Liberty Capital — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenue was flat at $261 million for the three months ended June 30, 2026, compared to $261 million in the prior year period; for the six months ended June 30, 2026, revenue declined 2% to $517 million from $527 million.
• Operating income was $29 million for the quarter, a 43% decrease from $51 million in the prior year period; for the six months, operating income declined 46% to $59 million from $109 million.
• Adjusted OIBDA decreased 11% to $96 million for the quarter from $108 million; for the six months, it declined 14% to $189 million from $221 million.
• Adjusted OIBDA margin was 36.8% for the quarter, down 460 basis points from 41.4%; for the six months, the margin was 36.6%, down 530 basis points from 41.9%.
• Operating income margin was 11.1% for the quarter, down 840 basis points from 19.5%; for the six months, it was 11.4%, down 930 basis points from 20.7%.
• Net cash provided by operating activities was $308 million on a trailing twelve-month basis through June 30, 2026, down from $342 million in the prior year period.
• Free cash flow was $59 million on a trailing twelve-month basis through June 30, 2026, down from $153 million in the prior year period.
• Capital expenditures were $70 million for the quarter (up 37% from $51 million) and $125 million for the six months (up 25% from $100 million).
• Total debt increased to $1,263 million as of June 30, 2026, from $1,035 million as of March 31, 2026.
• GCI leverage was 2.8x as of June 30, 2026, compared to 2.3x as of March 31, 2026.
• Liberty Capital leverage was 2.1x as of June 30, 2026, compared to 1.6x as of March 31, 2026.
• Cash, cash equivalents, and restricted cash increased to $510 million as of June 30, 2026, from $448 million as of March 31, 2026.
• Deferred revenue was $24 million (current) and $131 million (long-term) as of June 30, 2026.

Guidance and Future Outlook

• GCI expects to close the Quintillion acquisition in 2026.
• GCI's net capital expenditures for the full year 2026 are expected to be $290 million, including $20 million carried over from 2025.
• The Alaska operating company is on track to deliver stable performance in 2026 with a step-up in cash generation expected in 2027.
• Liberty Capital intends to initiate a recurring quarterly dividend beginning in December 2026, with an aggregate amount of approximately $60 million annualized at inception.

Business Segments and Product Lines

• Consumer Segment: Revenue was $117 million for the quarter (down 2% YoY) and $232 million for the six months (down 3% YoY), driven by the full exit of the video business in 2025.
  • Data revenue was flat at $60 million for the quarter and declined 2% to $119 million for the six months.
  • Wireless revenue increased 2% to $52 million for the quarter and 3% to $104 million for the six months.
  • Consumer broadband subscribers were 155,400 as of June 30, 2026, up 1% from 153,800 in the prior year period.
  • Consumer wireless lines in service were 202,100 as of June 30, 2026, up 1% from 199,200 in the prior year period.
  • Consumer gross margin was 71.8% for the quarter and 72.0% for the six months, up 160 basis points year-over-year for the six-month period.
• Business Segment: Revenue was $144 million for the quarter (up 1% YoY) and $285 million for the six months (down 1% YoY).
  • Business data revenue increased 2% to $127 million for the quarter but declined 1% to $251 million for the six months.
  • Business wireless lines in service were 8,000 as of June 30, 2026, down 7% from 8,600 in the prior year period.
  • Business gross margin was 75.7% for the quarter and 76.5% for the six months, down 540 basis points year-over-year for the six-month period.
  • Business direct costs increased 35% for the quarter and 29% for the six months, driven by higher distribution costs and restored service on the Quintillion network.

Market and Competitive Landscape

• The exit of the video business in 2025 continues to impact consumer revenue trends.
• Business data revenue in the prior year period benefited from approximately $4 million in revenue related to a successful rate appeal for healthcare customers, which did not recur in the current period.
• GCI purchased a small broadband provider in the second quarter of 2026, adding 5,400 broadband subscribers.

Risks and Challenges

• Increased operating expenses, including higher distribution costs and circuit costs, have negatively impacted gross margins and operating income.
• Acquisition costs of $4 million for the quarter and $7 million for the six months related to the Quintillion transaction impacted operating income.
• Forward-looking statements regarding the acquisition, dividend initiation, and cash flow growth involve risks including competitive issues, customer demand, economic conditions, regulatory matters, and the ability to execute growth strategies.

Management Commentary and Tone

• CEO Ron Duncan stated priorities remain focused on driving operational excellence, growing free cash flow at GCI, and generating shareholder value through opportunistic investments and capital returns.
• Management described GCI's performance as "solid," citing the reliability and resiliency of the network infrastructure in connecting communities around Alaska.
• Management expressed confidence that expected future growth in cash flow will support the initiation of a quarterly dividend at the parent level in December 2026.

Other Key Points

• GCI amended its credit facility on June 29, 2026, securing up to $480 million of additional financing capacity, including a $155 million term A-1 loan, a $25 million incremental revolving facility, and a $300 million term A-2 loan.
• Funding for the term A-1 loan and incremental revolving facility is contingent upon the closing of the Quintillion transaction.
• GCI reduced its revolver balance to zero as of quarter end, net of letters of credit.
• Subsequent to quarter end, GCI purchased approximately $129 million principal amount of outstanding Senior Notes due October 15, 2028.
• A loan of $160 million was drawn down to fund the loan to Quintillion pursuant to the acquisition agreement terms.
• Liberty Broadband sold $10 million of non-voting preferred stock to third-party buyers in the third quarter of 2025; this stock has a 12% dividend rate and a mandatory redemption date of July 14, 2032.
• GCI spent $125 million on capital expenditures year-to-date, primarily for rural wireless and state-wide data network improvements, with a significant portion allocated to hybrid fiber-coaxial network improvements in urban Alaska.