Liberty Broadband Reports Fourth Quarter and Year End 2023 Financial Results

Liberty Broadband Corporation ("Liberty Broadband") (NASDAQ:LBRDA, LBRDK, LBRDP))) today reported fourth quarter and year end 2023 results.

Headlines include ⁽¹⁾:

• Fair value of Charter investment was $18.0 billion as of December 31, 2023
• From November 1, 2023 through January 31, 2024, Liberty Broadband received $385 million of proceeds from sale of 933 thousand Charter shares to Charter
  • Maintained fully diluted equity interest in Charter of 26%⁽²⁾
• From November 1, 2023 through January 31, 2024, Liberty Broadband repurchased 3.2 million LBRDK shares at an average price per share of $79.69 for total cash consideration of $255 million
• For the full year, GCI⁽³⁾ grew revenue 1% to $981 million, generated operating income of $117 million and grew Adjusted OIBDA⁽⁴⁾ 1% to a record $361 million

"Despite a challenging environment, Charter deployed significant capital and made progress on its attractive mobile and rural expansion initiatives in 2023. Mobile is growing quickly, with promising post-promotional Spectrum One results. Rural footprint expansion is surpassing penetration and return targets. We are delivering value to customers leveraging the power of Charter's assets and we are confident these investments will strengthen Charter's competitive positioning, enhance future growth and increase shareholder value," said Greg Maffei, Liberty Broadband President & CEO. "GCI produced another year of solid financial results and continues to expand and upgrade its fiber network across Alaska."

Share Repurchases

From November 1, 2023 through January 31, 2024, Liberty Broadband repurchased 3.2 million shares of Series C Liberty Broadband common stock (NASDAQ:LBRDK) at an average cost per share of $79.69 for total cash consideration of $255 million. The total remaining repurchase authorization for Liberty Broadband as of February 1, 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 Class A common stock as is necessary to maintain Liberty Broadband's percentage equity interest at 26% on a fully diluted basis. Such sales are executed by Liberty Broadband monthly based on Charter's repurchase activity in the month prior.

From November 1, 2023 through January 31, 2024, Liberty Broadband sold 933 thousand shares of Charter Class A common stock to Charter for total proceeds of $385 million.

Balance Sheet

The following presentation is provided to separately identify cash and liquid investments, debt and public holdings of Liberty Broadband as of September 30, 2023 and December 31, 2023.

Liberty Broadband cash increased $70 million in the fourth quarter as proceeds from Charter share sales more than offset share repurchases in the period and debt reduction. GCI cash increased $41 million in the fourth quarter as cash from operations more than offset capital expenditures.

Liberty Broadband debt decreased by $69 million in the fourth quarter primarily due to repayment under the Charter margin loan. There is $840 million of available capacity under the Charter margin loan. GCI's credit facility has undrawn capacity of $397 million (net of letters of credit), and GCI's leverage as defined in its credit agreement is 2.9x.

GCI Operating and Financial Results

Unless otherwise noted, the following discussion compares financial information for the three and twelve months ended December 31, 2022 and December 31, 2023.

GCI revenue was flat in the fourth quarter, with growth in business data offset by declines in other revenue in both business and consumer. GCI revenue increased 1% for the full year driven by robust demand for data in business customers throughout the year, partially offset by a decline in video and voice revenue.

Operating income increased in the fourth quarter and full year due to lower depreciation expense as certain assets became fully depreciated in 2022. The full year also benefited from lapping a legal settlement accrual recognized in 2022. Adjusted OIBDA decreased 1% in the fourth quarter and increased 1% for the full year in line with revenue growth. Business data growth was strong throughout 2023 highlighting the shift to higher margin revenue, offset primarily by higher selling, general and administrative expense due to increases in labor related costs, software contracts, bad debt and property taxes.

In 2023, GCI spent $216 million, net, on capital expenditures, which is elevated compared to prior expectations largely due to the timing of receiving certain grant proceeds. Capital expenditure spending was primarily related to improvements to the wireless and data networks, particularly in rural Alaska. GCI's net capital expenditures for 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.

NOTES

LIBERTY BROADBAND FINANCIAL METRICS

Important Notice: Liberty Broadband (NASDAQ:LBRDA, LBRDK, LBRDP))) will discuss Liberty Broadband's earnings release on a conference call which will begin at 11:00 a.m. (E.T.) on February 16, 2024. The call can be accessed by dialing (877) 407-3944 or (412) 902-0038, passcode 13742819, 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, the expansion and upgrade of GCI's fiber network, expectations regarding Charter's mobile growth and Spectrum One results 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 Form 10-K, 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, 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 and twelve months ended December 31, 2022 and December 31, 2023.

GCI HOLDINGS ADJUSTED OIBDA RECONCILIATION

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 and twelve months ended December 31, 2022 and December 31, 2023.

LIBERTY BROADBAND ADJUSTED OIBDA RECONCILIATION

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