Liberty Broadband Corporation

Welcome to the Liberty Capital 2026 Q2 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press star 1 on your telephone. As a reminder, this conference will be recorded on August 6th. and I would now like to turn the call over to Hooper Stevens, Senior Vice President, Investor Relations. Please go ahead.

Thank you for joining us today. Today's call includes certain poor 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 forms 10-K and 10-Q followed by Liberty Capital and Liberty Broadband with the SEC. These forward-looking statements speak only as of the date of this call and Liberty Capital and Liberty Broadband expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Capital or Liberty Broadband's expectations. On today's call, we will discuss certain non-GAAP financial measures for Liberty Capital, including adjusted OIPDA, adjusted OIPDA margin, and free cash flow, information regarding the required definitions, along with the comparable GAAP metrics and reconciliations, including Schedule 1, for Liberty Capital can be found in the earnings press release issued today, which is available on Liberty Capital's website. Speaking on today's call will be Ron Duncan, the CEO of Liberty Capital, and Brian Wendling, Liberty Capital's Chief Accounting and Principal Financial Officer. Also during Q&A, We may take questions related to Liberty Broadband should they arise. Additional members of Liberty Capital, GCI, and Liberty Broadband Management are available to supplement your questions. Now, I'll turn the call over to Ron Duncan.

Thank you, Hooper, and good morning, everyone. This is our first earnings call in the Liberty Capital name, and we're excited about the momentum in our business. Our growing cash profile enables us to announce a new capital allocation policy under which we will initiate a quarterly dividend in December of this year with an initial aggregate amount of $60 million per year. We will aim to operate our GCI unit at approximately three times long-term net leverage with incremental cash and borrowing capacity used for both investment opportunities as well as a return of capital to shareholders, including buybacks. We are also pleased to report a solid second quarter. Liberty Capital generated revenue of $261 million and adjusted EBITDA of $96 million. Over the prior 12 months, free cash flow was $59 million. Brian will cover the financial results in greater detail. The quarter also demonstrates the platform we are building at Liberty Capital. GCI is a stable, increasingly cash-generative operating business with a unique and valuable position in Alaska. We are completing a period of elevated network investment with capital intensity expected to decline beginning next year and further in 2028. We expect the quintillion acquisition to increase the resilience of GCI's network and our free cash flow. At the parent company, Liberty Capital will allocate that cash flow with discipline between attractive investments and returns to shareholders. Turning to GCI, we are on track with our plans of the year for approximately stable OIBITDA with year-over-year performance weighted to the fourth quarter. Upon closing the Quintilian transaction later this year, we expect to realize approximately $20 million in run rate synergies over the following 24 months, with roughly half achieved in the first 12 months. Quintillion would have contributed $50 to $55 million of adjusted EBITDA, including run rate synergies, in 2026. We continue to grow our converged base, where we expect higher customer retention over time. Consumer wireless lines increased by 2,100 during the quarter, and our converged customer base continued to grow, with 42% of broadband customers taking wireless service, and 63% of postpaid wireless lines sold as part of the converged relationship. Consumer broadband subscribers declined organically by 500 during the quarter, but that was more than offset by the purchase of a small broadband provider that added 5,400 customers to our subscriber base. In the business segment, revenue grew slightly and margin declined as service was restored on the quintillion network in which GCI uses capacity. This increased our distribution costs compared to last year's second quarter. Service upgrades also drove higher circuit costs. Our operating priorities remain unchanged. Invest in network quality, complete our Alaska plan commitments, drive convergence, and extend high-quality connectivity across Alaska. We made visible progress against those priorities. GCI has expanded 5G service to more than 125 communities, reaching approximately 83% of Alaskans. More than 100 communities have been upgraded this year alone. These upgrades replace several generations of legacy technology with a more standardized 5G platform, improving performance today while giving our teams better network visibility, faster troubleshooting, and a more efficient operating environment. This progress also puts our capital spending in context. We are at the peak of the investment cycle, but that investment is producing tangible network accomplishments now. We continue to expect 2026 to represent our highest level of capital spending, followed by meaningful declines in both 27 and 28, returning GCI to its historical capital intensity range and generating stronger cash flow. Starlink remains a viable broadband competitor and we take that competition seriously. At the same time, serving Alaska requires every appropriate technology. GCI integrates Starlink into managed solutions for certain business customers and we recently announced that we will use Starlink's dedicated bonded gateway service as an additional resiliency layer in various communities, including Bethel, Sitka, and Kotzebue. Our approach is pragmatic. Where Starlink competes with us, we compete. Where its technology can strengthen our network or customer solutions, we will use it. Turning to Quintilian, the strategic rationale remains compelling. Combining the networks will create more ringed architecture, greater routing diversity, and improved reliability. It will reduce exposure to individual outages, improve restoration capabilities, and strengthen the infrastructure supporting communities, healthcare, Public Safety, Government, and National Security Activities. We expect the transaction to be accreted to free cash flow in the first year following closing. The HSR waiting period has expired and the FCC review remains in process. We remain enthusiastic about the transaction, which we now expect to close this year. We are planning a smooth and quick integration. The declining capital intensity, combined with Quintilian's expected contribution, will materially expand GCI's cash generation beginning in 2027. That gives us confidence to establish a more explicit capital allocation framework today. As I mentioned earlier, beginning in the fourth quarter, we intend to initiate a recurring dividend of approximately $15 million per quarter or $60 million per year. We expect this level of dividend to represent approximately half of next year's free cash flow and even less than 28 as CapEx continues to decline. The dividend provides a durable baseline shareholder return through normal business and investment cycles, and we intend to grow it over time. We also expect to manage GCI Opco for its net leverage of approximately three times over the long term. That is a rough target. and many more. Our capital allocation waterfall is clear. First, fund the operating business and committed network investments. Second, pay the regular dividend and look to increase it over time. Third, manage the balance sheet around our long-term leverage target. Residual free cash flow will be allocated between other opportunities and the return of capital to shareholders. Repurchases can be attractive when our shares trade a meaningful discount for the fair value of our equity, and they could be an option in the future. We will also consider liquidity, public market scale, and the value of preserving capacity for compelling investments. External investments will face the same disciplines. When we do not identify sufficient attractive high return uses, we expect to return additional cash to shareholders. In closing, GCI is moving toward stronger free cash flow as capital intensity declines. Quintilian should enhance network quality, resilience, and cash generation. Liberty Capital's coming dividend establishes a durable baseline return while our leverage framework preserves strategic capacity without requiring us to deploy it prematurely. External investments and repurchases will compete for capital as we seek to maximize shareholder returns. That's the Liberty Capital model. Maintain operational excellence at GCI, uncover new opportunities, and return capital when that is the best available use of shareholder funds. With that, I'll turn it over to Brian for more financial details.