Liberty Broadband (LBRDK) 2 Mar 192018 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the GCI Liberty 2018 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 today, February 28th. to President conference of like Chun, to now Vice Senior Investor would turn over the Courtnee I Relations. Please go ahead.

Thank you.

we'd the statement which call, On regard forward-looking risks any including meaning differ materially XX-K thereto Before or as reflect mentioned in any any forward-looking herein measures, call financial and and the conditions most such XXXX. in Actual Forms or on based. discuss any XX-Q to These statement with change today's Litigation uncertainties, or Liberty expectations forward-looking call we only GCI contained will circumstances begin, like to results recent certain everyone the of remind Broadband non-GAAP we disclaim any could or that Reform today, includes Act events OIBDA certain required the change in Liberty on this a is and including with the press website. GAAP statements can those statements regarding with of comparable to obligation speak OIBDA Liberty of or and revisions the due or Liberty of events note within to Private updates found expressly Information issued filed available Securities Schedules margins. along to date X SEC. this GCI be in adjusted including release X and metrics in which reconciliations, definitions undertaking is our number and and preliminary any disseminate Broadband earnings our of adjusted

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

related besides Mark Pounds. we Liberty and during Broadband Today, there this any. you of GCI GCI CFO, questions available Liberty's all if Q&A, to speaking CFO, to us Carleton; welcome and have Courtnee on the be answer call the we'll you, to are afternoon. myself, will Also Pete Thank joining

the GCI To of level, has you of that we the look-through stock. That with up Charter effectively GCI over price $XXX if has with starting at price repurchased Broadband January worth XXst, low repurchases. million that double Liberty, because look the Liberty to Charter Charter. of double and Charter to obviously, is discount -- discount Liberty on take repurchased and to is Xst average look Broadband advantage is date, discount, turn, and November considerably share at in GCI and around and the we a we've Liberty higher. you price. today corporate to low through We Liberty, $XXX, a itself $XXX look-through discount continued aim So, Between double at

So, we're excited that about trying discount. growth and in to take the advantage of double both, Charter

us year. the set GCI, more in favorable operated business XXXX better was will difficult a business challenging business regulatory initiatives environment. look critical in to future undoubtedly we environment environment to believe Nonetheless, Turning we and GCI We and several completed XXXX. a a for forward difficult up a

and shrink. lines mobile across in with mobile accelerate Charter the that fact and of industry. we the the potential We to advertising. with -- residential dramatically year $X of we're our launch to our flow last All Charter Charter $XXX. significant footprint that more a thesis hear the average CapEx CapEx for You'll to story upgraded excited XXXX. most Notably, in couple a own the decline expected to access in and spent the spectrum the and and digital is about Pete Broadband, dramatic line with performed over what about all and now in decrease at to gig residential, growth repurchased XXXX, commercial, saw with billion XXX,XXX in shortly. well XXXX of Over price strong billion We our its the years. expect over Liberty we finished cash of year after levered at Charter's has long-term, Internet service. Pounds is shares ended Charter strong from in XXXX. attractive can is equity in an it have free remains profiles $X a

it detail let Carleton to financials the turn to with GCI So, Mark in level. the some at over discuss that, me Liberty more

Thank debt $X In and you, cash was equity Liberty allowable the end, Liberty amount billion covenants. loan, had interest $X.X leverage, refinanced leverage The of $XXX quarter facility Greg. leases over which billion, Broadband million, was loan senior a to aforementioned and our in billion credit Liberty in This as includes GCI Liberty of outstanding which LendingTree. as consolidated against December, and times which exchangeable end, of billion includes Charter margin $X.X XXXX GCI, debt, total principal quarter GCI. including obligations had value At the interest of billion, close of cash Broadband, of GCI today's margin to leverage maximum its Liberty its extended LLC improved $XXX shares. agreement, A. capital $X resulted times. in GCI tower billion interest in the and in $X.X $X.X million includes X.X of compared revolving credit At has of public X.X million of Charter, term defined maturity a a $XXX December at GCI's at and GCI. securities Liberty its GCI debentures, loan

XX-K later our gets today. see, you As filed

weaknesses that notice its remitting controls financial over two material GCI's in You'll internal reporting.

processes issue to the management, controls access have IT the scrutiny we payroll relates last second, along in general increased acquired the GCI manual certainly with year. and controls focus the of The IT controls on around and and to since GCI We, level process. and first

continue activities financial focus I were not remediation control issues that and and going to And of Pete strengthening over external these the in an environment material the to with result we'll misstatements both our will breach We turn forward. any the problems, note correct reported to on results. not in that, implemented have it did We Pounds.

Mark. you, Thank

the year in reductions Health The challenges. our for significant GCI. stalled system, challenging launch was state, of economy and billing a Rural revenues new XXXX were Care mentioned, Greg our As in service the

customer billing business and platform the improving However, simplified has is our experience. our

the around. Health signs particular, economy developments with Alaska currently are life. in are tourism, Oil I'll that continued we Additionally, Care. to signs look in an showing these update on of on are There turning Rural XXXX. is that capitalizing GCI We and appeals start in to forward see two related pending.

reduce October November decision notified Xth, year is first $XX.X the for they response by The ended funding XXXX. decision to FCC, the June our in whereby XXth, received from of we on appealed letter the XXth to that us their XXXX, We million. that

in appealed by an press I or USAC, be on Company, these results, any XXth, letter our was on the discuss found Service at funding in which four due comparing by USAC those relates The year forma business. I'm matters due in Adjusted XXXX, reduction, revenue unless quarter appeals Administrative was on and there customer all OIBDA to and the the rate the of quarters results, XXXX. consumer full second all same to the fourth the XXXX, the XXXX don't to to who Universal otherwise materials to for RHC the was of compared year XXth, based also customer year. rate on XX-K. are When January for only year XXXX, reduction, background as updates of This RHC but funding GCI's more received to they November Operating last denied down up can this of the of noted. here on RHC the XXXX declines approximately point, were have but the impacted the but X% last release over XXXX. were detail growth going data. two quarters results X% in primarily Revenues down and was time pro

related the to continued year. On customer outages capital just the a consumer in related of November earthquake good adjusted XXth a severance write-offs, one-time note, X% recession, and to operate, I face cell including homes at charges, for earthquake some network positive incurred. was to showed a but quarterly the of one-time the in and down had the driven OIBDA excellent group expenses Additionally, payments, power charges Consumer, our minor resiliency On noted. outages by sites. basis, our in a midst and were

While and in billing million network in time revenue material invested fiber improvements, CapEx, coax capital and wireless for by partially year, from our the These higher excluding primarily fiber, were reduction, growth conversion migrate the Wireless during video expenditures. revenue a able advertising. to political the for with three value were ARPUs. improvements, system. new The flat, Business we up $XXX declines, to expenditures our wireless hybrid months we better approximately billing we significantly, in plans our subscribers see to had continue were data subscribers revenues with we subscribers year grow were August. revenue the roaming RHC the offset not offered challenging and declines. rate and

approximately back over spend same the call to expenditures in to amount capital the Greg. XXXX. expect now on hand We I'll

Greg?

do Greg, have we you?

Sorry, sorry, was yes. thank Mark I Thank muted. and you, you, Pete. Yes,

day. Day interest you I'd set listening of it Operator, have on see there annual the hope XXst you like We New appreciate now in if open meeting do up for our Thursday, continued to to many Liberty. York questions. for your We Investor and we please. audience in November would that GCI

Ratcliffe Instructions] take go our [Operator first ahead. Please you. We'll Evercore. James Thank with question from

Broadband. and Thanks one on the for taking GCI question. Two I Hi, good if afternoon. could, Liberty one on

the one-time regarding year-on-year could Greg, particular, you a sounds as been provider Charter expenses -- providers? both way see source network about forward, EBITDA the I were of And secondly, business in of in potentially going get have On would into at with wireless the I working the sure make you correctly. GCI the like Liberty Charter, -- you Thanks. that and the -- want absent can understand front, capacity talk how wireless sort those. phrased a just And or wireless more potentially into to Broadband that a it's you as little can the release, it in XQ? up

guys look Sure. make the can you question first, answers on would Broadband. sure comparability Liberty the I to how while you have of go the

that attractive that to bundle Charter vehicle, will pricing first share. business to thinks be will that about with way it the think foremost, help broadband is, which drive an I will help wireless, and drive

very mobile have we front as a some price taker Perhaps, consumers. MVNO? could that's attractive really We Broadband the network, contract very in us in to attractive a today. not and in and given believe us the can we have, circumstances, try make any road, the that's Wi-Fi consumer but line a offering relationship offering to that you'd take the In and and mobile like. front of if have the network somewhere and a the be have if could of superior our with together combined be provide for advantage we bundle helpful don't know strength on offering. fixed down we we side, there's Liberty of MVNO well capabilities of and more wireless That the -- broadband is reverse today -- space we I

Thanks. great. No, that's

Okay. of QX GCI? On comparability for

Yes.

So, fourth been you year-over-year, would we the is million the write-off a capital more were on in looking a earthquake $X at just biggest for little so roughly the but amounted the million. gotten than quarter. have three little I would over noted Taking really $X that OIBDA, and we up onetime items to that there. items, slightly Severance those and the look difference, at item of projects a down

expenses, meaningful of you'll fourth operating some a albeit write-off capital assets there. to the most earthquake, the On come from opposed financials in that there the quarter were expenses as really operating of see damage to the

hadn't I'm year-on-year. looking EBITDA up for the those been if been it correctly, on your close price and have cut, this XX% RHC at would

affected on a forma there. basis is pro RHC The

OIBDA before -- but forma the adjusted really of it, $XX.X XXXX quarter of is here. million So, when the the before in RHC reduction, you in $XX.X so RHC, came that included million higher at rate fourth $X million, look call about pro

look up I would items, three at have OIBDA. X% absent on So, X% we been or it, those would

Okay. Thank you.

We'll go Silver take ahead. with our next question Zack B. Please Riley. from

Thanks for the great. taking question. Okay,

been efficiencies up that and Broadband. on, number the sort one-year if you has it Charter? cost be of in between number to the if updated get having merger ventures a Any GCI GCI you've have thoughts public an And on redundancy companies any leveraging anniversary with Liberty for opportunities covered? with one, of the one to clean update Liberty great then of up, coming two relationship GCI two, First potential would

comment not Pete, the certainly not further first to has it those if efficiencies. addressing as as at really instead, Well, at structure, I'll I the address programs, I'd is add but its given is, are when with it's both and undertaking really is moment, deal can year much the own And and looking efficiencies a you we done, not cost XXX optimize GCI business. reductions that I'm say cross to ownership quite and you'd Charter the its think Charter way focus GCI on own But like. The its old. sharing some

a would course, occurs, got eliminated. looking had yet think couple close, never more year kind we You're And consider wouldn't might no conversations imagined be before a about have those obviously, that of anything, of a combination. weeks. we, at that or And

it. Got

Pete, on do you want the to add anything efficiencies? cost

this looking regulatory the I here. No, little not economy been and But front. We'd tailwinds internally on a your much think bit efficiencies we're on obviously Greg, focus the internal cost right at on comment's that headwinds has point. the so of like

this of not and OIBDA funding what Or that customer, you you can on not now? impact know on -- size based one the then maybe interpret issue to RHC And getting Okay. quick the the customer This way revenue right RHC that? follow-up. is just

can when you look Yes, but it's filed, million in a roughly year. our it gets $XX XX-K

Got you very Thank it. much.

last go Please SunTrust. ahead. our question Kerrane from with And Mike comes

of and in It's guys CapEx XXXX. would few response about Mike Pete, recall, purposely level deficits $XXX SunTrust. down same GCI. there. at I a as budget CapEx, again, I I economy took had guys. million that years Hi the XXXX you for the level you in know ago, question be you that from a in the Alaska to said, Kerrane the

as looks improves, doing a should of that higher? that was rate you like the level see bit economy know, it's it million. I been above we going little said Or run the CapEx forward? model the Is past, that better. You the CapEx economy to in $XXX go

the beyond would I I the of that, point out; probably, $XXX $XXX we that forward-looking say on the point that guess, would at CapEx give next at note we so don't were level or year. would I this of guess at I of million came guidance that million revenues. talking

clear nothing much XX%, that so guess indicate long-term. fundamentally that's deviate there's rate I substantially was the pretty there's unsustainable XX% from an the And that so that GCI we different the think on revenues, would should I And at that that of long-term for basis really industry. from

Thanks. helpful. that's Great,

operator much to the Great. Well, thank and listening you very audience.

to we you GCI this if Appreciate continued with call and today. on very Thank said interest the have we all that's think I not your before. next in afternoon. Liberty you as forward look speaking much

Once again that does conclude today's conference. Thank you for your participation.

disconnect now lines. phone You may your