Liberty Broadband Corporation (“Liberty Broadband”) (Nasdaq:
LBRDA, LBRDK, LBRDP) today reported first quarter 2024 results.
Headlines include(1):
- Fair value of Charter investment was $13.4 billion as of March
31st
- Liberty Broadband did not sell Charter shares to Charter from
February 1, 2024 through April 30, 2024 as its fully diluted equity
interest in Charter remained below 26%(2)
- From February 1, 2024 through April 30, 2024, Liberty Broadband
repurchased 103 thousand LBRDK shares at an average price per share
of $79.88 for total cash consideration of $8.2 million
- In the first quarter, GCI(3) revenue was flat at $245 million,
generated $37 million in operating income and Adjusted OIBDA(4) was
flat at $90 million
Share Repurchases
From February 1, 2024 through April 30, 2024, Liberty Broadband
repurchased 103 thousand shares of Series C Liberty Broadband
common stock (Nasdaq: LBRDK) at an average cost per share of $79.88
for total cash consideration of $8.2 million. The total remaining
repurchase authorization for Liberty Broadband as of April 30, 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 February 1, 2024 through April 30, 2024, Liberty Broadband
did not sell Charter shares to Charter as its fully diluted equity
interest in Charter remained below 26%(2).
Balance Sheet
The following presentation is provided to separately identify
cash and liquid investments, debt and public holdings of Liberty
Broadband as of December 31, 2023 and March 31, 2024.
(amounts in millions)
12/31/2023
3/31/2024
Cash and Cash Equivalents:
GCI Holdings
$
79
$
70
Corporate and Other
79
38
Total Liberty Broadband Consolidated
Cash
$
158
$
108
Fair Value of Public Holdings in
Charter(a)
$
17,984
$
13,385
Debt:
Senior Notes(b)
$
600
$
600
Senior Credit Facility
394
334
Tower Obligations and Other(c)
91
90
Total GCI Holdings Debt
$
1,085
$
1,024
GCI Leverage(d)
2.9x
2.8x
Charter Margin Loan
$
1,460
$
1,480
3.125% Exchangeable Senior Debentures due
2053(e)
1,265
1,265
Total Corporate Level Debt
$
2,725
$
2,745
Total Liberty Broadband Debt
$
3,810
$
3,769
Fair market value adjustment and deferred
loan costs
12
(45
)
Tower obligations and finance leases
(excluded from GAAP Debt)
(86
)
(85
)
Total Liberty Broadband Debt
(GAAP)
$
3,736
$
3,639
Other Financial Obligations:
Preferred Stock(f)
180
180
_________________________
a)
Represents fair value of the investment in
Charter as of December 31, 2023 and March 31, 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 decreased $50 million in the first
quarter primarily due to proceeds from Charter share sales and
borrowing under the Charter margin loan being more than offset by
share repurchases and other investing activities. GCI cash
decreased $9 million in the first quarter as cash from operations
was more than offset by debt repayment and capital expenditures
(net of grant proceeds) during the period.
Liberty Broadband debt decreased $41 million in the first
quarter as GCI repaid $60 million under its senior credit facility,
partially offset by additional borrowing under the Charter margin
loan. There is $820 million of available capacity under the Charter
margin loan. GCI’s credit facility has undrawn capacity of $457
million (net of letters of credit), and GCI’s leverage as defined
in its credit agreement is 2.8x.
GCI Operating and Financial
Results
1Q23
1Q24
% Change
(amounts in millions, except operating
metrics)
GCI Consolidated Financial
Metrics
Revenue
Consumer
$
118
$
117
(1)
%
Business
128
128
—
%
Total revenue
$
246
$
245
—
%
Operating income
$
29
$
37
28
%
Operating income margin (%)
11.8%
15.1%
330
bps
Adjusted OIBDA(a)
$
90
$
90
—
%
Adjusted OIBDA margin(a) (%)
36.6%
36.7%
10
bps
GCI Consumer
Financial Metrics
Revenue
Data
$
59
$
60
2
%
Wireless
47
47
—
%
Other
12
10
(17)
%
Total revenue
$
118
$
117
(1)
%
Operating Metrics
Data:
Cable modem subscribers(b)
159,100
159,800
—
%
Wireless:
Lines in service(c)
193,700
199,000
3
%
GCI Business
Financial Metrics
Revenue
Data
$
106
$
108
2
%
Wireless
13
12
(8)
%
Other
9
8
(11)
%
Total revenue
$
128
$
128
—
%
__________________________
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 March 31, 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 March 31, 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 March 31, 2024 to
the same period in 2023.
GCI revenue was flat in the first quarter. Consumer revenue was
down 1% driven by declines in video revenue, partially offset by
demand for consumer data. Business revenue was flat as growth in
data was offset by declines in wireless and other revenues.
Operating income increased by $8 million in the first quarter
driven by lower depreciation expense as certain assets became fully
depreciated during 2023. Adjusted OIBDA was flat in line with
revenue.
In the first quarter, GCI spent $46 million, net, on capital
expenditures. Capital expenditure spending was related primarily to
improvements to the wireless and data networks in rural Alaska.
GCI's net capital expenditures for the full year 2024 are expected
to be approximately $200 million related to additional
high-returning investments in middle and last mile connectivity,
with continued network expansion in GCI’s most important markets in
rural Alaska including the Bethel and AU-Aleutians fiber
projects.
FOOTNOTES
1)
Liberty Broadband will discuss
these highlights and other matters on Liberty Broadband's earnings
conference call that will begin at 11:15 a.m. (E.T.) on May 8,
2024. For information regarding how to access the call, please see
“Important Notice” later in this document.
2)
Calculated pursuant to the
stockholder agreement between Liberty Broadband and Charter
Communications, Inc. ("Charter").
3)
Liberty Broadband’s principal
operating asset is GCI Holdings, LLC (“GCI” or “GCI Holdings”),
Alaska's largest communications provider. Liberty Broadband also
holds an interest in Charter.
4)
For a definition of Adjusted
OIBDA and Adjusted OIBDA margin and applicable reconciliations, see
the accompanying schedules.
NOTES
LIBERTY BROADBAND FINANCIAL
METRICS
(amounts in millions)
1Q23
1Q24
Revenue
GCI Holdings
$
246
$
245
Corporate and other
—
—
Total Liberty Broadband Revenue
$
246
$
245
Operating Income
GCI Holdings
$
29
$
37
Corporate and other
(13
)
(9
)
Total Liberty Broadband Operating
Income
$
16
$
28
Adjusted OIBDA
GCI Holdings
$
90
$
90
Corporate and other
(8
)
(5
)
Total Liberty Broadband Adjusted
OIBDA
$
82
$
85
Important Notice: Liberty Broadband (Nasdaq: LBRDA,
LBRDK, LBRDP) will discuss Liberty Broadband’s earnings release on
a conference call which will begin at 11:15 a.m. (E.T.) on May 8,
2024. The call can be accessed by dialing (877) 407-3944 or (412)
902-0038, passcode 13742820, 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
https://www.libertybroadband.com/investors/news-events/ir-calendar.
Links to this press release and replays of the call will also be
available on Liberty Broadband’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 Liberty Broadband’s equity interest in Charter and Charter’s
buyback of common stock, Liberty Broadband’s participation in
Charter’s buyback of common stock, 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 Liberty Broadband, changes in law and government
regulations, the availability of investment opportunities, general
market conditions (including as a result of inflationary pressures)
and market conditions conducive to stock repurchases. These
forward-looking statements speak only as of the date of this press
release, and Liberty Broadband expressly disclaims any obligation
or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty Broadband'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 Liberty
Broadband, including the most recent Forms 10-K and 10-Q, for
additional information about Liberty Broadband and about the risks
and uncertainties related to Liberty Broadband which may affect the
statements made in this press release.
NON-GAAP FINANCIAL MEASURES
To provide investors with additional information regarding our
financial results, this press release includes a presentation of
Adjusted OIBDA, which is a non-GAAP financial measure, for Liberty
Broadband (and certain of its subsidiaries) and GCI Holdings
together with a reconciliation to that entity or such businesses’
operating income, as determined under GAAP. Liberty Broadband
defines Adjusted OIBDA as operating income (loss) plus depreciation
and amortization, stock-based compensation, transaction costs,
separately reported litigation settlements, restructuring and
impairment charges. Further, this press release includes Adjusted
OIBDA margin which is also a non-GAAP financial measure. Liberty
Broadband defines Adjusted OIBDA margin as Adjusted OIBDA divided
by revenue.
Liberty Broadband believes Adjusted OIBDA is an important
indicator of the operational strength and performance of its
businesses by identifying those items that are not directly a
reflection of each business' performance or indicative of ongoing
business trends. 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, Liberty Broadband 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 Liberty
Broadband’s management considers in assessing the results of
operations and performance of its assets. Please see the tables
below for applicable reconciliations.
SCHEDULE 1
The following table provides a reconciliation of GCI’s operating
income to its Adjusted OIBDA for the three months ended March 31,
2023 and March 31, 2024.
GCI HOLDINGS ADJUSTED OIBDA
RECONCILIATION
(amounts in millions)
1Q23
1Q24
GCI Holdings Operating Income
$
29
$
37
Depreciation and amortization
58
50
Stock-based compensation
3
3
GCI Holdings Adjusted OIBDA
$
90
$
90
SCHEDULE 2
The following table provides a reconciliation of operating
income (loss) calculated in accordance with GAAP to Adjusted OIBDA
for Liberty Broadband for the three months ended March 31, 2023 and
March 31, 2024.
LIBERTY BROADBAND ADJUSTED OIBDA
RECONCILIATION
(amounts in millions)
1Q23
1Q24
Liberty Broadband Operating
Income
$
16
$
28
Depreciation and amortization
58
50
Stock-based compensation
8
7
Liberty Broadband Adjusted
OIBDA
$
82
$
85
GCI Holdings
$
90
$
90
Corporate and other
(8
)
(5
)
LIBERTY BROADBAND
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEET INFORMATION
(unaudited)
March 31,
December 31,
2024
2023
amounts in millions,
except share amounts
Assets
Current assets:
Cash and cash equivalents
$
108
158
Trade and other receivables, net of
allowance for credit losses of $5 and $5, respectively
186
178
Prepaid and other current assets
56
94
Total current assets
350
430
Investment in Charter, accounted for using
the equity method
12,281
12,116
Property and equipment, net
1,078
1,053
Intangible assets not subject to
amortization
Goodwill
755
755
Cable certificates
550
550
Other
40
40
Intangible assets subject to amortization,
net
449
461
Other assets, net
237
236
Total assets
$
15,740
15,641
Liabilities and Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
94
86
Deferred revenue
29
30
Current portion of debt
3
3
Other current liabilities
67
59
Total current liabilities
193
178
Long-term debt, net, including $1,200 and
$1,255 measured at fair value, respectively
3,636
3,733
Obligations under tower obligations and
finance leases, excluding current portion
81
83
Long-term deferred revenue
77
65
Deferred income tax liabilities
2,255
2,216
Preferred stock
201
202
Other liabilities
139
141
Total liabilities
6,582
6,618
Equity
Series A common stock, $.01 par value.
Authorized 500,000,000 shares; issued and outstanding 18,235,286
and 18,233,573 at March 31, 2024 and December 31, 2023,
respectively
—
—
Series B common stock, $.01 par value.
Authorized 18,750,000 shares; issued and outstanding 2,023,432 and
2,025,232 at March 31, 2024 and December 31, 2023, respectively
—
—
Series C common stock, $.01 par value.
Authorized 500,000,000 shares; issued and outstanding 122,589,251
and 123,704,814 at March 31, 2024 and December 31, 2023,
respectively
1
1
Additional paid-in capital
3,018
3,107
Accumulated other comprehensive earnings
(loss), net of taxes
35
52
Retained earnings
6,084
5,843
Total stockholders' equity
9,138
9,003
Non-controlling interests
20
20
Total equity
9,158
9,023
Commitments and contingencies
Total liabilities and equity
$
15,740
15,641
LIBERTY BROADBAND
CORPORATION
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS INFORMATION
(unaudited)
Three months ended
March 31,
2024
2023
amounts in millions,
except per share
amounts
Revenue
$
245
246
Operating costs and expenses:
Operating expense (exclusive of
depreciation and amortization shown separately below)
62
62
Selling, general and administrative,
including stock-based compensation
105
110
Depreciation and amortization
50
58
217
230
Operating income (loss)
28
16
Other income (expense):
Interest expense (including amortization
of deferred loan fees)
(51
)
(45
)
Share of earnings (losses) of
affiliate
280
248
Gain (loss) on dilution of investment in
affiliate
(28
)
(27
)
Realized and unrealized gains (losses) on
financial instruments, net
76
(114
)
Other, net
4
14
Earnings (loss) before income taxes
309
92
Income tax benefit (expense)
(68
)
(23
)
Net earnings (loss)
241
69
Less net earnings (loss) attributable to
the non-controlling interests
—
—
Net earnings (loss) attributable to
Liberty Broadband shareholders
$
241
69
Basic net earnings (loss) attributable to
Series A, Series B and Series C Liberty Broadband shareholders per
common share
$
1.69
0.47
Diluted net earnings (loss) attributable
to Series A, Series B and Series C Liberty Broadband shareholders
per common share
$
1.69
0.47
LIBERTY BROADBAND
CORPORATION
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS INFORMATION
(unaudited)
Three months ended
March 31,
2024
2023
amounts in millions
Cash flows from operating activities:
Net earnings (loss)
$
241
69
Adjustments to reconcile net earnings
(loss) to net cash from operating activities:
Depreciation and amortization
50
58
Stock-based compensation
7
8
Share of (earnings) losses of affiliate,
net
(280
)
(248
)
(Gain) loss on dilution of investment in
affiliate
28
27
Realized and unrealized (gains) losses on
financial instruments, net
(76
)
114
Deferred income tax expense (benefit)
44
22
Other, net
(1
)
(1
)
Change in operating assets and
liabilities:
Current and other assets
39
(6
)
Payables and other liabilities
—
(2
)
Net cash provided by (used in) operating
activities
52
41
Cash flows from investing activities:
Capital expenditures
(61
)
(54
)
Grant proceeds received for capital
expenditures
15
—
Cash received for Charter shares
repurchased by Charter
81
42
Other investing activities, net
(17
)
—
Net cash provided by (used in) investing
activities
18
(12
)
Cash flows from financing activities:
Borrowings of debt
20
1,248
Repayments of debt, tower obligations and
finance leases
(62
)
(1,416
)
Repurchases of Liberty Broadband common
stock
(89
)
(40
)
Indemnification payment to Qurate
Retail
—
(24
)
Other financing activities, net
(1
)
(3
)
Net cash provided by (used in) financing
activities
(132
)
(235
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(62
)
(206
)
Cash, cash equivalents and restricted
cash, beginning of period
176
400
Cash, cash equivalents and restricted
cash, end of period
$
114
194
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507783975/en/
Liberty Broadband Corporation Shane Kleinstein, 720-875-5432
Liberty Broadband (NASDAQ:LBRDK)
Historical Stock Chart
From Oct 2024 to Nov 2024
Liberty Broadband (NASDAQ:LBRDK)
Historical Stock Chart
From Nov 2023 to Nov 2024
