GLIBA - Earnings call transcript Q1 2020 | Grizzly Merger Sub 1, LLC

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the GCI Liberty 2020 Q1 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded as of February 26, 2020.

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

Courtnee Chun

you. Thank

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

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

we including preliminary is metrics, be issued measures required the will schedules comparable in financial GAAP and discuss along non-GAAP and On two and which one release Information and the earnings found margin. available including reconciliations, OIBDA today, today’s on OIBDA Liberty’s definitions GCI website. adjusted press call, regarding certain Liberty, note with GCI can for adjusted

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

Greg Maffei

Principal questions and the Thank the will you. and Thank Brian CFO, will TripAdvisor. to Liberty Q&A related Officer, we call, on GCI be to Broadband all. Good have Chief also afternoon speaking you, during Pete Officer Financial Courtnee. Wendling; Today, available Liberty’s Accounting answer Liberty to Pounds, GCI’s

all hard our and to support this work you’re management safe teams crisis. healthy. and First, like of their I’d employees COVID-XX thank and through for all I also hope

network for very begin me GCI network withstood At has by pandemic. students teachers. upgrades traffic. Alaskans plans in increases they’re for team during the existing and K-XX the entry-level offering particular, been free new plans have on let keeping X connected turning customers Their has Liberty. and and providing data free for focused substantial strong data So customers. GCI, been in They And to equipment WiFi

that nation. carriers they model Keep Connected business has FCC’s the cable and – the general excellent. other across the Pledge were model the is are resilient, participating that GCI’s with Americans proved quarter in first of Part in and results Pledged business

they As also service launch of announced their official results, of a those first Anchorage. the part in XG

You’ll some hear minute. more that results of in Pounds and about from a Pete the

to launch in lenders under LendingTree. access solid quarter lending SBA They marketplace small turning the They So reported match need first businesses PPP program. did to to on with the funds results Tuesday. facilitate to

and credit pandemic home LendingTree during them They the hand more So doing in the Foundation of of experienced million storm a and relatively helped QX, their revolving many the insurance $X was facility. They a position million effectively than challenging. has the and as good in their and weather they’re diversification cash consumer segment performance sheet donation for balance They announced part capacity relief. under do pandemic more through in have well. liquidity $XX on million strong $XXX their with others space. Their

connections, for are as get Wi-Fi businesses. the up from and also educational through they They try requests upgrades help health the this care this to institutions help GCI, Broadband. and and They public Connected new and opened hotspots offers Like impacted educators of they pandemic, an and services Americans Turning and quarter. number students small had use. crisis. pledged a to to Charter has people including medium government for prioritizing to Keep Charter crisis. over outstanding committed during those Liberty by And

X.X levels have et network increase GCI, well The several despite the years traffic, well all-digital and to network to substantial perform Like moving their network cetera, last significant over in allowed an DOCSIS made the remain to time. they’ve investments maximum in during below and network very that this upgrading capability.

They I to residential was XXX,XXX mentioned their by the flow above, X.X%, offers those for SMB X.X%. was the side, in adjusted customers, The and very example, highest quarter and at but Charter XXX%. of the was – growth GC history. OIBDA rather Free inherent these on Part cash net strong. up operationally educational Revenue grew were added at up strong. due was over

million X.X billion. the shares for During quarter, repurchased Charter $X.X

they of Charter attractive billion the cash couple few rates. well very positioned front, billion in with its last well and is of weeks successfully and as liquidity the bond $X.X a offerings On had very under revolver, $X.X availability at

Turning I’ll call conference they but for they scheduled their have not released have that yet, had mention to morning. TripAdvisor. their is tomorrow which results,

avoid Liberty of and of $XXX Liberty million Certares I’ll Trip Boards. Certares, which Trip I commenting TripAdvisor will the So Greg announced cumulative comment lastly around founder an joined preferred redeemable O’Hara, TripAdvisor, on the that. stock. XX March on investment by – X% of

variable a $XX repay We also the on borrowings borrowed some hand new amount margin full the Certares outstanding proceeds against under prepaid forward, and forward amount investment, we small and prepaid the the to variable under from cash used our loan. million of

particularly the the longer no We the the us positions economic investment. market better with much withstand volatility This to today, volatility, have space. and travel setup and loan in term we margin investment better have Certares for

going Liberty’s turn I’m GCI it that, financials. with over to Brian So discuss to to

Brian Wendling

held which level. GCI end, and at LendingTree, GCI Liberty our interest in liquidity cash here. $X.X Greg. billion GCI billion, We’ll of public the minute today’s Charter, $X.X as $XXX had Liberty Liberty’s GCI securities value end. Broadband interest operating since the a $X.X Liberty At at that’s quarter talking includes million. consolidated This million position $XXX was an $XX nicely The in interest all includes equivalents about of cash million quarter cash billion Thanks, close spend up equity and of in of

its obligations its billion end, times. as of $XXX includes billion, amounts and debt the of Liberty Charter on to has X.X shares, at Liberty. $X.X of stock drawn, billion including as end the amount preferred total GCI allowable tower exchangeable debentures the credit available Broadband quarter. exclude debt, principal leverage defined of maximum fully its a million GCI. of which which is against revolver end, compared of was quarter agreement, GCI GCI’s that indemnification above $X.X the at capacity a times X.X undrawn leverage quarter and finance $X.X at GCI At outstanding loan Liberty had and in obligation the leases margin Note of

GCI’s to With that, I’ll Pete to operating over the about turn talk results. call

Pete Pounds

Starting the Thanks, update. COVID-XX with Brian.

time. Alaskans connected this As Greg mentioned, we’re committed to keeping during

offers up Administrators both the and are connected new for other also Department for use Keep stay customers to includes help our and teachers carriers a Alaska impacted Pledge, COVID-XX. opening number for crisis. Education are with data late service of have out Early existing who suspending residential by Council the have small and public during country, and businesses Connected customers in participating the students School Americans disconnects to of WiFi throughout which the fees there and and of We been working with our hotspots we waiving and Along

the industries been crisis have and last and in companies with has economy businesses and COVID-XX a impacted In significant depressed the of both market. a claims oil the over state in jobless had the tourism by seen XXX,XXX. workforce state oil XX,XXX just six damage. Alaska weeks, we’ve Small The

monitor slowdown see did to for area a and in this first continue we that we accounts, we’ll Accordingly, not of economic collections on or this concerns customers. allowance have quarter, most While revenues increased the is doubtful the situation the meaningful our in me the year. our impact

defensive in be to We are business. fortunate a

Our services in allowing our are home work employees and from customers safely. instrumental to

whom Our flying hard Based a have network work we effectiveness only and of a of planning, employees its of lot been with luck, recovered. both known has test passed COVID-XX, has are now had two a through with cases fully on quite little colors. of and

We of our safe, practices centers. into new several including employees repurposing have implemented stores number and call customers to retail a keep

X-band Moving XG upgrade. the to on

close faster XG the competitive more also speeds are in XX% the will improvement progress complete. to materially wireless XG has on service. as Anchorage our market. position enhance in Customers upgrade deployment XG continued making X-band seeing LTE and and We’re to bars are now led to our

We this are vast Anchorage majority the by upgrade of complete to sites of year. in the cell end to our the on track

improvement. million February, recognition XXXX. revenue includes which role of year, in in through $XX of That the QX we $X lapping and appeal I’ll talk results. had first the our adjusted Last Now in of net There million first $XX we we a OIBDA benefit quarter the last $XX took from this makes. have the major was unrecognized a the previously year, year difference million $XX in million What million. and reserve year from a a of quarter, played RHC win

the However, in elimination benefit improvement there year. restructuring due $XX XX still from a the last to revenue, and of lower operational our and time growth was our million materials business data

the side, On with revenue growth. the up consumer data was driving X%

modem to promotional period us quarter, emerge after but higher expect the hope due of revenue customers I customers also that when data stick free promotional paying some a X,XXX services, from selecting modem crisis. we our discontinue value we customers will the increased plans. X,XXX During will provided an service promotional service. and cable our customers gained customers with those the additional cable with some wireless excellent to Consumer that choose after experiencing

benefit. X% about The the $X was business, largely growth GCI education due out-of-period revenue at after in growth care Over and million RHC up to eliminating revenues. health was

we relatively than Finally, we long million challenges less of a the planned the the the CapEx first spent to on quarter CapEx. little year. as We depending typically how for We challenges. and on quarter due $XX quarter in may in spend logistical the light were are originally COVID-XX persist,

in track. the year on Anchorage XG capital project X-band primary our However, wireless is for

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

Greg Maffei

to we Liberty and continued Liberty, Liberty our GCI both Pete, to Broadband listening and Thanks Great. interest audience, and appreciate to in TripAdvisor. Brian your

with like open the to operator, questions. And line for that, I’d

Operator

We’ll our Ratcliffe question ISI. Instructions] first from now James Evercore take at [Operator

James Ratcliffe

one and GCI on on if I One L-Trip, could.

options the And And down understand – looks you are modem L-Trip the those? why On year-on-year? you around have I What generation front, what why It drop they at? chose other from front, just route to on can came some XXXX on the looked you Greg, us cable non-revenue context was did free dispensing of give the XXXX. highlight and you like subscribers. that GCI that they

Greg Maffei

and ahead go don’t can have Pete. you that, You start? Why Sure.

Pete Pounds

Yes.

the was question – was It our on was breaking data subs little on up So a side. year-over-year?

James Ratcliffe

Yes.

non-revenue-generating they which year-over-year? down customers were what – and the Yes, why subs, Sorry. wireless

Pete Pounds

Yes.

disconnect much to those. were promotional mobile giving basis to sticks and you in them sort and that had the put the So they thing, like we did your of money, iPad, we the customers of industry when promotions the a to cost broadband, rest those on laptops or kind that have of away get the started start

a it’s of so it’s hit. James? that Does a count, but And revenue help, loss subscriber not

James Ratcliffe

And Greg, on L-Trip Yes. just context... and

Greg Maffei

yes, Certares, really On we continuous a caught we got – in unfortunately, downdraft.

we – with where company previously this reduced We was have out, that seen price variable Trip forward. Liberty spun a full had had margin when substantially loan. we We had a

downs. remove our the that alternatives capability any Unfortunately, to received paid spun we profits Trip from price of variable the As forward loan we dividend or were to part paid proceeds the loan. and and in put We we that with loan on margin from closed period loan the hustling – stocks late the that onetime down the the of out, some the quickly downdrafts, exposure. took margin March down to margin and and margin took find

travel were and they have highest. quickly, they Trip and structure potential private also to were we was partnerships. extensive previously therefore, had be we kinds equity We really, about we that – because, of strategic building did that an to portfolio because Liberty And come discussions of with we Trip and for Certares value chose move had and able them us. up think we had the travel, synergistic in both two talk and other of the a to we Trip for Certares that and their – and chose in we at firms, expertise a think helpful to with number able And Certares worked

Operator

next question Rollins our take Citi. now from We’ll at Michael

Michael Rollins

could, if please. I questions, Two

current a that current space competitive? upgrades these one XG would more the there is revenue secondly, you you becoming relative from revenue GCI is mentioned you and any And the you what and to NAV how that the look Broadband? just on first the discounts Liberty incremental benefits way at just network. that then you’re as for and opportunities meant for The the getting thoughts monetizing for volatility at Liberty look market it’s the upgrades of and the about wireless frame on related XG And

Greg Maffei

or let I’ll Ron Peter on start the first.

Ron Duncan

substantially XG a upgrade tripling I’ll and to in stab throughput total with five to the their we experience at doubling is very concert Basically, XG, all XG radio new seeing XG the we’re implementing band a piece. radio, the on XG average both cellphones, that to the take and XG, available of by the full a people phones. bandwidth expanded what

the of you gain a So network the if we the from that in churn marketplace. us reduce both help front terms in back will pack And of have us moves of it the only think performance the XG to even marketplace device. pack gradually the share in and

a competitive position. our it’s substantial improvement So in

Pete Pounds

the but blew the expanded are in if a you end for And an advantage the liquidity over tightened most at back. we March. Liberty Broadband NAV to gradually frankly, and discount cases, that GCI at of long trading out as puts and and stock for period, of so against it think I business, They’ve Look, opportunity some discounts, term, look they stabilize take – towards crisis either certainly, still that’s by the dramatically the Liberty in discounts.

stock companies. have both back at We both

We at Liberty Broadband. have issued puts

are I use, are that market the the we’ll we take those believe, All advantage of think trying to attractive, by mispricing opportunities of and it.

Operator

next question take now our Citi. We’ll at Bentley from Cross

Unidentified Analyst

Just given increase willing price, would Charter at due? mean when margin the on the Broadband that in with question. Liberty comes strength how you I to the the be of size loan following last

Greg Maffei

probably just could we it be time. Well, we any – to clear, increase at

We at as our portfolio discussed. compared us. rightly out, volatility just margin That you point we’re And loans. full Broadband. charter the our – in Trip the in is balance investment haven’t saw as to having cautious and said, Liberty environment drawn Nation low margin the of margin that’s been on size available Liberty across both to at amount this at loans, around we Live of terms We

advantage So we’re right the time cautious on take but look for pay to we’ll that, attention and that. of

confident are very believe, Charter in we results. very Charter’s in market. positioned the is, We well

at look growing. are You how subs broadband

relative reduction per all is the the count reduction driving remain the which of dramatically. how optimistic the the continued expansion Charter. on moment We at continued of – look decline flow free video quite share CapEx, You for reduction, subs, share in margins, share cash

GCI to So take try we’ll look Liberty and and Liberty. advantage at of Broadband

Operator

from at now SunTrust. Michael taking our be question We’ll last Kerrane

Michael Kerrane

Duncan A question for Ron about Alaska.

providing stuck talk COVID. the declined, But Alaskans guys are by government at there as was are far home, a austerity Sounds state level for cancellation like you economy impacts state oil. of the impacted and wondering right dealing exacerbate the that lot you great last the economy. as service programs was at who and comment goes, about the now oil time price it a just with as potential of the reduction could if to position might projects in I what on government’s of state-funded price relates is spending lower on of

Ron Duncan

while economic impact longer is both in very price oil a July bulk It home, next the down. approved XXXX. and which until current state year, spin having it will of of state it’s between oil. and news to term the low caught unlikely of the The we’re to year. whammy, see that shutdown the and legislature through the the industry runs The budget good a the obviously take double Thanks. fiscal impact the recessed for gets of COVID The went little

post lot pulled some We’ve XXXX I more rubber meet in there’ll will cutting back the July year already oil then, on really the long and suspect the of we’ll done by price further of and next lot. road a with budget, color cutbacks. have run be a And state but

space. this have coming But the be had last been bad until like to two another in ago. rationalize persist us of to quite looks two that oil the happened instead it years, years So for it as the now would recession likely out things from in as year smartly three we’ve won’t it for some been it’s or

Greg Maffei

Great.

I think that’s our last question.

call. thank So for want COVID said, speak and much. the we’ll to I work great Hopefully, next very you for doing thank to the in teams, you our all quarter, today’s not, you all as before. I Thank if participating through of of safely crisis

think with And I operator, we’re that, done.

Operator

for concludes call. you Yes. participation. Thank today’s Thank you. your This

You now may disconnect.

Grizzly Merger Sub 1 (GLIBP) 8 May 202020 Q1 Earnings call transcript