GLIBA - Earnings call transcript Q4 2019 | Grizzly Merger Sub 1, LLC

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the GCI Liberty 2019 Q4 Earnings Call.

During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded February 26.

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

Courtnee Chun

Thank you.

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

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

On adjusted our Press financial today’s metrics required call we including Earnings adjusted definitions can comparable schedules and today, be and the margins. is preliminary along which X regarding OIBDA OIBDA in found GAAP with X reconciliations, issued non-GAAP on the including measures, in Information note Release will available discuss certain and website.

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

Greg Maffei

Officer, Liberty’s Accounting Today the Thank the you, Chief Courtnee, and Wendling; call have good of Pete you speaking Pounds. on call. GCI myself afternoon there on GCI's all out to besides CFO, we'll Brian

also Broadband. Q&A will related answer be to the available Liberty questions During to

in had fourth $X a a moment. was were but quarter. Liberty, benefit as the overall further being Ron it So a million will in pluses in regulatory starting release on There noted GCI operational discuss Brian of the first we front the as quarter solid also and minuses with

losses with full moving as challenging voice. sub the in stack in were was year revenue consumers growth despite business up data there consumer the in video a offset and there stable environment, gains from With

generated continues expense later from efficiencies savings will buildup and business. on this operational on GCI a anchorage work expect also XG focus Alaska completed we We the be year. the core which

which total pro over XXXX LendingTree, customers million. diversify add of of users forma they to QX yesterday, during the business LendingTree Insurance XX% the bringing prior The year.. and to home segments largest million to its double-digits reported QX versus myLendingTree number continues is over XX.X also Turning effectively, its and business now grew the last year. results includes consumer to X.X

as EBITDA another Tree Yesterday revenue earnings year for and the double-digit I issued and noted on XXXX call of guidance adjusted other growth.

Turning over customer over plan customers. They to and XG million offering to it Liberty new created added a mobile relationships for was year lines over X.X X.X million They added QX. begin XXX,XXX inn Broadband, net and internet great over charter.

adjusted year, and free full X.X% XXX%. grew flow grew it cash non-political EBITDA the being cable over For despite a cable advertising year by

basis. continue free share the We and strong particularly growth intensity disciplined combine capital declining drive capital with expect EBITDA continued a on flow deployment will strategy cash will cable to a per

cable XXXX. expect intensity XX% decline the to from in continue CapEx in do we XXXX Now to

with over turn financials. the further So that, let to Brian me to discuss

Brian Wendling

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

and includes Liberty At debt, tower billion loan and $X.X finance the a $X.X outstanding including $X.X of quarter GCI of of end, its margin amount against GCI. debentures Charter had Liberty debt total shares, leases which Broadband principal exchangeable obligations billion at billion,

defined Liberty for borrowings a GCI corporate senior $XXX portion X.X quarter, amounts facility to Liberty exclude maximum increased compared are times. the of purposes. table is million, and X.X level to a used the GCI fourth the at obligation stock leverage release. above repay credit loans general under separately of in that its quarter GCI proceeds cash times the Note margin GCI's the were preferred the was by and In at end identified on and credit debt agreement which leverage indemnification

control filed business over was Our access to from issues of process well that in identified design as GCI control. issues Material material weakness various its and is will you notice XXK also and financial an IT controls later, systems is aggregation running weakness as the over reporting. in of general internal operation

financial percent control strengthen that are and results. the are including control personal redesign, activities implementing the working were development. issues know to remediation do enhanced not forward going and training various our Our not We in environment reported and we an material in process breach misstatements towards any external issues result

significant Before there and events results two would in that to fourth through. walk Pete, GCI's rule I impacted over it are to the I hand quarter that like

aware Because we XXXX have a loss accrued of assets these on and of approximately of fourth quarter. First certain SG&A compliance expired million the issues GCI became issues December in $XX in of in RHD contracts.

of GCI's confine the which of SEC customer's of around quarter million issued of in the on Separately that XXXX denial issue continue appeal disclosure in We recognized SEC this first to resulted XX-K. loss one more order an resolve this we with a much we had to our XX February granted to reverse a XXXX. the which work approximately funding in $XX RHD previous and

the to recognized previously fourth This loss. new SEC million the led quarter $XX reversal in of order

contract new into information barring all from revenue recognize and we we what At all in periods and quarter evaluate the XXXX determine the last our months of nine majority XXXX, to first of for has expect in of recognize, revenue this amount for XXXX FCC. would will forward the to related service point taken going into this provide the this analysis. be will GCI to continued We account this can to or

the a together I reserve The million $XX in of operating net delivered GCI will GCI’s $X role results quarter to turn more detail. the million in negative that about a benefit over Pete it With reversal that, year. and talk fourth to has for just in resulted

Pete Pounds

in When based revenue Revenue reduced XXXX QX you, XXXX due Thank a a to non-Election business was of as video down full-year wireless compared video from revenue advertising business Brian. reductions to the year. down lack results, as X% in revenues. consumer quarter primarily revenue as well voice fourth and primarily and on video XXXX comparing was the in political

X% million down OIBDA $XX year. Adjusted was or for the

increased Brian million or X%. have $X matters Excluding the RHC noted would

showed of of growth have or adjusted even cost million quarter, efficiencies. This Adjusted RHC For Brian discussed. we adjusted million is strong our due the benefit focus XX%. on been the $X year-over-year OIBDA OIBDA improvement without matters the XX% fourth up to or $XX would OIBDA mostly

fourth a the rate stack the X% respectively. signs subscribers, quarters to subscribers to us starting life we Alaskan we product in and reach X% quarterly cable up to move see two customers after revenue of consumer continued we're In growth data finally consumer, had the helps on Moving a just which economy in data annual growth. modem years a on and quarter, row great cable few and X,XXX sequential basis of a in flat modem of grew subscriber

due sales. was revenue slightly increase up handset to wireless Consumer

five-band this to Anchorage to upgrades make expect summer. XG continue our which complete We we

revenue business in wireless, was good the and voice in On the slightly with and full-year offsetting side, business losses quarter down data. fourth video in performance

to roaming due The year non-election decline in declines. backhaul video revenue losses lower were and The wireless revenue. to was due advertising

provided services flat these On previously of customer in services. to the education additional our for offset the and and as data revenue side, quarter additional customers to full-year the increased loss mentioned due healthcare the from the RHC fourth revenue was

For in capital for million Expenditures we improvements fiber invested to coax year, the wireless, were approximately expenditures. primarily and networks. our $XXX

XXXX. in spend expect a We to similar amount

I'll now to the over call hand Greg. back

Greg Maffei

thank and Pete. Brian you, Thank you,

scheduled XXXX investor so New Thursday, our York, in XX, please have calendars. meeting for your We mark November

As to chatting if for open next and we with to GCI with up and that, forward before interest questions. operator, in look Liberty your always, we like I'd you appreciate quarter not continued

Operator

Instructions] Our comes Rollins, question first [Operator Michael Citi. from

Michael Rollins

Hi, be stock leverage level, appropriate the you'd I'm investments for And capacity increase the questions. at could most GCI the discuss uses other should company. the or either target you consider or repurchase the the thanks to curious taking for capital? have ratio if what for

Greg Maffei

you have why take about giving Treasurer. [indiscernible] we is This in of don't terms that. our leverage the at both talk currently But will where level we Pete are the constraints covenants? GCI and

Ron Duncan

the agreement times with both using bonds, the some credit credit and leverage So, at operates X.X are we public metric. that currently ratio under agreement, respect total GCI to

leverage issues. fluctuations me, covenants Obviously, mean, in then working approximately X.X over times versus seen are the And covenants, fluctuations six to in working, some the those the bond over seen RHC are write-offs, calculations the we've the times we excuse time. the covenants reversals, it some and On we due covenant. towards reducing I a

that will that calculations to note first improve issues forward. that these quarter sorry. will And off were RHC Please begin quarter anniversary in XXXX first affected and the quarter, going this

Greg Maffei

think And matters. I potentially in regulatory level think, the I to our note, thank you, is right given Laura. fluctuations what the

fluctuations the out little those cushion sure but what times to against we have we make particularly have this that of probably in of incurrence now, don't issues. be been build have And that levels made we We regulatory the We're try at might had conservative a and issues. various want and harder. that

Michael Rollins

operating cable just time. pricing those And think the over greater there's on to just like do you the that side whether natural sensitivities business, the oil sensitivity curious Alaska, it's business for resource in side some how of or example to question an consumer about marketing, find of a the

Greg Maffei

activity question answer people the asking articulate, particularly lag there or Particularly know, oil but they to where quite where price Ron certainly to Well, Pete you get lot. things side it does if understand with get for in been, what Slope, be some on started, the of think on build much basically more Alaska? tied projects what the much very your want you're GCI I are out, in oil what and drive like And areas a how the correctly, if be. will who business do further? has I comment where could Northern think oil is people what don’t I

Ron Duncan

revenue by prices I'll and in oil government. state Ron. climate substantial that the there's between oil damper by Alaska add to is current most getting comes This us the a recycled fluctuating and just

low prices that It's really companies to on North that or So in economy. an deficits three a immediately much it six barrel price Obviously has results. by short-term see influenced be that cycle, stays This in months oil. down is, won’t is impact. a where horizon. a of aren't budget perturbations And reflected are the long-term have unlikely impact using the that are very on investing the oil state Slope per long-term we

Michael Rollins

Thank you.

Operator

James Next up, from ISI. we'll hear Ratcliffe, Evercore

James Ratcliffe

it you I'm though, next Thanks to drove you looks licenses, that of it’s talk the you There's revenue. Two, any over and a to just comment Broadband like, to question. thanks. if pretty new on be the at up and for in May, $XXX with you I of plan that, thoughts that just the impairment secondly, coming about by million can what Liberty’s loss could. if taking if side, approach Liberty an close anyway, math, should wireless how release about the And house the reassessment long-term then, wireless GCI there's proxies related help XX% but could right, doing least the not

Greg Maffei

going going take question. expire. question, on Liberty both Sure. is the you the that second to Broadband let, James. think it's I first be answer wireless Brian note rightly But I'll and I the will think to question proxy on

that I Investments ensure to Act XXXX. several remedies don't there are the we regulatory think around have issues of potential

largely probably percentage could first given to cause my extending the with don't have whether not Potential constant selling to things us been want either sellers us would they you to plus have is their them. proxy. be that they into and remedies involved be the involved be marketplace, know having guess a less still would I it, that do, holding or

it's a partnership And worked the I more parties. had Charter XX particular, years, house Malone been is, for investment John both this for this think, very new well successful. And in in importantly, out families has

talked I willing they might but that. So about to really suspect be have not extend we

of rightly come including the depending end lastly, Secondly, Charter over that we you and the the in up the GCI there to Liberty that combine stock to our things Liberty well could own, Charter monies rate XX have buy products in across well buying could we on you we more are directly. certainly Broadband from do stock repurchases, and when very continues as note, on very could their back

tended that give things it have do financed broadband in did relatively you’ve to our seen at because match we XX downside end and hurdle. purchase would a cause example use for that Tree put a to us protection but the that We of how could it purchases some as not us get trades upside discount lean we call is and some us both outlay to would and us capital would over delivery

certainly I may we to have of any So think something lot rise. related pay regulatory while way attention that it's solve to, we issues a

valuation to related And then various required went the customers of on to or question that going at intangibles a many drive We variables but wireless each that that flow of disclosure through. year the won't that GAAP impairment too your was that non-amortizing on we details through required by various standard as process. the you're all was uncertainty the look valuation there process through certain increased the at end of

Unidentified Analyst

you. Thank Great.

Operator

Our next Silver, today be from Zach will FBR. Riley B. question

Zach Silver

of both impact how that the that there may today, sense of wondering XXXX? pieces in are know I if could are OEBITDA of a and sort you there directionally give moving guys but a plus us minus lot you on RHC disclosed

Greg Maffei

have would comfortable is with we should we being and I to we impact I a a that receiving we that to positive be there reserve that that but all are contracts circumstances larger know. equal the expect potential The we impact reserve million to think right on up our you could took outs were reserve end think we $XX the that. suspect,

were balance we the roughly our XX, million that that that more sitting is seen on three we $X a You’ve reversed undertaking for quarter is there sheet quarters.

the reimbursement received suspense We the we million reimbursement that revenues. are is would XX around that of we on that So that from all get there that get $X to same more SEC what is were in we that there sitting the recognize rate variables the rate money.

would are those than than SEC from today Pete you if know rather So incur have rather the or receive we Ron else not on same add the off that issues. don’t revenue to wants there. revenue sheet receive the margin to anyone more issues new likely my -- to Brian, not than I balance answer

Zach Silver

or then whoever and year higher spread of level net, the T-Mobile horizontal helpful mark this recently, take That's implications decision would on given a on the just Greg more merger Ron with that in been a you did large for M&A charter M&A open thought would decision share the of not may things door in possible this have for pressure this have before.

Greg Maffei

want to comments any Brian do add you or…

Brian Wendling

charter is I get the only and think the levels targeted that a T-Mobile lot is T-Mobile more from T-Mobile. for like of partner was benefit good The clearly by them. largest towards deal we GCI

revenues to we'll will comes have near running Sprint. will with it when additional the also their weren’t revenue that we We to us access which Sprint to through from merger deploy and have sector a getting some effect of term replace

win. GCI perspective a So big a from it's

Greg Maffei

about not what the on just issues was may a slightly it meant it might stronger enormous but probably other competitive negative, the margin less you I a the competitor think it Charter have Looking slight hand larger that environment. on at because mean for have

the of This may the without have scale or opportunity those positive does back means. for some by you so say probably the any might pieces in deals, out tend that probably we complete be enabling things large problems stage look other Charter, about The combinations in other potential weigh fact about the to hard what XG might pursuit XG willingness determents to two and could with to were that be implications certain. a of do other deal for or fact an impressions potential interested What will otherwise. that people all planning just it the seeing imagining in deal that know very mean and rolled

biggest a it's sure way stronger is impact fact stronger see, not is in T-Mo am issue. or I there the a another. product, But massive T-Mo one a We'll

Operator

from John hear Next up with we'll Suntrust. Malone

Unidentified Corporate Participant

the Mike [ph] get from wanted have of ask asked million additional questions answered, and $XXX What's been but you this just color of could Most if the on you what's margin the trying Hey get my could is remind it if more I I just Suntrust. to loans? those pay I [indiscernible]? loans, margin rate of that what to debt makes more types me sense you it's am of on whether figure out whether like and with is loans down revolver the or to those

Unidentified CompanyRepresentative

that we LLC repay Again it's Hi to use partially [indiscernible] again. back loans pay money. rather Sprint puts at facilities. The we do

Greg Maffei

of in presence loan the And this part reasons. regulatory is to

Unidentified Corporate Participant

Understood. Thanks for the answer.

Operator

final today Harrigan from question Matthew our And with Buckingham. comes

Matthew Harrigan

given have fairly last the but and a for question same RDAs structure still letter there the in to performance? on a anything you it's Russian asking uncertainty collapse Thank quarter, now as and the desirable Is [ph] the anymore. IRS discounts slightly ball they get cope the delicate in it the year you in particularly with to better this all can't loss make shown hefty you from clearly

if your if other review in lawsuit? there even in there is All and change could a products necessarily before a complete change imagine lawsuits regulatory was

Greg Maffei

we investment coming That one overhead, of our obviously issues no have holdings or be we plan just some advantage read to certainly that would that around the for probably have suggested taking some of spot. intent tax, some might but in have around it that consolidating That of and company. discounts, various issues on reducing larger clearly be some obviously others

believe type don’t be that believe to surprised or that, you which would now there DOJ issues. what are be I do to and or I certainly way suggesting STC significant

be of I and for. would work to largely issues around most IRS SEC the think

Greg Maffei

comments. friends and our as Thank we here speaking up Thank next you you the who much again all said everyone Anchorage to quarter to to sooner. forward I in very if with on everyone not Colorado their look for to you call. Thank you in was

Operator

Ladies conclude that and you Thank today for gentlemen, participation. all conference. does your

disconnect. You may now

Grizzly Merger Sub 1 (GLIBP) 26 Feb 202019 Q4 Earnings call transcript