Liberty Broadband Q4 2022 Earnings Report
Key Takeaways
Liberty Broadband reported Q4 2022 results, noting a fair value of Charter investment at $16.0 billion as of December 31, 2022. GCI's revenue increased by 2% due to strong data demand. Liberty Broadband's cash increased $172 million in the fourth quarter as proceeds from Charter share sales more than offset share repurchases in the period.
Fair value of Charter investment was $16.0 billion as of December 31, 2022.
Liberty Broadband received $291 million from the sale of 868 thousand Charter shares from November 1, 2022, through January 31, 2023.
Liberty Broadband repurchased 2.1 million LBRDA/K shares for $177 million from November 1, 2022, through January 31, 2023.
GCI's revenue increased 2% in the fourth quarter, driven by strength in demand for data in both business and consumer.
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Forward Guidance
GCI's net capital expenditures for 2023 are expected to be approximately $185 million related to increased investment in middle mile and last mile data connectivity, including network expansion in rural Alaska.
Positive Outlook
- Charter’s strategic investments in an upgraded network and expanded footprint will provide both attractive returns
- Charter’s strategic investments in an upgraded network and expanded footprint will provide an enhanced position with its competitively-priced converged product offering.
- GCI is continuing to expand its high speed connectivity to the most remote areas in Alaska
- The extension of the roaming agreement will benefit GCI for several years from the extension of the agreement
- The extension of the roaming agreement will benefit GCI for several years from the continued receipt of backhaul services for GCI’s network post expiration.
Challenges Ahead
- GCI faced tough revenue comparisons due to a change to one of its roaming agreements
- Capital expenditure spending was related primarily to improvements to the wireless and hybrid fiber coax networks.
- Liberty Broadband accrued $38 million for a litigation settlement relating to a tentative settlement of the Charter and Liberty Broadband Delaware litigation.
- Operating income for the year ended December 31, 2022 includes a $29 million legal settlement accrual recognized in the second and third quarters of 2022 related to discussions and settlement offers that GCI made to the DOJ and Enforcement Bureau of the FCC.
- The indemnification obligation on Liberty Broadband’s balance sheet is valued based on the estimated exchange feature in the LI LLC Charter exchangeable debentures.