Strategic Acquisitions and Investments
Definitive agreement to acquire Quintillion for $310 million (plus up to $50 million reimbursement and potential earn-outs); expected to be accretive to free cash flow in the first year after closing. Completed acquisition of a 6% equity interest in Liberty Latin America for approximately $107 million and pursuing additional LLA shares. GCI to provide a $160 million unsecured loan to Quintillion. Intention to rename GCI Liberty to Liberty Capital to reflect expanded investment focus.
Consumer Wireless Subscriber Growth
Consumer wireless lines grew 2% year-over-year to 200,000; total wireless lines ended the quarter at 207,700 (including 7,700 business lines). Net adds of ~1,000 consumer wireless lines in the quarter, including ~500 postpaid lines driven by the 'free for a year' promotion.
Convergence and Promotion Effectiveness
Converged customer adoption remains strong: more than 40% of broadband customers have one or more wireless lines and over 60% of postpaid wireless lines are sold as part of a package. Prior unlimited test drive retention was 'exceptionally high' in the low-90% range; new promotions are supporting postpaid wireless growth and converged sales.
Network Resilience and Rural Expansion
Quintillion deal and ongoing network investments will combine subsea and terrestrial fiber with GCI's microwave network to enhance routing diversity, resilience and statewide reach. Nearing completion of Alaska plan build-out with continued focus on increasing wireless speeds and expanding 5G coverage to covered Alaskans.
Liquidity Position at Quarter End
Consolidated cash, cash equivalents and restricted cash of $448 million (including $131 million at GCI). GCI credit facility had approximately $377 million of undrawn capacity net of letters of credit. Reported consolidated net leverage of 1.6x at quarter end.