Liberty Broadband (LBRDK) 26 Feb 202019 Q4 Earnings call transcript

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 Chief Senior would turn over the Courtnee Relations. I Vice President ahead, go Courtnee. Please

Thank you.

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

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

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

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

and you. there out call. Courtnee, good the Thank afternoon to you all on of

CFO, myself call, Pounds. besides Officer, GCI GCI's Liberty's Wendling; have the we’ll on speaking Today, Pete Accounting Brian Chief

available be we’ll questions related Q&A, During answer Liberty also to to Broadband.

Liberty. first with GCI So, starting

but fourth further Brian $X resulted a discuss As as in operational regulatory and a on quarter. it solid Ron will a There in we front, pluses in the minuses million quarter moment. had in noted were the benefit of release, the overall

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

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

which $X.X bringing results LendingTree total to to and largest is to its million. over to QX effectively. XXXX customers number grew during XX.X business XX% My the its of pro Insurance they another continues The forma last adjusted their QX yesterday, LendingTree and noted on, added the grew Yesterday business now EBITDA diversify issued reported year. I the segments digits users year Turning versus prior million revenue Consumer double-digit over earnings also Home of and Tree guidance growth. call as for had XXXX they and double LendingTree year.

year million Turning It Liberty created customers. a over X.X net XXX,XXX over planned offering Broadband. was in mobile begin to new lines QX. and great Internet added XG to added and relationships X.X over for million They Charter. customer They

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

XXXX XXXX. cable disciplined basis. drive the growth share expect expect and decline XX% in a on to CapEx cable declining strong strategy combined will continued with intensity free flow, continue EBITDA per do the continue to capital particularly to from We We cash deployment intensity in will capital a

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

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

the Broadband outstanding $X.X shares, $X.X debt, leases finance its At which debentures billion Liberty against billion margin exchangeable quarter-end, Liberty the had amount Charter GCI loans purposes. GCI of and under In billion, total of the general Liberty and GCI. were by repay debt at portion the million, principal proceeds $X obligations facility tower Broadband qua for credit and including to of increased margin a borrowings senior $X.X loan of includes fourth corporate Liberty a GCI

defined times leverage is of table end compared cash exclude which the credit its quarter maximum at in debt Note above was identified allowable the obligation a X.X and in to agreement X.X the separately that leverage are preferred and indemnification stock on GCI’s amounts release. times. the

the material an in you well XX-K I.T. general weakness of of weakness remedying later, issues material operation aggregation various access that and identified systems, a issues financial over over results as its controls process business was controls notice as in our internal filed is from design GCI And in will reporting, to controls.

Our control issues persist.

toward are reported forward, that any training an breach various know to enhance working including We and did process are control the remediation, strengthen going our financial not redesign, not development. external were in personnel issues in material the activities and implementing result misstatements We environment results.

impacted Before results like I'd that through. GCIs there to I fourth the it two hand over significant Care are in that Health Rural events quarter walk Pete,

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

our to with and much XX-K. around more work this to disclosure continue can this the We issue FCC you resolve find in

loss quarter denial February one an in appeal which first XXth XXXX, GCIs funding granted issued the resulted approximately order recognized million reverse customers of which a to previous XXXX. of on of that in of we a had $XX Separately RHC FCC the

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

evaluate contract into forward last will amount of going can We months related first quarter and XXXX we recognize. XXXX this the XXXX to what determine nine the of revenue for to

provide the periods this into barring analysis. taken point recognize the for in to would all information all will GCI account be and our new At to service majority has revenue this this continued expect of we FCC. from or

XX - million to a and and negative net a GCI in year. loss adjusted million fourth the resulted reversal accrual the in full for The together quarter $X OIBDA reserve benefit

about GCIs to turn I'll detail. that, With results more in to it operating over Pete talk

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

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

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

strong adjusted year-over-year quarter XX%. of For $XX or the million OIBDA fourth we showed growth

been mostly have due $X improvement matters of our would XX% or is to without the adjusted efficiencies. percent RHC million OIBDA OIBDA Adjusted discussed. cost focus This the even benefit up Brian on

to of signs of just the in starting flat We on years life quarters cable of growth. two modem after subscribers. a Alaskan had economy cable in subscriber We're Moving see sequential row finally to a great few consumer. modem

X% In reach we which quarter and a stack X% basis data consumer helped on product rate the grew annual data subscribers XXXX and respectively. fourth the and revenue a us to in up continued customers growth move quarterly

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

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

On offsetting to due year The voice revenue. data. wireless roaming losses slightly decline the year business with was due performance to the video good losses video was full declines. quarter fourth and in in The business in and were in backhaul wireless, non-election down lower advertising side, and revenue revenue

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

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

We expect a similar to amount spend XXXX. in

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

Brian Pete. Thank and you, thank you

our November York. We investor XXth scheduled have for meeting XXXX Thursday, in

So please mark your calendars.

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

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

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

that. level, take covenants. don’t Pete, leverage, in of the currently why constraints talk we are you we given about both have in GCI the will Laura where terms at

Sure.

Treasurer This our is Baldi, Laura

some a agreement GCI agreements, on total bonds. So, bonds covenant the we a we times roughly versus credit X.X that under the With X.X credit are to approximately at times are public respect and covenant. times operates leverage X metric, both ratio, using a

fluctuations then the time. those some in the the the covenants – seen calculations RHC of we've working we fluctuations the mean, issues reversals Obviously, of reducing are leverage and some and - me, due see I over covenants in towards write-offs it to excuse

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

is issues. have been think fluctuations, and thank times, And you against we various what - know, Laura. you, had levels at potentially try build and the think the given at right of I I the note little be matters our a level, might we particularly, regulatory to cushion and this probably what conservative we incurrence

of that make sure but issues We’re we now, harder. that and that out want that don't to fluctuations make regulatory the have those

side Alaska cable like an market, And greater do it's side natural pricing, on consumer example the that resource where sensitivity question, the there's business to just in you oil operating then find the the a for business. or of

of some time? over the about think to how curious sensitivities Just

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

between a is recycled add, by current the to This damper the in oil state in by Alaska. in governments. I'll there's being climate fluctuating Most Alaska revenue comes prices Ron. just us substantial oil

prices oil in an on really state have aren't impact reflected immediately that deficits So, economy. budget the

Obviously results a companies if won’t six-month it to And price this or down short in the Slope is we influenced very long-term is barrel is, are If it. horizon, are per oil. the where unlikely on impact. a North much using that term stays cycle, a in long-term see it perturbations which from that be investing by three- has the

Thank you.

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

Thanks have a term about talk just could. to what the comment that an question. in There's wireless long about million for impairment can that $XXX two drove loss I the you revenue? there’s if related of release And And taking I licenses. wireless reassessment

is help, proxy least math be looks up Thanks. house the And new by then if right, I'm you over next that May. like coming any if doing It not thoughts but for secondly, to, GCI at you Broadband Liberty's close approach anyway the you on Liberty to just if could - how plan side, the though XX% that? should of pretty

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

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

first I us involved, my guess know whether could be remedy Potential still want they the proxy. is Newhouse but don't the do. extending

selling largely holding us be into would would been their either percentage less them. have to they the sellers involved and or marketplace, be that cause a having constant not probably plus that to things Given

might to in importantly a investments Malone John partnership well for XX out think so not know, extend, have in successful more we years, I is had particular Newhouse And willing both has suspect and this I about they Charter the this it’s parties, family talked been for that. - really very worked you be

continues the come of from Secondly back own, well note, that as their Charter across repurchases, on have when could rate and very buy GCI we Broadband. combine XX up monies Liberty rightly could the vote depending that our over Liberty stock and we the the you to on end to well you very

would intended could there over that both at to relatively us did stock, in And downside use our hurdle. including us at Tree things certainly it a because things we the not purchase of financed discount, capital, seen stock we are do but outlay massive protection, lastly a get would We buying could as do us put we collard XX the directly. trades Liberty Charter [ph] do of give that is some have us example more cause upside and purchases and that to a you've some for the in Broadband

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

wireless as the it's the know, into we year of We that a required that end question, the the intangibles, so that or you to And many details drive GAAP through. you're various all then each won't at of look disclose valuation. standard non-amortizing on too variables went on impairment required that process by your go at various

was there related customers But the through increased certain valuation uncertainty process, flow impairment. resulted in to which that the

you. Thank Great.

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

sort of directionally for sense that in you the question. are there I of disclosed great. But the Okay, moving how could us and on OIBDA taking impact minus guys a the if the XXXX? RHC that may a Thanks pieces give in of know today. you lot wondering both plus

a is larger would we we contracts took on and should there equal, receiving know. impacts think the we comfortable else we reserve a You But The up I potential, that reserve we on on, think right know, positive facts could that reserve I the million you that. were the based end being suspect, have we're that. circumstances with $XX expect be of all

is seen there balance You've that quarter undertaking, that a were on is reverse roughly three order. sitting more sheet quarters million that we record in the for our we XX, stored $X

$X is is in there suspense. that million there more So, sitting

reimbursement to we the The on rate that received the of we we would variables from ‘XX were the are we that revenues, that money. rate If same what recognize all get around reimbursement get FCC.

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

Well summarized.

know, one, take you recently, on your you then large-scale a decision And or more Greg of T-Mobile, level at know, helpful. a love We'd higher implications M&A, Sprint merger. hear horizontal that's Yeah, the M&A just it whoever, given big Charter. Ron or for to

for this door know, have would you You precedent thought decision open this may things possible with to not does have the know before? you been that

Brian, comments want any add do you or? to

partner with get benefit our is clearly the for The I think that from them. was level - and is more GCI we T-Mobile a of T-Mobile. toward by targeted Charter good T-Mobile deal lot largest roaming

Alaska We their will we will revenues us that going roaming replace to revenue it access we additional spectrum, to able some have near-term to be have deploy comes will through which also it from in merger were Sprint. with a to and effect Sprint

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

Interesting.

maybe competitor. you a margin it at not stronger for think so hard mean Looking the a you probably competitive know an it's all know, is environment, just But to it those on issues it might Charter, – pieces, other larger that the the on certain. what you I for less it opportunity weigh hand, you was have slight about negative, Alaska you two because know have those enormous, may for meant know, slightly Charter,

what very did XG other what is say The interested are some that imagining would complete positive implications about any fact XG We'll The things in it way fact it's stronger see not probably stronger overlook to and threat. - people problems seeing does real of other that were of willingness - But of by that other without What that out might claiming is the a in otherwise. the with mean large-scale do and back T-Mo for all have the we means. deal a presence or rolled be states to combinations deals. potential T-Mo impact the or potential massive a about sure one portend I'm deal another. in might pursuit could detriments enabling

that's think the issue. biggest I

that you, Yeah, Thank makes sense. guys.

Next from John hear up of SunTrust. we'll Malone

been what's million I you I could if rate remind asked Most But X SunTrust. the $XXX just color is out ask questions if What’s loans. Kerrane margin just what my of more on answered. of you it's like additional to on could want get loans, me Hey. - Mike that This you from to have to is and of figure those loans pay makes those or sense types mortgage the trying to I'm [ph] more debt revolver XX? down the whether get it and with whether XX the

this of Hi. LIBOR plus and from again. Its is... Baldi Laura spread the on facility can a partially we we [indiscernible] by margins that which growth LLC pay XXX This

is presence We did and some - part some the for reasons. this loan that regulatory of

Thanks for answer. it. the for Thanks Understood.

today question comes Benchmark. Matthew And our from final Harrigan,

for slightly quarter, have last hefty as but with cope you question Apologies GLIB.A. the you. on discounts LBRDA indelicate fairly same Thank to still asking and the still the

Washington the make even get collapse You uncertainty Alaskan particularly [ph] the ruling performance, a you imagine Is anymore. was Washington? change there as it know, IRS structure although you I there given anything to regulatory in the would can't if the probably from was year, letter asset necessarily - this all couldn't a in there that Washington clearly in Russian ball better change before a desirable review a complete has shown,

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

type DOJ issues, of believe Matthew, you're don't to FCC be it's that surprised right way sort antitrust. the and be do I or I believe, not significant suggesting there'll

IRS to I largely think SEC and work around through. mostly issues would be

Greg. Thanks,

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

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

You may now disconnect.