Q2 2021 Liberty Broadband Corp and Liberty Tripadvisor Holdings Inc Earnings Call
[music].
Good day, ladies and gentlemen, thank you for standing by.
Welcome to the Liberty broadband 2021 quarter, 2 adding cool during the presentation. All participants will be on listen only mode. Afterwards, we will conduct a question and answer session. At this time. If you have a question. Please press star 1 on your telephone.
A reminder, this conference is being recorded August 10th I would now like to turn the conference Courtney Chun Chief portfolio Officer. Please go ahead.
Thank you before we begin we'd like to remind everyone that this call includes certain forward looking statements within the media and private Securities Litigation Reform Act of 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned and the most recent form 10-K, and 10-Q filed by and Liberty broadband and Liberty Tripadvisor with the SEC.
These forward looking statements speak only as of the date of this call and Liberty broadband and Liberty trip with Tripadvisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statement contained herein to reflect any change and liberty broadband or liberty tripadvisor expectations with regard there to or any change in events conditions or circumstances.
On which any such statement is based on today's call. We will discuss certain non-GAAP financial measures for Liberty broadband, including adjusted OIBDA information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary note and schedules 1 and 2 can be found and the earnings press release issued today, which is available on Liberty broadband.
Right now I'd like to turn the call over to Liberty, President and CEO, Greg Lefever.
Thank you Courtney and good morning floor and listeners today speaking on the call. We will also have Liberty broadband and Chief Accounting Officer, and principal financial Officer, Brian weapon.
Also during Q&A, we will answer questions related to Liberty Tripadvisor, who posted their earnings call earlier. This morning, Ron Duncan the CEO of <unk>.
And Pete pounds. The CFO GCI will also be available to answer questions. So.
So let me start.
On the numbers and Liberty broadband itself, we continue to participate and charters buyback holding our fully diluted ownership at 26%.
And from May 1 through July 31, we received $1.1 billion of proceeds.
Use these proceeds plus additional cash held at Belvieu Hardy to repurchase 7.5 million LDR D. K shares for $1.3 billion over the same period and average price per share.
$167.17.
This is a very attractive look through price for charter compared to the approximately of approximately $5.60 per share versus yesterday's close of $7.70 per share as.
As we've said before Liberty broadband is a very attractive levered play on charter and you can see debt and our results year to date, our LDR to repurchases plus strong performance and charter have accretive to our NAV per share almost 17% compared to charters growth of 15% over the same period.
As we mentioned last quarter, we expect <unk> purchases repurchases on an annual basis to match or exceed the after tax proceeds from our charter share sales.
Notably the board also increased the buyback authorization at Liberty broadband to $2.5 billion.
So turning to charter itself, which had another.
Great results residential revenue was up 6.9%.
And still over 6% adjusting for last year's Covid impacts.
Adjusted EBITDA was up 11, 8% the fourth consecutive quarter of double digit EBITDA growth at charter.
We had another strong broadband quarter.
With net adds of 400000 up meaningfully compared to the second quarter of 2019 pre COVID-19.
And mobile charter added 265000, new lines and is approaching a $3 million totaled $3 million total lines. After only 3 years of offering the service.
We are seeing a nice rebounds, and the segments that had been that were most affected by the pandemic, notably charters participating and a recovery of the advertising market and advertising revenue was up 65% over 2012% and 4% over 2019.
We also see a continued recovery in commercial revenue was strong growth of 5.6%.
So with that let me turn it over to Liberty, Tripadvisor and and Tripadvisor Liberty Leisure travel is back.
<unk> continues to lead with our hotel auction revenue, nearly reaching 2019 levels and the second quarter and trending positively throughout the quarter.
Europe has picked up recently with hotel shoppers, reaching approximately 75% on 2019 comparable levels up 45% from the first quarter.
Consolidated monthly revenue as a percent of revenue from 2000.1911, excuse me consolidate monthly revenues as a percent of 2019 revenues continued to trend up growing from 46% and April to 66% in June.
EBITDA turned positive to 25 million and the second quarter up from $51 million and from our first quarter results.
This was driven by revenue recovery as well as cost disciplines and relative to this during the pandemic and.
The majority of our 2020 fixed cost savings are expected to remain in place in 2021.
Trip during the pandemic as buildings have been building the tools to be even more relevant and travel resumes and we are differentiating our offerings and experiences and dining and we've rolled out a redesign trip app and we continue to invest and Tripadvisor plus subscription service, we expanded the tripadvisor plus to all customers use.
Customers in June and we've entered into new partnerships to enhance the value proposition, including partnering with the first major otas and trip Dot Com group, adding car rental benefits through Hertz and slight discounts through dollar flight club.
You would expect we will continue to enhance the supply offering and Tripadvisor plus 2 further OTI and direct hotel partnerships and with that I'll turn it over to Brian to discuss the financials.
Thank you Greg at quarter, and Liberty broadband had consolidated cash and cash equivalents of $219 million, which includes $41 million of cash at GCI.
The value of our charter investment based on the share that we held on August 1st the charters and closing price as of yesterday was <unk> $43 billion.
At quarter, and Liberty broadband had a total principal amount of debt of $3.8 billion, which includes $1.2 billion of debt at GCI.
During the quarter, we amended our charter margin loan, reducing pricing 35 basis points and extending the maturity by 2 years to May 2024, and connection with the amendment, we repaid $850 million under the margin loan, leaving $1..1 5 billion of Undrawn margin on capacity.
GTI continue to de lever driven by strong results. In addition, and an additional $30 million pay down on the revolver.
Average is defined and its credit agreement was 3.3 times as of quarter and <unk>.
CCI has $452 million undrawn capacity on its line of credit.
Adjusted the above amounts exclude the indemnification obligation and preferred stock.
Looking at GCI, and GC and GCI had a great second quarter revenue grew 7% and adjusted OIBDA grew 14% to $89 million driven by driven.
Driven by continued strong demand for consumer wireless and data as well as business data.
Operationally GCI added over 10000, consumer revenue generating and cable modem subscribers and nearly 10000 consumer revenue generating wireless subscribers over the past year.
With that I'll turn it back over to Greg.
Thanks, Brian.
And exciting news, our Investor meeting will be held on Thursday November 18th.
<unk> experience will be offered in person at the New York Times Center and virtually.
Please save the date and additional details will be provided soon.
And please note that all enforcement attendees and must be fully vaccinated against COVID-19.
We appreciate your continued interest and Liberty broadband and Liberty trip advisor and with that I'd like to open the line for questions operator.
Thank you if you'd like to ask a question. Please signal by pressing star 1 on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow the signal true chocolate ma'am.
And again Crestar 1 to ask a question we'll pause.
Just from mainland China and from Neptune to signal for a question.
Okay.
Well now take the last question from James Ratcliffe Evercore ISI. Please go ahead.
Thanks.
1 question for 2 people if I could.
Greg regarding charter and Ron regarding GCI can you talk about the.
Looks like to be the infrastructure, bill and both what opportunities and what risks.
And that comes that comes with it for the 2 businesses. Thanks.
Brian I'll, let you go first.
Okay.
Thanks, Greg I appreciate that.
I think a lot is up and the air right now on the infrastructure Bill in terms of exactly how it will impact the market up here, obviously, we have a substantial number of.
Locations that would fit and the Unserved category. So they would be eligible for a funding on.
Under the under the proposal.
There are some upside opportunities for GCI theres, some facilities, where we could expand our coverage building fiber up the Bethel area is something we've been trying to figure out how to put together for a long time.
And we're working with 1 group, though under the treble broadband program to see if that could come together.
There is also some risks because they are likely to be some startup operators coming in I think it's hard for people to compete with just sections of our network but.
Clearly some risk for us not necessarily of overbuilding Bud of market disruption when you put that much money that fast into the marketplace. It does create disruptions.
So I think some real challenges in terms of the anticipated timeframe I think the.
And what they anticipate in terms of the requirements for build are not particularly realistic in terms of available workforce available equipment available technology, but a lot more to be determined once the final version of the bill.
Yeah, and I would agree with Ron's comments I think for charter.
And certain markets you'll have.
And <unk>.
Increased competition doing Monday money being funded.
There's going to be a rush of.
Entities, whether it's.
States or municipalities thinking counties that you are thinking that they can and of the broadband business, whether they actually Ken we'll.
And we'll see but there will be some probably.
Impact on talent as Ron pointed out pouring all of that money and I expect and the Timeframes that things are going to get done means and a lot of cases, you'll be seeing people trying to hire.
And installers or whatever you want.
That is going to have an impact secondary impact on us and some of our markets.
The bill could have been and there are still details to be worked out as Ron rightly points out the bill could have been far worse in terms of potential for encouraging either fiber only.
100 symmetric.
And.
And in Muni overbuilt all of those things are fairly muted it appears.
And in terms of what what the most.
Radical elements would have liked.
So all and all I would say, it's it's a TBD on a lot of things, but probably not as bad as it could have been.
Thank you.
We will now take the next question from Matthew Harrigan Benchmark. Please go ahead.
Hello, and thank you Greg given your very broad prism on on CMT.
Your former EBITDA Board member Xbox and Formula 1.
What's your perspective on on really creating the apps to justify the demand from <unk>.
And your broadband.
Just the gaming sliver, but just overall I mean, it's a nice marketing proposition.
Feels like this on ways to go in terms of realizing the ladies and.
Potential thanks.
I'm, making sure I understand Matthew do I think there is going to be further opportunities around real time gaming as networks get faster and demand gets higher.
Yes, that's too low latency scheme and Bernie just everything comes over your transfer them in terms of deals and startups and ventures and all that.
Starting off with gaming as a subset.
Or what do you think really adjusted caused consumers paying of pone and you're up for a full gig or even faster broadband which is trying to become and good.
Eric where for a lot of.
And Chris from the market right now.
Well, you're right that there are certainly.
Customers, who we very much appreciate who are buying things like a gay who probably don't need it but can afford it and want to have the best.
And there's probably not that much demand for people really need a gig.
But I would say the pandemic has pointed out debt the demand.
Its certainly very high return path would be treated somewhat cavalierly has become way more important and a world of zoom and <unk>.
I expect debt that people, who have platforms like zoom and whether it be webex.
Webex or.
Blue jeans or <unk>.
Microsoft teams will continue to build.
Those platforms up and they will require and there'll be there'll be more bandwidth consuming as they buildup.
It truly is the case and I think Charlie Oregon has been articulate about this.
Debt as you build that network youll see apps develop that.
And our consumer.
Consumed the available.
You mentioned.
Net.
Breadth of experience I, certainly spent a lot of years at Microsoft.
Intel would build a new chip with more processing power and we would come up with and others with new software, which utilize that tower and I do think there is a case of.
And <unk>.
Field of dreams build it and they will come but I also think we've seen examples like as I mentioned, all the things around the pandemic from pushing the requirements of the network like things like low latency gaming, which are clearly going to benefit from increased speed, but I certainly wouldn't say I know them all today.
And we can spec them all today.
Thanks Kurt.
Operator, I believe we have no other questions. So if that is the.
The limit will think our listening audience I. Appreciate your continued interest and Liberty Tripadvisor and Liberty broadband and look forward to speaking with you again next quarter, if not earlier and seeing you in November.
Thank you operator.
That concludes today's call. Thank you for your participation you may now disconnect.
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Good day, ladies and gentlemen, thank you for standing by.
Welcome to the Liberty broadband 2021 quarter 2 earnings call.
During the presentation, all participants will be on listen only mode. Afterwards, we will conduct a question and answer session. At this time. If you have a question. Please press star 1 on your telephone.
As a reminder, this conference is being recorded August attendance I would now like to turn the conference Courtney Chun Chief portfolio Officer. Please go ahead.
Thank you before we begin we'd like to remind everyone that this call includes certain forward looking statements and the media and private Securities Litigation Reform Act and 1995 actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned and the most recent form 10-K, and 10-Q filed with Liberty broadband and Liberty trip advisor with the SEC.
These forward looking statements speak only as of the date of this call and Liberty broadband and Liberty trip with Tripadvisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change and liberty broadband and liberty Tripadvisor as expectations with regard thereto or any change in events conditions or circumstances.
And on which any such statements are based on today's call. We will discuss certain non-GAAP financial measures for Liberty broadband, including adjusted OIBDA information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary note and schedules 1 and 2 can be found and the earnings press release issued today, which is available on Liberty broadband.
Right now I would like to turn the call over to Liberty, President and CEO, Greg Maffei.
Thank you Courtney and good morning flow our listeners today speaking on the call. We will also have Liberty broadband and Chief Accounting Officer, and principal financial Officer, Brian Wendling.
Also during Q&A, we will answer questions related to Liberty Tripadvisor, who hosted their earnings call earlier this morning.
And Duncan the CEO of GCI and Pete pounds. The CFO of GCI will also be available to answer questions. So let me start.
At Liberty broadband itself, we continue to participate and charters buyback holding our fully diluted ownership at 26%.
From May 1 through July 31, we received $1.1 billion and proceeds we use these proceeds plus additional cash held at LDR D to repurchase 7.5 million LDR D. K shares for $1.3 billion over the same period at an average price per share.
$167.17.
This is a very attractive look through price for charter compared to the approximately of approximately $5.60 per share versus yesterday's close of $7.70 per share as.
As we said before Liberty broadband is a very attractive levered play on charter and you can see debt and our results year to date, our LDR day repurchases plus strong performance and charter have accrued our NAV per share almost 17% compared to charters growth of 15% over the same period.
As we mentioned last quarter, we expect <unk> purchases repurchases on an annual basis to match or exceed the after tax proceeds from our charter share sales.
Notably the board also increased the buyback authorization at Liberty broadband to $2.5 billion.
So turning to charter itself, which had another.
Great results residential revenue was up 6.9% and still over 6% adjusting for last year's Covid impacts.
Adjusted EBITDA was up 11, 8% the fourth consecutive quarter of double digit EBITDA growth at charter.
We had another strong broadband quarter.
With net adds of 400000 up meaningfully compared to the second quarter of 2019 pre COVID-19.
And mobile charter added 265000, new lines and is approaching a $3 million totaled $3 million total lines. After only 3 years offering the service.
We are seeing a nice rebounds, and the segments that have been that were most affected by the pandemic, notably charters participating and a recovery of the advertising market and advertising revenue was up 65% over 2012% and 4% over 2019.
We also see continue recovering and commercial revenue was strong growth of 5.6%.
So with that let me turn it over to Liberty, Tripadvisor and and Tripadvisor Liberty Leisure travel is back you.
<unk> continues to lead with our hotel auction revenue, nearly reaching 2019 levels and the second quarter and trending positively throughout the quarter.
Europe has picked up recently with hotel shoppers, reaching approximately 75% net 2019 comparable levels up 45% from the first quarter.
Consolidated monthly revenue as a percent of revenue from 2000, 1911, excuse me and holiday monthly revenues as a percent of 2019 revenues continued to trend up growing from 46% and April to 66% in June.
EBITDA turned positive $25 million, the second quarter up from $51 million from our.
And first quarter results. This was driven by the revenue recovery as well as cost disciplines and rescue.
During the pandemic.
The majority of our 2020 fixed cost savings are expected to remain in place and 2021.
Trip during the pandemic is building this had been building the tools to be even more relevant and travel resumes.
Our differentiating our offerings and experiences in dining and we've rolled out a redesign trip app and we continue to invest and Tripadvisor plus subscription service, we expanded the tripadvisor plus to all customers use customers day in June and we've engineered and new partnerships to enhance the value proposition, including partnering with the first.
Major Otas and trip Com group, adding car rental benefits and parts and slight discounts through dollar flight club you.
You should expect we will continue to enhance the supply offering a tripadvisor plus 2 further OTI and direct hotel partnerships and with that I'll turn it over to Brian to discuss the financials. Thank you Greg at quarter, and Liberty broadband had consolidated cash and cash equivalents of $219 million, which includes $41 million of cash and GCI.
And the value of our charter investment based on the share that we held on August 1 the charters closing price as of yesterday was <unk> $43 billion at.
At quarter, and Liberty broadband had a total principal amount of debt of $3.8 billion, which includes $1.2 billion of debt at GCI during.
During the quarter, we amended our charter margin loan, reducing pricing 35 basis points and extending the maturity by 2 years to May 2024, and connection with the amendment, we repaid $850 million under the margin loan, leaving $1.5 billion of Undrawn margin loan capacity.
GCI continue to de lever driven by strong results. In addition, and an additional $30 million pay down on the revolver Leverages defined and its credit agreement was 3.3 times as of quarter and.
GCI has $452 million undrawn capacity on its line of credit.
Note that the above amounts exclude the indemnification obligation and preferred stock.
Looking at GCI GC GCI had a great second quarter revenue grew 7% and adjusted OIBDA grew 14% to $89 million driven by Covid driven by continued strong demand for consumer wireless and data as well as business data.
Operationally GCI added over 10000, consumer revenue generating and cable modem subscribers and nearly 10000 consumer revenue generating wireless subscribers over the past year.
With that I'll turn it back over to Greg.
Thanks, Brian.
And exciting news, our Investor meeting will be held on Thursday November 18th.
<unk> experience will be offered in person at the New York Times Center and virtually.
Please save the date and additional details will be provided soon.
And please note that all enforcement attendees and must be fully vaccinated against COVID-19.
We appreciate your continued interest and Liberty broadband and Liberty Tripadvisor and with that I'd like to open the line for questions operator.
If you'd like to ask a question. Please signal by pressing star 1 on your telephone keypad, if youre using a speaker phone. Please make sure youll be exemption is turned off to allow the signal to reach our equipment.
And again Crestar 1 to ask a question we'll pause.
Just from Raymond <unk> from Nick Jansen and signal for a question.
Okay.
We will now take the last question from James Ratcliffe Evercore ISI. Please go ahead.
Thanks.
1 question for 2 people if I could.
Greg regarding charter and Ron regarding GCI can you talk about the.
Looks like to be the infrastructure, bill and both what opportunities and what risks.
And that comes that comes with it for the 2 businesses. Thanks.
Brian I'll, let you go first.
Okay.
Thanks, Greg I appreciate that.
I think a lot is up and the air right now on the infrastructure Bill in terms on exactly how it will impact the market up here, obviously, we have a substantial number of.
Locations that would fit and the Unserved category. So they would be eligible for a funding on.
Under the under the proposal.
And there are some upside opportunities for GCI theres, some facilities, where we could expand our coverage building fiber out the Bethel area is something we've been trying to figure out how to put together for a long time.
And we're working with 1 group, though under the treble broadband program to see if that could come together and there's also some risks because they are likely to be some startup operators coming and I think it's hard for people to compete with just sections of our network, but clear.
Clearly some risk for us not necessarily of overbuilding Bud of market disruption when you put that much money that fast into the marketplace. It does create disruption also I think some real challenges in terms of the anticipated timeframe. So I think.
And what they anticipate in terms of the requirements for build are not particularly realistic in terms of available workforce available equipment available technology.
Lot more to be determined and once the final version of the Bill.
Yeah, and I would agree with Ron's comments I think for charter.
And certain markets you'll have.
Yes.
Increased competition doing Monday money being funded I think theres going to be a rush of.
Entities, whether it's.
States or municipalities thinking counties that you're thinking that they can and of the broadband business, whether they actually Ken we'll.
And we'll see but there will be some probably.
Impact on talent as Ron pointed out pouring all of that money and I expect and the Timeframes that things are going to get done means and a lot of cases, you'll be seeing people trying to hire.
And installers or whatever you want.
That is going to have an impact secondary impact on us and some of our markets.
The book to Bill could have been and there are still details to be worked out as Rob rightly points out that bill could have been far worse in terms of potential for encouraging either fiber only.
100 symmetric.
Bob.
And the Muni Overbills all of those things are fairly muted it appears.
And in terms of what what the most.
Radical elements would have liked.
So all and all I would say is it's a TBD on a lot of things, but probably not as bad as it could have been.
Thank you.
We will now take the next question from Matthew Harrigan Benchmark. Please go ahead.
Hello, and thank you Greg given your very broad cruise demand on TMT.
Your former EBITDA forward number X box and a formula 1.
What's your perspective on on really created and the apps to justify the demand.
And your broadband.
Just the gaming sliver, but just overall I mean, it's a nice marketing proposition.
Feels like this on ways to go in terms of realizing the ladies and.
Potential thanks.
Uh huh.
And I am making sure I understand Matthew do I think there is going to be further opportunities around real time gaming as networks get faster and demand gets higher and is that low.
Hello, ladies and gaming, but I mean.
And just everything comes over your transit and in terms of deals and startups inventors and all that.
Starting off with gaming as a subset and they are what do you think really adjusted clause consumers paying of putting up for a full gig or even faster broadband, which has kind of become and Zurich.
Derek where for a lot of.
And from from the market right now.
Customers, who we very much appreciate who are buying things like a gay who probably don't need it but can afford it and want to have the best.
And there's probably not that much demand for people really need a gig.
But I would say the pandemic has pointed out debt to demand.
And certainly very high return path and treated somewhat cavalierly has become way more important and a world and zoom.
And I expect that the people who have platforms like zone, whether it would be.
<unk> were up.
Blue jeans or Mike.
And Microsoft teams will continue to build.
And those platforms up and they will require and there'll be there'll be more bandwidth consuming as they buildup.
It truly is the case and I think Charlie Oregon has been articulate about this.
Debt as you build that network youll see apps develop that are consumed the available.
You mentioned.
The breadth of experience I, certainly spent a lot of years at Microsoft and we are.
Until we build a new chip with more processing power and we would come up with and others with new software, which utilize that tower and I do think there is a case of.
The field of dreams build it and they will come but I also think we've seen examples like as I mentioned, all the things around the pandemic from pushing the requirements of the network like things like low latency gaming, which are clearly going to benefit from increased speed, but I certainly wouldn't say I know them all today.
And we can spec them all today.
Thanks Kurt.
Operator, I believe we have no other questions. So if that is the.
The limit will.
And our listening audience I appreciate your continued interest and Liberty Tripadvisor and Liberty broadband and look forward to speaking with you again next quarter, if not earlier and seeing you in November.
Thank you operator.
That concludes today's call. Thank you for your participation you may now disconnect.