GLIBA - Earnings call transcript Q3 2018 | Grizzly Merger Sub 1, LLC

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the GCI Liberty 2018 Q3 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded, November 8. I would now like to turn the conference over to Courtnee Chun, Senior Vice President of Investor Relations. Please go ahead.

Courtnee Chun

Thank you.

Care XXXX, like statements everyone the repurchases, within Litigation Act we'd includes this Private conditions, other financial future Health new begin, historical and launches to and business Reform forward-looking service, that and relating recession, are facts. Alaskan about matters Universal certain Service the of system the we performance, to Company market potential, matters not Administrative the that remind Rural call Program, and regulatory Securities strategies, Before market statements stock including meaning product of uncertainties These to materially could of acquisition forward-looking GCI distributed, capital statements implied without involve access many issues, expressed market competitive to Liberty. those opportunities, changes actual risks by differ products issues and acceptance to possible the statements, and group continued including, that on limitation, services, results availability or regulatory acceptable such cause terms from in of only in such disclaims forward-looking or is as to expressly thereto contained any reflect Liberty of speak of herein disseminate any or and any GCI date on the any based. circumstances forward-looking revisions updates any in change with Liberty's statement These regard conditions expectations any to statements or or GCI this events, obligation change which to undertaking call, statement discuss On including adjusted today's financial non-GAAP will call, OIBDA. we measures, certain found website. the press our release earnings The required which definitions X, available and reconciliations, including on preliminary in through can issued note in Schedules be X is today, regarding Securities Broadband. certain include Reform may also within XXXX meaning the call statements Liberty Litigation This the of Act of forward-looking Private materially implied differ uncertainties statements cause involve results could by from to expressed forward-looking risks those and or that These many such statements. actual reflect is any which this to any change of Liberty in Broadband or based. on as only any expressly with or circumstances forward-looking herein to and expectations Liberty speak call, such any disseminate conditions revisions obligation to any or thereto contained Broadband or statement in statement statements the regard date change any disclaims events, forward-looking of undertaking updates These

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

Greg Maffei

out Thank there call you, Courtnee, Liberty you us. joining for besides of speaking Pete CFO, the have Mark CFO, afternoon Today, this we'll GCI myself, and thank you Carleton; GCI's Pounds. all on

Q&A the answer about available as well questions Liberty. Broadband Liberty will we GCI to which be as During follows, session

So Liberty. first starting at GCI

During GCI what repurchase in $XXX where Liberty, look the the initiated Charter Charter XX% on discount as at of we to the GCI a over it Charter. $XX close, price the XX, Charter, to when of share repurchased X and range. of share was trading, we about you full quarter discounts at you and Broadband through double Liberty the August stock. look from at call discount it through look-through advantage assuming We're we and of today's is worth take million is Liberty doing the of period low October the And

So attractive we Liberty consider be these buying to at it GCI pretty prices.

the Alaska hear operating strategy completed Looking their during migration minute. improving system. from while coverage to cost they region. and a itself, quarter, billing in Notably their synergies expanding on in the this Pounds execute on at GCI continue of Pete you'll new They driving and the more to

and the you our and and leverage flow pure a them of Carleton EBITDA, significant an most me at cetera Warner commensurately. that an and through moves Charter, the free only opportunity drive and as cash scale the and meaningfully relevant Charter CapEx, less to is it to investment have story is cash intend do some can play flow discuss call, businesses optimistic hear integration we'll we of that Time things Bright it let exploit operator. to video on. Liberty Longer likes to in the share us moving had. but Mark Combine the to what to that has been which at years, conference in and beyond introduction on equity do if attractive it. behind believe, to they all with financials shrink, that, we XXXX very is attractive CapEx it. the here. about start penetration Charter and few by business. further term, to and the like continue able and detail. for is to of from stabilize profile the declining they what grow we the to high in did ability with over execute flow In story. come time some in a House et turn story, quarter, Charter behind you up with wireless I'd free optimistic is like this of prices incremental in GCI invest an their We elements extensive remain growing over quickly The in ownership Broadband their of take long-term cost our efficiently Liberty are cable expect With to network levels Looking more attractive Liberty why to to that, data listen to with itself taking have we thesis service. suspect to down cash we the continue latest above are Charter The is be the I They free speed price reviewing future very

Mark Carleton

debentures as million $X.X around Charter, At Liberty quarter-end, loan includes shares. Liberty of Broadband, $X GCI, a billion value close Liberty at $XXX million has got GCI leverage tower equity at Charter $X.X GCI's includes of a had leverage XX-Q, interest in you, billion credit $XXX capital outstanding of its interest was exceeded and million, securities GCI to times a One billion, consolidated of billion today's of in its $XX in $X.X defined maximum the X.X debt, $X.X and cash in Liberty principal of senior as Liberty billion margin of as exchangeable compared its amount margin the and total aforementioned leverage to GCI. the interest allowable quarter-end, notes. in the agreement public obligations which terms threshold the GCI including GCI billion, Broadband LendingTree. includes noted loan $X.X X.XX Thank which GCI maximum of debt was cash Liberty times. Greg. point of of at against which leases our in At

debt are we restricted on currently. So additional incurrence

the given sufficient operations. about business Mr. have we corporate Pete fund GCI And, resources we've to Pounds, However, that, opportunities to I'll talk all with CFO, at on-board. got GCI's liquidity our welcome

Pete Pounds

I'll three Mark. you, with Well, start Thank first, updates. material

Care. First of all, Rural Health

per release we no federal our If choice narrow ends to and the found but XXXX the $X in figures may October prior XX, areas the shown Bureau areas on updated this XXXX earnings in system reductions in stands, financials received we've In quarter. OIBDA business funding of from release. future letter quarter. programs. include reducing disagree urban of Care million have information, on XX, the million obligations The been our forma pivot in quarter are June conversion FCC funding be release this to for approximately remedies. XXXX. our This rules noted we operating a Schedule adjusted maintenance June Health which our the press Competition decisions year a where decision by is upgrade: left of in to to continue ended third rural obligations pro Wireline all of the XX, or we new will the XXXX. press be can The focus approximately funding impact completed in year X of reliable. restated our the income quarters year, and for financials all We As the would with any that billing absence the of adjust our our this will manner investments to system XX% meeting We $XX of in Billing pursue with similar available Rural and more our the revenues,

a through. encountered there are fixed to As outstanding have been issues and we expected, issues few few a still that work

who a and better. advance elected we to the new revenue, adjusted There from was bill of serve have income However, or operating numbers our selection for leading at going this continue moved was will efficiencies have result Dunleavy, tax double see which as to first system Anchorage, in and bill generate recession. OIBDA Slope. us further hear that North new million for of development $X customers allow we this the from consistently per development we system good economy: barrel, and improving; on one-time a rejection approximately Unemployment in an to the a took to Oil faster in with offer hit above bill and not and the will bill would the arrears to development. in of of business X, the signs regime particular, the We been to to services. economy hampered election certain We Governor are in customers. $XX week on climate that's The Alaska and Proposition believe for exit oil current have prices stable increased Alaska

will robust recovery, my don't XXXX, on expect do otherwise All or be us I in exit to recession the of I results: results the QX QX unless quarter While expect a comments noted. Operating two. to comparing XXXX next

video basis data of hit, being income a OIBDA voice by product. billing in were operating in impact flat our with system the and adjusted year-over-year Excluding pro forma the and gains on offset one-time declines

have upgrade revenues as the down we see not in year-over-year our data X% yet new expect continued system, basis those their billing quarters. seen plans. to Consumer: While coming were to up of XX%. Wireless benefits begin economic was a on the by customers the our we Data

choice to expenditures new video HFC and being advance. However, X% CapEx. bill by XXXX. fiber down in decline system. We track data. we Business revenues in due were a primarily was advertising in week's double the this election. to Through $XXX move the year-over-year on with to million capital CapEx offset most improvements, video political as The for $XXX gains basis declines expenditures. of in arrears approximately to bill on gains bill and of invested from by our million were first the wireless wireless were billing in in roaming voice and remain to primarily months The the due wireless, we customers the Business: nine in year, not for and improvements spend network

back Greg. over call to hand Now, the I'll

Greg Maffei

Thank thank you, you, Pete. Mark; and

reminder, Investor will and those As be be holding New in will Meeting listening, videos. a XXth Annual on our November York there we

link you'd operator, your If please the floor and on GCI in agenda, that, questions. to the We appreciate like the with And, I'd see homepage. open to Liberty. our for register interest use like continued

Operator

Please Ratcliffe go with Instructions] [Operator to go We'll Evercore first ahead, ISI. James sir.

James Ratcliffe

One Liberty, if could. at GCI, I GCI one for

at comes I just price Pete, $XX line? comes front, reduction, it I in EBITDA GCI RHC your to million that's price essentially the a about release want the narrowing On out reduction, talked commentary And and make XX, off understand, straight the so activities. the your

much as if talk this do return potential there's you cost further do narrowing improvement out could what's you Liberty, to activities, options essentially, buy prospects And regime? anything just how for, GCI EBITDA that. and well? if if So the If to continue end regarding come that, given there up back if would and Greg, you capital governing price about are stock

Mark Carleton

Pete, I'll let go you first.

Pete Pounds

Sure.

on $XX the is OIBDA anything a we dollar XX, million from the doesn't a so so structure, during revenue, June services year for to already hit, those dollar first revenue So change that reduction there. dropping it XXXX, the in cost provided with and are ended

of our the terms there. comments point don't magnitude this have at of In changes narrowing any we any focus, on really of

James Ratcliffe

up, to Just 'XX the this, to apply this 'XX 'XX, year 'XX to to also apply decrease does as increase to price well? to follow the

Tina Pidgeon

that's is. we're what effect and point, General this methodology GCI's relative years actually This FCC's the doing similar Pidgeon, some work is future the to guess Counsel, and our additional Tina that at best in understand

Greg Maffei

did Great. million a little quarter. with $XX And James, in the as over I said,

cash in We but cash flow capacity see the the we're And Rural Health have reductions, flexibility I corporate quarters. Obviously, still the nonetheless, somewhat and capacity. available have the we expect more have with GCI to corporate. with we Care at our we flow reduced by the continue next cash pace would over free same generate, kind of will that at have several the

Operator

Buckingham with Our ahead. Harrigan Please next question Matthew go will come from Research.

Matthew Harrigan

to you you days? Charter market? companies any a rationale executive pivoting RSN for I echo all pretty selective clearly this Is in a like these valuations operator in RSN executive books. that cable much own look the the by these scale your just wayside a deal at Is your persona of do there your investor How assumes these from particular content Greg, when morning, persona days? about the persona, feel to

Greg Maffei

Thank you, Matthew.

complicated long history at I have think something a we had with. assets, RSNs are that Liberty

a we went then very up exchange helped and many They RSNs they're we When I owning DIRECTV if for contract baseball. of you without RSN FOX, interesting, what and interesting does and you as series not a with with but with own think, those achieved potentially also up AT&T. X to look originally like substantial eventually a and recall, we the content ended owned the more. set on the did risk what involves FOX we they're to As baseball teams distributor, be that both distribution are teams to underlying can are were primarily the sports local amount

of when Braves the with sports out the largely content inherited we familiar Time the and one We because own are more other we from Braves of we RSN's because it of bought Warner these nature is out profitable the what of RSN's the of obviously and sports view there, cost. the the quite would as the contract that on underpricing out side,

OTT brought not audience, to there inherent as but longer-term a something so lot a it. to as as got cable risk priced be may drove So that networks, price that, are few RSN got that customers in the not an some you've appeal that were but who you've fact around helpful given the the of probably to can is distributor, lot that, acutely right that other and an around way the plus that it's still think they a-la-carte would on product. RSNs moving moving other grows are that lot distribute choose some risk back MLB these are to at said, and or pieces They a-la-carte trends right of choice an to some leagues as are and I pieces There further sit subscribed at potentially OTT of a the this underlying an subscribe overbuy. if pressure in put who

what can be there on, distribution those, rights are market I that pay So and ones you of underlying these would very what you be are we say, would cautious potential that purchasing. as dependent all the would and be in the while interesting much you them businesses, said about for

Operator

Thank you.

with Our will Kerrane ahead. SunTrust. next question come go Please from Mike

Mike Kerrane

And pursuing in on you could you the remedies just follow-up talk more wondering I all available wanted can Europe, the you remedies can with if there? press any on RHC Program color I'm funding. of what you FCC. and to us talk about pursue the question if there just In kind is about release that give precedent

Tina Pidgeon

Pidgeon right stuff Tina commission us the the at question. immediate This review front is to Mike, made issue full to was have level, address that that get appeal the available staff rate that's to we our a of most was that Because to processes that's and decision in again, us of related issued now.

Michael Kerrane

talk Is about? you any could also timing of there kind

Tina Pidgeon

would The due appeal issued, tomorrow. is letter after days that so was XX the be

Michael Kerrane

Thanks. Okay.

Tina Pidgeon

I on what further any give are really there the don't color around FCC's no -- dates can't that. I have And timing is.

Michael Kerrane

for the help. it. Thanks Got

Operator

you. Thank

Louis question from Hernandez, go ahead. final Please private will today investor. Our a come

Unidentified Analyst

for Yes. Hello. Good taking afternoon. the Thanks question.

of is, an sort one also, first GCI's a have maybe visibility? for to to is just The of what I more next wanted -- have year, little a EBITDA XXXX idea

Mark Carleton

Yes.

We any out year OIBDA. guidance for haven't provided

Greg Maffei

given. judgment own business other make But ask are I but that not providing forward information of in based their guidance, we investors and trends the to generally think on we've

all interest thank Liberty. for you you for So thank your and GCI in your questions

we Thank next seeing number you week. to New you, operator. of As look I said, a in forward York

Operator

participation you will again Thank now That disconnect. and once may you. conclude your you today's all Thank conference. for

Grizzly Merger Sub 1 (GLIBP) 10 Nov 182018 Q3 Earnings call transcript