Liberty Broadband Corporation

Greetings and welcome to the Liberty Broadband 2024 Year-End Earnings Call. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Shane Kleinstein, Senior Vice President, Investor Relations. Please go ahead, Shane.

Thank you, and good morning. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Form 10-K filed by Liberty Broadband with the SEC. These forward-looking statements speak only as of the date of this call, 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. On today's call, we will discuss certain non-GAAP financial measures for Liberty Broadband, including addressed at OIBDA. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary note and Schedules 1 and 2, can be found in the earnings press release issued today, as well as earnings releases for prior periods, which are available on Liberty Broadband's website. Speaking on today's call, we have Liberty Broadband's Chief Accounting Officer and Principal Financial Officer, Brian Wendling, Liberty's Executive Vice President and Treasurer, Ben Oren, and available to answer questions, we will have Ron Duncan, the CEO of GCI, Pete Pound, CFO of GCI, Renee Wilm, Liberty's Chief Legal and Administrative Officer, and Marty Patterson, Liberty's Co-Head of Corporate Development. And with that, I'll turn the call over to Brian.

Thank you, Shane, and good morning, everyone. On November 12th, we entered into a definitive agreement for Liberty Broadband to be acquired by Charter. We believe this transaction provides certainty for our shareholders, enhance trading liquidity for both Charter and Liberty Broadband, and serves in the best interest of all shareholders. Today we'll provide a brief update on the transaction before turning to the results of the GCI business and then opening it up to Q&A. A quick review of the terms of the transactions. Holders of the Liberty Broadband Series A, B, and C common stock will each receive .236 of a share of charter common stock for each share of Liberty Broadband held. We received Liberty Broadband shareholder approval yesterday, February 26th. The transaction is still expected to close on June 30, 2027 unless otherwise agreed to. We're very optimistic about Charter's future and look forward to continuing our strong partnership with them over the next two and a half years. Liberty Broadband has agreed to spin off GCI prior to the transaction close to Liberty Broadband shareholders. The GCI distribution is expected to be taxable to Liberty Broadband and its stockholders. Charter has agreed to bear the corporate level tax liability upon completion of that transaction. If the corporate level tax liability exceeds $420 million, Charter will be entitled to share and certain tax benefits realized by GCI under the terms of the merger agreement. The distribution of GCI will provide incremental value to shareholders that is not captured in the exchange ratio with charter. Ron Duncan will be the new CEO of the entity and called GCI Liberty, which is a throwback to GCI Liberty's old public days, and he'll also remain the CEO of GCI Opco. We expect to complete the spinoff in late Q2 or early Q3 of this year. which will simplify Liberty Broadband's equity story until the close of the transaction. Now taking a quick look at the operating results of GCI. In 2024, GCI achieved record revenue that crossed the billion-dollar mark for the first time. GCI also generated solid adjusted OEBDA and free cash flow and distributed $150 million of dividends to Liberty Broadband in the year. Revenue increased 5% in the fourth quarter and 4% for the full year, driven by strength in data revenue. Business data revenue benefited from a strong upgrade cycle in school and healthcare corporations in rural Alaska. Adjusted OIVDA decreased 4% in the fourth quarter and was up $1 million to $362 million for the full year, as revenue growth was primarily offset by higher SG&A expense from increased labor-related costs. Over the last year, adjusted for the reclassification from GCI business, GCI consumers saw a decline of 300 revenue-generating wireless subs, and cable modem subscribers declined 4,900, with approximately 3,800 of these losses driven by the expiration of the ACP program. In 2024, GCI spent $193 million on capital expenditures and that proceeds received from federal and state grant funding. This is slightly below our prior expectation of $200 million, largely due to delays in rural fiber projects. CapEx spend was primarily related to improvements to the wireless and data networks, Particularly in rural Alaska, GCI's net capital expenditure for 2025 are expected to be approximately $250 million, primarily related to additional investments in middle and last mile connectivity, with continued network expansion in our most important markets in rural Alaska. Taking a proactive approach to rural connectivity projects is critical to securing necessary government funding and a significant portion of the increased capex in 2025 are related to fulfilling build-out requirements of the Alaska plan. And with that, I'm incredibly excited to turn the call over to Ben Oren to go through the balance sheet and more transaction-related items.