GCI Liberty, Inc. (“GCI Liberty”) (Nasdaq: GLIBA, GLIBP) today
reported fourth quarter and year end 2019 results. Headlines
include(1):
- GCI(2) total revenue down 1% for the fourth quarter and full
year 2019
- GCI Consumer revenue flat for both periods, with Consumer data
revenue up 5% in the fourth quarter and 6% in the full year
- GCI Business revenue down 1% in the fourth quarter and 2% in
the full year
- GCI operating loss decreased for the fourth quarter and full
year
- GCI Adjusted OIBDA(3) increased 21% in the fourth quarter and
declined 4% in the full year
- Updates to Rural Health Care matters resulted in $4 million net
benefit to operating income and Adjusted OIBDA in the fourth
quarter and $17 million detriment in the full year, due to:
- FCC(4) granting the appeal of a prior funding denial, resulting
in reversal of a $21 million reserve taken in the first quarter of
2019
- Potential compliance issues identified under certain Rural
Health Care contracts resulting in a $17 million loss accrual in
the fourth quarter of 2019
“We had a solid fourth quarter at GCI. On a year over year
basis, Adjusted OIBDA improved approximately $9 million before an
additional $4 million net benefit from two significant Rural Health
Care matters. We were pleased that the FCC granted the appeal of
one of our largest Rural Health Care customers, and we continue to
work with them on other pending regulatory matters," said GCI CEO,
Ron Duncan. "Our operations performed well, with the efficiency
measures that we put in place earlier in the year showing very
positive results. We were pleased to see growth return to our
consumer cable modem business with net additions of 2,400
subscribers for the quarter."
Discussion of Results
Unless otherwise noted, the following discussion compares
financial information for the three months or year ended December
31, 2019 to the same periods in 2018.
The pro forma financial information presented herein for the
three months and full year ended December 31, 2018 was prepared
assuming the acquisition of GCI 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. The pro forma results have also been adjusted for
the FCC's October 2018 Rural Health Care decision.
GCI
GCI participates in various Universal Service Fund ("USF")
programs, which provide government subsidies to customers in low
income areas, including schools, libraries and other facilities.
One of these programs, the USF Rural Health Care ("RHC") Program,
subsidizes the rates for services provided to rural health care
providers.(5) In the first quarter of 2019, GCI recorded an
accounts receivable reserve of $21 million and associated bad debt
expense relating to an RHC customer whose requested funding was
denied under the RHC Program. As a result, GCI ceased recognizing
revenue related to this customer for the period from April 1, 2019
through December 31, 2019. On February 19, 2020, the FCC issued an
order that granted this customer's appeal and directed the
Universal Service Administrative Company ("USAC") to reverse its
previous funding denials. As a result, GCI reversed the previously
recorded $21 million accounts receivable reserve and associated bad
debt expense, benefiting fourth quarter operating income and
Adjusted OIBDA. In the first quarter of 2020, GCI will evaluate
what amount of revenue related to this contract for the last nine
months of 2019 and going forward into 2020 it can recognize. Note:
GCI has continued to provide service for all periods and this will
be taken into account in GCI’s analysis.
Separately, in the fourth quarter of 2019, GCI became aware of
potential RHC Program compliance issues related to certain active
and expired contracts with certain of its RHC customers. Following
an extensive review of these contracts, GCI deemed certain
contracts probable of noncompliance, and accrued a loss of
approximately $17 million as an expense in selling, general and
administrative expense in the fourth quarter of 2019. GCI has
notified the FCC of the issues and will continue to work with them
to resolve these matters.(5)
The following table provides GCI’s operating metrics and pro
forma financial results for the fourth quarter and full year 2018
and 2019.
(amounts in thousands, except operating
metrics)
4Q18
4Q19
% Change
FY18
FY19
% Change
GCI Consolidated Pro Forma Financial
Metrics
Revenue
Consumer
$
114,745
$
114,595
—
%
$
436,668
$
438,475
—
%
Business
111,479
109,849
(1
)
%
438,622
431,187
(2
)
%
Total Revenue
$
226,224
$
224,444
(1
)
%
$
875,290
$
869,662
(1
)
%
Operating Loss
$
(210,737
)
$
(155,325
)
26
%
$
(192,444
)
$
(182,841
)
5
%
Operating Loss Margin (%)
(93.2
)
%
(69.2
)
%
2,400
bps
(22.0
)
%
(21.0
)
%
100
bps
Adjusted OIBDA(1)
$
61,225
$
74,326
21
%
$
266,871
$
256,878
(4
)
%
Adjusted OIBDA Margin(1) (%)
27.1
%
33.1
%
600
bps
30.5
%
29.5
%
(100
)
bps
GCI Consumer
Financial Metrics
Revenue
Wireless
$
45,370
$
46,335
2
%
$
166,847
$
168,086
1
%
Data
41,710
43,777
5
%
159,667
169,332
6
%
Video
22,650
20,678
(9
)
%
89,553
83,946
(6
)
%
Voice
5,015
3,805
(24
)
%
20,601
17,111
(17
)
%
Total Revenue
$
114,745
$
114,595
—
%
$
436,668
$
438,475
—
%
Operating Metrics
Wireless
Revenue generating wireless lines in
service(2)
180,400
176,200
(2
)
%
Non-revenue generating wireless lines in
service(3)
12,300
6,100
(50
)
%
Wireless Lines in Service
192,700
182,300
(5
)
%
Data - Cable Modem Subscribers(4)
125,700
127,000
1
%
Video
Basic Subscribers
89,100
81,200
(9
)
%
Homes Passed
253,400
253,400
—
%
Voice - Total Local Access Lines in
Service(5)
44,500
39,900
(10
)
%
GCI Business
Financial Metrics
Revenue
Wireless
$
22,969
$
21,727
(5
)
%
$
95,649
$
92,603
(3
)
%
Data
70,148
73,043
4
%
278,315
277,519
—
%
Video
7,349
4,242
(42
)
%
19,449
16,170
(17
)
%
Voice
11,013
10,837
(2
)
%
45,209
44,895
(1
)
%
Total Revenue
$
111,479
$
109,849
(1
)
%
$
438,622
$
431,187
(2
)
%
Operating Metrics
Wireless Lines in Service
21,500
20,500
(5
)
%
Data - Cable Modem Subscribers(4)
9,200
8,800
(4
)
%
Voice - Total Local Access Lines in
Service(5)
36,500
34,500
(5
)
%
1)
See reconciling schedule 1.
2)
A revenue generating wireless line in
service is defined as a wireless device with a monthly fee for
services.
3)
A non-revenue generating wireless line in
service is defined as a data-only line with no monthly fee for
services.
4)
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.
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.
GCI revenue declined slightly in the fourth quarter and full
year due to lower GCI Business revenue, while GCI Consumer revenue
was stable. Operating loss declined for both the fourth quarter and
full year. Adjusted OIBDA increased in the fourth quarter due to
improvement in the operating performance of the business and a net
$4 million benefit from the two aforementioned RHC matters. The
operating performance improvement was driven by continued cost
efficiencies and a focus on the core facilities based Alaska
market. Adjusted OIBDA declined for the full year largely due to
the previously discussed $17 million RHC charge.
In the fourth quarter of 2019, GCI Liberty recorded an
impairment loss of $167 million primarily related to wireless
licenses, due to increased uncertainty around GCI long-term
wireless revenue. This impairment charge is excluded from fourth
quarter and full year 2019 Adjusted OIBDA. In the fourth quarter of
2018, due to certain FCC program revenue changes and market factors
impacting GCI operating results, GCI Liberty recorded impairment
losses of $136 million and $65 million related to goodwill and
cable certificates, respectively. These impairment charges are
excluded from fourth quarter and full year 2018 pro forma Adjusted
OIBDA.
GCI Consumer
Consumer revenue was flat for both the fourth quarter and full
year as declines in video and voice revenue were offset by gains in
wireless and data. The data revenue increase for both the fourth
quarter and full year was due to customer migration to more
expensive plans offering higher speeds and data limits. Data
revenue in the fourth quarter was also driven by an increase in
cable modem subscribers. Wireless revenue increased for the full
year largely due to lapping the free month of service given in the
third quarter of 2018 to certain customers due to the billing
system conversion. Wireless revenue in the fourth quarter increased
due to higher wireless handset sales. Video revenue declined in the
fourth quarter and full year due to a decrease in video
subscribers. Voice revenue declines in the fourth quarter and full
year were primarily driven by a scheduled decrease in USF High Cost
Support.
GCI Business
In the fourth quarter and full year, GCI Business revenue
declined due to decreases in wireless, video and voice revenue.
These declines were partially offset by an increase in data revenue
in the fourth quarter and flat data revenue for the full year.
Wireless revenue declined for the fourth quarter and full year due
to wholesale customers moving backhaul circuits off of the GCI
network. Video revenue decreased in the fourth quarter and full
year due to lower political advertising revenue. In the fourth
quarter, data revenue increased primarily due to higher sales to
education and health care customers. For the full year, data
revenue was flat as the higher sales to education and health care
customers were offset by lower time and materials revenue and a
reduction of revenue from the aforementioned health care customer
whose RHC funding was originally denied.
Capital Expenditures
In 2019, GCI spent $133 million on capital expenditures,
excluding capitalized interest and insurance payments received to
cover the costs of the 2018 earthquake. Capital expenditure
spending was related primarily to improvements to the wireless and
hybrid fiber coax networks. GCI's capital expenditures for 2020 are
expected to be similar.
Share Repurchases
GCI Liberty did not repurchase shares from November 1, 2019
through January 31, 2020. For the full year 2019, GCI Liberty
repurchased 1.0 million shares of common stock at an average price
of $43.64 for a total of $43.9 million. The total remaining
repurchase authorization for GCI Liberty is approximately $494
million.
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.S.T.) on February 26, 2020. For information regarding how to
access the call, please see “Important Notice” later in this
document.
2)
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.
3)
For a definition of adjusted OIBDA and
adjusted OIBDA margin and applicable reconciliations, see the
accompanying schedules.
4)
Federal Communications Commission.
5)
More detailed information regarding
certain regulatory matters pending before the FCC regarding USF
programs, including the RHC program, can be found in GCI Liberty's
Annual Report on Form 10-K for the year ended December 31,
2019.
GCI
LIBERTY GAAP FINANCIAL METRICS
(amounts in thousands)
4Q18
4Q19
FY18
FY19
Revenue
GCI Holdings(1)
$
226,222
$
224,444
$
715,842
$
869,662
Corporate and other
8,700
7,943
23,920
25,071
Total GCI Liberty Revenue
$
234,922
$
232,387
$
739,762
$
894,733
Operating Income
GCI Holdings(1)
$
(213,595
)
$
(155,325
)
$
(208,934
)
$
(182,841
)
Corporate and other
(8,566
)
(9,125
)
(41,058
)
(34,680
)
Total GCI Liberty Operating
Income
$
(222,161
)
$
(164,450
)
$
(249,992
)
$
(217,521
)
Adjusted OIBDA
GCI Holdings(1)
$
61,224
$
74,326
$
217,832
$
256,878
Corporate and other
(4,475
)
(4,666
)
(24,731
)
(21,865
)
Total GCI Liberty Adjusted
OIBDA
$
56,749
$
69,660
$
193,101
$
235,013
(1)
GCI Holdings 2018 pro forma financial
statements differ from GCI Holdings GAAP financial statements due
to the impact of acquisition accounting, including deferred revenue
adjustments, depreciation and amortization of intangible and
tangible assets, RHC Program revenue adjustments 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 Forms 10-Q and 10-K for the
three months ended September 30, 2019 and the year ended December
31, 2019.
Fair Value of Public Holdings
(amounts in millions)
9/30/2019
12/31/2019
Charter(1)
$
2,208
$
2,599
Liberty Broadband(1)
4,468
5,367
LendingTree(2)
1,069
1,045
Total
$
7,745
$
9,011
(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 $167 million and $166 million at
September 30, 2019 and December 31, 2019, respectively.
Cash and Debt
The following presentation is provided to separately identify
cash and liquid investments and debt information.
(amounts in millions)
9/30/2019
12/31/2019
Cash:
GCI
$
82
$
61
Corporate and other
328
509
Total GCI Liberty Consolidated
Cash
$
410
$
570
Debt:
Senior Notes
$
775
$
775
Senior Credit Facility
713
513
Finance leases, tower obligation and
other(1)
112
110
Total GCI Debt
$
1,600
$
1,398
Margin Loan
$
900
$
1,300
1.75% Exchangeable Senior Debentures due
2046
477
477
Total Corporate Level Debt
$
1,377
$
1,777
Total GCI Liberty Debt
$
2,977
$
3,175
Premium on debt and deferred financing
fees
118
191
Finance leases and tower obligation
(excluded from GAAP Debt)
(105
)
(103
)
Total GCI Liberty Debt (GAAP)
$
2,990
$
3,263
Other Financial Obligations:
Indemnification Obligation(2)
$
137
$
202
Preferred Stock(3)
178
178
GCI Leverage(4)
6.0x
5.1x
(1)
Includes the Wells Fargo Note Payable and
current and long-term obligations under finance 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 a 7% coupon,
$25/share liquidation preference plus accrued and unpaid dividends
and 1/3 vote per share. The redemption date is the first business
day following the twenty-first anniversary of the March 8, 2018
auto conversion. The preferred stock is considered a liability for
GAAP purposes.
(4)
As defined in GCI's credit agreement.
GCI Liberty cash increased due to increased borrowings on the
Margin Loan. Proceeds from the borrowings were partially used to
repay a portion of the GCI Senior Credit Facility and for corporate
expense. GCI cash decreased as cash flow from operations was more
than offset by capital expenditures.
GCI Liberty debt increased due to the aforementioned draw on the
Margin Loan, partially offset by a repayment of a portion of the
GCI Senior Credit Facility.
Pursuant to an indemnification agreement, GCI Liberty will
compensate Qurate Retail for any payments made in excess of the
adjusted principal amount of the LI LLC Charter exchangeable
debentures to any holder that exercises its exchange right on or
before the put/call date of October 5, 2023. This indemnity is
supported by a negative pledge in favor of Qurate Retail on the
reference shares of Class A common stock of Charter held at GCI
Liberty that underlie the LI LLC Charter exchangeable debentures.
The indemnification obligation on GCI Liberty's balance sheet is
valued based on the estimated exchange feature in the LI LLC
Charter exchangeable debentures. As of December 31, 2019, a holder
of the LI LLC Charter exchangeable debentures does have the ability
to exchange, and accordingly, the indemnification obligation has
been classified as a current liability. There is $332 million
principal amount of the LI LLC Charter exchangeable debentures
outstanding as of December 31, 2019.
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.S.T.)
on February 26, 2020. The call can be accessed by dialing (800)
458-4121 or (720) 543-0206, passcode 5580110, 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 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, capital expenditures, matters relating
to the Universal Service Administrative Company and Rural Health
Care program, 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, 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, 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
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 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 operating income (loss) plus depreciation and
amortization, stock-based compensation, separately reported
litigation settlements, insurance proceeds, restructuring,
acquisition and other related costs and impairment charges.
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 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, 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 operating
loss to its Adjusted OIBDA for the three months and years ended
December 31, 2018 and December 31, 2019. The pro forma financial
information presented below for the fourth quarter and full year
2018 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. The pro forma results have also been adjusted for
the FCC's October 2018 Rural Health Care decision described in GCI
Liberty's Annual Report on Form 10-K for the year ended December
31, 2019.
GCI HOLDINGS
ADJUSTED OIBDA RECONCILIATION
(amounts in thousands)
4Q18
4Q19
FY18
FY19
GCI Holdings
Operating Loss
$
(210,737
)
$
(155,325
)
$
(192,444
)
$
(182,841
)
Depreciation and amortization
62,944
65,616
241,687
263,508
Stock-based compensation
1,078
2,967
6,088
14,907
Impairment of intangibles and long-lived
assets
207,940
167,062
207,940
167,062
Insurance proceeds and restructuring,
net
—
(5,994
)
—
(5,758
)
Legal settlement
—
—
3,600
—
Adjusted OIBDA
$
61,225
$
74,326
$
266,871
$
256,878
SCHEDULE 2
The following table provides a reconciliation of operating loss
calculated in accordance with GAAP to Adjusted OIBDA for GCI
Liberty for the three months and years ended December 31, 2018 and
December 31, 2019, respectively.
GCI LIBERTY ADJUSTED
OIBDA RECONCILIATION
(amounts in thousands)
4Q18
4Q19
FY18
FY19
GCI
Liberty
GCI Liberty Operating Loss
$
(222,161
)
$
(164,450
)
$
(249,992
)
$
(217,521
)
Depreciation and amortization
63,689
66,298
206,946
266,333
Stock-based compensation
7,281
6,744
28,207
24,897
Impairment of intangibles and long-lived
assets
207,940
167,062
207,940
167,062
Insurance proceeds and restructuring,
net
—
(5,994
)
—
(5,758
)
Consolidated GCI Liberty Adjusted
OIBDA
$
56,749
$
69,660
$
193,101
$
235,013
GCI LIBERTY, INC. AND
SUBSIDIARIES
BALANCE SHEET
INFORMATION
(unaudited)
December 31,
December 31,
2019
2018
Amounts in thousands, except
share amounts
Assets
Current assets:
Cash and cash equivalents
$
569,520
491,257
Trade and other receivables, net of
allowance for doubtful accounts of $7,516 and $7,555,
respectively
114,435
182,600
Current portion of tax sharing
receivable
—
36,781
Other current assets
43,868
40,100
Total current assets
727,823
750,738
Investments in equity securities
2,605,293
1,533,517
Investments in affiliates, accounted for
using the equity method
167,643
177,030
Investment in Liberty Broadband measured
at fair value
5,367,242
3,074,373
Property and equipment, net
1,090,901
1,184,606
Intangible assets not subject to
amortization
Goodwill
855,837
855,837
Cable certificates
305,000
305,000
Wireless licenses
35,000
190,000
Other
6,500
16,500
1,202,337
1,367,337
Intangible assets subject to amortization,
net
391,979
436,006
Tax sharing receivable
84,534
65,701
Other assets, net
295,693
71,514
Total assets
$
11,933,445
8,660,822
Liabilities and Equity
Current liabilities:
Accounts payable and accrued
liabilities
$
92,893
100,334
Deferred revenue
27,886
31,743
Current portion of debt, net of deferred
financing costs
3,008
900,759
Indemnification obligation
202,086
—
Other current liabilities
69,149
47,958
Total current liabilities
395,022
1,080,794
Long-term debt, net, including $658,839
and $462,336 measured at fair value
3,263,210
1,985,275
Obligations under finance leases and tower
obligations, excluding current portion
97,507
122,245
Long-term deferred revenue
57,986
65,954
Deferred income tax liabilities
1,527,109
793,696
Preferred stock
178,002
177,103
Derivative Instrument
71,305
—
Indemnification obligation
—
78,522
Other liabilities
133,020
50,543
Total liabilities
5,723,161
4,354,132
Equity
Stockholders’ equity:
Series A common stock, $0.01 par value.
Authorized 500,000,000 shares; issued and outstanding 101,306,716
and 102,058,816 shares at December 31, 2019 and 2018,
respectively
1,013
1,021
Series B common stock, $0.01 par value.
Authorized 20,000,000 shares; issued and outstanding 4,437,593 and
4,441,609 shares at December 31, 2019 and 2018, respectively
44
44
Series C common stock, $0.01 par value.
Authorized 1,040,000,000 shares; no issued and outstanding shares
at December 31, 2019 and 2018
—
—
Additional paid-in capital
3,221,885
3,251,957
Accumulated other comprehensive earnings
(loss), net of taxes
(4,084
)
168
Retained earnings
2,982,626
1,043,933
Total stockholders' equity
6,201,484
4,297,123
Non-controlling interests
8,800
9,567
Total equity
6,210,284
4,306,690
Commitments and contingencies
Total liabilities and equity
$
11,933,445
8,660,822
GCI LIBERTY, INC. AND
SUBSIDIARIES
STATEMENT OF OPERATIONS
INFORMATION
(unaudited)
Year Ended
December 31,
2019
2018
Amounts in thousands, except
per share amounts
Revenue
$
894,733
739,762
Operating costs and expenses:
Operating expense (exclusive of
depreciation and amortization shown separately below)
285,331
227,192
Selling, general and administrative,
including stock-based compensation
399,286
347,676
Depreciation and amortization expense
266,333
206,946
Impairment of intangibles and long-lived
assets
167,062
207,940
Insurance proceeds and restructuring,
net
(5,758
)
—
1,112,254
989,754
Operating income (loss)
(217,521
)
(249,992
)
Other income (expense):
Interest expense (including amortization
of deferred loan fees)
(153,803
)
(119,296
)
Share of earnings (losses) of affiliates,
net
(2,629
)
25,772
Realized and unrealized gains (losses) on
financial instruments, net
3,002,400
(681,545
)
Tax sharing agreement
26,646
(32,105
)
Other, net
13,172
205
2,885,786
(806,969
)
Earnings (loss) before income taxes
2,668,265
(1,056,961
)
Income tax (expense) benefit
(730,023
)
183,307
Net earnings (loss)
1,938,242
(873,654
)
Less net earnings (loss) attributable to
the non-controlling interests
(456
)
(351
)
Net earnings (loss) attributable to GCI
Liberty, Inc. shareholders
$
1,938,698
(873,303
)
Basic net earnings (loss) attributable to
Series A and Series B GCI Liberty, Inc. shareholders per common
share
$
18.41
(8.09
)
Diluted net earnings (loss) attributable
to Series A and Series B GCI Liberty, Inc. shareholders per common
share
$
18.32
(8.09
)
GCI LIBERTY, INC. AND
SUBSIDIARIES
STATEMENT OF CASH FLOWS
INFORMATION
(unaudited)
Year Ended
December 31,
2019
2018
amounts in thousands
Cash flows from operating activities:
Net earnings (loss)
$
1,938,242
(873,654
)
Adjustments to reconcile net earnings
(loss) to net cash from operating activities:
Depreciation and amortization
266,333
206,946
Stock-based compensation expense
24,897
28,207
Share of (earnings) losses of affiliates,
net
2,629
(25,772
)
Realized and unrealized (gains) losses on
financial instruments, net
(3,002,400
)
681,545
Deferred income tax expense (benefit)
729,970
(182,724
)
Intergroup tax payments
—
—
Impairment of intangibles and long-lived
assets
167,062
207,940
Other, net
4,800
13,441
Change in operating assets and
liabilities:
Current and other assets
3,041
(34,698
)
Payables and other liabilities
(45,969
)
61,657
Net cash provided (used) by operating
activities
88,605
82,888
Cash flows from investing activities:
Cash and restricted cash from acquisition
of GCI Holdings
—
147,957
Capital expended for property and
equipment
(148,481
)
(134,352
)
Purchases of investments
—
(48,581
)
Proceeds from derivative instrument
105,866
—
Settlement of derivative instrument
(105,866
)
—
Other investing activities, net
17,799
2,700
Net cash provided (used) by investing
activities
(130,682
)
(32,276
)
Cash flows from financing activities:
Borrowings of debt
877,308
1,588,703
Repayment of debt, finance leases, and
tower obligations
(688,901
)
(254,033
)
Contributions from (distributions to)
former parent, net
—
(1,122,272
)
Indemnification payment to Qurate
Retail
—
(132,725
)
Derivative payments
—
(80,001
)
Repurchases of GCI Liberty common
stock
(43,910
)
(111,648
)
Other financing activities, net
(18,302
)
(20,752
)
Net cash provided (used) by financing
activities
126,195
(132,728
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
84,118
(82,116
)
Cash, cash equivalents and restricted cash
at beginning of period
492,032
574,148
Cash, cash equivalents and restricted cash
at end of period
$
576,150
492,032
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200226005867/en/
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