GCI Liberty, Inc. (“GCI Liberty”) (Nasdaq: GLIBA, GLIBP) today
reported second quarter 2018 results. Highlights include(1):
- Completed reincorporation of GCI
Liberty into Delaware on May 10th, preferred stock dividend
increased from 5% to 7% beginning July 16th
- GCI (as defined below) operating income
grew 41% and adjusted OIBDA(2) increased 3%
- GCI Consumer revenue grew 2%
- Consumer Data revenue up 11% and
Wireless revenue up 3% as revenue from top tier unlimited wireless
and data customers continued to grow
- Sequential Consumer Wireless growth of
4,400 subscribers
- GCI launched new billing system in
early August
"GCI had a solid quarter while gaining operating efficiencies
and expanding and improving coverage in Alaska," said Greg Maffei,
GCI Liberty President and CEO. "During the quarter, we also raised
$477 million of exchangeable senior debentures and reincorporated
the company in Delaware."
Corporate Updates
On March 9, 2018, Liberty Interactive Corporation ("Liberty
Interactive"), now known as Qurate Retail, Inc. ("Qurate Retail"),
completed the series of transactions that effected the split-off of
GCI Liberty, as described in more detail in GCI Liberty’s press
release issued on March 9, 2018. 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. For accounting purposes herein, GCI is considered the
acquired entity.
Discussion of Results
Unless otherwise noted, the following discussion compares
financial information for the three months ended June 30, 2018
to the same period in 2017.
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 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. Additionally, the pro forma results include
adjustments to the second quarter of 2017 for the impact of the new
revenue recognition standard (ASC 606) to assist in the
comparability of 2017 and 2018.
GCI
"This past week GCI launched a new billing platform that will
transform the way we do business with customers," said GCI CEO, Ron
Duncan. "Our entire company has been focused on the two-year
project, and I’m pleased to report that the transition has gone
smoothly. We know our customers will appreciate the new
functionality that gives them better insight into their data usage,
the ability to purchase more products and services online, and a
simple, streamlined monthly bill.”
The following table provides GCI’s pro forma financial and
operating results for the second quarter of 2017 and 2018.
(amounts in thousands, except operating metrics)
2Q17 2Q18
% Change
GCI Consolidated Pro Forma Financial Metrics Revenue
Consumer $ 106,306 $ 108,717 2 % Business 119,393
119,788 — % Total Revenue $ 225,699 $ 228,505
1 % Operating Income $ 13,851 $ 19,521 41 % Operating
Income Margin (%) 6.1
%
8.5
%
240
bps
Adjusted OIBDA(1) $ 76,466 $ 78,535 3 % Adjusted OIBDA
Margin(1) (%) 33.9
%
34.4
%
50
bps
GCI Consumer Financial Metrics Revenue
Wireless $ 40,557 $ 41,935 3 % Data 35,418 39,243 11 % Video 24,937
22,150
(11
)%
Voice 5,394 5,389
—
%
Total Revenue $ 106,306 $ 108,717 2 %
Operating
Metrics Wireless Lines in Service(2) 201,200 200,900 — % Data -
Cable Modem Subscribers(3) 128,100 125,200
(2
)%
Video Basic Subscribers(4) 102,700 91,600
(11
)%
Homes Passed 251,200 253,400 1 % Voice - Total Access Lines in
Service(5) 51,700 47,800
(8
)%
GCI Business Financial Metrics Revenue
Wireless $ 29,738 $ 27,678
(7
)%
Data 72,251 77,189 7 % Video 4,794 3,488
(27
)%
Voice 12,610 11,433
(9
)%
Total Revenue $ 119,393 $ 119,788 — %
Operating
Metrics Wireless Lines in Service(2) 23,300 22,100
(5
)%
Data - Cable Modem Subscribers(3) 10,000 9,200
(8
)%
Voice - Total Access Lines in Service(5) 40,200 37,000
(8
)%
1)
See reconciling schedule 1. 2) A wireless line in service is
defined as a revenue generating wireless device. On January 1,
2018, GCI transferred 600 small business wireless lines from
Business to Consumer. 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. On
January 1, 2018, GCI transferred 700 small business cable modem
subscribers from Business to Consumer. 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. On January 1, 2018, GCI transferred 100 small business
basic subscribers from Business to Consumer. 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. On
January 1, 2018, GCI transferred 1,600 small business local access
lines from Business to Consumer.
Total revenue increased modestly in the second quarter,
primarily driven by growth in GCI’s Consumer segment. Operating
income and adjusted OIBDA(2) increased in the second quarter of
2018. Year over year comparability was affected by a $5 million
rural health care (“RHC”) write off in the second quarter of 2017
which did not recur in the second quarter of 2018. Excluding this
item, operating income remained relatively flat and adjusted
OIBDA(2) decreased slightly on a year over year basis, driven by
lower GCI Business revenue partially offset by continued customer
migration from lower margin products to higher margin products.
GCI receives support from each of various Universal Service
Fund ("USF") programs: high cost, low income, rural health
care, and schools and libraries. The USF Rural Health Care
Program (“RHC Program") subsidizes the rates for services provided
to rural health care providers. On March 15, 2018, the
Universal Service Administrative Co. ("USAC") announced that the
funding request for the year that runs July 1, 2017 through June
30, 2018 (the "2017 funding year") exceeded the federal funding
available for the RHC Program. On June 25, 2018, the FCC issued an
order resulting in an increase of the annual RHC Program funding
cap from $400 to $571 million and applied it to the 2017 funding
year. As a result, funding is available to pay in full any approved
funding for the 2017 funding year. The FCC also determined that it
would annually adjust the RHC Program funding cap for inflation and
carry-forward unused funds from past funding years for use in
future funding years. Due to the ongoing USAC review of GCI's rural
rates, which has caused a continuing delay of support payments for
the 2017 funding year, GCI has maintained a total net reduction of
approximately $6 million to the RHC receivable. GCI may need to
further reduce the RHC Program support receivable as we continue to
work with the FCC on the rate review.
GCI Consumer
GCI Consumer revenue increased in the second quarter to $109
million. Sequential subscriber changes from the first quarter to
the second quarter meaningfully improved in 2018, compared to the
same period in 2017. Improvements were led by wireless, where GCI
grew 4,400 consumer subscribers in the second quarter of 2018
compared to 2,500 in the same period in 2017. The second quarter is
traditionally a strong season for GCI in wireless, due to an inflow
of workers and visitors into the state beginning in the late
spring.
GCI Business
Revenue from GCI business was flat in the second quarter.
Excluding the 2017 RHC write-off, revenue decreased primarily due
to decreases in lower margin products such as voice, video and time
and materials revenue.
Capital Expenditures
Year to date, GCI has spent $66 million on capital expenditures,
excluding capitalized interest. Capital expenditure spending was
related to wireless network improvements, fiber and Hybrid Fiber
Coax improvements and GCI's new billing system. GCI's capital
expenditures for 2018 are expected to be approximately $170
million.
Share Repurchases
On March 9, 2018, the board of directors authorized a share
repurchase program for $650 million of GCI Liberty Class A and
Class B common stock, which was reapproved by the board on June 25,
2018 (following the reincorporation) with respect to GCI Liberty's
Series A and Series B common stock. There were no repurchases of
GCI Liberty common stock from May 1, 2018 through July 31,
2018.
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
August 8, 2018. For information regarding how to access the call,
please see “Important Notice” later in this document. 2) 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) 2Q17
2Q18
Revenue GCI Holdings(1) $ — $ 227,781
Corporate and other 6,177 5,709
Total GCI Liberty Revenue $ 6,177
$ 233,490 Operating Income GCI
Holdings(1) $ — $ 10,424 Corporate and other (11,617 )
(11,017 )
Total GCI Liberty Operating Income $
(11,617 ) $ (593 )
Adjusted OIBDA GCI Holdings(1) $ — $ 78,915 Corporate and
other (6,922 ) (7,191 )
Total GCI Liberty Adjusted
OIBDA $ (6,922 ) $ 71,724
(1) GCI Holdings pro
forma financial statements differ from GCI Holdings GAAP financial
statements due to the impact of purchase accounting, including
deferred revenue adjustments, depreciation and amortization of
intangible and tangible assets 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 March 31, 2018 and June 30, 2018.
Fair Value of Public
Holdings
(amounts in millions) 3/31/2018
6/30/2018 Charter(1) $ 1,668 $ 1,571 Liberty
Broadband(1) 3,657 3,232 LendingTree(2) 1,058
689
Total $ 6,383 $ 5,492
(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
$112 million and $117 million at March 31, 2018 and June 30, 2018,
respectively.
Cash and Debt
The following presentation is provided to separately identify
cash and liquid investments and debt information.
(amounts in millions) 3/31/2018
6/30/2018
Cash: GCI Holdings $ 46 $ 31 Corporate and
other 357 737
Total GCI Liberty
Consolidated Cash $ 403 $
768 Debt: Senior Notes $ 775 $ 775
Senior Credit Facility 667 666 Capital Leases and Other(1)
152 148
Total GCI Holdings Debt
$ 1,594 $ 1,589
Margin Loan $ 1,000 $ 1,000 1.75% Exchangeable Senior Debentures
due 2046 — 477
Total Corporate Level
Debt $ 1,000 $ 1,477
Total GCI Liberty Debt $
2,594 $ 3,066 Premium on debt
and deferred financing fees 28 42 Capital leases and tower
obligation (excluded from GAAP Debt) (144 ) (140 )
Total GCI Liberty Debt (GAAP) $ 2,478
$ 2,968 Other Financial
Obligations: Indemnification Obligation(2) $ 253 $ 85 Preferred
Stock(3) 175 175 GCI Leverage(4) 4.9x 4.9x
(1)
Includes the Wells Fargo Note Payable and current and
long-term obligations under capital 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.
On June 18, 2018, GCI Liberty closed a private offering for
$477.25 million of 1.75% exchangeable senior debentures due 2046.
Approximately 1.3 million shares of Charter Class
A common stock are attributable to the debentures. Initially,
2.6989 shares of Charter Class A common stock are
attributable to each $1,000 original principal amount of
debentures, representing an initial exchange price
of $370.52 for each share of Charter Class A common
stock. GCI Liberty used the net proceeds of the
offering (1) to make indemnification payments to LI LLC,
a direct, wholly-owned subsidiary
of Qurate Retail, pursuant to GCI
Liberty’s indemnification agreement with LI
LLC and Qurate Retail, in connection with any of LI LLC’s
Charter exchangeable debentures that may be repurchased by LI
LLC in privately negotiated transactions, by tender offer or
in other purchase transactions (GCI Liberty made an
indemnification payment of approximately $133 million in cash
to LI LLC pursuant to the indemnification agreement in
the second quarter) and (2) for general corporate purposes,
which may include repayment of GCI Liberty’s outstanding
indebtedness.
GCI Liberty cash increased by $365 million in the second quarter
driven by the private offering of 1.75% exchangeable senior
debentures due 2046, partially offset by the indemnification
payment made to Qurate Retail. GCI Liberty debt increased by $472
million primarily due to the aforementioned exchangeable offering,
net of $5 million of existing debt repayment at GCI. GCI cash
decreased by $15 million in the second quarter due to debt pay
downs, capital expenditures and interest payments.
Pursuant to an indemnification agreement, GCI Liberty has agreed
to indemnify LI LLC for certain payments made to a holder of LI
LLC's Charter exchangeable debentures. Each of Qurate Retail and LI
LLC will use commercially reasonable efforts to purchase, in one or
more privately negotiated transactions, a tender offer or other
purchase transactions (each, a "Purchase Offer"), the outstanding
Charter exchangeable debentures, on terms and conditions (including
maximum offer price) reasonably acceptable to GCI Liberty, by
September 9, 2018. GCI Liberty will indemnify LI LLC for the
difference between the purchase price of any Charter exchangeable
debenture purchased pursuant to a Purchase Offer and the cash
delivered in the March 9, 2018 reattribution with respect to each
such purchased debenture, net of any tax benefits associated with
early extinguishment of such purchased debenture (the "Repurchase
Indemnity"). In June 2018, Qurate Retail repurchased $418
million of the Charter exchangeable debentures for approximately
$457 million, including accrued interest, and GCI Liberty made an
indemnification payment to Qurate Retail of $133 million. As of
June 30, 2018, $322 million principal amount of the Charter
exchangeable debentures remain outstanding.
After September 9, 2018, GCI Liberty continues to be obligated
to indemnify LI LLC with respect to the Charter exchangeable
debentures for any payments made to any holder that exercises its
exchange right on or before the put/call date of October 2023 (the
"Exchange Indemnity"). Such payment amount will equal the
difference between the exchange value and par value of the Charter
exchangeable debentures at the time the exchange occurs. The
Exchange Indemnity is supported by a negative pledge in favor of
Qurate Retail on the 1.0 million reference shares of Class A common
stock of Charter held at GCI Liberty that underlie the Charter
exchangeable debentures pro forma for the repurchases discussed
above. GCI Liberty's Exchange Indemnity obligation and the number
of shares subject to the negative pledge will be ratably reduced
with respect to any Charter exchangeable debentures repurchased by
LI LLC in connection with the Repurchase Indemnity. The
indemnification obligation is valued pursuant to the terms of the
Exchange Indemnity.
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 August 8, 2018. The call can be accessed by dialing (800)
281-7973 or (323) 794-2093, passcode 6601919, 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 http://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, matters relating to the Universal
Service Administrative Company and Rural Health Care program,
future capital expenditures, statements about the Purchase Offers
and 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 Form 10-K and Form 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 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 pro forma
adjusted OIBDA to its pro forma operating income for the three
months ended June 30, 2017 and June 30, 2018,
respectively. The pro forma financial information presented below
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. Additionally, the pro forma results include
adjustments to the second quarter of 2017 for the impact of the new
revenue recognition standard (ASC 606) to assist in the
comparability of 2017 and 2018.
GCI HOLDINGS PRO
FORMA ADJUSTED OIBDA RECONCILIATION
(amounts in thousands) 2Q17
2Q18
GCI Holdings Adjusted OIBDA $ 76,466 $
78,535 Depreciation and amortization (58,458 ) (57,347 ) Stock
compensation expense (4,157 ) (1,667 )
Operating
Income $ 13,851 $ 19,521
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 June 30, 2017 and
June 30, 2018, respectively.
GCI LIBERTY ADJUSTED
OIBDA RECONCILIATION
(amounts in thousands) 2Q17
2Q18
GCI
Liberty
GCI Liberty Adjusted OIBDA GCI Holdings $ — $ 78,915
Corporate and other (6,922 ) (7,191 ) Consolidated GCI
Liberty adjusted OIBDA $ (6,922 ) $ 71,724 Stock-based compensation
(3,873 ) (7,929 ) Depreciation and amortization (822 ) (64,388 )
GCI Liberty Operating Income $ (11,617
) $ (593 ) GCI
LIBERTY, INC. AND SUBSIDIARIES BALANCE SHEET INFORMATION
(unaudited) June
30, December 31, 2018 2017
Amounts in thousands, except share amounts Assets Current
assets: Cash and cash equivalents $ 767,873 573,210 Trade and other
receivables, net of allowance for doubtful accounts of $1,915
thousand and $0, respectively 225,820 6,803 Current portion of tax
sharing receivable 28,551 — Other current assets 37,146
1,265 Total current assets 1,059,390 581,278 Investments in
equity securities 1,574,212 1,803,064 Investments in affiliates,
accounted for using the equity method 121,880 114,655 Investment in
Liberty Broadband measured at fair value 3,231,869 3,634,786
Property and equipment, net 1,200,050 624 Intangible assets not
subject to amortization Goodwill 957,972 25,569 Cable certificates
370,000 — Wireless licenses 190,000 — Other 16,525 4,000
1,534,497 29,569 Intangible assets subject to amortization,
net 492,318 4,237 Tax sharing receivable 82,485 — Other assets, at
cost, net of accumulated amortization 47,396 4,000 Total
assets $ 9,344,097 6,172,213 Liabilities and Equity
Current liabilities: Accounts payable and accrued liabilities $
104,290 718 Deferred revenue 31,628 — Other current liabilities
52,153 9,747 Total current liabilities 188,071 10,465
Long-term debt, net 2,965,504 — Obligations under capital leases
and tower obligation, excluding current portion 128,692 — Long-term
deferred revenue 64,744 130 Deferred income tax liabilities 882,257
643,426 Taxes payable — 1,198,315 Preferred stock 174,973 —
Indemnification obligation 84,921 — Other liabilities 51,063
95,841 Total liabilities 4,540,225 1,948,177 Equity
Stockholders’ equity: Series A common stock, $.01 par value.
Authorized 500,000,000 shares; issued and outstanding 104,564,844
shares at June 30, 2018 1,046 — Series B common stock, $.01 par
value. Authorized 20,000,000 shares; issued and outstanding
4,444,127 shares at June 30, 2018 44 — Series C common stock, $.01
par value. Authorized 1,040,000,000 shares; no issued and
outstanding shares at June 30, 2018 — — Parent's investment —
2,305,440 Additional paid-in capital 3,367,534 — Accumulated other
comprehensive earnings (loss), net of taxes (13,118 ) — Retained
earnings 1,441,199 1,914,963 Total stockholders' equity
4,796,705 4,220,403 Non-controlling interests 7,167 3,633
Total equity 4,803,872 4,224,036 Commitments and
contingencies Total liabilities and equity $
9,344,097 6,172,213
GCI LIBERTY, INC. AND
SUBSIDIARIES STATEMENT OF OPERATIONS INFORMATION
(unaudited) Three
Months Ended June 30, 2018
2017 Amounts in thousands, except per share amounts
Revenue $ 233,490 6,177 Operating costs and expenses: Operating
expense (exclusive of depreciation and amortization shown
separately below) 69,294 2,838 Selling, general and administrative,
including stock-based compensation 100,401 14,134 Depreciation and
amortization expense 64,388 822 234,083 17,794
Operating income (loss) (593 ) (11,617 ) Other income
(expense): Interest expense (including amortization of deferred
loan fees) (35,442 ) (5 ) Share of earnings (losses) of affiliates,
net 10,350 1,600 Realized and unrealized gains (losses) on
financial instruments, net (428,356 ) 60,449 Other, net (1,845 )
541 (455,293 ) 62,585 Earnings (loss) before income
taxes (455,886 ) 50,968 Income tax (expense) benefit 152,406
(19,367 ) Net earnings (loss) (303,480 ) 31,601 Less net earnings
(loss) attributable to the non-controlling interests (154 ) (1 )
Net earnings (loss) attributable to GCI Liberty, Inc. shareholders
$ (303,326 ) 31,602 Basic net earnings attributable to Class
A and Class B GCI Liberty, Inc. shareholders per common share $
(2.82 ) 0.29 Diluted net earnings attributable to Class A and Class
B GCI Liberty, Inc. shareholders per common share $ (2.82 ) 0.29
GCI LIBERTY, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS INFORMATION (unaudited)
Six Months Ended June
30, 2018 2017 amounts in
thousands Cash flows from operating activities: Net earnings
(loss) $ (474,211 ) 482,255 Adjustments to reconcile net earnings
(loss) to net cash from operating activities: Depreciation and
amortization 80,409 1,575 Stock-based compensation expense 13,165
6,599 Share of (earnings) losses of affiliates, net (7,858 ) (3,323
) Realized and unrealized (gains) losses on financial instruments,
net 499,837 (798,001 ) Deferred income tax expense (benefit)
(97,203 ) 296,846 Intergroup tax payments — 155,480 Other, net
3,377 539 Change in operating assets and liabilities: Current and
other assets (38,681 ) 1,150 Payables and other liabilities 68,562
2,301 Net cash provided (used) by operating
activities 47,397 145,421 Cash flows from investing
activities: GCI Holdings cash and restricted cash acquired in
consolidation 147,958 — Capital expended for property and equipment
(40,303 ) (1,751 ) Purchases of investments — (76,815 ) Sales of
investments — 1,606 Net cash provided (used) by
investing activities 107,655 (76,960 ) Cash flows from
financing activities: Borrowings of debt 1,477,250 — Repayment of
debt, capital lease, and tower obligations (84,971 ) —
Contributions from (distributions to) parent, net (1,124,660 )
(70,624 ) Distribution to non-controlling interests (3,273 ) —
Indemnification payment to Qurate Retail (132,725 ) — Derivative
payments (80,001 ) — Other financing activities, net (11,973 ) (325
) Net cash provided (used) by financing activities 39,647
(70,949 ) Net increase (decrease) in cash, cash equivalents and
restricted cash 194,699 (2,488 ) Cash, cash equivalents and
restricted cash at beginning of period 574,148 488,127
Cash, cash equivalents and restricted cash at end of period
$ 768,847 485,639
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