Grizzly Merger Sub 1 (GLIBP) 11 Nov 192019 Q3 Earnings call transcript

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

During the presentation all parties 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 November 11, 2019.

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

Thank you.

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

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

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

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

there Principal related have Pete we you answer Liberty’s, Liberty all CFO, if are Thank will during the Q&A line. Officer, on and you, GCI speaking to available to will Today the Courtnee, of good any to Also Broadband. we and on call Brian questions Pounds. afternoon be GCI’s Financial Wendling

on to series team value GCIs results. in core third starting OIBDA and business. benefits changes to the solid Alaska the So, of strategic began of grew focus made Revenue as they GCI quarter had driving adjusted Liberty, a the see with

build driven to cable Business by modem Ericsson revenue group, data improved and higher part up under GCI products healthcare in data moving are schools way libraries customers that to is stack bandwidth of expected mid-XXXX. and and offerings. the we video moved with with and customers completion out XG higher Anchorage the sales their wireless, and and

experienced Looking third revenue, and to OIBDA. at a momentum continues grow margin move to of there, continue marketing variable The they now LendingTree and adjusted levels return and in mortgage quarter business record results the the business and forward good fashion. gain insurance to

segment for the and diversification in The that the challenges, portfolio invest machine in team weather the continuing year. marketing has guidance increased to improving to allowed to while leading

the grow of XX% of and quarter. offering Austin quarter had Broadband, to now markets rolling relationships consumer continue the they experience. additional their in are advanced in and the minimum footprint, third in-home Liberty strong results, customer WiFi They launched to XXX begin out meg as speeds charter team Over in revenue will the and improves in fourth

the the and the growth $X expect ended CapEx with to EBITDA XXXX. CapEx all to spectrum cable-free intensity of in XXX,XXX quarter year cash the lines, guidance We billion and XXX% in to declining decreased flow, for decline below capital to led continue mobile they growth

billion In quarter. the of addition, they $X repurchased shares in

With that, detail. over to turn discuss the in financials Brian let me to it more

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

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

as to compared of a its leverage allowable X.Xx. maximum in was GCI’s leverage end agreement quarter credit at Xx defined

the quarters, incurrence-based threshold additional previous senior revolving was portion facility. GCI the funding in in therefore discussed to maximum under As of senior terms leverage the unable the access exceeded notes credit of and its

the under Facility our current in end so and of access the GCI on long noted additional senior the the is borrowing. with portion very Based Xx, our any hand GCI position. giving with are the as cash As XX-Q, access at the availability the leverage after broadband effect the million the compliance has revolving margin now the under under credit With ability on Senior to ability has to of we facility, additional to funding GCI as loan, revolver comfortable liquidity in $XX quarter revolver. in Credit covenants the

Now, I’ll it to over Pete. turn

with XG is second five XXXX included Starting first our the is Alaska. we year in our being for quarter build partnership band, That announced guidance. Ericsson Brian. upgrade, Thanks with XG in CapEx network built, and our in the this the network to currently

to be in In meantime, improvements customers to already site on. bill new Anchorage the completed gets expect We mid-XXXX. each turned are see starting the as

the well the of XXXX. industries oil in update Alaska tourism state an economy, to and On are going

in end still challenges protracted jobs and the up small and the are state XXX a prior year in September, However, economy dividends facing gain. of but fund the state large budget the have as of permanent cuts around reduced anchorage helpful economy. as are government we debates from confidence Overall,

we or but time to With regard color the pursue this any appeals continue at to of don’t those timing with FCC, the have open appeals. outstanding on resolution the RHC matters,

operating and a consumer, a year-over-year in on initiatives. quarter see the X% due strong up was for of on were to X% Third revenue and due in expenses. increased quarter basis Adjusted to OIBDA as improvements enhancements wireless. and increases efficiency year-over-year we to data began Revenue SG&A basis both results the benefits operating product

system changes noted Last unable being the we to product we were that some of conversion. a roll-out to quite number during quarter, for that time do able after billing

in improvements in wireless, to video products. changes quarter. prepaid our enhancement driving include were modem revenue postpaid cable and launches the wireless, the New significant Those

mentioned Alaska also focus core significant business. on second made to the side to in also changes the expense efficiencies We that the order quarter. narrow the expense third toward Those in during the we quarter reductions our led

arrears Consumer: growth Consumer The being advance. as many increases voice. X% revenue driven in one billing wireless for by from lapping move accounts we declines was in month them wireless in data video XXXX and customer conversion, and offset partially with in credited we of billing up was service where by of to our the billing

due The increasingly customers higher our premium upgraded our ARPUs data growth was as packages. to to

sequential added consumer also new net This customers, pleased increase. and XXX quarter data were we with a the

flat were the Business: quarter. for revenues Business

the offset seeing are the up-sales XX in customer in headwind in RHC of that lower declines the business of to the in video materials business. this earlier was denied and last were business, the partially funding the ongoing continue our healthcare year. data We time we and data closure by gains but see quarter These gains to due business

Finally, CapEx.

Expenditures the For in improvements. network year we’ve invested fiber for fiber were million hybrid primarily and coax expenditures. $XX improvements, capital wireless

end spend expect the complete $XXX QX We projects in as the CapEx year. push at approximately freezes elevated to million before is the of we CapEx ground XXXX. generally to in

to Greg. over it turn I’ll Now,

that, you for Thank Pete.

we on interest to in our many today, your As have link it forward several you We Liberty. continued seeing times of There week. We for homepage. appreciate been there. noted a GCI to look meeting our that has next is investor register

up open I’d And like with to that questions. operator, it for

you, Thank ISI. James [Operator will sir. we Wonderful! Instructions] Evercore from Ratcliffe hear First, with

if Great! taking Three, Thanks for question. the I could.

customer, providing the or associated of RHC much to see some appeals with that at all much Pete, on point could if service GCI the fail that on side, First been has customer the where is how on benefit canceled, and how you decide funding you that? OpEx

your monetization driving you’ve sort of a call stake? pretty Tree. versus you’ve of thoughts mentioned be Broadband anything guess into might that Charter the GCI weeks. regarded Secondly, Should out source. read that on we the And seem about that Thanks. more is third, to by six the or the Greg, proxy, In actually performance what last Liberty the row this a I as and on seen have move past second in – substantially you’ve in operating that? spreads the Liberty Any views both month that potential

want to you first? do Pete, go

Sure.

question there will secondarily, it and the did Really for customer to RHC. significant maintain the not funded network the that of place. to stay is potentially savings, the that cost massive that on network, network, first, build a So due is capital the get OpEx that to expenditure is in

a So or SG&A, no is part of will turned towers stations see circuits expect would so, reduction of as to down and not down. that, turned were if I that there those meaningful be microwave earth

inside so somewhat Tree, a the operating also as talking – And more value. performance much think because it’s entity, only it’s as now Tree, about grown Liberty, the I GCI that in not importantly reality it’s but of the smaller far operating

think it it at the ‘XX I discussed we’ve in inherited bottom we the recession. when

our million. I think was stake worth $XX

Now billion; well, over well, the it’s team well there. to credit $X

no of a at important Day. be it’s our going certainly both Investor They are So efforts use own their to to it as are to capital. and where it plans because more noticeable. We source sits have of

benefits. a being enjoying and happy major at We’re Tree the shareholder

done to been which far stock have insights. buying I Liberty, any probably but has that I or Charter out Liberty the have toe-dips little efforts. to at the Sirius like more as more either modest and selling Sirius the just and has Sirius, situation the don’t been and as the that I moved between relates really as Charter GCI pace much, bit spread with aggressive far at as we’ve why Liberty don’t it the not situation, modest been repurchases know repurchases, back than And of where quite think our has so like stock, relative great which share Sirius puts the in but A much buying

Thank Great! you.

on, we’ll from Riley question hear Silver B. and Alright, FBR. moving with Zach a

the for question. great. Okay, taking Thanks

the mentioned to RHC had First one announced some FCC summer, over Pete; the that changes for reforms. the you

it to impact idea said break for early directionally tell what that was any how too going you have that’s three you have. months guys. You curious, would if I’m later to

before data early that Hi, undertaken in what think closely there would this that collected really idea to details it’s going setting by the that is to I to of the process new Universal at, be we’re It anyone additional at is one to a know decisions has have that made outcome the be process is involves Tina Company. a has Counsel. Pidgeon, The very be GCI’s still some is Service but looking of tell, General that median; Administrative to yes, be. and rates

about you, two on that I’m there. paused Tina. May buybacks just then repurchase day. on to questions in that what’s driving Greg, guess for I forward? as think have GCI, it’s curious going I And the been how But since Thank been, should same buybacks ask hate Great! the we and to

at look etcetera. buybacks caller the the we’ll Certainly underlying the we of there prior GCI spread is there between worth, think is value noted, Charter, and as what the

somewhat GCI free we’ve had. did I to cash of situation, flows stabilized think financing related our lines the to refinancing, give fact in the the that flow of some and that restricted generated. where sits but some pause our from us access at we’ve been to which didn’t been incremental the and those access We being some has necessarily lines

to So while, advantage that that how is up a in able opportunity we’re Even take we are little being seeing the future. discount see cautious is we’ll so probably with one exist this of where going there, we’re front. that the to on probably for

much. very Thank you it! Got

with next question the will Michael Rollins And from come Citi.

good and power Two Charter is for describe afternoon. increase to What second, Thanks. in just First, And Hi, quarter factor you are it well in practices? any each on questions: the did GCI for for purchasing revenues other. leverage have the as as opportunities best there impact that the itself the for segments? the technology, the pass-through marketing USF across could charges GCI,

first So, GCI one and like the too. from I’ll take who would these a to anyone cut add at

experience, scale. probably to what You They’ve it know days done expect leverage or want earlier dialogue may of they utilize. and expertise These or has many continue. GCI I when about technologies more have topics. Charter it to they’re dialogue think to ongoing on on I trying at GCI been given been cases where they because when going gone headed that that’s in there’s they on in issues - work and more done has work Charter’s several have

the extend They they while know that. have clear not something parentage, the you would ability don’t friendly, a hand, to but common why extend and Charter, On in purchasing they have they’re or have or not other own some same way. on they’re do common the discounts commonly ownership, like

of friendly So a that’s more relationship.

which like relationship, ownership know comment a if further. or contractual would but I those a generates to than kind one think I from benefits, don’t anybody of GCI

USF on risen question on none on that on of would on changes, of the I quarterly No, the level publicly contribution to a Greg. nothing changes that any further of the those information. and the typically factor would happen one, basis note have note filed

you. Thank

Matthew come next from will Harrigan with question Our Buckingham.

Thank of unique surprises the and MSOs the you. in are I US, Three from any you that with being and to Ericsson XG drawn terms you built Have guess One, questions: among integral Anchorage. applicability I the to XG mean, you guess number people. of of that’s I instructor the for an could a area small to cells. policy, actually other and cable be where the

mess the or there in were revenues significantly the the last more. your seasonality up for longer this nervous but of you time. as getting telecom is regulation the in apply possible, know well to And I year on thirdly, risk guess the with are on U.S. a – that over some up all and Thank just your you Secondly, were numbers? political in noise Would Greg, expenses increasingly QX, you. period year

Duncan. guess me back Greg up take the on is I’ll on XG, I and politics. This first let I’ll piece the Ron

the demonstrate first about that that process able that year. to But to We’re to wireless how half plant have. cells the actually lot the have XG virtually really combining with of that with of the know be throughout leverage we’re coax We’ll the in well able vision a a more benefits the down hybrid of the works spectrum extensive the unlimited and backhaul to we our all subscriber-residents our fiber early by holdings network next deploy communities, small the XG to is level. way clearly extensive we

a there synergy in see two we So on front. marrying the production real a

to consumer there terms We plays that a say of the synergies class, those are half perspective, teach important of together how tying but it whether we in have out in year. next from in also ready believe see I’d products we’re first to

want do deal Pete, to you seasonality? with

the Yeah. that on we’ve historically has last On seasonality, revenues, would few I over but seasonal years. significantly fairly that say very the been declined

of and expenses much I heavier revenue little QX expenses a So expect than and the there. seasonality see bit seasonality you a little QX side, being expenses on – do wouldn’t QX bit in The with QX.

on are stuff than more but correct, giving some other fourth probably of the quarter note or one-time you QX what are had there. to we’re last little there year not a than normal, numbers unusual seasonal is guidance and those numbers the that higher expenses in

than the their on certainly And at of a can scale. as Liberty on discussing has more minute that Charter rather I’ll well. first a it’s is mentioned topic many think in I of lot comment a the can XG comment, This just done there’s perhaps that learn installation, learn because because the politics, case – at one, we they and I where Charter cases a I’ll work ago

happening learning with installation what���s will own with zone. be powerful on our having a we an XG and So, very watch obviously great interest

it there’s of is. sure actionable politics; we with how just politics, the all it have but watch we items many I’m that’s that, risks interest. them certainly around of not way because On In the always problem, now reversed. would have a the a problem guessed DOJ in time or who we’ve of – more less got when general, was was – was SEC of more the a that the

knows will where who this all go. So

Thanks, and Greg, Ron Pete.

final Bentley Securities, we on move our TD to We will question Cross. have from

Hi, Broadband. quick Greg for Liberty question on

is non-issue anything proxy. themselves that forward done a there XX% new should Just look care or issue your and house the take the we the buybacks be thoughts exploration to altogether? Is threshold of so ownership there as of to the out advanced

it some non-issue. if particularly and point proxy. don’t would between Yeah, commonality solved. One three Certainly there and that it’s are of of I ways probably know gets renewal a John is, sort new houses the a Malone, there. relations good

XX%. us you may continues over Charter drive to the as Secondly, rightly repurchase alone and that know,

the know past could relatively you third, amounts efficient own. economics to And the ownership with our not used on us colors take that of massive over and and XX% increase our in drive ways like we’ve the

there night me say can’t means. I no So, any by keeps that risk, it’s one at up but not is

Thank you.

you. Thank

you speak said, to New you we if And next week questioners. you all quarter if as and next see thank we So not, and again many hope beforehand. operator. Thank listeners of in of York much, to the we’ll not very

again Thank ladies once our And for that conclude gentlemen, today. does joining us. call for you

You may now disconnect.