Liberty Capital (GLIBA) sees lower earnings amid Alaska telecom costs
Liberty Capital Corporation, which owns the Alaska-focused GCI telecom business, reported Q2 2026 revenue of $261 million, unchanged from Q2 2025, and net earnings of $16 million, down from $27 million. For the first half of 2026, revenue was $517 million and net earnings $34 million, versus $527 million and $62 million a year earlier. Adjusted OIBDA declined to $96 million in Q2 and $189 million year-to-date.
Operating margins softened as consumer video discontinuation reduced other revenue, business distribution costs rose after prior-year temporary savings, technology and service fees increased, and acquisition costs related to the planned $310 million Quintillion purchase were incurred. Cash and cash equivalents were $497 million at June 30, 2026, supported by an approximately $300 million rights offering, while total debt carried on the balance sheet was $1.21 billion. The company agreed to acquire Quintillion, extended and upsized its Senior Credit Facility (including new term loans), completed the small $11 million SwS fixed‑wireless acquisition, and put a $60 million per year dividend policy in place beginning in Q4 2026.
Liberty Capital continues to rely heavily on federal Universal Service Fund support and the Alaska economy, noting ongoing legal challenges to USF structures and inflationary pressures. Chairman John C. Malone now holds 53.7% voting control following regulatory approvals.
Positive
- None.
Negative
- None.
Filing Explained
The completed rights offering issued 11,059,127 shares, while Quintillion remains pending with a $160 million seller loan credited at closing.
This unaudited Form 10-Q is the company’s quarterly report for the period ended
The rights offering issued 11,059,127 Series C shares and was fully subscribed, with approximately
Quintillion remains subject to regulatory approval and customary closing conditions. The agreed consideration is
The seller loan had an initial principal amount of
Key Figures
Key Terms
Adjusted OIBDA financial
rights offering financial
Universal Service Fund regulatory
Term Loan Credit Agreement financial
Level 1 inputs financial
Senior Credit Facility financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
or
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number:
Liberty Capital Corporation
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
(Address of Principal Executive Offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | | Trading symbol | | Name of each Exchange on which registered |
| | The | ||
| | The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | ||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ☒ | Smaller reporting company | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of outstanding shares of the registrant’s common stock as of July 31, 2026 was:
| | | |
| Series A | Series B | Series C |
Liberty Capital Corporation GCI Group common stock | | | |
Table of Contents
TABLE OF CONTENTS
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|---|---|---|---|---|
| | | | Page |
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Part I | | Financial Information | | |
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Item 1. | | Financial Statements | | |
| | LIBERTY CAPITAL CORPORATION Condensed Consolidated Balance Sheets (Unaudited) | | I-3 |
| | LIBERTY CAPITAL CORPORATION Condensed Consolidated Statements of Operations (Unaudited) | | I-4 |
| | LIBERTY CAPITAL CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) | | I-5 |
| | LIBERTY CAPITAL CORPORATION Condensed Consolidated Statements of Equity (Unaudited) | | I-6 |
| | LIBERTY CAPITAL CORPORATION Notes to Condensed Consolidated Financial Statements (Unaudited) | | I-7 |
| | | | |
Item 2. | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | I-17 |
Item 3. | | Quantitative and Qualitative Disclosures about Market Risk | | I-26 |
Item 4. | | Controls and Procedures | | I-26 |
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Part II | | Other Information | | |
| | | | |
Item 1. | | Legal Proceedings | | II-1 |
Item 2. | | Unregistered Sales of Equity Securities and Use of Proceeds | | II-1 |
Item 5. | | Other Information | | II-1 |
Item 6. | | Exhibits | | II-2 |
| | | | |
| | | | |
Signatures | | | | II-3 |
I-2
Table of Contents
LIBERTY CAPITAL CORPORATION
Condensed Consolidated Balance Sheets
(unaudited)
| | | | | | |
| | June 30, | | December 31, |
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| | 2026 | | 2025 | | |
| | amounts in millions, except share amounts |
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Assets |
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Current assets: |
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Cash and cash equivalents | | $ | |
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Trade and other receivables, net of allowance for credit losses of $ | |
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Prepaid and other current assets | |
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Total current assets | |
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Property and equipment, net | |
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Intangible assets not subject to amortization (note 4) | |
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Goodwill | |
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Cable certificates | |
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Other | |
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Intangible assets subject to amortization, net (note 4) | |
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Deferred income tax assets | | | | | | |
Other assets, net | |
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Total assets | | | |
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Liabilities and Equity |
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Current liabilities: |
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Accounts payable and accrued liabilities | | | |
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Deferred revenue | |
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Current portion of debt (note 5) | |
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Other current liabilities | |
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Total current liabilities | |
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Long-term debt, net (note 5) | |
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Obligations under tower obligations | |
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Long-term deferred revenue | |
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Other liabilities | |
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Total liabilities | |
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Redeemable noncontrolling interest in equity of subsidiary | | | | | | |
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Equity | |
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Series A GCI Group common stock, $ | | | — | | — | |
Series B GCI Group common stock, $ | | | — | | — | |
Series C GCI Group common stock, $ | | | — | | — | |
Additional paid-in capital | | | | | | |
Retained earnings (deficit) | |
| ( |
| ( | |
Total equity | |
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Commitments and contingencies (note 7) | |
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Total liabilities and equity | | $ | |
| | |
See accompanying notes to condensed consolidated financial statements.
I-3
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LIBERTY CAPITAL CORPORATION
Condensed Consolidated Statements of Operations
(unaudited)
| | | | | | | | | | |
| | Three months ended | | Six months ended | | |||||
| | June 30, | | June 30, | | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | | |
| | amounts in millions, except per share amounts | | |||||||
Revenue | | $ | | | | | | | | |
Operating costs and expenses: | |
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Operating expense (exclusive of depreciation and amortization) | |
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Selling, general and administrative expense (including stock-based compensation) | | | | | | | | | | |
Depreciation and amortization | |
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Acquisition costs | | | | | — | | | | — | |
| |
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Operating income (loss) | |
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Other income (expense): | |
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Interest expense (including amortization of deferred loan fees) | |
| ( | | ( | | ( | | ( | |
Other, net | |
| | | | | | | | |
| |
| ( | | ( | | ( | | ( | |
Earnings (loss) before income taxes | |
| | | | | | | | |
Income tax benefit (expense) | |
| ( | | ( | | ( | | ( | |
Net earnings (loss) | | $ | | | | | | | | |
Basic net earnings (loss) attributable to Series A, Series B and Series C GCI Group shareholders per common share (note 2) | | $ | | | | | | | | |
Diluted net earnings (loss) attributable to Series A, Series B and Series C GCI Group shareholders per common share (note 2) | | $ | | | | | | | | |
See accompanying notes to condensed consolidated financial statements.
I-4
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LIBERTY CAPITAL CORPORATION
Condensed Consolidated Statements of Cash Flows
(unaudited)
| | | | | | |
| | Six months ended | | |||
| | June 30, | | |||
| | 2026 | | 2025 | | |
| | amounts in millions | ||||
Cash flows from operating activities: | | | | | | |
Net earnings (loss) | | $ | | | | |
Adjustments to reconcile net earnings (loss) to net cash from operating activities: | |
| | | | |
Depreciation and amortization | |
| | | | |
Stock-based compensation | |
| | | | |
Deferred income tax expense (benefit) | |
| | | ( | |
Other, net | |
| ( | | ( | |
Change in other assets and liabilities: | |
| | | | |
Decrease (increase) in accounts receivable | |
| | | | |
Amortization of right-of-use asset | | | | | | |
Decrease (increase) in other assets | | | ( | | | |
(Decrease) increase in operating lease liabilities | | | ( | | ( | |
(Decrease) increase in taxes payable | | | — | | | |
(Decrease) increase in payables and other liabilities | |
| ( | | ( | |
Net cash provided by (used in) operating activities | |
| | | | |
Cash flows from investing activities: | |
| | | | |
Cash paid for acquisitions, net of cash acquired | | | ( | | — | |
Loan to Quintillion (note 1) | | | ( | | — | |
Capital expenditures | |
| ( | | ( | |
Grant proceeds received for capital expenditures | | | | | | |
Purchase of investments | | | ( | | — | |
Sale of investments | | | | | — | |
Other investing activities, net | |
| — | | | |
Net cash provided by (used in) investing activities | |
| ( | | ( | |
Cash flows from financing activities: | |
| | | | |
Borrowings of debt | |
| | | | |
Repayment of debt and tower obligations | |
| ( | | ( | |
Other financing activities, net | |
| ( | | ( | |
Net cash provided by (used in) financing activities | |
| | | ( | |
Net increase (decrease) in cash, cash equivalents and restricted cash | |
| | | | |
Cash, cash equivalents and restricted cash, beginning of period | |
| | | | |
Cash, cash equivalents and restricted cash, end of period | | $ | | | | |
The following table reconciles cash and cash equivalents and restricted cash reported in the Company’s condensed consolidated balance sheets to the total amount presented in its condensed consolidated statements of cash flows:
| | | | | | |
| | | | |
| |
| | June 30, | | December 31, | | |
| | 2026 | | 2025 |
| |
| | amounts in millions |
| |||
Cash and cash equivalents | | $ | |
| | |
Restricted cash included in other current assets | |
| |
| | |
Restricted cash included in other long-term assets | | | | | | |
Total cash and cash equivalents and restricted cash at end of period | | $ | |
| | |
See accompanying notes to condensed consolidated financial statements.
I-5
Table of Contents
LIBERTY CAPITAL CORPORATION
Condensed Consolidated Statements of Equity
(unaudited)
| | | | | | | | | | | | | | |
| | GCI Group | | Additional | | Retained | | | | |||||
| | | Common Stock | | paid-in | | earnings | | Total | | ||||
| | | Series A | | Series B | | Series C | | capital | | (deficit) | | equity | |
| | amounts in millions | | |||||||||||
Balances at January 1, 2026 | | $ | — | | — | | — | | | | ( | | | |
Net earnings (loss) | | | — | | — | | — | | — | | | | | |
Stock-based compensation | | | — | | — | | — | | | | — | | | |
Other | | | — | | — | | — | | ( | | — | | ( | |
Balances at June 30, 2026 | | $ | — | | — | | — | | | | ( | | | |
| | | | | | | | | | | | | | |
| | GCI Group | | Additional | | Retained | | | | |||||
| | | Common Stock | | paid-in | | earnings | | Total | | ||||
| | | Series A | | Series B | | Series C | | capital | | (deficit) | | equity | |
| | amounts in millions | | |||||||||||
Balances at March 31, 2026 | | $ | — | | — | | — | | |
| ( |
| | |
Net earnings (loss) | | | — | | — | | — | | — | | | | | |
Stock-based compensation | | | — | | — | | — | | | | — | | | |
Balances at June 30, 2026 | | $ | — | | — | | — | | | | ( | | | |
| | | | | | | |
| | | Former | | Retained | | |
| | | Member's | | earnings | | Total |
| | | Investment | | (deficit) | | equity |
| | amounts in millions | |||||
Balances at January 1, 2025 | | $ | | | ( |
| |
Net earnings (loss) | | | — | | | | |
Stock-based compensation | | | | | — | | |
Other | | | ( | | — | | ( |
Balances at June 30, 2025 | | $ | | | ( | | |
| | | | | | | |
| | | Former | | Retained | | |
| | | Member's | | earnings | | Total |
| | | Investment | | (deficit) | | equity |
| | amounts in millions | |||||
Balances at March 31, 2025 | | $ | | | ( |
| |
Net earnings (loss) | | | — | | | | |
Stock-based compensation | | | | | — | | |
Other | | | ( | | — | | ( |
Balances at June 30, 2025 | | $ | | | ( | | |
See accompanying notes to condensed consolidated financial statements.
I-6
Table of Contents
LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
(1) Basis of Presentation
Liberty Capital Corporation (f/k/a GCI Liberty, Inc. prior to a name change on May 21, 2026) (“Liberty Capital”) consists of
The accompanying condensed consolidated financial statements represent the combination of the historical financial information of GCI Holdings until the date of the Separation. Although GCI Holdings was reported as a combined company until the date of the Separation, all periods reported herein are referred to as consolidated. The condensed consolidated financial statements and the notes thereto refer to the consolidation of GCI Holdings and certain other assets and liabilities as "Liberty Capital," "the Company," "us," "we" and "our." The Separation was accounted for at historical cost due to the pro rata nature of the distribution to holders of GCI Group common stock. All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.
The accompanying (a) condensed consolidated balance sheet as of December 31, 2025, which has been derived from audited financial statements, and (b) interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. Additionally, certain prior period amounts have been reclassified for comparability with the current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Liberty Capital’s Annual Report on Form 10-K for the year ended December 31, 2025.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Liberty Capital considers (i) fair value of non-financial instruments and (ii) accounting for income taxes to be its most significant estimates.
Through its ownership of interests in subsidiaries and other companies, the Company is primarily engaged in providing a full range of data, wireless, voice, and managed services to residential customers, businesses, governmental entities and educational and medical institutions primarily in Alaska under the GCI brand.
Separation of Liberty Capital from Liberty Broadband
Liberty Capital was formed in Nevada in December 2024 for the purpose of ultimately holding the GCI Business. On July 14, 2025, Liberty Broadband and its subsidiaries completed an internal reorganization in order for Liberty Broadband to transfer the GCI Business to Liberty Capital in exchange for Liberty Capital stock, including
I-7
Table of Contents
LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
prior to the Distribution. The internal reorganization, the Preferred Stock Sale, the reclassification and the Distribution are collectively referred to as the “Separation.”
In connection with the Separation, the Company entered into certain agreements, including a separation and distribution agreement, a tax sharing agreement (the “Tax Sharing Agreement”) and a tax receivables agreement (the “Tax Receivables Agreement”), pursuant to which, among other things, Liberty Capital and Liberty Broadband will indemnify each other against certain losses that may arise. The Tax Sharing Agreement governs the allocation of taxes, tax benefits, tax items and tax-related losses between Liberty Broadband and Liberty Capital, and the Tax Receivables Agreement governs the respective rights and obligations of Liberty Broadband and Liberty Capital with respect to certain tax matters.
In addition, the Company entered into certain agreements, including a services agreement (“Services Agreement”), a facilities sharing agreement and an aircraft time sharing agreement, with Liberty Media Corporation (“Liberty Media”) and/or its subsidiaries. Pursuant to the Services Agreement, Liberty Media provides Liberty Capital with public company support services, including legal, tax, accounting, treasury, information technology, cybersecurity, internal audit and investor relations services. Liberty Capital reimburses Liberty Media for all out-of-pocket expenses incurred by Liberty Media in providing the services and pays a services fee that will be subject to review and evaluation for reasonableness on a quarterly basis. For the three and six months ended June 30, 2026, approximately $
Rights Offering
On November 25, 2025, Liberty Capital distributed subscription rights (the “Series C GCI Group Rights”) to purchase shares of GLIBK to holders of GLIBA, GLIBB, and GLIBK in connection with a rights offering (the “rights offering”) that commenced on November 26, 2025. Liberty Capital distributed
Acquisitions
On April 21, 2026, GCI Holdings agreed pursuant to a securities purchase agreement (the “Purchase Agreement”), subject to receipt of regulatory approval and satisfaction of customary closing conditions, to acquire all of the issued and outstanding equity interests in Q Gateway Intermediate Holdings, LLC, a Delaware limited liability company (“Quintillion”), in exchange for consideration of $
Concurrent with the entry into the Purchase Agreement, GCI, LLC, as lender, entered into a Term Loan Credit Agreement with the seller in the acquisition, as borrower, providing for a term loan in an initial principal amount of $
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Table of Contents
LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
On April 29, 2026, GCI Communication Corporation, a wholly-owned subsidiary of the Company, purchased SPITwSPOTS, Inc. (“SwS”), a local fixed wireless access provider of broadband services, for total cash consideration of approximately $
Other Corporate Activity
On April 16, 2026, Liberty Capital completed the purchase of approximately
(2) Earnings (Loss) Per Common Share
Basic net earnings (loss) per common share ("EPS") is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding ("WASO") for the period. Diluted net EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. Potentially dilutive shares are excluded from the computation of diluted net EPS during periods in which losses are reported since the result would be antidilutive.
Excluded from diluted net EPS for both of the three and six months ended June 30, 2026 are approximately
In connection with the Separation, on July 14, 2025, the Company’s common stock was reclassified into approximately
| | | | | |
| | GCI Group Common Stock | | ||
| | Three months ended | | Six months ended | |
| | June 30, | | June 30, | |
| | 2026 | | 2026 | |
| | number of shares in millions | | ||
Basic WASO |
| | | | |
Potentially dilutive shares |
| — | | — | |
Diluted WASO |
| | | | |
(3) Revenue Recognition
Contracts with Customers
The Company had receivables of $
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LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
million and $
The Company expects to recognize revenue in the future related to performance obligations that are unsatisfied (or partially unsatisfied) of $
Revenue from contracts with customers, classified by customer type and significant service offerings, is as follows:
| | | | | | | | | |
| | Three months ended | | Six months ended | |||||
| | June 30, | | June 30, | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | |
| | amounts in millions | |||||||
GCI Holdings | | | | | | | | | |
Consumer Revenue | | | | | | | | | |
Data | | $ | | | | | | | |
Wireless | | | | | | | | | |
Other | |
| | | | | | | |
Business Revenue | |
| | | | | | | |
Data | |
| | | | | | | |
Wireless | |
| | | | | | | |
Other | |
| | | | | | | |
Lease, grant, and revenue from subsidies | |
| | | | | | | |
Total | | $ | | | | | | | |
Government Assistance
In current and prior years, the Company has been awarded, as either the recipient or subrecipient, federal government grants to construct broadband infrastructure to unserved and underserved communities in rural Alaska. During the three months ended June 30, 2026 and 2025, the Company received approximately $
These grants are accounted for using a grant accounting model by analogy to International Accounting Standard 20, Accounting for Government Grants and Disclosure of Government Assistance. These grants were recorded as deferred revenue since the primary conditions for the receipt of the grant are the build out and operation of the broadband services over the established time frames, which range from
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Table of Contents
LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
(4) Goodwill and Intangible Assets
| | | | | | | | | |
| Goodwill | | Cable Certificates | | Other | | Total | | |
Balance at January 1, 2026 | $ | | | | | | | | |
Acquisitions1 | | | | — | | — | | | |
Balance at June 30, 2026 | $ | | | | | | | | |
| 1) | Acquired goodwill relates to GCI’s acquisition of SwS (see note 1 for additional information). |
Intangible Assets Subject to Amortization, net
| | | | | | | | | | | | | | | |
| | June 30, 2026 | | December 31, 2025 |
| ||||||||||
| | Gross | | | | Net | | Gross | | | | Net | | ||
| | carrying | | Accumulated | | carrying | | carrying | | Accumulated | | carrying |
| ||
| | amount | | amortization | | amount | | amount | | amortization | | amount |
| ||
| | amounts in millions |
| ||||||||||||
Customer relationships | | $ | | | ( |
| | | | |
| ( |
| | |
Other amortizable intangible assets | |
| | | ( |
| | |
| |
| ( |
| | |
Total | | $ | | | ( |
| | | | |
| ( |
| | |
Intangible assets are being amortized generally on an accelerated basis as reflected in amortization expense and in the future amortization table below.
Amortization expense for intangible assets with finite useful lives was $
| | | | |
Remainder of 2026 | | $ | | |
2027 | | $ | | |
2028 | | $ | | |
2029 | | $ | | |
2030 | | $ | | |
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LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
(5) Debt
Debt is summarized as follows:
| | | | | | | | | |
| | Outstanding | | | | | |
| |
| | principal | | Carrying value |
| ||||
| | June 30, | | June 30, | | December 31, |
| ||
| | 2026 | | 2026 | | 2025 |
| ||
|
| amounts in millions | | ||||||
Senior Notes | | $ | | |
| |
| | |
Senior Credit Facility | |
| | |
| |
| | |
Other | |
| | |
| | | | |
Deferred financing costs | | | — | | | ( | | ( | |
Total debt | | $ | | |
| |
| | |
Debt classified as current | |
| | |
| ( |
| ( | |
Total long-term debt | | | | | $ | |
| | |
Senior Notes
On October 7, 2020, GCI, LLC issued $
On June 30, 2026, GCI, LLC entered into an agreement with a financial institution to purchase a portion of its outstanding Senior Notes subject to certain conditions. Following the Company’s fiscal quarter ended June 30, 2026, Liberty Capital purchased approximately $
Senior Credit Facility
On March 25, 2025, GCI, LLC entered into the Ninth Amended and Restated Credit Agreement (as amended by the Amendment No. 1 to Ninth Amended and Restated Credit Agreement described below, the “Senior Credit Facility”), which includes (x) a $
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LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
The revolving credit facility borrowings under the Senior Credit Facility that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between
The interest rate on the Senior Credit Facility was
GCI, LLC’s first lien leverage ratio may not exceed
The terms of the Senior Credit Facility include customary representations and warranties, customary affirmative and negative covenants and customary events of default. At any time after the occurrence of an event of default under the Senior Credit Facility, the lenders may, among other options, declare any amounts outstanding under the Senior Credit Facility immediately due and payable and terminate any commitment to make further loans under the Senior Credit Facility. The obligations under the Senior Credit Facility are secured by a security interest on substantially all of the assets of GCI, LLC and the subsidiary guarantors, as defined in the Senior Credit Facility, and on the stock of GCI Holdings.
As of June 30, 2026, there was $
Fair Value of Debt
The fair value of the Senior Notes was $
Due to the variable rate nature of the Senior Credit Facility and other debt, the Company believes that the carrying amounts approximate fair value at June 30, 2026.
(6) Stock-Based Compensation
Pursuant to the Liberty Capital Corporation 2025 Omnibus Incentive Plan (the “2025 Plan”), the Company may grant to certain of its directors, employees and employees of its subsidiaries, restricted stock units (“RSUs”) and stock options to purchase a maximum of
The Company measures the cost of employee services received in exchange for an equity classified award (such as RSUs) based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and re-measures the fair value of the Award at each reporting date.
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LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
Included in selling, general and administrative expense in the accompanying condensed consolidated statements of operations are $
Grants of Awards
RSUs granted during the six months ended June 30, 2026 are summarized as follows:
| | | | | | |
| | Six months ended | | |||
| | June 30, 2026 | | |||
| | RSUs | | Weighted | | |
| | granted | | average | | |
| | (000's) | | GDFV | | |
GLIBK time-based RSUs, employees and directors (1) | | | | $ | | |
GLIBK performance-based RSUs, employees (2) | | | | $ | | |
GLIBK performance-based RSUs, Liberty Capital CEO (3) | | | | $ | | |
| (1) | Grants generally vest between one and |
| (2) | Grants vest in March 2027, subject to the satisfaction of certain performance objectives. |
| (3) | Grant vests in March 2027, subject to the satisfaction of certain performance objectives. Grant was made to the Company’s Chief Executive Officer (“CEO”) in connection with his employment agreement. |
Performance objectives, which are subjective, are considered in determining the timing and amount of the compensation expense recognized. As the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The value of the grant is re-measured at each reporting period.
The Company did
The Company calculates the GDFV for all of its equity classified options and the subsequent remeasurement of its liability classified options using the Black-Scholes Model. The Company estimates the expected term of the options based on historical exercise and forfeiture data. The volatility used in the calculation for options is based on the historical volatility of the corresponding series of its predecessor Liberty Broadband common stock and, when available, the implied volatility of publicly traded Liberty Capital options. The Company uses a
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LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
Outstanding Awards
The following table presents the number and weighted average exercise price (“WAEP”) of options to purchase GLIBK granted to certain directors and employees of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the options.
| | | | | | | | | | | |
| Series C | | |||||||||
| | | | | | Weighted | | Aggregate | | ||
| | | | | | average | | intrinsic | | ||
| Options | | | | | remaining | | value | | ||
| (000's) | | WAEP | | life | | (millions) | | |||
Outstanding at January 1, 2026 | | | $ | | | | | | | | |
Granted | — | | $ | — | | | | | | | |
Exercised | — | | $ | — | | | | | | | |
Forfeited/Cancelled | — | | $ | — | | | | | | | |
Outstanding at June 30, 2026 | | | $ | | years | | $ | — | | ||
Exercisable at June 30, 2026 | | | $ | | years | | $ | — | | ||
The following table presents the number and weighted average GDFV of RSUs granted to employees of the Company.
| | | | |
| Series C | |||
| | | Weighted | |
| RSUs | | average | |
| (000's) | | GDFV | |
Outstanding at January 1, 2026 | | | $ | |
Granted | | | $ | |
Vested | ( | | $ | |
Forfeited/Cancelled | ( | | $ | |
Outstanding at June 30, 2026 | | | $ | |
As of June 30, 2026, there were
As of June 30, 2026, the total unrecognized compensation cost related to unvested Awards was approximately $
As of June 30, 2026, Liberty Capital reserved approximately
(7) Commitments and Contingencies
Guaranteed Service Levels
Certain customers have guaranteed levels of service with varying terms. In the event the Company is unable to provide the minimum service levels, it may incur penalties or issue credits to customers.
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LIBERTY CAPITAL CORPORATION
Notes to Condensed Consolidated Financial Statements (unaudited)
Litigation, Disputes, and Regulatory Matters
The Company and its subsidiaries are involved in various lawsuits, billing disputes, legal proceedings, and regulatory matters that have arisen from time to time in the normal course of business. Management believes there are no proceedings from asserted and unasserted claims that, if determined adversely, would have a material adverse effect on the Company’s financial position, results of operations or liquidity, other than as discussed below.
Universal Service Fund (“USF”) Programs
GCI Holdings receives support from various USF programs. The USF programs are subject to change by regulatory actions taken by the Federal Communications Commission, interpretations of or compliance with USF program rules, or legislative actions. The USF programs have also been subject to legal challenge, which could disrupt the support GCI Holdings receives. Changes to any of the USF programs that GCI Holdings participates in could result in a material decrease in revenue and accounts receivable, which could have an adverse effect on GCI Holdings' business and the Company's financial position, results of operations or liquidity.
(8) Segment Information
Liberty Capital’s chief operating decision maker (“CODM”), the Chief Executive Officer, assesses performance and allocates resources based on the Company’s consolidated statements of operations, as the converged network requires the CODM to manage and evaluate the results of the business in a consolidated manner to drive efficiencies and develop uniform strategies. Accordingly, key components and processes of the Company’s operations are managed centrally, including capital and new technology development and deployment, customer service, marketing and advertising, legal and government affairs. Segment asset information is not used by the CODM to allocate resources. Under this organizational and reporting structure, the Company has
As a single reportable segment entity, the Company’s segment performance measure is net earnings (loss). See note 3 for a description of the Company's disaggregated revenue by customer type and significant service offerings. Significant segment expenses that are not separately presented on the condensed consolidated statements of operations but are reviewed by the CODM are presented below:
Operating expenses
| | | | | | | | | |
| | Three months ended | | Six months ended | |||||
| | June 30, | | June 30, | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | |
| | amounts in millions | |||||||
Consumer direct costs | | $ | | | | | | | |
Business direct costs | | | | | | | | | |
Technology expense | | | | | | | | | |
Total operating expenses | | $ | | | | | | | |
Consumer direct costs consists of wireless handset inventory costs, video programming, wireless distribution costs, marketing and advertising expenses, bad debt expense, credit card and other transactional fees, and personnel expense for managing relationships with consumer customers. Business direct costs consists of network distribution costs, largely to healthcare and education customers, as well as personnel expense for managing relationships with business customers. Technology expense consists of field and technology operations costs incurred to manage the Company's network, including personnel expense, professional service fees, software related costs, lease expenses, maintenance costs, as well as utility costs.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding business, product and marketing strategies; revenue growth; future expenses; anticipated changes to regulations; the Universal Service Fund (“USF”) programs; the impacts of economic trends; indebtedness and the anticipated impact of certain contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. You can identify some of the forward-looking statements by the use of forward-looking words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “should,” “may” and other similar expressions, although not all forward-looking statements contain these identifying words. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but such statements necessarily involve risks and uncertainties. There can be no assurance that such expectations or beliefs will result or be achieved or accomplished and you should not place undue reliance on these forward-looking statements. The following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated:
| ● | competition faced by us that may reduce our market share and financial performance; |
| ● | customer demand for our products and services and our ability to adapt to changes in demand; |
| ● | adverse economic conditions in the United States (“U.S.”) and inflationary pressures on input costs and labor; |
| ● | changes in, or failure or inability to comply with, government regulations and legislation, including, without limitation, regulations of the Federal Communications Commission (the “FCC”), and adverse outcomes from regulatory proceedings and court cases; |
| ● | our ability to obtain or maintain roaming services needed from other carriers; |
| ● | our ability to stay abreast of new technology, including the use of artificial intelligence, and the resulting risks and challenges associated with the use of new technology; |
| ● | our ability to obtain necessary communications equipment from third-party vendors to meet customer needs; |
| ● | natural or man-made disasters or terrorist attacks; |
| ● | failure to protect the security of personal information about our customers, subjecting us to potentially costly government enforcement actions or private litigation and reputational damage; |
| ● | our ability to obtain additional financing, or refinance or renew our existing indebtedness on acceptable terms; |
| ● | the impact of our significant indebtedness; |
| ● | our ability to generate cash to service our debt and to meet other obligations; |
| ● | our overlapping directors and officers with Liberty Broadband Corporation (“Liberty Broadband”), and Liberty Media Corporation (“Liberty Media”), and our overlapping officers with Liberty Live Holdings, Inc.; |
| ● | the impact of events involving the assets and business market value of the GCI Group common stock; |
| ● | the unfavorable outcome of pending or future legal proceedings; and |
| ● | the additional costs we will incur or have incurred as a result of our Separation (as defined below). |
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For additional risk factors, please see Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Quarterly Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.
The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto and our Annual Report on Form 10-K for the year ended December 31, 2025.
Overview
Liberty Capital Corporation (f/k/a GCI Liberty, Inc. prior to a name change on May 21, 2026) (“Liberty Capital”) consists of 100% of the outstanding equity interests in GCI, LLC, GCI Holdings, LLC (“GCI Holdings” or “GCI”) and their subsidiaries (collectively, the “GCI Business”), and was formerly owned by Liberty Broadband, prior to the Separation (defined below).
Liberty Capital was formed in Nevada in December 2024 for the purpose of ultimately holding the GCI Business. On July 14, 2025, Liberty Broadband and its subsidiaries completed an internal reorganization in order for Liberty Broadband to transfer the GCI Business to Liberty Capital in exchange for Liberty Capital stock, including 10,000 shares of Liberty Capital non-voting preferred stock, and the assumption of liabilities related to the GCI Business by Liberty Capital. The internal reorganization resulted in Liberty Capital owning, directly or indirectly, GCI, LLC and the operations comprising, and the entities that conduct, the GCI Business. Following the internal reorganization, Liberty Broadband sold all of the non-voting preferred stock (the “Preferred Stock Sale”) to third parties. The non-voting preferred stock is issued by Liberty Capital, has a 12% dividend rate and $1,000 per share liquidation price plus accrued and unpaid dividends. The mandatory redemption date is July 14, 2032. Following the Preferred Stock Sale, Liberty Capital effected a reclassification of Liberty Capital’s existing common stock into a sufficient number of shares of Liberty Capital Series A GCI Group common stock (“GLIBA”), Liberty Capital Series B GCI Group common stock (“GLIBB”) and Liberty Capital Series C GCI Group common stock (“GLIBK”) to complete the divestiture of Liberty Capital pursuant to the distribution (the “Distribution”) by Liberty Broadband to the holders of record of Liberty Broadband common stock, as of the record date for the Distribution, of all the shares of Liberty Capital GCI Group common stock held by Liberty Broadband immediately prior to the Distribution. The internal reorganization, the Preferred Stock Sale, the reclassification and the Distribution are collectively referred to as the “Separation.”
In connection with the Separation, the Company entered into certain agreements, including a separation and distribution agreement, a tax sharing agreement (the “Tax Sharing Agreement”) and a tax receivables agreement (the “Tax Receivables Agreement”), pursuant to which, among other things, Liberty Capital and Liberty Broadband will indemnify each other against certain losses that may arise. The Tax Sharing Agreement governs the allocation of taxes, tax benefits, tax items and tax-related losses between Liberty Broadband and Liberty Capital, and the Tax Receivables Agreement governs the respective rights and obligations of Liberty Broadband and Liberty Capital with respect to certain tax matters. In addition, the Company entered into certain agreements, including a services agreement (the “Services Agreement”), a facilities sharing agreement and an aircraft time sharing agreement, with Liberty Media and/or its subsidiaries. Pursuant to the Services Agreement, Liberty Media provides Liberty Capital with public company support services, including legal, tax, accounting, treasury, information technology, cybersecurity, internal audit and investor relations services. Liberty Capital reimburses Liberty Media for all out-of-pocket expenses incurred by Liberty Media in providing the services and pays a services fee that is subject to review and evaluation for reasonableness on a quarterly basis.
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Update on Economic Conditions
GCI Holdings offers wireless and wireline telecommunication services, data services, and managed services to customers primarily throughout Alaska. Because of this geographic concentration, growth of GCI Holdings’ business and operations depends upon economic conditions in Alaska. Unfavorable economic conditions, such as a recession or economic slowdown in the U.S., or inflation in the markets in which GCI operates, could negatively affect the affordability of and demand for GCI’s products and services and its cost of doing business. In recent years, varying factors, including the conflict in Iran, have contributed to significant volatility and disruption of financial markets and global supply chains. Increased equipment costs, for example due to increased tariffs, could also impact GCI’s results.
The Alaska economy is dependent upon the oil industry, state and federal spending, investment earnings, and tourism. A decline in oil prices would put significant pressure on the Alaska state government budget. The Alaska state government has financial reserves that GCI Holdings believes may be able to help fund the state government for the next couple of years. The Alaska economy is subject to recessionary pressures as a result of the economic impacts of volatility in oil prices, inflation, and other causes that could result in a decrease in economic activity. While it is difficult for GCI Holdings to predict the future impact of a recession on its business, these conditions have had an adverse impact on its business and could adversely affect the affordability of and demand for some of its products and services and cause customers to shift to lower priced products and services or to delay or forgo purchases of its products and services. GCI Holdings’ customers may not be able to obtain adequate access to credit, which could affect their ability to make timely payments to GCI Holdings and could lead to an increase in accounts receivable and bad debt expense. If Alaska experiences a recession or economic slowdown, it could negatively affect GCI Holdings’ business including its financial position, results of operations, or liquidity, as well as its ability to service debt, pay other obligations and enhance shareholder returns.
In addition, during the past several years, GCI Holdings has experienced, and continues to experience the impact of inflation-sensitive items, including upward pressure on the costs of materials, labor, and other items that are critical to GCI Holdings’ business. GCI Holdings continues to monitor these impacts closely and, if costs continue to rise, GCI Holdings may be unable to recoup losses or offset diminished margins by passing these costs through to its customers or implementing offsetting cost reductions.
On October 1, 2025, the federal government of the U.S. began a shut-down. While this shut-down ended, future shut-downs could affect the timeliness of government grant approvals and funding the Company receives.
Due to goodwill and intangible asset impairments recorded during the third quarter of 2025, the fair values of such intangible assets do not significantly exceed their carrying value. The Company will continue to monitor current business performance versus the current and updated long-term forecasts, among other relevant considerations, to determine if the carrying value of its assets (including goodwill and indefinite-lived intangible assets) is appropriate. Future outlook declines in revenue, cash flows, or other factors could result in a sustained decrease in fair value that may result in a determination that additional carrying value adjustments are required, which could be material.
Federal Universal Service Programs
Legal Challenges to the Constitutionality of the FCC Universal Service Support Programs. There have been a number of legal challenges to the constitutionality of the USF. The U.S. Courts of Appeals for the Sixth and Eleventh Circuits rejected such challenges in 2023, as did a panel of three judges in the Fifth Circuit. However, on July 24, 2024, the U.S. Court of Appeals for the Fifth Circuit sitting en banc ruled that the USF program was unconstitutional as currently administered, and remanded the case to the FCC. In its decision, the en banc Fifth Circuit concluded that there was an impermissible public delegation of legislative authority to the FCC and an impermissible private delegation of authority from the FCC to the Universal Service Administrative Company (“USAC”), the private company responsible for USF administration. The Supreme Court issued a decision on June 27, 2025, reversing the Fifth Circuit and upholding the constitutionality of the USF contribution factor. There is continuing litigation, as petitioners have filed a new Petition for Review in the Fifth Circuit, on October 1, 2025, to challenge two statutory provisions that the Supreme Court did not have occasion to address, and pursuant to which GCI or its customers receive universal service support, as well as to challenge
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the legality of the USAC, which administers that program for the FCC. Oral argument is scheduled in the case for August 5, 2026.
USF Programs
GCI Holdings receives support from various USF programs. The USF programs are subject to change by regulatory actions taken by the FCC, interpretations of or compliance with USF program rules, or legislative actions. The USF programs have also been subject to legal challenge, which could disrupt the support GCI Holdings receives. Changes to any of the USF programs that GCI Holdings participates in could result in a material decrease in revenue and accounts receivable, which could have an adverse effect on GCI Holdings’ business and the Company’s financial position, results of operations or liquidity.
Acquisitions
On April 21, 2026, GCI Holdings agreed pursuant to a securities purchase agreement (the “Purchase Agreement”), subject to receipt of regulatory approval and satisfaction of customary closing conditions, to acquire all of the issued and outstanding equity interests in Q Gateway Intermediate Holdings, LLC, a Delaware limited liability company (“Quintillion”), in exchange for consideration of $310 million in cash subject to certain adjustments (including working capital, cash, indebtedness and transaction expenses), reimbursement of up to $50 million for certain capital expenditures incurred by Quintillion, and potential earn-out payments in 2028, 2029 and 2031. The acquisition is currently expected to close during the fourth quarter of 2026.
Concurrent with the entry into the Purchase Agreement, GCI, LLC, as lender, entered into a Term Loan Credit Agreement with the seller in the acquisition, as borrower, providing for a term loan in an initial principal amount of $160 million. The term loan bears interest at the Secured Overnight Financing Rate (“SOFR”) plus a margin of 8.50% (with, subject to certain conditions, up to SOFR plus 2.00% payable in cash and the remainder paid-in-kind). Upon the closing of the acquisition, the outstanding amounts under the term loan will automatically be deemed paid in full and credited toward the purchase price; if the acquisition does not close, the term loan will mature on April 21, 2031.
On April 29, 2026, GCI Communication Corporation, a wholly-owned subsidiary of the Company, purchased SPITwSPOTS, Inc. (“SwS”), a local fixed wireless access provider of broadband services, for total cash consideration of approximately $11 million. The Company recorded $10 million of goodwill, $11 million of fixed assets, $8 million of other assets, offset by $18 million of other liabilities related to the acquisition. The acquisition price allocation is preliminary and subject to revision as of June 30, 2026.
Other Corporate Activity
As of April 22, 2026, Liberty Capital has received all required regulatory approvals, including from the FCC, allowing its Chairman of the Board of Directors, Dr. John C. Malone, to hold de jure voting control of Liberty Capital and its subsidiaries. As a result, the existing letter agreement, dated December 31, 2024, that limited Dr. Malone’s voting power to below 50% has terminated by its terms, and Dr. Malone may now vote his equity ownership in full, which represents an approximate 53.7% voting interest based on outstanding shares as of March 23, 2026, the most recent record date applicable to a vote of Liberty Capital shareholders.
On April 16, 2026, Liberty Capital completed the purchase of approximately 61 thousand Class A Common Shares (“LILA”) and approximately 12.3 million Class C Common Shares (“LILAK”), in each case, of Liberty Latin America Ltd. (“LLA”) for approximately $107 million in cash. On May 22, 2026, the Company’s Chairman purchased the LLA shares back from the Company at its cost of $8.63 per share for aggregate cash of $107 million.
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Results of Operations – Consolidated
General. Provided in the tables below is information regarding the historical consolidated operating results and other income and expense of Liberty Capital.
| | | | | | | | | |
| | Three months ended |
| Six months ended | |||||
| | June 30, | | June 30, | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | |
| | amounts in millions | |||||||
Revenue | | $ | 261 |
| 261 | | 517 |
| 527 |
Operating costs and expenses: | | | | | | | | | |
Operating expense (exclusive of depreciation and amortization) | |
| 137 |
| 128 | | 269 |
| 253 |
Selling, general and administrative expense | | | 28 | | 25 | | 59 | | 53 |
Stock-based compensation | | | 7 | | 5 | | 15 | | 7 |
Depreciation and amortization | |
| 56 |
| 52 | | 108 |
| 105 |
Acquisition costs | | | 4 | | — | | 7 | | — |
Operating income (loss) | | | 29 |
| 51 | | 59 |
| 109 |
Other income (expense): | | | | | | | | | |
Interest expense (including amortization of deferred loan fees) | | | (12) | | (12) | | (20) | | (22) |
Other, net | | | 6 | | 2 | | 10 | | 3 |
| | | (6) | | (10) | | (10) | | (19) |
Earnings (loss) before income taxes | | | 23 | | 41 | | 49 | | 90 |
Income tax benefit (expense) | |
| (7) |
| (14) | | (15) |
| (28) |
Net earnings (loss) | | $ | 16 | | 27 | | 34 | | 62 |
| | | | | | | | | |
Adjusted OIBDA | | $ | 96 | | 108 | | 189 | | 221 |
Revenue. Consolidated revenue remained flat and decreased $10 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The following table highlights selected key performance indicators used in evaluating the Company’s business.
| | | | | |
| | June 30, |
| ||
| | 2026 | | 2025 |
|
Consumer |
| |
| | |
Data: |
| | | | |
Broadband subscribers1, 2 | | 155,400 | | 153,800 | |
Wireless: |
| | | | |
Wireless lines in service3 |
| 202,100 | | 199,200 | |
Business | | | | | |
Wireless: | | | | | |
Wireless lines in service4 | | 8,000 | | 8,600 | |
1 A broadband subscriber is defined by the purchase of high speed data service. If one entity purchases multiple broadband service access points, each access point is counted as a subscriber. Small-to-Medium Business customers, promotional broadband access points and customers that have been inactive for 60 days or less are included.
2 Consumer broadband subscribers as of June 30, 2026 includes approximately 5,400 acquired subscribers from the SwS acquisition.
3 A consumer wireless line in service is defined as a wireless device with a monthly fee for services. Consumer wireless lines include Small-to-Medium Business customers, promotional lines, postpaid lines that have been inactive for 60 days or less and paying prepaid lines.
4 A business wireless line in service is defined as a wireless device with a monthly fee for services. Business wireless lines include enterprise customers, promotional lines and postpaid lines that have been inactive for 60 days or less.
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The components of revenue are as follows:
| | | | | | | | | |
| | Three months ended |
| Six months ended | |||||
| | June 30, | | June 30, | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | |
| | amounts in millions | |||||||
Consumer | | | |
| | | |
| |
Data | | $ | 60 |
| 60 | | 119 |
| 121 |
Wireless | |
| 52 |
| 51 | | 104 |
| 101 |
Other | |
| 5 |
| 8 | | 9 |
| 18 |
Business | |
| |
| | | |
| |
Data | |
| 127 |
| 125 | | 251 |
| 253 |
Wireless | |
| 10 |
| 10 | | 20 |
| 20 |
Other | |
| 7 |
| 7 | | 14 |
| 14 |
Total revenue | | $ | 261 |
| 261 | | 517 |
| 527 |
Consumer data revenue remained flat and decreased $2 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The decrease for the six months ended June 30, 2026 was driven by a decrease in the number of subscribers, not including the subscribers acquired in the SwS acquisition. Without the SwS subscribers, consumer data subscribers were down 2.5% compared to the same period in the prior year.
Consumer wireless revenue increased $1 million and $3 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, driven by an increase in the number of subscribers.
Consumer other revenue decreased $3 million and $9 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Consumer other revenue consists of consumer voice revenue, other revenue and up until the third quarter of 2025, video revenue. The decrease was primarily due to no video revenue being recorded during the three and six months ended June 30, 2026 as a result of the discontinuation of video services in the prior year.
Business data revenue increased $2 million and decreased $2 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The increase for the three months ended June 30, 2026 was primarily due to service upgrades with existing healthcare and education customers. The decrease for the six months ended June 30, 2026 was primarily due to one-time revenue that occurred during the six months ended June 30, 2025 of approximately $4 million related to the successful appeal of rates for services provided to certain healthcare customers in prior years. This decrease was offset by an increase due to service upgrades with existing healthcare and education customers.
Business wireless revenue remained flat for both the three and six months ended June 30, 2026, as compared to the same periods in 2025.
Business other revenue remained flat for both the three and six months ended June 30, 2026, as compared to the same periods in 2025.
Operating expense
| | | | | | | | | |
| | Three months ended | | Six months ended | |||||
| | June 30, | | June 30, | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | |
| | amounts in millions | |||||||
Consumer direct costs | | $ | 33 | | 35 | | 65 | | 71 |
Business direct costs | | | 35 | | 26 | | 67 | | 52 |
Technology expense | | | 69 | | 67 | | 137 | | 130 |
Total operating expenses | | $ | 137 | | 128 | | 269 | | 253 |
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Consumer direct costs consists of wireless handset inventory costs, video programming, wireless distribution costs, marketing and advertising expenses, bad debt expense, credit card and other transactional fees, and personnel expense for managing relationships with consumer customers. Consumer direct costs decreased $2 million and $6 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, due to decreases in video programming costs as a result of the discontinuation of video services (as discussed above). The decreases in video programming costs were partially offset by increases in wireless distribution costs.
Business direct costs consists of network distribution costs, largely to healthcare and education customers, as well as personnel expense for managing relationships with business customers. Business direct costs increased $9 million and $15 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, due to increases in distribution costs for healthcare and education customers. A portion of this increase in distribution costs related to temporary cost savings of approximately $3 million and $8 million during the three and six months ended June 30, 2025, respectively, from a fiber break on a third party network in which GCI Holdings uses capacity which was fully restored during the three months ended September 30, 2025. The remaining portion of the increase was due to higher distribution costs to provide upgraded services, primarily due to higher circuit costs for a specific circuit.
Technology expense consists of field and technology operations costs incurred to manage the Company's network, including personnel expenses, professional service fees, software related costs, lease expenses, maintenance costs, as well as utility costs. Technology expenses increased $2 million and $7 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, primarily due to increased professional service fees, and to a lesser extent, an increase in maintenance and software costs.
Selling, general and administrative expense consists of corporate overhead costs largely comprised of personnel expenses, software costs, insurance expense, property taxes and professional service fees. Selling, general and administrative expense increased $3 million and $6 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, primarily due to amounts allocated pursuant to the Services Agreement.
Stock-based compensation increased $2 million and $8 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, primarily due to a delay in grants to GCI employees until after the Separation was effective combined with a change in grant timing for GCI employees resulting in two years of value being granted in March 2026, a portion of which vested immediately.
Depreciation and amortization increased $4 million and $3 million for the three and six months ended June 30, 2026, respectively, as compared to the same period in 2025, primarily due to an increase in assets placed in service.
Acquisition costs increased $4 million and $7 million, respectively, as compared to the same period in 2025, primarily due to expenses incurred related to the future acquisition of Quintillion, as described above.
Operating Income (Loss). Consolidated operating income decreased $22 million and $50 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. Operating income was impacted by the above explanations.
Adjusted OIBDA. To provide investors with additional information regarding the Company’s financial results, the Company also discloses Adjusted OIBDA, which is a non-GAAP financial measure. The Company defines Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, separately reported litigation settlements, restructuring, acquisition costs and impairment charges. The Company’s chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate its business decisions and allocate resources. The Company believes this is an important indicator of the operational strength and performance of its business by identifying those items that are not directly a reflection of business performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results, perform analytical comparisons and identify strategies to improve performance. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating
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activities and other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles.
The following table provides a reconciliation of operating income (loss) to Adjusted OIBDA:
| | | | | | | | | |
| | Three months ended | | Six months ended | |||||
| | June 30, | | June 30, | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | |
| | amounts in millions | |||||||
Operating income (loss) | | $ | 29 | | 51 | | 59 | | 109 |
Depreciation and amortization | | | 56 | | 52 | | 108 | | 105 |
Stock-based compensation | | | 7 | | 5 | | 15 | | 7 |
Acquisition costs | | | 4 | | — | | 7 | | — |
Adjusted OIBDA | | $ | 96 | | 108 | | 189 | | 221 |
Consolidated Adjusted OIBDA decreased $12 million and $32 million during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, due to the items discussed above.
Other Income and Expense
Components of Other income (expense) are presented in the table below.
| | | | | | | | | |
| | Three months ended | | Six months ended | |||||
| | June 30, | | June 30, | |||||
| | 2026 | | 2025 | | 2026 | | 2025 | |
| | amounts in millions | |||||||
Other income (expense): | | | | | | | | | |
Interest expense | | $ | (12) | | (12) | | (20) | | (22) |
Other, net | |
| 6 | | 2 | | 10 | | 3 |
| | $ | (6) | | (10) | | (10) | | (19) |
Interest Expense. Interest expense remained flat and decreased $2 million during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025. The decrease for the six months ended June 30, 2026 was primarily due to lower amounts outstanding during the majority of the six months ended June 30, 2026 and lower interest rates on the Company’s Senior Credit Facility (as defined in note 5 to the accompanying condensed consolidated financial statements) compared to the prior year.
Other, net. Other, net income increased $4 million and $7 million during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, primarily related to interest and dividend income related to the Company’s cash equivalents which were higher in the first half of 2026 compared to the prior year as a result of the rights offering (as defined and described in note 1 to the accompanying condensed consolidated financial statements).
Income taxes. Earnings (losses) before income taxes and income tax (expense) benefit are as follows:
| | | | | | | | | | |
| | Three months ended | | Six months ended | ||||||
| | June 30, | | June 30, | ||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||
| | amounts in millions | ||||||||
Earnings (loss) before income taxes | | $ | 23 | | 41 | | | 49 | | 90 |
Income tax (expense) benefit | | $ | (7) | | (14) | |
| (15) | | (28) |
Effective income tax rate | |
| 30% | | 34% | |
| 31% | | 31% |
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For both the three and six months ended June 30, 2026 and 2025, the income tax expense was in excess of the U.S. statutory tax rate of 21% primarily due to state income taxes and nondeductible executive compensation.
Net earnings (loss). The Company had net earnings of $16 million and $27 million for the three months ended June 30, 2026 and 2025, respectively, and net earnings of $34 million and $62 million for the six months ended June 30, 2026 and 2025, respectively. The change in net earnings (loss) was the result of the above-described fluctuations in our revenue, expenses, and other income and expenses.
Liquidity and Capital Resources
The following are potential sources of liquidity: available cash balances, cash generated by the operating activities of GCI Holdings, dividend and interest receipts, capital market transactions and debt (including borrowings under the Senior Credit Facility (as discussed in note 5 to the accompanying condensed consolidated financial statements)).
As of June 30, 2026, Liberty Capital had a cash and cash equivalents balance of $497 million, which was substantially held in cash equivalents. When applicable, cash equivalents are invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly rated financial and corporate debt instruments.
| | | | | |
| | Six months ended | |||
| | June 30, | |||
| | 2026 | | 2025 | |
| | amounts in millions | |||
Cash flow information | | | | | |
Net cash provided by (used in) operating activities | | $ | 164 |
| 226 |
Net cash provided by (used in) investing activities | | $ | (296) |
| (94) |
Net cash provided by (used in) financing activities | | $ | 213 |
| (90) |
The decrease in cash provided by operating activities during the six months ended June 30, 2026, as compared to the same period in 2025, was primarily driven by decreased net earnings and timing differences in working capital accounts.
During the six months ended June 30, 2026, net cash flows used in investing activities were primarily related to a loan to Quintillion of $160 million and capital expenditures, net of grant proceeds of $125 million. During the six months ended June 30, 2025, net cash flows used in investing activities were primarily relate to capital expenditures, net of grant proceeds of $100 million.
During the six months ended June 30, 2026, net cash provided by financing activities were primarily related to net debt borrowings of $220 million. During the six months ended June 30, 2025, net cash used by financing activities were primarily related to net debt repayments of $84 million.
The projected uses of our cash and restricted cash are debt repayments, net capital expenditures of approximately $165 million, approximately $30 million for interest payments on outstanding debt, reimbursements to Liberty Media for amounts due under various agreements and to fund investment opportunities at Liberty Capital, funding of possible future dividends, and acquisitions (including the Quintillion acquisition discussed above). We expect cash and other available sources of liquidity as discussed above to cover expenses for the foreseeable future.
In July 2026, the Executive Committee of our Board of Directors adopted a dividend policy providing for regular quarterly cash dividends on our GCI Group common stock beginning in the fourth quarter of 2026 with an initial aggregate amount of approximately $60 million annually at inception, or approximately $15 million per quarter. Under the policy, the Board (or an authorized committee) currently intends to declare quarterly cash dividends to the GCI Group common stockholders, subject to the Company's financial condition, results of operations, capital requirements, applicable law and other factors the Board (or an authorized committee) deems relevant. All future dividends remain within the discretion of the Board of Directors (or an authorized committee thereof), and the dividend policy may be modified, suspended or terminated at any time.
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GCI, LLC is in compliance with all debt maintenance covenants as of June 30, 2026. See note 5 to the accompanying condensed consolidated financial statements for a description of all indebtedness obligations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk in the normal course of business due to our ongoing investing and financial activities. Market risk refers to the risk of loss arising from adverse changes in stock prices and interest rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies, procedures and internal processes governing our management of market risks and the use of financial instruments to manage our exposure to such risks.
We are exposed to changes in interest rates primarily as a result of our borrowing and investment activities, which could include investments in fixed and floating rate debt instruments and borrowings used to maintain liquidity and to fund business operations. The nature and amount of our long-term and short-term debt are expected to vary as a result of future requirements, market conditions and other factors. We manage our exposure to interest rates by maintaining what we believe is an appropriate mix of fixed and variable rate debt. We believe this best protects us from interest rate risk. We could achieve this mix by (i) issuing fixed rate debt that we believe has a low stated interest rate and significant term to maturity, and (ii) issuing variable rate debt with appropriate maturities and interest rates.
As of June 30, 2026, our debt is comprised of the following amounts:
| | | | | | | | | | |
Variable rate debt | | | Fixed rate debt |
| ||||||
Principal | | Weighted avg | | | Principal | | Weighted avg |
| ||
amount | | interest rate | | | amount | | interest rate |
| ||
dollar amounts in millions |
| |||||||||
$ | 599 | | 5.6 | % | | $ | 600 | | 4.8 | % |
Item 4. Controls and Procedures
In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company carried out an evaluation, under the supervision and with the participation of management, including its chief executive officer and principal accounting and financial officer (the "Executives"), of the effectiveness of its disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, the Executives concluded that the Company's disclosure controls and procedures were effective as of June 30, 2026 to provide reasonable assurance that information required to be disclosed in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
There has been no change in the Company’s internal control over financial reporting that occurred during the three months ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
Our Annual Report on Form 10-K for the year ended December 31, 2025 includes “Legal Proceedings” under Item 3 of Part I. There have been no material changes to the legal proceedings described in our Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
As of June 30, 2026, the Company does not have an approved share repurchase program in place. Accordingly, there were no repurchases of Liberty Capital GCI Group common stock during the three months ended June 30, 2026.
Item 5. Other Information
None of the Company’s directors or officers
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Item 6. Exhibits
(a)Exhibits
Listed below are the exhibits which are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):
Exhibit No. | Description |
2.1 | Securities Purchase Agreement, dated April 21, 2026, by and among Q Gateway Ultimate Holdings, LLC, GCI Holdings, LLC and the Registrant (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed on April 23, 2026 (File No. 001-42742) (the “April 2026 8-K”)) |
3.1 | Certificate of Amendment to Articles of Incorporation, effective May 12, 2026 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 13, 2026 (File No. 001-42742)) |
3.2 | Certificate of Amendment to Articles of Incorporation, effective May 21, 2026 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 21, 2026 (File No. 001-42742) (the “May 21, 2026 8-K”)) |
3.3 | Amended and Restated Bylaws of the Company, as amended effective on May 21, 2026 (incorporated by reference to Exhibit 3.2 to the May 21, 2026 8-K) |
10.1 | Term Loan Credit Agreement, dated April 21, 2026, by and among GCI, LLC, as lender, Q Gateway Ultimate Holdings, LLC, as borrower, and Acquiom Agency Services LLC, as administrative agent (incorporated by reference to Exhibit 10.1 to the April 2026 8-K) |
10.2 | Amendment No. 1 to Ninth Amended and Restated Credit Agreement, dated June 29, 2026, by and among GCI, LLC, the subsidiary guarantors party thereto, the lenders party thereto, Credit Agricole Corporate and Investment Bank, as administrative agent, and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 29, 2026 (File No. 001-42742)) |
31.1 | Rule 13a-14(a)/15d-14(a) Certification* |
31.2 | Rule 13a-14(a)/15d-14(a) Certification* |
32 | Section 1350 Certification** |
99.1 | Reconciliation of GCI, LLC and its Subsidiaries Net Assets and Net Earnings (Loss) to GCI, LLC, Excluding the Liberty Subsidiaries ** |
101.INS | XBRL Instance Document * – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH | XBRL Taxonomy Extension Schema Document* |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document* |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document* |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document* |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document* |
| |
104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)* |
* | Filed herewith. |
** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
| LIBERTY CAPITAL CORPORATION | |
| | |
Date: August 6, 2026 | By: | /s/ Ronald A. Duncan |
| Ronald A. Duncan | |
| President and Chief Executive Officer | |
| | |
| | |
Date: August 6, 2026 | By: | /s/ Brian J. Wendling |
| Brian J. Wendling | |
| Chief Accounting Officer and Principal Financial Officer | |
| | |
| | |
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