General Communication Inc.
Annual Report 2018

PROXY STATEMENT

|

2018 ANNUAL REPORT

CONTENTS

Proxy Statement

Forward Looking Statements

Stock Performance

Investment Summary

Financial Information

Corporate Data

Environmental Statement

GCI LIBERTY, INC.
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5900

April 29, 2019

Dear Stockholder:

You are cordially invited to attend the 2019 annual meeting of stockholders of GCI Liberty, Inc. (GCI Liberty) to be
held at 8:00 a.m., local time, on June 24, 2019, at the corporate offices of GCI Liberty, 12300 Liberty Boulevard,
Englewood, Colorado 80112, telephone (720) 875-5900.

At the annual meeting, you will be asked to consider and vote on the proposals described in the accompanying
notice of annual meeting and proxy statement, as well as on such other business as may properly come before the
meeting.

Your vote is important, regardless of the number of shares you own. Whether or not you plan to attend the
annual meeting, please read the enclosed proxy materials and then promptly vote via the Internet or
telephone or by completing, signing and returning by mail the enclosed proxy card. Doing so will not prevent
you from later revoking your proxy or changing your vote at the meeting.

Thank you for your cooperation and continued support and interest in GCI Liberty.

Very truly yours,

The proxy materials relating to the annual meeting will first be made available on or about May 3, 2019.

Gregory B. Maffei
President and Chief Executive Officer

GCI LIBERTY, INC.
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5900

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be Held on June 24, 2019

NOTICE IS HEREBY GIVEN of the annual meeting of stockholders of GCI Liberty, Inc. (GCI Liberty) to be held at
8:00 a.m., local time, on June 24, 2019, at the corporate offices of GCI Liberty, 12300 Liberty Boulevard,
Englewood, Colorado 80112, telephone (720) 875-5900, to consider and vote on the following proposals:

1. A proposal (which we refer to as the election of directors proposal) to elect John C. Malone and Richard

R. Green to continue serving as Class I members of our board until the 2022 annual meeting of
stockholders or their earlier resignation or removal; and

2. A proposal (which we refer to as the auditors ratification proposal) to ratify the selection of KPMG LLP

as our independent auditors for the fiscal year ending December 31, 2019.

You may also be asked to consider and vote on such other business as may properly come before the annual
meeting.

Holders of record of our Series A common stock, par value $0.01 per share, Series B common stock, par value
$0.01 per share, and Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share, in each case,
outstanding as of 5:00 p.m., New York City time, on April 25, 2019, the record date for the annual meeting, will be
entitled to notice of the annual meeting and to vote at the annual meeting or any adjournment or postponement
thereof. These holders will vote together as a single class on each proposal. A list of stockholders entitled to vote at
the annual meeting will be available at our offices at 12300 Liberty Boulevard, Englewood, Colorado 80112 for
review by our stockholders for any purpose germane to the annual meeting for at least ten days prior to the annual
meeting.

We describe the proposals in more detail in the accompanying proxy statement. We encourage you to read the
proxy statement in its entirety before voting.

Our board of directors has unanimously approved each proposal and recommends that you vote “FOR” the election
of each director nominee and “FOR” the auditors ratification proposal.

Votes may be cast in person at the annual meeting or by proxy prior to the meeting by telephone, via the Internet, or
by mail.

Important Notice Regarding the Availability of Proxy Materials For the Annual Meeting of Stockholders to be Held on
June 24, 2019: our Notice of Annual Meeting of Stockholders, Proxy Statement, and 2018 Annual Report to
Stockholders are available at www.proxyvote.com.

YOUR VOTE IS IMPORTANT. Voting promptly, regardless of the number of shares you own, will aid us in reducing
the expense of any further proxy solicitation in connection with the annual meeting.

By order of the board of directors,

Katherine C. Jewell
Assistant Vice President and Secretary

Englewood, Colorado
April 29, 2019

WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING, PLEASE VOTE PROMPTLY
VIA TELEPHONE OR ELECTRONICALLY VIA THE INTERNET. ALTERNATIVELY, PLEASE COMPLETE, SIGN
AND RETURN BY MAIL THE ENCLOSED PAPER PROXY CARD.

TABLE OF CONTENTS

PROXY STATEMENT SUMMARY

THE ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . 1
Electronic Delivery . . . . . . . . . . . . . . . . . . . . . . . 1
Time, Place and Date . . . . . . . . . . . . . . . . . . . . . 1
Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Who May Vote . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Votes Required . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Votes You Have . . . . . . . . . . . . . . . . . . . . . . . . . 2
Recommendation of Our Board of Directors . . . . . 2
Shares Outstanding . . . . . . . . . . . . . . . . . . . . . . 2
Number of Holders . . . . . . . . . . . . . . . . . . . . . . . 2
Voting Procedures for Record Holders . . . . . . . . . 2
Voting Procedures for Shares Held in Street
Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Revoking a Proxy . . . . . . . . . . . . . . . . . . . . . . . . 3
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . 3
Other Matters to Be Voted on at the Annual
Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT . . . . . 4
Security Ownership of Certain Beneficial Owners . 4
. . . . . . . . . . 6
Security Ownership of Management
Changes in Control . . . . . . . . . . . . . . . . . . . . . . . 8

MANAGEMENT AND GOVERNANCE MATTERS . . . 17
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 16(a) Beneficial Ownership Reporting
Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Director Independence . . . . . . . . . . . . . . . . . . . . 18
Board Composition . . . . . . . . . . . . . . . . . . . . . . . 18
Board Leadership Structure . . . . . . . . . . . . . . . . . 18
Board Role in Risk Oversight . . . . . . . . . . . . . . . . 18
Committees of the Board of Directors . . . . . . . . . 19
Board Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 23
Director Attendance at Annual Meetings . . . . . . . . 23
Stockholder Communication with Directors . . . . . . 23
Executive Sessions . . . . . . . . . . . . . . . . . . . . . . . 23

EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . 24
Compensation Discussion and Analysis . . . . . . . . 24
Summary Compensation Table . . . . . . . . . . . . . . 30
Executive Compensation Arrangements . . . . . . . . 31
Equity Incentive Plans . . . . . . . . . . . . . . . . . . . . . 32
Grants of Plan-Based Awards . . . . . . . . . . . . . . . 34
Outstanding Equity Awards at Fiscal Year-End . . . 35
Option Exercises and Stock Vested . . . . . . . . . . . 37
Potential Payments Upon Termination or
Change-in-Control

. . . . . . . . . . . . . . . . . . . . . . . 38

PROPOSALS OF OUR BOARD. . . . . . . . . . . . . . . . 9

DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . 42

PROPOSAL 1—THE ELECTION OF DIRECTORS
PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 9
Vote and Recommendation . . . . . . . . . . . . . . . . . 13

PROPOSAL 2—THE AUDITORS RATIFICATION
PROPOSAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Change in Independent Auditors . . . . . . . . . . . . . 14
Audit Fees and All Other Fees . . . . . . . . . . . . . . . 15
Policy on Pre-Approval of Audit and Permissible
Non-Audit Services of Independent Auditor
. . . . . 15
Vote and Recommendation . . . . . . . . . . . . . . . . . 16

DIRECTOR COMPENSATION TABLE . . . . . . . . . . . 44

EQUITY COMPENSATION PLAN INFORMATION . . 45

CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 46

STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . 50

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . 51

PROXY STATEMENT SUMMARY

2019 ANNUAL MEETING OF STOCKHOLDERS

WHEN

ITEMS OF BUSINESS

8:00 a.m., local time, on June 24,
2019

WHERE

The Corporate Offices of GCI Liberty
12300 Liberty Boulevard
Englewood, Colorado 80112

1.

Election of directors proposal—To elect John C. Malone and Richard R.
Green to continue serving as Class I members of our board until the 2022
annual meeting of stockholders or their earlier resignation or removal.
2. Auditors ratification proposal—To ratify the selection of KPMG LLP as our
independent auditors for the fiscal year ending December 31, 2019.

Such other business as may properly come before the annual meeting.

RECORD DATE

WHO MAY VOTE

5:00 p.m., New York City time, on
April 25, 2019

PROXY VOTING

Holders of shares of GLIBA, GLIBB and GLIBP

Stockholders of record on the record date are entitled to vote by proxy in the following ways:

By calling 1-800-690-6903
(toll free) in the United States or
Canada

Online at
www.proxyvote.com

By returning a properly
completed, signed and dated
proxy card

ANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONS

Proposal

Election of directors proposal

Auditors ratification proposal

Voting
Recommendation

Page Reference
(for more detail)

✓ FOR EACH NOMINEE

9

✓ FOR

14

| GCI LIBERTY, INC. 2019 PROXY STATEMENT

GCI LIBERTY, INC.
a Delaware Corporation

12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5900

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

We are furnishing this proxy statement in connection with the board of directors’ solicitation of proxies for use at our
2019 Annual Meeting of Stockholders to be held at 8:00 a.m., local time, on June 24, 2019, at the corporate offices
of GCI Liberty, 12300 Liberty Boulevard, Englewood, Colorado 80112, or at any adjournment or postponement of
the annual meeting. At the annual meeting, we will ask you to consider and vote on the proposals described in the
accompanying Notice of Annual Meeting of Stockholders. The proposals are described in more detail in this proxy
statement. We are soliciting proxies from holders of our Series A common stock, par value $0.01 per share
(GLIBA), Series B common stock, par value $0.01 per share (GLIBB), and Series A Cumulative Redeemable
Preferred Stock, par value $0.01 per share (GLIBP). We refer to GLIBA and GLIBB as our common stock. We
refer to our common stock together with GLIBP as our capital stock.

THE ANNUAL MEETING

ELECTRONIC DELIVERY

Registered stockholders may elect to receive future notices and proxy materials by e-mail. To sign up for electronic
delivery, go to www.proxyvote.com. Stockholders who hold shares through a bank, brokerage firm or other nominee
may sign up for electronic delivery when voting by Internet at www.proxyvote.com, by following the prompts. Also,
stockholders who hold shares through a bank, brokerage firm or other nominee may sign up for electronic delivery
by contacting their nominee. Once you sign up, you will not receive a printed copy of the notices and proxy
materials, unless you request them. If you are a registered stockholder, you may suspend electronic delivery of the
notices and proxy materials at any time by contacting our transfer agent, Broadridge, at (888) 789-8606 (outside the
United States (303) 562-9275). Stockholders who hold shares through a bank, brokerage firm or other nominee
should contact their nominee to suspend electronic delivery.

TIME, PLACE AND DATE

The annual meeting of stockholders is to be held at 8:00 a.m., local time, on June 24, 2019, at the corporate offices
of GCI Liberty, 12300 Liberty Boulevard, Englewood, Colorado 80112, telephone (720) 875-5900.

PURPOSE

At the annual meeting, you will be asked to consider and vote on each of the following:

•

•

the election of directors proposal, to elect John C. Malone and Richard R. Green to continue serving as Class I
members of our board until the 2022 annual meeting of stockholders or their earlier resignation or removal;
and

the auditors ratification proposal, to ratify the selection of KPMG LLP as our independent auditors for the fiscal
year ending December 31, 2019.

You may also be asked to consider and vote on such other business as may properly come before the annual
meeting, although we are not aware at this time of any other business that might come before the annual meeting.

QUORUM

In order to conduct the business of the annual meeting, a quorum must be present. This means that the holders of
at least a majority of the aggregate voting power represented by the shares of our capital stock outstanding on the
record date and entitled to vote at the annual meeting must be represented at the annual meeting either in person
or by proxy. For purposes of determining a quorum, your shares will be included as represented at the meeting
even if you indicate on your proxy that you abstain from voting. If a broker, who is a record holder of shares,
indicates on a form of proxy that the broker does not have discretionary authority to vote those shares on a

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 1

particular proposal or proposals, or if those shares are voted in circumstances in which proxy authority is defective
or has been withheld, those shares (broker non-votes) will nevertheless be treated as present for purposes of
determining the presence of a quorum. See “—Voting Procedures for Shares Held in Street Name—Effect of
Broker Non-Votes” below.

WHO MAY VOTE

Holders of shares of GLIBA, GLIBB and GLIBP, as recorded in our stock register as of 5:00 p.m., New York City
time, on April 25, 2019 (such date and time, the record date for the annual meeting), will be entitled to notice of the
annual meeting and to vote at the annual meeting or any adjournment or postponement thereof.

VOTES REQUIRED

Each director nominee who receives a plurality of the combined voting power of the outstanding shares of our
capital stock present in person or represented by proxy at the annual meeting and entitled to vote on the election of
directors at the annual meeting, voting together as a single class, will be elected to the office.

Approval of the auditors ratification proposal requires the affirmative vote of a majority of the combined voting
power of the outstanding shares of our capital stock that are present in person or by proxy, and entitled to vote at
the annual meeting, voting together as a single class.

VOTES YOU HAVE

At the annual meeting, holders of shares of GLIBA will have one vote per share, holders of shares of GLIBB will
have ten votes per share, and holders of shares of GLIBP will have one-third of one vote per share, in each case,
that our records show are owned as of the record date.

RECOMMENDATION OF OUR
BOARD OF DIRECTORS

Our board of directors has unanimously approved each of the
proposals and recommends that you vote “FOR” the election of
each director nominee and “FOR” the auditors ratification proposal.

SHARES OUTSTANDING

As of the record date, an aggregate of approximately 101,079,000 shares of GLIBA, 4,441,000 shares of GLIBB
and 7,215,000 shares of GLIBP were issued and outstanding and entitled to vote at the annual meeting.

NUMBER OF HOLDERS

There were, as of the record date, 1,566, 57 and 666 record holders of GLIBA, GLIBB and GLIBP, respectively
(which amounts do not include the number of stockholders whose shares are held of record by banks, brokers or
other nominees, but include each such institution as one holder).

VOTING PROCEDURES FOR RECORD HOLDERS

Holders of record of GLIBA, GLIBB and GLIBP as of the record date may vote in person at the annual meeting, by
telephone or through the Internet. Alternatively, they may give a proxy by completing, signing, dating and returning
the proxy card by mail. Instructions for voting by using the telephone or the Internet are printed on the proxy voting
instructions attached to the proxy card. In order to vote through the Internet, holders should have their proxy cards
available so they can input the required information from the proxy card, and log onto the Internet website address
shown on the proxy card. When holders log onto the Internet website address, they will receive instructions on how
to vote their shares. The telephone and Internet voting procedures are designed to authenticate votes cast by use
of a personal identification number, which will be provided to each voting stockholder separately. Unless
subsequently revoked, shares of our capital stock represented by a proxy submitted as described herein and
received at or before the annual meeting will be voted in accordance with the instructions on the proxy.

YOUR VOTE IS IMPORTANT. It is recommended that you vote by proxy even if you plan to attend the annual
meeting. You may change your vote at the annual meeting.

2 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

THE ANNUAL MEETING

If you submit a properly executed proxy without indicating any voting instructions as to a proposal enumerated in
the Notice of Annual Meeting of Stockholders, the shares represented by the proxy will be voted “FOR” the election
of each director nominee and “FOR” the auditors ratification proposal.

If you submit a proxy indicating that you abstain from voting as to a proposal, it will have no effect on the election of
directors proposal and will have the same effect as a vote “AGAINST” the auditors ratification proposal.

If you do not submit a proxy or you do not vote in person at the annual meeting, your shares will not be counted as
present and entitled to vote for purposes of determining a quorum, and your failure to vote will have no effect on
determining whether any of the proposals are approved (if a quorum is present).

VOTING PROCEDURES FOR SHARES HELD IN STREET NAME

General

If you hold your shares in the name of a broker, bank or other nominee, you should follow the instructions provided
by your broker, bank or other nominee when voting your shares or to grant or revoke a proxy. The rules and
regulations of the New York Stock Exchange and The Nasdaq Stock Market LLC (Nasdaq) prohibit brokers, banks
and other nominees from voting shares on behalf of their clients with respect to numerous matters, including, in our
case, the election of directors proposal. Accordingly, to ensure your shares held in street name are voted on these
matters, we encourage you to provide promptly specific voting instructions to your broker, bank or other nominee.

Effect of Broker Non-Votes

Broker non-votes are counted as shares of our capital stock present and entitled to vote for purposes of
determining a quorum but will have no effect on any of the proposals. You should follow the directions your broker,
bank or other nominee provides to you regarding how to vote your shares of GLIBA, GLIBB or GLIBP or how to
change your vote or revoke your proxy.

REVOKING A PROXY

If you submitted a proxy prior to the start of the annual meeting, you may change your vote by voting in person at
the annual meeting or by delivering a signed proxy revocation or a new signed proxy with a later date to Vote
Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Any signed proxy revocation or later-dated
proxy must be received before the start of the annual meeting. In addition, you may change your vote through the
Internet or by telephone (if you originally voted by the corresponding method) not later than 11:59 p.m., New York
City time, on June 23, 2019 for shares held directly and 11:59 p.m., New York City time, on June 19, 2019 for
shares held in the Liberty Media 401(k) Savings Plan or the Employee Stock Purchase Plan (the GCI 401(k) Plan)
adopted by GCI Liberty, Inc., an Alaska corporation (Old GCI Liberty).

Your attendance at the annual meeting will not, by itself, revoke a prior vote or proxy from you.

If your shares are held in an account by a broker, bank or other nominee, you should contact your nominee to
change your vote or revoke your proxy.

SOLICITATION OF PROXIES

We are soliciting proxies by means of our proxy statement and our annual report (together, the proxy materials) on
behalf of our board of directors. In addition to this mailing, our employees may solicit proxies personally or by
telephone. We pay the cost of soliciting these proxies. We also reimburse brokers and other nominees for their
expenses in sending paper proxy materials to you and getting your voting instructions.

If you have any further questions about voting or attending the annual meeting, please contact GCI Liberty Investor
Relations at (833) 618-8602 or Broadridge at (888) 789-8606.

OTHER MATTERS TO BE VOTED ON AT THE ANNUAL MEETING

Our board of directors is not currently aware of any business to be acted on at the annual meeting other than that
which is described in the Notice of Annual Meeting of Stockholders and this proxy statement. If, however, other
matters are properly brought to a vote at the annual meeting, the persons designated as proxies will have discretion
to vote or to act on these matters according to their best judgment. In the event there is a proposal to adjourn or
postpone the annual meeting, the persons designated as proxies will have discretion to vote on that proposal.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 3

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table sets forth information concerning shares of our capital stock beneficially owned by each person
or entity known by us to own more than five percent of the outstanding shares of each series of our capital stock.
All of such information is based on publicly available filings, unless otherwise known to us from other sources.

Unless otherwise indicated, the security ownership information is given as of February 28, 2019 and, in the case of
percentage ownership information, is based upon (1) 101,046,645 shares of GLIBA, (2) 4,441,109 shares of
GLIBB and (3) 7,215,832 shares of GLIBP, in each case, outstanding on that date. The percentage voting power is
presented in the table below on an aggregate basis for all shares of our capital stock.

Name and Address of Beneficial Owner

John C. Malone

c/o GCI Liberty, Inc.
12300 Liberty Boulevard
Englewood, CO 80112

Gregory B. Maffei

c/o GCI Liberty, Inc.
12300 Liberty Boulevard
Englewood, CO 80112

Ronald A. Duncan

c/o GCI Liberty, Inc.
12300 Liberty Boulevard
Englewood, CO 80112

John W. Stanton and Theresa E. Gillespie

155 108th Avenue, N.E., Suite 400
Bellevue, WA 98004

T. Rowe Price Associates, Inc.

100 E. Pratt Street
Baltimore, MD 21202

FPR Partners, LLC

199 Fremont Street, Suite 2500
San Francisco, CA 94105

The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355

Eagle Capital Management LLC
499 Park Avenue, 17th Floor
New York, NY 10022

Title of
Series or
Class

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

Amount and
Nature of
Beneficial
Ownership

607,021(1)
4,021,175(1)
10(1)

1,807,099(1)
1,151,220(1)

—

1,480,362(1)

—

476,104(1)

1,690,085(2)

—

536,193(3)
10,582,924(4)

—

—

8,746,670(5)

—

—

8,460,160(6)

—

—

5,890,527(7)

—

—

Percent of
Series
(%)

*

90.5

*

1.8

21.5

—

1.5

—

6.6

1.7

—

7.4

10.5

—

—

8.7

—

—

8.4

—

—

5.8

—

—

Voting
Power
(%)

27.6

8.4

1.1

1.3

7.2

5.9

5.7

4.0

*

(1)

Less than one percent

Information with respect to shares of GCI Liberty capital stock beneficially owned by Mr. Malone, who is the Chairman of the
Board and a director of GCI Liberty, Mr. Maffei, who is the President and Chief Executive Officer and a director of GCI Liberty, and
Mr. Duncan, who is a director of GCI Liberty, is also set forth in “—Security Ownership of Management” below.

(2) Based on information available to us and Amendment No. 8 to Schedule 13D, filed March 12, 2018, by John W. Stanton and

Theresa E. Gillespie (Stanton and Gillespie), which states that, with respect to GLIBA, Stanton and Gillespie have shared voting
and shared dispositive power over 1,689,008.58 shares.

4 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(3) Based on the Schedule 13D, filed March 12, 2018, by Stanton and Gillespie, which states that, with respect to GLIBP, Stanton and

Gillespie have shared voting power over 536,193 shares and shared dispositive power over 536,193 shares.

(4) Based on Amendment No. 1 to Schedule 13G, filed February 14, 2019, jointly by T. Rowe Price Associates, Inc. (T. Rowe) and T.

Rowe Price New Horizons Fund, Inc. (New Horizons), which states that, with respect to GLIBA, T. Rowe has sole voting power
over 2,103,245 shares and sole dispositive power over 10,582,924 shares and New Horizons has sole voting power over 7,479,877
shares.

(5) Based on Schedule 13G, filed February 14, 2019, jointly by FPR Partners, LLC. (FPR), Andrew Raab and Bob Peck, which states

that, with respect to GLIBA, FPR has sole voting power and sole dispositive power over 8,746,670 shares and Mr. Raab and Mr.
Peck have shared voting power and shared dispositive power over 8,746,670 shares.

(6) Based on Amendment 7 to Schedule 13G, filed February 11, 2019, by The Vanguard Group (Vanguard), which states that, with
respect to GLIBA, Vanguard has sole voting power over 47,624 shares, sole dispositive power over 8,410,620 shares, shared
voting power over 11,522 shares and shared dispositive power over 49,540 shares.

(7) Based on Schedule 13G, filed February 14, 2019, by Eagle Capital Management LLC (Eagle Capital), which states that, with

respect to GLIBA, Eagle Capital has sole voting power over 5,060,467 shares and sole dispositive power over 5,890,527 shares.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 5

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth information with respect to the ownership by each of our directors and named
executive officers and by all of our directors and executive officers as a group of shares of GLIBA, GLIBB, and
GLIBP. The security ownership information with respect to the shares of our capital stock is given as of
February 28, 2019, and, in the case of percentage ownership information, is based upon (1) 101,046,645 shares of
GLIBA, (2) 4,441,109 shares of GLIBB and (3) 7,215,832 shares of GLIBP, in each case, outstanding on that date.
The percentage voting power is presented in the table below on an aggregate basis for all shares of our capital
stock.

Shares of restricted stock that have been granted pursuant to GCI Liberty’s incentive plans are included in the
outstanding share numbers, for purposes of the table below. The table also includes performance-based restricted
stock units that have been certified as earned by our compensation committee on or before February 28, 2019 that
will be settled in shares of our common stock within 60 days of such date. Shares of common stock issuable upon
exercise or conversion of options, warrants and convertible securities that were exercisable or convertible on or
within 60 days after February 28, 2019 are deemed to be outstanding and to be beneficially owned by the person
holding the options, warrants or convertible securities for the purpose of computing the percentage ownership of
that person and for the aggregate percentage owned by the directors and executive officers as a group, but are not
treated as outstanding for the purpose of computing the percentage ownership of any other individual person. For
purposes of the following presentation, beneficial ownership of shares of GLIBB, though convertible on a
one-for-one basis into shares of GLIBA, are reported as beneficial ownership of GLIBB only, and not as beneficial
ownership of GLIBA. So far as is known, the persons indicated below have sole voting and dispositive power with
respect to the shares indicated as owned by them, except as otherwise stated in the notes to the table.

The number of shares indicated as owned by the persons in the table includes interests in shares held by the
Liberty Media 401(k) Savings Plan and the GCI 401(k) Plan as of February 28, 2019. The shares held by the
respective trustee of the Liberty Media 401(k) Savings Plan and the GCI 401(k) Plan for the benefit of these
persons are voted as directed by such persons.

Name

John C. Malone

Chairman of the
Board and Director

Gregory B. Maffei
President, Chief
Executive
Officer and Director

Ronald A. Duncan

Director and Chief
Executive Officer,
GCI Holdings, LLC

Gregg L. Engles

Director

Donne F. Fisher

Director

Richard R. Green

Director

Title of
Series or
Class

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

Amount and Nature of
Beneficial Ownership
(in thousands)
607(1)(2)

4,021(1)(3)

**

1,807(4)(5)(6)

1,151(5)

—

1,480(7)(10)

—

476(7)

2

—

—

57

**

8

2(8)

—

—

6 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

Voting
Power
(%)

27.6

8.4

1.1

*

*

*

Percent of
Series
(%)

*

90.5

*

1.8

21.5

—

1.5

—

6.6

*

—

—

*

*

*

*

—

—

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Name

Sue Ann Hamilton

Director

Richard N. Baer

Chief Legal Officer

Mark D. Carleton

Chief Financial Officer

Albert E. Rosenthaler
Chief Corporate
Development Officer

Peter Pounds

Former Senior Vice
President, Chief
Financial Officer,
Secretary and
Treasurer of Old GCI
Liberty

All directors and
executive officers (as a
group (11 persons))

Title of
Series or
Class

Amount and Nature of
Beneficial Ownership
(in thousands)

Percent of
Series
(%)

Voting
Power
(%)

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

GLIBA

GLIBB

GLIBP

2

—

—

22(5)(9)

—

—

53(5)(9)

—

3

98(4)(5)(9)

—

—

72(10)

—

35

*

*

*

*

*

*

—

—

*

—

—

*

—

*

*

—

—

*

—

*

4,201(1)(2)(4)(5)(6)(7)(8)(9)(10)

5,173(1)(3)(5)

522(7)

35.5

4.1

96.8

7.2

*
**
(1)

(2)

(3)

(4)

Less than one percent
Less than 1,000 shares
Includes 79,243 GLIBA shares and 123,847 GLIBB shares held by Mr. Malone’s wife, Mrs. Leslie Malone, as to which shares
Mr. Malone has disclaimed beneficial ownership.
Includes (i) 527,746 GLIBA shares pledged to Fidelity Brokerage Services, LLC (Fidelity) in connection with a margin loan facility
extended by Fidelity and (ii) 79,243 GLIBA shares pledged to Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) in
connection with margin loan facilities extended by Merrill Lynch.
Includes 66,683 GLIBB shares held by two trusts which are managed by an independent trustee, of which the beneficiaries are
Mr. Malone’s adult children and in which Mr. Malone has no pecuniary interest. Mr. Malone retains the right to substitute assets held
by the trusts and has disclaimed beneficial ownership of the shares held by the trusts.
Includes shares held in the Liberty Media 401(k) Savings Plan as follows:

Gregory B. Maffei
Albert E. Rosenthaler

Total

GLIBA
870
1,845
2,715

(5)

Includes beneficial ownership of shares that may be acquired upon exercise of, or which relate to, stock options exercisable within
60 days after February 28, 2019.

Richard N. Baer
Mark D. Carleton
Gregory B. Maffei
Albert E. Rosenthaler

Total

GLIBA
2,659
30,418
873,998
44,111
951,186

GLIBB
—
—
904,825
—
904,825

(6)
(7)

Includes 574,210 GLIBA shares held by a grantor retained annuity trust.
Includes the following: (a) 2,178 shares of GLIBA and 581 shares of GLIBP allocated to Mr. Duncan under the GCI 401(k) Plan,
formerly known as the Stock Purchase Plan; (b) 917,229 shares of GLIBA and 332,022 shares of GLIBP to which Mr. Duncan has
a direct pecuniary interest; (c) 12,600 shares of GLIBA and 4,000 shares of GLIBP held by Missy, LLC, which is 25% owned by
Mr. Duncan, 25% owned by Dani Bowman, Mr. Duncan’s wife, and 50% owned by a trust of which Mr. Duncan’s daughter is the

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 7

50% beneficiary and for which Mr. Duncan is the General Manager and has voting and dispositive power; (d) 9,450 shares of
GLIBA and 3,000 shares of GLIBP owned by the Neoma Lowndes Trust which Ms. Miller is a 50% beneficiary and for which Mr.
Duncan is the trustee with sole voting and dispositive power; (e) 56,828 shares of GLIBA and 18,041 shares of GLIBP held by
Dani Bowman, of which Mr. Duncan disclaims beneficial ownership; and (f) 188,930 shares of GLIBA and 20,721 shares of GLIBP
held by a grantor retained annuity trust. Includes 1,403,985 shares of GLIBA and 452,327 shares of GLIBP pledged as security for
certain margin loan facilities as of February 1, 2019.

(8)

(9)

Includes 354 shares of GLIBA held by Dr. Green’s spouse.

Includes performance-based restricted stock units that had been certified as earned by our compensation committee and that will
be settled in shares of our common stock within 60 days after February 28, 2019, as follows:

Richard N. Baer
Mark D. Carleton
Albert E. Rosenthaler

Total

GLIBA

4,171
3,114
3,114

10,399

(10) Includes restricted stock units that will be settled in shares of our common stock within 60 days after February 28, 2019, as follows:

Ronald A. Duncan
Peter Pounds

Total

CHANGES IN CONTROL

GLIBA

4,654
1,406

6,060

We know of no arrangements, including any pledge by any person of our securities, the operation of which may at
a subsequent date result in a change in control of our company.

8 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

PROPOSALS OF OUR BOARD

The following proposals will be presented at the annual meeting by our board of directors.

PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

BOARD OF DIRECTORS

Our board of directors currently consists of seven directors, divided among three classes. Our Class I directors,
whose term will expire at the 2019 annual meeting, are John C. Malone and Richard R. Green. These directors are
nominated for election to our board to continue serving as Class I directors, and we have been informed that
Messrs. Malone and Green are each willing to continue serving as a director of our company. The term of the Class
I directors who are elected at the annual meeting will expire at the annual meeting of our stockholders in the year
2022. Our Class II directors, whose term will expire at the annual meeting of stockholders in the year 2020, are
Ronald A. Duncan and Donne F. Fisher. Our Class III directors, whose term will expire at the annual meeting of
stockholders in the year 2021, are Gregory B. Maffei, Sue Ann Hamilton and Gregg L. Engles.

If any nominee should decline election or should become unable to serve as a director of our company for any
reason before election at the annual meeting, votes will be cast by the persons appointed as proxies for a substitute
nominee, if any, designated by the board of directors.

The following lists the two nominees for election as directors at the annual meeting and the five directors of our
company whose term of office will continue after the annual meeting, and includes as to each person how long
such person has been a director of our company, such person’s professional background, other public company
directorships and other factors considered in the determination that such person possesses the requisite
qualifications and skills to serve as a member of our board of directors. All positions referenced in the biographical
information below with our company include, where applicable, positions with our predecessors. The number of
shares of our capital stock beneficially owned by each director is set forth in this proxy statement under the caption
“Security Ownership of Certain Beneficial Owners and Management—Security Ownership of Management.”

Nominees for Election as Directors

John C. Malone

• Age: 78

• Chairman of the Board of our company.

• Professional Background: Mr. Malone has served as the Chairman of the Board of our company since

March 2018. He served as Chairman of the Board of Qurate Retail, Inc. (formerly named Liberty Interactive
Corporation, Qurate Retail), including its predecessor, from its inception in 1994 until March 2018 and served
as Qurate Retail’s Chief Executive Officer from August 2005 to February 2006. Mr. Malone served as
Chairman of the Board of Tele-Communications, Inc. (TCI) from November 1996 until March 1999, when it
was acquired by AT&T Corp., and as Chief Executive Officer of TCI from January 1994 to March 1997.

• Other Public Company Directorships: Mr. Malone has served as (i) Chairman of the Board of Liberty Media

Corporation (Liberty Media) (including its predecessor) since August 2011 and as a director since December
2010, (ii) the Chairman of the Board of Liberty Broadband Corporation (Liberty Broadband) since November
2014, (iii) the Chairman of the Board of Liberty Global plc (LGP) since June 2013, having previously served as
Chairman of the Board of Liberty Global, Inc. (LGI), LGP’s predecessor, from June 2005 to June 2013,
Chairman of the Board of LGI’s predecessor, Liberty Media International, Inc. (LMI) from March 2004 to
June 2005 and a director of UnitedGlobalCom, Inc., now a subsidiary of LGP, from January 2002 to June
2005, (iv) a director of Discovery, Inc. (Discovery), which was formerly known as Discovery Communications,
Inc. (Discovery Communications), since September 2008, and a director of Discovery Communications’
predecessor Discovery Holding Company (DHC), from May 2005 to September 2008 and as Chairman of the
Board from March 2005 to September 2008, (v) Chairman of the Board of Liberty Expedia Holdings, Inc.
(Liberty Expedia) since November 2016, (vi) a director of Liberty Latin America Ltd. since December 2017
and (vii) a director of Qurate Retail (including its predecessor) since 1994 and served as Chairman of the
Board of Qurate Retail (including its predecessor) from 1994 to March 2018. Previously, he served as (i) a
director of Lions Gate Entertainment Corp. from March 2015 to September 2018, (ii) a director of Charter

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 9

Communications, Inc. (Charter) from May 2013 to July 2018, (iii) a director of Expedia, Inc. from December
2012 to December 2017, having previously served as a director from August 2005 to November 2012, (iv) the
Chairman of the Board of Liberty TripAdvisor Holdings, Inc. (Liberty TripAdvisor) from August 2014 to
June 2015, (v) a director of Sirius XM Holdings Inc. (Sirius XM) from April 2009 to May 2013, (vi) a director of
Ascent Capital Group, Inc. from January 2010 to September 2012, (vii) a director of Live Nation Entertainment,
Inc. (Live Nation) from January 2010 to February 2011, (viii) Chairman of the Board of DIRECTV and its
predecessors from February 2008 to June 2010 and (ix) a director of IAC/InterActive Corp from May 2006 to
June 2010.

• Board Membership Qualifications: Mr. Malone, as President of TCI, co-founded Qurate Retail’s former parent

company and is considered one of the preeminent figures in the media and telecommunications industry. He is
well known for his sophisticated problem solving and risk assessment skills.

Richard R. Green

• Age: 81

• A director of our company.

• Professional Background: Dr. Green has served as a director of our company since March 2018. For over
20 years, Dr. Green served as President and Chief Executive Officer of CableLabs® before retiring in
December 2009. Prior to joining CableLabs®, he was a senior vice president at PBS from 1984 through 1988,
and served as a director of CBS’s Advanced Television Technology Laboratory from 1980 through 1983.
Dr. Green is a Professor of Engineering and Director of the Center of Technology and Innovation at the
University of Denver. He also serves as a director of Jones/NCTI, a Jones Knowledge Company, which is a
workforce performance solutions company for individuals and broadband companies.

• Other Public Company Directorships: Dr. Green has served as a director of Liberty Broadband since

November 2014 and a director of LGP and its predecessors since December 2008. He has also served as a
director of Shaw Communications, Inc., a telecommunications company based in Canada, since 2010.

• Board Membership Qualifications: Dr. Green brings to our board his extensive professional and executive
background and his particular knowledge and experience in the complex and rapidly changing field of
technology for broadband communications services, which contributes to our company’s evaluation of
technological initiatives and challenges and strengthens the board’s collective qualifications, skills and
attributes.

Directors Whose Term Expires in 2020

Ronald A. Duncan

• Age: 66

• A director of our company.

• Professional Background: Mr. Duncan is a co-founder of our predecessor, Old GCI Liberty, and has served as
a director on our board, including the board of our predecessor, since 1979. Mr. Duncan has served as the
Chief Executive Officer of our subsidiary, GCI Holdings, LLC (GCI Holdings) since March 2018. Mr. Duncan
served as Chief Executive Officer of our predecessor from January 1989 to March 2018 and as its President
from January 1989 to August 2017.

• Other Public Company Directorships: None.

• Board Membership Qualifications: Mr. Duncan brings to our board significant financial and operational

experience in the telecommunications industry as the co-founder of our predecessor and its former Chief
Executive Officer and President.

10 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

Donne F. Fisher

• Age: 80

• A director of our company.

• Professional Background: Mr. Fisher has served as a director of our company since March 2018, as a director
of our predecessor from 1980 to December 2005 and as Chairman of the Board of our predecessor from June
2002 to December 2005. Mr. Fisher has served as President of Fisher Capital Partners, Ltd., a venture capital
partnership, since December 1991. Mr. Fisher also served in various positions at TCI from 1968 to 1996
including as Executive Vice President of TCI from January 1994 to January 1996 and served as a consultant
to TCI, including its successors AT&T Broadband LLC and Comcast Corporation, from 1996 to December
2005.

• Other Public Company Directorships: Mr. Fisher served as a director of Liberty Broadband from November

2014 to June 2015 and served as a director of Liberty Media (including its predecessor) from September 2011
to June 2015. Mr. Fisher served as a director of our predecessor from 1980 to December 2005, as a director of
LMI from May 2004 to June 2005 and as a director of Qurate Retail from October 2001 to September 2011.
Mr. Fisher was also Chairman of the Board of our predecessor from June 2002 to December 2005.

• Board Membership Qualifications: Mr. Fisher brings extensive industry experience to our board and a critical

perspective on its business, having held several executive positions over many years with TCI, having
previously served as a director of Qurate Retail, Liberty Media, Liberty Broadband and our predecessor. In
addition, Mr. Fisher’s financial expertise includes a focus on venture capital investment, which is different from
the focus of our other board members and helpful to our board in formulating investment objectives and
determining the growth potential of businesses both within our company and those that the board evaluates for
investment purposes.

Directors Whose Term Expires in 2021

Gregory B. Maffei

• Age: 58

• Chief Executive Officer, President and a director of our company.

• Professional Background: Mr. Maffei has served as a director and the President and Chief Executive Officer of
our company since March 2018. He has served as the President and Chief Executive Officer of Liberty Media
(including its predecessor) since May 2007, Liberty TripAdvisor since July 2013 and Liberty Broadband since
June 2014. He has served as the Chairman of the Board of Qurate Retail (including its predecessor) since
March 2018, and as a director of Qurate Retail (including its predecessor) since November 2005, and he
served as the President and Chief Executive Officer of Qurate Retail (including its predecessor) from February
2006 to March 2018, having served as its CEO-Elect from November 2005 through February 2006. Prior
thereto, Mr. Maffei served as President and Chief Financial Officer of Oracle Corporation (Oracle), Chairman,
President and Chief Executive Officer of 360networks Corporation (360networks), and Chief Financial Officer
of Microsoft Corporation (Microsoft).

• Other Public Company Directorships: Mr. Maffei has served as (i) a director of Liberty Media (including its

predecessor) since May 2007, (ii) a director of Liberty TripAdvisor since July 2013 and as its Chairman of the
Board since June 2015, (iii) a director of Liberty Broadband since June 2014 and (iv) Chairman of the Board of
Qurate Retail since March 2018 and a director of Qurate Retail (including its predecessor) since November
2005. He has served as (i) the Chairman of the Board of Sirius XM since April 2013 and as a director since
March 2009, (ii) the Chairman of the Board of Live Nation since March 2013 and as a director since February
2011, (iii) the Chairman of the Board of TripAdvisor, Inc. since February 2013, (iv) a director of Charter since
May 2013 and (v) a director of Zillow Group, Inc. since February 2015, having previously served as a director
of its predecessor, Zillow, Inc., from May 2005 to February 2015. Mr. Maffei served as (i) Chairman of the
Board of Starz from January 2013 until its acquisition by Lions Gate Entertainment Corp. in December 2016,
(ii) a director of Barnes & Noble, Inc. from September 2011 to April 2014, (iii) a director of Electronic Arts, Inc.
from June 2003 to July 2013, (iv) a director of DIRECTV and its predecessors from February 2008 to June
2010 and (v) the Chairman of the Board of Pandora Media, Inc. from September 2017 to February 2019.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 11

• Board Membership Qualifications: Mr. Maffei brings to our board significant financial and operational

experience based on his current senior policy making positions at our company, Liberty Media, Qurate Retail,
Liberty TripAdvisor, and Liberty Broadband and his previous executive positions at Oracle, 360networks and
Microsoft. In addition, Mr. Maffei has extensive public company board experience. He provides our board with
an executive leadership perspective on the strategic planning for, and operations and management of, large
public companies and risk management principles.

Sue Ann Hamilton

• Age: 58

• A director of our company.

• Professional Background: As Principal of the consultancy Hamilton Media LLC (Hamilton Media),

Ms. Hamilton advises and represents major media and technology companies. In this role, she serves as
Executive Vice President—Distribution and Business Development for AXS TV LLC, a partnership between
founder Mark Cuban, AEG, Ryan Seacrest Media, Creative Artists Agency and CBS, and she represents The
Mark Cuban Companies/Radical Ventures as board observer for Philo, Inc., a privately held technology
company. Prior to launching Hamilton Media, from 2003 until 2007, she served as Executive Vice President—
Programming and Senior Vice President—Programming for Charter, the cable and internet service provider.
Before her work at Charter, she held numerous management positions at AT&T Broadband LLC and its
predecessor, TCI, dating back to 1993. Prior to her career in technology, media, and telecommunications, she
was a partner at Chicago-based law firm Kirkland & Ellis, specializing in complex commercial transactions.
She received her J.D. degree from Stanford Law School, where she was Associate Managing Editor of the
Stanford Law Review and Editor of the Stanford Journal of International Law. She is a magna cum laude
graduate of Carleton College in Northfield, Minnesota.

• Other Public Company Directorships: Ms. Hamilton has served as a director of FTD since December 2014.

• Board Membership Qualifications: As a result of her extensive management experience, Ms. Hamilton brings

to our board significant leadership, oversight and consulting skills, as well as experience in the media,
technology and legal fields.

Gregg L. Engles

• Age: 61

• A director of our company.

• Professional Background: Mr. Engles has served as a director of our company since March 2018. He has
served as a partner of Capitol Peak Partners since he founded it in August 2017. He previously served as
(i) Chairman of the Board and Chief Executive Officer of The WhiteWave Foods Company (WhiteWave) from
October 2012 until its acquisition by Danone in April 2017 and (ii) Chief Executive Officer of Dean Foods
Company, WhiteWave’s former parent company, from April 1996 until WhiteWave’s initial public offering in
October 2012.

• Other Public Company Directorships: Mr. Engles has served as a director of Liberty Expedia since November
2016. He has also served as a director of Danone since April 2017. Mr. Engles previously served as a director
and Chairman of the Board of Dean Foods Company from April 1996 to July 2013, except when he served as
its Vice-Chairman from January 2002 to May 2002. He also served as a director of Treehouse Foods, Inc. from
June 2005 to May 2008.

• Board Membership Qualifications: Mr. Engles offers our board significant operational experience gained

through his senior leadership positions at WhiteWave and other large public companies. He provides our board
with executive leadership perspective on the operations and management of public companies, which will
assist our board in evaluating strategic opportunities.

12 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

PROPOSAL 1—THE ELECTION OF DIRECTORS PROPOSAL

VOTE AND RECOMMENDATION

A plurality of the combined voting power of the outstanding shares of our capital stock present in person or
represented by proxy at the annual meeting and entitled to vote on the election of directors at the annual meeting,
voting together as a single class, is required to elect each of Messrs. Malone and Green as a Class I member of
our board of directors.

Our board of directors unanimously recommends a vote
“FOR” the election of each nominee to our board of directors.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 13

PROPOSAL 2—THE AUDITORS RATIFICATION PROPOSAL

We are asking our stockholders to ratify the selection of KPMG LLP as our independent auditors for the fiscal year
ending December 31, 2019.

Even if the selection of KPMG LLP is ratified, the audit committee of our board of directors in its discretion may
direct the appointment of a different independent accounting firm at any time during the year if our audit committee
determines that such a change would be advisable. In the event our stockholders fail to ratify the selection of
KPMG LLP, our audit committee will consider it as a direction to select other auditors for the year ending
December 31, 2019.

A representative of KPMG LLP is expected to be available to answer appropriate questions at the annual meeting
and will have the opportunity to make a statement if he or she so desires.

CHANGE IN INDEPENDENT AUDITORS

On March 9, 2018, pursuant to the Agreement and Plan of Reorganization, dated as of April 4, 2017, by and
among Qurate Retail, Liberty Interactive LLC, a Delaware limited liability company and a direct, wholly owned
subsidiary of Qurate Retail (Liberty LLC), and Old GCI Liberty, as amended (the GCI Reorganization
Agreement), Qurate Retail acquired a controlling equity interest in Old GCI Liberty in exchange for certain assets
and liabilities of Qurate Retail’s Ventures Group, which controlling equity interest Qurate Retail subsequently
split-off to holders of its Series A and Series B Liberty Ventures common stock (the LVNT stock) in full redemption
thereof (such transactions together with the other transactions contemplated by the GCI Reorganization
Agreement, the Transactions). Further, references to Old GCI Liberty refer to Old GCI Liberty prior to the
completion of the Transactions (including under its prior name, General Communication, Inc.).

Grant Thornton LLP (GT) was Old GCI Liberty’s independent registered public accounting firm for the fiscal year
ended December 31, 2017. On March 9, 2018, GT was replaced as our independent registered public accounting
firm by KPMG LLP. The replacement of GT and approval of the appointment of KPMG LLP as our independent
registered public accounting firm was approved by the audit committee of our board of directors on March 9, 2018
in connection with the closing of the Transactions and on May 11, 2018 following the reincorporation of our
company in Delaware. For accounting purposes, the Transactions are treated as a reverse acquisition and, as such,
the historical financial statements of the accounting acquirer, which were audited by KPMG LLP for the fiscal years
ended December 31, 2015, 2016 and 2017, have become our historical financial statements.

GT’s audit report on Old GCI Liberty’s financial statements for the fiscal year ended December 31, 2017, did not
contain an adverse opinion or disclaimer of opinion, nor was it qualified as to audit scope or accounting principles.
During the fiscal year ended December 31, 2017 and in the subsequent interim period through March 9, 2018,
(a) there were no “disagreements” (as described in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions) between us and GT on any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedures, which disagreements, if not resolved to GT’s satisfaction, would have caused GT
to make reference in connection with GT’s opinion to the subject matter of the disagreement; and (b) there were no
“reportable events” as the term is described in Item 304(a)(1)(v) of Regulation S-K.

We provided GT with a copy of the disclosures made in a Current Report on Form 8-K filed with the SEC on
March 14, 2018 and requested that GT furnish us with a letter addressed to the Securities and Exchange
Commission (SEC) stating whether they agree with the above statements. The letter is filed as Exhibit 16.1 to that
Current Report on Form 8-K.

During the fiscal year ended December 31, 2017 and in the subsequent interim period through March 9, 2018,
neither we nor anyone on our behalf consulted with KPMG LLP regarding either (a) the application of accounting
principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be
rendered on our financial statements, and neither a written report nor oral advice was provided to us that KPMG
LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or
financial reporting issue; or (b) any matter that was either the subject of a disagreement (as defined in paragraph
304(a)(1)(iv) of Regulation S-K and the related instructions thereto) or a reportable event (as described in
paragraph 304(a)(1)(v) of Regulation S-K).

14 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

PROPOSAL 2—THE AUDITORS RATIFICATION PROPOSAL

AUDIT FEES AND ALL OTHER FEES

The following table presents fees for professional audit services rendered by (i) KPMG LLP for the audit of our
consolidated financial statements for 2018 and fees billed for other services rendered by KPMG LLP for 2018 and
(ii) GT for the audit of Old GCI Liberty’s consolidated financial statements for 2017 and fees billed for other
services rendered by GT for 2017.

Audit fees(1)
Audit related fees(2)

Audit and audit related fees

Tax fees

Total fees

2018

$3,998,000
—

3,998,000

—

2017

1,435,000
135,000

1,570,000

—

$3,998,000

1,570,000

(1) Consists of fees for our and Old GCI Liberty’s annual financial statement audit, quarterly financial statement reviews, reviews of
other filings by the company with the SEC, audit of Old GCI Liberty’s internal control over financial reporting and for services that
are normally provided by an auditor in connection with statutory and regulatory filings or engagements.

(2) Consists of fees for Form S-4 filings in 2017 and the audit of the GCI 401(k) Plan and review of the related annual report on

Form 11-K filed with the SEC during 2018 and 2017.

Our audit committee has considered whether the provision of services by KPMG LLP to our company other than
auditing is compatible with KPMG LLP maintaining its independence and believes that the provision of such other
services is compatible with KPMG LLP maintaining its independence.

POLICY ON PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF
INDEPENDENT AUDITOR

Our audit committee has adopted a policy regarding the pre-approval of all audit and permissible non-audit
services provided by our independent auditor. Pursuant to this policy, our audit committee has approved the
engagement of our independent auditor to provide the following services (all of which are collectively referred to as
“pre-approved services”):

• audit services as specified in the policy, including (i) financial audits of our company and our subsidiaries,

(ii) services associated with registration statements, periodic reports and other documents filed or issued in
connection with securities offerings (including comfort letters and consents), (iii) attestations of management
reports on our internal controls and (iv) consultations with management as to accounting or disclosure
treatment of transactions;

• audit related services as specified in the policy, including (i) due diligence services, (ii) financial statement
audits of employee benefit plans, (iii) consultations with management as to the accounting or disclosure
treatment of transactions, (iv) attest services not required by statute or regulation, (v) certain audits
incremental to the audit of our consolidated financial statements, (vi) closing balance sheet audits related to
dispositions, and (vii) general assistance with implementation of the requirements of certain Securities and
Exchange Commission rules or listing standards; and

•

tax services as specified in the policy, including federal, state, local and international tax planning, compliance
and review services, and tax due diligence and advice regarding mergers and acquisitions.

Notwithstanding the foregoing general pre-approval, if, in the reasonable judgment of our Chief Financial Officer or
Senior Vice President and Controller, an individual project involving the provision of pre-approved services is likely
to result in fees in excess of $50,000, or if individual projects under $50,000 are likely to equal or exceed $250,000
during the period between the regularly scheduled meetings of the audit committee, then such projects will require
the specific pre-approval of our audit committee. Our audit committee has delegated the authority for the foregoing
approvals to the chairman of the audit committee, subject to his subsequent disclosure to the entire audit
committee of the granting of any such approval. Gregg Engles currently serves as the chairman of our audit
committee. In addition, the independent auditor is required to provide a report at each regularly scheduled audit
committee meeting on all pre-approved services incurred during the preceding quarter. Any engagement of our
independent auditors for services other than the pre-approved services requires the specific approval of our audit
committee.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 15

Our pre-approval policy prohibits the engagement of our independent auditor to provide any services that are
subject to the prohibition imposed by Section 201 of the Sarbanes-Oxley Act.

All services provided by our independent auditor during 2018 were approved in accordance with the terms of the
policy in place.

VOTE AND RECOMMENDATION

The affirmative vote of a majority of the combined voting power of the outstanding shares of our capital stock that
are present in person or by proxy, and entitled to vote at the annual meeting, voting together as a single class, is
required to approve the auditors ratification proposal.

Our board of directors unanimously recommends a vote
“FOR” the auditors ratification proposal.

16 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

MANAGEMENT AND GOVERNANCE MATTERS

EXECUTIVE OFFICERS

The following lists the executive officers of our company (other than Gregory B. Maffei, our President and Chief
Executive Officer, and John C. Malone, our Chairman of the Board, who also serve as directors of our company
and who are listed under “Proposal 1—The Election of Directors Proposal”), their ages and a description of their
business experience, including positions held with our company. All positions referenced in the table below with our
company include, where applicable, positions with our predecessors.

Name

Richard N. Baer
Age: 62

Albert E. Rosenthaler
Age: 59

Mark D. Carleton
Age: 58

Positions

Mr. Baer has served as Chief Legal Officer of our company since March 2018, Qurate Retail,
Liberty Media, Liberty TripAdvisor and Liberty Broadband since January 2016 and Liberty
Expedia since March 2016. He previously served as Senior Vice President and General Counsel
of Qurate Retail and Liberty Media from January 2013 to December 2015, Liberty TripAdvisor
from July 2013 to December 2015 and Liberty Broadband from June 2014 to December 2015.
Previously, Mr. Baer served as Executive Vice President and Chief Legal Officer of
UnitedHealth Group Incorporated from May 2011 to December 2012. He served as Executive
Vice President and General Counsel of Qwest Communications International Inc. from
December 2002 to April 2011 and Chief Administrative Officer from August 2008 to April
2011.

Mr. Rosenthaler has served as Chief Corporate Development Officer of our company since
March 2018, and Qurate Retail, Liberty Media, Liberty TripAdvisor, Liberty Broadband and
Liberty Expedia since October 2016. He previously served as Chief Tax Officer of Qurate Retail,
Liberty Media, Liberty TripAdvisor and Liberty Broadband from January 2016 to September
2016 and Liberty Expedia from March 2016 to September 2016. He previously served as a
Senior Vice President of Qurate Retail (including its predecessor) from April 2002 to December
2015, Liberty Media (including its predecessor) from May 2007 to December 2015, Liberty
TripAdvisor from July 2013 to December 2015 and Liberty Broadband from June 2014 to
December 2015.

Mr. Carleton has served as Chief Financial Officer of our company since March 2018. He
previously served as Treasurer of our company from March 2018 to May 2018. He has also
served as Chief Financial Officer of Qurate Retail, Liberty Media and Liberty Broadband since
October 2016. He previously served as Chief Development Officer of Qurate Retail, Liberty
Media, Liberty Broadband and Liberty TripAdvisor from January 2016 to September 2016, as a
Senior Vice President of Qurate Retail from November 2014 to December 2015, Liberty Media
from January 2013 to December 2015 and Liberty Broadband from October 2014 to
December 2015, and as a Senior Vice President of predecessors of Liberty Media from
December 2003 to January 2013. Prior to that time, Mr. Carleton served as a partner at
KPMG LLP.

Our executive officers will serve in such capacities until their respective successors have been duly elected and
have been qualified, or until their earlier death, resignation, disqualification or removal from office. There is no
family relationship between any of our executive officers or directors, by blood, marriage or adoption.

During the past ten years, none of our directors and executive officers has had any involvement in such legal
proceedings as would be material to an evaluation of his or her ability or integrity.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires our executive
officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to
file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten-percent
stockholders are required by SEC regulation to furnish us with copies of all Section 16 forms they file.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 17

Based solely on a review of the copies of the Forms 3, 4 and 5 and amendments to those forms furnished to us
during our most recent fiscal year and written representations made to us by our executive officers and directors,
we believe that, during the year ended December 31, 2018, all Section 16(a) filing requirements applicable to
our officers, directors and greater than ten-percent beneficial owners were met, with the exception of three
Form 4 filings reporting five transactions by Mark Carleton that were filed on an untimely basis.

CODE OF ETHICS

We have adopted a code of business conduct and ethics that applies to all of our employees, directors and officers,
which constitutes our “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act. Our code of
business conduct and ethics is available on our website at www.gciliberty.com.

DIRECTOR INDEPENDENCE

It is our policy that a majority of the members of our board of directors be independent of our management. For a
director to be deemed independent, our board of directors must affirmatively determine that the director has no
direct or indirect material relationship with us. To assist our board of directors in determining which of our directors
qualify as independent for purposes of Nasdaq rules as well as applicable rules and regulations adopted by the
SEC, the nominating and corporate governance committee of our board of directors follows Nasdaq’s corporate
governance rules on the criteria for director independence.

Our board of directors has determined that each of Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue
Ann Hamilton qualifies as an independent director of our company.

In connection with the Transactions, Stephen M. Brett, Jerry A. Edgerton, Scott M. Fisher, William P. Glasgow, Mark
W. Kroloff, Stephen R. Mooney, James M. Schneider, Bridget L. Baker and Eric L. Zinterhofer resigned as members
of Old GCI Liberty’s board of directors (the Legacy Board) as of March 9, 2018, at 8:00 a.m., New York City time
(the contribution effective time). The Legacy Board believed that each of its members satisfied the definition of
an “Independent Director,” with the exception of Mr. Duncan. The term “Independent Director” as used by the
Legacy Board meant an individual, other than one of Old GCI Liberty’s executive officers or employees, and other
than any other individual having a relationship which in the opinion of the board would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. Accordingly, the Legacy Board believed that
each of Stephen M. Brett, Jerry A. Edgerton, Scott M. Fisher, William P. Glasgow, Mark W. Kroloff, Stephen R.
Mooney, James M. Schneider, Bridget L. Baker and Eric L. Zinterhofer was an “Independent Director.”

BOARD COMPOSITION

As described above under “Proposal 1—The Election of Directors Proposal,” our board is comprised of directors
with a broad range of backgrounds and skill sets, including in media and telecommunications, venture capital and
technology. Our board is also chronologically diverse with our members’ ages spanning three to four decades. For
more information on our policies with respect to board candidates, see “—Committees of the Board of Directors—
Nominating and Corporate Governance Committee” below.

BOARD LEADERSHIP STRUCTURE

Our board has separated the positions of Chairman of the Board and Chief Executive Officer (principal executive
officer). John C. Malone, one of our largest stockholders, holds the position of Chairman of the Board, leads our
board and board meetings and provides strategic guidance to our Chief Executive Officer. Gregory B. Maffei, our
President, holds the position of Chief Executive Officer, leads our management team and is responsible for driving
the performance of our company. We believe this division of responsibility effectively assists our board in fulfilling its
duties.

BOARD ROLE IN RISK OVERSIGHT

The board as a whole has responsibility for risk oversight, with reviews of certain areas being conducted by the
relevant board committees. Our audit committee oversees management of financial risks and risks relating to
potential conflicts of interest. Our compensation committee oversees the management of risks relating to our
compensation arrangements with senior officers. Our nominating and corporate governance committee oversees
risks associated with the independence of the board. These committees then provide reports periodically to the full
board. The oversight responsibility of the board and its committees is enabled by management reporting processes

18 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

MANAGEMENT AND GOVERNANCE MATTERS

that are designed to provide visibility to the board about the identification, assessment and management of critical
risks. These areas of focus include strategic, operational, financial and reporting, succession and compensation,
legal and compliance, and other risks. Our management reporting processes include regular reports from our Chief
Executive Officer, which are prepared with input from our senior management team, and also include input from our
Internal Audit group.

COMMITTEES OF THE BOARD OF DIRECTORS

Executive Committee

Our board of directors has established an executive committee, whose members are John C. Malone and
Gregory B. Maffei. Except as specifically prohibited by the General Corporation Law of the State of Delaware, the
executive committee may exercise all the powers and authority of our board of directors in the management of our
business and affairs, including the power and authority to authorize the issuance of shares of our capital stock.

Compensation Committee

Our board of directors has established a compensation committee, whose chairperson is Sue Ann Hamilton and
whose other members are Gregg L. Engles and Richard R. Green. Stephen M. Brett, Bridget L. Baker, Jerry A.
Edgerton, Stephen R. Mooney and James M. Schneider had also served as members of the compensation
committee during their tenure on the Legacy Board. See “—Director Independence” above.

In connection with the Transactions, we entered into a Services Agreement, dated March 9, 2018, with Liberty
Media (the services agreement), pursuant to which Liberty Media will provide us with administrative, executive and
management services. The compensation committee will evaluate the services fee under the services agreement
on at least an annual basis. In addition, the compensation committee may approve incentive awards or other forms
of compensation to employees of Liberty Media who are providing services to our company, which employees
include our executive officers.

If we engage a Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, Chief Tax Officer or Chief
Corporate Development Officer to perform services for our company outside the services agreement, the
compensation committee will review and approve corporate goals and objectives relevant to the compensation of
any such person. The compensation committee also oversees the compensation of the executive officers of our
non-public operating subsidiaries. For a description of our processes and policies for consideration and
determination of executive compensation, including the role of our Chief Executive Officer and outside consultants
in determining or recommending amounts and/or forms of compensation, see “Executive Compensation—
Compensation Discussion and Analysis.”

Our board of directors has adopted a written charter for the compensation committee, which is available on our
website at www.gciliberty.com.

Compensation Committee Report

The compensation committee has reviewed and discussed with our management the “Compensation Discussion
and Analysis” included under “Executive Compensation” below. Based on such review and discussions, the
compensation committee recommended to our board of directors that the “Compensation Discussion and Analysis”
be included in this proxy statement.

Submitted by the Members of the Compensation Committee

Sue Ann Hamilton
Gregg L. Engles
Richard R. Green

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 19

Compensation Committee Interlocks and Insider Participation

No member of our compensation committee during 2018 is or has been an officer or employee of our company, or
has engaged in any related party transaction in which our company was a participant.

Nominating and Corporate Governance Committee

Our board of directors has established a nominating and corporate governance committee, whose chairman is
Richard R. Green and whose other members are Gregg L. Engles and Sue Ann Hamilton. See “—Director
Independence” above. All of the members of the Legacy Board, other than Ronald A. Duncan, had also served as
members of the nominating & corporate governance committee during their tenure on the Legacy Board. See
“—Director Independence” above.

The nominating and corporate governance committee identifies individuals qualified to become board members
consistent with criteria established or approved by our board of directors from time to time, identifies director
nominees for upcoming annual meetings, develops corporate governance guidelines applicable to our company
and oversees the evaluation of our board and management.

The nominating and corporate governance committee will consider candidates for director recommended by any
stockholder provided that such recommendations are properly submitted. Eligible stockholders wishing to
recommend a candidate for nomination as a director should send the recommendation in writing to the Corporate
Secretary, GCI Liberty, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112. Stockholder recommendations
must be made in accordance with our bylaws, as discussed under “Stockholder Proposals” below, and contain the
following information:

•

•

the name and address of the proposing stockholder and the beneficial owner, if any, on whose behalf the
nomination is being made, and documentation indicating the number of shares of our capital stock owned
beneficially and of record by such person and the holder or holders of record of those shares, together with a
statement that the proposing stockholder is recommending a candidate for nomination as a director;

the candidate’s name, age, business and residence addresses, principal occupation or employment, business
experience, educational background and any other information relevant in light of the factors considered by the
nominating and corporate governance committee in making a determination of a candidate’s qualifications, as
described below;

• a statement detailing any relationship, arrangement or understanding between the proposing stockholder
and/or beneficial owner(s), if different, and any other person(s) (including their names) under which the
proposing stockholder is making the nomination and any affiliates or associates (as defined in Rule 12b-2 of
the Exchange Act) of such proposing stockholder(s) or beneficial owner (each a Proposing Person);

• a statement detailing any relationship, arrangement or understanding that might affect the independence of

the candidate as a member of our board of directors;

• any other information that would be required under SEC rules in a proxy statement soliciting proxies for the

election of such candidate as a director;

• a representation as to whether the Proposing Person intends (or is part of a group that intends) to deliver any

proxy materials or otherwise solicit proxies in support of the director nominee;

• a representation by each Proposing Person who is a holder of record of our capital stock as to whether the
notice is being given on behalf of the holder of record and/or one or more beneficial owners, the number of
shares held by any beneficial owner along with evidence of such beneficial ownership and that such holder of
record is entitled to vote at the annual stockholders meeting and intends to appear in person or by proxy at the
annual stockholders meeting at which the person named in such notice is to stand for election;

• a written consent of the candidate to be named in the proxy statement and to serve as a director, if nominated

and elected;

• a representation as to whether the Proposing Person has received any financial assistance, funding or other

consideration from any other person regarding the nomination (a Stockholder Associated Person) (including
the details of such assistance, funding or consideration); and

20 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

MANAGEMENT AND GOVERNANCE MATTERS

• a representation as to whether and the extent to which any hedging, derivative or other transaction has been

entered into with respect to our company within the last six months by, or is in effect with respect to, the
Proposing Person, any person to be nominated by the proposing stockholder or any Stockholder Associated
Person, the effect or intent of which transaction is to mitigate loss to or manage risk or benefit of share price
changes for, or increase or decrease the voting power of, the Proposing Person, its nominee, or any such
Stockholder Associated Person.

In connection with its evaluation, the nominating and corporate governance committee may request additional
information from the proposing stockholder and the candidate. The nominating and corporate governance
committee has sole discretion to decide which individuals to recommend for nomination as directors.

To be nominated to serve as a director, a nominee need not meet any specific minimum criteria. However, the
nominating and corporate governance committee believes that nominees for director should possess the highest
personal and professional ethics, integrity, values and judgment and should be committed to the long-term interests
of our stockholders. When evaluating a potential director nominee, including one recommended by a stockholder,
the nominating and corporate governance committee will take into account a number of factors, including, but not
limited to, the following:

•

independence from management;

• his or her unique background, including education, professional experience and relevant skill sets;

•

judgment, skill, integrity and reputation;

• existing commitments to other businesses as a director, executive or owner;

• personal conflicts of interest, if any; and

•

the size and composition of the existing board of directors, including whether the potential director nominee
would positively impact the composition of the board by bringing a new perspective or viewpoint to the board of
directors.

The nominating and corporate governance committee does not assign specific weights to particular criteria and no
particular criterion is necessarily applicable to all prospective nominees. The nominating and corporate governance
committee does not have a formal policy with respect to diversity; however, our board and the nominating and
corporate governance committee believe that it is important that our board members represent diverse viewpoints.

When seeking candidates for director, the nominating and corporate governance committee may solicit suggestions
from incumbent directors, management, stockholders and others. After conducting an initial evaluation of a
prospective nominee, the nominating and corporate governance committee will interview that candidate if it
believes the candidate might be suitable to be a director. The nominating and corporate governance committee may
also ask the candidate to meet with management. If the nominating and corporate governance committee believes
a candidate would be a valuable addition to our board of directors, it may recommend to the full board that
candidate’s nomination and election.

Prior to nominating an incumbent director for re-election at an annual meeting of stockholders, the nominating and
corporate governance committee will consider the director’s past attendance at, and participation in, meetings of
the board of directors and its committees and the director’s formal and informal contributions to the various
activities conducted by the board and the board committees of which such individual is a member.

The members of our nominating and corporate governance committee have determined that Messrs. Malone and
Green, who are nominated for election at the annual meeting, continue to be qualified to serve as directors of our
company and such nominations were approved by the entire board of directors.

Our board of directors has adopted a written charter for the nominating and corporate governance committee. Our
board of directors has also adopted corporate governance guidelines, which were developed by the nominating and
corporate governance committee. The charter and the corporate governance guidelines are available on our
website at www.gciliberty.com.

Audit Committee

Our board of directors has established an audit committee, whose chairman is Gregg L. Engles and whose other
members are Richard R. Green and Sue Ann Hamilton. Scott M. Fisher, William P. Glasgow and Stephen R.
Mooney had also served as members of the audit committee during their tenure on the Legacy Board. See
“—Director Independence” above.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 21

Our board of directors has determined that Mr. Engles is an “audit committee financial expert” under applicable
SEC rules and regulations. The audit committee reviews and monitors the corporate financial reporting and the
internal and external audits of our company. The committee’s functions include, among other things:

• appointing or replacing our independent auditors;

•

•

•

•

reviewing and approving in advance the scope and the fees of our annual audit and reviewing the results of
our audits with our independent auditors;

reviewing and approving in advance the scope and the fees of non-audit services of our independent auditors;

reviewing compliance with and the adequacy of our existing major accounting and financial reporting policies;

reviewing our management’s procedures and policies relating to the adequacy of our internal accounting
controls and compliance with applicable laws relating to accounting practices;

• confirming compliance with applicable SEC and stock exchange rules; and

• preparing a report for our annual proxy statement.

Our board of directors has adopted a written charter for the audit committee, which is available on our website at
www.gciliberty.com.

Audit Committee Report

Each member of the audit committee is an independent director as determined by our board of directors, based on
the listing standards of Nasdaq. Each member of the audit committee also satisfies the SEC’s independence
requirements for members of audit committees. Our board of directors has determined that Mr. Engles is an “audit
committee financial expert” under applicable SEC rules and regulations.

The audit committee reviews our financial reporting process on behalf of our board of directors. Management has
primary responsibility for establishing and maintaining adequate internal controls, for preparing financial statements
and for the public reporting process. Our independent auditor, KPMG LLP, is responsible for expressing opinions on
the conformity of our audited consolidated financial statements with U.S. generally accepted accounting principles.
Our independent auditor also expresses its opinion as to the effectiveness of our internal control over financial
reporting.

Our audit committee has reviewed and discussed with management and KPMG LLP our most recent audited
consolidated financial statements, as well as management’s assessment of the effectiveness of our internal control
over financial reporting and KPMG LLP’s evaluation of the effectiveness of our internal control over financial
reporting. Our audit committee has also discussed with KPMG LLP the matters required to be discussed by the
Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with Audit Committees,
including that firm’s judgment about the quality of our accounting principles, as applied in its financial reporting.

KPMG LLP has provided our audit committee with the written disclosures and the letter required by the applicable
requirements of the Public Company Accounting Oversight Board regarding KPMG LLP’s communications with the
audit committee concerning independence, and the audit committee has discussed with KPMG LLP that firm’s
independence from the company and its subsidiaries.

Based on the reviews, discussions and other considerations referred to above, our audit committee recommended
to our board of directors that the audited financial statements be included in our Annual Report on Form 10-K for
the year ended December 31, 2018 (the 2018 Form 10-K), which was filed on February 28, 2019 with the SEC.

Submitted by the Members of the Audit Committee

Gregg L. Engles
Richard R. Green
Sue Ann Hamilton

Other

Our board of directors, by resolution, may from time to time establish other committees of our board of directors,
consisting of one or more of our directors. Any committee so established will have the powers delegated to it by
resolution of our board of directors, subject to applicable law.

22 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

MANAGEMENT AND GOVERNANCE MATTERS

BOARD MEETINGS

During 2018, there were six meetings of our full board of directors, no meetings of our executive committee, three
meetings of our compensation committee, one meeting of our nominating and corporate governance committee
and seven meetings of our audit committee. Additionally, during 2018, there were no meetings of the full Legacy
Board, no meetings of the Legacy Board’s executive committee, one meeting of the Legacy Board’s compensation
committee, no meetings of the Legacy Board’s nominating & corporate governance committee and one meeting of
the Legacy Board’s audit committee

DIRECTOR ATTENDANCE AT ANNUAL MEETINGS

Our board of directors encourages all members of the board to attend each annual meeting of our stockholders.
Four of the seven directors then serving attended our 2018 annual meeting of stockholders.

STOCKHOLDER COMMUNICATION WITH DIRECTORS

Our stockholders may send communications to our board of directors or to individual directors by mail addressed to
our board of directors or to an individual director c/o GCI Liberty, Inc., 12300 Liberty Boulevard, Englewood,
Colorado 80112. All such communications from stockholders will be forwarded to our directors on a timely basis.

EXECUTIVE SESSIONS

In 2018, the independent directors of our company, then serving, met at three executive sessions without
management participation.

Any interested party who has a concern regarding any matter that it wishes to have addressed by our independent
directors, as a group, at an upcoming executive session may send its concern in writing addressed to independent
directors of GCI Liberty, c/o GCI Liberty, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112. The current
independent directors of our company are Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann
Hamilton.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 23

EXECUTIVE COMPENSATION

This section sets forth information relating to, and an analysis and discussion of, compensation paid by our
company to the following persons (who we refer to as the named executive officers):

• Gregory B. Maffei, our President and Chief Executive Officer;

• Mark D. Carleton, our Chief Financial Officer;

• Richard N. Baer, our Chief Legal Officer;

• Albert E. Rosenthaler, our Chief Corporate Development Officer;

• Ronald A. Duncan, the Chief Executive Officer of GCI Holdings and the former Chief Executive Officer of Old

GCI Liberty; and

• Peter J. Pounds, Senior Vice President, Chief Financial Officer, Secretary and Treasurer of GCI Holdings and

the former Senior Vice President, Chief Financial Officer and Secretary of Old GCI Liberty.

On March 9, 2018, following the completion of the Transactions, Messrs. Maffei, Carleton, Baer and Rosenthaler
were appointed to their current executive positions at our company, and their 2018 compensation was determined
by the respective compensation committees of Liberty Media, Qurate Retail and our company. In connection with
the completion of the Transactions, Messrs. Duncan and Pounds resigned from their executive positions with Old
GCI Liberty and Messrs. Duncan and Pounds assumed the role of CEO and CFO, respectively, of our subsidiary,
GCI Holdings. Messrs. Duncan’s and Pounds’ 2018 compensation was determined by our compensation committee
following the completion of the Transactions.

COMPENSATION DISCUSSION AND ANALYSIS

GCI Liberty Executives’ Compensation—Messrs. Maffei, Baer, Carleton and Rosenthaler

Services Agreement

In connection with the Transactions, we entered into the Services Agreement, pursuant to which Liberty Media
provides to our company certain administrative and management services, and we pay Liberty Media a monthly
management fee, the amount of which is subject to semi-annual review (and at least an annual review by our
compensation committee). Liberty Media employees, including Messrs. Maffei, Baer, Carleton and Rosenthaler,
who provide services to our company pursuant to the Services Agreement, are not separately compensated by our
company other than with respect to equity awards with respect to our common stock. See “—Changes for
2019—Equity Awards to Messrs. Maffei, Baer, Carlton and Rosenthaler” below for information concerning equity
awards that were granted to these named executive officers in 2019.

For the year ended December 31, 2018, we accrued management fees payable to Liberty Media under the services
agreement of $5.9 million.

Role of Chief Executive Officer in Compensation Decisions; Setting Executive Compensation

Mr. Maffei did not make any determinations with respect to 2018 compensation because no compensation was paid
by the company in 2018 to Messrs. Baer, Carleton and Rosenthaler. As a result of the management fee paid to
Liberty Media, the compensation committee does not currently expect to provide any cash compensation to these
named executive officers; rather it may determine to separately compensate these named executive officers with
equity incentive compensation. Prospectively, Mr. Maffei may make recommendations with respect to any equity
compensation to be awarded to these named executive officers. It is expected that our chief executive officer, in
making any recommendations to our compensation committee, will evaluate the performance and contributions of
each of these named executive officers, given his respective area of responsibility, and, in doing so, will consider
various qualitative factors such as:

•

•

•

•

the executive officer’s experience and overall effectiveness;

the executive officer’s performance during the preceding year;

the responsibilities of the executive officer, including any changes to those responsibilities over the year; and

the executive officer’s demonstrated leadership and management ability.

24 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

EXECUTIVE COMPENSATION

Elements of 2018 Executive Compensation

Messrs. Maffei, Baer, Carleton and Rosenthaler did not receive any equity incentive compensation from our
company during 2018. The equity awards held by these named executive officers and reported below in
“—Outstanding Equity Awards at Fiscal Year-End” were issued as a result of the anti-dilution adjustments applied to
their outstanding equity awards relating to Qurate Retail’s Liberty Ventures common stock when the Transactions
were completed, including their outstanding unvested multi-year grants and performance-based RSU awards
described below. Please see “—Changes for 2019—Equity Awards to Messrs. Maffei, Baer, Carlton and
Rosenthaler—2018 Above-Target Awards” for information pertaining to Mr. Maffei’s 2018 above-target stock option
award in our GLIBB shares that was granted in March 2019 and our compensation committee’s plan to grant equity
awards in the future to these named executive officers.

Equity Incentive Compensation

Consistent with our compensation philosophy, our compensation committee believes in aligning the interests of
these named executive officers with those of our stockholders and may grant awards of stock-based incentive
compensation in the future to further align their interests. This will ensure that our executives have a continuing
stake in our long-term success.

The GCI Liberty, Inc. 2018 Omnibus Incentive Plan (the 2018 incentive plan) provides for the grant of a variety of
incentive awards, including stock options, restricted shares, RSUs, stock appreciation rights and performance
awards. We expect that our compensation committee will prefer to grant stock options and awards of restricted
stock or RSUs (as compared with other types of available awards under the 2018 incentive plan) based on the
belief that they better promote retention of key employees through the continuing, long-term nature of an equity
investment. It is the policy of our compensation committee that stock options be awarded with an exercise price
equal to fair market value on the date of grant, typically measured by reference to the closing price on the grant
date.

Prior to the Transactions, the Qurate Retail compensation committee (and prior to September 2011 when Liberty
Media’s former parent company was split off from its former parent company, Liberty Interactive, the Liberty
Interactive compensation committee) determined to make larger grants (equaling approximately four to five years’
value of the annual grants made in years prior to 2009) that vest between four and five and three-quarters years
after grant, rather than making annual grants over the same period. These multi-year stock option grants provide for
back-end weighted vesting and generally expire seven to ten years after grant to encourage executives to remain
with the company over the long-term and to better align their interests with those of the stockholders. In addition,
the Qurate Retail compensation committee also has been granting annual performance-based equity awards to its
senior officers since December 2014. In that regard, multi-year stock option awards and performance-based RSU
awards were granted to Qurate Retail’s executive officers prior to the Transactions, including Messrs. Maffei, Baer,
Carleton and Rosenthaler, and, accordingly, the multi-year stock option grants and performance-based RSU awards
were adjusted in connection with the Transactions pursuant to the anti-dilution provisions of the incentive plans
under which they were granted. The performance-based RSUs granted to Messrs. Maffei, Baer, Carleton and
Rosenthaler would vest based in part on the Qurate Retail compensation committee’s evaluation of the
performance of the businesses and assets contributed to GCI Liberty in connection with the Transactions.

Old GCI Liberty Executives’ Compensation—Messrs. Duncan and Pounds

Compensation Process and Principles

As discussed above, on March 9, 2018, Mr. Duncan became Chief Executive Officer of GCI Holdings and
Mr. Pounds became Chief Financial Officer of GCI Holdings when their resignations from their respective executive
positions at Old GCI Liberty became effective. Following the completion of the Transactions, our compensation
committee determined the compensation of Messrs. Duncan and Pounds for the remainder of 2018 and
considered:

• each element of their respective compensation packages, including base salary, bonus, equity compensation,

perquisites and other personal benefits;

• GCI Holdings’ financial performance compared to internal forecasts and budgets;

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 25

•

•

individual performance and the performance of the groups reporting to Mr. Duncan and Mr. Pounds; and

the competitive nature of the compensation packages offered based on general industry knowledge of the
media, and telecommunications industries and, use of survey information provided by Mercer (US) Inc.

Prior to approving Messrs. Duncan’s and Pounds’ 2018 compensation, our compensation committee also
considered the recommendation of Mr. Maffei with respect to Mr. Duncan’s compensation and the recommendation
of Mr. Maffei and Mr. Duncan with respect to Mr. Pounds’ compensation. We currently expect to enter into long-term
employment arrangements this year with each of Mr. Duncan and Mr. Pounds that will establish the elements and
amounts of their respective compensation packages.

Elements of 2018 Executive Compensation

For 2018, the elements of Messrs. Duncan and Pounds’ compensation were:

• base salary;

• a performance-based bonus payable in cash;

•

time-vested RSUs and performance-based RSUs; and

• perquisites and other limited personal benefits.

Base Salary. Mr. Duncan’s and Mr. Pounds’ 2018 base salaries remained the same as their 2017 base salaries.
Our compensation committee believes base salary should be a relatively smaller portion of Messrs. Duncan’s and
Pounds’ overall compensation package, thereby aligning their interests more closely with those of our stockholders.
Generally, after an individual’s base salary has been established, we expect that salary increases will be limited to
changes in the scope of the individual’s responsibilities.

2018 Performance-based Bonuses. Because the Transactions were not completed until March 2018 and 2018
was a transitional year, our compensation committee did not establish pre-determined performance criteria for
payout of bonuses in 2018. Therefore, our compensation committee determined to pay a discretionary bonus to
each of Mr. Duncan and Mr. Pounds based on their 2018 performance and the achievement of GCI Holdings’ 2018
objectives and plan. In determining the amounts to be paid, our compensation committee reviewed GCI Holdings’
Adjusted EBITDA growth and revenue growth. Our compensation committee also reviewed GCI Holdings’ 2018
capital expenditures. For purposes of the bonus determination, Adjusted EBITDA is defined as earnings before
interest, taxes, depreciation, amortization and certain purchase price adjustments. In addition, our compensation
committee considered input from Mr. Maffei with respect to the bonus paid in 2019 to Mr. Duncan for his 2018
performance. Our compensation committee also considered input from Mr. Maffei and Mr. Duncan on the bonus
paid in 2019 to Mr. Pounds for his 2018 performance. Our compensation committee then approved a payment to Mr.
Duncan of $489,159, which was 41% of his maximum bonus of $1,207,741, and approved a payment to Mr.
Pounds of $147,765, which was 44% of his maximum bonus of $334,375.

Equity Incentive Compensation.

• Multi-year RSUs. Consistent with Qurate Retail’s previous practices, our compensation committee expects to
make larger equity awards (equaling approximately five years’ value of an executive officer’s annual grants)
that will vest five years after grant, rather than making annual grants over the same period. These multi-year
grants provide for back-end weighted vesting to encourage GCI Holdings’ officers to remain with the company
over the long-term and to better align their interests with those of our stockholders. Accordingly, our
compensation committee made a multi-year RSU award to Messrs. Duncan and Pounds in December 2018.
All of the 56,134 multi-year RSUs granted to Mr. Duncan will cliff vest on January 5, 2023, and all of the
15,990 multi-year RSUs granted to Mr. Pounds will cliff vest on November 15, 2022.

• Annual Performance-based Equity Awards. Consistent with Qurate Retail’s previous practice of granting

annual performance-based awards to its senior officers, our compensation committee expects to grant annual
performance-based RSUs to Messrs. Duncan and Pounds. Because the Transactions were not completed until
March 2018 and 2018 was a transitional year, our compensation committee did not establish a performance-
based RSU program in 2018. Instead, our compensation committee reviewed the 2018 performance of Mr.
Duncan and Mr. Pounds on the same criteria as used in the 2018 performance-based bonus program
described above under “—Old GCI Liberty Executives’ Compensation—Messrs. Duncan and Pounds—
Elements of 2018 Executive Compensation—2018 Performance-based Bonuses.” Our compensation
committee then determined to grant and vest 4,654 RSUs for Mr. Duncan’s 2018 performance and grant and

26 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

EXECUTIVE COMPENSATION

vest 1,406 RSUs for Mr. Pounds’ 2018 performance. As a result, Mr. Duncan received 41% of the maximum
number of 2018 RSUs for which he was eligible to receive in 2018, and Mr. Pounds received 44% of the
maximum number of 2018 RSUs for which he was eligible to receive in 2018.

Perquisites. Messrs. Maffei, Baer, Carleton and Rosenthaler did not receive any perquisites from our company in
2018.

Old GCI Liberty’s executive officers, including Messrs. Duncan and Pounds, received certain perquisites during
2018 that the Old GCI Liberty’s compensation committee (the Legacy CC) believed were reasonable and
appropriate and consistent with Old GCI Liberty’s awareness of perquisites offered by similar publicly traded
companies. The perquisites assisted in attracting and retaining Old GCI Liberty’s executive officers and, in the case
of certain perquisites, promoted health, safety and efficiency of the executive officers. These perquisites continued
to be provided after the closing of the Transactions and are described below.

• Use of Company Aircraft. Old GCI Liberty permitted employees, including Messrs. Duncan, Pounds and its

other executive officers, to use company aircraft for personal travel for themselves and their guests. Such travel
generally was limited to a space available basis on flights that were otherwise business-related, and the
additional variable cost to Old GCI Liberty (such as fuel, catering, and landing fees) was de minimus. Where
the additional variable cost to Old GCI Liberty occurred on such a flight solely for the personal purposes of
Mr. Duncan, Mr. Pounds or their guests, that cost is included in the Summary Compensation Table entry for
Mr. Duncan or Mr. Pounds, as the case may be. Fixed costs (such as hangar expenses, crew salaries and
monthly leases) are not included in the Summary Compensation Table. In any case, in the event such a cost
was non-deductible by Old GCI Liberty under the Internal Revenue Code of 1986, as amended (the Code),
the value of that lost deduction is included in the Summary Compensation Table entry for Mr. Duncan or
Mr. Pounds. When employees, including Messrs. Duncan and Pounds, used company aircraft for such travel
they were attributed with taxable income in accordance with regulations pursuant to the Code. Old GCI Liberty
did not “gross up” or reimburse an employee for taxes he or she owed on such attributed income. The variable
cost of the aircraft for personal travel, if any, is included in the respective entries in the Summary
Compensation Table. See “—Summary Compensation Table.”

• Enhanced Disability Benefits. Old GCI Liberty provided its senior executive officers with enhanced long-term
and short-term disability benefits. The long-term disability benefit provided a supplemental replacement
income benefit of 60% of average monthly compensation capped at $10,000 per month, and the short-term
disability benefit provided a supplemental replacement income benefit of 662∕3% of average monthly
compensation, capped at $2,300 per week.

• Miscellaneous. Aside from benefits offered to its employees generally, Old GCI Liberty provided miscellaneous

other benefits to Mr. Duncan and/or Mr. Pounds, including:

◦ a success sharing incentive program offered to all of Old GCI Liberty’s employees that shared 15% of the

excess Adjusted EBITDA over the highest previous year (Success Sharing);

◦ use of our company retreat facilities; and

◦ in Mr. Duncan’s case, board fees for his service on Old GCI Liberty’s board of directors. The Legacy CC

believed that it was appropriate to pay board fees to Mr. Duncan given the additional oversight
responsibilities and the accompanying liability incumbent upon members of the board. In determining the
appropriate amount of overall compensation payable to Mr. Duncan in his capacity as Old GCI Liberty’s chief
executive officer, the Legacy CC considered the board fees that were payable to Mr. Duncan.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 27

Shareholder Advisory Votes on Executive Compensation

At Old GCI Liberty’s 2017 annual stockholder meeting, stockholders representing a majority of the aggregate
voting power of Old GCI Liberty present and entitled to vote on Old GCI Liberty’s say-on-pay proposal voted in
favor of, on an advisory basis, the executive compensation disclosed in Old GCI Liberty’s proxy statement for the
2017 annual meeting of stockholders. No material changes were implemented to our executive compensation
program as a result of this vote. At Old GCI Liberty’s 2017 annual stockholder meeting, stockholders elected to
hold a say-on-pay vote every three years, which was adopted as the frequency at which future say-on-pay votes
would be held.

Changes for 2019

Equity Awards to Messrs. Maffei, Baer, Carleton and Rosenthaler

2019 Performance-based RSUs. As discussed above, Messrs. Maffei, Baer, Carleton and Rosenthaler perform
management services for our company pursuant to the services agreement. As a result, we have not separately
compensated these named executive officers for these services. In addition, our company has not incurred any of
the costs of the equity awards granted by Liberty Media to its executive officers who provide services to our
company. Following a review of this practice, our compensation committee determined to grant the equity awards to
Messrs. Maffei, Baer, Carleton and Rosenthaler described below after considering the Liberty Media compensation
committee’s request that our company grant a proportionate share of the aggregate equity grant value given to
each of these named executive officers each year for their service to our company and each of Liberty Media,
Qurate Retail, Liberty TripAdvisor and Liberty Broadband. The proportionate share for each company was
determined based 50% on relative market capitalization and 50% on relative time spent by Liberty Media
employees on services for our company.

In March 2019, our compensation committee determined to grant RSUs with respect to 51,429 GLIBB shares to
Mr. Maffei, and RSUs with respect to GLIBA shares (collectively, the 2019 RSUs) to Messrs. Baer (4,821), Carleton
(3,600) and Rosenthaler (3,600). Mr. Maffei will determine the extent to which the 2019 RSUs will vest for
Messrs. Baer, Carleton and Rosenthaler and recommend such payout to our compensation committee. Our
compensation committee will also consult with the Liberty Media compensation committee regarding Mr. Maffei’s
performance and vesting of his 2019 RSUs. However, notwithstanding this joint effort, our compensation committee
retains sole discretion with respect to approving the extent to which these named executive officers’ 2019 RSUs will
vest.

2018 Above-Target Awards. In addition, after consultation with the Liberty Media compensation committee, our
compensation committee awarded Mr. Maffei above-target awards for his performance in 2018. As a result of the
discussions with the Liberty Media compensation committee, the Liberty Media compensation committee, the
Qurate Retail compensation committee and our compensation committee awarded Mr. Maffei above-target awards
with a grant value aggregating $2.7 million. The compensation committees split the grant value by each granting an
additional 15% of the target number of restricted stock units and stock options granted to Mr. Maffei in March 2018
pursuant to the Liberty Media and Qurate Retail performance equity programs. Accordingly, our compensation
committee approved the grant of 21,457 GLIBB stock options to Mr. Maffei, relating to awards of Qurate Retail’s
former Series B Liberty Ventures common stock (LVNTB) on an as-converted basis as a result of the Transactions.
It is expected that the stock options will be granted and will vest in May 2019. The stock options will have a
seven-year term.

Arrangements with Messrs. Duncan and Pounds

Duncan Aircraft Arrangement. Our compensation committee approved providing Mr. Duncan with 80 hours of
personal flight time for 2019. See “Certain Relationships and Related Transactions—Duncan Leases—Duncan
Aircraft Usage Arrangement” for more information.

Employment Agreements. Messrs. Duncan and Pounds currently do not have employment agreements with
GCI Holdings or our company. We anticipate entering into agreements with these executives in 2019.

Policy on Restatements

In those instances where we grant equity-based incentive compensation, we expect to include in the related
agreement with the executive a right, in favor of our company, to require the executive to repay or return to the
company any cash, stock or other incentive compensation (including proceeds from the disposition of shares

28 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

EXECUTIVE COMPENSATION

received upon exercise of options or stock appreciation rights). That right will arise if (1) a material restatement of
any of our financial statements is required and (2) in the reasonable judgment of our compensation committee,
(A) such restatement is due to material noncompliance with any financial reporting requirement under applicable
securities laws and (B) such noncompliance is a result of misconduct on the part of the executive. In determining
the amount of such repayment or return, our compensation committee may take into account, among other factors
it deems relevant, the extent to which the market value of the applicable series of our common stock was affected
by the errors giving rise to the restatement. The cash, stock or other compensation that we may require the
executive to repay or return must have been received by the executive during the 12-month period beginning on the
date of the first public issuance or the filing with the SEC, whichever occurs earlier, of the financial statement
requiring restatement. The compensation required to be repaid or returned will include (1) cash or company stock
received by the executive (A) upon the exercise during that 12-month period of any stock appreciation right held by
the executive or (B) upon the payment during that 12-month period of any incentive compensation, the value of
which is determined by reference to the value of company stock, and (2) any proceeds received by the executive
from the disposition during that 12-month period of company stock received by the executive upon the exercise,
vesting or payment during that 12-month period of any award of equity-based incentive compensation.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 29

SUMMARY COMPENSATION TABLE

Salary
($)

Bonus
($)

Stock
Awards
($)(1)

Option
Awards
($)

Non-Equity
Incentive Plan
Compensation
($)

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)

All Other
Compensation
($)

Total
($)

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

925,000

489,159

3,153,385

925,000
925,000

— 1,188,789
— 1,118,454

400,000
400,000
400,000

147,765
35,384(6)

1,512,014
468,134
5,280(6) 1,845,581

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

—
—

—
—
—

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

981,747
833,632

—
184,899
206,982

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

—
—

—
—
—

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

—

n/a
n/a

108,762(4)
127,840(4)
83,000(4)

18,560(4)
25,000(4)
18,279(4)

4,676,306

3,223,376
2,960,086

2,078,339
1,113,417
2,476,122

Name and
Principal Position
(as of 12/31/18)

Gregory B. Maffei(2)
President and Chief
Executive Officer

Richard N. Baer(2)

Chief Legal Officer

Mark D. Carleton(2)

Chief Financial Officer

Albert E. Rosenthaler(2)

Chief Corporate
Development Officer

Ronald A. Duncan(3)

Chief Executive Officer of
GCI Holdings; and Former
Chief Executive Officer of
Old GCI Liberty

Peter J. Pounds(5)

Chief Financial Officer of
GCI Holdings; and Former
Senior Vice President,
Chief Financial Officer
and Secretary of Old GCI
Liberty

Year

2018

2017
2016

2018

2017
2016

2018

2017
2016

2018

2017
2016

2018

2017
2016

2018
2017
2016

(1) This column reflects the grant date fair values of awards of restricted stock granted to Messrs. Duncan and Pounds during 2018,
2017 and 2016 and Messrs. Duncan’s and Pounds’ 2018 awards of multi-year restricted stock units, each of which has been
computed in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for estimated forfeitures.
For a description of the assumptions applied in these calculations, see Note 13 to our consolidated financial statements for the
year ended December 31, 2018 (which are included in our 2018 Form 10-K).

(2) Messrs. Maffei, Baer, Carleton and Rosenthaler joined our company in March 2018 and are named executive officers of our

(3)

company for the first time.
In connection with the completion of the Transactions, Mr. Duncan resigned as Chief Executive Officer of Old GCI Liberty and
assumed the role of Chief Executive Officer of GCI Holdings.

(4) The “All Other Compensation” amounts reported for Messrs. Duncan and Pounds consisted of:

Name
Ronald A. Duncan

Peter J. Pounds

Year
2018

2017
2016
2018
2017
2016

GCI 401(k)
Plan
($)(a)
18,500

18,000
18,000
18,500
18,000
18,000

Board
Fees
($)
32,500

65,000
65,000
—
—
—

Success
Sharing
($)(b)
—

—
—
—
—
279

Life
Insurance
Premiums
($)
762

—
—
60
—
—

Use of
Company
Retreat
Facilities
($)(c)
57,000

44,840
—
—
7,000
—

Total
($)
108,762

127,840
83,000
18,560
25,000
18,279

(a) Represents matching contributions by Old GCI Liberty under the GCI 401(k) Plan, which were made to each of Old GCI
Liberty’s full-time employees with over one year of service. During 2018, 2017 and 2016, the match was based upon the
lesser of $18,500, $18,000 and $18,000, respectively, or 10% of the employee’s salary and the total of the employee’s pre-tax
and post-tax contributions to the plan.

(b) See “—Compensation Discussion and Analysis—Old GCI Liberty Executives’ Compensation—Messrs. Duncan and Pounds—

Elements of 2018 Executive Compensation—Perquisites.”

(5)

(c) The allocated cost of using Old GCI Liberty’s remote fishing retreat for personal guests or family members.
In connection with the completion of the Transactions, Mr. Pounds resigned as Senior Vice President, Chief Financial Officer and
Secretary of Old GCI Liberty and assumed the role of Chief Financial Officer GCI Holdings.

(6) Represents compensation paid pursuant to Old GCI Liberty’s 2017 and 2016 annual incentive compensation programs in excess of

Mr. Pounds’ target payment under the programs.

30 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

EXECUTIVE COMPENSATION

Pay Ratio Disclosure

We are providing the following information about the relationship of the median annual total compensation of our
employees and our chief executive officer’s total compensation for 2018 pursuant to the SEC’s pay ratio disclosure
rules set forth in Item 402(u) of Regulation S-K. We believe our pay ratio is a reasonable estimate calculated in a
manner consistent with the SEC’s pay ratio disclosure rules. However, because these rules provide flexibility in
determining the methodology, assumptions and estimates used to determine pay ratios and the fact that workforce
composition issues differ significantly between companies, our pay ratio may not be comparable to the pay ratios
reported by other companies.

On March 9, 2018, the Transactions were completed, which significantly changed how we compensate our
executive officers, including our chief executive officer, and our employee population, with the addition of new
employees from Qurate Retail and Evite, Inc. (Evite). To identify our new median employee, we first determined our
employee population as of December 31, 2018 (the determination date), which consisted of employees located in
the U.S. representing all full-time, part-time, seasonal and temporary employees employed by our company and our
consolidated subsidiaries, GCI Holdings and Evite, on that date. Using information from our payroll records and
Form W-2s, we then measured each employee’s gross wages for calendar year 2018, consisting of base salary,
commissions, actual bonus payments, long-term incentive cash payments, if any, realized equity award value and
taxable fringe benefits. We did not annualize the compensation of employees who were new hires or took a leave of
absence in 2018. Also, we did not annualize the compensation of our temporary or seasonal employees. In
addition, we did not make any cost-of-living adjustments to the gross wages information.

Once we identified our new median employee, we then determined that employee’s total compensation, including
any perquisites and other benefits, in the same manner that we determined the total compensation of our named
executive officers for purposes of the Summary Compensation Table above. We then compared the new median
employee’s total compensation against the total compensation of Mr. Maffei, who was our chief executive officer on
the determination date. Because Mr. Maffei did not receive any compensation from our company during 2018, we
did not annualize his compensation. The ratio of our chief executive officer’s total annual compensation to that of
the new median employee was as follows:

Chief Executive Officer Total Annual Compensation

Median Employee Total Annual Compensation

Ratio of Chief Executive Officer to Median Employee Total Annual Compensation

$

0

$70,926

0:1

EXECUTIVE COMPENSATION ARRANGEMENTS

Gregory B. Maffei

In connection with the completion of the Transaction, Mr. Maffei’s option awards to purchase shares of LVNT stock,
including his December 2014 grant of term options to purchase LVNTB shares from Qurate Retail, and his
unvested award of restricted LVNTB shares were adjusted pursuant to the anti-dilution provisions of the various
incentive plans under which these awards were granted, such that his options to purchase LVNT stock were
exchanged for options to purchase an equivalent number of shares of the corresponding series of our common
stock and his award of restricted LVNTB shares was exchanged for an award of restricted GLIBB shares
(collectively, the Legacy Maffei Awards).

Upon a change in control (as defined in Mr. Maffei’s Employment Agreement with Qurate Retail) prior to Mr. Maffei’s
termination or in the event of Mr. Maffei’s termination for death or disability, all of his unvested Legacy Maffei
Awards will become vested and exercisable, as applicable. If Mr. Maffei is terminated for cause, all of his unvested
Legacy Maffei Awards will terminate immediately. If Mr. Maffei is terminated by our company without cause or if he
terminates his employment for good reason, then each unvested tranche of each type of Legacy Maffei Awards will
vest pro rata based on the number of days elapsed in the vesting period for such tranche since the grant date plus
548 calendar days; however, in the event (i) all members of the Malone Group (as defined in Mr. Maffei’s
Employment Agreement with Qurate Retail) cease to beneficially own securities of our company representing at
least 20% of our company’s voting power, (ii) within 90 to 210 days of clause (i) Mr. Maffei’s employment is
terminated by our company without cause or by Mr. Maffei for good reason and (iii) at the time of clause
(i) Mr. Maffei does not beneficially own securities of our company representing at least 20% of our company’s
voting power, then all unvested Legacy Maffei Awards will vest in full as of the date of Mr. Maffei’s termination. If
Mr. Maffei terminates his employment without good reason, then a portion of each unvested tranche of each type of

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 31

Legacy Maffei Awards will vest pro rata based on the number of days elapsed in the vesting period for such tranche
since the grant date. In the event of a change in control prior to Mr. Maffei’s termination, all of the Legacy Maffei
Awards options will remain exercisable until the end of the term. If Mr. Maffei is terminated for cause prior to
December 31, 2019 (without a prior change in control occurring), then all vested Legacy Maffei Awards options will
expire on the 90th day following such termination. In all other events of termination or if Mr. Maffei has not been
terminated prior to December 31, 2019, all vested Legacy Maffei Awards options will expire at the end of the term.

EQUITY INCENTIVE PLANS

2018 Incentive Plan

The 2018 incentive plan is administered by the compensation committee of our board of directors, other than
awards granted to nonemployee directors which may be administered by our full board of directors or the
compensation committee. The 2018 incentive plan is designed to provide additional remuneration to officers,
employees, nonemployee directors and independent contractors for service to our company and to encourage
those persons’ investment in our company. Non-qualified stock options, SARs, restricted shares, restricted
stock units, cash awards, performance awards or any combination of the foregoing may be granted under the 2018
incentive plan (collectively, incentive plan awards).

As of December 31, 2018, (i) the maximum number of shares of our common stock with respect to which incentive
plan awards may be issued under the 2018 incentive plan is 8 million, subject to anti-dilution and other adjustment
provisions of the 2018 incentive plan, and (ii) with limited exceptions, no person may be granted in any calendar
year incentive plan awards covering more than 1.5 million shares of our common stock under the 2018 incentive
plan (subject to anti-dilution and other adjustment provisions of the 2018 incentive plan) nor may any person
receive under the 2018 incentive plan payment for cash incentive plan awards during any calendar year in excess of
$10 million, and no nonemployee director may be granted during any calendar year incentive plan awards having a
value (as determined on the grant date of such award) in excess of $3 million. Shares of our common stock
issuable pursuant to incentive plan awards made under the existing incentive plans are made available from either
authorized but unissued shares or shares that have been issued but reacquired by our company. The 2018
incentive plan has a five year term.

GCI Liberty Transitional Stock Adjustment Plan

In connection with the Transactions, new equity incentive awards with respect to our common stock (new GCI
Liberty awards) were issued in connection with adjustments made to outstanding equity incentive awards with
respect to shares of Qurate Retail’s Liberty Ventures common stock which had been granted to various directors,
officers and employees and consultants of Qurate Retail and certain of its subsidiaries pursuant to the various
stock incentive plans administered by the Qurate Retail board of directors or the compensation committee thereof.
These new GCI Liberty awards were issued pursuant to the GCI Liberty, Inc. Transitional Stock Adjustment Plan
(the transitional plan), which governs the terms and conditions of the new GCI Liberty awards but cannot be used
to make any additional grants following the Transactions.

Amended and Restated 1986 Stock Option Plan of General Communication, Inc.

The Amended and Restated 1986 Stock Option Plan of General Communication, Inc. (the Old GCI Stock Option
Plan) was initially adopted in 1986 and was administered by the Legacy CC. Under the Old GCI Stock Option Plan,
Old GCI Liberty was authorized to grant restricted stock awards with respect to Old GCI Liberty’s Class A common
stock and Class A-1 common stock (collectively, GNCMA) and options to purchase shares of GNCMA to selected
officers, directors and other employees of, and consultants or advisors to, Old GCI Liberty and its subsidiaries. Old
GCI Liberty did not issue any stock options after 2010. The selection of grantees for awards under the plan was
made by the Legacy CC.

The number of shares of GNCMA allocated to the Old GCI Stock Option Plan was 15.7 million shares. The number
of shares for which options or awards could be granted was subject to adjustment upon the occurrence of stock
dividends, stock splits, mergers, consolidations and certain other changes in corporate structure or capitalization. In
connection with the Transactions, restricted stock awards with respect to our common stock were issued in
connection with adjustments made to the outstanding restricted stock awards with respect to shares of GNCMA
which had been granted to various directors, officers and employees and consultants of Old GCI Liberty and
certain of its subsidiaries pursuant to the anti-dilution adjustment provisions of the Old GCI Stock Option Plan.

32 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

Upon the adoption of the 2018 incentive plan, no additional grants were permitted under the Old GCI Stock Option
Plan.

EXECUTIVE COMPENSATION

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 33

GRANTS OF PLAN-BASED AWARDS

The following table contains information regarding plan-based incentive awards granted during the year ended
December 31, 2018 to the named executive officers. Only Messrs. Duncan and Pounds received grants during
2018.

Estimated Future Payouts
under Non-Equity
Incentive Plan Awards

Estimated Future Payouts
under Equity
Incentive Plan Awards

Grant
Date

Threshold
($)

Target
($)

Maximum
($)

Threshold
(#)

Target
(#)

Maximum
(#)

—

—

—

—

3/1/2018

3/1/2018

12/10/2018

3/1/2018

12/10/2018

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Name

Gregory B. Maffei

Richard N. Baer

Mark D. Carleton

Albert E. Rosenthaler

Ronald A. Duncan

GNCMA

GNCMA

GLIBA

Peter J. Pounds

GNCMA

GLIBA

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)

Grant
Date Fair
Value of
Stock and
Option
Awards
($)

—

—

—

—

—

—

—

—

7,500(1)

7,919(2)

288,225

304,327

56,134(3)

2,560,833

20,363(2)

15,990(4)

782,550

729,464

(1) Represents restricted shares that were granted to Mr. Duncan for his service on the Old GCI Liberty board of directors. These

restricted shares vested on March 1, 2018.

(2) Represents the portions of Messrs. Duncan and Pounds’ 2017 bonuses that were paid in restricted shares of GNCMA. These

restricted shares were adjusted in connection with the Transactions pursuant to the anti-dilution provisions of the Old GCI Stock
Option Plan under which they were granted. These restricted shares will vest on November 30, 2019.

(3) Vests in full on January 5, 2023.

(4) Vests in full on November 15, 2022.

34 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table contains information regarding unexercised options and unvested awards of restricted stock and
RSUs which were outstanding as of December 31, 2018 and held by the named executive officers.

EXECUTIVE COMPENSATION

Option awards(1)

Stock awards(1)

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)

Number
of Shares
or Units
of Stock
That Have
Not Vested
(#)

Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)

Option
exercise
price
($)

Option
expiration
date

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)

Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)

Number of
securities
underlying
unexercised
options (#)
Exercisable

Number of
securities
underlying
unexercised
options (#)
Unexercisable

765,441
108,557
318,780
64,732
119,545
258,724
143,044

—

—
2,659

—

—

9,985
12,232
5,002
—
3,199

—

—

22,669
12,232
5,002
—
4,208

—

—

—
—

318,781(2)

—
—
—
—

—

47,184(3)

—

—

—

—
—
—

33,290(3)

—

—

—

—
—
—

33,290(3)

—

—

—

—
—
—
—
—
—
—

—

—
—

—

—

—
—
—
—
—

—

—

—
—
—
—
—

—

—

55.96
55.96
56.38
56.38
56.38
56.38
54.01

12/17/2019
12/26/2024
12/24/2021
03/31/2022
03/29/2023
05/11/2024
03/05/2025

—
—
—
—
—
—

—
—
—
—
—
—

—

— 82,842(2) 3,533,211

—
—

—

—
—

—

— 12,041(3)

495,608

—
—
—
—
—

—

—
—
—
—
—

—

7,422(3)

305,490

—
—
—
—
—

—

—
—
—
—
—

—

55.96
55.96

12/31/2023
12/26/2024

—

—

—

55.96
55.96
55.96
55.96
55.96

03/19/2020
03/04/2022
03/04/2022
03/04/2023
12/26/2024

—

—

—

—

55.96
55.96
55.96
55.96
55.96

03/19/2020
03/04/2022
03/04/2022
03/04/2023
12/26/2024

—

—

—

—

—
—
—
—
—
—

—

—
—

—
—
—
—
—
—

—

—
—

4,171(4)

171,678

—

—
—
—
—
—

—

—
—
—
—
—

3,114(4)

128,172

—

—
—
—
—
—

—

—
—
—
—
—

3,114(4)

128,172

7,422(3)

305,490

—

—

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 35

Name

Gregory B. Maffei
Option Awards

GLIBA
GLIBA
GLIBB
GLIBB
GLIBB
GLIBB
GLIBB
Stock Award
GLIBB

Richard N. Baer
Option Awards

GLIBA
GLIBA
RSU Award
GLIBA
Stock Award
GLIBA

Mark D. Carleton
Option Awards

GLIBA
GLIBA
GLIBA
GLIBA
GLIBA
RSU Award
GLIBA
Stock Award
GLIBA

Albert E. Rosenthaler
Option Awards

GLIBA
GLIBA
GLIBA
GLIBA
GLIBA
RSU Award
GLIBA
Stock Award
GLIBA

Option awards(1)

Stock awards(1)

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)

Number
of Shares
or Units
of Stock
That Have
Not Vested
(#)

Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)

Option
exercise
price
($)

Option
expiration
date

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)

Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)

Number of
securities
underlying
unexercised
options (#)
Exercisable

Number of
securities
underlying
unexercised
options (#)
Unexercisable

—

—
—

—

—
—
—
—

—

—
—

—

—
—
—
—

—

—
—

—

—
—
—
—

—

—
—

—

—
—
—
—

—

—
—

—

—
—
—
—

56,134(5) 2,310,475

4,988(6)
1,583(6)

205,306
38,356

15,990(7)

658,148

47,250(8) 1,944,810
12,828(6)
528,000
15,000(8)
363,450
4,072(6)
98,665

—

—
—

—

—
—
—
—

—

—
—

—

—
—
—
—

Name

Ronald A. Duncan
RSU Award

GLIBA

Stock Awards

GLIBA
GLIBP

Peter J. Pounds
RSU Award

GLIBA

Stock Awards

GLIBA
GLIBA
GLIBP
GLIBP

(1)

In connection with the completion of the Transaction, Messrs. Maffei, Baer, Carleton and Rosenthaler’s respective option awards to
purchase shares of LVNT stock (each, a LVNT Option), unvested performance RSUs (each, a LVNT RSU) and restricted stock
awards (each, a LVNT stock award) with respect to shares of LVNT stock were adjusted pursuant to the anti-dilution provisions of
the various incentive plans under which the LVNT Options, LVNT RSUs and LVNT stock awards were granted, such that each
LVNT Option was exchanged for an option to purchase an equivalent number of shares of the corresponding series of our
common stock and each LVNT RSU and LVNT stock award was exchanged for an RSU and a restricted stock award, respectively,
with respect to the corresponding series of our common stock.

In addition, in connection with the completion of the Transactions, all restricted stock awards with respect to GNCMA shares held
by Messrs. Duncan and Pounds were adjusted pursuant to the anti-dilution provisions of the Old GCI Stock Option Plan such that
each restricted stock award was converted into (i) a fraction of a share of GLIBA equal to 0.63 and (ii) a fraction of a GLIBP share
equal to 0.20.

(2) Vests on December 24, 2019.

(3) Vests 50% on December 31, 2019 and 50% on December 31, 2020.

(4) Represents the target number of performance-based RSUs that each of Messrs. Baer, Carleton and Rosenthaler could earn

(collectively, the 2018 Chief RSUs) based on 2018 performance.

(5) Vests in full on January 5, 2023.

(6) Vests in full on November 30, 2019.

(7) Vests in full on November 15, 2022.

(8) Vests in full on November 30, 2021.

36 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

OPTION EXERCISES AND STOCK VESTED

The following table sets forth information concerning the vesting of restricted stock or RSUs held by our named
executive officers, in each case, during the year ended December 31, 2018. Our named executive officers did not
exercise any options during 2018.

EXECUTIVE COMPENSATION

Name
Gregory B. Maffei

GLIBA
GLIBB
GLIBP

Richard N. Baer

GLIBA
GLIBB
GLIBP

Mark D. Carleton

GLIBA
GLIBB
GLIBP

Albert E. Rosenthaler

GLIBA
GLIBB
GLIBP

Ronald A. Duncan

GNCMA
GLIBA
GLIBB
GLIBP

Peter J. Pounds

GNCMA
GLIBA
GLIBB
GLIBP

Option Awards

Stock Awards

Number of
shares
acquired on
exercise
(#)(1)

Value
realized on
exercise
($)

Number of
shares
acquired on
vesting
(#)(1)

Value
realized on
vesting
($)

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—
—

—
—
—
—

—
—
—

—
—
—

—
—
—

—
—
—

—
—
—
—

—
—
—
—

—
82,842
—

—
—
—

—
—
—

—
—
—

7,500
61,942
—
19,664

3,333
29,862
—
9,480

—
—(2)
—

—
—
—

—
—
—

—
—
—

288,225
2,973,216
—
473,902

137,686
1,433,376
—
228,468

(1)

Includes shares withheld in payment of withholding taxes at election of holder.

(2) On December 26, 2017 (the Grant Date), to effect Qurate Retail’s 2017 option modification program, Qurate Retail’s compensation

committee approved the acceleration of each unvested in-the-money option to acquire shares of its Series A Qurate Retail
common stock (QRTEA), LVNTB and Series A Liberty Ventures common stock (LVNTA) held by certain of its and its subsidiaries’
officers (collectively, the Eligible Optionholders), including Messrs. Maffei, Carleton and Rosenthaler, who are named executive
officers of our company and were named executive officers of Qurate Retail on the Grant Date. Following this acceleration, also on
the Grant Date, each Eligible Optionholder exercised, on a net settled basis, substantially all of his or her outstanding in-the-money
vested and unvested options to acquire QRTEA, QRTEB, LVNTA or LVNTB shares (the Eligible Options) and with respect to each
unvested Eligible Option, each Eligible Optionholder acquired LVNTA shares (or, in Mr. Maffei’s case, LVNTB shares) which have a
vesting schedule identical to that of the unvested Eligible Option (the New Shares). In connection with the Transactions, new
equity incentive awards with respect to our common stock were issued in connection with adjustments made to outstanding equity
incentive awards with respect to shares of Qurate Retail’s Liberty Ventures common stock, including the New Shares.

The Value column below represents the value related to awards with respect to GLIBB held by Mr. Maffei that were subject to
continued vesting requirements as of the Grant Date, but which vested during the twelve months ended December 31, 2018. Such
value was realized by Mr. Maffei in 2017 and therefore included in Qurate Retail’s proxy statement relating to its 2018 annual
meeting of stockholders under “—Option Exercises and Stock Vested.”

Name

Gregory B. Maffei

Number of shares acquired
upon lapse of restriction
(#)

82,842

Value
($)

4,670,632

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 37

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

The following table sets forth the potential payments to our named executive officers if their employment had
terminated or a change in control had occurred, in each case, as of December 31, 2018, which was the last
business day of our last completed fiscal year. In the event of such a termination or change in control, the actual
amounts may be different due to various factors. In addition, we may enter into new arrangements or modify these
arrangements from time to time.

The amounts provided in the tables are based on the closing market prices on December 31, 2018 for our GLIBA
common stock, GLIBB common stock and GLIBP preferred stock, which were $41.16, $42.65 and $24.23,
respectively. Because the exercise price of each named executive officer’s options was more than the closing
market price of GLIBA common stock and GLIBB common stock, as applicable, on December 31, 2018, these
options have been excluded from the table below. The value of the restricted stock and RSUs shown in the table is
based on the applicable closing market price and the number of shares and RSUs unvested.

The circumstances giving rise to these potential payments and a brief summary of the provisions governing their
payout are described below and in the footnotes to the table (other than those described under “—Executive
Compensation Arrangements,” which are incorporated by reference herein):

Voluntary Termination

Messrs. Maffei, Baer, Carleton and Rosenthaler hold equity awards that were issued under the transitional plan,
and Messrs. Duncan and Pounds hold equity awards that were issued under the Old GCI Stock Option Plan and
the 2018 incentive plan. Under these plans and the related award agreements, except with respect to the Legacy
Maffei Awards, in the event of a voluntary termination of his employment with our company, each named executive
officer would only have a right to the equity grants that vested prior to his termination date. Mr. Maffei has certain
acceleration rights upon a voluntary termination without good reason pursuant to the award agreement relating to
the unvested Legacy Maffei Awards. Mr. Baer would have forfeited the equity awards that were issued under the
transitional plan if he had voluntarily terminated his employment as of December 31, 2018. Messrs. Carleton,
Rosenthaler, Duncan and Pounds are not entitled to any severance payments or other benefits upon a voluntary
termination of his employment. The foregoing discussion assumes that the named executive officer voluntarily
terminated his respective employment without good reason. See “—Termination Without Cause or for Good
Reason” below for a discussion of potential payments and benefits upon a named executive officer’s voluntary
termination of his employment for good reason.

Termination for Cause

All outstanding equity grants constituting options, whether unvested or vested but not yet exercised, and all equity
grants constituting unvested restricted shares and RSUs under the existing incentive plans would be forfeited by
any named executive officer (other than Mr. Maffei in the case of equity grants constituting vested options or similar
rights) who is terminated for “cause.” The existing incentive plans, which govern the awards unless there is a
different definition in the applicable award agreement, define “cause” as insubordination, dishonesty, incompetence,
moral turpitude, other misconduct of any kind and the refusal to perform his duties and responsibilities for any
reason other than illness or incapacity; provided that, if such termination is within 12 months after a change in
control (as described below), “cause” means a felony conviction for fraud, misappropriation or embezzlement.

Termination Without Cause or for Good Reason

As of December 31, 2018, Mr. Maffei’s unvested equity awards consisted of certain Legacy Maffei Awards, which
are subject to partial acceleration upon a termination of his employment by our company without cause or by
Mr. Maffei for good reason. See “—Executive Compensation Arrangements—Gregory B. Maffei” above.

As of December 31, 2018, Mr. Baer’s unvested equity awards consisted of options granted to Mr. Baer by Qurate
Retail in 2016 for LVNTA shares (as modified or replaced pursuant to Qurate Retail’s 2017 option modification
program), which were converted into options to purchase GLIBA shares and a restricted stock award with respect
to GLIBA shares (the Legacy Baer Awards), and his performance-based LVNT RSUs granted by Qurate Retail on
March 5, 2018, which were converted into his 2018 Chief RSUs. Subject to his execution of a severance
agreement and release in favor of our company, Mr. Baer would have vested in 75% of his Legacy Baer Awards
(less any awards that have previously vested) if his employment had been terminated by our company without
cause or by Mr. Baer for good reason as of December 31, 2018, and his 2018 Chief RSUs would have stayed

38 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

EXECUTIVE COMPENSATION

outstanding until the date the compensation committee acted to determine the extent to which the performance
criteria were met and the number of Mr. Baer’s 2018 Chief RSUs that would have been earned and vested had he
remained employed through December 31, 2018.

As of December 31, 2018, Mr. Carleton’s and Mr. Rosenthaler’s unvested equity awards consisted of an LVNT
Option granted on March 4, 2015 by Qurate Retail (as modified or replaced pursuant to Qurate Retail’s 2017 option
modification program), which was converted into options to purchase GLIBA shares and a restricted stock award
with respect to GLIBA shares (respectively, the Legacy Carleton Awards and the Legacy Rosenthaler Awards)
and their 2018 Chief RSUs. The Legacy Carleton Awards and the Legacy Rosenthaler Awards provide for vesting
upon a termination of employment by our company without cause of those options that would have vested during
the 12-month period following the termination date if such person had remained an employee, plus a pro rata
portion of the remaining unvested options based on the portion of the vesting period elapsed through the
termination date. Mr. Carleton’s and Mr. Rosethaler’s 2018 Chief RSUs would have stayed outstanding until the
date the compensation committee acted to determine the extent to which the performance criteria were met and the
number of 2018 Chief RSUs that each of them would have earned and vested had each remained employed
through December 31, 2018.

Messrs. Maffei, Baer, Carleton and Rosenthaler are not entitled to any severance pay or other benefits upon a
termination without cause.

As of December 31, 2018, Mr. Duncan’s and Mr. Pounds’ unvested equity awards consisted of RSUs and restricted
stock awards with respect to GLIBA and GLIBP shares. Upon a termination by our company without cause or by
each of them for good reason, the RSUs are subject to partial acceleration and the restricted stock awards would
be forfeited.

Death

In the event of death of any of the named executive officers, the existing incentive plans and applicable award
agreements provide for vesting in full of any outstanding options and the lapse of restrictions on any restricted
shares and RSU awards. None of our named executive officers is entitled to any severance pay or other benefits if
he dies while employed by our company.

Disability

If the employment of any of the named executive officers is terminated due to disability, which is defined in the
existing incentive plans or applicable award agreements, such plans or agreements provide for vesting in full of any
outstanding options and the lapse of restrictions on any restricted shares and RSU awards. None of our named
executive officers is entitled to any severance pay or other benefits upon a termination of his employment due to
disability.

Change in Control

In case of a change in control, the incentive plans provide for vesting in full of any outstanding options and the
lapse of restrictions on any restricted share and RSU awards held by the named executive officers. A change in
control is generally defined as:

• The acquisition by a non-exempt person (as defined in the incentive plans) of beneficial ownership of at least
20% of the combined voting power of the then outstanding shares of our company ordinarily having the right
to vote in the election of directors, other than pursuant to a transaction approved by our board of directors.

• The individuals constituting our board of directors over any two consecutive years cease to constitute at least a
majority of the board, subject to certain exceptions that permit the board to approve new members by approval
of at least two-thirds of the remaining directors.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 39

• Any merger, consolidation or binding share exchange that causes the persons who were common stockholders
of our company immediately prior thereto to lose their proportionate interest in the common stock or voting
power of the successor or to have less than a majority of the combined voting power of the then outstanding
shares ordinarily having the right to vote in the election of directors, the sale of substantially all of the assets of
the company or the dissolution of the company.

In the case of a change in control described in the last bullet point, our compensation committee may determine not
to accelerate the existing equity awards of the named executive officers if equivalent awards will be substituted for
the existing awards, except that Mr. Maffei’s Legacy Maffei Awards may also be subject to acceleration upon a
change in control, including of the type described in the last bullet point. See “—Executive Compensation
Arrangements—Gregory B. Maffei” above. For purposes of the tabular presentation below, we have assumed that
our named executive officers’ existing unvested equity awards would vest in full in the case of a change in control
described in the last bullet.

Benefits Payable Upon Termination or Change-in-Control

Name

Gregory B. Maffei

Restricted shares/RSUs

Total

Richard N. Baer

Restricted shares/RSUs

Total

Mark D. Carleton

Restricted shares/RSUs

Total

Albert E. Rosenthaler

Restricted shares/RSUs

Total

Ronald A. Duncan

Restricted shares/RSUs

Total

Peter J. Pounds

Restricted shares/RSUs

Total

Voluntary
Termination
Without Good
Reason
($)

2,840,490(1)

2,840,490

—(2)

—

—(2)

—

—(2)

—

—(2)

—

—(2)

—

Termination
for Cause
($)

Termination
Without
Cause or for
Good Reason
($)

Death
($)

Disability
($)

After a Change
in Control
($)

—(2)

—

—(2)

—

—(2)

—

—(2)

—

—(2)

—

—(2)

—

3,533,211(3)

3,533,211(6)

3,533,211(6)

3,533,211(6)

3,533,211

3,533,211

3,533,211

3,533,211

543,353(4)

667,286(6)

667,286(6)

543,353

667,286

667,286

381,183(4)

433,662(6)

433,662(6)

381,183

433,662

433,662

381,183(4)

433,662(6)

433,662(6)

381,183

433,662

433,662

667,286(6)

667,286

433,662(6)

433,662

433,662(6)

433,662

1,386,269(5)

2,554,138(6)

2,554,138(6)

2,554,138(6)

1,386,269

2,554,138

2,554,138

2,554,138

394,889(5)

3,593,073(6)

3,593,073(6)

3,593,073(6)

394,889

3,593,073

3,593,073

3,593,073

(1)

(2)

(3)

If Mr. Maffei had voluntarily terminated his employment without good reason as of December 31, 2018, then a portion of each
unvested tranche of his Legacy Maffei Awards would have vested pro rata based on the number of days elapsed in the vesting
period for such tranche since the grant date. Mr. Maffei’s stock options have been excluded from the table because the exercise
price of each of these options was more than the closing market price of GLIBA and GLIBB shares on December 31, 2018. See
“—Executive Compensation Arrangements—Gregory B. Maffei” and the “Outstanding Equity Awards at Fiscal Year-End” table
above.

If Mr. Maffei’s employment had been terminated for cause as of December 31, 2018, he would have forfeited his unvested Legacy
Maffei Awards. If Messrs. Baer, Carleton or Rosenthaler’s employment had been terminated without good reason or for cause as of
December 31, 2018, he would have forfeited the Legacy Baer Awards, the Legacy Carleton Awards, the Legacy Rosenthaler
Awards, as the case may be, and his 2018 Chief RSUs. Each of Messrs. Duncan and Pounds would have forfeited his RSUs and
his restricted shares if his employment had been terminated without good reason or for cause as of December 31, 2018. For more
information, see the “Outstanding Equity Awards at Fiscal Year-End” table above.

If Mr. Maffei’s employment had been terminated by our company without cause or by Mr. Maffei for good reason as of
December 31, 2018, then a portion of each unvested tranche of his Legacy Maffei Awards would have forward vested. Mr. Maffei’s
stock options have been excluded from the table because the exercise price of each of these options was more than the closing
market price of GLIBA and GLIBB shares on December 31, 2018. See “—Executive Compensation Arrangements—Gregory B.
Maffei” and the “Outstanding Equity Awards at Fiscal Year-End” table above.

40 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

EXECUTIVE COMPENSATION

(4) Based on (i) the number of unvested restricted shares included in the Legacy Baer Awards, Legacy Carleton Awards and Legacy
Rosenthaler Awards that would have vested if the executive had been terminated without cause (or if Mr. Baer had voluntarily
terminated his employment for good reason) as of December 31, 2018 and (ii) 2018 Chief RSUs held by Messrs. Baer, Carleton
and Rosenthaler as of December 31, 2018. Messrs. Baer, Carleton and Rosenthaler’s options have been excluded from the table
because the exercise price of each of these options was more than the closing market price of GLIBA shares on December 31,
2018. For more information, see the “Outstanding Equity Awards at Fiscal Year-End” table above.

(5)

If Mr. Duncan’s or Mr. Pounds’ employment had been terminated by our company without cause or by such person for good reason
as of December 31, 2018, then such person’s unvested RSUs would have been subject to partial acceleration. See the
“Outstanding Equity Awards at Fiscal Year-End” table above.

(6) Based on (i) the number of Legacy Maffei Awards held by Mr. Maffei, (ii) the number of unvested Legacy Baer Awards, Legacy

Carleton Awards, Legacy Rosenthaler Awards and 2018 Chief RSUs held by Messrs. Baer, Carleton and Rosenthaler and (iii) the
number of unvested RSUs and restricted shares held by Messrs. Duncan and Pounds, in each case, as of December 31, 2018.
Messrs. Maffei, Baer, Carleton, Rosenthaler’s options have been excluded from the table because the exercise price of each of
these options was more than the closing market price of GLIBA and GLIBB shares, as the case may be, on December 31, 2018.
See “—Executive Compensation Arrangements—Gregory B. Maffei” and the “Outstanding Equity Awards at Fiscal Year-End” table
above.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 41

DIRECTOR COMPENSATION

NONEMPLOYEE DIRECTOR COMPENSATION AFTER MARCH 9, 2018

Director Fees

Each of our directors who is not an employee of our company is paid an annual fee for 2019 of $156,000 (which, in
2018, was $153,000) (which we refer to as the director fee), of which $78,000 ($76,500 in 2018) is payable in cash
and the balance is payable in RSUs or options to purchase shares of GLIBA. For service on our board in 2019 and
2018, each director was permitted to elect to receive $78,000 and $76,500, respectively, of his or her director fee in
RSUs or options to purchase GLIBA shares. The awards issued to our directors with respect to their service on our
board in 2019 were issued in December 2018. See “—Director RSU Grants” and “—Director Option Grants” below
for information on the incentive awards granted in 2018 to the nonemployee directors.

Fees for service on our audit committee, compensation committee and nominating and corporate governance
committee are the same for 2018 and 2019, with each member thereof receiving an additional annual fee of
$15,000, $10,000 and $10,000, respectively, for his or her participation on each such committee, except that the
chairman of each such committee instead receives an additional annual fee of $25,000, $15,000 and $15,000,
respectively, for his or her participation on that committee. The cash portion of the director fees and the fees for
participation on committees are payable quarterly in arrears.

Equity Incentive Plans

Awards granted to our nonemployee directors under the 2018 incentive plan are administered by our board of
directors or our compensation committee. Our board of directors has full power and authority to grant nonemployee
directors the awards described below and to determine the terms and conditions under which any awards are
made. The 2018 incentive plan is designed to provide our nonemployee directors with additional remuneration for
services rendered, to encourage their investment in our common stock and to aid in attracting persons of
exceptional ability to become nonemployee directors of our company. Our board of directors may grant
non-qualified stock options, SARs, restricted shares, restricted stock units and cash awards or any combination of
the foregoing under the 2018 incentive plan.

The maximum number of shares of our common stock with respect to which awards may be issued under the 2018
incentive plan is 8 million, subject to anti-dilution and other adjustment provisions of the respective plans. Under the
2018 incentive plan, no nonemployee director may be granted during any calendar year awards having a value
determined on the date of grant in excess of $3 million. Shares of our common stock issuable pursuant to awards
made under the 2018 incentive plan are made available from either authorized but unissued shares or shares that
have been issued but reacquired by our company.

Director RSU Grants

Pursuant to our director compensation policy described above and the 2018 incentive plan, we granted the
following RSU awards in May 2018 and December 2018:

Name

Gregg L. Engles

Richard R. Green

Sue Ann Hamilton

May 2018
GLIBA RSUs

December 2018
GLIBA RSUs

1,555

1,555

1,555

1,638

1,638

1,638

The RSUs granted in May 2018 vested in full on December 12, 2018. The RSUs granted in December 2018 will
vest on December 10, 2019, or on such earlier date that the grantee ceases to be a director because of death or
disability and, unless our board of directors determines otherwise, will be forfeited if the grantee resigns or is
removed from the board before the vesting date.

42 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

Director Option Grants

Pursuant to our director compensation policy described above and the 2018 incentive plan, we granted the
following stock option award in May 2018 with respect to service on our board in 2018, which became exercisable
on December 12, 2018:

DIRECTOR COMPENSATION

Name

Donne F. Fisher

# of GLIBA
Options

4,848

Exercise
Price
($)

42.99

In addition, we also granted the following stock option award in December 2018 with respect to service on our
board in 2019:

Name

Donne F. Fisher

# of GLIBA
Options

4,952

Exercise
Price
($)

45.62

The options granted in December 2018 will become exercisable on December 10, 2019, or on such earlier date that
the grantee ceases to be a director because of death or disability, and, unless our board of directors determines
otherwise, will be terminated without becoming exercisable if the grantee resigns or is removed from the board
before the vesting date. Once vested, the options will remain exercisable until the seventh anniversary of the grant
date or, if earlier, until the first business day following the first anniversary of the date the grantee ceases to be a
director.

NONEMPLOYEE DIRECTOR COMPENSATION BEFORE MARCH 9, 2018

Each of Old GCI Liberty’s directors received director fees for his or her service on Old GCI Liberty’s board of directors
prior to the completion of the Transactions. These directors fees consisted of $32,500 (or in Mr. Mooney’s case,
$45,000) paid in cash and 7,500 shares of GNCMA that were granted on March 1, 2018. The directors’ stock awards
were fully vested at grant.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 43

DIRECTOR COMPENSATION TABLE

Name(1)

Current Directors(4)

John C. Malone

Gregg L. Engles

Donne F. Fisher

Richard R. Green

Sue Ann Hamilton

Former Directors(4)

Stephen M. Brett

Bridget L. Baker

Jerry A. Edgerton

Scott M. Fisher

William P. Glasgow

Mark W. Kroloff

Stephen R. Mooney

James M. Schneider

Eric L. Zinterhofer

Fees
Earned
or Paid in
Cash
($)

—

98,568

62,262

94,818

94,818

32,500

32,500

32,500

32,500

32,500

32,500

45,000

32,500

32,500

Stock
Awards
($)(2)(3)

—

141,575

—

—

—

138,104

141,575

141,575

288,225

288,225

288,225

288,225

288,225

288,225

288,225

288,225

288,225

—

—

—

—

—

—

—

—

—

—

—

Change in
Pension
Value and
Nonqualified
Deferred

Option
Awards
($)(2)(3)

Compensation

All other

Earnings
($)

compensation

($)

Total
($)

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

240,143

200,366

236,393

236,393

320,725

320,725

320,725

320,725

320,725

320,725

333,225

320,725

320,725

(1) Gregory B. Maffei, who is a director of our company and a named executive officer, and John C. Malone, who is a director of our
company, received no compensation for serving as directors of our company during 2018. Mr. Duncan’s director compensation is
reflected in the “Summary Compensation Table” above.

(2) The aggregate grant date fair values of options to purchase GLIBA shares granted to Mr. Fisher and the GLIBA RSUs granted to
Mr. Engles, Mr. Green and Ms. Hamilton in May 2018 and December 2018 have been computed based on the closing price of
GLIBA shares on the grant dates in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for
estimated forfeitures. For a description of the assumptions applied in these calculations, see Note 13 to our consolidated financial
statements for the year ended December 31, 2018 (which are included in the 2018 Form 10-K).

Each of the former directors of Old GCI Liberty in the table above received a grant of 7,500 shares of GNCMA on March 1, 2018.
The grant date fair value of the shares granted to the former directors has been computed based on the closing price of GNCMA
shares on the grant date in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for
estimated forfeitures.

(3) As of December 31, 2018, our directors (other than Messrs. Maffei and Duncan, whose equity awards are listed in “Executive

Compensation—Outstanding Equity Awards at Fiscal Year-End” above) held the following equity awards:

Options(#)

GLIBA

RSUs(#)

GLIBA

John C.
Malone

Gregg L.
Engles

Donne F.
Fisher

Richard R.
Green

Sue Ann
Hamilton

—

—

—

9,800

—

—

1,638

—

1,638

1,638

The former directors of Old GCI Liberty did not have any outstanding equity awards as of December 31, 2018.

(4) John C. Malone, Gregory B. Maffei, Gregg L. Engles, Donne F. Fisher, Richard R. Green and Sue Ann Hamilton were appointed to
our board of directors, effective upon the resignations of Stephen M. Brett, Jerry A. Edgerton, Scott M. Fisher, William P. Glasgow,
Mark W. Kroloff, Stephen R. Mooney, James M. Schneider, Bridget L. Baker and Eric L. Zinterhofer from the Legacy Board.

44 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information as of December 31, 2018, with respect to shares of our common stock
authorized for issuance under our equity compensation plans.

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)

Weighted average
exercise price of
outstanding options,
warrants and rights

Number of securities
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column (a))

Plan Category
Equity compensation plans approved by security
holders:

GCI Liberty, Inc. 2018 Omnibus Incentive Plan

GLIBA
GLIBB
GLIBP

Equity compensation plans not approved by security
holders:

GCI Liberty, Inc. Transitional Stock Adjustment
Plan

GLIBA
GLIBB
GLIBP

Total

GLIBA

GLIBB

GLIBP

$44.32
—
—

$47.63
$56.10
—

9,800
—
—

1,639,594
1,223,606
—

1,649,394

1,223,606

—

7,691,462(1)

—(2)

7,691,462

(1) The 2018 incentive plan permits grants of, or with respect to, shares of any series of our common stock, subject to a single

aggregate limit.

(2) The GCI Liberty, Inc. Transitional Stock Adjustment Plan governs the terms and conditions of awards with respect to our common
stock that were granted in connection with adjustments made to awards granted by Qurate Retail with respect to its Liberty
Ventures common stock. As a result, no further grants are permitted under this plan.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 45

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Under our Code of Business Conduct and Ethics and Corporate Governance Guidelines, if a director or executive
officer has an actual or potential conflict of interest (which includes being a party to a proposed “related party
transaction” (as defined in Item 404 of Regulation S-K)), the director or executive officer should promptly inform the
person designated by our board to address such actual or potential conflicts. No related party transaction may be
effected by our company without the approval of the audit committee of our board or another independent body of
our board designated to address such actual or potential conflicts.

STANTON SHAREHOLDINGS, REGISTRATION RIGHTS AGREEMENT

As of December 31, 2017, John W. Stanton and Theresa E. Gillespie, husband and wife (collectively, Stantons),
were significant shareholders of Old GCI Liberty’s Class B common stock, which had previously been quoted on
the OTC Markets. As of that date, neither the Stantons nor the Stantons’ affiliates were Old GCI Liberty’s directors,
officers, nominees for election as directors, or members of the immediate family of such directors, officers, or
nominees. We are a party to a registration rights agreement (the Stanton Registration Rights Agreement) with
the Stantons pursuant to which the Stantons have two demand registrations and incidental registration rights with
respect to the Stantons’ GLIBA and GLIBP shares (and any securities issued in exchange thereof or in respect
thereof) if Rule 144 is not available for the sale of such securities by the Stantons. The basic terms of the Stanton
Registration Rights Agreement are as follows. If we propose to register any of our securities under the Securities
Act of 1933, as amended (the Securities Act), for our own account or for the account of one or more of our
shareholders, we must notify the Stantons of that intent. In addition, we must allow the Stantons an opportunity to
include the holder’s shares (Stanton Registerable Shares) in that registration.

Under the Stanton Registration Rights Agreement, the Stantons also have the right, under certain circumstances, to
require us to register all or any portion of the Stanton Registerable Shares under the Securities Act. The agreement
is subject to certain limitations and restrictions, including our right to limit the number of Stanton Registerable
Shares included in the registration. Generally, we are required to pay all registration expenses in connection with
each registration of Stanton Registerable Shares pursuant to this agreement.

The Stanton Registration Rights Agreement specifically states we are not required to effect any registration on
behalf of the Stantons regarding Stanton Registerable Shares if the request for registration covers an aggregate
number of Stanton Registerable Shares having a market value of less than $1.5 million. The agreement further
states we are not required to effect such a registration for the Stantons where we have at that point previously filed
two registration statements with the SEC, or where the registration would require us to undergo an interim audit or
prepare and file with the SEC sooner than otherwise required financial statements relating to the proposed
transaction. Finally, the agreement states we are not required to effect such a registration when in the opinion of
our legal counsel a registration is not required in order to permit resale under Rule 144 as adopted by the SEC
pursuant to the Exchange Act.

The Stanton Registration Rights Agreement provides that the first demand for registration by the Stantons must be
for no less than 15% of the total number of Stanton Registerable Shares. However, the Stantons may take the
opportunity to require us to include the Stanton Registerable Shares as incidental to a registered offering proposed
by us.

DUNCAN LEASES

Old GCI Liberty entered into a long-term capital lease agreement in 1991 with the wife of Old GCI Liberty’s Chief
Executive Officer for property occupied by it. The leased asset was capitalized in 1991 at the owner’s cost of
$900,000 and the related obligation was recorded. The lease agreement was amended in April 2008 and Old GCI
Liberty’s existing capital lease asset and liability increased by $1.3 million to record the extension of this capital
lease. The amended lease terminates on September 30, 2026. The property consists of a building presently
occupied by us. Lease payments were $27,132 per month from January 2018 until September 2018, at which point
they increased to $28,732 per month.

In January 2001, Old GCI Liberty entered into an aircraft operating lease agreement with a company owned by Old
GCI Liberty’s Chief Executive Officer (the Aircraft Lessor) pursuant to which we lease an aircraft from the Aircraft
Lessor. In 2001, Old GCI Liberty paid a deposit of $1.5 million in connection with the lease. The deposit will be
repaid to us no later than six months after the agreement terminates. Effective November 30, 2018, we entered into
an amendment to the aircraft lease, providing for a reduction in the rate from $132,000 per month to $40,000 per

46 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

month. In addition, pursuant to the amendment, the Aircraft Lessor paid us $896,258, representing a refund of the
amount by which payments made by us with respect to the period from March 2018 until December 2018 exceeded
the amount that would have been due at the reduced rate of $40,000 per month. Our audit committee approved the
entry into the lease amendment.

Duncan Aircraft Usage Arrangement

In 2019, we entered into a letter agreement with Mr. Duncan pursuant to which Mr. Duncan is entitled to 80 hours
per year of personal flight time through the first to occur of (i) the date that Mr. Duncan ceases to be employed by
us and (ii) the date that we cease to own or lease any aircraft.

SEARCHLIGHT NOTE AND DERIVATIVE FINANCIAL INSTRUMENT

Searchlight Capital L.P. (Searchlight) became a related party as of February 2, 2015 when, as part of the
transactions in which Old GCI Liberty purchased Alaska Communications Systems Group, Inc.’s interest in The
Alaska Wireless Network, LLC and certain other assets, Old GCI Liberty sold an unsecured promissory note to
Searchlight in the principal amount of $75.0 million that was scheduled to mature on February 2, 2023 and bore
interest at a rate of 7.5% per year (the Searchlight Note). The Searchlight Note had provided that we could not
prepay the Searchlight Note prior to February 2, 2019. On July 13, 2015, Old GCI Liberty amended the Searchlight
transaction documents to permit Searchlight to pledge the Searchlight Note and related stock appreciation rights,
subject to a right to redeem the Searchlight Note for 50% of its then current outstanding balance in the event a
lender attempts to enforce its rights with respect to such pledged collateral.

In conjunction with the Searchlight Note, Old GCI Liberty had entered into a stock appreciation rights agreement
pursuant to which it issued to Searchlight three million stock appreciation rights which entitled Searchlight to
receive, upon exercise, an amount payable at Old GCI Liberty’s election in either cash or shares of Old GCI
Liberty’s Class A common stock equal in value to the excess of the fair market value of such a share on the date of
exercise over the price of $13.00.

On March 9, 2018, in connection with the closing of the Transactions, we prepaid the principal amount of the
Searchlight Note, together with accrued and unpaid interest, and terminated the Searchlight Note with the consent
of Searchlight. On March 9, 2018, we also made a payment to Searchlight of approximately $80 million in
connection with the cancellation of the stock appreciation rights issued to Searchlight and terminated the
securityholders agreement with Searchlight.

Eric L. Zinterhofer is a founding partner and affiliate of Searchlight and was a director of Old GCI Liberty in 2017
and 2018 until his resignation on March 9, 2018 in connection with the completion of the Transactions.

RELATIONSHIPS BETWEEN GCI LIBERTY AND QURATE RETAIL AND/OR LIBERTY
MEDIA FOLLOWING THE TRANSACTIONS

Upon completion of the Transactions, Qurate Retail and GCI Liberty operated independently, and neither had any
ownership interest in the other. In order to govern certain of the ongoing relationships between Qurate Retail and/or
Liberty Media (or their respective subsidiaries), on the one hand, and GCI Liberty, on the other hand, after the
Transactions and to provide mechanisms for an orderly transition, Qurate Retail and/or Liberty Media (or their
respective subsidiaries), on the one hand, and GCI Liberty, on the other hand, entered into certain agreements, the
terms of which are summarized below.

In addition to the agreements described below, Qurate Retail and/or Liberty Media may enter into, from time to time,
agreements and arrangements with GCI Liberty and certain of its related entities, in connection with, and in the
ordinary course of, its business.

Tax Sharing Agreement

On March 9, 2018, we and Qurate Retail entered into a tax sharing agreement, which generally allocates taxes, tax
benefits, tax items, and tax-related losses between us and Qurate Retail in a manner consistent with the tax sharing
policies of Qurate Retail in effect prior to the split-off, with taxes, tax benefits, tax items, and tax-related losses
attributable to the assets, liabilities and activities of Qurate Retail’s former QVC Group (and former Interactive
Group) being allocated to Qurate Retail and taxes, tax benefits, tax items, and tax-related losses attributable to the
assets, liabilities and activities of Qurate Retail’s former Ventures Group being allocated to us.

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 47

In addition, the tax sharing agreement includes special allocation provisions, some of which are not addressed by
the former Qurate Retail tax sharing policies, related to the manner in which certain taxes, tax-related losses, and
other tax items will be allocated between us and Qurate Retail. Among other matters, these special rules include
the manner in which any taxes or tax-related losses arising from the split-off and certain related restructuring
transactions, as well as from prior transactions that have been effected by Qurate Retail and its subsidiaries
(including the split-off of Liberty Expedia Holdings, Inc. on November 4, 2016 (the LEXE Split-Off), the spin-off of
CommerceHub, Inc. on July 22, 2016 (the CHUB Spin-Off), and the spin-off of Liberty TripAdvisor Holdings, Inc.
on August 27, 2014 (the LTRIP Spin-Off)), will be allocated between the parties and provides restrictive covenants
intended to preserve the tax-free treatment of these transactions. Under the tax sharing agreement, Qurate Retail
will be allocated any taxes and tax-related losses that result from the split-off and certain related restructuring
transactions, except that we will be allocated any such taxes or tax-related losses that (i) result primarily from,
individually or in the aggregate, our breach of any of our restrictive covenants in the tax sharing agreement or
(ii) result from Section 355(e) of the Code applying to the split-off as a result of the split-off being part of a plan (or
series of related transactions) pursuant to which one or more persons acquire a 50% or greater interest (by vote or
value) in our stock. Further, we will be allocated any taxes and tax-related losses that result from the LEXE
Split-Off, the CHUB Spin-off, and the LTRIP Spin-Off, except that Qurate Retail will be allocated any such taxes or
tax-related losses that result primarily from, individually or in the aggregate, its breach of any of its restrictive
covenants in the tax sharing agreement.

The parties must indemnify each other for taxes and losses allocated to them under the tax sharing agreement and
for taxes and losses arising from a breach by them of their respective covenants and obligations under the tax
sharing agreement. The tax sharing agreement also provides for the agreements between the parties related to the
filing of tax returns, control of tax audits, cooperation on tax matters, retention of tax records, and other tax
matters.

This summary is qualified by reference to the full text of the Tax Sharing Agreement, which is filed as Exhibit 10.1 to
our Current Report on Form 8-K filed with the SEC on March 14, 2018.

Indemnification Agreement

In connection with the Transactions, Qurate Retail, Liberty LLC, Old GCI Liberty and the other party thereto,
entered into the Indemnification Agreement, pursuant to which, and subject to certain exceptions, GCI Liberty will
indemnify and hold harmless Qurate Retail and Liberty LLC, their subsidiaries, and certain related persons
specified therein (the LIC Indemnified Parties) from and against any losses incurred by such parties to the extent
arising out of or resulting from (i) the assets of Old GCI Liberty and its subsidiaries immediately prior to the closing
of the contribution of assets and liabilities attributed to Ventures Group to GCI Liberty on March 9, 2018, in
exchange for a controlling equity interest in GCI Liberty (the contribution), (ii) the assets contributed to Old GCI
Liberty pursuant to the contribution (together with (i), the Company Assets), (iii) the conduct of the businesses of
the Company Assets, (iv) (a) the liabilities of Old GCI Liberty and its subsidiaries immediately prior to the closing of
the contribution and (b) the liabilities assumed by Old GCI Liberty pursuant to the contribution, and (v) any breach
of, or failure to perform or comply with, any covenant, undertaking or obligation of Old GCI Liberty or any of its
subsidiaries under the Indemnification Agreement. The Indemnification Agreement also provides that, except under
specified circumstances, Qurate Retail and Liberty LLC will (jointly and severally) indemnify and hold harmless GCI
Liberty, its subsidiaries and certain related persons specified therein from and against any losses incurred by such
parties arising out of or resulting from (i) the conduct of the businesses of the assets held by Qurate Retail and its
subsidiaries immediately prior to the closing of the contribution, other than the contributed Ventures Group assets
(the LIC Retained Assets), (ii) the LIC Retained Assets, (iii) the liabilities held by Qurate Retail and its subsidiaries
immediately prior to the closing of the contribution, other than the assumed liabilities, and (iv) any breach of, or
failure to perform or comply with, any covenant, undertaking or obligation of Qurate Retail or any of its subsidiaries
under the Indemnification Agreement.

Pursuant to the Indemnification Agreement, GCI Liberty has agreed to indemnify Liberty LLC for certain payments
made to a holder of Liberty LLC 1.75% exchangeable debentures due 2046 (the Liberty Charter Exchangeable
Debentures) that exercises its exchange right under the terms of the debentures on or before October 5, 2023 (the
Exchange Indemnity). The Exchange Indemnity, which is supported by a negative pledge in favor of Qurate Retail
on the referenced shares that underlie the Liberty Charter Exchangeable Debentures, will not apply to any Liberty
Charter Exchangeable Debentures purchased by Liberty LLC, as described below. Also, within six months of the
split-off, Qurate Retail, Liberty LLC and GCI Liberty will cooperate, and reasonably assist each other, with respect
to the commencement and consummation of one or more privately negotiated transactions, a tender offer or other

48 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

purchase transactions (each, a Purchase Offer) whereby Liberty LLC will offer to purchase the Liberty Charter
Exchangeable Debentures on terms and conditions (including maximum offer price) reasonably acceptable to GCI
Liberty. GCI Liberty will indemnify Liberty LLC for each Liberty Charter Exchangeable Debenture repurchased by
Liberty LLC in a Purchase Offer for an amount by which the purchase price for such debenture exceeds the amount
of cash reattributed with respect to such purchased Liberty Charter Exchangeable Debenture net of certain tax
benefits, if any, attributable to such Liberty Charter Exchangeable Debenture (the Repurchase Indemnity). GCI
Liberty’s Exchange Indemnity obligation and the number of shares subject to the negative pledge will be ratably
reduced as to any Liberty Charter Exchangeable Debentures purchased in a Purchase Offer in connection with the
Repurchase Indemnity.

Furthermore, GCI Liberty will indemnify and reimburse the LIC Indemnified Parties and hold each of them
harmless against any and all other losses to which such LIC Indemnified Party may become subject arising out of,
resulting from or in connection with any claim, litigation, investigation or proceeding relating to a Purchase Offer or
any other agreement, document, instrument or transaction related thereto.

This summary is qualified by reference to the full text of the Indemnification Agreement, which is filed as
Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on March 14, 2018.

Services Agreement

In connection with the Transactions, Old GCI Liberty entered into the Services Agreement with Liberty Media,
pursuant to which Liberty Media provides GCI Liberty with specified services, including:

•

insurance administration and risk management services;

• other services typically performed by Liberty Media’s legal, investor relations, tax, accounting and internal

audit departments; and

• such other services as Liberty Media may obtain from its officers, employees and consultants in the

management of its own operations that GCI Liberty may from time to time request or require.

In addition, Liberty Media provides to GCI Liberty certain technical and information technology services, including
management information systems, computer, data storage, network and telecommunications services.

GCI Liberty pays Liberty Media an agreed-upon annual services fee under the Services Agreement, which is
currently $7 million. GCI Liberty also reimburses Liberty Media for direct out-of-pocket costs incurred by Liberty
Media for third party services provided to GCI Liberty. Liberty Media and GCI Liberty will evaluate all charges for
reasonableness semi-annually and make adjustments to these charges as the parties mutually agree upon.

The Services Agreement will continue in effect until the close of business on the third anniversary of the split-off,
unless earlier terminated (1) by GCI Liberty at any time on at least 30 days’ prior written notice, (2) by Liberty Media
upon written notice to GCI Liberty following a change in control or certain bankruptcy or insolvency-related events
affecting GCI Liberty or (3) by GCI Liberty, upon written notice to Liberty Media, following certain changes in control
of Liberty Media or Liberty Media being the subject of certain bankruptcy or insolvency-related events.

This summary is qualified by reference to the full text of the Services Agreement, which is filed as a form of which
is filed as exhibit 10.3 to our Current Report on Form 8-K filed with the SEC on March 14, 2018.

Facilities Sharing Agreement

In connection with the split-off, Old GCI Liberty entered into a facilities sharing agreement with Liberty Media and
Liberty Property Holdings, Inc. (LPH), a wholly-owned subsidiary of Liberty Media, pursuant to which, following the
split-off, GCI Liberty shares office facilities with Qurate Retail and Liberty Media located at 12300 Liberty
Boulevard, Englewood, Colorado. GCI Liberty pays a sharing fee for use of the office based on a comparable fair
market rental rate and an estimate of the usage of the office facilities by or on behalf of GCI Liberty. The sharing
fees payable to Liberty Media for the year ending December 31, 2018 are expected to be approximately $2 million.
The Facilities Sharing Agreement will continue in effect until the close of business on the third anniversary of the
split-off, unless earlier terminated (1) by GCI Liberty at any time on at least 30 days’ prior written notice, (2) by LPH
upon written notice to GCI Liberty following a default by GCI Liberty of any of its material obligations under the
Facilities Sharing Agreement, which default remains unremedied for 30 days after written notice of such default is
provided, (3) by GCI Liberty upon written notice to LPH, following certain changes in control of Liberty Media or

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 49

Liberty Media being the subject of certain bankruptcy or insolvency-related events or (4) by LPH upon written
notice to GCI Liberty, following certain changes in control of GCI Liberty or GCI Liberty being the subject of certain
bankruptcy or insolvency-related events.

This summary is qualified by reference to the full text of the Facilities Sharing Agreement, which is filed as
exhibit 10.4 to our Current Report on Form 8-K filed with the SEC on March 14, 2018.

Aircraft Time Sharing Agreements

Prior to the completion of the split-off, Old GCI Liberty (Lessee) entered into three aircraft time sharing agreements
with Liberty Media or one or more of its wholly-owned subsidiaries (individually, the Aircraft Time Sharing
Agreement, or collectively, the Aircraft Time Sharing Agreements) for each of three aircraft owned by Liberty
Media or in which a wholly owned subsidiary of Liberty Media owns a fractional interest. Each Aircraft Time
Sharing Agreement provides that Liberty Media or its subsidiaries will lease the aircraft to Lessee and provide or
arrange for a fully qualified flight crew for all operations on a periodic, non-exclusive time sharing basis. Lessee will
pay Liberty Media or its subsidiaries an amount equal to the actual expenses of each flight conducted under each
Aircraft Time Sharing Agreement to the maximum extent permitted under Federal Aviation Administration rules
(which GCI Liberty estimates will be a de minimis amount for the first year under the Aircraft Time Sharing
Agreements). Such expenses may include fuel, oil, lubricants and other additives (plus an additional charge of
100% thereof), travel expenses of the crew, hanger and tie down costs, insurance obtained for a specific flight,
landing fees, airport taxes and similar assessments, customs and similar fees, in-flight food and beverage costs,
ground transportation, flight planning and weather contact services. The Aircraft Time Sharing Agreements will
continue in effect until the close of business on the first anniversary of the split-off, and then will be automatically
renewed on a month-to-month basis, unless terminated earlier by either party upon at least 30 days’ prior written
notice.

This summary is qualified by reference to the full text of the Aircraft Time Sharing Agreements, which are filed as
exhibits 10.5 and 10.6 to our Current Report on Form 8-K filed with the SEC on March 14, 2018.

STOCKHOLDER PROPOSALS

This proxy statement relates to our annual meeting of stockholders for the calendar year 2019 which will take place
on June 24, 2019. Based solely on the date of our 2019 annual meeting and the date of this proxy statement, (i) a
stockholder proposal must be submitted in writing to our Corporate Secretary and received at our executive offices
at 12300 Liberty Boulevard, Englewood, Colorado 80112, by the close of business on January 4, 2020 in order to
be eligible for inclusion in our proxy materials for the annual meeting of stockholders for the calendar year 2020
(the 2020 annual meeting), and (ii) a stockholder proposal, or any nomination by stockholders of a person or
persons for election to the board of directors, must be received at our executive offices at the foregoing address not
earlier than March 26, 2020 and not later than April 27, 2020 to be considered for presentation at the 2020 annual
meeting. We currently anticipate that the 2020 annual meeting will be held during the second quarter of 2020. If the
2020 annual meeting takes place more than 30 days before or 30 days after June 24, 2020 (the anniversary of the
2019 annual meeting), a stockholder proposal, or any nomination by stockholders of a person or persons for
election to the board of directors, will instead be required to be received at our executive offices at the foregoing
address not later than the close of business on the tenth day following the first day on which notice of the date of
the 2020 annual meeting is communicated to stockholders or public disclosure of the date of the 2020 annual
meeting is made, whichever occurs first, in order to be considered for presentation at the 2020 annual meeting.

All stockholder proposals for inclusion in our proxy materials will be subject to the requirements of the proxy rules
adopted under the Exchange Act, our charter and bylaws and Delaware law.

50 | GCI LIBERTY, INC. 2019 PROXY STATEMENT

ADDITIONAL INFORMATION

We file periodic reports, proxy materials and other information with the SEC. You may read and copy any document
that we file at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330. You may
also inspect such filings on the Internet website maintained by the SEC at www.sec.gov. Additional information can
also be found on our website at www.gciliberty.com. (Information contained on any website referenced in this proxy
statement is not incorporated by reference in this proxy statement.) If you would like to receive a copy of the
2018 Form 10-K, or any of the exhibits listed therein, please call or submit a request in writing to Investor
Relations, GCI Liberty, Inc., 12300 Liberty Boulevard, Englewood, Colorado 80112, Tel. No. (833) 618-8602,
and we will provide you with the 2018 Form 10-K without charge, or any of the exhibits listed therein upon
the payment of a nominal fee (which fee will be limited to the expenses we incur in providing you with the
requested exhibits).

GCI LIBERTY, INC. 2019 PROXY STATEMENT | 51

FORWARD LOOKING STATEMENTS

Certain statements in this Annual Report constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including statements regarding our business, product and marketing
strategies; revenue growth; the recoverability of our goodwill and other long-lived assets; our projected sources and
uses of cash; renewal of licenses; the Rural Healthcare Program; the new customer billing system and the anticipated
impact of certain contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary
course of business. In particular, statements under “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk” contain forward-looking
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 there can be
no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but
not all of the factors that could cause actual results or events to differ materially from those anticipated:

• The ability of our company to successfully integrate and recognize anticipated efficiencies and benefits from

the March 2018 transactions with Qurate Retail, Inc.;

• customer demand for our company’s products and services and our company’s ability to adapt to changes in

demand;

•

the ability of GCI Holdings, LLC to recognize anticipated efficiencies and benefits from its new billing system;

• competitor responses to our company’s and our businesses' products and services;

•

the levels of online traffic to our company’s businesses' websites and its ability to convert visitors into
consumers or contributors;

• uncertainties inherent in the development and integration of new business lines and business strategies;

•

•

•

future financial performance, including availability, terms and deployment of capital;

the ability of suppliers and vendors to deliver products, equipment, software and services;

the outcome of any pending or threatened litigation;

• availability of qualified personnel;

• changes in, or failure or inability to comply with, government regulations, including, without limitation,

regulations of the Federal Communications Commission, and adverse outcomes from regulatory proceedings;

• changes in the nature of key strategic relationships with partners, distributors, suppliers and vendors;

• domestic and international economic and business conditions and industry trends, specifically the state of the

Alaska economy;

• consumer spending levels, including the availability and amount of individual consumer debt;

•

•

rapid technological changes;

failure to protect the security of personal information about our company’s and our businesses' customers,
subjecting our company and its businesses to potentially costly government enforcement actions or private
litigation and reputational damage; and

•

the regulatory and competitive environment of the industries in which our company operates.

These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this
Annual 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. When considering such
forward-looking statements, you should keep in mind any risk factors identified and other cautionary statements
contained in this Annual Report and in our publicly filed documents, including our most recent Forms 10-K and 10-Q.
Such risk factors and statements describe circumstances which could cause actual results to differ materially from
those contained in any forward-looking statement. This Annual Report includes information concerning public
companies in which we have controlling and non-controlling interests that file reports and other information with the
Securities and Exchange Commission (the “SEC”) in accordance with the Securities Exchange Act of 1934, as
amended. Information contained in this Annual Report concerning those companies has been derived from the
reports and other information filed by them with the SEC. If you would like further information about these companies,
the reports and other information they file with the SEC can be accessed on the Internet website maintained by the
SEC at www.sec.gov. Those reports and other information are not incorporated by reference in this Annual Report.

STOCK PERFORMANCE

The following graph compares the percentage change in the cumulative total stockholder return on an investment in
GCI Liberty Series A common stock from March 12, 2018 (the day GCI Liberty began trading following the series of
transactions that effected its split-off from Liberty Interactive Corporation) through December 31, 2018 to the
S&P 500 Index and S&P 500 Media Index.

GCI Liberty Series A Common  Stock vs. S&P 500 & S&P 500 Media Indices
3/12/18 to 12/31/18

$110

$105

$100

$95

$90

$85

$80

$75

$70

$65

Mar-18

GCI Liberty Series A

S&P 500 Index

S&P 500 Media Index

Apr-18

Jun-18

Jul-18

Sep-18

Oct-18

Dec-18

GCI Liberty Series A

S&P 500 Index

S&P 500 Media Index

3/12/2018

$100.00

$100.00

$100.00

12/31/2018

$75.21

$90.08

$89.77

INVESTMENT SUMMARY

(Based on publicly available information as of January 31, 2019)—GCILiberty.com/overview/asset-list.html

The following table sets forth some of GCI Liberty, Inc.’s assets which may be held directly and indirectly through
partnerships, joint ventures, common stock investments and/or instruments convertible into common stock.
Ownership percentages in the tables are approximate and, where applicable, assume conversion to common stock
by GCI Liberty, Inc. and, to the extent known by GCI Liberty, Inc., other holders. Ownership percentages in the
tables are approximate. In some cases, GCI Liberty, Inc.’s interest may be subject to buy/sell procedures,
repurchase rights or dilution.

ENTITY

GCI Liberty

DESCRIPTION OF
OPERATING BUSINESS

Charter Communications, Inc.
(NASDAQ: CHTR)

GCI

Evite, Inc.

Liberty Broadband Corporation
(NASDAQ: LBRDK)

LendingTree, Inc.
(NASDAQ: TREE)

The second largest cable operator in
the United States and a leading
broadband communications services
company providing video, Internet
and voice services to residential and
small and medium business
customers.

GCI is the largest Alaska-based
communications provider based on
revenues, providing a full range of
wireless, data, video, voice, and
managed services to residential
customers, businesses, governmental
entities, and educational and medical
institutions.

Leading online invitation and social
event planning service on the web.

Liberty Broadband Corporation holds
ownership interests in Charter
Communications, Inc. and Skyhook
Holding, Inc.

LendingTree, Inc. operates what they
believe is the nation’s leading online
loan marketplace, provides an array
of online tools and information to
consumers and connects them with
multiple, competing lenders.

ATTRIBUTED
SHARE COUNT(1)
(in millions)
5.4(3)

ATTRIBUTED
OWNERSHIP(2)

2%

N/A

100%

N/A

42.7

3.4

100%

24%

27%

(1) Applicable only for publicly-traded entities.

(2) Represents undiluted ownership interest.

(3) GCI Liberty, Inc. has granted to Liberty Broadband Corporation a proxy and a right of first refusal with respect to its Charter shares.

FINANCIAL  INFORMATION

Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information for Common Stock

On April 4, 2017, Liberty Interactive Corporation, now known as Qurate Retail, Inc. (“Qurate Retail”), entered into 

an Agreement and Plan of Reorganization with General Communication, Inc. (“GCI”), an Alaska corporation and parent 
company of GCI Holdings, LLC, and Liberty Interactive LLC, a Delaware limited liability company and a direct 
wholly owned subsidiary of Qurate Retail. GCI’s Class A common stock traded on the Nasdaq Global Select Market under 
the symbol “GNCMA” and its Class B common stock was quoted on the OTC Markets under the symbol “GNCMB.”  
Pursuant to the reorganization agreement, on February 20, 2018, GCI amended and restated its articles of incorporation, 
which resulted in GCI being renamed GCI Liberty, Inc. (“Predecessor GCI Liberty”) and GCI’s issued and outstanding shares 
of Class A common stock and Class B common stock being reclassified into shares of Predecessor GCI Liberty’s Class A-1 
common stock and Class B-1 common stock, respectively.  Predecessor GCI Liberty’s Class A-1 common stock continued to 
be traded on the Nasdaq Global Select Market under the symbol “GNCMA” and its Class B-1 common stock continued to be 
quoted on the OTC Markets under the symbol “GNCMB.”  Following these events, (i) Qurate Retail acquired Predecessor 
GCI Liberty on March 9, 2018 through a reorganization in which certain Qurate Retail interests, assets and liabilities 
attributed to its Ventures Group, were contributed to Predecessor GCI Liberty in exchange for shares of Predecessor GCI 
Liberty’s Class A-1 common stock and Class B-1 common stock and, following such contribution, (ii) Predecessor GCI 
Liberty’s Class A-1 common stock and Class B-1 common stock automatically converted into (x) a fraction of a share of 
Predecessor GCI Liberty’s Class A common stock equal to 0.63 and (y) a fraction of a share of the Predecessor GCI Liberty’s 
Series A Cumulative Redeemable Preferred Stock equal to 0.2, in each case, without any action by the holder thereof.  
Predecessor GCI Liberty’s Class A common stock began trading on the Nasdaq Global Select Market under the symbol 
“GLIBA” on March 12, 2018.  

On May 10, 2018, Predecessor GCI Liberty changed its state of incorporation from Alaska to Delaware pursuant to 

an Agreement and Plan of Merger, dated March 22, 2018 (the “Reincorporation Merger Agreement”). Pursuant to the 
Reincorporation Merger Agreement, a wholly-owned subsidiary of Predecessor GCI Liberty merged into GCI Liberty and 
each outstanding share of Predecessor GCI Liberty Class A and Class B common stock was automatically converted into one 
share of GCI Liberty common stock. Following the reincorporation merger, shares of GCI Liberty Series A common stock 
continued to trade on the Nasdaq Global Select Market under the symbol “GLIBA,” and, since April 27, 2018, shares of GCI 
Liberty Series B common stock have been quoted on the OTC Markets under the symbol “GLIBB.” Stock price information 
for securities traded on the Nasdaq Global Select Market can be found on the Nasdaq’s website at www.nasdaq.com. 

Although the transactions discussed above resulted in changes to the classes and series of outstanding shares of GCI, 

Predecessor GCI Liberty and our company and related ticker symbol changes, historical information of GCI’s Class B 
common stock and Predecessor GCI Liberty’s Class B-1 common stock and Class B common stock refers to such stock as 
our Series B common stock.  The following table sets forth the high and low sales price for our Series B common stock for 
the years ended December 31, 2018 and 2017.  There is no established public trading market for our Series B common stock, 
which is quoted on OTC Market. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, 
mark-down or commission and may not necessarily represent actual transactions.

F-1

 
 
 
 
 
2017

First Quarter

Second Quarter

Third Quarter

Fourth Quarter
2018

First Quarter

Second Quarter (April 1 - April 26) (1)

Second Quarter (April 27 - June 30)

Third Quarter

Series B
(GLIBB)

High

Low

20.85

38.05

43.08

42.46

42.55

42.55

45.50

53.95

20.65

31.61

36.08

39.00

37.65

37.65

41.75

40.51

Fourth Quarter
(1) The Series B common shares trade infrequently. During the period between April 1, 2018 and April 26, 2018, no trades
occurred, as such the high and low prices shown for this period related to the first quarter of 2018.

53.01

42.65

Holders

As of January 31, 2019, there were 1,592 holders of record of our Series A common stock and 58 holders of record 

of our Series B common stock. The foregoing numbers of record holders do not include the number of stockholders whose 
shares are held nominally by banks, brokerage houses or other institutions, but include each such institution as one 
shareholder.

Dividends

The Company has not paid any cash dividends on its common stock, and it has no present intention of so 
doing. Payment of cash dividends, if any, in the future will be determined by the Company's board of directors in light of 
its earnings, financial condition and other relevant considerations. See “Management’s Discussion and Analysis of 
Financial Condition and Results of Operation – Liquidity and Capital Resources.”

Stock Transfer Agent and Registrar

Broadridge is the Company's stock transfer agent and registrar.

Securities Authorized for Issuance Under Equity Compensation Plans

Information required by this item is incorporated by reference to the Company's definitive proxy statement for its 

2019 Annual Meeting of Stockholders that will be filed with the Securities and Exchange Commission on or before April 30, 
2019.

Purchases of Equity Securities by the Issuer

Share Repurchase Programs

On March 9, 2018, the board of directors authorized a share repurchase program for $650 million of GCI Liberty 
Class A and Class B common stock. On June 25, 2018, the board of directors of GCI Liberty reapproved such repurchase 
program with respect to GCI Liberty's Series A and Series B common stock. 

F-2

 
 
 
 
 
 
 
 
 
 
 
 
A summary of the repurchase activity for the three months ended December 31, 2018 is as follows:

GCI Liberty Series A Common Stock

(a) Total
Number of
Shares
Purchased

(b) Average
Price Paid
per Share

(c) Total Number of
Shares Purchased as Part
of Publicly Announced
Plans or Programs

(d) Maximum Number (or
approximate Dollar Value)
of Shares that May Yet Be
Purchased Under the Plan
or Programs

552,362

644,128

711,657

$

$

$

1,908,147

47.44

46.49

44.36

1,041,925

1,686,053

2,397,710

$599.9 million

$569.9 million

$538.4 million

Period

October 1 - 31, 2018

November 1 - 30, 2018

December 1 - 31, 2018

Total

2018.

There were no repurchases of  GCI Liberty Series B common stock during the three months ended December 31, 

113,040 shares of GCI Liberty Series A common stock and 25,304 shares of GCI Liberty Series A Cumulative 

Redeemable Preferred Stock were surrendered by our officers and employees to pay withholding taxes and other deductions 
in connection with the vesting of their restricted stock and restricted stock units during the three months ended December 31, 
2018.

F-3

 
 
 
 
Selected Financial Data

The following tables present selected historical information relating to financial condition and results of operations 

over the past five years. Certain prior period amounts have been reclassified for comparability with the current year 
presentation. The following data should be read in conjunction with our consolidated financial statements.

Summary Balance Sheet Data:

Cash and cash equivalents

Investments in equity securities

December 31,

2018 (1)

2017

2016

2015

2014

amounts in thousands

$

491,257

573,210

487,163

2,001,481

1,846,112

$ 1,533,517

1,803,064

1,546,615

1,896,535

1,696,845

Investments in affiliates, accounted for using the equity method $

177,030

114,655

31,493

Investment in Liberty Broadband measured at fair value

$ 3,074,373

3,634,786

3,161,444

427

—

—

—

Total assets

Debt

Deferred income tax liabilities

Taxes payable

Total equity

$ 8,660,822

6,172,213

5,300,776

3,977,743

3,586,863

$ 2,886,034

—

$

$

793,696

643,426

—

1,198,315

—

777,092

925,715

—

301,848

631,582

—

246,023

471,683

$ 4,306,690

4,224,036

3,592,682

3,032,661

2,864,055

Years Ended December 31,

2018 (1)

2017

2016

2015

2014

amounts in thousands,
except per share amounts

Summary Statement of Operations Data:

Revenue

Operating income (loss)

Interest expense

Share of earnings (losses) of affiliates, net

Realized and unrealized gains (losses) on financial instruments,
net

Earnings (loss) before income taxes

Net earnings (loss) attributable to GCI Liberty, Inc.
shareholders

Basic net earnings (loss) attributable to Series A and Series B
GCI Liberty, Inc. shareholders per common share

Diluted net earnings (loss) attributable to Series A and Series B
GCI Liberty, Inc. shareholders per common share

$

739,762

$ (249,992)

$ (119,296)

$

25,772

23,817

(55,597)

—

7,001

22,552

(35,155)

—

11,831

20,307

(28,534)

—

2,142

$ (681,545)

$(1,056,961)

637,164

591,035

1,309,365

1,316,814

179,699

171,692

17,032

(34,526)

—

999

90,447

74,306

$ (873,303)

724,586

820,683

110,713

48,053

$

$

(8.09)

(8.09)

6.65

6.65

7.53

7.53

1.02

1.02

0.44

0.44

(1) As of March 9, 2018, the Company's financial condition and results of operations include the activities of GCI Holdings, 
which are further described in notes 1 and 4 to the accompanying consolidated financial statements.

F-4

 
Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 consolidated financial statements and the 
notes thereto. Additionally, see note 2 in the accompanying consolidated financial statements for an overview of new 
accounting standards that the Company has adopted or that it plans to adopt that have had or may have an impact on its 
financial statements.

Overview

On April 4, 2017, Liberty Interactive Corporation, now known as Qurate Retail, entered into an Agreement and Plan 

of Reorganization (as amended, the "reorganization agreement" and the transactions contemplated thereby, the 
"Transactions") with GCI, an Alaska corporation, and Liberty Interactive LLC, a Delaware limited liability company and a 
direct wholly owned subsidiary of Qurate Retail ("LI LLC"). Pursuant to the reorganization agreement, GCI amended and 
restated its articles of incorporation (which resulted in GCI being renamed GCI Liberty, Inc. ("GCI Liberty")) and effected a 
reclassification and auto conversion of its common stock. Following these events, Qurate Retail acquired GCI Liberty on 
March 9, 2018 through a reorganization in which certain Qurate Retail interests, assets and liabilities attributed to its Ventures 
Group (following the reattribution by Qurate Retail of certain assets and liabilities from its Ventures Group to its QVC 
Group) were contributed to GCI Liberty in exchange for a controlling interest in GCI Liberty (the "contribution"). Qurate 
Retail and LI LLC contributed to GCI Liberty their entire equity interests in Liberty Broadband Corporation ("Liberty 
Broadband"), Charter Communications, Inc. ("Charter"), and LendingTree, Inc. ("LendingTree"), the Evite, Inc. ("Evite") 
operating business and other assets and liabilities (collectively, "HoldCo"), in exchange for (a) the issuance to LI LLC of a 
number of shares of GCI Liberty Class A common stock and a number of shares of GCI Liberty Class B common stock equal 
to the number of outstanding shares of Qurate Retail's Series A Liberty Ventures common stock and Qurate Retail's Series B 
Liberty Ventures common stock on March 9, 2018, respectively, (b) cash and (c) the assumption of certain liabilities by GCI 
Liberty.

The contribution was treated as a reverse acquisition under the acquisition method of accounting in accordance with 

generally accepted accounting principles in the United States ("GAAP"). For accounting purposes, HoldCo is considered to 
have acquired GCI Liberty in the contribution based, among other considerations, upon the fact that in exchange for the 
contribution of HoldCo, Qurate Retail received a controlling interest in the combined company of GCI Liberty.

Following the contribution and acquisition of GCI Liberty, Qurate Retail effected a tax free separation of its 
controlling interest in the combined company, GCI Liberty, to the holders of Qurate Retail's Liberty Ventures common stock 
in full redemption of all outstanding shares of such stock (the "HoldCo Split-Off"), in which each outstanding share of Qurate 
Retail's Series A Liberty Ventures common stock was redeemed for one share of GCI Liberty Class A common stock and each 
outstanding share of Qurate Retail's Series B Liberty Ventures common stock was redeemed for one share of GCI Liberty 
Class B common stock. In July 2018, the Internal Revenue Service ("IRS") completed its review of the HoldCo Split-Off and 
informed Qurate Retail that it agreed with the nontaxable characterization of the transactions. Qurate Retail received an Issue 
Resolution Agreement from the IRS documenting this conclusion.

On May 10, 2018, pursuant to the Agreement and Plan of Merger, dated as of March 22, 2018, GCI Liberty 
completed its reincorporation into Delaware by merging with its wholly owned Delaware subsidiary, which was the surviving 
corporation (the “Reincorporation Merger”). References to GCI Liberty or the Company prior to May 10, 2018 refer to GCI 
Liberty, Inc., an Alaska corporation and references to GCI Liberty after May 10, 2018 refer to GCI Liberty, Inc., a Delaware 
corporation.

We refer to the combination of GCI Holdings, LLC ("GCI Holdings"), non controlling interests in Liberty 
Broadband, Charter and LendingTree, a controlling interest in Evite, and certain other assets and liabilities as "GCI Liberty", 
the "Company", "us", "we" and "our." Although HoldCo was reported as a combined company until the date of the HoldCo 
Split-Off, the accompanying financial statements and the following discussion present all periods as consolidated by the 
Company.

F-5

 
 
 
 
 
 
Customer Billing Systems 

On August 4, 2018, GCI Holdings transferred its customer billing systems for business and consumer voice, data, 
video, and wireless services to a new third-party billing system to better meet its needs. The new billing system has many 
benefits including a single invoice for customers, meaningful efficiencies for processing transactions, and the ability to 
accelerate the introduction of new products and promotions.

Update on Economic Conditions

GCI Holdings offers wireless and wireline telecommunication services, data services, video 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. The economy of Alaska is dependent upon the oil 
industry, state government spending, United States military spending, investment earnings and tourism. Prolonged periods of 
low oil prices adversely impacts the Alaska economy, which in turn can have an adverse impact on the demand for GCI 
Holdings' products and services and on its results of operations and financial condition.  

Low oil prices have put significant pressure on the Alaska state government budget since the majority of its revenue 
comes from the oil industry. While the Alaska state government has significant reserves that GCI Holdings believes will help 
fund the state government for the next couple of years, major structural budgetary reforms will need to be implemented in 
order to offset the impact of low oil prices. 

The Alaska economy is in a recession that started in late 2015. While it is difficult for GCI Holdings to predict the 

future impact of the continuing recession on its business, these conditions have had an adverse impact on its business and 
could continue to 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. Additionally, 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. If that were to occur, GCI Holdings could be required to increase its allowance for doubtful 
accounts, and the number of days outstanding for its accounts receivable could increase. If the recession continues, it could 
continue to 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.

Rural Health Care (“RHC”) Program

GCI Holdings receives support from various Universal Service Fund ("USF") programs including the RHC 
Program.  The USF programs are subject to change by regulatory actions taken by the Federal Communications Commission 
("FCC") or legislative actions.  The following paragraphs describe certain separate matters related to the RHC Program that 
impact or could impact the revenue earned by the Company.

In November 2017, the Universal Service Administrative Company ("USAC") requested further information in 

support of the rural rates charged to a number of GCI Holdings' RHC customers in connection with the funding requests for 
the year that runs July 1, 2017 through June 30, 2018. On October 10, 2018, GCI Holdings received a letter from the FCC's 
Wireline Competition Bureau (“Bureau”) notifying it of the Bureau’s decision to reduce the rural rates charged to RHC 
customers for the funding year that ended on June 30, 2018 by approximately 26% resulting in a reduction of total support 
payments of $27.8 million. The FCC also informed GCI Holdings that the same cost methodology used for the funding year 
that ended on June 30, 2018 would be applied to rates charged to RHC customers in subsequent funding years. In response to 
the letter from the Bureau, GCI Holdings filed an Application for Review of the Bureau’s decision with the FCC. In the third 
quarter of 2018, GCI Holdings recorded a $19.1 million reduction in its receivables balance as part of its acquisition 
accounting and recorded a reduction in revenue in the current period for the funding year that ended on June 30, 2018 of 
approximately $8.6 million. GCI Holdings expects to reduce future RHC program revenue by a similar rate as to the funding 
year that ended on June 30, 2018, which based on a current run rate would approximate $7 million per quarter until it can 
reach a final resolution with the FCC regarding the funding amounts.

On March 15, 2018, USAC announced that the funding requests for the year that runs July 1, 2017 through June 30, 

2018 exceeded the funding available for the RHC Program. Since that time, on June 25, 2018, the FCC issued an order 
resulting in an increase of the annual RHC Program funding cap from $400 million to $571 million and applied it to the 

F-6

 
 
 
 
 
 
funding year that ended on June 30, 2018. The FCC also determined that it would annually adjust the RHC Program funding 
cap for inflation, beginning with the funding year ending on June 30, 2019 and carry-forward unused funds from past funding 
years for use in future funding years. As a result, aggregate funding was available to pay in full the approved funding under 
the RHC program for the funding year ended on June 30, 2018.

In addition, on March 23, 2018, GCI Holdings received a separate letter of inquiry and request for information from 

the Enforcement Bureau of the FCC, to which it is in the process of responding. This inquiry into the rates charged by GCI 
Holdings is still pending, and presently it is unable to assess the ultimate resolution of this matter. The ongoing uncertainty in 
program funding could have an adverse effect on its business, financial position, results of operations or liquidity.

On November 30, 2018, GCI Holdings received multiple funding denial notices from USAC, denying requested 

funding from the RHC Program operated by a rural health customer (the “Customer”) for the funding year that ended on June 
30, 2018. At the rates approved by the Bureau in a letter received on October 10, 2018, the funding at issue under the denials 
is approximately $13 million. In November 2017, USAC requested information from the Customer related to bidding process 
documentation for two separate service contracts GCI Holdings has with the Customer. Although the Customer timely 
responded, USAC found that bids previously received were not submitted with the original funding request and/or that 
bidding information submitted was related to the wrong bidding year. The Customer filed an appeal with USAC on January 
29, 2019. At this time, GCI Holdings has no reason to believe that there was any violation of the FCC’s competitive bidding 
rules, but without further information from the Customer and/or USAC, it cannot assess whether the USAC denials will be 
overturned. If the denial notices are upheld for reasons relating to the Customer’s competitive bidding process, funding issued 
under one or both contracts for prior years could be subject to further review, as well as funding for services already being 
delivered or to be delivered for the period from July 1, 2018 through June 30, 2019. GCI Holdings has accounts receivable of 
approximately $18 million outstanding as of December 31, 2018 associated with these two service contracts. The outstanding 
accounts receivable includes the approximate $13 million of funding at issue as discussed above and additional amounts for 
services provided for the period from July 1, 2018 through December 31, 2018. Given the uncertainty of whether the USAC 
denials will be overturned, it is reasonably possible that GCI Holdings may incur a loss.  The amount of a potential loss could 
range from zero to the full amount of the accounts receivable balance as of December 31, 2018.  No amount within this range 
of a potential loss is a better estimate than any other amount.  Accordingly, no loss was recorded as of December 31, 2018 
given the minimum amount in the range is zero.    

In addition, on December 4, 2018, the FCC issued a public notice seeking further comment on an earlier proposal to 
determine the rural rates for services supported by the RHC Program in a different manner than it does today. GCI Holdings 
and others submitted comments on January 30, 2019, but GCI Holdings cannot assess at this time the substance, impact on 
funding, or timing of any future rule changes that may be adopted by the FCC.

F-7

 
Results of Operations - Consolidated

General.   We provide in the tables below information regarding our consolidated operating results and other income 
and expenses, as well as information regarding the contribution to those items from our reportable segments. The "Corporate 
and other" category consists of those assets or businesses which do not qualify as a separate reportable segment. For a more 
detailed discussion and analysis of the financial results of our principal reportable segment see "Results of Operations-GCI 
Holdings" below.

Operating Results

Revenue

GCI Holdings

Corporate and other

Consolidated

Operating Income (Loss)

GCI Holdings

Corporate and other

Consolidated

Adjusted OIBDA

GCI Holdings

Corporate and other

Consolidated

Years ended December 31,

2018

2017

2016

amounts in thousands

$ 715,842

23,920

$ 739,762

—

23,817

23,817

—

22,552

22,552

$ (208,934)
(41,058)
$ (249,992)

—
(55,597)
(55,597)

—
(35,155)
(35,155)

$ 217,832
(24,731)
$ 193,101

—
(25,762)
(25,762)

—
(16,063)
(16,063)

Revenue. Our consolidated revenue increased $715.9 million and $1.3 million for the years ended December 31, 

2018 and 2017, respectively, as compared to the corresponding prior year periods. The increase during the year ended 
December 31, 2018 is primarily due to an increase of $715.8 million at GCI Holdings as compared to the prior period as a 
result of the acquisition of GCI Holdings on March 9, 2018.  See “Results of Operations-GCI Holdings, LLC” below for a 
more complete discussion of the results of operations of GCI Holdings.

Operating Income (Loss). Our consolidated operating loss increased $194.4 million and $20.4 million for the years 

ended December 31, 2018 and 2017, respectively, as compared to the corresponding prior year periods. The decrease in 
operating income for 2018 is primarily due to the acquisition of GCI Holdings on March 9, 2018 and its subsequent 
impairment of intangibles and long-lived assets (see note 8 in the accompanying consolidated financial statements for more 
information)  and associated depreciation and amortization as a result of purchase accounting. See “Results of Operations-
GCI Holdings, LLC” below for a more complete discussion of the results of operations of GCI Holdings. 

Operating losses for corporate and other decreased $14.5 million and increased $20.4 million for the years ended 

December 31, 2018 and 2017, respectively, as compared to the corresponding prior year periods. The decrease in 2018 is due 
to a decrease in costs associated with the Transactions partially offset by an increase in costs as a wholly owned subsidiary 
increased investment in its business and increased public company costs. The increase in 2017 is primarily due to costs 
related to the Transactions.

Stock-based compensation. Stock based compensation includes compensation related to restricted shares of GCI 

Liberty's common stock and preferred stock, restricted stock units with respect to GCI Liberty's common stock, and options 
to purchase shares of GCI Liberty's common stock granted to certain of the Company's directors, employees, and employees 
of its subsidiaries. We recorded $28.2 million, $26.6 million and $16.1 million of stock compensation expense for the years 

F-8

 
 
 
 
 
 
ended December 31, 2018, 2017 and 2016, respectively. The increase for the year ended December 31, 2018 as compared to 
the corresponding prior year period is primarily due to the acquisition of GCI Holdings on March 9, 2018 partially offset by a 
decrease in one-time costs associated with an option exchange between HoldCo and certain of its officers. See “Results of 
Operations-GCI Holdings, LLC” below for a more complete discussion of the results of operations of GCI Holdings. The 
increase for the year ended December 31, 2017 as compared to the corresponding prior year period is primarily due to the 
option exchange that was discussed above. As of December 31, 2018, the total unrecognized compensation cost related to 
unvested options and restricted stock was approximately $9.4 million and $24.2 million, respectively. Such amounts will be 
recognized in the Company's consolidated statements of operations over a weighted average period of approximately 1.2 
years and 2.0 years, respectively.

Adjusted OIBDA. The Company defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and 

selling, general and administrative expenses (excluding stock based compensation). The Company believes this measure is an 
important indicator of the operational strength and performance of its businesses, including each business’s ability to service 
debt and fund capital expenditures. In addition, this measure allows management, including the chief operating decision 
maker, to view operating results and perform analytical comparisons and benchmarking between businesses and identify 
strategies to improve performance. This measure of performance excludes depreciation and amortization, stock based 
compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the 
measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but 
not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of 
financial performance prepared in accordance with GAAP. See note 16 in the accompanying consolidated financial 
statements for a reconciliation of Adjusted OIBDA to operating income (loss) and earnings (loss) from continuing operations 
before income taxes.

Consolidated Adjusted OIBDA increased $218.9 million and decreased $9.7 million during the years ended 

December 31, 2018 and 2017, respectively, as compared to the corresponding prior year periods. The increase for the year 
ended December 31, 2018 is primarily due to the acquisition of GCI Holdings on March 9, 2018. See “Results of Operations-
GCI Holdings, LLC” below for a more complete discussion of the results of operations of GCI Holdings. The decrease for 
the year ended December 31, 2017 is primarily due to an increase in expenses at Corporate and other as a result of the 
Transactions.

F-9

 
 
Other Income and Expense

Components of Other income (expense) are presented in the table below.

Interest expense

GCI Holdings

Corporate and other

Consolidated

Share of earnings (losses) of affiliates, net

GCI Holdings

Corporate and other

Consolidated

Realized and unrealized gains (losses) on financial instruments, net

GCI Holdings

Corporate and other

Consolidated

Tax sharing agreement

GCI Holdings

Corporate and other

Consolidated

Other, net

GCI Holdings

Corporate and other

Consolidated

2018

Years ended December 31,
2017
amounts in thousands

2016

$ (69,478)
(49,818)
$ (119,296)

—

—
—

—

—
—

$

$

(111)
25,883

25,772

—

7,001

7,001

—
11,831

11,831

$

—
(681,545)
$ (681,545)

—

—

637,164

1,309,365

637,164

1,309,365

$

—
(32,105)
$ (32,105)

—

—

—

—

—

—

$

$

1,376
(1,171)
205

—

2,467

2,467

—

30,773

30,773

Interest Expense. Consolidated interest expense increased $119.3 million during the year ended December 31, 2018 

as compared to the corresponding prior year period primarily due to the acquisition of GCI Holdings on March 9, 2018 and 
the $1.0 billion margin loan. The Company issued exchangeable senior debentures on June 18, 2018 that is expected to result 
in increased interest expense in future periods.

Share of earnings (losses) of affiliates, net. Share of earnings (losses) of affiliates, net increased $18.8 million and 
decreased $4.8 million during the years ended December 31, 2018 and 2017, respectively, as compared to the corresponding 
prior year periods. The increase in the year ended December 31, 2018 as compared to the corresponding prior year period is 
due to increases in LendingTree's results. The decrease in the year ended December 31, 2017 as compared to the 
corresponding prior year period is due to decreases in LendingTree's results.

F-10

 
 
 
Realized and unrealized gains (losses) on financial instruments, net. Realized and unrealized gains (losses) on 

financial instruments, net are comprised of changes in the fair value of the following:

2018

Years ended December 31,
2017
amounts in thousands

2016

Equity securities
Investment in Liberty Broadband
Variable forward
Indemnification obligation
Exchangeables senior debentures

$ (274,393)
(560,413)
75,970
70,007
7,284
$ (681,545)

258,629
473,342
(94,807)
NA
NA
637,164

547,921
761,444
NA
NA
NA
1,309,365

The changes in these accounts are primarily due to market factors and changes in the fair value of the underlying 

stocks or financial instruments to which they are related. The decrease for the year ended December 31, 2018 as compared to 
the corresponding prior year period was primarily driven by a decrease in the market value of our investments in Liberty 
Broadband and Charter. The decrease for the year ended December 31, 2017 as compared to the corresponding prior year 
period was primarily driven by less growth in the market value of our investments in Liberty Broadband and Charter than the 
prior period.

Tax sharing agreement. The Company had a loss of $32.1 million for the year ended December 31, 2018 for a tax 

sharing agreement, which provides for the allocation and indemnification of tax liabilities and benefits between Qurate Retail 
and GCI Liberty (see note 1 in the accompanying consolidated financial statements for more information).

Income taxes. The Company had an income tax benefit of $183.3 million and $133.5 million for the years ended 

December 31, 2018 and 2017, respectively, and income tax expense of $496.2 million for the year ended December 31, 2016. 
For the year ended December 31, 2018, the income tax benefit was lower than the U.S. statutory tax rate of 21% primarily 
due to a change in the effective tax rate used to measure deferred taxes due to the acquisition as discussed in notes 1 and 4 to 
the accompanying consolidated financial statements and a goodwill impairment that is not deductible for tax purposes, 
partially offset by a change in the state effective tax rate used to measure deferred taxes resulting from a state law change.

For the year ended December 31, 2017, the most significant reconciling item is a net tax benefit for the effect of the 

change in the U.S. federal corporate tax rate from 35% to 21% on deferred taxes. Income tax expense was higher than the 
U.S. statutory tax rate of 35% in 2016 due to state expense related to unrealized gains on the Company’s investments.

Net earnings (loss). The Company had a net loss of $873.3 million for the year ended December 31, 2018 and net 

earnings of $724.6 million and $820.7 million for the years ended December 31, 2017, and 2016, respectively. The change in 
net earnings was the result of the above-described fluctuations in our revenue, expenses, and other income and expenses.  

Liquidity and Capital Resources

As of December 31, 2018, substantially all of our cash and cash equivalents were invested in U.S. Treasury 

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

The following are potential sources of liquidity: available cash balances, proceeds from asset sales, monetization of 

our investments, outstanding or anticipated debt facilities, and debt and equity issuances. To the extent that the Company 
recognizes any taxable gains from the sale of assets, the Company may incur tax expense and be required to make tax 
payments, thereby reducing any cash proceeds. As of December 31, 2018, GCI, LLC exceeded the maximum leverage 
threshold, as measured by the terms of its Senior Notes (as defined below), and therefore does not have access to any 
additional funding under the revolving portion of the Senior Credit Facility. See note 9 in the accompanying consolidated 
financial statements for additional information on its Senior Credit Facility. We believe we have sufficient cash from 
operating activities and cash on hand to fund our business.

F-11

 
 
 
 
 
 
 
 
 
 
As of December 31, 2018, the Company had a cash and cash equivalents balance of $491.3 million of which $170.7 

million is held by the Company's subsidiaries.

2018

Years ended December 31,
2017
amounts in thousands

2016

Cash flow information

Net cash provided (used) by operating activities
Net cash provided (used) by investing activities
Net cash provided (used) by financing activities

$

$

82,888
(32,276)
(132,728)
(82,116)

304,864
(78,123)
(140,720)
86,021

292,225
(1,504,771)
(300,808)
(1,513,354)

During the year ended December 31, 2018, the Company’s primary uses of cash included a $1.1 billion distribution 

to its former parent in connection with the Transactions, $254.0 million in repayments of debt, a $132.7 million 
indemnification payment to Qurate Retail, $111.6 million in repurchases of GCI Liberty Series A common stock, and a $80.0 
million derivative payment in connection with the Transactions. The Company’s primary sources of cash included cash from 
operations, borrowing $1.5 billion under the Company's margin loan and exchangeable senior debentures, and cash from the 
acquisition of GCI Holdings on March 9, 2018.

Net cash used for investing activities consists primarily of cash paid for capital expenditures and investments. Our 

significant recurring investing activity has been GCI Holdings' capital expenditures and the purchase of investments. We 
expect that this will continue in the future.  A significant portion of our capital expenditures are based on the level of GCI 
Holdings' customer growth and the technology being deployed. Purchases of investments are based on what we believe are 
good opportunities for growth. 

Proceeds from borrowings fluctuate from year to year based on our liquidity needs. We may use excess cash to make 

optional repayments on our debt or repurchase our common stock depending on various factors, such as market conditions.

The projected uses of the Company's cash are capital expenditures of approximately $165 million, approximately 

$135 million for interest payments on outstanding debt, approximately $13 million for preferred stock dividends, repurchases 
of GCI Liberty Series A common stock, and potential additional investments in existing or new businesses. 

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

We have contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of 
business.  Although it is reasonably possible we may incur losses upon conclusion of such matters, an estimate of any loss or 
range of loss cannot be made.  In the opinion of management, it is expected that amounts, if any, which may be required to 
satisfy such contingencies will not be material in relation to the accompanying consolidated financial statements.

F-12

 
 
 
 
 
 
 
Information concerning the amount and timing of required payments, both accrued and off-balance sheet, under our 

contractual obligations, is summarized below.

Total

Less Than 1 Year

1 to 3 Years

4 to 5 Years

More Than 5
Years

Payments Due by Period

Consolidated contractual obligations

Debt (1)

Preferred stock

Interest on long-term debt and preferred stock (2)

Capital lease obligations, including interest

Tower obligations, including interest

Operating lease commitments

Purchase obligations

$

2,874,928

177,103

636,509

46,658

182,592

140,430

51,139

amounts in thousands

902,934

—

146,346

13,450

7,644

40,487

51,139

1,038,687

—

166,997

25,503

15,750

56,788

—

478,374

—

102,991

5,971

16,386

21,829

—

454,933

177,103

220,175

1,734

142,812

21,326

—

Total contractual obligations

$

4,109,359

1,162,000

1,303,725

625,551

1,018,083

(1) Amounts are reflected in the table at the outstanding principal amount, assuming the debt instrument will remain outstanding until the stated maturity
date, and may differ from the amounts stated in our consolidated balance sheet to the extent debt instruments (i) were issued at a discount or premium or
(ii) have elements which are reported at fair value in our consolidated balance sheets. Amounts do not assume additional borrowings or refinancings of
existing debt.

(2) Amounts (i) are based on our outstanding debt at December 31, 2018, (ii) assume the interest rates on our variable rate debt remain constant at the
December 31, 2018 rates and (iii) assume that our existing debt is repaid at maturity.

Critical Accounting Estimates

The preparation of our financial statements in conformity with GAAP requires us 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. Listed below are the accounting estimates that we believe are 
critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the 
magnitude of the asset, liability, revenue or expense being reported.  All of these accounting estimates and assumptions, as 
well as the resulting impact to our financial statements, have been discussed with the audit committee of our board of 
directors.

Fair Value of Non-Financial Instruments.  Our non-financial instrument valuations are primarily comprised of our 

determination of the estimated fair value allocation of net tangible and identifiable intangible assets acquired in business 
combinations, our annual assessment of the recoverability of our goodwill and other nonamortizable intangibles, and our 
evaluation of the recoverability of our other long-lived assets upon certain triggering events.

The Company periodically reviews the carrying value of its intangible assets with definite lives and other long-lived 
assets to be used in operations whenever events or changes in circumstances indicate that the carrying amount of the assets or 
asset groups might not be recoverable. Factors that would necessitate an impairment assessment include a significant adverse 
change in the extent or manner in which an asset is used, a significant adverse change in legal factors or the business climate 
that could affect the value of the asset group, or a significant decline in the observable market value of an asset group, among 
others. If such facts indicate a potential impairment, the recoverability of the asset group is assessed by determining whether 
the carrying value of the asset group exceeds the sum of the projected undiscounted cash flows expected to result from the 
use and eventual disposition of the asset group over the remaining economic life of the asset group. If the carrying amount of 
the asset group is greater than the expected undiscounted cash flows to be generated by such asset group, including its 
ultimate disposition, an impairment adjustment is recognized.

If the carrying value of our intangible or long-lived assets exceeds their estimated fair value, we are required to write 

the carrying value down to fair value. Any such write down is included in impairment expense in our consolidated statement 
of operations. A high degree of judgment is required to estimate the fair value of our intangible and long-lived assets. We may 
use quoted market prices, prices for similar assets, present value techniques and other valuation techniques to prepare these 
estimates. We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to 

F-13

 
 
 
 
 
implement these valuation techniques. Due to the high degree of judgment involved in our estimation techniques, any value 
ultimately derived from our intangible or long-lived assets may differ from our estimate of fair value.

We utilize the cost approach as the primary method used to establish fair value for our property and equipment in 

connection with business combinations.  The cost approach considers the amount required to replace an asset by constructing 
or purchasing a new asset with similar utility, then adjusts the value in consideration of physical depreciation and functional 
and technological obsolescence as of the appraisal date. The cost approach relies on management’s assumptions regarding 
current material and labor costs required to rebuild and repurchase significant components of our property and equipment 
along with assumptions regarding the age and estimated useful lives of our property and equipment.

The accounting guidance permits entities to first perform a qualitative assessment to determine whether it is more 

likely than not that an indefinite-lived intangible asset is impaired. If the qualitative assessment supports that it is more likely 
than not that the carrying value of the Company's indefinite-lived intangible assets, other than goodwill, exceeds its fair 
value, then a quantitative assessment is performed. At December 31, 2018,  the Company determined that it was necessary to 
perform a quantitative impairment assessment of its cable certificates and wireless licenses. An impairment was recorded in 
the amount of $65 million (see note 8 in the accompanying consolidated financial statements).

We utilize an income approach as the primary method used to establish fair value for our customer relationships, 

cable certificates, and wireless licenses in connection with business combinations.  The income approach quantifies the 
expected earnings of our customer relationships, cable certificates, and wireless licenses by isolating the after tax cash flows 
attributable to the respective asset and then discounting the cash flows to their present value.  The income approach relies on 
management’s assumptions such as projected revenue, market penetration, expenses, capital expenditures, customer trends, 
and a discount rate applied to the estimated after tax cash flows.  

We perform our annual assessment of the recoverability of our goodwill in the fourth quarter each year. The 
Company utilizes a qualitative assessment for determining whether the quantitative goodwill impairment analysis is 
necessary. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely 
than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is 
necessary to perform the quantitative goodwill impairment test. In evaluating goodwill on a qualitative basis, the Company 
reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant 
accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of our 
reporting units. The Company considers whether there are any negative macroeconomic conditions, industry specific 
conditions, market changes, increased competition, increased costs in doing business, management challenges, legal 
environments and how these factors might impact company specific performance in future periods. As part of the analysis, 
the Company also considers fair value determinations for certain reporting units that have been made at various points 
throughout the current and prior year for other purposes. At December 31, 2018,  the Company determined that it was 
necessary to perform a quantitative goodwill impairment assessment for the GCI Holdings reporting unit.  An impairment 
was recorded in the amount of $136 million (see note 8 in the accompanying consolidated financial statements).  Due to this 
impairment, the carrying value of the GCI Holdings reporting unit approximates fair value as of December 31, 2018.

The fair value of goodwill is determined using an income approach. The Company’s income approach model used 

for its goodwill valuation is consistent with that used for the cable certificates except that cash flows from the entire business 
enterprise are used for the goodwill valuation.

Income Taxes.  We are required to estimate the amount of tax payable or refundable for the current year and the 

deferred income tax liabilities and assets for the future tax consequences of events that have been reflected in our financial 
statements or tax returns for each taxing jurisdiction in which we operate. This process requires our management to make 
judgments regarding the timing and probability of the ultimate tax impact of the various agreements and transactions that we 
enter into. Based on these judgments we may record tax reserves or adjustments to valuation allowances on deferred tax 
assets to reflect the expected realizability of future tax benefits. Actual income taxes could vary from these estimates due to 
future changes in income tax law, significant changes in the jurisdictions in which we operate, our inability to generate 
sufficient future taxable income or unpredicted results from the final determination of each year's liability by taxing 
authorities. These changes could have a significant impact on our financial position.

F-14

 
 
 
 
 
 
Results of Operations - GCI Holdings, LLC

GCI Holdings provides a full range of wireless, data, video, voice, and managed services to residential, businesses, 

governmental entities, and educational and medical institutions primarily in Alaska. We have seen a general decrease in 
subscriber metrics primarily due to the recession in Alaska as discussed in the Overview section. The following table 
highlights selected key performance indicators used in evaluating GCI Holdings.

Consumer

Wireless:

Wireless lines in service1

Data:

Cable modem subscribers2

Video:

Basic subscribers

Homes passed

Voice:

Total local access lines in service3

Business

Wireless:

Wireless lines in service1

Data:

Cable modem subscribers2

Voice:

Total local access lines in service3

December 31,

2018

2017

192,700

196,800

125,700

124,900

89,100

253,400

97,200

252,500

44,500

48,900

21,500

22,600

9,200

9,900

36,500

38,500

1 

A wireless line in service is defined as a revenue generating wireless device.  On January 1, 2018, we transferred 600 small business wireless lines from 

Business to Consumer.
2 A cable modem subscriber is defined by the purchase of cable modem service regardless of the level of service purchased. If one entity purchases 
multiple cable modem service access points, each access point is counted as a subscriber.  On January 1, 2018, we transferred 700 small business cable 
modem subscribers from Business to Consumer. 
3 A local access line in service is defined as a revenue generating circuit or channel connecting a customer to the public switched telephone network.  On 
January 1, 2018, we transferred 1,600 small business local access lines from Business to Consumer.

As described in notes 1 and 4 to the accompanying consolidated financial statements, for accounting purposes, 

HoldCo is considered to have acquired GCI Liberty in the contribution. Although GCI Holdings’ results are only included in 
the Company’s results beginning on March 9, 2018, we believe a discussion of GCI Holdings’ results for all periods 
presented promotes a better understanding of the overall results of its business. For comparison and discussion purposes we 
are presenting the pro forma results of GCI Holdings for the years ended December 31, 2018 and 2017, inclusive of 
acquisition accounting adjustments. The pro forma financial information was prepared based on the historical financial 
information of GCI Holdings and assuming the acquisition of GCI Holdings took place on January 1, 2017. The acquisition 
price allocation related to the GCI Holdings business combination is preliminary. Accordingly, the pro forma adjustments are 
based on the preliminary acquisition price allocation and have been made solely for the purpose of providing comparative pro 
forma financial information. We have made pro forma adjustments to the results for the year ended December 31, 2017 for 
the impact of the new revenue standard (as described in note 2) to assist in the comparability of the year ended December 31, 
2018. We have made pro forma adjustments to the results for the year ended December 31, 2018 and 2017 to reflect the 
impact of the FCC's decision in regards to RHC funding as described above in the Overview section. The financial 
information below is presented for illustrative purposes only and does not purport to represent what the results of operations 
of GCI Holdings would actually have been had the business combination occurred on January 1, 2017, or to project the 
results of operations of GCI Holdings for any future periods. The pro forma adjustments are based on available information 
and certain assumptions that the Company's management believes are reasonable. The pro forma adjustments are directly 

F-15

 
 
 
 
 
 
 
attributable to the business combination including adjustments related to the amortization of acquired tangible and intangible 
assets, stock-based compensation, and the exclusion of transaction related costs; RHC funding as described above; and the 
new revenue standard and are expected to have a continuing impact on the results of operations of GCI Holdings.

GCI Holdings’ pro forma operating results were as follows:

Revenue

Operating expenses (excluding stock-based compensation included below):

Operating expense

Selling, general and administrative expenses

Adjusted OIBDA

Stock-based compensation

Impairment of intangibles and long-lived assets

Legal settlement
Depreciation and amortization

Operating income

Pro forma revenue

The components of pro forma revenue are as follows:

Consumer

Wireless

Data

Video

Voice

Business

Wireless

Data

Video

Voice

Total pro forma revenue

Years ended December 31,

2018

2017

amounts in thousands

$

875,290

894,909

(259,516)
(348,903)
266,871
(6,088)
(207,940)
(3,600)
(241,687)
(192,444)

(276,885)
(333,023)
285,001
(14,230)
—

—
(240,206)
30,565

Years ended December 31,

2018

2017

amounts in thousands

166,847

159,667

89,553

20,601

95,649

278,315

19,449

45,209
875,290

169,601

145,757

99,609

21,858

99,940

290,194

18,039
49,911
894,909

$

$

$

Pro forma consumer wireless revenue decreased $2.8 million for the year ended December 31, 2018 as compared 

to the corresponding prior year period. The decrease was partially due to a $4.2 million decrease in wireless plan fee revenue 
for the year ended December 31, 2018 as compared to the corresponding prior year period, which was primarily driven by a 
decrease in the number of subscribers and the forgiveness of a month of service for our wireless customers due to the 
implementation of the new billing system. During the third quarter of 2018, we converted to a new third-party billing system. 
The billing system implementation included a transition of wireless customers from billing in arrears to billing in advance. To 
ease the transition for our customers, we chose to forgive one month of service for those customers who would have 
otherwise received an invoice for two months of service. Additionally, there was a decrease of $2.2 million in USF high cost 
support ("High Cost Support") for the year ended December 31, 2018 as compared to the corresponding prior year period due 
to a scheduled decrease in cash received for High Cost Support for urban areas. As previously disclosed, High Cost Support 

F-16

 
 
 
 
 
 
 
for urban areas ends as of December 31, 2018. We expect High Cost Support to decrease by $4.1 million in 2019 as 
compared to 2018 due to the end of High Cost Support provided for certain urban areas previously included. The decreases 
discussed above were partially offset by a $5.1 million increase in wireless equipment revenue for the year ended December 
31, 2018 as compared to the corresponding prior year period, which was primarily driven by an increase in the number of 
higher priced wireless devices sold.

Pro forma consumer data revenue increased $13.9 million for the year ended December 31, 2018 as compared to 

the corresponding prior year period. The increase was primarily attributable to an increase in prices for lower tier cable 
modem plans, which has led to subscribers moving to plans with higher recurring monthly charges that offer higher speeds 
and higher usage limits. 

Pro forma consumer video revenue decreased $10.1 million for the year ended December 31, 2018 as compared to 

the corresponding prior year period. The decrease was primarily due to a 8.3% decrease in the number of subscribers.

Pro forma consumer voice revenue decreased $1.3 million for the year ended December 31, 2018 as compared to 
the corresponding prior year period. The decrease for the year ended December 31, 2018 was primarily due to a decrease in 
High Cost Support due to a scheduled decrease in funding for urban areas. 

Pro forma business wireless revenue decreased $4.3 million for the year ended December 31, 2018 as compared to 

the corresponding prior year period. The decrease is due to wholesale customers moving backhaul circuits off our network 
and a reduction of roaming traffic due to a wholesale customer's construction of its own facilities.

Pro forma business data revenue decreased $11.9 million for the year ended December 31, 2018 as compared to the 

corresponding prior year period. The decrease was primarily due to a $7.3 million decrease in data and transport service 
revenue due to the reduction from the RHC Program as discussed above in the Overview section and a $4.3 million decrease 
in professional services revenue due to a decrease in special project work.

Pro forma business video revenue increased $1.4 million for the year ended December 31, 2018 as compared to the 

corresponding prior year period primarily due to an increase in political advertising revenue partially offset by a decrease in 
video plan fee revenue due to a decrease in business video subscribers.

Pro forma business voice revenue decreased $4.7 million year ended December 31, 2018 as compared to the 

corresponding prior year period. The decrease is primarily due to a $2.1 million decrease in long distance revenue as a result 
of decreased long distance traffic and rate compression and a $2.6 million decrease in local voice revenue due to a decrease 
in the number of business access lines in service.

Pro forma Operating expenses decreased $17.4 million for the year ended December 31, 2018 as compared to the 

corresponding prior year period. The decrease for the year ended December 31, 2018 was primarily due to a $3.9 million 
decrease in video distribution and programming costs primarily due to a decrease in the number of video subscribers; a $5.1 
million decrease in wireless costs due to a decrease in wireless distribution costs driven by construction of facilities that 
allowed us to move traffic to our network; a $3.1 million decrease in professional services expense due to a decrease in 
special project work; and a $2.7 million decrease in voice costs due to the decrease in long distance traffic and a reduction of 
local access lines in service.

Pro forma Selling, general and administrative expenses increased $15.9 million for the year ended December 31, 

2018, as compared to the corresponding prior year period primarily due to a $4.0 million write-off of costs associated with an 
abandoned project, a $3.3 million increase in labor costs driven by severance payments to employees who were laid off and 
annual merit increases, and a $3.3 million increase in software contracts due to additional work as part of the billing system 
implementation. 

Pro forma Stock based compensation decreased $8.1 million for the year ended December 31, 2018 as compared to 

the corresponding prior year period due to awards for which, based on purchase accounting, amortization was completely 
recognized during 2017.

F-17

 
 
 
 
 
 
 
 
 
 
Pro forma Impairment of intangibles and long-lived assets increased $207.9 million primarily due to the 
impairment of goodwill and cable certificates as a result of unanticipated program revenue changes and certain other market 
factors impacting GCI Holdings' operating results.

Pro forma Depreciation and amortization increased $1.5 million during the year ended December 31, 2018 as 

compared to the corresponding prior year period. The increase was primarily due to new assets placed in service since March 
9, 2018,  which was partially offset due to lower amortization expense because of an accelerated recognition pattern for 
amortizing intangibles.  

Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to market risk in the normal course of business due to its 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. The Company has 
established policies, procedures and internal processes governing our management of market risks and the use of financial 
instruments to manage its exposure to such risks.

The Company is exposed to changes in interest rates primarily as a result of its borrowing and investment activities, 
which 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 its long-term and short-term debt are expected to vary as a result of future 
requirements, market conditions and other factors. The Company manages its exposure to interest rates by maintaining what 
it believes is an appropriate mix of fixed and variable rate debt. The Company believes this best protects it from interest rate 
risk. The Company has achieved this mix by (i) issuing fixed rate debt that it believes has a low stated interest rate and 
significant term to maturity, (ii) issuing variable rate debt with appropriate maturities and interest rates and (iii) entering into 
interest rate swap arrangements when it deems appropriate. As of December 31, 2018, the Company's debt is comprised of 
the following amounts:

GCI Holdings

Corporate and other

Variable rate debt

Fixed rate debt

Weighted
average
interest
rate

Principal
amount

Weighted
average
interest
rate

Principal
amount

dollar amounts in thousands

$ 722,678

$ 900,000

4.8% $ 775,000

4.2% $ 477,250

6.8%

1.8%

The Company is exposed to changes in stock prices primarily as a result of its significant holdings in publicly traded 

securities. The Company continually monitors changes in stock markets, in general, and changes in the stock prices of its 
holdings, specifically. The Company believes that changes in stock prices can be expected to vary as a result of general 
market conditions, technological changes, specific industry changes and other factors. The Company periodically uses equity 
collars and other financial instruments to manage market risk associated with certain investment positions. These instruments 
are recorded at fair value based on option pricing models.

At December 31, 2018, the fair value of the Company's equity securities was $1.5 billion. Had the market price of 
such securities been 10% lower at December 31, 2018, the aggregate value of such securities would have been $153 million 
lower. At December 31, 2018, the fair value of the Company's investment in Liberty Broadband was $3.1 billion. Had the 
market price of such security been 10% lower at December 31, 2018, the fair value of such security would have been $307 
million lower.

Consolidated Financial Statements and Supplementary Data

          The Company's consolidated financial statements are included herein, beginning on page F-25.  

F-18

 
 
 
 
 
 
 
 
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Controls and Procedures.  

Disclosure Controls and Procedures 

In accordance with Exchange Act Rules 13a-15 and 15d-15, the Company carried out an evaluation, under the 

supervision and with the participation of management, including its chief executive officer and its 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 report. Based on that evaluation, the Executives concluded that the Company's disclosure controls and 
procedures were not effective as of December 31, 2018 because of two material weaknesses in its internal control over 
financial reporting that are described below in “Management’s Report on Internal Control Over Financial Reporting.” 

However, giving full consideration to the two material weaknesses, the Company’s management has concluded  

that the consolidated financial statements included in this Annual Report present fairly, in all material respects, the 
Company’s financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. generally 
accepted accounting principles ("GAAP"). KPMG LLP has issued its report dated February 28, 2019, which expressed an 
unqualified opinion on those consolidated financial statements.

Management’s Report on Internal Control Over Financial Reporting

See page F-21 for Management's Report on Internal Control Over Financial Reporting.

See page F-22 for KPMG LLP’s attestation report regarding the effectiveness of our internal control over financial 
reporting.

Changes in Internal Control Over Financial Reporting 

In March 2018, the Company completed the Transactions, pursuant to which the contribution was treated as a 
reverse acquisition under the acquisition method of accounting in accordance with GAAP. The Transactions resulted in 
changes to the management of the Company. As a result, management made significant enhancements to internal controls 
over financial reporting, especially to the information technology general controls (“ITGC”) as management shifted from a 
highly manual control environment to more reliance on ITGCs.

Except for certain of the remediation activities described below, and changes that resulted from the Transactions, 

there was no change in the Company’s internal control over financial reporting that occurred during the Company’s quarter 
ended December 31, 2018 that has materially affected, or is reasonably likely to materially affect, the Company’s internal 
control over financial reporting.

Remediation Plan for Material Weaknesses in Internal Control Over Financial Reporting 

In response to the two material weaknesses identified in “Management’s Report on Internal Control Over Financial 

Reporting,” the Company, with oversight from the Audit Committee of the Board of Directors, has developed a plan to 
remediate the material weaknesses at GCI Holdings. The remediation actions included the following: 

• 

Improvement of the design and operation of control activities and procedures associated with user access to the 
affected IT systems, including removing all inappropriate IT system access associated with the material weakness 
and ensuring no inappropriate activity occurred during the period.

•  Enhance management’s risk assessment to emphasize and evaluate the interdependencies of business processes, 

automated control activities, and effective ITGCs.

•  Enhance controls related to the review of payroll changes and of payroll calculations after payroll is processed by 

the third-party processing company, but before payments are disbursed to employees.  

The Company believes the foregoing efforts remediated the two material weaknesses described in “Management’s 
Report on Internal Control Over Financial Reporting” after the assessment date and prior to the filing of this Annual Report. 

F-19

 
 
 
 
 
 
 
 
 
 
However, because the reliability of the internal control process requires repeatable execution, the successful on-going 
remediation of these material weaknesses will require on-going training, monitoring, and evidence of effectiveness 
prior to concluding that the controls are effective. 

Additionally, the Company and GCI Holdings intend to continue to monitor information system access and the 

assessment of process level risks to determine whether additional adjustments should be made to ensure controls are effective 
in the future.

Other Information.

None.

F-20

 
 
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over the 
Company’s financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. The Company’s internal 
control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and 
the preparation of financial statements for external purposes in accordance with GAAP. Because of inherent limitations, 
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of 
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, 
or that the degree of compliance with the policies and procedures may deteriorate. 

The Company’s management assessed the effectiveness of internal control over financial reporting as of December 

31, 2018, using the criteria in Internal Control-Integrated Framework (2013), issued by the Committee of Sponsoring 
Organizations of the Treadway Commission. Based on this assessment, management has concluded that, as of December 31, 
2018, the Company's internal control over financial reporting is not effective due to the two material weaknesses described 
below.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, 

such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial 
statements will not be prevented or detected on a timely basis. Based on management's evaluation of internal control over 
financial reporting, two material weaknesses were identified as described below at GCI Holdings, a wholly owned subsidiary. 

1. 

2. 

ITGCs around financially significant information technology ("IT") systems were not effective. Specifically, the 
ITGCs around system access were not operating consistently to ensure that access to applications and data was 
adequately restricted to appropriate personnel. Because of the deficiency in ITGCs for these systems, the business 
process controls (automated and manual) that are dependent on these systems were also deemed ineffective because 
they could have been adversely impacted. We believe that these control deficiencies were a result of an inadequate 
assessment of IT risks, which in turn contributed to inappropriate reliance on manual business process controls 
rather than ITGCs. 

Internal controls around the payroll process were ineffective due to an aggregation of deficiencies relating to the IT 
deficiencies described above, ineffectively designed controls over payroll changes, and ineffective review and 
monitoring controls. We believe that these control deficiencies were a result of an inadequate assessment of risk 
related to outsourcing payroll processing to a third-party provider, which contributed to the ineffective design of 
controls intended to validate that manual changes to payroll inputs were appropriate.

As part of the control environment improvements disclosed in our Quarterly Reports on Form 10-Q for the quarters 
ended June 30, 2018 and September 30, 2018, there was an emphasis on improving the strength of the Company’s ITGCs. In 
several cases, the strengthened controls were not fully operational until the fourth quarter of 2018. Due to the newness of the 
controls and personnel constraints and due to the control operators' dedication to supporting the launch of GCI Holdings' new 
billing and payroll systems, several of the improved access controls were not consistently executed in the fourth quarter of 
2018.  

The control deficiencies did not result in any identified misstatements. 

              The Company's independent registered public accounting firm that audited the consolidated financial statements 
included in this Annual Report has issued an adverse report on the effectiveness of the Company's internal control over 
financial reporting. This attestation report appears on page F-22 of this Annual Report.

F-21

 
 
 
 
 
 
Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors 
GCI Liberty, Inc.:

Opinion on Internal Control Over Financial Reporting 

We have audited GCI Liberty, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of 
December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the 
Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material 
weaknesses, described below, on the achievement of the objectives of the control criteria, the Company has not maintained 
effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - 
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2018 and 2017, the related consolidated 
statements of operations, comprehensive earnings (loss), cash flows, and equity for each of the years in the three-year period 
ended December 31, 2018, and the related notes (collectively, the consolidated financial statements), and our report dated 
February 28, 2019 expressed an unqualified opinion on those consolidated financial statements. 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that 
there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not 
be prevented or detected on a timely basis. The following material weaknesses have been identified and included in 
management’s assessment: 

1. 

2. 

Information technology general controls (ITGCs) around financially significant information technology (IT) systems 
were not effective. Specifically, the ITGCs around system access were not operating consistently to ensure that 
access to applications and data was adequately restricted to appropriate personnel. Because of the deficiency in 
ITGCs for these systems, the business process controls (automated and manual) that are dependent on these systems 
were also deemed ineffective because they could have been adversely impacted. These control deficiencies were a 
result of an inadequate assessment of IT risks, which in turn contributed to inappropriate reliance on manual 
business process controls rather than ITGCs. 

Internal controls around the payroll process were ineffective due to an aggregation of deficiencies relating to the IT 
deficiencies described above, ineffectively designed controls over payroll changes, and ineffective review and 
monitoring controls. These control deficiencies were a result of an inadequate assessment of risk related to 
outsourcing payroll processing to a third-party provider, which contributed to the ineffective design of controls 
intended to validate that manual changes to payroll inputs were appropriate.

The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of 
the 2018 consolidated financial statements, and this report does not affect our report on those consolidated financial 
statements.

Basis for Opinion 

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its 
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s 
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal 
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are 
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable 
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in 

F-22

all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal 
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and 
operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other 
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our 
opinion.

Definition and Limitations of Internal Control Over Financial Reporting 

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the 
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally 
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures 
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and 
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to 
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and 
expenditures of the company are being made only in accordance with authorizations of management and directors of the 
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or 
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, 
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate 
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Denver, Colorado
February 28, 2019

/s/ KPMG LLP

F-23

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
GCI Liberty, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of GCI Liberty, Inc. and subsidiaries (the Company) as of 
December 31, 2018 and 2017, the related consolidated statements of operations, comprehensive earnings (loss), cash flows, 
and equity for each of the years in the three-year period ended December 31, 2018, and the related notes (collectively, the 
consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, 
the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows 
for each of the years in the three-year period ended December 31, 2018, in conformity with U.S. generally accepted 
accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) 
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in 
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway 
Commission, and our report dated February 28, 2019 expressed an adverse opinion on the effectiveness of the Company’s 
internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express 
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the 
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws 
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform 
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material 
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material 
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond 
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the 
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant 
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We 
believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2017.

Denver, Colorado
February 28, 2019

F-24

GCI LIBERTY, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2018 and 2017

Assets

Current assets:

Cash and cash equivalents

Trade and other receivables, net of allowance for doubtful accounts of $7,555 and $0,

respectively

Current portion of tax sharing receivable

Other current assets

Total current assets

Investments in equity securities (note 6)
Investments in affiliates, accounted for using the equity method (note 7)
Investment in Liberty Broadband measured at fair value (note 7)

Property and equipment, net

Intangible assets not subject to amortization

Goodwill (note 8)

Cable certificates

Wireless licenses

Other

Intangible assets subject to amortization, net (note 8)

Tax sharing receivable

Other assets, at cost, net of accumulated amortization

Total assets

2018

2017

amounts in thousands

$

491,257

573,210

182,600

36,781

40,100

750,738

1,533,517
177,030
3,074,373

1,184,606

855,837

305,000

190,000

16,500

1,367,337

436,006

65,701

71,514

6,803

—

1,265

581,278

1,803,064
114,655
3,634,786

624

25,569

—

—

4,000

29,569

4,237

—

4,000

$

8,660,822

6,172,213

(Continued)

See accompanying notes to consolidated financial statements.

F-25

GCI LIBERTY, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (Continued)

December 31, 2018 and 2017

Liabilities and Equity

Current liabilities:

Accounts payable and accrued liabilities

Deferred revenue

Current portion of debt, net of deferred financing costs (note 9)

Other current liabilities

Total current liabilities

Long-term debt, net, including $462,336 and $0 measured at fair value (note 9)
Obligations under capital leases and tower obligations, excluding current portion (note 15)

Long-term deferred revenue

Deferred income tax liabilities

Taxes payable

Preferred stock (note 11)

Indemnification obligation (note 5)

Other liabilities

Total liabilities

Equity

Stockholders’ equity:

Series A common stock, $0.01 par value. Authorized 500,000,000 shares; issued and

outstanding 102,058,816 shares at December 31, 2018

Series B common stock, $0.01 par value. Authorized 20,000,000 shares; issued and

outstanding 4,441,609 shares at December 31, 2018

Series C common stock, $0.01 par value. Authorized 1,040,000,000 shares; no issued

and outstanding shares at December 31, 2018

Parent's investment

Additional paid-in capital

Accumulated other comprehensive earnings (loss), net of taxes

Retained earnings

Total stockholders' equity

Non-controlling interests

Total equity

Commitments and contingencies

Total liabilities and equity

2018
amounts in thousands, 
except share amounts

2017

$

100,334

31,743

900,759

47,958

1,080,794

1,985,275
122,245

65,954

793,696

—

177,103

78,522

50,543

718

—

—

9,747

10,465

—
—

130

643,426

1,198,315

—

—

95,841

4,354,132

1,948,177

1,021

44

—

—

3,251,957

168

1,043,933

4,297,123

9,567

—

—

—

2,305,440

—

—

1,914,963

4,220,403

3,633

4,306,690

4,224,036

$

8,660,822

6,172,213

 See accompanying notes to consolidated financial statements.

F-26

 
GCI LIBERTY, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Years ended December 31, 2018, 2017 and 2016

Revenue

Operating costs and expenses:

Operating expense (exclusive of depreciation and amortization shown

separately below)

Selling, general and administrative, including stock-based compensation (note

13)

Depreciation and amortization expense

Impairment of intangibles and long-lived assets

Operating income (loss)

Other income (expense):

Interest expense (including amortization of deferred loan fees)

Share of earnings (losses) of affiliates, net (note 7)

Realized and unrealized gains (losses) on financial instruments, net (note 5)

Tax sharing agreement

Other, net

Earnings (loss) before income taxes

Income tax (expense) benefit

Net earnings (loss)

Less net earnings (loss) attributable to the non-controlling interests

Net earnings (loss) attributable to GCI Liberty, Inc. shareholders

Basic net earnings (loss) attributable to Series A and Series B GCI Liberty, Inc.

shareholders per common share (note 2)

Diluted net earnings (loss) attributable to Series A and Series B GCI Liberty, Inc.

shareholders per common share (note 2)

$

$

$

2018

2017

2016

amounts in thousands, 
except per share amounts

$

739,762

23,817

22,552

227,192

347,676

206,946

207,940

989,754

(249,992)

(119,296)

25,772

(681,545)

(32,105)

205

(806,969)

(1,056,961)

183,307

(873,654)

(351)

(873,303)

(8.09)

(8.09)

11,541

64,621

3,252

—

79,414

(55,597)

—

7,001

11,702

43,041

2,964

—

57,707

(35,155)

—

11,831

637,164

1,309,365

—

2,467

646,632

591,035

133,522

724,557

(29)

724,586

6.65

6.65

—

30,773

1,351,969

1,316,814

(496,245)

820,569

(114)

820,683

7.53

7.53

See accompanying notes to consolidated financial statements.

F-27

GCI LIBERTY, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Earnings (Loss)

Years ended December 31, 2018, 2017 and 2016

Net earnings (loss)

Other comprehensive earnings (loss), net of taxes:

2018

2017

2016

amounts in thousands

$

(873,654)

724,557

820,569

Comprehensive earnings (loss) attributable to debt credit risk adjustments

Comprehensive earnings (loss)

Less comprehensive earnings (loss) attributable to the non-controlling

interests

168

(873,486)

—

724,557

(351)

(29)

Comprehensive earnings (loss) attributable to GCI Liberty, Inc. shareholders

$

(873,135)

724,586

—

820,569

(114)

820,683

See accompanying notes to consolidated financial statements.

F-28

GCI LIBERTY, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 2018, 2017 and 2016

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 expense

Share of (earnings) losses of affiliates, net

Realized and unrealized (gains) losses on financial instruments, net

Deferred income tax expense (benefit)

Intergroup tax payments

Impairment of intangibles and long-lived assets

Other, net

Change in operating assets and liabilities:

Current and other assets

Payables and other liabilities

Net cash provided (used) by operating activities

Cash flows from investing activities:

Cash and restricted cash from acquisition of GCI Holdings

Capital expended for property and equipment

Purchases of investments

Sales of investments

Investment in Liberty Broadband

Other investing activities, net

Net cash provided (used) by investing activities

Cash flows from financing activities:

Borrowings of debt

Repayment of debt, capital lease, and tower obligations

Contributions from (distributions to) former parent, net

Distribution to non-controlling interests

Indemnification payment to Qurate Retail

Derivative payments

Repurchases of GCI Liberty common stock

Other financing activities, net

2018

2017

2016

amounts in thousands
(See note 3)

$

(873,654)

724,557

820,569

206,946

28,207

(25,772)

681,545

(182,724)

—

207,940

13,441

(34,698)

61,657

82,888

147,957

(134,352)

(48,581)

—

—

2,700

(32,276)

1,588,703

(254,033)

(1,122,272)

(3,625)

(132,725)

(80,001)

(111,648)

(17,127)

(132,728)

(82,116)

574,148

492,032

3,252

26,583

(7,001)

(637,164)

(133,522)

287,763

—

1,040

31,772

7,584

304,864

—

(3,488)

(76,815)

2,180

—

—

2,964

16,128

(11,831)

(1,309,365)

496,820

294,708

—

(18,044)

5,881

(5,605)

292,225

—

(2,642)

(264,703)

1,161,596

(2,400,000)

978

(78,123)

(1,504,771)

—

—

—

—

(109,540)

(302,797)

—

—

—

—

(31,180)

(140,720)

86,021

488,127

574,148

—

—

—

—

1,989

(300,808)

(1,513,354)

2,001,481

488,127

Net cash provided (used) by financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

$

See accompanying notes to consolidated financial statements.

F-29

 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Consolidated Statement of Equity

Years ended December 31, 2018, 2017, and 2016

Series A
common
stock

Series B
common
stock

Parent's
investment

Additional
paid-in
capital

Accumulated
other
comprehensive
earnings (loss)

Retained
earnings

Non-controlling
interest in equity
of subsidiaries

Total
equity

amounts in thousands

Balances at January 1, 2016

$

Net earnings (loss)

Cumulative effect of accounting change

Stock-based compensation

Contributions from (distributions to)

former parent, net

Intergroup (payments) receipts

Other

Balances at December 31, 2016

Net earnings (loss)

Stock-based compensation

Withholding taxes on net share
settlements of stock-based
compensation

Contributions from (distributions to)

former parent, net

Intergroup (payments) receipts

Other

Balances at December 31, 2017

Net earnings (loss)

Other comprehensive earnings (loss)

Stock-based compensation

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Series A GCI Liberty stock repurchases

(25)

Contribution of taxes in connection with

HoldCo Split-Off

Contributions from (distributions to)

former parent, net

Change in Capitalization in connection

with HoldCo Split-Off

Issuance of GCI Liberty Stock in

connection with the Transactions

Issuance of Indemnification Agreement

Distribution to non-controlling interests

Other

—

—

1,046

—

—

—

—

Balances at December 31, 2018

$

1,021

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

44

—

—

—

—

44

2,684,850

—

—

14,906

(272,195)

(30,602)

1,493

2,398,452

—

26,243

(27,793)

(146,680)

37,140

18,078

2,305,440

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

25,399

(111,623)

1,341,657

—

(1,122,272)

(2,019)

(2,524,825)

2,523,735

1,111,206

(281,255)

—

(13,486)

—

—

—

—

—

—

—

—

—

—

—

—

347,811

820,683

21,576

—

—

—

498

3,776

3,036,437

(114)

820,569

—

—

—

—

—

21,576

14,906

(272,195)

(30,602)

1,991

— 1,190,568

3,662

3,592,682

—

—

—

—

—

—

724,586

—

—

—

—

(191)

(29)

—

724,557

26,243

—

—

—

—

(27,793)

(146,680)

37,140

17,887

— 1,914,963

3,633

4,224,036

—

168

—

—

—

—

—

—

—

—

—

(873,303)

(351)

(873,654)

—

—

—

—

2,019

—

—

—

—

254

—

—

—

—

—

168

25,399

(111,648)

1,341,657

(1,122,272)

7,000

7,000

—

—

(3,625)

2,910

1,111,206

(281,255)

(3,625)

(10,322)

3,251,957

168

1,043,933

9,567

4,306,690

 See accompanying notes to consolidated financial statements.

F-30

GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

(1)  Basis of Presentation

On April 4, 2017, Liberty Interactive Corporation, now known as Qurate Retail, Inc. ("Qurate Retail"), entered into 

an Agreement and Plan of Reorganization (as amended, the "reorganization agreement" and the transactions contemplated 
thereby, the "Transactions") with General Communication, Inc. ("GCI"), an Alaska corporation and parent company of GCI 
Holdings, LLC ("GCI Holdings"), and Liberty Interactive LLC, a Delaware limited liability company and a direct 
wholly owned subsidiary of Qurate Retail ("LI LLC"). Pursuant to the reorganization agreement, GCI amended and restated 
its articles of incorporation (which resulted in GCI being renamed GCI Liberty, Inc. ("GCI Liberty")) and effected a 
reclassification and auto conversion of its common stock. Following these events, Qurate Retail acquired GCI Liberty on 
March 9, 2018 through a reorganization in which certain Qurate Retail interests, assets and liabilities attributed to its Ventures 
Group (following the reattribution by Qurate Retail of certain assets and liabilities from its Ventures Group to its QVC 
Group), were contributed to GCI Liberty in exchange for a controlling interest in GCI Liberty (the "contribution"). Qurate 
Retail and LI LLC contributed to GCI Liberty their entire equity interests in Liberty Broadband Corporation ("Liberty 
Broadband"), Charter Communications, Inc. ("Charter"), and LendingTree, Inc. ("LendingTree"), the Evite, Inc. ("Evite") 
operating business and other assets and liabilities (collectively, "HoldCo"), in exchange for (a) the issuance to LI LLC of a 
number of shares of GCI Liberty Class A common stock and a number of shares of GCI Liberty Class B common stock equal 
to the number of outstanding shares of Qurate Retail's Series A Liberty Ventures common stock and Qurate Retail's Series B 
Liberty Ventures common stock on March 9, 2018, respectively, (b) cash and (c) the assumption of certain liabilities by GCI 
Liberty.

The contribution was treated as a reverse acquisition under the acquisition method of accounting in accordance with 

generally accepted accounting principles in the United States ("GAAP"). For accounting purposes, HoldCo is considered to 
have acquired GCI Liberty in the contribution based, among other considerations, upon the fact that in exchange for the 
contribution of HoldCo, Qurate Retail received a controlling interest in the combined company of GCI Liberty.

Following the contribution and acquisition of GCI Liberty, Qurate Retail effected a tax free separation of its 
controlling interest in the combined company, GCI Liberty, to the holders of Qurate Retail's Liberty Ventures common stock 
in full redemption of all outstanding shares of such stock (the "HoldCo Split Off"), in which each outstanding share of Qurate 
Retail's Series A Liberty Ventures common stock ("LVNTA") was redeemed for one share of GCI Liberty Class A common 
stock and each outstanding share of Qurate Retail's Series B Liberty Ventures common stock ("LVNTB") was redeemed for 
one share of GCI Liberty Class B common stock. In July 2018, the Internal Revenue Service completed its review of the 
HoldCo Split-Off and informed Qurate Retail that it agreed with the nontaxable characterization of the transactions. Qurate 
Retail received an Issue Resolution Agreement from the Internal Revenue Service ("IRS") documenting this conclusion.

On May 10, 2018, pursuant to the Agreement and Plan of Merger, dated as of March 22, 2018, GCI Liberty 
completed its reincorporation into Delaware by merging with its wholly owned Delaware subsidiary, which was the surviving 
corporation (the “Reincorporation Merger”). References to GCI Liberty or the Company prior to May 10, 2018 refer to GCI 
Liberty, Inc., an Alaska corporation and references to GCI Liberty after May 10, 2018 refer to GCI Liberty, Inc., a Delaware 
corporation.

The accompanying consolidated financial statements refer to the combination of GCI Holdings, non controlling 

interests in Liberty Broadband, Charter and LendingTree, a controlling interest in Evite, and certain other assets and liabilities 
as "GCI Liberty", the "Company", "us", "we" and "our." Although HoldCo was reported as a combined company until the 
date of the HoldCo Split-Off, these financial statements present all periods as consolidated by the Company. All significant 
intercompany accounts and transactions have been eliminated in the consolidated financial statements.

F-31

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

The Company, through its ownership of interests in subsidiaries and other companies, is primarily engaged in 

providing a full range of wireless, data, video, voice, and managed services to residential customers, businesses, 
governmental entities, and educational and medical institutions primarily in Alaska. 

The Company holds investments that are accounted for using the equity method. The Company does not control the 

decision making process or business management practices of these affiliates. Accordingly, the Company relies on 
management of these affiliates to provide it with accurate financial information prepared in accordance with GAAP that the 
Company uses in the application of the equity method. In addition, the Company relies on audit reports that are provided by 
the affiliates' independent auditors on the financial statements of such affiliates. The Company is not aware, however, of any 
errors in or possible misstatements of the financial information provided by its equity affiliates that would have a material 
effect on its consolidated financial statements.

Split Off from Qurate Retail

Following the HoldCo Split Off, Qurate Retail and GCI Liberty operate as separate, publicly traded companies, and 

neither have any stock ownership, beneficial or otherwise, in the other. In connection with the HoldCo Split Off, Qurate 
Retail, Liberty Media Corporation ("Liberty Media") (or its subsidiary) and GCI Liberty entered into certain agreements in 
order to govern certain of the ongoing relationships among the companies after the HoldCo Split Off and to provide for an 
orderly transition. These agreements include an indemnification agreement, a reorganization agreement, a services 
agreement, a facilities sharing agreement and a tax sharing agreement.

The reorganization agreement provides for, among other things, the principal corporate transactions (including the 
internal restructuring) required to effect the Transactions and certain conditions to and provisions governing the relationship 
between GCI Liberty and Qurate Retail (for accounting purposes a related party of GCI Liberty) with respect to and resulting 
from the Transactions. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and 
benefits between Qurate Retail and GCI Liberty and other agreements related to tax matters. Pursuant to the services 
agreement, Liberty Media provides GCI Liberty with general and administrative services including legal, tax, accounting, 
treasury and investor relations support. Under the facilities sharing agreement, GCI Liberty shares office space with Liberty 
Media and related amenities at its corporate headquarters. GCI Liberty reimburses Liberty Media for direct, out of pocket 
expenses incurred by Liberty Media in providing these services and for costs that will be negotiated semi annually. Liberty 
Media is a related party of GCI Liberty for accounting purposes as a result of services agreement. Under these agreements, 
approximately $8.3 million was reimbursable to Liberty Media for the year ended December 31, 2018.

In addition, Qurate Retail and GCI Liberty have agreed to indemnify each other with respect to certain potential 

losses in respect of the HoldCo Split Off. See note 5 for information related to the indemnification agreement.

(2)  Summary of Significant Accounting Principles

Cash and Cash Equivalents

Cash equivalents consist of investments which are readily convertible into cash and have maturities of three months 

or less at the time of acquisition. Financial instruments, which potentially subject the Company to concentration of credit 
risk, consist primarily of cash and cash equivalents and corporate debt securities. The Company maintains some cash and 
cash equivalents balances with financial institutions that are in excess of Federal Deposit Insurance Corporation insurance 
limits.

F-32

 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Accounts Receivable and Allowance for Doubtful Receivables

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful 

receivables is the Company's best estimate of the amount of probable credit losses in its existing accounts receivable. The 
Company bases its estimates on the aging of its accounts receivable balances, financial health of specific customers, regional 
economic data, changes in its collections process, regulatory requirements and its customers’ compliance with Universal 
Service Administrative Company rules. The Company reviews its allowance for doubtful receivables methodology at least 
annually.

Depending upon the type of account receivable the Company's allowance is calculated using a pooled basis with an 
allowance for all accounts greater than 120 days past due, a pooled basis using a percentage of related accounts, or a specific 
identification method.  When a specific identification method is used, potentially uncollectible accounts due to bankruptcy or 
other issues are reviewed individually for collectability.  Account balances are charged off against the allowance when it 
determines that it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit 
exposure related to its customers.

Changes in the allowance for doubtful receivables during the years ended December 31, 2018, 2017 and 2016 are 

summarized below (amounts in thousands): 

Additions

Balance at
beginning of
year

Charged to
costs and
expenses

Charged to
other
accounts

$

$

$

—

1,100

244

8,741

—

1,100

—

—

—

Deductions

Write-offs
net of
recoveries

1,186

1,100

244

Balance at
end of year

7,555

—

1,100

Description

2018

2017

2016

Investments

All marketable equity and debt securities held by the Company are carried at fair value, generally based on quoted 

market prices and changes in the fair value of such securities are reported in realized and unrealized gain (losses) on financial 
instruments in the accompanying consolidated statements of operations. The Company elected the measurement alternative 
(defined as the cost of the security, adjusted for changes in fair value when there are observable prices, less impairments) for 
its equity securities without readily determinable fair values.

For those investments in affiliates in which the Company has the ability to exercise significant influence, the equity 

method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize the 
Company’s share of net earnings or losses of the affiliate as they occur rather than as dividends or other distributions are 
received. Losses are limited to the extent of the Company’s investment in, advances to and commitments for the investee. In 
the event the Company is unable to obtain accurate financial information from an equity affiliate in a timely manner, the 
Company records its share of earnings or losses of such affiliate on a lag.

Changes in the Company’s proportionate share of the underlying equity of an equity method investee, which result 

from the issuance of additional equity securities by such equity investee, are recognized in the statements of operations 
through the Other, net line item. To the extent there is a difference between the Company's ownership percentage in the 
underlying equity of an equity method investee and the Company's carrying value, such difference is accounted for as if the 
equity method investee were a consolidated subsidiary.

F-33

 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

The Company continually reviews its equity method investments to determine whether a decline in fair value below 
the carrying value is other than temporary. The primary factors the Company considers in its determination are the length of 
time that the fair value of the investment is below the Company’s carrying value; the severity of the decline; and the financial 
condition, operating performance and near term prospects of the investee. In addition, the Company considers the reason for 
the decline in fair value, be it general market conditions, industry specific or investee specific; analysts’ ratings and estimates 
of 12-month share price targets for the investee; changes in stock price or valuation subsequent to the balance sheet date; and 
the Company’s intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. If 
the decline in fair value is deemed to be other than temporary, the carrying value of the equity method investment is written 
down to fair value. In situations where the fair value of an investment is not evident due to a lack of a public market price or 
other factors, the Company uses its best estimates and assumptions to arrive at the estimated fair value of such investment. 
The Company’s assessment of the foregoing factors involves a high degree of judgment and accordingly, actual results may 
differ materially from the Company’s estimates and judgments. Writedowns for equity method investments are included in 
share of earnings (losses) of affiliates.

The Company performs a qualitative assessment each reporting period for its equity securities without readily 

determinable fair values to identify whether an equity security could be impaired. When the Company's qualitative 
assessment indicates that an impairment could exist, it estimates the fair value of the investment and to the extent the fair 
value is less than the carrying value, it records the difference as an impairment in the consolidated statements of operations. 

Derivative Instruments

The Company’s derivative is recorded on the balance sheet at fair value. The Company's derivative is not designated 

as a hedge, and changes in the fair value of the derivative are recognized in earnings.

The fair value of the Company’s derivative instrument is estimated using the Black-Scholes-Merton model. The 

Black-Scholes-Merton model incorporates a number of variables in determining such fair values, including expected 
volatility of the underlying security and an appropriate discount rate. The Company obtains volatility rates from pricing 
services based on the expected volatility of the underlying security over the remaining term of the derivative instrument. A 
discount rate is obtained at the inception of the derivative instrument and updated each reporting period, based on the 
Company’s estimate of the discount rate at which it could currently settle the derivative instrument. The Company considered 
its own credit risk as well as the credit risk of its counterparties in estimating the discount rate. Management judgment is 
required in estimating the Black-Scholes-Merton model variables.

Property and Equipment

Property and equipment is stated at depreciated cost less impairments, if any. Construction costs of facilities are 

capitalized. Equipment financed under a capital lease is recorded at the lower of fair market value or the present value 
of future minimum lease payments at inception of the lease. Construction in progress represents transmission equipment and 
support equipment and systems not placed in service on December 31, 2018, that management intends to place in service 
during 2019.  Depreciation is computed using the straight-line method based upon the shorter of the estimated useful lives of 
the assets or the lease term, if applicable.

F-34

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Net property and equipment consists of the following:

December 31,

2018

2017

amounts in thousands

Land and buildings (25 years)

$

Telephony transmission equipment and distribution facilities (5-20 years)

Cable transmission equipment and distribution facilities (5-30 years)

Studio equipment (10-15 years)

Support equipment and systems (3-20 years)
Transportation equipment (5-13 years)

Customer premise equipment (2-20 years)

Fiber optic cable systems (15-25 years)

Property and equipment under capital leases

Construction in progress

Less accumulated depreciation

Less accumulated amortization on property and equipment under capital leases

105,525

763,957

100,391

3,315

118,230
16,066

21,351

53,384

41,084

113,819

1,337,122

145,321

7,195

Net property and equipment

$

1,184,606

441

—

—

—

921
—

—

—

—

—

1,362

738

—

624

Amortization of property and equipment under capital leases is included in Depreciation and Amortization Expense 
in the Consolidated Statements of Operations. Depreciation expense for the years ended December 31, 2018, 2017 and 2016 
was $153.5 million, $0.2 million and $0.1 million, respectively.

Repairs and maintenance are charged to expense as incurred. Expenditures for major renewals and betterments are 

capitalized. Accumulated depreciation is removed and gains or losses are recognized at the time of sales or other dispositions 
of property and equipment.

Material interest costs incurred during the construction period of non-software capital projects are capitalized. 

Interest is capitalized in the period commencing with the first expenditure for a qualifying capital project and ending when 
the capital project is substantially complete and ready for its intended use. Capitalized interest costs for the year ended 
December 31, 2018 was $3.9 million.

Impairment of Long-lived Assets

The Company periodically reviews the carrying amounts of its property and equipment and its intangible assets 

(other than goodwill and indefinite-lived intangible assets) to determine whether current events or circumstances indicate that 
such carrying amounts may not be recoverable.  If the carrying amount of the asset group is greater than the expected 
undiscounted cash flows to be generated by such asset group, including its ultimate disposition, an impairment adjustment is 
to be recognized.  Such adjustment is measured by the amount that the carrying value of such asset groups exceeds their fair 
value.  The Company generally measures fair value by considering sale prices for similar asset groups or by discounting 
estimated future cash flows using an appropriate discount rate.  Considerable management judgment is necessary to estimate 
the fair value of asset groups.  Accordingly, actual results could vary significantly from such estimates.  Asset groups to be 
disposed of are carried at the lower of their financial statement carrying amount or fair value less costs to sell.

F-35

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Asset Retirement Obligations

The Company records the fair value of a liability for an asset retirement obligation in the period in which it is 
incurred in Other Liabilities on the Consolidated Balance Sheets. When the liability is initially recorded, the Company 
capitalizes a cost by increasing the carrying amount of the related long-lived asset. In periods subsequent to initial 
measurement, changes in the liability for an asset retirement obligation resulting from revisions to either the timing or the 
amount of the original estimate of undiscounted cash flows are recognized.  Over time, the liability is accreted to its present 
value each period, and the capitalized cost is depreciated over the useful life of the related asset.  Upon settlement of the 
liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss upon settlement.

The majority of the Company's asset retirement obligations are the estimated cost to remove telephony transmission 
equipment and support equipment from leased property.  Following is a reconciliation of the beginning and ending aggregate 
carrying amounts of the liability for asset retirement obligations (amounts in thousands):

Balance at January1, 2018

Liability acquired

Liability incurred

Accretion expense

Liability settled

Balance at December 31, 2018

$

$

—

38,686

113

1,662

—

40,461

Certain of the Company's network facilities are on property that requires it to have a permit and the permit contains 

provisions requiring the Company to remove its network facilities in the event the permit is not renewed.  The Company 
expects to continually renew its permits and therefore cannot estimate any liabilities associated with such agreements.  A 
remote possibility exists that the Company would not be able to successfully renew a permit, which could result in it 
incurring significant expense in complying with restoration or removal provisions.

Intangible Assets

Internally used software, whether developed or purchased and installed as is, is capitalized and amortized using the 

straight-line method over an estimated useful life of three to five years. The Company capitalizes certain costs associated 
with internally developed software such as payroll costs of employees devoting time to the projects, external direct costs for 
materials and services, and interest costs incurred. Costs associated with internally developed software to be used internally 
are expensed until the point the project has reached the development stage. Subsequent additions, modifications or upgrades 
to internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not 
perform. Software maintenance and training costs are expensed in the period in which they are incurred. The capitalization of 
software requires judgment in determining when a project has reached the development stage.

The Company has Software as a Service ("SaaS") arrangements which are accounted for as service agreements, and 
are not capitalized. Internal and other third party costs for SaaS arrangements are expensed as incurred. Data migration costs 
for such arrangements are expensed consistent with the same type of costs for internally developed and modified software. 
Additionally, configuration costs paid to the vendor are recorded as a prepaid expense and expensed over the term of the SaaS 
arrangement.

F-36

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their 

estimated residual values, and reviewed for impairment upon certain triggering events.  Intangible assets with estimable 
useful lives are being amortized over 1 to 20 year periods with a weighted-average life of 14 years. 

Goodwill, cable certificates (certificates of convenience and public necessity), wireless licenses and other intangible 
assets with indefinite useful lives are not amortized, but instead are tested for impairment at least annually. Cable certificates 
represent certain perpetual operating rights to provide cable services. Wireless licenses represent the right to utilize certain 
radio frequency spectrum to provide wireless communications services. Goodwill represents the excess of cost over fair value 
of net assets acquired in connection with a business acquisition. The Company's annual impairment assessment of its 
indefinite-lived intangible assets is performed during the fourth quarter of each year.

In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit 
and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it was more likely 
than not that an indicated impairment exists for any of its reporting units. The Company considers whether there are any 
negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in 
doing business, management challenges, the legal environments and how these factors might impact company specific 
performance in future periods. As part of the analysis the Company also considers fair value determinations for certain 
reporting units that have been made at various points throughout the current year and prior year for other purposes. If based 
on the qualitative analysis it is more likely than not that an impairment exists, the Company performs the quantitative 
impairment test.

The quantitative goodwill impairment test compares the estimated fair value of a reporting unit to its carrying value 

and to the extent the carrying value is greater than the fair value, the difference is recorded as an impairment in the 
consolidated statements of operations. Developing estimates of fair value requires significant judgments, including making 
assumptions about appropriate discount rates, perpetual growth rates, relevant comparable market multiples, public trading 
prices and the amount and timing of expected future cash flows. The cash flows employed in the Company's valuation 
analyses are based on management's best estimates considering current marketplace factors and risks as well as assumptions 
of growth rates in future years. There is no assurance that actual results in the future will approximate these forecasts.

The accounting guidance also permits entities to first perform a qualitative assessment to determine whether it is 

more likely than not that an indefinite-lived intangible asset, other than goodwill, is impaired. The accounting guidance also 
allows entities the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and 
proceed directly to the quantitative impairment test. The entity may resume performing the qualitative assessment in any 
subsequent period. If the qualitative assessment supports that it is more likely than not that the carrying value of the 
Company’s indefinite-lived intangible assets, other than goodwill, exceeds its fair value, then a quantitative assessment is 
performed. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized 
in an amount equal to that excess.

See note 8 for information on impairments recorded during the year ended December 31, 2018.

Revenue Recognition

In May 2014, the Financial Accounting Standards Board (the "FASB") issued new accounting guidance on revenue 

from contracts with customers. The Company adopted the new guidance, which established Accounting Standards 
Codification Topic 606 ("ASC 606"), effective January 1, 2018, under the modified retrospective transition method. The 
impact of the new guidance on Evite was not material to the consolidated financial statements. GCI Holdings adopted the 
new guidance prior to its acquisition by HoldCo. As a result, there was no impact to the Company’s consolidated financial 

F-37

 
 
 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

statements related to GCI Holdings’ adoption of the new guidance. 

Revenue is measured based on consideration specified in a contract with a customer and excludes any sales 
incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance 
obligation by transferring control over a product or service to a customer. Substantially all of the Company's revenue is 
earned from services transferred over time. If at contract inception the Company determines the time period between when it 
transfers a promised good or service to a customer and when the customer pays for that good or service is one year or less, 
the Company does not adjust the promised amount of consideration for the effects of a significant financing component. 

Certain of the Company's customers have guaranteed levels of service.  If an interruption in service occurs, the 

Company does not recognize revenue for any portion of the monthly service fee that will be refunded to the customer or not 
billed to the customer due to these service level agreements.

Taxes assessed by a governmental authority that are both imposed on, and concurrent with, a specific revenue-

producing transaction that are collected by the Company from a customer, are excluded from revenue from contracts with 
customers.

Nature of Services and Products

Wireless

Wireless revenue is generated by providing access to, and usage of the Company's network, as well as the sale of 

equipment. In general, access revenue is billed in advance, recorded as deferred revenue on the balance sheet, and recognized 
as the associated services are provided to the customer. Equipment sales revenue associated with the sale of wireless devices 
and accessories is generally recognized when the products are delivered to and control transfers to the customer. 
Consideration received from the customer is allocated to the service and products based on stand-alone selling prices when 
purchased together.

New and existing wireless customers have the option to participate in Upgrade Now, a program that provides 

eligible customers with the ability to purchase certain wireless devices in installments over a period of up to 24 months. 
Participating customers have the right to trade-in the original equipment for a new device after making the equivalent of 12 
monthly installment payments, provided their handset is in good working condition. Upon upgrade, the outstanding balance 
of the wireless equipment installment plan is exchanged for the used handset. The Company accounts for this upgrade option 
as a right of return with a reduction of Revenue and Operating expense for handsets expected to be upgraded based on 
historical data.

Data

Data revenue is generated by providing data network access, high-speed internet services, and product sales. 

Monthly service revenue for data network access and high-speed internet services is billed in advance, recorded as deferred 
revenue on the balance sheet, and recognized as the associated services are provided to the customer. Internet service excess 
usage revenue is recognized when the services are provided. The Company recognizes revenue for product sales when a 
customer takes possession of the equipment. The Company provides telecommunications engineering services on a time and 
materials basis. Revenue is recognized for these services as-invoiced. 

F-38

 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Video

Video revenue is generated primarily from residential and business customers that subscribe to the Company's cable 

video plans. Video revenue is billed in advance, recorded as deferred revenue on the balance sheet, and recognized as the 
associated services are provided to the customer. 

Voice

Voice revenue is for fixed monthly fees for voice plans as well as usage based fees for long-distance service usage. 

Voice plan fees are billed in advance, recorded as deferred revenue on the balance sheet, and recognized as the associated 
services are provided to the customer. Usage based fees are recognized as services are provided.

Arrangements with Multiple Performance Obligations

Contracts with customers may include multiple performance obligations as customers purchase multiple services 

and products within those contracts. For such arrangements, revenue is allocated to each performance obligation based on the 
relative standalone selling price for each service or product within the contract. Standalone selling prices are generally 
determined based on the prices charged to customers.

Significant Judgments

Some contracts with customers include variable consideration, and may require significant judgment to determine 

the total transaction price, which impacts the amount and timing of revenue recognized. The Company uses historical 
customer data to estimate the amount of variable consideration included in the total transaction price and reassess its estimate 
at each reporting period. Any change in the total transaction price due to a change in the estimated variable consideration is 
allocated to the performance obligations on the same basis as at contract inception. Any portion of a change in transaction 
price that is allocated to a satisfied or partially satisfied performance obligation is recognized as revenue (or a reduction in 
revenue) in the period of the transaction price change. Variable consideration has been constrained to reduce the likelihood of 
a significant revenue reversal.

Often contracts with customers include promises to transfer multiple products and services to a customer. 

Determining whether products and services are considered distinct performance obligations that should be accounted for 
separately versus together may require significant judgment.

Judgment is required to determine the standalone selling price for each distinct performance obligation. Services and 

products are generally sold separately, and help establish standalone selling price for services and products the Company 
provides.

Remaining Performance Obligations

The Company expects to recognize revenue in the future related to performance obligations that are unsatisfied (or 

partially unsatisfied) as of December 31, 2018 of $244.6 million in 2019, $219.3 million in 2020, $130.1 million in 2021, 
$85.4 million in 2022 and $23.4 million in 2023 and thereafter. 

The Company applies certain practical expedients as permitted under ASC 606 and does not disclose information 

about remaining performance obligations that have original expected durations of one year or less, information about revenue 
remaining from usage based performance obligations that are recognized over time as-invoiced, or variable consideration 
allocated to wholly unsatisfied performance obligations.

F-39

 
 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Contract Balances

The Company had receivables of $198.8 million and deferred revenue of $31.7 million at December 31, 2018 from 

contracts with customers, which amounts exclude receivables and deferred revenue that are out of the scope of ASC 606. The 
Company's customers generally pay for services in advance of the performance obligation and therefore these prepayments 
are recorded as deferred revenue. The deferred revenue is recognized as revenue in the accompanying consolidated 
statements of operations as the services are provided. Changes in the contract liability balance for the Company during 2018 
was not materially impacted by other factors. 

Assets Recognized from the Costs to Obtain a Contract with a Customer

Management expects that incremental commission fees paid to intermediaries as a result of obtaining customer 

contracts are recoverable and therefore the Company capitalizes them as contract costs.

Capitalized commission fees are amortized based on the transfer of goods or services to which the assets relate 

which typically range from two to five years, and are included in Selling, general, and administrative expenses. 

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the 

amortization period of the assets that the Company otherwise would have recognized is one year or less. These costs are 
included in Selling, general, and administrative expenses.

Revenue from contracts with customers, classified by customer type and significant service offerings follows:

GCI Holdings

Consumer Revenue

Wireless

Data

Video

Voice

Business Revenue

Wireless

Data

Video

Voice

Evite

Lease, grant, and revenue from subsidies

Total

F-40

Year ended
December 31, 2018
amounts in
thousands

$

$

63,482

223,121

16,786

19,820

94,713

130,631

72,826

14,791

23,920

79,672

739,762

 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Lease, Grant, and Revenue from Subsidies

Universal Service Fund

GCI Holdings receives support from each of the various Universal Service Fund ("USF") programs: high cost, low 

income, rural health care, and schools and libraries. The programs are subject to change by regulatory actions taken by the 
Federal Communications Commission ("FCC") or legislative actions, therefore, changes to the programs could result in a 
material decrease in revenue that the Company has recorded.  Revenue recognized from the programs was 23% of the 
Company's revenue for the year ended December 31, 2018.  The Company had USF net receivables of $91.3 million at 
December 31, 2018. 

Leases

Scheduled operating lease rent increases are amortized over the expected lease term on a straight-line basis. Rent 

holidays are recognized on a straight-line basis over the operating lease term (including any rent holiday period).

Leasehold improvements are amortized over the shorter of their economic lives or the lease term. The Company may 

amortize a leasehold improvement over a term that includes assumption of a lease renewal if the renewal is reasonably 
assured. Leasehold improvements acquired in a business combination are amortized over the shorter of the useful life of the 
assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date of 
acquisition. Leasehold improvements that are placed in service significantly after and are not contemplated at or near the 
beginning of the lease term are amortized over the shorter of the useful life of the assets or a term that includes required lease 
periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. 
Leasehold improvements made by the Company and funded by landlord incentives or allowances under an operating lease 
are recorded as deferred rent and amortized as reductions to lease expense over the lease term.

Stock-Based Compensation

As more fully described in note 13, the Company has granted to certain directors, employees and employees of its 

subsidiaries, restricted shares ("RSAs"), restricted stock units ("RSUs") and options to purchase shares of GCI Liberty's 
common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an 
equity classified Award (such as stock options, RSAs and RSUs) based on the grant-date fair value 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 remeasures the fair value of the Award at each reporting date.

Stock compensation expense was $28.2 million, $26.6 million and $16.1 million for the years ended December 31, 

2018, 2017, and 2016, respectively, included in selling, general and administrative expense in the accompanying consolidated 
statements of operations. In March 2016, the FASB issued new guidance which simplifies several aspects of the accounting 
for share-based payment award transactions, including the income tax consequences, forfeitures, classification of awards as 
either equity or liabilities, and classification on the statement of cash flows. The new standard is effective for the Company 
for fiscal years and interim periods beginning after December 15, 2016, with early application permitted. The Company 
adopted this guidance in the third quarter of 2016. In accordance with the new guidance, excess tax benefits and tax 
deficiencies are recognized as income tax benefit or expense rather than as additional paid-in capital. The Company has 
elected to recognize forfeitures as they occur rather than continue to estimate expected forfeitures. In addition, pursuant to the 
new guidance, excess tax benefits are classified as an operating activity on the consolidated statements of cash flows. The 
recognition of excess tax benefits and deficiencies are applied prospectively from January 1, 2016. For tax benefits that were 

F-41

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

not previously recognized and for adjustments to compensation cost based on actual forfeitures, the Company recorded a 
cumulative-effect adjustment in retained earnings as of January 1, 2016.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are 

recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts 
and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit 
carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing 
jurisdiction in which the Company operates for the year in which those temporary differences are expected to be recovered or 
settled. Net deferred tax assets are then reduced by a valuation allowance if the Company believes it more likely than not 
such net deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of an enacted change in tax 
rates is recognized in income in the period that includes the enactment date.

When the tax law requires interest to be paid on an underpayment of income taxes, the Company recognizes interest 

expense from the first period the interest would begin accruing according to the relevant tax law. Such interest expense is 
included in interest expense in the accompanying consolidated statements of operations. Any accrual of penalties related to 
underpayment of income taxes on uncertain tax positions is included in other income (expense) in the accompanying 
consolidated statements of operations.

Earnings per Share (EPS)

Basic 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 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 EPS during periods in which losses are reported since the result 
would be antidilutive.

The total number of Series A and Series B common shares outstanding on March 9, 2018, 109,004,250, is being 

used in the calculation of both basic and diluted earnings per share for all periods prior to the date of the HoldCo Split-Off.

Series A and Series B Common Stock

Basic WASO

Potentially dilutive shares

Diluted WASO

Antidilutive shares excluded from diluted WASO, including potentially dilutive shares, as a result of

the Company's net loss attributable to GCI Liberty, Inc. shareholders

F-42

March 9, 2018 
through 
December 31, 2018
number of shares in
thousands

107,924

—

107,924

1,127

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Reclassifications

Reclassifications have been made to the prior years' consolidated financial statements to conform to classifications 

used in the current year.

Estimates

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. The Company 
considers (i) non-recurring fair value measurements of non-financial instruments and (ii) accounting for income taxes to be 
its most significant estimates.

The Company has investments that are accounted for using the equity method. The Company does not control the 

decision making process or business management practices of these affiliates. Accordingly, the Company relies on 
management of these affiliates to provide it with accurate financial information prepared in accordance with GAAP that the 
Company uses in the application of the equity method. In addition, the Company relies on audit reports that are provided by 
the affiliates’ independent auditors on the financial statements of such affiliates. The Company is not aware, however, of any 
errors in or possible misstatements of the financial information provided by its equity affiliates that would have a material 
effect on the Company’s consolidated financial statements.

New Accounting Pronouncements Not Yet Adopted

In August 2018, the FASB issued new guidance which aligns the requirements for capitalizing implementation costs 

incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs 
incurred to develop or obtain internal-use software. The guidance will be effective for the Company in the first quarter of 
2020 with early adoption permitted. The Company is currently assessing the impact that adopting this new accounting 
standard will have on its consolidated financial statements.

In February 2016, the FASB issued new accounting guidance on lease accounting. This guidance requires a 

company to recognize lease assets and lease liabilities arising from operating leases in the statement of financial position. 
Additionally, the criteria for classifying a lease as a finance lease versus an operating lease are substantially the same as the 
previous guidance. In January 2018, the FASB issued an additional amendment that provides a practical expedient that gives 
companies the option to not evaluate existing or expired land easements that were not previously accounted for as leases 
under the current leases guidance. The amendments in these updates are effective for fiscal years beginning after December 
15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The Company plans to adopt 
this guidance on January 1, 2019. The Company expects to adopt using the optional transitional method that allows for a 
cumulative effect adjustment in the period of adoption without adjusting the comparative periods presented. Additionally, the 
Company currently expects to elect certain optional practical expedients under the transition guidance. The Company 
continues to assess the impact of the new lease guidance with respect to its current operating and capital leases and 
specifically are reviewing the impact of a previous failed sale and leaseback tower transaction in order to determine the 
appropriate treatment upon transition to the new lease guidance. The Company has identified a technology solution to use for 
managing the population of leases identified and for making the necessary calculations. The Company continues to work with 
its consolidated subsidiaries to evaluate the impact of the adoption of this new guidance on its consolidated financial 
statements, including identifying the population of leases and collecting lease data.

F-43

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

(3)  Supplemental Disclosures to Consolidated Statements of Cash Flows

Cash paid for acquisition:

Property and equipment

Intangible assets not subject to amortization

Intangible assets subject to amortization
Receivables and other assets

Liabilities assumed

Deferred tax assets (liabilities)

Fair value of equity consideration

Cash paid (received) for acquisitions, net of cash acquired

Cash paid for interest, net of amounts capitalized

Non-cash additions for purchases of property and equipment

Years ended December 31,

2018

2017

2016

amounts in thousands

$

1,211,392

1,538,544

468,737
254,436
(2,233,177)
(276,683)
(1,111,206)
(147,957)

132,103

15,916

$

$

$

—

—

—
—

—

—
—

—

6

—

—

—

—
—

—

—
—

—

—

—

In November 2016, the FASB issued a new accounting standard which requires that the statement of cash flows 

include restricted cash and cash equivalents when reconciling beginning and ending cash. The guidance is effective for fiscal 
years, and interim periods within those fiscal years, beginning after December 15, 2017. The Company adopted this new 
guidance effective January 1, 2018. Upon adoption, the Company added restricted cash to the reconciliation of beginning and 
ending cash and cash equivalents and included a reconciliation of total cash and cash equivalents and restricted cash to the 
balance sheet for each period presented in the consolidated statements of cash flows. The following table reconciles cash and 
cash equivalents and restricted cash reported in the Company's consolidated balance sheets to the total amount presented in 
its  consolidated statements of cash flows:

Cash and cash equivalents

Restricted cash included in other current assets

Total cash and cash equivalents and restricted cash at end of period

(4)  Acquisition

2018

Years ended December 31,
2017
amounts in thousands

2016

$

$

491,257

775

492,032

573,210

938

574,148

487,163

964

488,127

The Company accounted for the Transactions contemplated under the reorganization agreement using the acquisition 

method of accounting. Under this method, HoldCo is the acquirer of GCI Liberty. The acquisition price was $1.1 billion 
(level 1). The application of the acquisition method resulted in the assignment of purchase price to the GCI Liberty assets 
acquired and liabilities assumed based on preliminary estimates of their acquisition date fair values (primarily level 3). The 
assets acquired and liabilities assumed, and as discussed within this note, are those assets and liabilities of GCI Liberty prior 

F-44

 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

to the completion of the Transactions. The determination of the fair values of the acquired assets and liabilities (and the 
determination of estimated lives of depreciable tangible and identifiable intangible assets) requires significant judgment. 

The preliminary acquisition price allocation for GCI Liberty is as follows (amounts in thousands): 

Cash and cash equivalents including restricted cash
Receivables
Property and equipment
Goodwill
Intangible assets not subject to amortization
Intangible assets subject to amortization
Other assets
Deferred revenue
Debt, including capital leases
Other liabilities
Deferred income tax liabilities
Preferred stock
Non-controlling interest

$

$

147,957
171,014
1,211,392
966,044
572,500
468,737
83,422
(92,561)
(1,707,002)
(251,692)
(276,683)
(174,922)
(7,000)
1,111,206

Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and 

represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate 
recognition, including assembled workforce, value associated with future customers, continued innovation and non-
contractual relationships. Amortizable intangible assets of $468.7 million were acquired and are comprised of a tradename 
with an estimated useful life of approximately 10 years, customer relationships with a weighted average useful life of 
approximately 16 years and right-to-use assets with a weighted average useful life of 8 years. Approximately $170.0 million 
of the acquired goodwill will be deductible for income tax purposes. As of December 31, 2018, the determination of the 
estimated acquisition date fair value of the acquired assets and assumed liabilities is preliminary and subject to revision. The 
primary areas of the Company's acquisition price allocation that changed from the initial allocation recorded in the 
Company's March 31, 2018 financial statements relate to a decrease in receivables of $13.7 million, an increase in property 
and equipment of $16.3 million, an increase to intangible assets not subject to amortization of $9.5 million, a decrease to 
intangible assets subject to amortization of $75.2 million, an increase in deferred revenue of $15.6 million, a decrease in 
other liabilities of $21.4 million, a decrease in deferred income tax liabilities of $15.6 million, and an increase to goodwill of 
$41.4 million. The acquisition date fair values related to certain assets, liabilities and tax balances associated with the support 
GCI Holdings receives from various USF programs have not been finalized.

Since the date of the acquisition, included in net earnings (loss) attributable to GCI Liberty shareholders for the year 
ended December 31, 2018 is $307.9 million in losses related to GCI Holdings. The unaudited pro forma revenue, net earnings 
and basic and diluted net earnings per common share of GCI Liberty, prepared utilizing the historical financial statements of 
HoldCo, giving effect to acquisition accounting related adjustments made at the time of acquisition, as if the acquisition 
discussed above occurred on January 1, 2017, are as follows:

F-45

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Years Ended December 31,

2018

2017

Revenue
Net earnings (loss)
Net earnings (loss) attributable to GCI Liberty shareholders

amounts in thousands, except
per share amounts
899,210
(872,306)
(871,839)

918,726
713,377
713,882

$
$
$

Basic net earnings (loss) attributable to Series A and Series B GCI Liberty, Inc.

shareholders per common share

Diluted net earnings (loss) attributable to Series A and Series B GCI Liberty, Inc.

shareholders per common share

$

$

(8.08)

(8.08)

6.55

6.55

The pro forma results include adjustments directly attributable to the business combination including adjustments 
related to the amortization of acquired tangible and intangible assets, revenue, interest expense, stock-based compensation, 
and the exclusion of transaction related costs; the impact of the FCC's decision to reduce rates paid to the Company under the 
Rural Health Care Program; and the new revenue standard. The pro forma information is not representative of the Company’s 
future results of operations nor does it reflect what the Company’s results of operations would have been if the acquisition 
had occurred previously and the Company consolidated the results of GCI Liberty during the periods presented.

(5)  Assets and Liabilities Measured at Fair Value

For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to 

valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active 
markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 
inputs, other than quoted market prices included within Level 1, are observable for the asset or liability, either directly or 
indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company does not have any recurring assets or 
liabilities measured at fair value that would be considered Level 3.

The Company’s assets and liabilities measured at fair value are as follows:

Description

Total

December 31, 2018

December 31, 2017

Quoted 
prices
in active
markets
for identical
assets
(Level 1)

Significant
other
observable
inputs
(Level 2)

Quoted 
prices
in active
markets
for identical
assets
(Level 1)

Significant
other
observable
inputs
(Level 2)

Total

amounts in thousands

Cash equivalents

Equity securities

$

384,071

384,071

—

570,526

570,526

$ 1,529,901

1,529,901

— 1,800,208

1,800,208

Investment in Liberty Broadband

$ 3,074,373

3,074,373

— 3,634,786

3,634,786

Variable forward

Indemnification obligation

Exchangeable senior debentures

$

$

$

20,340

78,522

462,336

—

—

—

20,340

78,522

462,336

94,807

—

—

—

—

—

—

—

—

94,807

—

—

F-46

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

On June 6, 2017, Qurate Retail purchased an additional 450,000 LendingTree shares and executed a 2 year variable 
forward with respect to 642,850 LendingTree shares. The variable forward was executed at the LendingTree closing price on 
June 6, 2017 of $170.70 per share and has a floor price of $128.03 per share and a cap price of $211.67 per share. The 
liability associated with this instrument is included in the Other current liabilities line item as of December 31, 2018 and 
Other liabilities line item as of December 31, 2017 in the consolidated balance sheets. The fair value of the variable forward 
was derived from a Black Scholes Merton model using observable market data as the significant inputs.

Pursuant to an indemnification agreement, GCI Liberty has agreed to indemnify LI LLC for certain payments made 

to a holder of LI LLC's 1.75% exchangeable debentures due 2046 (the "1.75% Exchangeable Debentures"). An indemnity 
obligation in the amount of $281.3 million was recorded upon completion of the HoldCo Split-Off. In June 2018, Qurate 
Retail repurchased 417,759 bonds of the 1.75% Exchangeable Debentures for approximately $457 million, including accrued 
interest, and the Company made a payment under the indemnification agreement to Qurate Retail in the amount of $133 
million.  The remaining indemnification liability due to LI LLC pertains to the holder’s ability to exercise its exchange right 
according to the terms of the 1.75% Exchangeable Debentures on or before October 5, 2023. Such amount will equal the 
difference between the exchange value and par value of the 1.75% Exchangeable Debentures at the time the exchange occurs. 
The indemnification obligation recorded in the consolidated balance sheets as of December 31, 2018 represents the fair value 
of the estimated exchange feature included in the 1.75% Exchangeable Debentures primarily based on observable market data 
as significant inputs (Level 2). As of December 31, 2018, a holder of the 1.75% Exchangeable Debentures does not have the 
ability to exchange and, accordingly, such indemnification obligation is included as a long-term liability in the Company's 
consolidated balance sheets. Additionally, as of December 31, 2018, 332,241 bonds of the 1.75% Exchangeable Debentures 
remain outstanding. 

Realized and Unrealized Gains (Losses) on Financial Instruments, net

Realized and unrealized gains (losses) on financial instruments, net are comprised of changes in the fair value of the 

following:

Equity securities
Investment in Liberty Broadband
Variable forward
Indemnification obligation
Exchangeable senior debentures

2018

Years ended December 31,
2017
amounts in thousands

2016

$

$

(274,393)
(560,413)
75,970
70,007
7,284
(681,545)

258,629
473,342
(94,807)
NA
NA
637,164

547,921
761,444
NA
NA
NA
1,309,365

The Company has elected to account for its exchangeable debt using the fair value option. Accordingly, a portion of 
the unrealized gain (loss) recognized on the Company’s exchangeable debt is presented in other comprehensive income as it 
relates to instrument specific credit risk and any other changes in fair value are presented in the accompanying consolidated 
statements of operations.

F-47

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

(6)  Investments in Equity Securities

Investments in equity securities, the majority of which are carried at fair value, are summarized as follows:

Charter (a)
Other investments (b)

December 31,

2018
2017
amounts in thousands
1,526,984
6,533
1,533,517

1,800,208
2,856
1,803,064

$

$

(a) A portion of the Charter equity securities are considered covered shares and subject to certain contractual restrictions in 
accordance with the indemnification agreement. See note 5 for additional discussion of the indemnification agreement.
(b) The Company has elected the measurement alternative for a portion of these securities.

(7)  Investments in Affiliates Accounted for Using the Equity Method

Investment in LendingTree

The Company has various investments accounted for using the equity method. The following table includes the 

Company’s carrying amount and percentage ownership of the more significant investments in affiliates at December 31, 2018 
and the carrying amount at December 31, 2017:

LendingTree (a)

Other

December 31, 2018
Market
value

Percentage
ownership

Carrying
amount

December 31, 2017
Carrying
amount

dollars in thousands

26.6% $

756,197

$ 174,002

various

NA

3,028

$ 177,030

114,655

—

114,655

(a)  Both the Company's ownership interest in LendingTree and the Company's share of LendingTree's earnings (losses) are
reported on a three month lag. The market value disclosed is as of December 31, 2018.

The Company’s share of LendingTree’s earnings (losses) was $21.1 million, $7.0 million, and $11.8 million for the 

years ended December 31, 2018, 2017, and 2016, respectively. 

Investment in Liberty Broadband

On May 18, 2016, Qurate Retail completed a $2.4 billion investment in Liberty Broadband Series C non-voting 

shares (for accounting purposes a related party of the Company) in connection with the merger of Charter and Time Warner 
Cable Inc. ("TWC"). The proceeds of this investment were used by Liberty Broadband to fund, in part, its acquisition of $5 
billion of stock in the new public parent company, Charter, of the combined enterprises. Qurate Retail, along with third party 
investors, all of whom invested on the same terms as Qurate Retail, purchased newly issued shares of Liberty Broadband 
Series C common stock at a per share price of $56.23, which was determined based upon the fair value of Liberty 
Broadband’s net assets on a sum of the parts basis at the time the investment agreements were executed (May 2015). Qurate 
Retail, as part of the merger described above, exchanged, in a tax free transaction, its shares of TWC common stock for 
shares of Charter Class A common stock, on a one for one basis, and Qurate Retail granted to Liberty Broadband a proxy and 

F-48

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

a right of first refusal with respect to the shares of Charter Class A common stock held by Qurate Retail following the 
exchange, which proxy and right of first refusal was assigned to GCI Liberty in connection with the completion of the 
Transactions.

As of December 31, 2018, the Company has a 23.5% economic ownership interest in Liberty Broadband. Due to 

overlapping boards of directors and management, the Company has been deemed to have significant influence over Liberty 
Broadband for accounting purposes, even though the Company does not have any voting rights. The Company has elected to 
apply the fair value option for its investment in Liberty Broadband (Level 1) as it is believed that investors value this 
investment based on the trading price of Liberty Broadband. The Company recognizes changes in the fair value of its 
investment in Liberty Broadband in realized and unrealized gains (losses) on financial instruments, net in the consolidated 
statements of operations. Summarized financial information for Liberty Broadband is as follows:

Current assets
Investment in Charter, accounted for using the equity method
Other assets

Total assets
Long-term debt
Deferred income tax liabilities
Other liabilities
Equity

Total liabilities and shareholders' equity

December 31,

2018
2017
amounts in thousands

$

$

84,574
12,004,376
9,487
12,098,437
522,928
965,829
11,062
10,598,618
12,098,437

84,054
11,835,613
12,122
11,931,789
497,370
932,593
14,925
10,486,901
11,931,789

2018

Years ended December 31,
2017
amounts in thousands

2016

Revenue
Operating expenses, net

Operating income (loss)

Share of earnings (losses) of affiliates
Gain (loss) on dilution of investment in affiliate
Realized and unrealized gains (losses) on financial instruments, net
Other income (expense), net
Income tax benefit (expense)

Net earnings (loss)

$

$

22,256
(34,270)
(12,014)
166,146
(43,575)
3,659
(22,339)
(21,924)
69,953

13,092
(38,570)
(25,478)
2,508,991
(17,872)
3,098
(18,139)
(416,933)
2,033,667

30,586
(51,746)
(21,160)
641,544
770,766
94,122
(9,600)
(558,369)
917,303

F-49

 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

(8)  Goodwill and Intangible Assets

Goodwill and Indefinite Lived Assets

Changes in the carrying amount of goodwill are as follows:

Balance at January 1, 2018

Acquisitions
Impairment

Balance at December 31, 2018

GCI Holdings

Corporate and
other
amounts in thousands

Total

$

$

—

966,044
(135,776)
830,268

25,569

—
—

25,569

25,569

966,044
(135,776)
855,837

As presented in the accompanying consolidated balance sheets, cable certificates and wireless licenses are the other 

significant indefinite lived intangible asset.

Intangible Assets Subject to Amortization

Customer relationships
Other amortizable intangibles
Total

December 31, 2018

     Gross

carrying
amount

     Net

Accumulated
amortization
amounts in thousands

carrying
amount

$ 408,267
122,759
$ 531,026

(55,417)
(39,603)
(95,020)

352,850
83,156
436,006

Amortization expense for intangible assets with finite useful lives was $53.5 million for the year ended December 
31, 2018. Amortization expense for amortizable intangible assets for each of the five succeeding fiscal years is estimated to 
be (amounts in thousands):

Years Ending December 31,

2019

2020

2021

2022

2023

Impairments

$

$

$

$

$

59,790

49,892

39,548

34,428

32,341

Due to unanticipated program revenue changes and certain other market factors impacting GCI Holdings operating 
results, impairment losses of $136 million and $65 million were recorded during the year ended December 31, 2018 related 
to goodwill and cable certificates, respectively, related to the GCI Holdings reporting unit. The fair value of the cable 

F-50

 
 
    
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

certificates and the GCI Holdings reporting unit was determined using an income approach (Level 3).  As of December 31, 
2018, the GCI Holdings and Corporate and Other segments have accumulated goodwill impairment losses of $136 million 
and $56 million, respectively.

Based on the quantitative assessment performed during the fourth quarter and the resulting impairment losses recorded, 

the estimated fair values of the cable certificates and the GCI Holdings reporting unit do not significantly exceed their 
carrying values as of December 31, 2018.

(9)  Debt

Debt is summarized as follows:

Outstanding
Principal
December 31,
2018

Carrying Value

December 31,
2018

December 31,
2017

amounts in thousands

$

900,000

477,250

775,000

715,124

7,554

—

$

2,874,928

900,000

462,336

803,287

715,124

7,554
(2,267)
2,886,034
(900,759)
1,985,275

$

—

NA

NA

NA

NA

—

—

—

—

Margin Loan Facility

Exchangeable senior debentures

Senior notes

Senior credit facility

Wells Fargo note payable

Deferred financing costs

Total debt

Debt classified as current, net of deferred financing costs

Total long-term debt

Margin Loan

On December 29, 2017, Broadband Holdco, LLC ("Broadband Holdco"), a wholly owned subsidiary of, at such 

time, Qurate Retail, and now the Company, entered into a margin loan agreement with various lender parties consisting of a 
term loan in an aggregate principal amount of $1 billion (the “Margin Loan”). Approximately 42,681,842 shares of Liberty 
Broadband Series C common stock were previously pledged by Broadband Holdco, LLC as collateral for the loan. The 
Margin Loan had a term of two years with an interest rate of LIBOR plus 1.85% and an undrawn commitment fee of up to 
1.0% per annum. Deferred financing costs incurred on the Margin Loan are reflected in Long-term debt, net in the 
consolidated balance sheet. In connection with the completion of the Transactions, Broadband Holdco borrowed the full 
principal amount of the Margin Loan. A portion of the proceeds of the Margin Loan were used to make a distribution to 
Qurate Retail of $1.1 billion to be used within one year for the repurchase of QVC Group stock (now the Qurate Retail 
common stock) or to pay down certain debt at Qurate Retail, and for the payment of fees and other costs and expenses, in 
each case, pursuant to the terms of the reorganization agreement. The distributed loan proceeds constituted a portion of the 
cash reattributed to the QVC Group.

On October 5, 2018 (the “Closing Date”), Broadband Holdco entered into Amendment No. 1 (the “Amendment”) to 

the Margin Loan (the “Margin Loan Agreement”). Pursuant to the Amendment, lenders under the Margin Loan have agreed 
to, among other things, provide commitments (the “Revolving Commitments”) for a new revolving credit facility in an 

F-51

 
    
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

aggregate principal amount of up to $200.0 million (the “Revolving Credit Facility” and, the loans thereunder, the 
“Revolving Loans”). The Revolving Credit Facility established under the Margin Loan Agreement is in addition to the 
existing term loan credit facility under the Margin Loan Agreement (the “Term Loan Facility” and, together with Revolving 
Credit Facility, the “Margin Loan Facility” and the loans thereunder, the “Loans”). After giving effect to the initial borrowing 
of Revolving Loans and Term Loan Prepayment (as defined below) on the Closing Date, $800.0 million of loans under the 
Term Loan Facility were outstanding and $200.0 million of Revolving Loans were outstanding. Subsequent to the Closing 
Date, the Company repaid $100.0 million of the Revolving Credit Facility. The Amendment also amends certain covenants in 
the Margin Loan to permit, among other things, a designated GCI Liberty subsidiary to enter into a subordinated revolving 
note with GCI Liberty and certain additional investments. Approximately 42,681,842 shares of Liberty Broadband Series C 
common stock with a value of $3.1 billion were pledged by Broadband Holdco, LLC as collateral for the loan as of 
December 31, 2018.

Broadband Holdco is permitted to use the proceeds of the Revolving Loans for any purpose not prohibited under the 
Margin Loan, including, without limitation, (i) to make dividends and distributions, (ii) for the purchase of margin stock, (iii) 
to make investments not prohibited under the Margin Loan, (iv) to repay an intercompany loan to GCI Liberty, and/or (v) 
otherwise for general corporate purposes, including, without limitation, for payment of interest and fees and other costs and 
expenses. On the Closing Date, Broadband Holdco drew down on the full amount of the commitments under the Revolving 
Credit Facility and applied all of the proceeds to prepay, on the Closing Date, a portion of the loans outstanding under the 
Term Loan Facility (the “Term Loan Prepayment”).

The Loans will mature on December 29, 2019 (the “maturity date”) and accrue interest at a rate equal to the 3-month 

LIBOR rate plus a per annum spread of 1.85%, subject to certain conditions and exceptions. Undrawn Revolving 
Commitments shall be available to Broadband Holdco from the Closing Date to but excluding the earlier of (i) the date that is 
one month prior to the maturity date and (ii) the date of the termination of such Revolving Commitments pursuant to the 
terms of the Margin Loan. The obligations under the Revolving Credit Facility, together with the obligations under Term 
Loan Facility, are secured by first priority liens on the shares of Liberty Broadband owned by Broadband Holdco and certain 
other cash collateral provided by Broadband Holdco. In addition, the Revolving Credit Facility and the Term Loan Facility 
are subject to the same affirmative and negative covenants and events of default.

Exchangeable Senior Debentures

On June 18, 2018, GCI Liberty issued 1.75% exchangeable senior debentures due 2046 ("Exchangeable Senior 

Debentures"). Upon an exchange of debentures, GCI Liberty, at its option, may deliver Charter Class A common stock, cash 
or a combination of Charter Class A common stock and cash. Initially, 2.6989 shares of Charter Class A common stock are 
attributable to each $1,000 principal amount of debentures, representing an initial exchange price of approximately $370.52 
for each share of Charter Class A common stock. A total of 1,288,051 shares of Charter Class A common stock are 
attributable to the debentures. Interest is payable quarterly on March 31, June 30, September 30 and December 31 of each 
year. The debentures may be redeemed by GCI Liberty, in whole or in part, on or after October 5, 2023. Holders of 
debentures also have the right to require GCI Liberty to purchase their debentures on October 5, 2023. The redemption and 
purchase price will generally equal 100% of the adjusted principal amount of the debentures plus accrued and unpaid interest.

Senior Notes

Interest on the 6.75% Senior Notes due 2021 (the "2021 Notes") and the 6.875% Senior Notes due 2025, both of 

which were issued by GCI, Inc., which is now GCI, LLC (collectively, the “Senior Notes”), is payable semi-annually in 
arrears. The Senior Notes are redeemable at the Company's option, in whole or in part, at a redemption price defined in the 
respective indentures, and accrued and unpaid interest (if any) to the date of redemption. The Senior Notes are stated net of 
an aggregate unamortized premium of $28.3 million at December 31, 2018. Such premium is being amortized to interest 

F-52

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

expense in the accompanying consolidated statements of operations. As of December 31, 2018, GCI, LLC exceeded the 
maximum leverage threshold, as measured by the terms of its Senior Notes, and therefore does not have access to any 
additional funding under the revolving portion of the Senior Credit Facility, as defined below.

Senior Credit Facility

On December 27, 2018, GCI, LLC, a wholly-owned subsidiary of the Company, amended and restated the Fifth 
Amended and Restated Credit Agreement dated as of March 9, 2018 and refinanced the revolving credit facility and term 
loan A with a new revolving credit facility, leaving the existing Term Loan B in place (the "Senior Credit Facility"). The 
Senior Credit Facility provide a $240.7 million term loan B ("Term Loan B") and a $550.0 million revolving credit facility.

GCI, LLC's Senior Credit Facility Total Leverage Ratio (as defined in the Senior Credit Facility) may not exceed 

6.50 to one and the Secured Leverage Ratio (as defined in the Senior Credit Facility) may not exceed 4.00 to one. 

The revolving credit facility borrowings that are LIBOR loans bear interest at a per annum rate equal to the 
applicable LIBOR plus a margin that varies between 1.50% and 2.75% depending on the total leverage ratio. The full 
principal  revolving credit facility included in the Senior Credit Facility will mature on December 27, 2023 or December 3, 
2020 if the 2021 Notes are not refinanced prior to such date.

The interest rate for the Term Loan B is LIBOR plus 2.25%. The Term Loan B requires principal payments of 0.25% 
of the original principal amount on the last day of each calendar quarter with the full amount maturing on February 2, 2022 or 
December 3, 2020 if the Company's 2021 Notes are not refinanced prior to such date. 

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 
Holdings and the subsidiary guarantors, as defined in the Senior Credit Facility, and on the stock of GCI Holdings. 

As of December 31, 2018, there is $240.1 million outstanding under the Term Loan B, $475.0 million outstanding 

under the revolving portion of the Senior Credit Facility and $10.1 million in letters of credit under the Senior Credit Facility, 
which leaves $64.9 million available for borrowing when GCI, LLC meets the maximum leverage threshold, as measured by 
the terms of its Senior Notes. 

Wells Fargo Note Payable

GCI Holdings issued a note to Wells Fargo that matures on July 15, 2029 and is payable in monthly installments of 

principal and interest (the "Wells Fargo Note Payable"). The interest rate is variable at one month LIBOR plus 2.25%. 

The note is subject to similar affirmative and negative covenants as the Senior Credit Facility. The obligations under 

the note are secured by a security interest and lien on the building purchased with the note.

Debt Covenants

GCI, LLC is subject to covenants and restrictions under its Senior Notes and Senior Credit Facility. The Company 

and GCI, LLC are in compliance with all debt maintenance covenants as of December 31, 2018. 

F-53

 
 
 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Five Year Maturities

The annual principal maturities of debt, based on stated maturity dates, for each of the next five years is as follows 

(amounts in thousands):

2019

2020

2021

2022

2023

2024 and thereafter

Total debt

Fair Value of Debt

$

902,934

713,163

325,524

549

477,825

454,933

$

2,874,928

The fair value of the Senior Notes was $763.9 million at December 31, 2018.

Due to the variable rate nature of the Margin Loan, Senior Credit Facility and Wells Fargo Note Payable, the 

Company believes that the carrying amount approximates fair value at December 31, 2018.

(10)  Income Taxes

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the 
Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code, including, but 
not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; (2) bonus depreciation that will 
allow for full expensing of qualified property; (3) creating a new limitation on deductible interest expense; (4) eliminating the 
corporate alternative minimum tax ("AMT") and changing how existing AMT credits can be realized; (5) changing rules 
related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; (6) 
limitations on the deductibility of certain executive compensation; and (7) requiring a one-time transition tax on certain 
unrepatriated earnings of foreign subsidiaries that is payable over eight years. The Securities and Exchange Commission 
("SEC") issued guidance on accounting for the tax effects of the Tax Act. The Company reflected the income tax effects of 
those aspects of the Tax Act for which the accounting was known as of December 31, 2017 and made immaterial revisions to 
such amounts during the allowed one year measurement period.  As of December 31, 2018, the Company has completed its 
analysis of the tax effects of the Tax Act.

Holdco was included in the federal combined income tax return of Qurate Retail prior to the HoldCo Split-Off.  For 
periods prior to the HoldCo Split-Off, the tax provision included in these financial statements was prepared on a stand-alone 
basis, as if the Company was not part of Qurate Retail.  Certain HoldCo income tax related balances as of the date of the 
HoldCo Split-Off were recorded as equity contributions from Qurate Retail in the net amount of $1.3 billion as shown in the 
consolidated statement of equity.  Subsequent to the HoldCo Split-Off, GCI Liberty's consolidated tax return will include 
HoldCo. Although the acquisition of GCI Liberty was accounted for as a reverse acquisition under GAAP, the consolidated 
income tax return of GCI Liberty for 2018 will include a full year of GCI Liberty’s financials results (including activity prior 
to the Transactions) and the partial year of financial results of HoldCo for the period subsequent to the HoldCo Split-Off.

F-54

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Income tax benefit (expense) consists of:

Current:

Federal

State and local

Deferred:
Federal

State and local

Income tax benefit (expense)

Years Ended December 31,

2018

2017

2016

amounts in thousands

$

607
(24)
583

190,931
(8,207)
182,724

$

183,307

—

—

—

—

575

575

160,150
(26,628)
133,522

133,522

(436,260)
(60,560)
(496,820)
(496,245)

Income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 

21% for the year ended December 31, 2018 and 35% for both of the years ended December 31, 2017 and 2016 as a result of 
the following:

Years Ended December 31,

2018

2017

2016

amounts in thousands

Computed expected tax benefit (expense)

$

221,962

State and local income taxes, net of federal income taxes

Dividends received deductions

Executive compensation

Change in valuation allowance affecting tax expense

Change in state tax rate due to acquisition

Change in state tax rate due to law change

Change in tax rate due to Tax Act

Deductible stock compensation
Goodwill impairment

Other, net

Income tax benefit (expense)

74,105

—
(7,114)
(189)
(117,496)
37,073

—
(131)
(28,513)
3,610

$

183,307

(206,862)
(17,001)
—

—
(384)
—

—

347,979
14,116
—
(4,326)
133,522

(460,885)
(38,991)
1,969

—

—

—

—

—
1,700

—
(38)
(496,245)

For the year ended December 31, 2018, the income tax benefit was lower than the U.S. statutory tax rate of 21% 

primarily due to a change in the effective state tax rate used to measure deferred taxes due to the acquisition as discussed in 
notes 1 and 4 and a goodwill impairment that is not deductible for tax purposes, partially offset by a change in the state 
effective tax rate used to measure deferred taxes resulting from a state law change.

F-55

 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

For the year ended December 31, 2017, the most significant reconciling item is a net tax benefit for the effect of the 

change in the U.S. federal corporate tax rate from 35% to 21% on deferred taxes. Income tax expense was higher than the 
U.S. statutory tax rate of 35% in 2016 due to state tax expense related to unrealized gains on the Company’s investments.

The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and 

deferred income tax liabilities are presented below:

Deferred tax assets:

Loss and capital carryforwards

Deferred revenue

Inventory

Accrued stock compensation

Debt

Other accrued liabilities

Other future deductible amounts

Deferred tax assets

Valuation allowance

Net deferred tax assets

Deferred tax liabilities

Investments

Fixed assets

Intangible assets

Other

Deferred tax liabilities

Net deferred tax liabilities

December 31,

2018

2017

amounts in thousands

$

153,931

48,898

23,716

115

3,598

6,209

20,108

19,074

226,751
(1,326)
225,425

573,016

232,899

213,206

—

1,019,121

$

793,696

—

—

6,999

—

362

63

56,322
(433)
55,889

697,393

—

1,892

30

699,315

643,426

During the year ended December 31, 2018 there was an increase in the valuation allowance of $893,000 of which 
$189,000 affected tax expense. During the year ended December 31, 2017, there was an increase in the valuation allowance 
of $384,000 of which all of the increase affected tax expense.

At December 31, 2018, the Company had federal and state net operating losses and interest expense carryforwards 
for income tax purposes aggregating approximately $154 million (on a tax effected basis).  Of the $154 million, $39 million 
are carryforwards with no expiration. The future use of the remaining carryforwards of $115 million are subject to limitation 
and expire at certain future dates. Based on current projections, $1 million of these carryforwards may expire unused and 
accordingly are subject to a valuation allowance. The carryforwards that are expected to be utilized will begin to expire in 
2021. 

As of December 31, 2018, the Company had not recorded tax reserves related to unrecognized tax benefits for 

uncertain tax positions.

F-56

 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

As of December 31, 2018, none of GCI’s tax years prior to the HoldCo Split-Off are under audit. Qurate Retail’s tax 

years prior to 2015 are closed for federal income tax purposes and the IRS has completed its examination of Qurate Retail’s 
2015, 2016 and 2017 tax years. Qurate Retail’s 2018 tax year is being examined currently as part of the IRS's Compliance 
Assurance Process program. Various states are currently examining Qurate Retail’s prior years’ state income tax returns.

(11)  Stockholders’ Equity

Preferred Stock

GCI Liberty Series A Cumulative Redeemable Preferred Stock (the "Preferred Stock") was issued as a result of the 

auto conversion that occurred on March 8, 2018. The Company is required to redeem all outstanding shares of Preferred 
Stock out of funds legally available, at the liquidation price plus all unpaid dividends (whether or not declared) accrued from 
the most recent dividend payment date through the redemption date, on the first business day following the twenty-first 
anniversary of the March 8, 2018 auto conversion. There were 7,500,000 shares of Preferred Stock authorized and 7,222,052 
shares issued and outstanding at December 31, 2018. An additional 42,500,000 shares of preferred stock of the Company are 
authorized and are undesignated as to series. The Preferred Stock is accounted for as a liability on the Company's 
consolidated balance sheets because it is mandatorily redeemable.  As a result, all dividends paid on the Preferred Stock are 
recorded as interest expense in the Company's consolidated statements of operations.

The liquidation price is measured per share and shall mean the sum of (i) $25, plus (ii) an amount equal to all unpaid 

dividends (whether or not declared) accrued with respect to such share have been added to and then remain part of the 
liquidation price as of such date.  

The holders of shares of Preferred Stock are entitled to receive, when and as declared by the GCI Liberty Board of 

Directors, out of legally available funds, preferential dividends that accrue and cumulate as provided in the restated GCI 
Liberty certificate of incorporation.

Dividends on each share of Preferred Stock accrued on a daily basis at an initial rate of 5.00% per annum of the 

liquidation price, and increased to 7.00% per annum of the liquidation price effective July 16, 2018 as a result of the 
Reincorporation Merger in the State of Delaware in May 2018.

Accrued dividends are payable quarterly on each dividend payment date, which is January 15, April 15, July 15, and 
October 15 of each year, commencing on the first such date following the auto conversion, which occurred immediately after 
the market closed on March 8, 2018. If GCI Liberty fails to pay cash dividends on the Preferred Stock in full for any four 
consecutive or non-consecutive dividend periods then the dividend rate shall increase by 2.00% per annum of the liquidation 
price until cured. The Company paid a special cash dividend of approximately $0.13 per share of Preferred Stock on May 3, 
2018, a cash dividend of approximately $0.31 per share of Preferred Stock on July 16, 2018, and a cash dividend of 
approximately $0.44 on October 15, 2018. On December 13, 2018, the Company declared a quarterly cash dividend of 
approximately $0.44 per share of Preferred Stock which was paid on January 15, 2019 to shareholders of record of the 
Preferred Stock at the close of business on December 31, 2018.

Common Stock

The Company's Series A common stock and Series B common stock are identical in all respects, except that each 
share of Series A common stock has one vote per share and each share of Series B common stock has ten votes per share. 
Each share of Series B common stock outstanding is convertible, at the option of the holder, into one share of Series A 
common stock.

F-57

 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Purchases of Common Stock

During the year ended December 31, 2018, the Company repurchased 2,397,710 shares of Series A common stock 

for aggregate cash consideration of $111.6 million.

All of the foregoing shares were repurchased pursuant to a previously announced share repurchase program and 

have been retired and returned to the status of authorized and available for issuance.

(12)  Variable Interest Entities

New Markets Tax Credit Entities

GCI entered into several arrangements under the New Markets Tax Credit ("NMTC") program with US Bancorp to 

help fund various projects that extended terrestrial broadband service for the first time to rural Northwestern Alaska 
communities via a high capacity hybrid fiber optic and microwave network.  The NMTC program was provided for in the 
Community Renewal Tax Relief Act of 2000 (the “Act”) to induce capital investment in qualified lower income 
communities.  The Act permits taxpayers to claim credits against their federal income taxes for up to 39% of qualified 
investments in the equity of community development entities (“CDEs”).  CDEs are privately managed investment institutions 
that are certified to make qualified low-income community investments.

Each of the transactions has an investment fund, which is a special purpose entity created to effect the financing 

arrangement.  In each of the transactions, the Company loaned money to the investment fund and US Bancorp invested 
money in the investment fund.  The investment fund would then contribute the funds from the Company's loan and US 
Bancorp's investment to a CDE.  The CDE, in turn, would loan the funds to the Company's wholly owned subsidiary, 
Unicom, Inc. ("Unicom") as partial financing for the projects.  

US Bancorp is entitled to substantially all of the benefits derived from the NMTCs.  All of the loan proceeds to 

Unicom, net of syndication and arrangement fees, were restricted for use on the projects.  Restricted cash of $0.8 million was 
held by Unicom at December 31, 2018 and is included in the Company's consolidated balance sheets.  The Company 
completed construction of the projects partially funded by these transactions.

These transactions include put/call provisions whereby the Company may be obligated or entitled to repurchase US 
Bancorp’s interest in each investment fund for a nominal amount. The Company believes that US Bancorp will exercise the 
put options at the end of the compliance periods for each of the transactions.  The NMTCs are subject to 100% recapture for 
a period of seven years as provided in the Internal Revenue Code of 1986, as amended.  The Company is required to be in 
compliance with various regulations and contractual provisions that apply to the NMTC arrangements.  Non-compliance with 
applicable requirements could result in projected tax benefits not being realized by US Bancorp.  The Company agreed to 
indemnify US Bancorp for any loss or recapture of NMTCs totaling $35.1 million until such time as its obligation to deliver 
tax benefits is relieved.  There have been no credit recaptures as of December 31, 2018.  The value attributed to the put/calls 
is nominal. 

The Company has determined that each of the investment funds are variable interest entities ("VIEs").  The 

consolidated financial statements of each of the investment funds include the CDEs.  The ongoing activities of the VIEs – 
collecting and remitting interest and fees and NMTC compliance – were all considered in the initial design and are not 
expected to significantly affect economic performance throughout the life of the VIEs.  Management considered the 
contractual arrangements that obligate the Company to deliver tax benefits and provide various other guarantees to US 
Bancorp; US Bancorp’s lack of a material interest in the underlying economics of the project; and the fact that the Company 

F-58

 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

is obligated to absorb losses of the VIEs.  The Company concluded that it is the primary beneficiary of each and consolidated 
the VIEs in accordance with the accounting standard for consolidation.

On September 14, 2018, US Bancorp exercised its put option for the NMTC #1 transaction that was entered into on 

August 30, 2011 resulting in the Company obtaining ownership of the investment fund. Upon obtaining ownership of the 
investment fund, the Company settled the loans and dissolved the VIEs associated with the August 30, 2011 NMTC 
transaction.

The assets and liabilities of the consolidated VIEs were $89.0 million and $63.0 million, respectively, as of 

December 31, 2018.

The assets of the VIEs serve as the sole source of repayment for the debt issued by these entities. US Bancorp does 
not have recourse to the Company or its other assets, with the exception of customary representations and indemnities it has 
provided. The Company is not required and does not currently intend to provide additional financial support to these VIEs. 
While these subsidiaries are included in its consolidated financial statements, these subsidiaries are separate legal entities and 
their assets are legally owned by them and not available to the Company's creditors.

The following table summarizes the key terms of each of the NMTC transactions:

Financing
Arrangement

Investment
Funds

Transaction
Date

Loan
Amount

NMTC #2

NMTC #3

NMTC #4

NMTC #5

TIF 2 &
TIF 2-USB

October 3,
2012

TIF 3

TIF 4

December 11,
2012

March 21,
2017

TIF 5-1 and
TIF 5-2

December 22,
2017

$37.7
million

$8.2
million

$6.7
million

$10.4
million

Interest
Rate on
Loan to
Investment
Fund

1%

1%

1%

1%

Maturity
Date

October 2,
2042

December 10,
2042

March 21,
2040

December 22,
2047

US
Bancorp
Investment

$17.5
million

$3.8 million

$3.3 million

$5.1 million

Loan to
Unicom

$52.0
million

$12.0
million

$9.8
million

$14.7
million

Interest Rate
on Loan(s) to
Unicom

Expected Put
Option
Exercise

0.71% to
0.77%

October 2019

1.35%

December 2019

0.73%

0.67% to
1.24%

March 2024

December 2024

(13)  Stock-Based Compensation

GCI Liberty - Incentive Plan

Pursuant to the GCI Liberty, Inc. 2018 Omnibus Incentive Plan, the Company may grant Awards to be made in 

respect of a maximum of 8.0 million shares of GCI Liberty common stock.  Awards generally vest over 1-5 years and have a 
term of 7-10 years.  GCI Liberty issues new shares upon exercise of equity awards.

GCI Liberty - Grants of Stock Options

During the fourth quarter of 2017, prior to the HoldCo Split-Off, Qurate Retail entered into a series of transactions 

with certain of its officers, associated with certain outstanding stock options, in order to recognize tax deductions in 2017 
versus future years (the "Option Exchange"). On December 26, 2017 (the "Grant Date"), pursuant to the approval of the 
Compensation Committee of its Board of Directors, Qurate Retail effected the acceleration of (i) each unvested in-the-money 
option to acquire shares of LVNTA and (ii) each unvested in-the-money option to acquire shares of LVNTB, in each case, 
held by certain of its officers (collectively, the "Eligible Optionholders"). Following this acceleration, also on the Grant Date, 

F-59

 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

each Eligible Optionholder exercised, on a net settled basis, all of his outstanding in-the-money vested and unvested options 
to acquire LVNTA shares and LVNTB shares (the "Eligible Options"), and:

•  with respect to each vested Eligible Option, Qurate Retail granted the Eligible Optionholder a vested new option 
with substantially the same terms and conditions as the exercised vested Eligible Option, except that the exercise 
price for the new option was, in the case of options to acquire shares of LVNTA, the closing price on the Grant Date 
per LVNTA share and, in the case of options to acquire shares of LVNTB, the fair market value on the Grant Date of 
the LVNTB shares as determined pursuant to the incentive plan under which the awards were granted; and

•  with respect to each unvested Eligible Option:

• 

in satisfaction of the exercise, on a net settled basis, of the unvested Eligible Options, Qurate Retail granted 
the Eligible Optionholder a number of restricted LVNTA or LVNTB shares (the "Restricted Shares") with a 
vesting schedule identical to that of the unvested Eligible Options so exercised, and the Eligible 
Optionholder made an election under Section 83(b) of the Internal Revenue Code with respect to such 
Restricted Shares; and

•  Qurate Retail granted the Eligible Optionholder a new option (the "Unvested New Option") to acquire the 
same series of common stock and with substantially the same terms and conditions, including with respect 
to vesting and expiration, as the unvested Eligible Option exercised as set forth above, except that the 
number of LVNTA or LVNTB shares subject to such Unvested New Option was equal to the number of 
shares subject to the unvested Eligible Option minus the number of Restricted Shares received upon 
exercise of such unvested Eligible Option. The exercise price of such new option was, in the case of a 
LVNTA option, the closing price on the Grant Date per share of LVNTA, or, in the case of a LVNTB 
option, the fair market value on the Grant Date of the LVNTB shares as determined pursuant to the 
incentive plan under which the Unvested New Options were granted.

The Option Exchange was considered a modification under ASC 718 — Stock Compensation, with the following 
impacts on compensation expense. The unamortized value of the unvested Eligible Options that were exercised, which was 
$13.5 million for LVNTA and LVNTB combined, will be expensed over the vesting period of the Restricted Shares 
attributable to the exercise of those options. The grant of new vested options resulted in incremental compensation expense in 
the fourth quarter of 2017 of $9.2 million for LVNTA and LVNTB combined. The grant of Unvested New Options resulted in 
incremental compensation expense totaling $6.4 million for LVNTA and LVNTB combined, which will be amortized over the 
vesting periods of those options.

During the year ended December 31 2018, the Company granted to GCI Liberty directors 10,000 options to 
purchase shares of GCI Liberty Series A common stock. Such options had a weighted average grant-date fair value ("GDFV") 
of $14.09 per share and generally cliff vest in one year. During the years ended December 31, 2017 and 2016, the Company 
granted to directors and employees 188,000 and 114,000 options, respectively, to purchase shares of LVNTA.  Such options 
had a weighted average GDFV of $16.52 and $12.25 per share, respectively, and vest between three and five years for 
employees and in one year for directors.

Also during the years ended December 31, 2018, 2017 and 2016, and in connection with the Company's current 

CEO's employment agreement, the Company granted 143,000, 269,000 and 209,000 options, respectively, to purchase shares 
of LVNTB to the Company's current CEO.  Such options had a weighted average GDFV of $16.55, $15.41 and $12.48 per 
share, respectively, and cliff vested at the end of their respective grant year.

F-60

 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

In connection with the Option Exchange, the Company granted 946,000 and 1.1 million options to purchase shares 

of LVNTA and LVNTB, respectively.  Such options have an incremental weighted average GDFV of $8.53 and $6.94, 
respectively.

In addition to the stock option grants to the Company’s current CEO, the Company granted 16,000 performance-

based RSUs of LVNTB in 2016.  The RSUs had a fair value of $38.79 per share at the time they were granted and cliff vested 
in one year, subject to the satisfaction of certain performance objectives and based on an amount determined by the 
compensation committee.

The Company has calculated the GDFV for all of its equity classified Awards and any subsequent remeasurement of 

its liability classified Awards using the Black-Scholes-Merton Model. The Company estimates the expected term of the 
Awards based on historical exercise and forfeiture data. For grants made in 2018, 2017 and 2016,  the range of expected 
terms was 4.9 to 6.3 years. The volatility used in the calculation for Awards is based on the historical volatility of GCI 
Liberty's stock and the implied volatility of publicly traded GCI Liberty options. For grants made in 2018, 2017 and 2016 the 
range of volatilities was 25.9% to 31.6%. The Company uses a 0 dividend rate and the risk-free rate for Treasury Bonds with 
a term similar to that of the subject options.

GCI Liberty - Outstanding Awards

The following tables present the number and weighted average exercise price ("WAEP") of Awards to purchase GCI 

Liberty common stock granted to certain officers, employees and directors of the Company, as well as the weighted average 
remaining life and aggregate intrinsic value of the Awards. The options outstanding as of January 1, 2018 reflect Qurate 
Retail's Series A and Series B Liberty Ventures common stock.  On March 9, 2018, Qurate Retail redeemed each outstanding 
share of Qurate Retail's Series A and Series B Liberty Ventures common stock for the corresponding class of GCI Liberty 
common stock using a one-for-one ratio. 

Outstanding at January 1, 2018

Granted
Exercised
Forfeited/Cancelled

Outstanding at December 31, 2018
Exercisable at December 31, 2018

Series A

     Weighted
average

     Aggregate
intrinsic

remaining

value

WAEP

life

(millions)

Awards

(000's)

1,670
10
(27)
(3)
1,650
1,316

$
$
$
$
$
$

47.12
44.32
16.23
55.81
47.61  
47.99  

1.7 years
1.3 years

$
$

6
6

F-61

 
 
 
 
    
    
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Outstanding at January 1, 2018

Granted
Exercised
Forfeited/Cancelled

Outstanding at December 31, 2018
Exercisable at December 31, 2018

Series B

     Weighted
average

     Aggregate
intrinsic

remaining

value

WAEP

life

(millions)

Awards

(000's)

1,080
$
$
143
— $
— $
$
$

1,223
905

56.38
54.01
—
—
56.10  
56.01  

4.0 years
4.4 years

$
$

—
—

As of December 31, 2018, the total unrecognized compensation cost related to unvested options and RSAs was 

approximately $9.4 million and $24.2 million, respectively. Such amounts will be recognized in the Company's consolidated 
statements of operations over a weighted average period of approximately 1.2 years and 2.0 years, respectively.

As of December 31, 2018, GCI Liberty reserved for issuance upon exercise of outstanding stock options 
approximately 1.7 million shares of GCI Liberty Series A common stock and 1.2 million shares of GCI Liberty Series B 
common stock.

GCI Liberty - Exercises

The aggregate intrinsic value of all options exercised during the years ended December 31, 2018, 2017 and 2016 
was $814,000, $71.9 million and $6.6 million, respectively.  The aggregate intrinsic value of options exercised for the year 
ended December 31, 2017 includes approximately $56.3 million related to the intrinsic value of options exercised as a result 
of the Option Exchange.

GCI Liberty - Restricted Shares

As of December 31, 2018, GCI Liberty had approximately 885,000 and 138,000 unvested RSAs and RSUs of GCI 
Liberty common stock and preferred stock, respectively, held by certain directors, officers and employees of the Company. 
These Series A common stock, Series B common stock and Series A Cumulative Redeemable Preferred unvested RSAs, 
along with the Series A common stock unvested RSUs of GCI Liberty had a weighted average GDFV of $46.21 per share.

The aggregate fair value of all restricted shares of GCI Liberty common and preferred stock that vested during the 

years ended December 31, 2018, 2017 and 2016 was $21.9 million, $2.3 million and $1.3 million, respectively.

(14)  Employee Benefit Plans

Subsidiaries of the Company sponsor 401(k) plans, which provide their employees an opportunity to make 
contributions to a trust for investment in GCI Liberty common stock, as well as other mutual funds.  The Company's 
subsidiaries make matching contributions to their plans based on a percentage of the amount contributed by 
employees.  Employer cash contributions to all plans aggregated $11.0 million, $0.2 million and zero, respectively, for the 
years ended December 31, 2018,  2017 and 2016, respectively.

F-62

    
    
 
 
 
 
 
 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

(15)  Commitments and Contingencies

Operating Leases

The Company leases business office space, site leases, satellite transponder lease agreements, fiber capacity, and 

certain equipment pursuant to operating lease arrangements.  Many of the Company's leases are for multiple years and 
contain renewal options.  Rental expense under such arrangements amounted to $46.7 million, $1.9 million and $1.1 million 
for the years ended December 31, 2018, 2017 and 2016, respectively.

Capital Leases

The Company entered into long-term capital leases for an office building, certain retail store locations, and 

transponder capacity on Intelsat, Ltd.’s Galaxy 18 spacecraft.  

Tower Sale and Leaseback

In 2016 and 2017, certain tower sites were sold by GCI Holdings to Vertical Bridge II, LLC ("Vertical Bridge"). GCI 
Holdings entered into a master lease agreement in which it leased back space at the tower sites for an initial term of ten years, 
followed by the option to renew for eight additional five year periods, for a total possible lease term of 50 years. Each lease is 
subject to a 2% annual increase in lease payments throughout the life of the initial lease and all subsequent lease renewals. 

Per the master lease agreement, GCI Holdings has the right to cure land lease defaults on behalf of Vertical Bridge 

and has negotiated fixed rate lease renewals as described above. Due to this continuing involvement with the Tower Sites, 
GCI Holdings determined it was precluded from applying sale-leaseback accounting. GCI Holdings recorded long-term 
financial obligations (“Tower Obligations”) in the amount of the net proceeds received and recognized interest on the Tower 
Obligations at a rate of 7.1% using the effective interest method. The Tower Obligations are increased by interest expense and 
amortized through contractual leaseback payments made by GCI Holdings to Vertical Bridge. GCI Holdings' historical tower 
site asset costs continue to be depreciated and reported in Property and Equipment, net. The Company has property of $32.0 
million included in Property and Equipment, net on the consolidated balance sheets at December 31, 2018 that had been 
conveyed to Vertical Bridge as part of the tower sale. 

F-63

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

A summary of future minimum lease payments under noncancelable operating, capital leases and tower obligations

 follows (amounts in thousands):

Years ending December 31:

2019

2020

2021

2022

2023

2024 and thereafter

Total minimum lease payments

Less amount representing interest

Less current maturity of obligations

Operating

Capital

Tower
Obligations

$

40,487

33,225

23,563

13,177

8,652

21,326

$

140,430

13,450

13,459

12,044

5,293

678

1,734

46,658

4,162

11,636

7,644

7,797

7,953

8,112

8,274

142,812

182,592

90,273

934

Long-term obligations under capital leases and tower obligations,
excluding current maturity

$

30,860

91,385

The leases generally provide that the Company pays the taxes, insurance and maintenance expenses related to the 
leased assets.  Several of the leases include renewal options, escalation clauses and immaterial amounts of contingent rent 
expense.  The Company expects that in the normal course of business leases that expire will be renewed or replaced by leases 
on other properties.  

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.

Litigation, Disputes, and Regulatory Matters

The Company is 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 which 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.

Rural Health Care Program

GCI Holdings receives support from various Universal Service Fund USF programs including the USF Rural Health 

Care ("RHC") Program. 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. 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. The following paragraphs 
describe certain separate matters related to the RHC Program that impact or could impact the revenue earned and receivables 
recognized by the Company.

In November 2017, the Universal Service Administrative Company ("USAC") requested further information in 

support of the rural rates charged to a number of GCI Holdings' RHC customers in connection with the funding requests for 
F-64

 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

the year that runs July 1, 2017 through June 30, 2018. On October 10, 2018, GCI Holdings received a letter from the FCC's 
Wireline Competition Bureau (“Bureau”) notifying it of the Bureau’s decision to reduce the rural rates charged to RHC 
customers for the funding year that ended on June 30, 2018 by approximately 26% resulting in a reduction of total support 
payments of $27.8 million. The FCC also informed GCI Holdings that the same cost methodology used for the funding year 
that ended on June 30, 2018 would be applied to rates charged to RHC customers in subsequent funding years. In response to 
the letter from the Bureau, GCI Holdings filed an Application for Review of the Bureau’s decision with the FCC. In the third 
quarter of 2018, GCI Holdings recorded a $19.1 million reduction in its receivables balance as part of its acquisition 
accounting and recorded a reduction in revenue in the current period for the funding year that ended on June 30, 2018 of 
approximately $8.6 million. GCI Holdings expects to reduce future RHC program revenue by a similar rate as to the funding 
year that ended on June 30, 2018, which based on a current run rate would approximate $7 million per quarter until it can 
reach a final resolution with the FCC regarding the funding amounts.

On March 15, 2018, USAC announced that the funding requests for the year that runs July 1, 2017 through June 30, 

2018 exceeded the funding available for the RHC Program. Since that time, on June 25, 2018, the FCC issued an order 
resulting in an increase of the annual RHC Program funding cap from $400 million to $571 million and applied it to the 
funding year that ended on June 30, 2018. The FCC also determined that it would annually adjust the RHC Program funding 
cap for inflation, beginning with the funding year ending on June 30, 2019 and carry-forward unused funds from past funding 
years for use in future funding years. As a result, aggregate funding was available to pay in full the approved funding under 
the RHC program for the funding year ended on June 30, 2018.

In addition, on March 23, 2018, GCI Holdings received a separate letter of inquiry and request for information from 

the Enforcement Bureau of the FCC, to which it is in the process of responding. This inquiry into the rates charged by GCI 
Holdings is still pending, and presently it is unable to assess the ultimate resolution of this matter. The ongoing uncertainty in 
program funding could have an adverse effect on its business, financial position, results of operations or liquidity.

On November 30, 2018, GCI Holdings received multiple funding denial notices from USAC, denying requested 

funding from the RHC Program operated by a rural health customer (the “Customer”) for the funding year that ended on June 
30, 2018. At the rates approved by the Bureau in a letter received on October 10, 2018, the funding at issue under the denials 
is approximately $13 million. In November 2017, USAC requested information from the Customer related to bidding process 
documentation for two separate service contracts GCI Holdings has with the Customer. Although the Customer timely 
responded, USAC found that bids previously received were not submitted with the original funding request and/or that 
bidding information submitted was related to the wrong bidding year. The Customer filed an appeal with USAC on January 
29, 2019. At this time, GCI Holdings has no reason to believe that there was any violation of the FCC’s competitive bidding 
rules, but without further information from the Customer and/or USAC, it cannot assess whether the USAC denials will be 
overturned. If the denial notices are upheld for reasons relating to the Customer’s competitive bidding process, funding issued 
under one or both contracts for prior years could be subject to further review, as well as funding for services already being 
delivered or to be delivered for the period from July 1, 2018 through June 30, 2019. GCI Holdings has accounts receivable of 
approximately $18 million outstanding as of December 31, 2018 associated with these two service contracts. The outstanding 
accounts receivable includes the approximate $13 million of funding at issue as discussed above and additional amounts for 
services provided for the period from July 1, 2018 through December 31, 2018. Given the uncertainty of whether the USAC 
denials will be overturned, it is reasonably possible that GCI Holdings may incur a loss.  The amount of a potential loss could 
range from zero to the full amount of the accounts receivable balance as of December 31, 2018.  No amount within this range 
of a potential loss is a better estimate than any other amount.  Accordingly, no loss was recorded as of December 31, 2018 
given the minimum amount in the range is zero.    

In addition, on December 4, 2018, the FCC issued a public notice seeking further comment on an earlier proposal to 
determine the rural rates for services supported by the RHC Program in a different manner than it does today.  GCI Holdings 

F-65

 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

and others submitted comments on January 30, 2019, but GCI Holdings cannot assess at this time the substance, impact on 
funding, or timing of any future rule changes that may be adopted by the FCC.

(16)  Information About the Company's Operating Segments

The Company, through its interests in subsidiaries and other companies, is primarily engaged in the broadband 

communications services industry. The Company identifies its reportable segments as (A) those consolidated companies that 
represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) or total assets and 
(B) those equity method affiliates whose share of earnings represent 10% or more of the Company’s annual pre tax earnings. 
The segment presentation for prior periods has been conformed to the current period segment presentation.

The Company evaluates performance and makes decisions about allocating resources to its operating segments 

based on financial measures such as revenue, Adjusted OIBDA, and subscriber metrics.

The Company defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and 

administrative expenses (excluding stock based compensation). The Company believes this measure is an important indicator 
of the operational strength and performance of its businesses, including each business’s ability to service debt and fund 
capital expenditures. In addition, this measure allows management, including the chief operating decision maker, to view 
operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to 
improve performance. This measure of performance excludes depreciation and amortization, stock based compensation, 
separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of 
operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a 
substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial 
performance prepared in accordance with GAAP.

For the year ended December 31, 2018 the Company has identified the following subsidiary as a reportable segment:

•  GCI Holdings-provides a full range of wireless, data, video, voice, and managed services to residential, businesses, 

governmental entities, and educational and medical institutions primarily in Alaska.

For presentation purposes the Company is providing financial information for Liberty Broadband. While the 

Company’s equity method investment in Liberty Broadband does not meet the reportable segment threshold defined above, 
the Company believes that the inclusion of such information is relevant to users of these financial statements.

•  Liberty Broadband-an equity method affiliate of the Company, accounted for at fair value, has a non controlling 

interest in Charter, and a wholly owned subsidiary, Skyhook Wireless, Inc. ("Skyhook"). Charter is the second 
largest cable operator in the United States and a leading broadband communications services company providing 
video, Internet and voice services. Skyhook provides a Wi Fi based location platform focused on providing 
positioning technology and contextual location intelligence solutions.

The Company’s operating segments are strategic business units that offer different products and services. They are 

managed separately because each segment requires different technologies, distribution channels and marketing strategies. The 
accounting policies of the consolidated subsidiaries included in the segments are the same as those described in the 
Company’s summary of significant accounting policies.

F-66

 
 
 
 
 
 
 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

Years ended December 31,

2018

2017

2016

Revenue

Adjusted
OIBDA

Revenue

Adjusted
OIBDA

Revenue

Adjusted
OIBDA

$ 715,842

22,256
23,920
762,018

217,832
(3,528)
(24,731)
189,573

(22,256)

3,528

$ 739,762

193,101

amounts in thousands

—

13,092
23,817
36,909
(13,092)
23,817

—
(16,416)
(25,762)
(42,178)
16,416
(25,762)

—

30,586
22,552
53,138
(30,586)
22,552

—
(11,442)
(16,063)
(27,505)
11,442
(16,063)

Performance Measures

GCI Holdings

Liberty Broadband
Corporate and other

Eliminate Liberty Broadband

Other Information

December 31, 2018

December 31, 2017

Total

assets

Investments

Capital

in affiliates

expenditures

Total

assets

Investments

Capital

in affiliates

expenditures

GCI Holdings

Liberty Broadband

Corporate and other

amounts in thousands

$

3,343,372

719

131,029

—

—

12,098,437

12,004,376

41

11,931,789

11,835,613

5,317,450

176,311

3,323

6,172,213

114,655

20,759,259

12,181,406

134,393

18,104,002

11,950,268

Eliminate Liberty Broadband

(12,098,437)

(12,004,376)

(41)

(11,931,789)

(11,835,613)

Consolidated

$

8,660,822

177,030

134,352

6,172,213

114,655

—

70

3,488

3,558

(70)

3,488

F-67

GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

The following table provides a reconciliation of segment Adjusted OIBDA to operating income and earnings (loss) 

from continuing operations before income taxes:

Consolidated segment Adjusted OIBDA

Depreciation and amortization

Impairment of intangibles and long-lived assets

Operating income (loss)

Interest expense

Share of earnings (loss) of affiliates, net

Realized and unrealized gains (losses) on financial instruments, net

Tax sharing agreement

Other, net

Earnings (loss) from continuing operations before income taxes

Years ended December 31,

2018

2017

2016

amounts in thousands

$

193,101
(28,207)
(206,946)
(207,940)
(249,992)
(119,296)
25,772
(681,545)
(32,105)
205
$ (1,056,961)

(25,762)
(26,583)
(3,252)
—
(55,597)
—

7,001

(16,063)
(16,128)
(2,964)
—
(35,155)
—

11,831

637,164

1,309,365

—

2,467

—

30,773

591,035

1,316,814

F-68

 
GCI LIBERTY, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

December 31, 2018, 2017 and 2016

(17)  Quarterly Financial Information (Unaudited)

The following is a summary of unaudited quarterly results of operations for the years ended December 31, 2018 and 

2017:

2018

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

amounts in thousands,
except per share amounts

Revenue
Operating income (loss)

61,204
$
(7,369)
$
$ (170,731)
Net earnings (loss)
Net earnings (loss) attributable to GCI Liberty, Inc. shareholders $ (170,692)
Basic net earnings (loss) attributable to Series A and Series B

GCI Liberty, Inc. shareholders per common share

Diluted net earnings (loss) attributable to Series A and Series B

GCI Liberty, Inc. shareholders per common share

2017

Revenue

Operating income (loss)

Net earnings (loss)

$

$

$

$

$

3,969
(11,351)
450,654

233,490
(593)
(303,480)
(303,326)

(2.82)

(1.58)

(1.58)

(2.82)

210,146
(19,869)
317,256

317,383

2.95

2.91

5,493
(10,469)
287,290

287,362

2.64

2.64

234,922
(222,161)
(716,699)
(716,668)

(6.72)

(6.72)

8,178
(22,160)
(44,988)
(45,032)

(0.41)

(0.41)

6,177
(11,617)
31,601

31,602

0.29

0.29

Net earnings (loss) attributable to GCI Liberty, Inc. shareholders $

450,654

Basic net earnings (loss) attributable to Series A and Series B

GCI Liberty, Inc. shareholders per common share

Diluted net earnings (loss) attributable to Series A and Series B

GCI Liberty, Inc. shareholders per common share

$

$

4.13

4.13

F-69

 
GCI LIBERTY, INC.
CORPORATE DATA

Board of Directors
John C. Malone
Chairman of the Board
GCI Liberty, Inc.

Ronald A. Duncan
Chief Executive Officer
GCI Holdings, LLC

Gregg L. Engles
Founder and Chief Executive Officer
Capitol Peak Partners

Donne F. Fisher
President
Fisher Capital Partners, Ltd.

Richard R. Green
Retired President and Chief Executive
Officer
CableLabs®

Sue A. Hamilton
Principal
Hamilton Media LLC

Audit Committee
Gregg L. Engles (Chairman)
Richard R. Green
Sue A. Hamilton

Nominating & Corporate
Governance Committee
Richard R. Green (Chairman)
Gregg L. Engles
Sue A. Hamilton

Senior Officers
John C. Malone
Chairman of the Board

Gregory B. Maffei
President and Chief Executive Officer

Richard N. Baer
Chief Legal Officer

Mark D. Carleton
Chief Financial Officer

Gregory B. Maffei
President and Chief Executive Officer
GCI Liberty, Inc.

Albert E. Rosenthaler
Chief Corporate Development Officer

Executive Committee
John C. Malone
Gregory B. Maffei

Compensation Committee
Sue A. Hamilton (Chairman)
Gregg L. Engles
Richard R. Green

Corporate Secretary
Katherine C. Jewell

Corporate Headquarters
12300 Liberty Boulevard
Englewood, CO 80112
(720) 875-5900

Stock Information
Series A Common Stock (GLIBA) and
Series A Cumulative Redeemable
Preferred Stock (GLIBP) trade on
the NASDAQ Global Select Market.

Series B Common Stock (GLIBB) is
quoted on the OTC Markets.

CUSIP Numbers
GLIBA – 36164 V305
GLIBB – 36164 V404
GLIBP – 36164 V503

Transfer Agent
GCI Liberty, Inc.
Shareholder Services
c/o Broadridge Corporate Issuer Solutions
P.O. Box 1342
Brentwood, NY 11717
Phone: (888) 789-8606
Toll Free: (303) 562-9275
https://shareholder.broadridge.com/gci

Investor Relations
Courtnee Chun
investor@gciliberty.com
(720) 875-5900

On the Internet
Visit the GCI Liberty, Inc. website at
www.gciliberty.com

Financial Statements
GCI Liberty, Inc. financial statements are
filed with the Securities and Exchange
Commission. Copies of these financial
statements can be obtained from the
Transfer Agent or through the GCI Liberty,
Inc. website.

ELECTRONIC DELIVERY

We encourage GCI Liberty stockholders to voluntarily
elect to receive future proxy and annual report
materials electronically.

•

If you are a registered stockholder, please visit
www.proxyvote.com for simple instructions.

• Beneficial shareowners can elect to receive future
proxy and annual report materials electronically as
well as vote their shares online at
www.proxyvote.com.
▸ Faster ▸ Economical ▸ Cleaner ▸ Convenient

SCAN THE QR CODE

•

to vote using your mobile device, sign up for
e-delivery or download annual meeting materials.

OUR ENVIRONMENT

GCI Liberty believes in working to keep our
environment cleaner and healthier. We are proud
to have our headquarters overlooking the
Colorado Rockies. Every day, GCI Liberty takes
steps to preserve the natural beauty of the
surroundings that we are privileged to enjoy.

▸ GCI Liberty’s initiative in reducing its carbon footprint by
promoting electronic delivery of shareholder materials
has had a positive effect on the environment. Based
upon 2018 statistics, voluntary receipt of e-delivery
resulted in the following environmental savings:

Using approximately 35 fewer tons of wood, or
209.6 fewer trees

Using approximately 241.3 million fewer BTUs,
or the equivalent to 287.1 residential
refrigerators operated/year

Using approximately 168,300 fewer pounds of
greenhouse gases, including carbon dioxide, or
the equivalent to 15.3 cars/year

Saving approximately 210,600 gallons of water,
or the equivalent to 152.1 clothes washers
operated/year

Saving approximately 11,510 pounds of solid
waste

Reducing hazardous air pollutants by
approximately 15.25 pounds

Environmental impact estimates calculated using the
Environmental Paper Network Paper Calculator. For more
information visit www.papercalculator.org.

• • • • • • • • • • • • • • • • • • • • • • • • • •

2019 ANNUAL MEETING OF STOCKHOLDERS

Monday, June 24, 2019

8:00 a.m. Local Time

Corporate Offices of GCI Liberty, Inc.
12300 Liberty Boulevard
Englewood, Colorado 80112

www.gciliberty.com