor expenses [188]. Economic and Market Conditions - The Alaska economy, which GCI Holdings is heavily reliant on, faces recessionary pressures due to volatility in oil prices and inflation, potentially impacting demand for GCI's services [161]. - GCI Holdings has experienced inflationary pressures on costs, particularly for materials and labor, which may affect its ability to maintain margins [162]. - The effective income tax rate for the six months ended June 30, 2025, was 4%, significantly lower than the 22% rate for the same period in 2024 [195]. Debt and Interest Rate Exposure - The company is exposed to market risk from adverse changes in stock prices and interest rates, which could impact fair values, cash flows, and future earnings [223]. - Interest rate exposure arises from borrowing and investment activities, with a strategy to maintain a mix of fixed and variable rate debt to mitigate risk [224]. - As of June 30, 2025, variable rate debt amounts to $1,488 million with a weighted average interest rate of 6.2%, while fixed rate debt totals $965 million with a weighted average interest rate of 3.1% [225]. - GCI Holdings has variable rate debt of $373 million at a weighted average interest rate of 6.2% and fixed rate debt of $600 million at 4.8% [225]. - Corporate and other segments have variable rate debt of $1,115 million at 6.2% and fixed rate debt of $965 million at 3.1% [225]. - The investment in Charter, an equity method affiliate, is publicly traded and subject to market risk not reflected in the financial statements [225]. Business Strategy and Operations - Liberty Broadband entered into a Merger Agreement with Charter, which includes provisions for monthly share repurchases of at least $100 million during the transaction period [151]. - The company expects to exit the video business by the end of 2025 after receiving regulatory approval to discontinue video services [216]. - Consumer wireless revenue increased by $4 million for the three months ended June 30, 2025, driven by an increase in wireless subscribers [215]. - Business data revenue rose by $16 million for the three months ended June 30, 2025, primarily due to service upgrades with existing healthcare and education customers [217]. - Operating expenses decreased by $4 million for the three months ended June 30, 2025, compared to the same period in 2024, due to reduced distribution costs [220]. - Stock-based compensation remained relatively flat for both the three and six months ended June 30, 2025, compared to the prior year periods [222]. - Depreciation and amortization increased by $3 million for the three and six months ended June 30, 2025, due to a general increase in assets placed in service after March 31, 2024 [222].
Liberty Broadband(LBRDK) - 2025 Q2 - Quarterly Report