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Welcome to GCI Liberty 2026 first quarter 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 one on your telephone. As a reminder, this conference will be recorded May seventh. I would now like to turn the call over to Courtnee Ulrich, Senior Vice President, Investor Relations. Please go ahead.

Thank you, everyone, for joining us today for GCI Liberty's first quarter 2026 earnings call. As you know, this call may include 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 forms 10-K and 10-Q filed by GCI Liberty and Liberty Broadband with the SEC. These forward-looking statements speak only as of the date of this call and GCI Liberty 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 GCI Liberty or Liberty Broadband's expectations with regard to 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 GCI Liberty, including Adjusted OIBDA, Adjusted OIBDA margin, and free cash flow. Information regarding the required definitions along with the comparable GAAP metrics and reconciliations for GCI Liberty can be found in the earnings press release issued today, which is available on GCI Liberty's IR website. Speaking on today's call will be Ron Duncan, the CEO of GCI Liberty, and Brian Wendling, GCI Liberty's Chief Accounting and Principal Financial Officer. Also, during Q&A, we will take questions related to Liberty Broadband should they arise, and we have additional members of GCI and Liberty Broadband management available to answer questions. With that, I'll turn the call over to Ron Duncan.

Thank you and good morning. We had an incredibly productive start to the year and delivered solid first quarter results. We continue to execute on our mission of delivering quality connectivity to all Alaskans. At GCI, we recently announced a definitive agreement to acquire Quintillion for consideration of $310 million in cash, subject to certain adjustments, reimbursement of up to $50 million for capital expenditures incurred by Quintillion prior to closing and potential earn out payments. We are incredibly excited to marry two of Alaska's best networks. This transaction will bring together complementary subsea and terrestrial fiber routes, our extensive rural microwave network, deep operational expertise and long-term investment under one operating model. It will enhance the scale, resilience, and reach of GCI's statewide network to benefit all Alaskans. We expect the transaction to be accretive to free cash flow in the first year after closing.

We announced yesterday that GCI Liberty has invested approximately $107 million to acquire Searchlight Capital Partners equity interest in Liberty Latin America. We are also in discussions with Dr. John Malone, Chairman of the Board of GCI Liberty and Director Emeritus of Liberty Latin America, and certain affiliates to acquire additional shares in Liberty Latin America. We are pleased to begin GCI Liberty's next chapter of growth with this opportunistic investment in Liberty Latin America and are keenly interested in acquiring a more significant equity and voting stake in the company from Dr. Malone and others. Balan Nair and his team have done an impressive job of developing LLA into a leading integrated connectivity provider across Latin America and the Caribbean, and we look forward to participating in the growth potential that lies ahead.

As part of this evolution, we intend to change our name from GCI Liberty to Liberty Capital Corporation in the coming weeks with no change to our ticker. We are changing our name to reflect our expanded focus at the parent level as we start making investments outside of our core Alaska operating subsidiary. Our Alaska operations will continue under the GCI name and brand. These first steps of strategic change at GCI Liberty represent our focus on augmenting the ways we create value for our shareholders and our progression as Liberty Capital. We look forward to keeping you updated on our progress. Turning now to our operating highlights. We grew consumer wireless subscribers 2% year-over-year, ending the quarter with 200,000 consumer wireless lines.

We had a total of 207,700 wireless lines at quarter end, including 7,700 business lines. We added 1,000 consumer wireless lines during the quarter, including 500 postpaid lines, largely from our GCI+ wireless free for a year promotion. On the data side, we saw a 3% decline year-over-year, ending the quarter with 15,500 data subscribers. We lost 700 data subscribers during the quarter due to continued competitive pressure from wireless substitution and limited competition from Starlink. Encouragingly, we note the pace of our broadband losses is decreasing, indicating a stabilizing broadband base. We believe the stabilization is due to the success of our new GCI+ promotional offer and the improvements we are making to speed and reliability throughout our network. As we look forward, we expect the business to remain stable.

At GCI, our operating priorities are first, to invest in our network infrastructure, including closing our acquisition of Quintillion. Second, to complete our build-out commitments under the Alaska Plan. Third, to drive value and the benefits of convergence for our customers. Finally, to bridge the digital divide through our rural expansion. Within the first year of closing, the transaction will bring together complementary fiber routes, and we expect to enhance network resilience, routing diversity, and overall reliability through a more robust architecture comprised of multiple rings and sub-rings. This expanded fiber footprint positions us to compete more effectively against LEO satellite broadband alternatives, bringing a more competitive connectivity environment to Alaska. Importantly, this transaction also strengthens critical communications infrastructure that supports Alaska's communities, government operations, and national security priorities. Next, on driving convergence and maximizing value and quality for our consumers.

We remain encouraged by our promotional offers in the market, which provide value for our consumers. Last year, we concluded our unlimited test drive promotion. The retention of upsales from that promotion was exceptionally high in the low 90% range. This quarter, we launched free for a year wireless promotion that continues to support our consumer postpaid wireless growth and drives convergence. Our converged customer base continues to grow. More than 40% of our broadband customers have one or more wireless lines, and more than 60% of our postpaid wireless lines are sold as part of a package. Lastly, on bridging the digital divide in Alaska through rural expansion and completing our commitments on the Alaska Plan. We are nearing completion of our build-out for the Alaska Plan, increasing wireless speeds across the communities we serve.

We will continue to focus on providing 5G wireless service to all cover the last things over the coming years. We still expect CapEx, including Quintillion, to peak this year and to step down over the coming years as it returns to our historical range of 15%-20% of revenue. The Quintillion acquisition should support substantial cash generation as we look ahead. In summary, we are encouraged by our steady financial and operational performance this quarter. At GCI Liberty, we remain focused on our continued evolution as Liberty Capital as we look to create value for our shareholders from our existing business and new investments. With that, I'll turn it to Brian to discuss the financials in more detail.

Thanks, Ron, and good morning, everyone. At the end of the first quarter, GCI Liberty had consolidated cash equivalents, and restricted cash of $448 million, including $131 million of cash equivalents, and restricted cash at GCI. Total principal amount of debt at GCI Liberty was approximately $1 billion. At quarter end, GCI Liberty's consolidated net leverage was 1.6 times, which incorporates cash at the parent level, including proceeds from last quarter's rights offering as well as GCI's non-voting preferred stock. Subsequent to the end of the first quarter, GCI completed the acquisition of a 6% equity interest in Liberty Latin America from Searchlight for $107 million.

GCI will also provide a $160 million unsecured loan to Quintillion pursuant to the terms of the acquisition agreement. Pro forma for these two transactions, GCI Liberty's consolidated net leverage would have been 2.3 times. At quarter end, GCI's net leverage, as defined in its credit agreement, was 2.3 times. Additionally, GCI's credit facility had $377 million of undrawn capacity net of letters of credit. Pro forma for the $160 million loan that GCI will provide to Quintillion, GCI's leverage would have been approximately 2.7 times. Now turning to GCI's operating results for the first quarter. For the first quarter, GCI generated total revenue of $256 million, representing a 4% decrease year-over-year.

An Adjusted OIBDA of $93 million, an 18% decrease year-over-year. There were approximately $13 million of items impacting year-over-year comparability, most of which are non-recurring in nature. These include about a $4 million benefit we recognized during the first quarter of 2025 related to the successful appeal of rates for services provided to certain healthcare customers in prior years. Additionally, we are lapping a roughly $2 million net benefit to OIBDA last quarter, related to the fiber break on the Quintillion network that GCI uses capacity, which has since been repaired. We're also making incremental investments into operating business more efficiently, representing an increase of approximately $4 million in operating expenses.

Lastly, during the first quarter of this year, we have $3 million of public company costs which were not in the prior year numbers. We do expect these public company costs to continue. Looking at the segment detail, the consumer revenue declined 5% during the first quarter, with the majority of the decline driven by the shutdown of the video business as well as data subscriber losses slightly offset by growth in wireless. As a reminder, GCI exited the video business during the third quarter of last year. Consumer gross margin increased to 72.2% for the quarter, driven by a decline in consumer direct costs resulting from decreases in video programming costs. Business revenue declined 3% for the first quarter.

As mentioned above, the first quarter of 2025 benefited from approximately $4 million amount of period revenue, excluding or out of period, more like recovered revenue. Excluding this impact, revenue would have been flat. Business gross margin decreased to 77.3% for the first quarter, primarily driven by higher distribution costs related to restored service on the Quintillion fiber network. As we've previously mentioned, this network was out of service during the first quarter of 2025. Capital expenditures net of grant proceeds totaled $55 million during the first quarter. We expect 2026 CapEx of approximately $290 million, which includes $20 million that was carried over from 2025 due to normal course timing shifts. As Ron mentioned, we do expect 2026 to represent our peak year of CapEx spend.

GCI generated $99 million in free cash flow for the trailing 12 months through the end of the first quarter, down around 13% year-over-year. This was largely driven by an increase in CapEx net of grant proceeds. The CapEx increase in 2026, when coupled with ordinary course working capital swings, will drive proportionately lower free cash flow on a year-over-year basis. With that, I'll turn the call back over to you, Ron.

Thank you. Operator, we can open it up for questions.

Thank you. Our first question is from David Joyce with Seaport Research Partners. Please proceed.

Thank you. A few questions, please. First I'll ask on the operational side, with the Business Wireless losses, what were the drivers of that?

The Business Wireless is kind of a small part of the business, and I think there's ordinary churn going on in there. We've been gradually descending in Business Wireless, partly as people transition business accounts more to the consumer side. I don't think the magnitude of those losses is material to the overall situation that the company is in.

Understood. Then secondly, on the Liberty Latin America investments, should we think of that as a tax-advantaged cash flow, you know, place since they announced that they're distributing a 9% preferred later this summer, thereby, you know, you could use some of your tax attributes with those, you know, cash flows to fund your own preferred and CapEx? Or is there some other kind of strategic thrust there?

We think there's a more strategic thrust there. We are pleased with their restructuring and will be happy to receive the benefits of the preferred there. You're correct, those would be sheltered. We've been looking at Liberty Latin America for a while before they had decided on their recapitalization plan with the preferred. We believe it's an undervalued entity and has many characteristics that are similar to what we face in the Alaskan market. It's got a great asset footprint in a market that is generally underinvested in, although they have some specific end markets that have more competition than we do. We think they're on the verge of a substantial inflection in free cash flow, and we think, looking at the overall situation there, that they are materially undervalued.

We saw this as an opportunity to get in at that undervaluation and build a bigger position over time. We're happy to have the benefit of the preferred, but that's not the principal reason for undertaking the transaction.

All right, thanks. A final question is on Quintillion. What were your payments to them last year? Have there been other fiber breaks in the past like you experienced last year? Who would the remaining customers be?

Okay, let's take those one at a time. I don't think we have broken out the total Quintillion payments. Have we, Pete?

We have not. We have not.

Okay. We are more than half of Quintillion's total revenues. That's a big piece of what drives the transaction. We generally don't compete with them on a customer basis. They're more in the wholesale business. We buy services from them that we then remarket to our business and rural healthcare customers in the marketplace. Give me the last piece of that question again too, please, David.

Oh, yeah. Just wondering who the, you know, the customer base was.

Okay.

aside from yourself.

The customer base would be other people who provide services largely to the schools and the healthcare providers. It would include ACS and some of the smaller local telephone companies throughout the state.

Great. Thank you very much.

Thank you, David.

Our next question is from Jim Harris with Bizzlet Management. Please proceed.

Hi there. Liberty Broadband question. Outside of the repurchases that they're making of Charter stock from Liberty every month, why wouldn't Liberty Broadband be encouraging Charter to reduce their debt in absolute terms since their business is shrinking? It's making it more risky, and reducing the debt would increase the value per share. Just wondering why Liberty isn't pushing that absolute debt reduction as their current plan to sort of slowly leverage. Thanks.

Yeah, this is Martin Patterson speaking for Liberty Broadband. I think you'll note that pro forma for the Cox transaction, there will be a reduction in net leverage. We remain very supportive of the capital allocation policy at the company, and do see them lowering their leverage at the close of the Cox transaction, which will also be the close of the Liberty Broadband transaction.

Okay. Thanks.

Thank you, Jim. Thank you everyone for participating in today's call. We will speak to you soon. Again, thanks. Take care.

Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.

This will be recorded February 11, I would now like to turn the call over to Hooper Stevens, Senior Vice President of Investor Relations. Please go ahead. Good morning. Thank you for joining us. 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 Forms 10-Ks filed by GCI Liberty, Inc. and Liberty Broadband with the SEC. These forward-looking statements speak only as of the date of this call and GCI Liberty, Inc. and Liberty Broadband expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in GCI Liberty, Inc. or Liberty Broadband's expectations with regard thereto or any change in events, conditions, or circumstances on which such statements are based. On today's call, we will discuss certain non-GAAP financial measures for GCI Liberty, Inc., including adjusted OIBDA, adjusted OIBDA margin, and free cash flow information regarding the required definitions along with the comparable GAAP metrics and reconciliations, including Schedule one and Schedule two for GCI Liberty, Inc., be found in the earnings press release issued today, which is available on GCI Liberty, Inc.'s IR website. Speaking on today's call will be Ronald A. Duncan, the CEO of Liberty, and Brian J. Wendling, GCI Liberty, Inc.'s Chief Accounting and Principal Financial Officer. Also during the Q&A, we will take questions related to Liberty Broadband should they arise. Additional members of GCI Liberty, Inc. and Liberty Broadband management will be available to assist Ronald A. Duncan and Brian J. Wendling with questions. With that, I'll hand the call over to Ronald A. Duncan. Thank you, Hooper, and good morning. GCI Liberty, Inc. had an exceptional year. We reported solid fourth quarter results with achieved record revenue of over $1 billion and record adjusted EBITDA of more than $400 million, a significant milestone for the company. We continue to execute on our mission to deliver best-in-class connectivity across Alaska. Our consumer wireless base is expanding,

We are realizing the benefits of last year's strong sales cycle in our business segment. We continue to sharpen our strategic focus as Alaska's only converged broadband and wireless provider following the exit of our video business last year. During the fourth quarter, we announced, executed, and completed our rights offering.

The rights offering was fully subscribed

resulting in approximately $300 million in net proceeds. We are pleased with the outcome, which allows us ample flexibility to continuously canvas the market and fine-tune our strategy at the parent company level. We plan to use the proceeds for general corporate purposes as well as for potential strategic acquisitions, investments, or partnerships.

Turning to the business,

I'm proud of how nimble and effective our GCI Liberty, Inc. team is in ensuring the continuity of our network. First, in December, we experienced two fiber breaks, one in Dutch Harbor, was repaired in early January in under two weeks, and the other in Deereng. We expect to incur repair costs this year in the low single-digit million range with service expected to be restored at Deereng in the summer months after the ice goes out. Second, as we mentioned last quarter, Typhoon Helong hit Southwest Alaska in early October of last year. We fully restored service to the two villages that were hit in under four months. Beyond the small revenue overhang in January, we do not expect any ongoing impact to our business. We commend the entire GCI Liberty, Inc. team for their outstanding service to the communities that we serve. Turning now to our operating highlights. We grew consumer wireless subscribers 2% year over year and ended the year with 199,000 consumer wireless lines. We had a total of 207,500 wireless lines at year-end including 8,500 business lines. We added 3,500 consumer wireless lines during the year, including 6,700 postpaid lines largely as a result of our unlimited test drive promotion. We continue to see slow erosion in our prepaid and government-subsidized lifeline segments partially offsetting the growth in our postpaid lines. On the data side, we saw a 3% decline year over year exiting the year with 151,200 data subscribers. We lost 4,500 data subscribers during the year and 1,200 data subscribers during the fourth quarter. The decline of data subscribers over the past year is due to wireless substitution and limited competition from Starlink and others, exacerbated by a fiber break on a third-party network in which GCI Liberty, Inc. uses capacity. As of the third quarter, service has been restored although we note that winning back customers in the service-impacted areas has been slow. We are proud of the operational and financial progress we made in 2025.

We

reported over $400 million of adjusted OIBDA, an exceptional milestone for GCI Liberty, Inc. But looking ahead to this year, we expect the business to be stable. As we look forward to 2026, our operating priorities are

first,

to invest in our network infrastructure to deliver high-quality service to our customers. Second, to complete our build-out commitments under the Alaska plan. Third, to drive value and the benefits of convergence for our customers and fourth, to continue bridging the digital divide through our rural expansion. Starting with our network infrastructure. We're offering 2.5 gigabit broadband connectivity everywhere that has fiber middle mile which means we can offer it to an overwhelming majority of our customers. We're making progress improving the broadband network in Anchorage. We're in the process of upgrading the core, reducing node sizes, and upgrading to a 1.8 gigahertz plant. Our initial deployment is yielding positive results. We plan to significantly scale deployment of our HFC network this year. All the work that we are doing is DOCSIS 4.0 or 4.0 capable enabling speeds that are multiple times what we have today. We will be rolling this out to markets outside of Anchorage this year allowing us to get to five gigabits and ultimately beyond. We believe these changes will not only lead to higher speeds, but also a network with better reliability and fewer maintenance requirements. The strength of this offering positions us well against competitors today and into the future. Next, on driving convergence and maximizing value and quality for our customers. We concluded our unlimited test drive promotion at year-end which drove meaningful postpaid consumer wireless growth in 2025 to a peak of 165,400 lines. The first cohorts of our promotional subscribers are now rolling off, and while it's still early, we are seeing exceptionally strong retention rates. In January, we launched a twelve-month free promotion that we expect will further support postpaid wireless growth this year. As of year-end, approximately 40% of our broadband customers have one or more wireless lines, and approximately 62% of our postpaid wireless lines are sold as part of a bundle up from 57% at the end of 2024. Our focus remains on delivering quality and value for all of our customers. Lastly, on bridging the digital divide in Alaska, through expansion and completing our build of commitments on the Alaska plan. Just a few weeks ago, we announced that we had completed the build-out of the iHUC one network which brings fiber infrastructure to the Yukon Quest equipped Delta ensuring residents there enjoy two and a half gigabit service. We also remain on track to complete our build-out requirements for the Alaska plan this year. Increase wireless speeds in the communities we serve. The new Alaska Connect fund will extend the Alaska plan to 2034. Our focus remains on providing 5G wireless service to all covered Alaskans over the coming years. Turning briefly to Bead, the state of Alaska has announced that GCI Liberty, Inc. has been provisionally awarded approximately $120 million in Bead fund. The award remains subject to approval by the NTIA. There remains substantial uncertainty about the timing of the final awards as the state is still in active negotiations with the NTIA regarding the ultimate distribution of Alaska to be funded. Any funding that GCI Liberty, Inc. ultimately receives will offset our capital costs as we expand in unserved locations. Regulatory and macro environment. From a macro perspective, Alaska's economy could be poised for some long overdue economic growth. In mid-October, the Trump administration announced plans to open the Arctic National Wildlife Range to drilling, a development that could accelerate oil and gas activity across the state. Combined with the potential development of the gas line, these initiatives could drive substantial economic expansion in Alaska lifting the Alaska economy and creating new opportunities with the potential of increased demand for our services. In summary, we are encouraged by an exceptional year of financial and operational performance. The peak of CapEx in 2026 and projected step down over the coming years back to our historical range of 15% to 20% of revenue should be highly supportive of substantial cash generation as we look ahead. We believe the strength of our network and our robust operating results will continue to create value for our customers

partners and shareholders.

With that, I'll turn it to Brian to discuss the financials in more detail.

Thank you, Ron, and good morning, everyone. At year-end, GCI Liberty, Inc. had consolidated cash, cash equivalents, and restricted cash of $429 million which is inclusive of our approximately $300 million rights offering, which was completed at the end of 2025. And we had a total principal amount of debt of approximately $1 billion. At year-end, GCI Liberty, Inc.'s net leverage as defined in its credit agreement was 2.3 times, GCI Liberty, Inc.'s consolidated net leverage was 1.6 times, which incorporates cash at the parent level. Including the proceeds from the rights offering. As well as GCI Liberty, Inc.'s non-voting preferred stock. Additionally, GCI Liberty, Inc.'s credit facility has $377 million of undrawn capacity net of letters of credit. Just an admin matter during the fourth quarter, we refined the definition of our subscriber metrics. The definitions of consumer cable and wireless subscribers now exclude prepaid customers who are no longer paying. For the service and postpaid and cable modem customers who have been inactive for over sixty days. All prior periods have been reflected for this refined definition and this aligns with how GCI Liberty, Inc. manages and evaluates the business. Turning to the GCI Liberty, Inc.'s operating results for the full year and the fourth quarter. For the year, GCI Liberty, Inc. generated total revenue of $1 billion representing a 3% increase for the full year. Revenue increased primarily due to growth at GCI Liberty, Inc. business Adjusted OIBDA of $403 million was a record high and increased 12% for the full year. The increase was driven by both higher revenue and lower operating expenses, which this includes lower programming video programming expenses, and reduced distribution costs related to temporary cost savings from a fiber break. On a third-party network. The fiber break was fully restored during 2025. In the fourth quarter, GCI Liberty, Inc. generated total revenue of $262 million. This is flat with the prior year quarter. And adjusted OIBDA increased 7% to $90 million primarily due to lower selling, general and administrative expenses related to personnel and compensation. Expenses. Consumer revenue declined 2% for the full year in the fourth quarter with the majority of the decline driven by the shutdown of the video business as well as data subscriber losses slightly offset by growth in wireless. As a reminder, GCI Liberty, Inc. exited the video business during the third quarter of the year Consumer wireless revenue increased both for the full year and the fourth quarter driven by an increase in federal wireless subsidies. Consumer gross margin increased to 70.7% for the full year and increased to 69.7% for the fourth quarter. Driven by a decline in consumer direct costs resulting from decreases in video programming costs. For the year, direct costs also benefited from temporary cost savings from the fiber break.

On the third-party network that was previously discussed.

Business revenue grew 7% for the year and 1% during the fourth quarter. The year, the increase was driven by the strong upgrade cycle, which started in 2024. For both the full year and fourth quarter, revenue growth was partially offset by lower wireless roaming revenue. Business gross margin increased to 80.1% for the year and increased to 78.3% for the fourth quarter. Primarily driven by revenue growth. For the year, business gross margin benefited from lower direct costs due to temporary cost savings.

From the aforementioned third-party fiber break.

Capital expenditures net of grant proceeds totaled $224 million for the year. As Ron said, we expect 2026 CapEx of approximately $290 million which includes $20 million carried over from 2025 due to normal course timing shifts. As was mentioned, we expect '26 to represent our peak year of CapEx spend driven by completing the build-out requirements of the Alaska plan, and the timing shifts for 2025. Our historical CapEx has been 15% to 20% of revenue and we expect our long-term CapEx following the completion of the Alaska plan build-out. Trend back to these levels. Generated $146 million in free cash flow for the full year. Up over 70% from 2024. Driven by our record financial

growth.

And 2025 free cash flow also benefited from positive working capital swings. The CapEx increase in 2026 when coupled with ordinary core course working capital swings will drive proportionately lower free cash flow

on a year-over-year basis.

And with that, I'll turn the call back over to Ron.

Thank you, Brian. We appreciate

everyone's interest in GCI Liberty, Inc., and we look forward to continuing to update you on our progress. With that, we'll open the call up for Q&A. Thank you.

Now be conducting a question and answer session. Thank you. And the first question comes from the line of David Joyce with Seaport Research. Please proceed with your questions.

Thank you. A couple of questions, please. First, I was wondering how we should think about margins this year

since you'll be comping against the operational savings while the undersea fiber was offline in the first part of last year and then you don't have the TV programming expenses? And then secondly, what sort of cadence of CapEx spending should we expect this year? And if you could kind of drill down on where you would be spending which products? Thanks.

Okay. Pete, do you want to tackle the margin question?

Pete, you're out there? No, Pete. Okay. Well, I will do my best on the margins. The margins should be is Pete there? Pete just joined.

No, Tyler.

Go ahead. I'm happy to take the margin question, and you can add the color if you want.

I think on the margin, we obviously can't guide, David.

On where we think we'll ultimately end up for 2026. Jake, as you heard Ron say in his remarks, we expect a stable year for 2026. There are certainly some things on the cost side that are benefits meaning no video expense at all during 2026. We also had revenue that was offsetting that in the early part of the year. And then there was the benefit from the fiber break. But overall, expect a pretty stable year for work. For next year. And I have Ron's comment

on

Yes, I'll take the CapEx. I would just comment on margins as well. That the video business was kind of a net zero for us anyway by the time we got out. They were substantial revenues, but also very substantial programming costs. The reasons we exited was we could see ourselves heading into a negative free cash flow situation to stay in the video business. So it was a net positive going forward and probably not tremendous change in the base of the business as you look at it. On the CapEx cadence, typically, we peak in the second and third quarters. When the construction season is in full swing up here and I expect that pattern to continue this year. The largest single element of this year's CapEx is in wireless particularly rural wireless as we sprint to the finish of our first phase commitments under the Alaska plan we'll also be expanding substantial CapEx to expand the urban wired network as we move to our 5G and full DOCSIS 4.0 implementation.

Great. Thank you. Thank you.

David, if you don't have any other questions, that will conclude today's call. Appreciate everybody's participation. And we look forward to speaking to you offline in next quarter as well. Thank you.

Thank you all very much.

Thank you. This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation. Have a wonderful day.

Welcome to the GCI Liberty 2025 Q2 Earnings Call. [Operator Instructions] As a reminder, this conference will be recorded as of today, August 7, 2025. I would now like to turn the call over to Shane Kleinstein, Senior Vice President of Investor Relations. Please go ahead.

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 prospectus forming part of GCI Liberty's registration statement and the most recent Forms 10-Q filed by GCI Liberty and Liberty Broadband with the SEC. These forward-looking statements speak only as of the date of this call, and GCI Liberty and Liberty Broadband expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in GCI Liberty or 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 GCI Liberty, including adjusted OIBDA, adjusted OIBDA margin and free cash flow. Information regarding the required definitions, along with comparable GAAP metrics and reconciliations, including Schedule 1, can be found in the earnings press release issued today, which is available on GCI Liberty's website. Today speaking on the call, we have Ron Duncan, CEO of GCI Liberty; Brian Wendling, GCI Liberty's Chief Accounting and Principal Financial Officer. And also during Q&A, will answer questions related to Liberty Broadband. Members of both GCI and Liberty Broadband management will be available to answer questions during the Q&A portion. With that, I will turn the call over to Ron.

Good morning. We were pleased to complete the spin-off of GCI Liberty from Liberty Broadband last month, allowing me to speak to you today on our first quarterly call as a once again public company. 2025 is off to a great start. GCI continues to lead in the provision of statewide service to all of our customers. This has been a particular value to our rural health and education customers. In the last 12 months, we have achieved significant upsells in this segment as rural schools and clinics have purchased additional bandwidth. We grew consumer wireless subscribers 1% year-over-year, ending the quarter with 207,000 subscribers. During the quarter, we added 4,700 consumer wireless lines. On the data side, we saw a 3% decline year-over-year, ending the quarter with 154,500 cable modem subscribers. During the quarter, we lost 1,300 data subscribers. The decline of data subs over the past year is largely due to the elimination of the ACP program in 2024, the fiber break on a third-party network in which GCI uses capacity, Starlink competition and wireless substitution. Financially, these results have translated into a record last 12 months OIBDA of $405 million as of the second quarter. The USF challenge at the Supreme Court, which had been an overhang on our business and led to a negative credit watch earlier in the year, has been definitively and favorably resolved. Looking at several other financial highlights. In March, we successfully refinanced our senior credit facility and pushed out maturities to 2030 and 2031. In the second quarter, we were able to reduce our net debt by $86 million, bringing our total leverage down to 2.3x as defined by our credit agreement. The combination of these events led S&P to eliminate the negative credit watch and raise our credit rating in July. We're proud of the progress, both financially and operationally over the first half of the year. While we're now a stand-alone public company, it's business as usual for our team in Alaska. We remain focused on improving our infrastructure to deliver high-quality service to our customers, furthering our rural expansion to bridge the digital divide and increasing the efficiency of our business. I'll go into a bit more detail in several areas. Starting with our network infrastructure. We are offering 2.5 gigabit broadband connectivity in areas that have fiber middle mile, which cover an overwhelming majority of our customers. Material progress is being made in improving the broadband network in Anchorage as we are in the process of upgrading the core, reducing node sizes and upgrading the plant to 1.8 gigahertz. All of the work that we are doing is DOCSIS 4.0 or 4.0 capable, enabling speeds that are multiple times what we have today. We will be rolling this out to other markets in the coming years, allowing us to get to 5 gigabits and ultimately beyond. We believe these changes will not only lead to higher speeds, but also a network that has fewer maintenance requirements. The strength of this offering positions us well against competitors today and into the future. On wireless, we are encouraged by early signs that our wireless postpaid business is growing again. We launched our unlimited test drive promotion in April of this year. This offers our broadband customers a discounted price to gain access to unlimited broadband and add a wireless line. This promotion is driving growth for both our GCI+ converged product and postpaid wireless lines with sequential growth in postpaid lines of 3,400 in the second quarter. We expect to roll out other new pricing and packaging offers later this year to drive further growth in our wireless products. We plan to provide 5G wireless service to all Alaskans over the coming years. We continue to bridge the digital divide in Alaska with rural expansion. As I mentioned, we are happy to have the Universal Service Fund ruling behind us. This was an enormous win for the Universal Service Fund, the State of Alaska and all of the providers in Alaska, including GCI. The Supreme Court's decision clearly affirms the legal foundation of this important program. On the Alaska plan, we expect to complete the first phase and meet our build-out requirements in 2026. This will increase wireless speeds in the communities we're serving. The FCC's new Alaska Connect Fund will extend the Alaska plan and increase the amount of support. This will aid in the deployment of 5G wireless throughout Alaska. On BEAD, the state of Alaska was allocated up to $992 million in funding for infrastructure projects to connect unserved and underserved locations. Recent changes to the program make it unlikely that the state will be able to award the full amount of its allocation. GCI submitted several applications to participate in the Alaska BEAD program. Any monies that GCI has awarded will defray our capital costs as we expand in unserved locations, but this funding is not currently factored into our CapEx budgeting. Finally, on our effort to increase efficiency in our business. For the past 1.5 years, we've been engaged in efforts to proactively manage our cost structure. In 2024, we have reorganized our tech organization and early this year hired our first-ever Chief Technology Officer, Troy Goldie, who has been leading the efforts to make sure that our technology team is both effective and efficient. I'm very pleased with the early results in the CTO group. We are continuing our efforts to streamline the business and increase efficiency by implementing new systems and applying the lessons learned in the CTO reorganization to other elements of the company. We expect these efforts will help maintain better discipline across our entire cost structure. Before closing, I should comment briefly on the Alaska economy. The market has been flat up here with a slowly declining workforce for over a decade. The state government is challenged by the lack of a credible fiscal plan. The drop in oil prices has contributed to the malaise. There hasn't been much good news to talk about. However, the new administration's change in resource policy with respect to both oil and mineral exploration make me cautiously optimistic about Alaska's economic future. More importantly, there could be a ray of hope on the horizon. For 50 years, Alaskans have dreamed about the construction of a natural gas pipeline from Prudhoe Bay to Tidewater. This has always seemed to be a pipe dream, if you will, that was just out of reach. While details are still emerging, the inclusion of significant purchases of Alaska gas and the promise of investment by Japan in the President's recently announced trade deal could change the game. Adding cheap energy to an environment where average temperatures are cooler and there is an abundance of land and water could make Alaska a very appealing location for participants in the AI economy. There's still a lot of skepticism and some genuine doubt, but we hope to know more over the next few months. The construction of the gas line and the export of material amounts of natural gas would clearly be caused for optimism. In the meantime, we welcome anyone else to join us here in Alaska, where we would remind you the water flows well, the climate stays cool and the environment is wonderfully conducive to the demands of the ever-growing data center industry. To our listening audience of telco analysts, please spread the word. In summary, we remain confident in our ability to deliver high-quality service to the state of Alaska with both the breadth and caliber of our network and service. We believe the quality of our infrastructure and durability of our financial results will drive value for customers, partners and shareholders. With that, I'll turn to Brian to discuss the financials in more detail.

Thank you, Ron, and good morning, everyone. As Ron said, the GCI Liberty spin-off from Liberty Broadband was completed on July 14. Holders of Liberty Broadband common stock received 0.2 shares of the corresponding series of GCI Liberty common stock per share of the corresponding series of Liberty Broadband common stock held on record as of that date and on the record date. At quarter end, GCI Liberty had consolidated cash, cash equivalents and restricted cash of $117 million and total principal amount of debt of approximately $1 billion. As a reminder, GCI refinanced its senior credit facility in March with a $450 million revolver that matures in 2030 and a $300 million Term Loan A that matures in 2031. At quarter end, GCI's leverage as defined by its credit agreement was 2.3x, and GCI's credit facility had $377 million of undrawn capacity net of letters of credit. Prior to the spin-off and subsequent to quarter end, $10 million of nonvoting preferred stock of GCI Liberty was issued to Liberty Broadband and then sold by Liberty Broadband to third-party buyers. The GCI Liberty nonvoting preferred stock pays a 12% dividend with a redemption date in 2032. Now looking at GCI's results, GCI generated total revenue of $261 million, representing 6% growth in the second quarter. Adjusted OIBDA of $108 million increased 26%. Results in the quarter continued to benefit from a strong upgrade cycle in schools and health care corporations that began in the third quarter of 2024 as well as growth in consumer wireless and cost efficiencies. Note, we expect a slowdown in adjusted OIBDA growth in the back half of this year, partially driven by fully lapping the upsell cycle in schools that began in the third quarter of '24. Additionally, we have benefited from several other onetime items in the first half of the year, including lower employee benefit costs. GCI remains on track to fully exit the video business by the end of this calendar year. This will allow us to focus the business on the products and services that our customers need and want, but will not have a significant impact on revenue or COGS and the impact to free cash flow and OIBDA will be immaterial. Consumer revenue declined 2% to $119 million. The majority of the decline was driven by a decline in data revenue as well as the video segment, which we are exiting, slightly offset by growth in consumer wireless. Consumer wireless revenue increased 6% to $51 million, benefiting from wireless subscriber growth and an increase in federal wireless subsidies. Consumer gross margin of 70.6% was relatively flat compared to the same period last year. Business revenue grew 14% to $142 million. Most of the increase was driven by data revenue, which continued to benefit from the strong upgrade cycle noted above, which began in the third quarter of 2024. Wireless revenue declined $2 million or 17%, largely driven by a decline in roaming revenue. Business gross margin increased to 81.7%, primarily due to temporary cost savings from the Quintillion fiber break combined with the data revenue growth. Capital expenditures, net of grant proceeds totaled $51 million during the quarter. Year-to-date, GCI had approximately $100 million in net CapEx investment and expects full year net CapEx to be around $250 million. GCI generated $153 million in free cash flow on a trailing 12-month basis through the end of the second quarter. We believe presenting free cash flow on a trailing 12-month basis more accurately demonstrates our cash generation and liquidity profile by minimizing seasonal fluctuations, particularly around the timing of USF cash receipts. Typically, we have a delay in cash payments from our USF supported revenue at the start of the new funding year, which begins in the third quarter of each year. Last year, we didn't start to receive meaningful amounts of cash until the beginning of Q1 of the following year. However, the outlook for the rest of '25 is favorable as we have received USAC approval for a significant amount of services already. We should start to collect cash over the next few months and meaningfully accelerate the timing of our cash flows versus the prior year. Lastly, based on recent stock prices, we currently expect the GCI Liberty spin-off will result in a basis step-up of approximately $1 billion. Our combined federal and state tax rate is just under 30%. So that gives you an idea of the value of the tax asset, though we're not providing a time line for its utilization as that may depend -- will depend on a variety of factors. And with that, I'll turn the call back over to Ron.

Thank you, Brian. We appreciate your interest in GCI Liberty and look forward to continuing to update you on our progress. With that, we'll open the call up for Q&A.

[Operator Instructions] And we have a question from Barry Sine with Litchfield Hills Research, which will be our last question on the call.

I wanted to ask about your acquisition strategy. On the June 3 call you guys did, you spoke about acquisitions likely being a key part of your strategy. And if I think about the Alaska telecom environment, you've tried buying a TV station, Quintillion has scour issues, MTA is a co-op. You could always buy the Iditarod. Liberty has created a lot of value at Formula 1. Would you go out of Alaska? Would you go out of your industry? What are your criteria for acquisitions?

Thank you, Barry. Yes, I think buying Iditarod would be great, and we'll turn that into international sport and infuriate Pet beyond all belief. Obviously, there's not a lot of attractive acquisitions of scale in Alaska. So any acquisition strategy would largely be directed out of state. It wouldn't necessarily be within the business we're currently in today. I don't think we're looking at leveraging the operating resources of GCI in any future acquisition strategy rather than the financial resources and the tax assets. That said, GCI as a public company is not quite 4 weeks old. We haven't had our first full quarterly Board meeting yet, and we don't have a developed list of acquisition targets or even necessarily a list of priorities and strategy for that. You'll have to give us a little more time to develop that. But obviously, we have a lot of cash flow to deploy, and we have a lot of tax asset that can be accelerated. So with that, I think we are done for this quarter, and we appreciate your interest in GCI. We look forward to getting back to you at the end of the next quarter. Thank you.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Enjoy the rest of your day.