Liberty Capital — Third Quarter 2026 Earnings Summary

Financial Performance

• Consolidated revenue increased 4% year-over-year to $267 million for the three months ended September 30, 2026, compared to $257 million in the prior year period; revenue remained flat at $784 million for the nine months ended September 30, 2026.
• Operating income turned positive to $36 million for the quarter ended September 30, 2026, compared to a loss of $488 million in the prior year; operating income was $95 million for the nine-month period, compared to a loss of $379 million.
• Adjusted OIBDA increased 10% to $101 million for the quarter ended September 30, 2026, compared to $92 million; Adjusted OIBDA decreased 7% to $290 million for the nine-month period.
• Adjusted OIBDA margin improved to 37.8% for the quarter ended September 30, 2026, up from 35.8% in the prior year period; the margin was 37.0% for the nine-month period, down from 39.9%.
• Net cash provided by operating activities was $311 million on a trailing twelve-month basis through September 30, 2026.
• Free cash flow was $37 million on a trailing twelve-month basis through September 30, 2026, down from $155 million in the prior year period.
• Capital expenditures net of grant proceeds were $77 million for the quarter and $202 million for the nine months ended September 30, 2026.
• Total debt decreased to $1,163 million as of September 30, 2026, from $1,263 million as of June 30, 2026; GCI leverage was 2.7x as of September 30, 2026.
• Cash, cash equivalents, and restricted cash totaled $417 million as of September 30, 2026.
• Deferred revenue was $24 million (current) and $128 million (long-term) as of September 30, 2026.

Guidance and Future Outlook

• GCI expects to close the Quintillion acquisition shortly.
• Net capital expenditures for the full year 2026 are expected to be $290 million, including $20 million carried over from 2025.
• A significant portion of the increased 2026 capital expenditures is related to hybrid fiber-coaxial network improvements in urban Alaska.

Business Segments and Product Lines

• Consumer Segment: Revenue increased 3% to $118 million for the quarter and declined 1% to $350 million for the nine months; growth was driven by wireless revenue, partially offset by the exit from the video business in 2025.
• Consumer Wireless: Wireless revenue increased 4% for the quarter and 3% for the nine months; consumer wireless lines in service grew 1% to 202,000.
• Consumer Data: Data revenue increased 2% for the quarter and declined 1% for the nine months; growth was driven by an acquired small broadband provider, partially offset by organic subscriber decreases.
• Consumer Gross Margin: Gross margin was 72.0% for the nine months ended September 30, 2026, a 100 basis point increase from the prior year period.
• Business Segment: Revenue increased 5% to $149 million for the quarter and 1% to $434 million for the nine months; growth was driven by data revenue from service upgrades with healthcare and education customers.
• Business Data: Data revenue increased 6% for the quarter and 2% for the nine months; nine-month growth was partially offset by $4 million of revenue in the prior year related to a successful rate appeal for healthcare customers.
• Business Wireless: Wireless revenue decreased 10% for the quarter and 3% for the nine months; business wireless lines in service decreased 4% to 7,900.
• Business Gross Margin: Gross margin was 77.2% for the nine months ended September 30, 2026, a 350 basis point decrease from the prior year period, driven by higher distribution costs for healthcare and education customers.

Market and Competitive Landscape

• GCI provides data, mobile, voice, and managed services to consumer, business, government, and carrier customers throughout Alaska.
• GCI acquired a small broadband provider during the second quarter of 2026, contributing approximately 5,400 broadband subscribers as of September 30, 2026.
• GCI added 3,000 consumer wireless lines year-to-date.

Risks and Challenges

• Forward-looking statements involve risks including competitive issues, customer demand, economic conditions (including inflationary pressures), and regulatory matters affecting Universal Service Fund programs.
• Risks include legal challenges to and changes in Universal Service Fund programs, the completion of the Quintillion acquisition, and the ability to declare dividends or repurchase shares.
• Actual results may differ materially from forward-looking statements due to risks detailed in the company's Form 10-K and Quarterly Report on Form 10-Q.

Management Commentary and Tone

• CEO Ron Duncan stated the quarter reflected the strength and unmatched reach of the network infrastructure and expressed confidence in the business's cash-generating power.
• Management highlighted the declaration of the first quarterly dividend and the inaugural share buyback program as capital allocation initiatives preserving balance sheet capacity for future growth.
• Management noted the expectation to close the Quintillion acquisition soon.

Other Key Points

• Liberty Capital declared a quarterly dividend of $0.375 per share of GCI Group common stock, payable on December 15, 2026.
• Liberty Capital authorized a $100 million share repurchase program, allowing repurchases via open market or privately negotiated transactions.
• Subsequent to the quarter end, GCI raised $300 million in secured financing and retired all outstanding principal of its 4.750% Senior Notes due 2028, extending the nearest maturity to 2030.
• On October 28, 2026, GCI amended its credit agreement to add a $270 million incremental senior secured Term A-3 loan facility maturing in 2031 and increased its revolving credit facility by $30 million to $480 million.
• GCI's credit facility had undrawn capacity of $383 million (net of letters of credit) as of September 30, 2026.
• GCI spent $11 million on acquisitions and provided a $160 million loan to Quintillion during the nine months ended September 30, 2026.
• Impairment of goodwill and intangible assets of $525 million recorded in the prior year period was not present in the current period.
• Acquisition costs were $1 million for the quarter and $8 million for the nine months ended September 30, 2026.