Q4 2020 Liberty Broadband Corp and Liberty Tripadvisor Holdings Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Liberty broadband 'twenty and 'twenty ear and earnings call.
During the presentation, all participants will be in a listen only mode.
Afterwards, we will conduct a question and answer session.
At that time, if you have a question. Please press star one on your telephone.
Minder. This conference is being recorded February 26th.
I would now like to turn the conference over to Courtney Chun Chief portfolio Officer. Please go ahead.
And you and good morning, before we begin we'd like to remind everyone that this call and free and certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 actual events and results could differ materially due to a number of risks and uncertainties.
And he knows mentioned and our most recent form 10-K filed with ease.
These forward looking statements speak only as of the date of this fall and Liberty broadband and Liberty Tripadvisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein.
Like any change and liberty broadband or Liberty Tripadvisor.
<unk> expectations with regard there to or any.
Strange and events conditions or circumstances on which any such statement and based on.
Today's call, we will discuss certain non-GAAP financial measures for Liberty broadband.
And adjusted OIBDA and adjusted OIBDA margin.
And regarding the comparable GAAP metrics, along with required definitions and reconciliations.
We went and preliminary note and schedules.
And he found and frankly each day.
It's available on Liberty broadband website, now I'd like to turn the call over to Greg and the day Liberty President and CEO.
Courtney and good morning to all of our listeners.
Today speaking on the call. We'll also have on Liberty broadband and Chief Accounting Officer, and principal financial Officer, Brian Wendling.
And during Q&A, we will be available to answer questions related and Liberty Tripadvisor.
Duncan GCI.
C P. I N T E L F O and GCI and will also be available to answer questions.
Let me start by talking about Liberty broadband and so.
On December 18th earlier.
Earlier than expected.
And do the acquisitions and GCI Liberty.
During the period November 1st of January 31, we repurchased one 9 million shares of Liberty broadband for $293 million.
One 8 million on the repurchases were completed after the December shareholder votes on the GCI Liberty.
Since then we spent about $272 million on repurchases and and average price of about $155 a share.
Well you may notice that the average purchase price and that'll be all over.
Over this period and higher than Yesterdays close.
They represent an attractive luxury price to charter of $528 per share versus yesterday's closing price.
And so too and we remain long term bullish.
And the first quarter, we exceeded our 26% ownership cap and charter and.
And expect to sell into their buyback beginning in March and do so going forward on a monthly basis.
Based on charters historic buyback cadence.
We expect our share sale and it didn't.
Charter and to generate cash and well north of $2 billion for Liberty broadband this year with about a five 5% tax.
Our plan is to use this capital plus the ample liquidity, we have on hand already and broadband to attack the discount at Liberty broadband and take advantage of it with this and my our board has increased the repurchase authorization at Liberty broadband to approximately two and a half million.
Looking at charter from 2020 broadband affirmed its place as one of the most important consumer and business services and charter added more broadband subscribers and the first half of 2020 and in any calendar year.
On Warner merger.
With operational efficiencies from increased self installation and self service platform and online digital sales and the combination of these.
Combined with the mix shift and continued mix shift of Boardman and resulted in full year, 'twenty and 'twenty cable EBITDA margin exceeding 40%.
For the first time and the company's history.
And we added a small number of video subscribers in 'twenty and a lone star and the current and they'd be.
Market.
Mobile is also an exciting growth business for charter with improving economics charter added one 3 million line during 2020.
And is the fastest growing wireless provider and and footprint.
In fact from several quarters, we were the fastest growing wireless player and the nation.
Free cash flow at charter increased 50% for the year and charter repurchased over $12 billion.
So on all all in all pretty good.
Finally, let's turn to Liberty Tripadvisor.
Tripadvisor is well positioned for what we believe is the pent up travel demand and continues to grow.
Keep some of our investors stuck and colder climate and thinking about the right thing to check out the best speeches and 2021 trip announced this week, it's led by Whitehaven Beach, and Australia, and Santa Maria Beach, and Cuba, perhaps so shouldn't be there.
Costco and control taken.
And 2020 have enabled operating leverage as revenue return we're on.
Also excited about Tripadvisor plus the first of its kind and direct to consumer subscription offering and the travel space currently in beta and we expect to roll it out and the U S and the first half of 2021.
It provides travelers with compelling value through deals on hotels and experiences as well as getting access to the person and benefit and this is just the beginning over time, we envision adding more services more benefits and VIP amenities and destination travel benefit airlines et cetera.
The addressable market for Tripadvisor philosophy is enormous.
And we continue to have over 400 million monthly unique visitors that trip in 2000, and 2019 and were confirmed and even a small percentage of that traffic and provides a meaningful long term growth opportunities and recurring revenue stream for threat and.
With that let me turn it over to Brian to talk about the financials. Thanks, Greg.
Quarter, and Liberty broadband had consolidated cash and cash equivalents and one 4 billion.
Which includes $32 million cash at GCI.
After year, and GCI received $174 million and payments and government.
Relating to the RFC funding years, 18 and 19.
And it's a lot of GCI and to pay down the line of credit by $180 million subsequent to year end.
Value of our charter investment on Liberty broadband and yesterday's close was 36.
At quarter, and Liberty broadband and had a total principal amount of debt of $4 eight.
Putting the impact of the $180 million pay down and do you have on credit.
And so we broadband has principal amount of debt.
$4 6 billion.
She has leveraged with the bond and its credit agreement was three five times.
And meaningful Delevering from year end 2019, EPS leverage was five four.
UGI and substantial cushion under its maximum leverage covenants.
Liberty broadband has 300 million of umbrella and larger loan capacity and GCI has reported.
But on drawn borrowing capacity on its line of credit following the debt.
These amounts exclude the indemnification obligation and preferred stock.
Now just a quick update on GCI.
<unk> was a great year for the company full year revenue grew 9% and adjusted OIBDA was 34.
Our pipeline.
Company's highest ever adjusted OIBDA, driven by data demand and lower cost associated with that and reduce bad debt and health care expense.
And with previous cost saving initiatives.
We also had $15 million and one time items favorably impacting revenue per the year.
Impacts on the quarters.
There's additional discussion and TPS results and our 10-K that will be filed later today.
Fourth quarter experienced 12% revenue growth and 20% adjusted OIBDA growth.
Operationally they added nearly 14 day.
Cable modem subscribers and built that Alaska is sourced by us and them.
And then.
Basically they flow the broadcast business and reduced per ton and cirrhosis and focus on their core competitive advantage and Alaska network.
But a favorable impact on overall margins.
Although and definitely some favorable macro trends impacting on the spring through 'twenty and 'twenty number.
Solid performance on a team from top to bottom and that generated those resolved.
It's a truly Brian Scott.
On our IC matters, we are currently working with the FCC and rates and payments on a year.
On.
And we're following the news we received a new order from the ft.
And January to his rate certainty to Alaska providers refunding years, ending in June 'twenty and 'twenty three.
We expect to have a shorter period between service delivery and cash collections going forward.
I'll turn the call back over to Greg.
Thanks, Brian and thank you to our listening audience for your continued interest and Liberty broadband and Liberty Tripadvisor and operator with that I'd like to open the floor for questions.
Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure you're on mute function is turned off because I expect all three chocolate and that again press star one to ask a question.
Pause for just a moment for a lot everyone and opportunity to sit and all her question.
We'll go first to Michael Collins with Citi.
Hi, good morning, I'm curious on.
Liberty broadband.
Think about this.
Office and Liberty broadband going forward can you left and we'll look to price to charter earlier and discussion can you expect liberty broadband and just keep yeah hi.
And can stay fairly simple or all of you on the other half debt.
We're investing and placed into Liberty broadband.
Thank you for the question I I.
Look the easy money here in terms of what to do with the capital we received from <unk>.
Solid capital on our balance sheet, but the capital we will receive the repurchase.
The charter makes and the payments we get is to take advantage of the basically and 15%.
The differential between the after tax proceeds we get and the discount to.
Charter that we have and that's the obvious place to put our accounts now so the green we'd become more oh on.
Uncertain about the.
And the charter buyback effectively weak and decided what pace, we want to be a part of the charter buyback by holding the cash and doing something different.
But that's where given our belief and charter and given the discount that's what's attractive today.
Today prices and the market in general are pretty full for other kinds of assets.
World changes, we might change our view.
That's where we stand today.
And earlier last year and stuff.
I believe about being in discussions.
With charter, where and how to handle this cash are you approaching it.
Can you share any thoughts on what you learned from that assertion and widen besides and enforced the cash versus maybe just on you hold on to the shares that you have.
And then just a final decision or is it possible that and the future, but the structure and the agreement might be revisited.
We did have discussions where they are and independent committee of the board.
Of charter.
About increasing the cap ex.
And frankly, the proposals that were put forward by them to Liberty broadband and we didn't find as attractive as the alternative just repurchase our shares.
Can't say that we won't revisit that don't know what will come in the future, but at the moment and we looked at the alternatives of what was presented to us versus as I said the opportunity to.
Net cash back pay a five 5% tax rate and by what's been running about and age to buy the stock back of Liberty broadband and and running at about 18, 5% discount to charter and thought that was a pretty attractive alternative.
Thanks very much.
Well go next to James Ratcliffe with Evercore ISI.
Oh on GCI.
And with a Y on Joe discussion you mentioned should we be looking at for Q is pretty much normal laws when they come.
Oh, I see something close and going forward.
And secondly on L trip.
And we're talking about discounting going on with later on.
And I heard you said thereabouts.
And tools available to take advantage of wellness and population.
And the sampling of the ballpark.
And.
So I'll, let you want to comment on the TCR and talk about our future.
Brian.
Yes.
Okay.
[noise] coming on.
Operator, we have seem to have some feedback on the line. Thank you.
Brian do you want to comment on the RFP or or and who left deep ore into Iran and anything.
And just thoughts on the one time items. There was a there was one settlement for $6 million that came through and the fourth quarter.
Otherwise.
The results for the fourth quarter.
And are pretty much normalized that on update if there's anything you'd want to add on that.
No. That's that's good Brian, particularly nothing unusual with our H C that impacted the income statement there.
And Liberty trip and a discount on the funny thing is highly volatile and if you look at the beef price.
And you combine the bees and the a price it's not clear it's as big a discount now.
Yeah.
Float and liquidity there isn't a b's all acknowledge that it's a hard number to look at.
There is not a ton of excess liquidity held trips a day, but we continue to think about ways and take advantage of any discounts we see women.
Great. Thank you.
Moving next to Bentley Cross with TD Securities.
Well two minor housekeeping question.
And.
What's the right corporate overhead you're I guess and devoting all of the combined company and then secondly can you just put the advertising and in fact was which is going on.
Florida.
And can you repeat the first question I didn't hear you.
What's the right corporate overhead drag to think about now and hope the combined company.
And that gave us on Sept, Brian you want to answer that.
Sure Yeah, I don't think it's it's slightly elevated in Q4, 'twenty and 'twenty and did you see on their leases.
Seven 3 million. So I went back off that a little bit without giving specific guidance, but that could be an approximation to annualize.
And we reduced that down a bit.
Thank you, Brian and Manhattan.
Right.
Yes.
Maybe you repeat the second question is to make sure we all heard and as well.
Can you discuss the advertising impact.
PCI and political advertising and Florida.
Brian Our piece you guys want to take a cut at that.
And I'll go ahead, and then yeah.
Yeah, we are.
After the sale of the broadcast business, we've got relatively de minimus cable advertising revenue that goes on our our cable television programming there.
And due to the political advertising, we got about a 3 million dollar bump over and above what I would consider to be relatively de minimis revenue streams there.
Thank you.
We'll go next to Matthew Harrigan with benchmark.
Well thank you.
Firstly, probably gets lots of them on the Liberty Sirius earning from leases.
Morning, but USB C.
And with 50 dollar our Crosby and supposed to be for lower income homes and stuff and $74 and.
Tribal areas that.
Two a week for 21 zone.
All right.
And from the wildfire given the material.
Native population there and then secondly, I guess much more prominently in the news.
Moving on to Austin, and one in southern and so.
Comcast and charter were not from winter.
I'm not surprised and it gets hit from those.
Prices is that I know you do have from from our core and Crazy your answer.
He did and some indication there.
Might be more and venerable charter or Comcast, which is maybe you cant say definitively on Atkins, who would make more sense.
Work with Verizon in terms of D C and the relationship on the on the small cell side.
And just as far as he and I know, it's supposed to you on that before but lots of moving pieces here and if the auction results. Thank you.
So peak or Rod do you guys want to talk about the potential impact and tribal areas and a $75 subject.
And the media.
Right.
Of the quick go to debt GCI is already a substantial lifeline provider on the voice side and we have programs set up that we believe will be well positioned to more fairly quickly and to the broadband subsidy That's Greg Inc.
They're all of a lost cause you trouble area. So the.
$75 subsidy place statewide.
So there's some upside to that I believe for D C.
You also have to look at the fact that our broadband penetration is also exceedingly high even more so after the pandemic effect from last year.
So the upside is probably limited although it will probably have a positive effect on further driving down to bad debt and supporting me and some spring. Thank you.
And as far as the C band, the band auctions and and charter I think.
Liberty like many observers were stunned by the prices.
Obviously, you're looking at sort of the mid Ninety's to high $90 billion. When you include the cost from the spectrum.
And some of the amount for each of the larger carriers and particularly by horizon.
But also T paid.
Paid you know a big numbers.
I look and think a R T.
P. B R. S alternative debt, we did participate in and it's been about $500 million of charter ins.
S auction is very attractive with a cost per pop basis.
And that was probably like a seventh of the price or something like that and the other point I'd make is we're really beneficiaries.
Because of our recently renewed.
And B and our relationship with Verizon, where we're going to get the benefit from whatever spending they have and they do there.
In terms of the.
And we count the M. B you know, we get we get the latest and greatest that Verizon has built.
I think it's a win all the way around for charter to be perfectly honest switches.
And we get owner economics, where we choose and C. B R. S. At a fraction of the price and we get rental economics per upgraded network.
And with a continuing downward stream based on what their retail prices are so and probably.
<unk> stapling as much debt on some of those larger companies, it's probably got a call and come to look at.
Yes.
Bigger and certain alternative if they might do to participate and some of the markets, where and so I consider it a pretty good result for charter.
But specifically as far as Dan and thank you have on the small cell tower and your book taxes and all.
Is that still something that's it's a moving target I know this is something I know Comcast and historically been reluctant to Lyft rides and messenger network and Feeney experience and then.
And I'm sure charters and probably in the same place.
And I take it with.
And with the new agreement that wasn't something that was specifically contemplated or is that something that could work out and the future such as well.
People who work.
I think it's the point you make where we haven't rolled that out yet or C. B R. S. We havent really rolled out our owner economics anywhere yet, but down the road one could imagine.
And providing access to our network as well as you know we certainly do provide other places where we provide backhaul on the line from plenty of the larger mobile carrier. So I don't know why.
And last mile per passenger as well.
Thanks, Craig.
We'll go next to Michael Beamer with E. L C cap at all.
Good morning, and I have a couple of questions.
Looking at charter.
It looks to me that with 63%.
Homes passed.
Their penetration roughly it's about 68 per cent.
And the average monthly Bill was around 11 one.
$111.
What are you thinking in terms of and.
Opportunity for the total penetration.
And also what do you think is the.
Purchasing.
Our ability to.
Fund spending on cable relative to the average rent.
Which is approximately $900000 per month across the U S. How are you thinking about debt and when you discuss that.
Please touch on the price increase that was announced at the end of last year by charter.
Go through and.
And what are your thoughts about inflation.
Sorry, I know, it's a lot, but I really appreciate your thoughts on that.
I'm also going on right. The final chapter of the Bible over and done here, but.
Look I think if you asked Tom Rutledge she wouldn't believed ultimately we're going to have to.
And two thirds.
And we'll grow our share of the two thirds and the market or for price.
Perhaps even more of a time, because we have the best network.
And and in large parts of our market, where we can provide a better customer service at a relatively low cost.
Great.
And so we really are well positioned.
In general, Yes charter has taken some price increases and it really is hard to say because it is quite plan, where it rolls out across the nation. It's not a uniform we turned the switch and everything goes up 3%. It really is when the customers contracted and what kind of plan their under and what do you plan and we offered.
In general and if you look at most analysis and that I've seen.
Charter has not been a price taker, we had been a share taker and.
And I think the management team and charter has done a great job on doing that where we gained share and largely faster than anyone else and among the big cable players and your price is something that perhaps is available down the road, but not something we need to work on today, we've got a better offering and lower price and continue to take share and leave that volume.
And that volume rather than price style, rather and the volume dial less.
Less churn and then some of the others and the market.
As far as where it can go.
We'll see.
As you increasingly look and a world where people are going to have remote alternatives, whether it be businesses on a personal use if.
You will see increased demand for broadband and the book value and the service is likely to rise and I don't have a number and my head and how it never really looked at or thought about it against average rent, particularly because a lot of cases people on their homes on a rental property.
And then we have businesses small businesses. So I don't necessarily think about them against rents are but I do think the product as I started out as shown increasing broadband has shown increasing value to consumers and businesses alike, and 2020, and I don't expect that to dissipate much.
And I just spent a lot going on with Muslim.
Sure.
The recent the recent.
Excess of Liberty Media acquisition Corp.
Clearly you have access to capital.
And the people on bad debt free cash flow from the repurchase and he's going to create a high class problem for you.
How are you thinking not just and Liberty brother, and but across your company and study.
Think about it.
Conflicts of interest and.
Tempting to essentially treat every shareholder properly because liberty media is going on.
Yeah. So a couple of things I think I talked about the <unk>.
First and primary opportunity, we're pursuing today and Liberty broadband.
And given prices and the market and given the opportunity we see in front of us that looks pretty attractive.
And our belief and the underlying value and charter.
And charter continues to shrink its equity grow its cash flow growing revenue grow inhibitor. So we're pretty enthused about that now.
Each of the companies and has been spun from Liberty media, specifically waive their conflict of interest and in fact, we've been and just a long time and really haven't seen a lot of cases, where that's been an issue.
You know if.
If we see something and ecommerce that's probably likely to go into your curate if we see something around Motorsports, that's probably likely to go on to Formula One and.
And if we see something around music, that's probably likely go on to the Liberty Siri and Theres just seem to be natural homes.
Now on the case and this back on.
Liberty media and did not waive its conflicts so any opportunity that this vaccine will first be offered to Liberty media and we created a position where John Malone is effectively not and the Liberty media acquisition management team and he will be the but wanted to get to decide whether to be not on the almac management team and they'll be the ones to start whether it goes and Liberty media, but.
And I think it's unlikely, we're really going to see that as a practical matter because.
Again, if we see something and motorsports unless its two largest scale, it's likely to be formula one and we see something that doesn't fit, particularly well it may very well be and its back so.
You know we've had this conflict and in fact for years, we've never really had an issue with shareholders about it because I think we're pretty we try and be transparent and explain our motives and and generally try and create pure play and among the entities, we have and not happened diversified unless there was a really good reason and in fact, one of the reasons we created this backwards.
And so it's diverse alternatives that may not fit so well and the portfolio we have today.
Thank you and thank you as a team and D. C on you've done an amazing job and long term shareholders and took a.
Good luck and Charles Thank you.
Our last question comes from Mike Garen, Switzerland.
Hey, Thanks for taking my question and I've two quick ones on what it looks like GCI moving from video subs from.
From the business segments for the consumer segment I was just wondering if that is.
Correct on that.
Explain some of the change in revenue.
And my second question has to do with the transfer of the.
And GCI subsidiary that holds the charter shares up.
So the parents can you give us more color.
And our reasoning and the implications for that change on the org structure.
I'll take the second one.
And often it's the case and Liberty it was tax motivated and and that was our.
Our primary goal and I'll, let Pete do you want to comment on any or Brian and I Wanna comment on any changes and the video sub.
Allocation or positioning.
Yeah I'll go to that.
Yeah. So when we sold the broadcast T V business, we elected to change the the unit that took the revenue and it used to go into the GCI business revenues stream because.
Broadcast we viewed as a bit more of a business play.
Without the broadcast it's just the video advertising revenue and that seem to follow more with the consumer revenue stream. So that's why Michael It moved from the business to the residential and that's just the advertising revenue.
Okay great.
Yeah. Thank you I think that's our last question thanks to our management teams and thanks to our employees and thanks to all our listeners for their interest and Liberty broadband and Liberty Tripadvisor, We hope to speak with you next quarter if not sooner.
This does conclude today's conference and thank you for your participation.
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And.
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Ladies and gentlemen, thank you for C and D by walk.
From to the Liberty broadband 'twenty, and 'twenty ear and earnings call.
During the presentation, all participants will be in a listen only mode.
We will conduct a question and answer session.
At that time and do you have a question and please press star one on your telephone.
Mind you. This conference is being recorded February 26.
I would now like theirs from the conference over to <unk> Chun portfolio Officer. Please go ahead.
Thank you and good morning, before we begin we'd like to remind everyone that is calling for it and certain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 actual events and results could differ materially due to a number of risks and uncertainties.
And putting those mentioned in our most recent form 10-K filed with SEC.
These forward looking statements speak only as of the date of this fall and Liberty broadband and Liberty Tripadvisor expressly disclaim any obligation or undertaking.
And any updates or revisions and any forward looking statement contained herein to reflect any change and liberty broadband are and the beef tripadvisor and expectations with regard there to or any change in events conditions or something on <unk>.
Any such statement and space.
On today's call, we will discuss certain non-GAAP financial measures for Liberty broadband adjusted.
Adjusted EBITDA and adjusted OIBDA margin.
Information regarding the comparable GAAP metrics, along with required definitions and reconciliations.
And preliminary note and scheduled fundings can be found and frankly.
And this is available on Liberty broadband and website.
I'd like to turn the call over to Greg mid day, Liberty President and CEO.
Thank you Courtney and good morning to all of our listeners.
Today speaking on the call will also have Liberty broadband and Chief Accounting Officer and for net principal financial Officer, Brian Wendling.
Also during Q&A, we will be available to answer questions related to Liberty.
Tripadvisor.
Ron Duncan TPI, and <unk> CFO and GCI will also be available to answer questions.
Let me start by talking about Liberty broadband itself.
On December 18th.
Earlier than expected.
Completed the acquisition and GCI Liberty.
During the period November 1st and January 31, and we repurchased one 9 million shares of Liberty broadband for $293 million.
One nine on the repurchases were completed after the December shareholder bumps on the GCI Liberty merger.
And we spent about 272 million on repurchases and an average price and about $155 per share.
While you May note the average purchase price on <unk> over this period and higher than yesterday flow.
They represent.
And on attractive luxury price to charter.
$128 per share versus yesterday's closing.
And.
And we remain long term bullish.
And the first quarter, we exceeded our 26% ownership cap and charter.
And expect to sell into their buying back beginning in March and do so going forward on a monthly basis.
Based on charters historic buyback cadence.
We expect our share sales guidance.
Charter and to generate cash well north of $2 billion forward and Liberty broadband this year with about five 5% tax.
Our plan and to use this capital plus the ample liquidity, we have on hand already and broadband to attack the discount at Liberty broadband and take advantage of it with this in mind, our board has increased and repurchase authorization at Liberty broadband to approximately $2 5 million.
Looking at chart from 2020 broadband from display is one of the most important consumer and business services and charter added more broadband subscribers and the first half of 2020 and and any calendar year.
Time Warner merger.
With operational efficiencies through increased self installation and self service platform and online digital sales and the combination of these.
And with the mix shift and continuing mix shift to broadband resulted in full year 2020 cable EBITDA margins exceeding 40% for the first time and the company's history.
And we added a small number of video subscribers in 2000, and a lone star and the current and B E.
Market.
Mobile is also an exciting growth business for charter with improving economics chartered added one 3 million lines during 2020.
And is the fastest growing wireless provider and it's appropriate in fact and several quarters moving the fastest growing wireless player and the nation.
Free cash flow and charter increased 50% per year and charter repurchased over $12 billion.
On all in all pretty good.
Finally, let's turn to Liberty Tripadvisor.
Tripadvisor is well positioned for what we believe is the pent up travel demand and continues to grow.
Keep some of our investors stuck and colder climate and thinking about the right things and check out. The best features from 2021 trip announced this week, it's led by Whitehaven Beach and Australia.
On the Marina Beach, and Cuba, perhaps just shouldn't be there.
Costco controls and take it.
And 2020 have enabled operating leverage as revenue per return.
We're also excited about Tripadvisor plus the first of its kind and direct to consumer subscription offering and the travel space currently in beta and we expect to roll it out and the U S and the first half of 2021.
It provides travelers with compelling value to deal on hotels and experiences as well and getting access perks and benefits and this is just the beginning over time, we envision adding more services or benefits VIP amenities and destination travel benefit airline per et cetera.
The addressable market for Tripadvisor philosophy deposits and.
And we continue to have over 400 million monthly unique visitors and trip in 2000, and 2019, and we've converted and even a small percentage of that traffic and provides a meaningful long term growth opportunity and recurring revenue from <unk>.
Trip and <unk>.
With that let me turn it over to Brian to talk about the financials. Thanks, Greg.
Quarter end, Liberty broadband and consolidated cash and cash equivalents $1 4 billion.
Which includes $42 million cash as these GAAP.
After year, and GCI received $174 million and payments.
Ladies and RMC funding years, 18 and 19.
And in July GTI and pay down the line of credit by $190 million subsequent to year end.
Value of our charter investment on Liberty broadband and yesterday's close was 36.
At quarter, and Liberty broadband had a total principal amount of debt of $4 eight.
Putting the impact of the $180 million Paydown as we gather on credit.
A rebroadcast and had principal on debt.
6 billion DTI.
Gci's leverage that the bond and the credit agreement and three five times and meaningful Delevering from year end 2019, EPS leverage was spot on.
PCI and substantial question under its maximum leverage covenant.
And the broadband has 300 million of Undrawn large loan capacity and GTI and has approximately four percentage points.
And on drawn on capacity on the planet credit on demand.
These amounts exclude the indemnification obligation and preferred stock.
And that's just a quick update on GCI.
<unk> was a great year for the company full year revenue grew 9% and adjusted OIBDA increased 34%.
And our platform.
Company's highest ever adjusted OIBDA, driven by data demand and lower costs associated with that and reduce that debt and healthcare expenses.
And with previous cost saving initiatives.
We also had $15 million and one time items favorably impacting revenue per year.
Impact for the quarter was day.
There is additional discussion of PPR and resolve and our 10-K that will be filed later today.
Fourth quarter experienced 12% revenue growth and 20% and adjusted OIBDA growth.
Operationally they added nearly 14 back.
And the modem subscribers and built that Alaska is a 45 day.
Basically they fall on the broadcast business and reduced per ton uninterrupted focus on their core competitive advantage.
<unk> network.
And had a favorable impact on overall margins.
Although indefinitely and favorable macro trends impacting and it's frankly, 'twenty and 'twenty number.
And with solid performance on the team top to bottom that generated both from Paul.
And then a truly Brian Scott.
On our IC matters. We are currently working on the Senate races, and payments on a year.
On a.
And we're positive news, we received and the water.
And in January and to his right certainty, we will have to providers with funding years ending in June 'twenty two 'twenty three.
Expect to have a shorter period between service delivery and cash collections going forward.
That I will turn the call back over to Greg.
Thanks, Brian and thank you to our listening audience for your continued interest and Liberty broadband and Liberty Tripadvisor and operator with that I'd like to open the floor for questions.
Thank you prefer you'd like to ask a question. Please signal by pressing star one on your telephone keypads.
Or you think speaker phone. Please make sure you're on mute function is turned off the line.
<unk> talked with and again press star one to ask a question.
Pause for just a moment go on everyone and opportunity to signal for questions.
We'll go first to Michael Rollins with Citi.
Hi, good morning curious on.
Liberty broadband.
You think about the assets and.
And we will do broadband going forward and you often look to price to charter early and discussion can you expect liberty broadband and just keep yeah hi.
And can stay fairly simple or all of you on the other half debt.
We're investing in.
In terms of and broadband.
Thank you for the question.
Look the easy money here in terms of what to do with the capital we received from <unk>.
Solid capital on our balance sheet, but the capital we will receive the repurchase.
And charter based on the payments, we get and to take advantage of the basically and.
And the 15%.
And so between the after tax proceeds we get and the discount to.
Charter that we have and that's the obvious place to put our accounts now to degree we become more.
On certain about.
On the charter buyback effectively we can decide at what pace, we want to be a part of the charter buyback by holding the cash and doing something different.
But that's where given our belief and charter and given the discount that's what's attractive.
Today and prices and the market in general are pretty full for other kinds of assets.
If the world changes, we might change our view, but.
That's where we stand today.
And earlier last year and tough I believe about BD and discussion.
With charter, where and how to handle their cash.
How are you approaching it.
Can you share any thoughts on what you learned from net question why they decided to enforce the cap versus maybe just one and you hold on to the shares that you have.
And just a final decision or is it possible that and the future.
But the structure and.
And the agreement might be revisited.
We did have discussions with Ey and independent committee of the board.
Of charter.
Increasing the cap ex.
And frankly, the proposals that were put forward by them to Liberty broadband and we didn't find as attractive as the alternative debt repurchase our shares.
Can't say that we won't revisit that don't know won't comment on future, but at the moment and we looked at the alternatives of what was presented to us versus as I said the opportunity to.
Net cash back pay a five 5% tax rate and by what's been running about and buy the stock back Liberty broadband and points and running at about 18, 5% discount to charter and thought that was a pretty attractive alternative.
Thanks very much.
We will go next to James Ratcliffe with Evercore ISI.
Paul on <unk>.
And <unk>.
While on the discussion you mentioned should we be looking at for Q pretty much normalized from.
And our HDI funding from going forward.
And second one on L trip and talking about discounts as well.
And so do you think thereabouts.
All tools available to take advantage of that.
And as capital to ballpark the culture.
And so I'll, let you want to comment on the TCR and time matters, either Brian or it all over again.
Okay.
Operator, we have seem to have some feedback on the line. Thank you.
Brian do you want to comment on <unk>.
And we're into Iran patents.
And just thoughts on that.
And one time items. There was there was one settlement for $6 million and came through and the fourth quarter.
Otherwise you know.
Volume for the fourth quarter.
And are pretty much normalized that on update if there's anything you'd want to add on that.
No that's good Brian, particularly nothing unusual with RH see that impacted the income statement there.
I'm Liberty trip and the discount.
Funny thing and is highly volatile and if you look at the beef price.
And you combine the beads and the a price it's not clear it's as big a discount now.
Much.
Float and liquidity there is the b's all acknowledge that it's a hard number to look at.
There is not a ton of excess liquidity held trips a day, but we continue to think about ways to take advantage of any discounts we see weapons.
Great. Thank you.
We'll go next to Bentley Cross with TD Securities.
Well, it's too Brian.
And a housekeeping question.
What's the right corporate overhead drag from devote now of the combined company and then secondly can you just flush.
But the advertising and in fact was.
On the quarter.
Can you repeat the first question I didn't hear you.
What's the right corporate overhead drag do you think about now and hope the combined company.
And it gave us one for Brian you want to answer that.
Sure Yeah, I think it is.
It's slightly elevated in Q4, 'twenty and D C and the release of <unk>.
Seven 3 million. So I went back off that a little bit without giving specific guidance, but that could be an approximation to annualize.
And reduce that down a bit.
Yeah.
Thank you, Brian and Manhattan.
Yes.
Right.
Yes.
Maybe you repeat the second question is to make sure we all heard and as well.
Can you discuss the advertising impact.
And the PCI and political advertising and Florida.
Brian are you guys want to take a cut at that.
Yeah I'll go ahead and then.
Yeah, we are.
After the sale of the broadcast business, we've got relatively de minimus cable advertising revenue that goes on our cable television programming there.
And due to the political advertising, we got about a $3 million bump over and above what I would consider to be relatively de minimus revenue streams there.
Thank you.
We'll go next to Matthew Harrigan with benchmark.
Well thank you.
Call it gets locked them on Liberty.
Theory of earnings releases and.
40, but the FCC.
And all are broadly on so to speak the lower income homes investing $7 and <unk>.
Tribal areas does that.
Two weeks.
<unk> to 'twenty one.
<unk> <unk>.
And I have from Alaska given the.
And real.
Neither population there and then secondly, you know it gets much more prominently in the news.
Moving on to Austin, and you know one of southern and so.
Comcast and charter were not winters.
And not surprisingly given those.
Prices is that and I know you have seen from our core and sort of your answer.
And could there be some indication there.
And you might be more and venerable charter or Comcast, which is maybe.
You cant say definitively on out.
And so it would make more sense.
Work with Verizon in terms of PC and the relationship on the on the small cell side.
As far as the newest supposed to you on that before but lots of moving pieces Europe E auction results. Thank you.
So.
Pete or Rob you guys want to talk about the potential impact and tribal areas and a $75 subsidy and the media.
Okay got it debt GCI is already a substantial lifeline provider on the voice side and we have programs set up that we believe will be well positioned to more fairly quickly into the broadband subsidy.
Greg.
Blood there all of a lost cause you trouble area. So the 70.
$75 subsidy applause statewide.
So there's some upside to that I believe or do you see.
You also have to look at the fact that our broadband penetration was also exceedingly high even more so after the pandemic effects from last year.
So the upside is probably limited although it will probably have a positive effect on further driving down the bad debt and supporting me and from spring. Thank you.
And as far as the C band, the band auctions and and charter I think.
Liberty like many observers would stand by and the prices.
Obviously, you're looking at sort of the mid Ninety's the high $90 million. When you include the cost from the spectrum and.
And some of the amount for each of the larger carriers and particularly by horizon.
But also T.
Paid a big numbers.
I look and take on.
And I see.
E B R. At alternative debt, we did participate in and it's been about $500 million of charter ins.
S auction is very attractive with a cost per pop basis.
And that was something like a seventh of the price or something like that and the other point I'd make is we are really beneficiaries.
Because of our recently renewed.
And be in a relationship with Verizon, where we're going to get the benefit of whatever spending they have and they do there.
In terms of.
The count the MB and how we get we get the latest and greatest that Verizon has built.
I think it's a win all the way around for charter to be perfectly honest switches.
And we get owner economics, where we choose and C. P. R. S. At a fraction of the price and we get rental economics that go on.
Our upgraded network.
And with a continuing downward street based on what their retail prices are.
So.
And probably.
And frankly stapling as much debt.
And on some of those larger companies and there's probably going to call and come to look at that.
Bigger and certain alternative if they might do to participate and some of the markets were and so I consider it a pretty good result for charter.
But specifically as far as Dan and since you have on the small cell side.
Our and and better access.
And all day, and that's still something that's it's a moving target I know this is something I know Comcast and historically, we do a lot of people like Verizon and Messenger network ETD expands and on some surcharges and probably and the same place.
And I take it.
With the new agreement that wasn't something that was specifically contemplated or is that something that could work out and the future or is that just fell.
Off the table for a while.
I think it's the point you make where we haven't rolled that out yet or see brs, we haven't really rolled out our owner economics anywhere and yet but down the road one could imagine.
Providing access to our network as well, we certainly do provide other places where we provide backhaul on the line from plenty of the larger mobile carriers. So I don't know why.
Last mile capacity as well.
Thanks.
We'll go next to Michael Beamer with plc capital.
Yes, good morning, and I have a couple of questions.
And looking at charter.
It looks to me that with 60 people.
Homes passed.
Their penetration roughly is about 68 per cent.
And the average monthly Bill was around 11, one zone.
$111.
What are you thinking in terms of guidance.
Opportunity for the total penetration.
And also what do you think is the.
Purchasing.
Ability to Hum.
Fund the spending on cable.
Relative to the average rent.
And which is approximately $900000 per month across the U S. How.
How are you thinking about debt and when you discuss debt.
Please such on the price increase that was announced at the end of last year by charter you could go through and.
And what are your thoughts about inflation, sorry, I know, it's a lot, but I really appreciate your thoughts on that.
I'm also going on right. The final chapter of the Bible over got here, but b.
The look I think if you asked Tom Rutledge, she would bleed and ultimately we're going to have.
Two thirds of the.
And we'll grow our share of the two thirds of the marketer or price perhaps.
Perhaps even more of a time, because we have the best network.
And in large parts of our market, where we can provide better customer service at a relatively low cost.
Great.
And so we really are well positioned.
In general, Yes charter has taken some price increases and it really is hard to say and because it is quite plan, where it rolls out across the nation, it's not a.
And we turned the switch and everything goes up 3%. It really is when the customers contracted and what kind of play on the Roger and what can be plants, we offered.
In General if you look at most analysis and that I've seen.
Charter has not been a price taker, we've been a share taker and.
And I think the management team and charter has done a great job of doing that where we gained share and largely faster than anyone else. Among the big cable players and your price is something that perhaps its available down the road, but not something we need to work on today, and we've got a better offering and lower price and continue to take share and.
Leave that vast that volume rather than price style, rather and the volume dial.
Yes.
Less churn and then some of the others on the market.
And as far as where it can go.
And.
We'll see that.
As you increasingly look and a world where people are going to have remote alternatives, whether it be businesses on a personal use.
And you will see increased demand for broadband and the book value and the service is likely to rise and I don't have a number on my head on.
Never really looked at or thought about them against average rent, particularly because of a lot of cases people own their homes total rental property and <unk>.
We have businesses small businesses so.
Don't necessarily think about it against threats, but.
But I do think the product as I start out as shown increasing broadband has shown increasing value to consumers and businesses alike in 2020, and I don't expect that to anticipate much.
And I just follow up with me.
Sure.
And the recent the recent.
And our success.
Liberty Media acquisition Corp.
Clearly you have access to capital.
And the people on that on the free cash flow from the <unk>.
Purchase.
And it's going to create a high class problem for you.
How are you thinking not just at.
And at Liberty broadband, but across your company and Scotty.
Think about it.
Conflicts of interest and attempting to essentially treat every shareholder properly because liberty media and your comment.
Yeah. So a couple of things I think I talked about the first and primary opportunity, we're pursuing today and Liberty broadband.
And given prices and the market and given the opportunity we see in front of us that looks pretty attractive.
And our belief and the underlying value and charter and you can charter continues to shrink its equity grow its cash flow grow its revenue grow exhibited so we're pretty enthused about that now.
Each of the companies and has been spun from Liberty media and specifically waive their conflicts of interest and in fact, we've been and just a long time and really haven't seen a lot of cases, where that's been an issue.
No.
If we see something and ecommerce that's probably likely to go into new curated if we see something around Motorsports, that's probably likely to go on to Formula one.
And if we see something around music, that's probably likely to go on to the Liberty Siri and Theres just seem to be natural homes now.
And now in the case of the stack.
Liberty media and did not waive its conflicts so any opportunities that this vaccine will first be offered to liberty media and we.
It created a position where John Malone is effectively not and the Liberty media acquisition management team and he will be the but wanted to get to decide whether to be not on the almac management team and they'll be the ones you start whether it goes and Liberty media.
But I think it's unlikely, we're really going to see that as a practical matter because.
And again, if we see something and motorsports unless its two largest scale, it's likely to be formula one and we see something that doesn't fit, particularly well it may very well be and its back so.
And we've had this conflict and attack for years, we've never really had an issue with shareholders about it because I think we're pretty we try and be transparent explain our motives and and generally try and create pure play and among the entities, we have and not happen and diversified unless there was a really good reason and in fact, one of the reasons we created this backwards.
Look at those diverse alternatives that may not fit so well with the portfolio and we have today.
Thank you and thank you as a team and Dci you've done an amazing job on.
And from shareholders.
And to continue to your long term shareholders. Thank you.
Our last question comes from Mike Garen, Switzerland.
Hey, Thanks for taking my question I have two quick ones on what it looks like GCI and moving some video subs from.
The business segment for the consumer segment I was just wondering if that is correct on that.
And some of the change in revenue.
My second question has to do with the transfer of the GCI.
GCI subsidiary that holds the charter shares.
Up to the parent can you give us more color on.
On the reasoning and the implications for that change on the org structure.
I'll take the second one.
And often it's the case and Liberty it was tax motivated and.
And that was our primary goal and I'll, let Pete do you want to comment on any or Brian and I want to comment on any changes and the video sub.
Allocation or positioning.
Yeah I'll go to that.
So when we sold the broadcast TV business, we elected to change the the unit that took the revenue what it used to go into the GCI business revenues strain because.
Broadcast we viewed as a bit more of a business play.
Without the broadcast it's just the video advertising revenue and that seemed to follow more what's the consumer revenue stream. So that's why Michael it moved from the business to the residential and it's just the advertising revenue.
Okay great.
Yes. Thank you I think that's our last question thanks to our management teams and thanks to our employees and thanks to all our listeners for their interest and Liberty broadband and Liberty Tripadvisor, We hope to speak with you next quarter if not sooner.
This does conclude today's conference we thank you for your participation.