GCI Liberty, Inc. (“GCI Liberty”) (Nasdaq: GLIBA, GLIBP) today reported
first quarter 2019 results. Headlines include(1):
-
GCI(2) total revenue declined 1% compared to the first
quarter 2018- GCI Consumer revenue down 1%, with Consumer data revenue up 5%
- GCI Business revenue decreased 1%, with Business data revenue up 1%
“The GCI team continues to grow data revenue while implementing cost
savings measures, including organizational restructuring, to offset a
challenging operating and regulatory environment,” said Greg Maffei, GCI
Liberty President and CEO.
Discussion of Results
Unless otherwise noted, the following discussion compares financial
information for the three months ended March 31, 2019 to pro forma
financial information for the same period in 2018.
Although GCI’s results are only included in GCI Liberty’s results
beginning March 9, 2018, we believe discussion of the standalone results
of GCI for all periods presented promotes a better understanding of the
overall results of the business. The pro forma financial information
presented herein for the three months ended March 31, 2018 was prepared
assuming the acquisition took place on January 1, 2017. The pro forma
financial information is presented for illustrative purposes only and
does not represent what the results of operations of GCI would have been
had the acquisition occurred at that time. GCI’s pro forma operating
results include acquisition accounting adjustments primarily related to
revenue, depreciation, amortization, stock compensation and the
exclusion of transaction related costs.
GCI
GCI receives support from various Universal Service Fund (“USF”)
programs: high cost, low income, rural health care, and schools and
libraries. The USF Rural Health Care (“RHC”) Program subsidizes the
rates for services provided to rural health care providers. In November
2017, the Universal Service Administrative Co. (“USAC”) requested
further information to support GCI’s rural rates charged to a number of
its RHC Program customers for the year that runs July 1,
2017 through June 30, 2018 (the “2017 Funding Year”). On October 10,
2018, the Federal Communications Commission (“FCC”) staff notified GCI
of their decision to reduce RHC support payments to GCI for the 2017
Funding Year by $27.8 million, an approximate 26% reduction, and to
apply the same cost methodology to subsequent funding years. Pro forma
financials for the first quarter of 2018 reflect this reduction. GCI
filed an appeal to the FCC staff decision on November 9, 2018 and a
supplemental appeal on January 29, 2019. GCI will continue to pursue
this appeal and expects to reduce future RHC Program revenue by a
similar rate until a final resolution is reached with the FCC.
Separately, on November 30, 2018, GCI received multiple notices from
USAC denying requested funding from an RHC customer (the “Customer”) for
the 2017 Funding Year. In November 2017, USAC requested information from
the Customer related to bidding process documentation for two separate
service contracts they have with GCI. The Customer responded, but USAC
denied the funding based on the determination that bids previously
received were not submitted with the original funding request and/or
that bidding information submitted was related to the wrong bidding
year. The Customer filed an appeal with USAC on January 29, 2019 and
made a supplemental filing on March 12, 2019.
On May 6, 2019, USAC denied the appeal. As a result of the denial, GCI
has taken a reserve of $21 million and an associated bad debt expense
has been recorded that impacted operating income and adjusted OIBDA(3),
representing the portion of revenue for the Customer that would have
otherwise been subsidized by the RHC Program recognized from July 1,
2017 through March 31, 2019. Going forward, GCI will not recognize RHC
revenue to the extent services continue to be provided to the Customer,
which has historically approximated $12 million per year, until an
adequate level of clarity is reached on the matter and the applicable
revenue recognition criteria are met. GCI expects the Customer to appeal
the latest USAC decision to the Wireline Competition Bureau of the FCC
within 60 days.
“We are deeply disappointed by the recent appeal denial by USAC, but in
2019 GCI will focus on our core strengths: our network speed and
reliability. The network investments we make in 2019 will bring our
urban wireless service on par with GCI’s high speed internet service
which has become a flagship product for the company,” said GCI CEO, Ron
Duncan. “We believe the combination of our superior wireline network and
improved wireless service will be a competitive advantage for the
company as consumer demand for data, especially mobile data, grows.”
The following table provides GCI’s operating metrics and pro forma
financial results for the first quarter of 2018 and 2019.
| (amounts in thousands, except operating metrics) | 1Q18 | 1Q19 | % Change | |||||||||||
| GCI Consolidated Financial Metrics | ||||||||||||||
| Revenue | ||||||||||||||
| Consumer | $ | 107,828 | $ | 106,590 | (1 | ) | % | |||||||
| Business | 107,230 | 106,621 | (1 | ) | % | |||||||||
| Total Revenue | $ | 215,058 | $ | 213,211 | (1 | ) | % | |||||||
| Operating Income | $ | 3,844 | $ | (23,978 | ) | (724 | ) | % | ||||||
| Operating Income Margin (%) | 1.8 | % | (11.2 | ) | % | (1,300 | ) | bps | ||||||
| Adjusted OIBDA(1) | $ | 67,789 | $ | 44,471 | (34 | ) | % | |||||||
| Adjusted OIBDA Margin(1) (%) | 31.5 | % | 20.9 | % | (1,060 | ) | bps | |||||||
| GCI Consumer | ||||||||||||||
| Financial Metrics | ||||||||||||||
| Revenue | ||||||||||||||
| Wireless | $ | 40,990 | $ | 39,907 | (3 | ) | % | |||||||
| Data | 39,062 | 41,178 | 5 | % | ||||||||||
| Video | 22,477 | 21,021 | (6 | ) | % | |||||||||
| Voice | 5,299 | 4,484 | (15 | ) | % | |||||||||
| Total Revenue | $ | 107,828 | $ | 106,590 | (1 | ) | % | |||||||
| Operating Metrics | ||||||||||||||
| Wireless Lines in Service(2) | 196,500 | 188,700 | (4 | ) | % | |||||||||
| Data – Cable Modem Subscribers(3) | 125,400 | 124,800 | — | % | ||||||||||
| Video | ||||||||||||||
| Basic Subscribers(4) | 93,900 | 86,700 | (8 | ) | % | |||||||||
| Homes Passed | 252,900 | 253,400 | — | % | ||||||||||
| Voice – Total Access Lines in Service(5) | 49,300 | 43,600 | (12 | ) | % | |||||||||
| GCI Business | ||||||||||||||
| Financial Metrics | ||||||||||||||
| Revenue | ||||||||||||||
| Wireless | $ | 23,803 | $ | 22,757 | (4 | ) | % | |||||||
| Data | 68,327 | 69,035 | 1 | % | ||||||||||
| Video | 3,685 | 3,825 | 4 | % | ||||||||||
| Voice | 11,415 | 11,004 | (4 | ) | % | |||||||||
| Total Revenue | $ | 107,230 | $ | 106,621 | (1 | ) | % | |||||||
| Operating Metrics | ||||||||||||||
| Wireless Lines in Service(2) | 22,100 | 20,900 | (5 | ) | % | |||||||||
| Data – Cable Modem Subscribers(3) | 9,200 | 9,000 | (2 | ) | % | |||||||||
|
Voice – Total Access Lines in Service(5) |
37,600 | 35,700 | (5 | ) | % | |||||||||
| 1) | See reconciling schedule 1. | |
| 2) |
A wireless line in service is defined as a revenue generating wireless device. |
|
| 3) |
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. |
|
| 4) |
A basic subscriber is defined as one basic tier of service delivered to an address or separate subunits thereof regardless of the number of outlets purchased. |
|
| 5) |
A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network. |
|
GCI revenue declined in the first quarter driven by declines in Consumer
and Business wireless revenue driven by subscriber losses, a decrease in
USF high cost support, and wholesale customers moving backhaul circuits
off of the GCI network. These declines were partially offset by growth
in both Consumer and Business data revenue. Operating income and
adjusted OIBDA declined due to the $21 million RHC reserve, the decrease
in revenue and increased costs in the time and materials business,
partially offset by reduced selling, general and administrative expense
due to lower contract labor costs. The operating income decline was also
impacted by an increase in depreciation and amortization due to new
assets placed in service.
GCI Consumer
Consumer revenue was down 1% in the first quarter due to declines in
wireless, video and voice revenue primarily driven by subscriber losses.
These losses were partially offset by significant growth in consumer
data revenue due to customer migration to more expensive plans offering
higher speeds and data limits.
GCI Business
GCI Business revenue declined by 1% primarily due to the aforementioned
declines in wireless revenue driven by wholesale customers moving
backhaul circuits off of the GCI network. This was partially offset by
an increase in data revenue.
Capital Expenditures
Year to date, GCI has spent $30 million on capital expenditures,
excluding capitalized interest. Capital expenditure spending was related
primarily to improvements to data and wireless networks. GCI’s capital
expenditures for 2019 are expected to be approximately $140 million,
down from the $160 million expected as of last quarter.
Share Repurchases
From February 1, 2019 through April 30, 2019, GCI Liberty repurchased
approximately 84 thousand Series A GCI Liberty shares (Nasdaq: GLIBA) at
an average cost per share of $47.76 for total cash consideration of $4
million. The total remaining repurchase authorization for GCI Liberty is
approximately $494 million.
FOOTNOTES
| 1) |
GCI Liberty’s President and CEO, Greg Maffei, will discuss these highlights and other matters on GCI Liberty’s earnings conference call which will begin at 5:00 p.m. (E.D.T.) on May 9, 2019. For information regarding how to access the call, please see “Important Notice” later in this document. |
|
| 2) |
GCI Liberty’s principal asset is GCI Holdings, LLC (“GCI” or “GCI Holdings”), Alaska’s largest communications provider. Other assets include its interests in Charter Communications, Inc. (“Charter”) and Liberty Broadband Corporation, as well as its interest in LendingTree and subsidiary Evite. |
|
| 3) |
For a definition of adjusted OIBDA and adjusted OIBDA margin and applicable reconciliations, see the accompanying schedules. |
|
|
GCI LIBERTY GAAP FINANCIAL METRICS |
|||||||||
| (amounts in thousands) | 1Q18(1) | 1Q19 | |||||||
| Revenue | |||||||||
| GCI Holdings | $ | 56,792 | $ | 213,211 | |||||
| Corporate and other | 4,412 | 4,525 | |||||||
| Total GCI Liberty Revenue | $ | 61,204 | $ | 217,736 | |||||
| Operating Income | |||||||||
| GCI Holdings | $ | 3,096 | $ | (23,978 | ) | ||||
| Corporate and other | (10,465 | ) | (8,666 | ) | |||||
| Total GCI Liberty Operating Income | $ | (7,369 | ) | $ | (32,644 | ) | |||
| Adjusted OIBDA | |||||||||
| GCI Holdings | $ | 19,748 | $ | 44,471 | |||||
| Corporate and other | (5,860 | ) | (6,306 | ) | |||||
| Total GCI Liberty Adjusted OIBDA | $ | 13,888 | $ | 38,165 | |||||
| (1) |
First quarter 2018 results include results of GCI Holdings for the period following the GCI Liberty split-off on March 9, 2018. GCI Holdings GAAP financial statements for the first quarter of 2018 differ from GCI Holdings pro forma financial statements due to the impact of acquisition accounting, including deferred revenue adjustments, depreciation and amortization of intangible and tangible assets, RHC Program revenue adjustments and other adjustments. |
NOTES
The following financial information with respect to GCI Liberty’s
investments in equity securities and equity affiliates is intended to
supplement GCI Liberty’s consolidated statements of operations which are
included in its Form 10-Q for the three months ended December 31, 2018
and March 31, 2019.
Fair Value of Public Holdings
| (amounts in millions) | 12/31/2018 | 3/31/2019 | |||||||||
| Charter(1) | $ | 1,527 | $ | 1,859 | |||||||
| Liberty Broadband(1) | 3,074 | 3,916 | |||||||||
| LendingTree(2) | 756 | 1,211 | |||||||||
| Total | $ | 5,357 | $ | 6,986 | |||||||
| (1) |
Represents fair value of the investments in Charter and Liberty Broadband. A portion of the Charter equity securities are considered covered shares and subject to certain contractual restrictions in accordance with the indemnification obligation, as described below. |
|
| (2) |
Represents fair value of the investment in LendingTree. In accordance with GAAP, this investment is accounted for using the equity method of accounting and is included in the balance sheet of GCI Liberty at $174 million and $171 million at December 31, 2018 and March 31, 2019, respectively. |
|
Cash and Debt
The following presentation is provided to separately identify cash and
liquid investments and debt information.
| (amounts in millions) |
12/31/2018 |
3/31/2019 |
|||||||
| Cash: | |||||||||
| GCI | $ | 100 |
|
$ | 96 | ||||
| Corporate and other | 391 | 326 | |||||||
| Total GCI Liberty Consolidated Cash | $ | 491 |
|
$ | 422 | ||||
| Debt: | |||||||||
| Senior Notes | $ | 775 | $ | 775 | |||||
| Senior Credit Facility | 715 | 715 | |||||||
| Finance Leases and Other(1) | 142 | 138 | |||||||
| Total GCI Debt | $ | 1,632 |
|
$ | 1,628 | ||||
| Margin Loan | $ | 900 | $ | 900 | |||||
| 1.75% Exchangeable Senior Debentures due 2046 | 477 | 477 | |||||||
| Total Corporate Level Debt | $ | 1,377 | $ | 1,377 | |||||
| Total GCI Liberty Debt | $ | 3,009 |
|
$ | 3,005 | ||||
| Premium on debt and deferred financing fees | 12 | 69 | |||||||
| Finance leases and tower obligation (excluded from GAAP Debt) | (135 | ) | (131 | ) | |||||
| Total GCI Liberty Debt (GAAP) | $ | 2,886 | $ | 2,943 | |||||
| Other Financial Obligations: | |||||||||
| Indemnification Obligation(2) | $ | 79 | $ | 110 | |||||
| Preferred Stock(3) | 177 | 177 | |||||||
| GCI Leverage(4) | 5.2x | 5.9x | |||||||
| (1) |
Includes the Wells Fargo Note Payable and current and long-term obligations under finance leases and communication tower obligations. |
|
| (2) |
Indemnity to Qurate Retail, pursuant to an indemnification agreement (the “indemnification agreement”), with respect to the Liberty Interactive LLC (“LI LLC”) 1.75% exchangeable debentures due 2046 (the “Charter exchangeable debentures”), as described below. |
|
| (3) |
Preferred shares have 21-year term, 7% coupon, $25/share liquidation preference plus accrued and unpaid dividends and 1/3 vote per share. The preferred stock is considered a liability for GAAP purposes. |
|
| (4) | As defined in GCI’s credit agreement. | |
GCI Liberty cash decreased by $69 million in the first quarter primarily
due to share repurchases. Cash at GCI was relatively flat in the quarter
as cash from operations was offset by capital expenditures. GCI Liberty
debt remained relatively flat.
Pursuant to an indemnification agreement, GCI Liberty will compensate
Qurate Retail for any payments made in excess of the adjusted principal
amount of the LI LLC Charter exchangeable debentures to any holder that
exercises its exchange right on or before the put/call date of October
5, 2023. This indemnity is supported by a negative pledge in favor of
Qurate Retail on the reference shares of Class A common stock of Charter
held at GCI Liberty that underlie the LI LLC Charter exchangeable
debentures. The indemnification obligation on GCI Liberty’s balance
sheet is valued based on the estimated exchange feature in the LI LLC
Charter exchangeable debentures. As of March 31, 2019, a holder of the
LI LLC Charter exchangeable debentures does not have the ability to
exchange, and accordingly, the indemnification obligation has been
classified as a long-term liability. There is $332 million principal
amount of the LI LLC Charter exchangeable debentures outstanding as of
March 31, 2019.
Important Notice: GCI Liberty (Nasdaq: GLIBA, GLIBP) President
and CEO, Greg Maffei, will discuss GCI Liberty’s earnings release on a
conference call which will begin at 5:00 p.m. (E.D.T.) on May 9, 2019.
The call can be accessed by dialing (800) 458-4121 or (323) 794-2093,
passcode 6435458, at least 10 minutes prior to the start time. The call
will also be broadcast live across the Internet and archived on our
website. To access the webcast go to www.gciliberty.com/events.
Links to this press release and replays of the call will also be
available on GCI Liberty’s website.
This press release includes certain forward-looking statements under
the Private Securities Litigation Reform Act of 1995, including
statements about business strategies, market potential, future financial
prospects, capital expenditures, matters relating to the Universal
Service Administrative Company and Rural Health Care program, statements
about the indemnification by GCI Liberty, the continuation of our stock
repurchase program and other matters that are not historical facts. These
forward-looking statements involve many risks and uncertainties that
could cause actual results to differ materially from those expressed or
implied by such statements, including, without limitation, possible
changes in market acceptance of new products or services, competitive
issues, regulatory matters affecting our businesses, continued access to
capital on terms acceptable to GCI Liberty, changes in law and
government regulations that may impact the derivative instruments that
hedge certain of our financial risks, the availability of investment
opportunities and market conditions conducive to stock repurchases. These
forward-looking statements speak only as of the date of this press
release, and GCI Liberty expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in GCI
Liberty’s expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based. Please
refer to the publicly filed documents of GCI Liberty, including the most
recent Forms 10-K and Forms 10-Q, for additional information about GCI
Liberty and about the risks and uncertainties related to GCI Liberty’s
business which may affect the statements made in this press release.
NON-GAAP FINANCIAL MEASURES
This press release includes a presentation of adjusted OIBDA, which is a
non-GAAP financial measure, for GCI Liberty (and certain of its
subsidiaries) and GCI Holdings together with a reconciliation to that
entity or such businesses’ operating income, as determined under GAAP.
GCI Liberty defines adjusted OIBDA as revenue less cost of sales,
operating expenses, and selling, general and administrative expenses,
excluding all stock based compensation, and excludes from that
definition depreciation and amortization, separately reported litigation
settlements, insurance proceeds and restructuring and impairment charges
that are included in the measurement of operating income pursuant to
GAAP. Further, this press release includes adjusted OIBDA margin which
is also a non-GAAP financial measure. GCI Liberty defines adjusted OIBDA
margin as adjusted OIBDA divided by revenue.
GCI Liberty believes adjusted OIBDA is an important indicator of the
operational strength and performance of its businesses, including each
business’ ability to service debt and fund capital expenditures. In
addition, this measure allows management to view operating results and
perform analytical comparisons and benchmarking between businesses and
identify strategies to improve performance. Because adjusted OIBDA is
used as a measure of operating performance, GCI Liberty views operating
income as the most directly comparable GAAP measure. Adjusted OIBDA is
not meant to replace or supersede operating income or any other GAAP
measure, but rather to supplement such GAAP measures in order to present
investors with the same information that GCI Liberty’s management
considers in assessing the results of operations and performance of its
assets. Please see the attached schedules for applicable reconciliations.
SCHEDULE 1
The following table provides a reconciliation of GCI’s adjusted OIBDA to
its operating income for the three months ended March 31, 2018 and
March 31, 2019, respectively. The pro forma financial information
presented below for the three months ended March 31, 2018 was prepared
assuming the acquisition took place on January 1, 2017. The pro forma
financial information is presented for illustrative purposes only and
does not represent what the results of operations of GCI would have been
had the acquisition occurred at that time. GCI’s pro forma operating
results include acquisition accounting adjustments primarily related to
revenue, depreciation, amortization, stock compensation and the
exclusion of transaction related costs. The pro forma results have also
been adjusted for the FCC’s Rural Health Care decision.
GCI HOLDINGS ADJUSTED OIBDA RECONCILIATION
| (amounts in thousands) | 1Q18 | 1Q19 | |||||||
| GCI Holdings | |||||||||
| Adjusted OIBDA | $ | 67,789 | $ | 44,471 | |||||
| Depreciation and amortization | (58,669 | ) | (66,953 | ) | |||||
| Legal settlement | (3,600 | ) | — | ||||||
| Insurance proceeds(1) | — | 2,500 | |||||||
| Stock compensation expense | (1,676 | ) | (3,996 | ) | |||||
| Operating Income | $ | 3,844 | $ | (23,978 | ) | ||||
| (1) |
Insurance payments received for damages sustained during 2018 earthquake. |
|
SCHEDULE 2
The following table provides a reconciliation of adjusted OIBDA for GCI
Liberty to operating income (loss) calculated in accordance with GAAP
for the three months ended March 31, 2018 and March 31, 2019,
respectively.
GCI LIBERTY ADJUSTED OIBDA RECONCILIATION
| (amounts in thousands) |
1Q18(1) |
1Q19 | |||||||
|
GCI Liberty |
|||||||||
| GCI Liberty Adjusted OIBDA | |||||||||
| GCI Holdings | $ | 19,748 | $ | 44,471 | |||||
| Corporate and other | (5,860 | ) | (6,306 | ) | |||||
| Consolidated GCI Liberty adjusted OIBDA | $ | 13,888 | $ | 38,165 | |||||
| Stock-based compensation | (5,236 | ) | (5,631 | ) | |||||
| Insurance proceeds | — | 2,500 | |||||||
| Depreciation and amortization | (16,021 | ) | (67,678 | ) | |||||
| GCI Liberty Operating Income (Loss) | $ | (7,369 | ) | $ | (32,644 | ) | |||
| (1) |
First quarter 2018 results include results of GCI Holdings for the period following the GCI Liberty split-off on March 9, 2018. |
|
| GCI LIBERTY, INC. AND SUBSIDIARIES | |||||||
| BALANCE SHEET INFORMATION | |||||||
| (unaudited) | |||||||
| March 31, | December 31, | ||||||
| 2019 | 2018 | ||||||
|
Amounts in thousands, except |
|||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 422,420 | 491,257 | ||||
|
Trade and other receivables, net of allowance for doubtful accounts of $17,548 and $7,555, respectively |
175,825 | 182,600 | |||||
| Current portion of tax sharing receivable | 36,781 | 36,781 | |||||
| Other current assets | 34,349 | 40,100 | |||||
| Total current assets | 669,375 | 750,738 | |||||
| Investments in equity securities | 1,867,838 | 1,533,517 | |||||
| Investments in affiliates, accounted for using the equity method | 172,975 | 177,030 | |||||
| Investment in Liberty Broadband measured at fair value | 3,915,632 | 3,074,373 | |||||
| Property and equipment, net | 1,161,345 | 1,184,606 | |||||
| Intangible assets not subject to amortization | |||||||
| Goodwill | 855,837 | 855,837 | |||||
| Cable certificates | 305,000 | 305,000 | |||||
| Wireless licenses | 191,697 | 190,000 | |||||
| Other | 16,500 | 16,500 | |||||
| 1,369,034 | 1,367,337 | ||||||
| Intangible assets subject to amortization, net | 423,431 | 436,006 | |||||
| Tax sharing receivable | 74,782 | 65,701 | |||||
| Other assets, net | 163,848 | 71,514 | |||||
| Total assets | $ | 9,818,260 | 8,660,822 | ||||
| Liabilities and Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 80,678 | 100,334 | ||||
| Deferred revenue | 32,004 | 31,743 | |||||
| Current portion of debt, net of deferred financing costs | 901,306 | 900,759 | |||||
| Variable forward | 91,484 | 20,340 | |||||
| Other current liabilities | 67,490 | 27,618 | |||||
| Total current liabilities | 1,172,962 | 1,080,794 | |||||
|
Long-term debt, net, including $521,376 and $462,336 measured at fair value |
2,042,158 | 1,985,275 | |||||
|
Obligations under finance leases and tower obligations, excluding current portion |
118,039 | 122,245 | |||||
| Long-term deferred revenue | 62,324 | 65,954 | |||||
| Deferred income tax liabilities | 1,064,198 | 793,696 | |||||
| Preferred stock | 177,445 | 177,103 | |||||
| Indemnification obligation | 110,317 | 78,522 | |||||
| Other liabilities | 121,835 | 50,543 | |||||
| Total liabilities | 4,869,278 | 4,354,132 | |||||
| Equity | |||||||
| Stockholders’ equity: | |||||||
|
Series A common stock, $.01 par value. Authorized 500,000,000 shares; issued and outstanding 101,078,065 shares at March 31, 2019 and 102,058,816 shares at December 31, 2018 |
1,011 | 1,021 | |||||
|
Series B common stock, $.01 par value. Authorized 20,000,000 shares; issued and outstanding 4,441,109 shares at March 31, 2019 and 4,441,609 shares at December 31, 2018 |
44 | 44 | |||||
|
Series C common stock, $.01 par value. Authorized 1,040,000,000 shares; no shares issued |
— | — | |||||
| Additional paid-in capital | 3,212,878 | 3,251,957 | |||||
| Accumulated other comprehensive earnings (loss), net of taxes | 3,068 | 168 | |||||
| Retained earnings | 1,722,471 | 1,043,933 | |||||
| Total stockholders’ equity | 4,939,472 | 4,297,123 | |||||
| Non-controlling interests | 9,510 | 9,567 | |||||
| Total equity | 4,948,982 | 4,306,690 | |||||
| Commitments and contingencies | |||||||
| Total liabilities and equity | $ | 9,818,260 | 8,660,822 | ||||
| GCI LIBERTY, INC. AND SUBSIDIARIES | ||||||||
| STATEMENT OF OPERATIONS INFORMATION | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
|
Amounts in thousands, except |
||||||||
| Revenue | $ | 217,736 | 61,204 | |||||
| Operating costs and expenses: | ||||||||
|
Operating expense (exclusive of depreciation and amortization shown separately below) |
68,893 | 19,819 | ||||||
|
Selling, general and administrative, including stock-based compensation |
116,309 | 32,733 | ||||||
| Insurance proceeds | (2,500 | ) | — | |||||
| Depreciation and amortization expense | 67,678 | 16,021 | ||||||
| 250,380 | 68,573 | |||||||
| Operating income (loss) | (32,644 | ) | (7,369 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense (including amortization of deferred loan fees) | (37,618 | ) | (8,248 | ) | ||||
| Share of earnings (losses) of affiliates, net | (3,296 | ) | (2,492 | ) | ||||
| Realized and unrealized gains (losses) on financial instruments, net | 1,009,600 | (71,481 | ) | |||||
| Tax sharing agreement | 9,081 | (6,883 | ) | |||||
| Other, net | 2,768 | 1,697 | ||||||
| 980,535 | (87,407 | ) | ||||||
| Earnings (loss) before income taxes | 947,891 | (94,776 | ) | |||||
| Income tax (expense) benefit | (269,405 | ) | (75,955 | ) | ||||
| Net earnings (loss) | 678,486 | (170,731 | ) | |||||
|
Less net earnings (loss) attributable to the non-controlling interests |
(57 | ) | (39 | ) | ||||
| Net earnings (loss) attributable to GCI Liberty, Inc. shareholders | 678,543 | (170,692 | ) | |||||
|
Basic net earnings attributable to Class A and Class B GCI Liberty, Inc. shareholders per common share |
$ | 6.47 | (1.58 | ) | ||||
|
Diluted net earnings attributable to Class A and Class B GCI Liberty, Inc. shareholders per common share |
$ | 6.41 | (1.58 | ) | ||||
| GCI LIBERTY, INC. AND SUBSIDIARIES | ||||||||
| STATEMENT OF CASH FLOWS INFORMATION | ||||||||
| (unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| amounts in thousands | ||||||||
| Cash flows from operating activities: | ||||||||
| Net earnings (loss) | $ | 678,486 | (170,731 | ) | ||||
|
Adjustments to reconcile net earnings (loss) to net cash from operating activities: |
||||||||
| Depreciation and amortization | 67,678 | 16,021 | ||||||
| Stock-based compensation expense | 5,631 | 5,236 | ||||||
| Share of (earnings) losses of affiliates, net | 3,296 | 2,492 | ||||||
| Realized and unrealized (gains) losses on financial instruments, net | (1,009,600 | ) | 71,481 | |||||
| Deferred income tax expense (benefit) | 269,397 | 75,596 | ||||||
| Other, net | 2,489 | 243 | ||||||
| Change in operating assets and liabilities: | ||||||||
| Current and other assets | 20,882 | (20,092 | ) | |||||
| Payables and other liabilities | (17,194 | ) | (1,889 | ) | ||||
| Net cash provided (used) by operating activities | 21,065 | (21,643 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Cash and restricted cash from acquisition of GCI Holdings | — | 147,957 | ||||||
| Capital expended for property and equipment | (40,114 | ) | (6,500 | ) | ||||
| Other | 803 | — | ||||||
| Net cash provided (used) by investing activities | (39,311 | ) | 141,457 | |||||
| Cash flows from financing activities: | ||||||||
| Borrowings of debt | — | 1,000,000 | ||||||
| Repayment of debt, capital lease, and tower obligations | (4,739 | ) | (81,386 | ) | ||||
| Repurchases of GCI Liberty common stock | (43,910 | ) | — | |||||
| Contributions from (distributions to) parent, net | — | (1,121,320 | ) | |||||
| Distribution to non-controlling interests | — | (3,272 | ) | |||||
| Derivative payments | — | (80,001 | ) | |||||
| Other financing activities, net | (1,929 | ) | (4,341 | ) | ||||
| Net cash provided (used) by financing activities | (50,578 | ) | (290,320 | ) | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (68,824 | ) | (170,506 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 492,032 | 574,148 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 423,208 | 403,642 | |||||
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