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Ben Oren

Thanks, Brian. At quarter end, Liberty Broadband had consolidated cash and restricted cash of $565 million which includes $149 million of cash and restricted cash at GCI.
There were $338 million of restricted cash at Liberty Broadband as of quarter end, representing proceeds from charter share sales to be used towards debt service.
Reminder that the exchange ratio is fixed in the Charter and Liberty Broadband transaction, essentially creating a lockbox structure between the two companies until transaction close.
Tax-free proceeds from charter share sales are going to delivering at Liberty Broadband until transaction close as well.
In March, at the request of Charter, Liberty Broadband issued a redemption notice for all of its 3.125% debentures due in 2054 for cash, which were either redeemed in April 2025 or exchanged and are expected to be cash settled in May 2025.
In March, GCI refinanced its senior credit facility with a $450 million revolver that matures in 2030 and a $300 million term loan A that matures in 2031.
At quarter end, GCI's leverage as defined by its credit agreement was 2.8 times, and GCI's credit facility had $292 million of undrawn capacity net of letters of credit.
The value of our charter investment based on $44.2 million shares held as of May 1, and charter share price at yesterday's close was $17.8 billion.
At quarter end, Liberty Broadband had a total principal amount of debt of $3.7 billion. Note this excludes preferred stock.
I'll now turn the call over to Ronald Duncan to walk through the operating results of GCI.

Ronald Duncan

Thanks, Ben. The first quarter of 2025 was GCI's best quarter ever with revenue of $266 million and adjusted a bit of $111 million up 9% and 23% respectively over the prior year.
Adjusted but our margin was 42%. Growth was driven primarily by data revenue and businesses, which benefited from the continued strong upgrade cycle in school and healthcare services in rural Alaska, which began in the third quarter of 2024.
The first quarter included a $4 million benefit arising from the successful appeal of rates for services provided to certain healthcare customers in prior years.
Over the last year, adjusted for the reclassification from GCI business, GCI consumer experienced the decline of 400 wireless subs and the decline of 5,000 cable modem customers. The decline in wireless was a result of postpaid growth being offset by losses in pre-paid and Lifeline. The declining cable modem subscribers relates primarily to the termination of the ACP program in 2024.
Operating expenses declined during the quarter due to lower distribution costs for healthcare, education, and consumer customers, partially related to temporary cost savings from a fibre break on a third-party network where GCI uses capacity.
On January 18, the Quintillion fibre under the ice in the Beaufort Sea failed for the second time in three years. This disrupted traffic for GCI's consumer and enterprise customers. Working in cooperation with Quintillion, our networks have been partially restored through a combination of Leo satellite capacity and a rerouting of existing fibre and microwave connections.
Most of our wholesale and enterprise services were restored quickly after the outage. Consumer services have been partially restored, but consumers will unfortunately experience substantially degraded service until the quintillion fibre break is repaired, which is expected to be late this summer.
As Ben mentioned, GCI refinanced its credit facility this quarter, extending maturity to attractive rates. This provides us with good liquidity, and our next meaningful maturity is in October 2028, when the bonds come due.
GCI spent $49 million on CapEx in the first quarter net of grant proceeds. Net CapEx for 2025 is expected to be $250 million related to investments in middle and last mile connectivity in rural Alaska. Capital spending is elevated in 2025 and expected to remain elevated in 2026 as we fulfil build-out requirements under the Alaska plan. Historically, CapEx has been 15% to 20% of revenue, which we will expect, which we expect will be consistent in future years after Alaska plan requirements are satisfied.
Turning to updates on Universal Service Fund matters, on March 26, the Supreme Court heard oral arguments in the case challenging the constitutionality of the Universal Service Fund. We continue to believe the government, which is defending the fund, has a solid position.
Additionally, we've been working with industry groups and legislators on potential legislative solutions that could be enacted in the event of an adverse ruling from the Supreme Court. We are preparing contingency plans to enable GCI to react to a range of potential Supreme Court rulings.
I'll close today with an exciting update for our business and the customers we serve. On Tuesday, April 15, GCI completed a major milestone in remote Alaska. We connected Bethel, the largest community in western Alaska, with fibre all the way from Anchorage.
15 years ago, Bethel was limited to 2G wireless and satellite delivered data services. More recently, the Bethel community had caps on wireless usage, and the fastest broadband speed was 10 megabits with a usage cap of 200 gigs a month.
We expect to launch residential services this May, at which point, Bethel residents will have access to a 5G wireless network and 2.5 gigabits unlimited broadband service under the same pricing plans as Anchorage. We believe this will be transformational for the community and is a major accomplishment in our 45-year effort to connect Alaska. I'm proud of the diligence, resilience, and hard work put in by so many at GCI to make this a reality.
I look forward to speaking with many of you in the coming quarters once the spinoff of GCI Liberty takes place, if not sooner. We appreciate your interest in both Liberty Broadband and GCI and with that operator, we'll open the call up to questions.

Question and Answer Session

Operator

(Operator Instructions) Kutgun Maral, Evercore ISI.

Kutgun Maral

Great, thanks for taking the questions. A few on GCI, first, a number of cable companies have, or they're in the process of somewhat reimagining their strategies, whether it's broadening the product portfolio's or needing to shift some of their go to market and pricing strategies given growing competitive intensity.
I know GCI is not a typical cable company and that the competitive dynamics in Alaska are a bit different than what we see in other markets, but as investors dig into the GCI with the opportunity, maybe you could help us think about the business and whether you might see a need to shift the broader operating and pricing strategy, or is there really no need in the near future, given the current momentum that you have and the outlook that you see ahead.
And secondly, I think you asked this last quarter as well, but are you seeing any changes in consumer business customer behaviours due to the ongoing macro uncertainty more broadly, or have trends remained relatively stable given the different profile of the Alaskan market and economy?
Thank you.

Ronald Duncan

Okay, let me take those in reverse order and deal with any changes in behaviour first. We're pretty much seeing a flat marketplace.
We're seeing a little bit of competition from Starlink around the edges. I think that's probably our equivalent of the fixed wireless competition that Companies in the lower 48 are experiencing, but no real changes on the broadband front and slow but steady growth on the consumer wireless front. With respect to the broader strategy, it's important to remember how much of GCI is really enterprise services.
Consumer services are the minority of the company's revenue and OIBDA, the bulk of the company's revenue and OIBDA come from Enterprise services provided to healthcare corporations and schools in rural Alaska and the largest enterprise customers in the state.
On the consumer market front, we are in tune with the rest of the industry looking at ways to both differentiate and further solidify the customer.
Proposition that's received by GCI. We've been very heavily focused, like lower 48 com companies on bundling wireless with broadband. We're a little different than the lower 48 in that we own our own wireless network.
We're not an MVNO, we're an MNO. And we're right now re-evaluating our pricing and product mix to see what we could do to increase the stickiness for customers, but we haven't experienced the level of competition that companies in the lower 48 have, and we're probably not as advanced as they are in terms of fully integrated packages of services that go beyond just the wireless and the broadband that we're moving in that direction.

Kutgun Maral

That's very helpful. Thank you.

Brian Wendling

Thank you, Kutgun. With that is our one question for today. We thank you for your continued interest in Liberty Broadband and GCI Liberty, and we look forward to speaking with you more on GCI Liberty in the near future.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.