Grizzly Merger Sub 1 (GLIBP) 10 May 192019 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the GCI Liberty 2019 Q1 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 May 9. now President conference of to Chun, to like Vice Senior Investor would turn over the Courtnee I Relations. Please go ahead ma'am.

Thank you.

we'd the statement which call On regard forward-looking risks any including meaning differ materially XX-K thereto begin 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 we like to results recent certain everyone the of remind Broadband's non-GAAP Before 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 Greg Liberty's Now Maffei. to and CEO, introduce I'd President

Carleton; GCI's the call, Good you. all CFO, Liberty's on Pete and we'll CFO, speaking Courtnee, Pounds. GCI you, Thank to Today, of welcome also and have Mark afternoon.

we answer Liberty not be will to Broadband. questions Q&A, GCI related to the During but Liberty only available

very quarter. grid. and under increase from do as stock take million we will We beginning million this advantage with to of were stock reduced repurchase underlying to able can. we discount spending $X our the when or and continue Liberty, stock Charter the strong We price of only purchase double has been $X so GCI the So of did the

are GCI that GCI, Turning and The in they the to operating now in execute team environment. a some unit, their a the operating taken that have they continues tough are cuts very obviously data revenue. to regulatory job cost against to including challenging addressing growing also structure response regulatory setbacks And having experienced. the we

on value focused We investments future here. are drive that will

benefits strong penetrated through roughly upside and passings primarily Charter the the Internet They rather briefly crossings that PSUs, product continued a Tom of Liberty we with and strong that first today. is only they We've Looking relationships there. team integration that have – have of Broadband, well are executed driving their XX% at posted quarter. leading. customer ads we the Business their increased Internet

and share investment area We the repurchased continue potential also combined increase We cash experienced with in and Mark turn let dramatic cash per to growth, significantly combining me yielded ahead. in a count. Carleton flow over led share. $XXX progress worth free growth flow that, cash the on Charter deliver falling that shrink quarter that strong with quarter million make to will residential, we flow With stock to expenditures the quarters discuss revenue strong in XXX,XXX having to lines. mobile the with ended intensity continues lines. residential And across mobile in of growth commercial to of for capital EBITDA financials. the thesis the reduced with levered the free

margin billion, of we obligations maximum of credit noted which $XX $XXX finance in billion times. leases and of the agreement the million And X.X value in which compared of at public as securities its as GCI Liberty the includes cash our our as the in our the GCI consolidated against of the under its billion GCI Liberty billion total close our compliance continue million Greg. of and Liberty with we in current $X.X therefore plenty At we on principal hand and have debentures GCI. $X had LendingTree. But at a million space access leverage of GCI which $XXX maximum $X.X X.X includes to debt debt at has in the defined in allowable equity GCI margin including was leverage operate Senior GCI. had And GCI and incumbent, have in of billion, to Broadband leveraged has $X Liberty you, Thank Charter we're amount its interest outstanding with end, of aforementioned Notes. terms times, interest cash quarter we in XX-Q loan, At don't Liberty $X.X business $X.X to exceeded includes a end, threshold Charter, loan, the of billion quarter cash Liberty covenants. interest tower maintenance Broadband revolver. additional funding shares. The be today's exchangeable to

to with over turn I'll Pete. that, So it

Thank you, Mark.

start update with an out to me our Let matters. HC

of X was received As in May November. an USAC from filed denied from XXXX. customer press our of which by our appeal on we described USAC, RHC customers denying in requested The release, notices one funding back

X, appealing that from This expect we've X the FCC reserve account point, million March decision for May reserve customer adjusted XXXX. quarter. At to denial. the the XXXX $XX.X Competition the Wireline of will impacted be our days related in through this a revenues taken XX this the OIBDA for the We from XX, customer to within July Bureau to

at million. of completed whereby is all XXXX surrounding available other We funding to the we XXXX $XX.X the but until options by point. towards appealed decision their million for particular of challenging momentum. X, some was the other see we have starting a a that of this appeal In recording on the to don't continued per reduce quarter pursue forward, areas, resolution. we're The XX, on one, new I preliminary is us they we any first received of process to employment certainty not June that economy is respect had anticipating. letter ended approximately Anchorage November issue will quarter. a saw Going that bid With that from job notified been the the collectability. on month, October basis in during XXXX growth to the greater slight change the April year there FCC and that report that our $X XX revenues showing was positive This be or we updates

have time and and materials network of particularly our our and margin on focusing This we're Accordingly, on reduced in in XXXX, to low size During us our in the speeds lower market beyond. bringing allow XX. wireless wireline business XXXX increase the focus faster to we Alaska. will

Additionally, rolled now momentum we've that data see are out for and the in new updates increases our was nine performance. revenue our during approximately for wireless Operating in new well months, and number has declines quarter X% down offset by results, of future billing being starting somewhat bodes products product system in revenues. place a been for voice to which with

will in earlier, ultimately network our are XXXX noted believe Alaska I enhancing we which in As wireless focusing revenues. lead on to improved we

margin the lower decline to operations will customers materials on going lead low Additionally, that XX forward. Alaska the in in a and time revenue focus from particularly

our for quarter. reduce in mentioned we I revenue higher in and time in adjusted steps million earlier, to was time the OIBDA our materials costs approximately $XX.X business the took down reserve The Excluding XX. significantly and On declines masked our cost X, lower reductions that materials particularly elsewhere. progress X% costs April the and

were revenues data as voice, by to slightly side, consumer down wireless being migrated service plans. faster declines in mostly revenues video and the On increases with offset in customers

we we system. new the products to significant nationwide a from in providers. our put plan As able new I implemented which prepaid been are April in so unlimited market stemming On doing launched losses our billing noted wireless now has after new to wireless instrumental while we restriction X, earlier,

coming and our refreshes next Cable over TV several months. the Cable to Modem product online have We

revenue slightly coax improvements, the hybrid On the improvements. revenues in the primarily we for driven million down wireless $XX and business were declines approximately for invested revenue. network in Expenditures side, declines backhaul by quarter in capital were largely CapEx, to fiber, wireless due wireless business expenditures.

spend in $XXX I to is XXXX down estimate from on in $XXX expect million the which CapEx earnings call. We approximately last million provided our

Greg. back hand to the call I'll Now

that think And questions. we're open operator, with to for up ready I

Our with The you. Zack Instructions] ahead. Thank question-and-answer FBR. session be electronically. first conducted [Operator from question come go Please B. Riley will will Silver

question. the taking for Thanks great. Okay,

the about how been valuing Broadband's you Greg, NAV Liberty transaction? well? And for us you many potential two to baking NAV GCI clearly, additionally, one were you're the when think And in have Liberty that GCI would to Broadband. then GLIBA, Liberty at about thinking as you and combine of combine discount First thinking if about in are entities, the full the

Thank you for the question Zack.

portfolio at time from to look appropriate and will We obviously time combinations. our consider

We fair plan to expect shareholders have we come of combination, announce NAVs Broadband estimate decision. said, of and as they underlying have at to obviously I into to market do to a and they and both merge and that Anytime or no the fair independent nothing look at try up and are nothing would and that GCI kind a Board announce. recognize of intent time at Liberty responsible fair look and would with of this that the are who Liberty we members values what come set try today. values But think we and

improvement And for were Pete, soft in Alaska a of signs that helpful. system subscriber the quarter. That's and in has the the maybe metrics then you. Thank of shown yet the Yes. economy one think, very I bit

competitor the going So a we're anything just is not potentially economy about? of on, and there is kind something improving that thinking there is Alaskan really or this that a else lag else or

the a some that Zack, quarter. billing that the decent the there of systems have between just I that happened and think, transition cleanup Yes, probably been first in would chunk of

sub in though. pickup sub So of slight count the overall that most of counts say I cleanup see was minor some improvements economy to unexpected between note systems. that really and would I not delays between it's would the of maybe

Okay. you. Really helpful. Thank

Thanks.

question Ratcliffe James next come with from Our Please go Evercore. will ahead.

if Right, thanks sorry, could. question. Two One the and one for again I taking for and for Mark. Greg Pete,

James. much, so Thanks

sort the Broadband, be would John boards purely who just in directors be or a it process GLIBA on roughly and rate considered? process? quarterly back I'm or denied run And that that million million to material just to of coming both with in $X you trying. is secondly associated role any on Greg have the that sort of are there cost not and that RHC is Thanks. Pete trying, for revenue, hit that would Would $XX how Liberty the EBITDA? I'm appeal procedurally involved

I right. All guess the there. one first pick I'll

yes. is So as answer James as cost? are there material far The

costs. fixed mostly are they However,

So expensive costs very result it's the this of costs forthcoming, but opportunity not this. a we'll where will of as build and look network those significant be an a don't be to at recovery variable as shedding

I'm about we that. haven't have driven two about that any they non-overlapping expect they no to their there have facts be process management directors or that their transactions thought independent ensure I circumstances would would own companies. they would no we there me, counsel by were much James – the have whether occur said the own intent sure too unduly was financial of the as directors But expect independent and will asked influenced. that really questions I on on advisors independent opinion excuse and non-independent directors, – but of I any might was of the plan primarily the because would the

Thank you. Great.

Thank you.

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

or Charter, Thank nixed the discount roll recover is which Washington the of seem you to GCI, you. just the together Liberty close could if what particularly think. deal Clearly to gets was if people in everything Broadband discount Sprint-T-Mobile and in some

[indiscernible] outside your more know command. even Your someone are Charter. position and I But have position trying that for Thanks. they're maximizing how the people there that solution value your and Sprint. you you and rights to look some of you and feel reciprocal could do looking say if relative economic get another for blocking is hunting strategic for around positioning about Charter position things do to M&A because of value value

Well, thank you, Matthew.

but feel a and Charter current I not If think and the for that own products the and on its wireless offers. they has including potential look only on and of are shows that we'll who we potential think carriage there network the the consider right, down opportunities but business, on the the the has to I strategic business us the to were any strong. relationship might weight both We its network, offer against positioned add incremental Charter's through potential network, buyers, have well on at you're the is its up find time network buyer their MVNO the book our us value, results have. at a on own we'll potential potential

there the blocking position that that you moving Is on and that any on rights something have can't comment would sunset on? or you Charter is

not refer sorry. what I'm I'm blocking exactly you sure to? rates

sell wanted that party, an Charter any sort in were you'd outside In your to able of... XX% economic undesirable understanding terms thought be you Charter Is of moves you to that Charter. is stake able to would just to block there that, by as if my block any be roughly

don't a – may believe be sale. to that think we certain think have rights we'd allowed position. might of in somewhere I can I any be But go stock. sell that interest And I I No, we do up – economic other I blocking owe away we to think we XX% XX%. And – able and is rights to between have we're we XX% could if there think our almost our than

a hopefully substantial some shareholder, we're there So voice. is and

you. Okay great. Thank

you. Thank

Bentley come ahead Cross Securities. question will last Please from TD go Our with sir.

I falls and wanted that overall it's time But cable the and on with to question last asked one, thoughts I question your within space? on again. you've wondering just the ask been a consolidation potential time Greg, know

on good around I to side, side, of a There the a synergies cost think shareholders practical I side, that cost cost value. left consumers streamlines and economic the for and something around right. thing. the only operating it's been value a benefit largely adds on content buy having add It matter, There purchasing so lot economic said, there think That of are but on the that costs. adds synergies alike. not as much are isn't

on XX of drop video, mid substantial who broadband Comcast it's million subs. million have XXs four broadband people, to three XXs low XX and on then XXs and You've got with at broadband, high us on video and of – maybe a and

I up for there Cox don't think So I sign. don't has attractive Alex a family, is they the Kennedy's sale – a haven't consolidation. Taylor some potential very the business. seen and putting Cox of But more modest them

where So I that's be consolidation would that to occur, in happen. Charter not very going could any interested think it's but obvious

you. Thank Very fair.

conferences I talking very you the done. of the I listening you audience. very much. if any term you near Operator, Thank in to we're much to believe look call at the or with again forward Thank not next quarter.

Thank all you. That today's Thank you does conclude for your participation. conference.

now You may disconnect.