What changed in this filing

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Item 2. Management’s Discussion and Analysis

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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;

new service and product offerings;

revenue growth;

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anticipated changes to regulations;

the Universal Service Fund (“USF”) programs, including the Rural Health Care (“RHC”) Program;

the Universal Service Fund (“USF”) programs;

the impacts of economic trends;

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● 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;

● the impact of a prolonged federal government shutdown on the timeliness of government grant approvals and funding;

● our ability to obtain or maintain roaming services needed from other carriers;

● our ability to stay abreast of new technology;

● 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;

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● our ability to generate cash to service our debt and to meet other obligations;

● our overlapping directors and management with Liberty Broadband Corporation (“Liberty Broadband”) and Liberty Media Corporation (“Liberty Media”);

● 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;

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● the additional costs we will incur or have incurred as a result of our Separation (as defined below).

For additional risk factors, please see “Risk Factors” in our prospectus filed on July 2, 2025 with the Securities and Exchange Commission, as part of our Registration Statement on Form S-1 (File No.

333-286272) (the “Prospectus”), and Part II, Item 1A in this Quarterly Report.

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.

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 the Prospectus.

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 .

GCI Liberty, Inc.

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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 GCI Liberty, has a 12% dividend rate and $1,000 per share liquidation price plus accrued and unpaid dividends.

The non-voting preferred stock is issued by GCI Liberty, and 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, GCI Liberty effected a reclassification of GCI Liberty’s existing common stock into a sufficient number of shares of Series A GCI Group common stock, Series B GCI Group common stock and Series C GCI Group common stock to complete the divestiture of GCI Liberty 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 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 as the “Separation.”

In connection with the Separation, the Company entered into certain agreements, including the 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, GCI Liberty and Liberty Broadband will indemnify each other against certain losses that may arise.

Following the Preferred Stock Sale, GCI Liberty effected a reclassification of GCI Liberty’s existing common stock into a sufficient number of shares of Series A GCI Group common stock (“GLIBA”), Series B GCI Group common stock (“GLIBB”) and Series C GCI Group common stock (“GLIBK”) to complete the divestiture of GCI Liberty 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 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, GCI Liberty 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 GCI Liberty, and the Tax Receivables Agreement governs the respective rights and obligations of Liberty Broadband and GCI Liberty 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 will provide GCI Liberty with public company support services, including legal, tax, accounting, treasury, information technology, cybersecurity, internal auditing and investor relations services.

GCI Liberty will reimburse Liberty Media for all out-of-pocket expenses incurred by Liberty Media in providing the services and will pay a services fee that will be subject to review and evaluation for reasonableness on a quarterly basis.

The fees payable to Liberty Media for the first year of the Services Agreement are not expected to exceed approximately $5 million.

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 GCI Liberty with public company support services, including legal, tax, accounting, treasury, information technology, cybersecurity, internal audit and investor relations services.

GCI Liberty 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.

Update on Economic Conditions

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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 have contributed to significant volatility and disruption of financial markets and global supply chains.

Additionally, the U.S.

Federal Reserve began decreasing interest rates in 2024 after several years of higher rates, and while interest rates remained steady throughout most of 2025, the U.S.

Federal Reserve further decreased rates in the second half of 2025.

In recent years, varying factors, including the conflict in Iran, have contributed to significant volatility and disruption of financial markets and global supply chains.

After several years of higher interest rates, the U.S.

Federal Reserve decreased interest rates in 2024 and the latter half of 2025, with no additional decreases thus far in 2026.

Mounting inflationary cost pressures and recessionary fears have negatively impacted the U.S.

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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 2024 and continuing in 2025, GCI Holdings has experienced 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.

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 July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.

The accounting impacts from the law change were included in our third quarter results.

The OBBBA did not have a material impact on income tax expense on our financial statements;

however, we were able to defer cash taxes to future years as a result of the OBBBA.

On October 1, 2025, the federal government of the United States began a shut-down, which could affect the timeliness of government grant approvals and funding the Company receives.

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.

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However, on July 24, 2024, the U.S.

Court of Appeals for the Fifth Circuit sitting en banc ruled that the USF program is 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, the private company responsible for USF administration.

The Supreme Court granted petitions for certiorari from the Fifth Circuit’s decision and heard the case on March 26, 2025.

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, as well as to challenge the legality of the USAC, which administers that program for the FCC.

Pause in Federal Financial Assistance.

On January 27, 2025, the Office of Management and Budget (“OMB”) issued a memorandum directing a pause in federal financial assistance pending review for consistency with presidential executive actions.

On January 28, 2025, OMB clarified that this only applied to programs affected by certain specified executive actions, which do not appear to include FCC universal service support programs.

OMB subsequently withdrew the memorandum, which has also been subject to preliminary injunction by two federal district courts.

However, if this or another pause were to extend to federal universal service support programs, or to other infrastructure grants that GCI Holdings receives, and such a pause were to become extended, it could have a material adverse effect on GCI Holdings’ business and the Company’s financial position, results of operations or liquidity.

GCI Holdings receives support from various USF programs including the RHC Program.

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 the legality of the USAC, which administers that program for the FCC.

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 ongoing legal challenges, which could disrupt or eliminate the support GCI Holdings receives.

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.

Quintillion Acquisition

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.

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, subject to the satisfaction of certain condition precedents, for a term loan in an initial principal amount of $160 million.

The term loan bears interest at 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.

Other Corporate Activity

As of April 22, 2026, GCI Liberty has received all required regulatory approvals, including from the FCC, allowing its Chairman of the Board of Directors, Dr.

Malone, to hold de jure voting control of GCI Liberty 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.

On April 16, 2026, GCI Liberty 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 April 16, 2026, the Board of Directors approved renaming the parent company from GCI Liberty, Inc.

to Liberty Capital Corporation.

The company does not intend to change the tickers.

Results of Operations – Consolidated

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Operating expense (exclusive of depreciation and amortization)

Selling, general and administrative expense (excluding stock-based compensation)

Selling, general and administrative expense

Stock-based compensation

Depreciation and amortization

Impairment of goodwill and intangible assets

Acquisition costs

Operating income (loss)

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Adjusted OIBDA

Consolidated revenue decreased $5 million and increased $31 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

Consolidated revenue decreased $10 million for the three months ended March 31, 2026, as compared to the same period in 2025.

The following table highlights selected key performance indicators used in evaluating the Company’s business.

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Cable modem subscribers 1

Wireless lines in service 2

Wireless lines in service 3

1 A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased.

Small-to-Medium Business customers and promotional and suspended subscribers are included.

If one entity purchases multiple cable modem service access points, each access point is counted as a subscriber.

2 A wireless line in service is defined as a wireless device with a monthly fee for services.

Small-to-Medium Business customers and promotional and suspended lines are included.

Small-to-Medium Business customers, promotional cable modem access points and customers that have been inactive for 60 days or less are included.

2 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.

3 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.

The components of revenue are as follows:

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Total revenue

Consumer data revenue decreased $2 million and $6 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

The decrease for the three months ended September 30, 2025 was primarily driven by a decrease in the number of subscribers.

The decrease for the nine months ended September 30, 2025 was primarily driven by a decrease in the number of subscribers, including the impact of the discontinuation of the Affordable Connectivity Program in 2024.

Subscriber growth in rural areas has also been adversely impacted by an outage from a fiber break on a third-party network in which GCI Holdings uses capacity, however the network was restored during the three months ended September 30, 2025.

Consumer wireless revenue increased $5 million and $11 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

The increases were driven by an increase in wireless USF support for high cost areas.

Consumer other revenue decreased $8 million and $11 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

Consumer other revenue consists of consumer video and voice revenue.

The decreases were primarily due to decreases in video subscribers.

On May 5, 2025, GCI Holdings received regulatory approval to begin discontinuing video services.

The Company began discontinuing service for remaining video customers after receiving the regulatory approval and as of September 30, 2025, the Company has exited the video business.

Business data revenue increased $1 million and $42 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, primarily due to service upgrades with existing health care and education customers.

Business wireless revenue decreased $1 million and $5 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, primarily due to decreases in roaming revenue due to contractual changes.

Business other revenue remained flat for both the three and nine months ended September 30, 2025, as compared to the same periods in 2024.

Business other revenue consists of business video and voice revenue.

On May 5, 2025, GCI Holdings received regulatory approval to begin discontinuing video services.

The Company began discontinuing service for remaining video customers after receiving the regulatory approval and as of September 30, 2025, the Company has exited the video business.

Consumer data revenue decreased $2 million for the three months ended March 31, 2026, as compared to the same period in 2025, driven by a decrease in the number of subscribers.

Consumer wireless revenue increased $2 million for the three months ended March 31, 2026, as compared to the same period in 2025, driven by an increase in the number of subscribers.

Consumer other revenue decreased $6 million for the three months ended March 31, 2026, as compared to the same period in 2025.

Consumer other revenue consists of consumer voice revenue, and up until the third quarter of 2025, video revenue, and other revenue.

The decrease was primarily due to no video revenue being recorded during the quarter ended March 31, 2026 as a result of the discontinuation of video services in the prior year.

Business data revenue decreased $4 million for the three months ended March 31, 2026, as compared to the same period in 2025 .

The three months ended March 31, 2025 benefited from approximately $4 million of revenue relating to the successful appeal of rates for services provided to certain healthcare customers in prior years.

Business wireless revenue remained flat for the three months ended March 31, 2026, as compared to the same period in 2025.

Business other revenue remained flat for the three months ended March 31, 2026, as compared to the same period in 2025.

Operating expense

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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 internal and external labor costs for managing relationships with consumer customers.

Consumer direct costs decreased $6 million and $8 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, due to decreases in video programming costs and distribution costs.

The decreases in distribution costs were partially due to the temporary cost savings 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.

Business direct costs consists of network distribution costs, largely to healthcare and education customers, as well as internal and external labor costs for managing relationships with business customers.

Business direct costs decreased $1 million and $12 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, due to decreases in distribution costs for health care and education customers, primarily related to temporary cost savings 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.

Technology expense consists of field and technology operations costs incurred to manage the Company's network, including internal and external labor costs, software related costs, lease expenses, maintenance costs, as well as utility costs.

Technology expenses increased $2 million and $5 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, primarily due to increased maintenance and software costs.

Selling, general and administrative expense consists of corporate overhead costs largely comprised of internal and external labor costs, software costs, insurance expense, property taxes and professional service fees.

Selling, general and administrative expense increased $8 million and $9 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, primarily due to an increase in internal labor costs, including higher healthcare costs and higher accrued incentive payments, as well as increased corporate expenses related to amounts allocated pursuant to the Services Agreement, partially offset by a decrease in external labor costs.

Stock-based compensation decreased $2 million for both of the three and nine months ended September 30, 2025, as compared to the same periods in 2024, primarily due to decreased grant activity prior to the Separation.

Depreciation and amortization remained relatively flat for the three and nine months ended September 30, 2025, as compared to the same periods in 2024.

Impairment of goodwill and intangible assets.

During the nine months ended September 30, 2025, the Company recorded an impairment of goodwill and intangible assets of $525 million, consisting of a goodwill impairment of $108 million and an intangible asset impairment of $417 million.

See note 4 to the accompanying notes to the condensed consolidated financial statements for additional information.

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 $4 million for the three months ended March 31, 2026, as compared to the same period in 2025, due to decreases in video programming costs as a result of the discontinuation of video services (as discussed above).

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 $6 million for the three months ended March 31, 2026, as compared to the same period in 2025, due to increases in distribution costs for health care and education customers.

The increase was primarily related to temporary cost savings of approximately $5 million in the first quarter of 2025 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.

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 $5 million for the three months ended March 31, 2026, as compared to the same period 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 for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to amounts allocated pursuant to the Services Agreement.

Stock-based compensation increased $6 million for the three months ended March 31, 2026, as compared to the same period 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 remained relatively flat for the three months ended March 31, 2026, as compared to the same period in 2025.

Acquisition costs increased $3 million, as compared to the same period in 2025, due to expenses incurred related to the future acquisition of Quintillion, as described above.

Operating Income (Loss).

Consolidated operating loss increased $529 million and $487 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

Operating loss was impacted by the above explanations.

Consolidated operating income decreased $28 million for the three months ended March 31, 2026, as compared to the same period 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, 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.

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Stock-based compensation

Impairment of goodwill and intangible assets

Acquisition costs

Adjusted OIBDA

Consolidated Adjusted OIBDA decreased $8 million and increased $37 million during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, due to the items discussed above.

Consolidated Adjusted OIBDA decreased $20 million during the three months ended March 31, 2026, as compared to the same period in 2025, due to the items discussed above.

Other Income and Expense

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Interest Expense.

Interest expense remained relatively flat during the three and nine months ended September 30, 2025, as compared to the same periods in 2024.

Other, net income was relatively flat during the three and nine months ended September 30, 2025, as compared to the same periods in 2024.

Interest expense decreased $2 million during the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to lower amounts outstanding 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 income increased $3 million during the three months ended March 31, 2026, as compared to the same period in 2025, primarily related to interest and dividend income related to the Company’s cash equivalents which were higher in the first quarter 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.

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Effective income tax rate

For the three months ended September 30, 2025, the income tax benefit differs from the U.S.

statutory tax rate of 21% primarily due to state income taxes, mostly offset by an impairment of goodwill that is not deductible for tax purposes (see note 4 to the accompanying condensed consolidated financial statements).

For the nine months ended September 30, 2025, the income tax benefit differs from the U.S.

statutory rate of 21% primarily due to state income taxes, offset by an impairment of goodwill that is not deductible for tax purposes.

For the three and nine months ended September 30, 2024, the income tax expense differs from the U.S.

statutory tax rate of 21% primarily due to state income taxes.

For the three months ended March 31, 2026, 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.

For the three months ended March 31, 2025, the income tax expense was in excess of the U.S.

statutory rate of 21% primarily due to state income taxes.

Net earnings (loss).

The Company had net losses of $387 million and net earnings of $21 million for the three months ended September 30, 2025 and 2024, respectively, and net losses of $325 million and net earnings of $54 million for the nine months ended September 30, 2025 and 2024, respectively.

The Company had net earnings of $18 million and $35 million for the three months ended March 31, 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.

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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 September 30, 2025, GCI Liberty had a cash and cash equivalents balance of $124 million, which was substantially held in cash.

As of March 31, 2026, GCI Liberty had a cash and cash equivalents balance of $435 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.

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Treasury securities, other

government securities or government guaranteed funds, AAA rated money market funds and other highly rated financial and corporate debt instruments.

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Net cash provided by (used in) financing activities

The increase in cash provided by operating activities during the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily driven by increased operating income (not factoring in the impairment) and timing differences in working capital accounts.

During the nine months ended September 30, 2025 and 2024, net cash flows used in investing activities were primarily related to capital expenditures, net of grant proceeds of $152 million and $143 million, respectively.

During the nine months ended September 30, 2025, net cash flows used in financing activities were primarily for net debt repayments of $87 million.

During the nine months ended September 30, 2024, net cash flows used in financing activities were primarily for distributions to our former parent of $150 million, partially offset by net debt borrowings of $26 million.

The projected uses of our cash and restricted cash are debt repayments, net capital expenditures of approximately $80 million, approximately $20 million for interest payments on outstanding debt, reimbursements to Liberty Media for amounts due under various agreements and to fund potential investment opportunities at GCI Liberty.

The decrease in cash provided by operating activities during the three months ended March 31, 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 three months ended March 31, 2026 and 2025, net cash flows used in investing activities were primarily related to capital expenditures, net of grant proceeds of $55 million and $49 million, respectively.

The projected uses of our cash and restricted cash are debt repayments, net capital expenditures of approximately $235 million, approximately $45 million for interest payments on outstanding debt, reimbursements to Liberty Media for amounts due under various agreements and to fund investment opportunities at GCI Liberty (including the LLA investments discussed above), 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.

GCI, LLC is in compliance with all debt maintenance covenants as of September 30, 2025.

GCI, LLC is in compliance with all debt maintenance covenants as of March 31, 2026.

See note 5 to the accompanying condensed consolidated financial statements for a description of all indebtedness obligations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis