LBRDA - Earnings call transcript Q3 2019 | Liberty Broadband Corporation

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the GCI Liberty 2019 Third Quarter Earnings Call.

During the presentation, all parties will be in a listen-only mode, and afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded today, November 11, 2019.

I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer and Senior Vice President of Investor Relations. ma'am. ahead, go Please

Courtnee Chun

you. Thank

or begin, the those includes we'd the everyone, we forms XX-Q risks Actual to Securities to and materially a XX-K number in like forward-looking statements our call of events XXXX. certain of of uncertainties, Reform this could within differ Litigation due SEC. including Before and Act remind with results mentioned the Private recent filed meaning most

any herein contained and statement the forward-looking to change and GCI statements revisions to Liberty or call speak is of change regard These any expectations any with disseminate which thereto, undertaking forward-looking or statement in or Liberty in such GCI of Broadband Liberty or conditions date or disclaim based. as updates expressly to reflect any Liberty events, Broadband's any this only on circumstances obligation any

along margin. reconciliations, the X adjusted On can in the earnings comparable discuss OIBDA available today's call, be which on issued and we'll press metrics is and required non-GAAP financial website. adjusted and our today, Information found Schedules regarding preliminary including note with measures, definitions OIBDA X, certain release GAAP including and

call Maffei. Now, turn Liberty's to the CEO, Greg to I'd and like President over

Greg Maffei

Thank the of and afternoon you you. Courtnee, line. to all good on

are Today, Officer, will we be speaking GCI Brian related have Pete on Financial Liberty Also the questions, to during Q&A, available there call, Liberty's Wendling; if CFO, Principal any, we Broadband. will answer Pounds. and GCI's to

they higher on in benefits Alaska of GCI Revenue up So, began see the adjusted strategic moved as starting to core a changes OIBDA team stack quarter had series and of way Ericsson data data grew, mid-XXXX. libraries with Liberty. is and the part and and are made solid to driving results. under moving third the XG GCI with business. that And in by revenue focus GCI's to customers value to Business and of the wireless offerings. with expected schools their higher and customers, build modem, out healthcare and we completion sales bandwidth driven cable video the products improve grew Anchorage

LendingTree forward guidance while continued there. allowed levels at The good continuing move to and team and to in momentum business marketing fashion. and in of EBITDA. mortgage to now continued improving Looking the third diversification experienced machine insurance quarter for returned portfolio a in year. the invest margin gain segment the weather They and to the revenue, The marketing growth increased and challenges, to leading has to business the record the adjusted variable results

continue now of strong Over and quarter. Liberty Austin Broadband, minimum customer to Charter markets rolling to meg the they XXX additional team in quarter advanced in and the third footprint, in in-home and XX% relationships of Wi-Fi launched offering experience. begin their out improves consumer They're had results, in the speeds will grow as revenue fourth

to the and year growth billion CapEx ended continue with in EBITDA guidance all to spectrum cable-free intensity of in XXX,XXX quarter to cash decreased lines, for We and they XXX% to declining CapEx flow, the XXXX. $X capital below led decline mobile expect growth

in billion In the repurchased of $X shares addition, they quarter.

With detail. more it discuss that, to Brian turn let to the financials me over in

Brian Wendling

Greg. Thanks,

value our as $X a in Liberty $X.X Charter, of interest which and $XX billion, includes billion billion close Broadband, million, consolidated GCI held includes GCI of $X.X securities public was cash GCI had LendingTree. billion interest cash the and the Liberty which cash in of level. in The quarter-end, at of at At interest equivalents Liberty million directly $XXX that's $X.X today's equity

leverage a outstanding exchangeable $X $XXX the Liberty Liberty $X.X debentures of billion, as a million margin its maximum X.X GCI's which -- finance quarter-end, and principal times credit quarter leases compared was X agreement financing loan had of including defined and Charter times. leverage billion of and at Broadband amount to at in debt, GCI. allowable of At total its GCI leases obligations end against includes debt shares, tower

maximum the unable previous to leverage credit the in threshold and facility. in GCI notes therefore incurrence-based funding of was its the the discussed senior As of senior access terms under portion quarters, exceeded additional revolving

availability to credit in are on borrowing. very current GCI and As senior $XX GCI X the leverage to margin under the our comfortable long the GCI times, noted at with Based the With the the portion in of giving the now additional access in hand revolving broadband cash the revolver with liquidity as the credit has ability ability covenants XX-Q, on to after of is access revolver. has funding our compliance under under quarter-end million any we so the effect additional loan, senior facility position. facility,

turn it I'll Pete. to Now, over

Pete Pounds

Brian. Thanks,

being Starting is built, year this five Ericsson with and our build XXXX for network partnership with CapEx In second guidance. we upgrade. the currently is to the in included our network first band quarter, our announced Alaska. That XG in the XG

We mid-XXXX. new improvements expect each to site Anchorage to the be in as the already turned customers gets meantime, completed starting see are bill In on.

of On industries Alaska and state to The economy. are oil going well XXXX. tourism an the in update

permanent up economy. However, are budget are cuts prior and year in facing helpful confidence the Overall, reduced as from gain. of but in end small a as XXX state protracted jobs fund anchorage the the state dividends challenges of and September, we government economy the have around still debates large

those FCC, continue pursue any the at appeals. timing have With matters, the regard RHC with outstanding the to appeals this resolution time on we open color but don't to or of

consumer, the enhancements began X% efficiency product on were basis strong and initiatives. SG&A both improvements of in for results wireless. revenue to quarter and year-over-year see was X% basis Third a expenses. due to in data, due quarter OIBDA year-over-year increases Revenue operating on increased and the benefits to a we Adjusted as operating up

the do we that for quarter, changes to roll quite out unable were product a of being that during noted Last some we to conversion. system time able number after billing

video our changes wireless, Those postpaid to revenue launches and wireless, improvements New quarter. products. modem the significant cable enhancement in were driving the in include prepaid

during we second business. order towards reductions changes significant the made the mentioned expense quarter. narrow side in also Those Alaska in expense to focus the We core third the also our the led efficiencies that quarter on to

and XXXX month was The revenue with in partially in was Consumer increases X% where them for was many packages. premium driven voice. conversion wireless from upgraded offset due customers as customer our growth we billing of up to Consumer: in ARPUs data and higher service the wireless our advance. billing increasingly being growth our The data as move credited in to by we arrears by of declines accounts lapping video one billing to

also pleased we data with added quarter, sequential customers, new net increase. This consumer XXX a and the we're

Business: quarter. Business revenues the were flat for

business, were video by the continue closure are due earlier data in RHC in ongoing partially time see to that last but funding of denied the We we declines gains the business customer to up-sales of in headwind Lower our offset was the business These in data seeing gains materials and and healthcare this the the XX business. quarter year.

million year, network for Finally, the wireless CapEx: primarily coax and $XX For fiber fiber have were capital expenditures. Expenditures improvements, in improvements. hybrid we invested

the elevated generally projects million end expect the the spend in before ground year. of CapEx We we freezes XXXX. in $XXX CapEx to as push at is approximately QX to complete

turn I'll Now, over it to Greg.

Greg Maffei

investor many forward as our we in register have Liberty. your you been Thank noted several a on is next has link times that continued to there. seeing Pete. to meeting today, -- for GCI We you appreciate our We for that, week. look There of homepage. interest We

questions. up operator, for that, open like to I'd with And

Operator

we First, hear Instructions] Ratcliffe Evercore will [Operator ISI. with from James

James Ratcliffe

Great. the question Thanks if I for taking -- could. three,

with GCI on providing actually that operating customer much funding Secondly, and associated sort at on second canceled, you Pete, is Any might have a be all, see First or and the on been And on Tree. much row Thanks. GCI anything move OpEx spreads seen third, the we monetization of substantially how benefit Charter your in side, potential decide last in to by the the appeals Liberty where source. I the Liberty a thoughts customer, out with some you've pretty point driving that of guess about the the if service views fail is how of that? RHC that mentioned month the that past, what you on seemed weeks. call as six Greg, that -- Broadband -- versus performance more or to this regarded stake? that Should the In could that? read you've into has you've

Greg Maffei

do Pete, go you want first? to

Pete Pounds

Sure.

not So, is OpEx to will the on get funded to customer potentially in of the a network; there significant really is capital network. stay expenditure to that did is maintain that RHC, cost it place. for secondarily, that and build the due first, the massive the That network savings question

will that that. towers there part no earth down microwave or stations as So, turned a of is be

reduction to would so, of circuits turned SG&A, if meaningful I expect those And were not a see down.

Greg Maffei

-- of now a the much it's think, it's not because about as value. grown only somewhat smaller that it's And Tree, reality operating GCI more the operating so importantly, far entity, talking but inside performance Tree, as also Liberty, in the I

$X bottom at well, million well I stake now; was billion. $XX recession, think, the team the when it's, worth we over we there. to discussed in ‘XX I well, it our inherited Credit the think,

We're it certainly to important to sits happy a being going where source Tree have at our major of They're at and more of efforts their because to be a both as the plans it's and capital. We So, Day. benefits. are use noticeable. own it shareholder Investor enjoying no

like as And, has GCI moved know Charter why much. spread out and the I and so between Liberty, that don't as far really

been modest buying stock done, efforts, relative selling the relates probably puts more situation. has modest with I which little in been the have stock, that think, which it back dips pace Charter or to the buying far either a at to the just like we've bit toe

been have than quite Liberty But, Sirius, repurchases. not Sirius as as insights. great aggressive and much share Sirius at Liberty situation have any I Sirius don't where more repurchases the So, of the our

Operator

Zack we'll with moving from Silver on, And a Riley question B. hear FBR.

Zack Silver

great. the Okay, taking for question. Thanks

one First Pete. for

that to announced Over reforms. you the the changes RHC some the had FCC mentioned summer,

to directionally months later, that's would idea if curious, was any how You you early said, it I'm you too to impact guys. that tell break going what three have for have.

Tina Pidgeon

what But, and in be General one is a setting that really very early anyone would by Tina GCI's Pidgeon, the the know is Service at. I going Counsel. has collected have that Company. process be. that to idea to The new that This before involves is be think undertaken looking that has of details to Hi. is decisions data some median closely of additional a is outcome still tell to at process rates the we’re to It Administrative Universal made be there

Zack Silver

buybacks the two you, it's there. about ask that hate same buybacks been and on And curious repurchase driving have think on Great. to guess going I'm paused But, how what's to questions in been forward? GCI, Thank as we Tina. just Greg, the since then that I I for day. May should

Greg Maffei

buybacks, caller on Certainly, the we GCI what et between prior a at is is Charter, underlying there and there noted, spread we the look worth value cetera. think as of the

financing generated. and pause us our being we've those had. fact the from free of and flows the we've I in didn't where somewhat been did We access to situation but of access sits to has some the stabilize at necessarily flow some think, refinancings, lines some GCI restricted that cash give related lines been the incremental -- to which that our

for that a So, opportunity discounts the is we're on that being one even probably exist where probably there. with This going is little while. front, to cautious

we’re how that take the able future. see we'll advantage So, to in of

Operator

Citi. And come the will with Michael question Rollins from next

Michael Rollins

Two Hi. afternoon. questions. Good

revenues practices? segments? First, power if second, purchasing technology, and then the in GCI for describe GCI, in USF the the And as itself other, well leverage Charter pass-through could opportunities the it’s whether charges on you any for the impact as are each factor best for there marketing for had did increase just quarter to across

Greg Maffei

So, it, who and first kind anyone of from I'll add, one, would please the do. like to GCI take

topics. expertise ongoing at I what utilize. issues many in where work trying it, several either want or technologies more about it been on they that's or or think, to dialogue GCI more to there given Charter has they to because and have I scale, when been headed experience, done when earlier They've work has they're that on GCI may going cases leverage probably -- expect has and dialogue done gone Charter's continue. on they on,

contractual discounts on friendly, On would or of why would ability I have They friendly a something do way. hand, think, GCI they're have like extend a benefits. they know more the anybody further. than from not one -- of if commonly and while the relationship, not common ownership kind have own Right? clear generates a in like extend to So, or Charter the ownership. some They those relationship; that's don't same don't or other common to comment But, parentage, a they're purchasing I that. which

Pete Pounds

Greg. and the have none No, changes. risen nothing note USF publicly question of Those further any on level typically on I on on happen quarterly that basis, filed one, the contribution the of on the would to a note that of would information. factor changes

Operator

Matthew Our next Benchmark. from come with Harrigan will question

Matthew Harrigan

a an questions. you. One, other Thank unique of being the in for the XG actually small XG you area where among of of that to you MSOs Three number instruct the cells? guess applicability you’re I build from your topology and Anchorage. could people. drawn with to terms I and and integral any ideas Ericsson that's U.S. surprises Have mean, cable

Greg, then, guess the are mess regulation thirdly numbers? over year, expenses well a last you and up nervous more. this to increasingly all year telecom that just there is of And U.S. significantly or in your were I the political Would time? for the risk up possible in the seasonality, but period Secondly, longer were revenues in getting as noise some with your QX apply on

Ron Duncan

Ron will on Duncan. I'll up guess, I politics. take first Greg clean and piece back XG the is This on the let

our benefits process fiber network the demonstrate coax of half lot actually be of clearly, to the that We'll to the first subscriber more extensive the in extensive know have. well down with way have that to a works a leverage that we level. early we wireless to XG backhaul deploy We're how with by and our the plant able holdings about really residents the communities, we're cells to the vision virtually But hybrid combining small that is XG year. of unlimited the all throughout next the spectrum able

production there marrying a So, the front. we a real see in synergy two on

ready tying the first there class, terms of of we that in have synergies believe I'd how say, important whether year. plays together to a from in are also it We products we're in But, perspective. out those consumer see to half teach next

want Pete, with to seasonality? do you deal

Pete Pounds

the revenues, Yes. we've On seasonality, significantly historically say very that on years. seasonal over last that declined fairly been but has would I few the

heavier probably seasonal expect being than more So, a you guidance normal. other the and The of on in the much seasonality QX than a is a are correct, little on revenue see and wouldn't the and not expenses one-time seasonality you expenses unusual numbers bit But, we're there. little side, there. expenses what giving stuff little I or of QX. numbers are QX QX fourth expenses, QX some in do those with that had bit than year higher note last there quarter

Greg Maffei

certainly of Charter work learn we mentioned and perhaps rather lot there first, ago than scale. their because can a at installation, Charter is on discussing the because the just I'll as minute Liberty many This in at that learn well. think a that And but politics, I they done -- where a I cases, XG case has more is I'll comment a of can comment topic on

having And interest. watch with obviously, on so, a learning own installation what's XG we powerful great a will with happening be zone. our very And

of we the there's when would got a it many the politics, was we I'm certainly reversed. problem them general, DoJ in was just we've the of items was watch a problem risks On politics. all that, have it interest. In SEC guessed more, the always around less how a of or of is. because but who not that and time more That's now sure have actionable way with

this go. where So, will who knows all

Operator

Cross. have we will move on from question And final Bentley our to TD we Securities

Bentley Cross

Quick for on Hi. Liberty Broadband. Greg question

to as of that Just issue, be take there we all so a forward proxy. out care Advanced/Newhouse is buybacks there Is the the should anything look to exploration the your thoughts done XX% together? threshold the or ownership non-issue themselves of

Greg Maffei

it that relations Newhouses don't that know would proxy. probably Certainly, point between renewal Malone, three gets I is, ways I One commonality Yes. a the some of solved. there. sort John particularly it's non-issue. and a and of good if

drive and ownership the us in XX% efficient that would not risk continues on the take to Charter used alone over know, XX%. economic and third, massive amounts of that past, repurchase, rightly to over ways you relatively as the our like we've could that [indiscernible] Secondly, the And may our own. us increase drive

So, I by there not say up but keeps can't is one it's no risk, me night that means. any at

Bentley Cross

Thank you.

Greg Maffei

you. Thank

to again next said, listeners Thank we you see operator. hope of much to not, questioners. thank and of speak not So, we'll next the many you we beforehand. very And quarter New as you week all York. if in if And

Operator

does And Thank that you once joining for conclude gentlemen, for again, today. us. ladies our call and

You disconnect. may now

Liberty Broadband (LBRDK) 11 Nov 192019 Q3 Earnings call transcript