Liberty Broadband Reports Third Quarter 2024 Financial Results
ENGLEWOOD, Colo.--(BUSINESS WIRE)--November 07, 2024--
Liberty Broadband Corporation ("Liberty Broadband") (Nasdaq: LBRDA, LBRDK, LBRDP) today reported third quarter 2024 results.
Headlines include(1) :
-- Fair value of Charter investment was $14.8 billion as of September 30th
-- As described in the Schedule 13D/A filed with the SEC on September 23rd,
Liberty Broadband and the Special Committee of the Board of Directors of
Charter are discussing a proposed all-stock combination of Liberty
Broadband with Charter
-- Proposed transaction would rationalize dual corporate structure
and provide enhanced trading liquidity
-- Additional updates will be provided only if and when definitive
terms are agreed
-- From August 1, 2024 through October 31, 2024, Liberty Broadband received
$74 million of proceeds from sale of 225 thousand Charter shares to
Charter
-- Maintained fully diluted equity interest in Charter of 26%(2)
-- In the third quarter, GCI(3) increased revenue 9% to $262 million,
generated $42 million in operating income and grew Adjusted OIBDA(4) 12%
to $100 million
Share Repurchases
There were no repurchases of Liberty Broadband's common stock (Nasdaq: LBRDA, LBRDK) from August 1, 2024 through October 31, 2024. The total remaining repurchase authorization for Liberty Broadband as of October 31, 2024 is approximately $1.7 billion.
Charter Ownership
Under the terms of Liberty Broadband and Charter's stockholder agreement, Liberty Broadband has sold and will continue to sell to Charter a number of shares of Charter Class A common stock as is necessary to maintain Liberty Broadband's percentage equity interest at 26%(2) on a fully diluted basis. Such sales are executed by Liberty Broadband monthly based on Charter's repurchase activity in the month prior.
From August 1, 2024 through October 31, 2024, Liberty Broadband sold 225 thousand shares of Charter Class A common stock to Charter for total proceeds of $74 million.
Balance Sheet
The following presentation is provided to separately identify cash and liquid investments, debt and public holdings of Liberty Broadband as of June 30, 2024 and September 30, 2024.
(amounts in millions) 6/30/2024 9/30/2024
----------- -----------
Cash and Cash Equivalents:
GCI Holdings $ 47 $ 47
Corporate and Other 26 121
------ ------
Total Liberty Broadband Consolidated
Cash $ 73 $ 168
------ ------
Fair Value of Public Holdings in
Charter(a) $ 13,730 $ 14,769
Debt:
Senior Notes(b) $ 600 $ 600
Senior Credit Facility 443 423
Tower Obligations and Other(c) 88 87
------ ------
Total GCI Holdings Debt $ 1,131 $ 1,110
------ ------
GCI Leverage(d) 3.2x 3.1x
Charter Margin Loan $ 1,330 $ 790
3.125% Exchangeable Senior Debentures due
2053(e) 1,265 965
3.125% Exchangeable Senior Debentures due
2054(e) -- 860
------ ------
Total Corporate Level Debt $ 2,595 $ 2,615
------ ------
Total Liberty Broadband Debt $ 3,726 $ 3,725
------ ------
Fair market value adjustment and deferred
loan costs (33) 70
Tower obligations and finance leases
(excluded from GAAP Debt) (84) (83)
------ ------
Total Liberty Broadband Debt (GAAP) $ 3,609 $ 3,712
------ ------
Other Financial Obligations:
Preferred Stock(f) 180 180
_______________________
a) Represents fair value of the investment in Charter as of June 30, 2024
and September 30, 2024.
b) Principal amount of Senior Notes.
c) Includes the Wells Fargo Note Payable and current and long-term
obligations under tower obligations and finance leases.
d) As defined in GCI's credit agreement.
e) Principal amount of Exchangeable Senior Debentures exclusive of fair
market value adjustments.
f) Liquidation value of preferred stock. Preferred stock has a 7% coupon,
$25 per share liquidation preference plus accrued and unpaid dividends
and 1/3 vote per share. The redemption date is the first business day
following March 8, 2039. The preferred stock is considered a liability
for GAAP purposes.
Liberty Broadband cash increased $95 million in the third quarter primarily due to proceeds from Charter share sales. GCI cash was flat in the third quarter as cash from operations were offset by capital expenditures (net of grant proceeds) and net debt repayment.
Liberty Broadband debt was relatively flat in the third quarter as net debt issuance at Liberty Broadband offset net debt repayment at GCI. On July 2, 2024, Liberty Broadband closed a private offering of $860 million aggregate principal amount of 3.125% exchangeable senior debentures due 2054 and used net proceeds to repay $540 million of borrowings under the Charter margin loan, leaving $1.15 billion of available capacity under the Charter margin loan, and also repurchased $300 million in aggregate principal amount of 3.125% exchangeable senior debentures due 2053. GCI repaid $20 million under its senior credit facility in the third quarter. As of September 30, 2024, GCI's credit facility has undrawn capacity of $367 million (net of letters of credit), and GCI's leverage as defined in its credit agreement is 3.1x.
GCI Operating and Financial Results
3Q23 3Q24 % Change
------------ ------------ ----------
(amounts in millions,
except operating
metrics)
GCI Consolidated
Financial Metrics
Revenue
Consumer $ 114 $ 116 2%
Business 126 146 16%
------- -------
Total revenue $ 240 $ 262 9%
======= =======
Operating income $ 30 $ 42 40%
Operating income margin
(%) 12.5% 16.0% 350 bps
Adjusted OIBDA(a) $ 89 $ 100 12%
Adjusted OIBDA margin(a)
(%) 37.1% 38.2% 110 bps
GCI Consumer
Financial Metrics
Revenue
Data $ 57 $ 59 4%
Wireless 47 47 --%
Other 10 10 --%
------- -------
Total revenue $ 114 $ 116 2%
======= =======
Operating Metrics
Data:
Cable modem
subscribers(b) 159,300 156,400 (2)%
Wireless:
Lines in service(c) 200,300 200,300 --%
GCI Business
Financial Metrics
Revenue
Data $ 105 $ 125 19%
Wireless 12 12 --%
Other 9 9 --%
------- -------
Total revenue $ 126 $ 146 16%
======= =======
________________________
a) See reconciling schedule 1.
b) A cable modem subscriber is defined by the purchase of cable modem
service regardless of the level of service purchased. If one entity
purchases multiple cable modem service access points, each access point
is counted as a subscriber. Data cable modem subscribers as of September
30, 2024 include 900 subscribers that were reclassified from GCI
Business to GCI Consumer subscribers in the first quarter of 2024 and
are not new additions.
c) A wireless line in service is defined as a wireless device with a
monthly fee for services. Wireless lines in service as of September 30,
2024 include 1,800 lines that were reclassified from GCI Business to GCI
Consumer lines in the first quarter of 2024 and are not new additions.
Unless otherwise noted, the following discussion compares financial information for the three months ended September 30, 2024 to the same period in 2023.
GCI revenue increased 9% in the third quarter. Consumer revenue increased 2% driven by growth in data revenue. Business revenue increased 16% driven by a strong upgrade cycle in schools and healthcare corporations in remote Alaska.
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