Q3 2023 Liberty Broadband Corp Earnings Call

November 3, 2023

Operator: Welcome to the Liberty Broadband 2023 Q3 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. As a reminder, this conference will be recorded 3 November 2023. I would now like to turn the call over to Shane Kleinstein, Vice President, Investor Relations. Please go ahead.

Speaker 1: Welcome to the Liberty broadband 2023 third quarter earnings call.

Welcome to the Liberty broadband 2023 third quarter earnings call.

Speaker 1: During the presentation, all participants will be in a listen-only mode. Afterwards, we will condi-

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 as a reminder, this conference will be recorded in November 3rd.

Speaker 1: At that time, if you have a question, please press star 1 on your telephone. As a reminder, this conference will be recorded.

Speaker 1: I would now like to turn the call over to Shane Kleinstein, Vice President, Investor Relations. Please go.

I would now like to turn the call over to Shane clients seen Vice President Investor Relations. Please go ahead.

Shane Kleinstein: Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the 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 in the most recent Forms 10-K and 10-Q filed by 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 TripAdvisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Liberty Broadband or Liberty TripAdvisor's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

Speaker 2: Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Form 10-K and 10-Q filed by Liberty Broadband and Liberty Trip Advisor with the SEC.

Thank you before we begin we'd like to remind everyone that this call includes certain forward looking statements within the meaning of the 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 in our most recent Form 10-K, and 10-Q filed by Liberty broadband and Liberty Tripadvisor with the SEC.

Speaker 2: These forward-looking statements speak only as of the date of this call, and Liberty Broadband and Liberty Trip Advisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Broadband or Liberty Trip Advisor's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

These forward looking statements speak only as of the date of this call and Liberty broadband and Liberty Tripadvisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward looking statement contained herein to reflect any change in liberty broadband or liberty tripadvisor its expectations with regard there to or any change in events conditions or.

Circumstances on which any such statement is based.

Shane Kleinstein: On today's call, we will discuss certain non-GAAP financial measures for Liberty Broadband, including Adjusted OIBDA. Information regarding the comparable GAAP, GAAP metrics, along with required definitions and reconciliations, including preliminary note, and schedules 1 and 2, can be found in the earnings press release issued today, as well as earnings releases for prior periods, which are available on Liberty Broadband's website. Now I'd like to introduce Greg Maffei, Liberty's President and CEO.

Speaker 2: 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 in schedules one and two, can be found in the earnings press release issued today, as well as earnings releases for prior periods, which are available on Liberty Broadband's website. Now I'd like to introduce Greg Maffei, Liberty's president and CEO . Thank you, Shane, and good morning.

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 one and two can be found in the earnings press release issued today as well as earnings releases from prior periods, which are available on Liberty broadband website, now I'd like to introduce Greg Maffei, and Liberty's President and CEO.

Greg Maffei: Thank you, Shane, and good morning to all. Today, speaking on the call, we will also have Liberty's, Liberty Broadband's Chief Accounting and Principal Financial Officer, Brian Wendling. GCI management will be available to answer questions. Also, during Q&A, we will be available to answer questions related to Liberty TripAdvisor. But please note, TripAdvisor has not yet reported their third quarter results, so we will obviously not be able to comment on the current quarter. So beginning with Liberty Broadband, we did resume selling into the Charter buyback in October. We received $48 million of proceeds, and we deployed $13.1 million into Liberty Broadband buyback at an average cost of $88.18 per share.

Thank you Shane and good morning to all.

Speaker 3: Today speaking on the call, we will also have Liberty Broadband's Chief Accounting and Principal Financial Officer Brian Wendling. GCI Management will be...

Today speaking on the call. We will also have Liberty's Liberty broadband chief accounting and principal financial Officer, Brian Wendling.

GCI management will be available to answer questions also during Q&A, we will be available to answer questions related to Liberty Tripadvisor, but please note tripadvisor has not yet reported their third quarter results. So we will obviously not be able to comment on the call.

Speaker 3: Also during Q&A, we will be available to answer questions related to Liberty TripAdvisor. But please note, TripAdvisor has not yet reported their third quarter results.

Speaker 3: So we will obviously not be able to comment on the current quarter. So beginning with Liberty broadband.

Right.

So beginning with Liberty broadband.

Speaker 3: We did resume selling into the charter buyback in October .

We did resume selling into the charter buyback in October.

Speaker 3: We received $48 million of proceeds and we deployed $13.1 million into Liberty Broadband buyback at an average cost of $88.18 per share.

We received 48 million of proceeds and we deployed $13 1 million into Liberty broadband buyback at an average cost of $88 18 per share.

Greg Maffei: We anticipate that we will continue to buy back LBRDA and K shares with the substantial majority of the after-tax proceeds we receive from Charter throughout the rest of the year. Now looking at Charter. Charter did report solid operating and financial results despite a tougher market and the Disney exchange. Charter added 63 broadband net adds. We continue to benefit from rural expansion, with 31,000 subsidized rural net adds in the Q3, and we are already achieving 50% penetration after 12 months of those net adds into customer cohorts, well above the case that those were underwritten upon. We believe this reinforces the rural investment opportunity, which we think is an attractive use of capital allocation. There is high demand for Charter services, both broadband and mobile, in those markets. Mobile strength does also continue.

Speaker 3: We anticipate that we will continue to buy back LBRDA and K-Shares with the substantial majority of the after-tax proceeds we receive from charter throughout the rest of the year.

We anticipate that we will continue to buyback L. B R. D. A N K shares with the substantial majority of the after tax proceeds we received from charter throughout the rest of the year.

And now looking at charter Charter did report solid operating and financial results, Despite a tougher market and the Disney exchange.

Speaker 3: And now looking at Charter. Charter did report solid operating and financial results despite a tougher market and the Disney exchange. Charter added 63 broadband net ads.

Charter added 63 broadband net adds we continue to benefit from rural expansion with 31000.

Speaker 3: We continue to benefit from rural expansion with 31,000 subsidized rural net ads in the third quarter. And we are already achieving 50% penetration after 12 months of those net ads and to customer cohorts well above the case that those were underwritten upon.

Subsidize rural net ads in the third quarter.

We are already of achieving 50% penetration.

After 12 months of those net adds into customer cohorts well above the case that those were underwritten upon.

Speaker 3: We believe this reinforces the rural investment opportunity, which we think is an attractive use of capital allocation.

We believe this reinforces the rural investment opportunity, which we think is an attractive use of capital allocation.

Speaker 3: There was high demand, four charter services, both broadband and mobile in those markets.

There are there was high demand for charter services, both broadband and mobile in those markets.

Speaker 3: Mobile strength does also continue. We added 594,000 mobile lines during the third quarter. We will begin to see the benefit of those in the fourth quarter, as expect from one.

Mobile strength does also continue we added 594000 mobile lines during the third quarter.

Greg Maffei: We added 594,000 mobile lines during Q3. We will begin to see the benefit of those in Q4 as Spectrum One pricing opportunities roll off, and we begin to see closer pricing on those. These free lines will begin to convert into paid lines during Q4. And as you may have heard from management last week, we've seen low churn on those conversions from our trial cohorts. We did have a successful resolution with Disney, and we believe the new agreement is beneficial for both parties and does provide a path forward for both linear and over-the-top to work together with our network partners as a carriage provider, and that's a model we think can be good for all parties going forward.

We will begin to see the benefit of those in the fourth quarter as spectrum one.

Speaker 3: pricing Opportunities roll off and we begin to see closer pricing on

Pricing.

<unk> roll off and we begin to see closer pricing on those these free lines will begin to convert.

Speaker 3: These free lines will begin to convert into paid lines during the fourth quarter. And as you may have heard from management last week, we've seen low churn on those conversions from our trial cohort.

And to paint lines during the fourth quarter and as you may have heard from management last week, we've seen low churn on those conversions from our trial cohorts.

Speaker 3: We did have a successful resolution with Disney and we believe the new agreement is beneficial for both parties and does provide a path forward for both linear and over the top to work together with our...

We did have a successful resolution with Disney and we believe the new agreement is beneficial for both parties and does provide a path forward for both linear and over the top to work together with our.

Speaker 3: our network partners as a carriage provider, and that's a model we think could be good for all parties going forward. I'd also note that ZOOMO went live a month ago. Our video platform will have which allows convenient access to both linear and DTC content with unified search and excellent discovery interface. We're excited for it. This distribution of ZOOMO across both charter and Comcast, we think could be a winner.

Our network partners as a carriage provider and that's a model we think it can be good for all parties going forward I'd.

Greg Maffei: I'd also note that Xumo went live a month ago. Our video platform, which allows convenient access to both linear and DTC content with unified search and an excellent discovery interface. We're excited for it. This distribution of Xumo across both Charter and Comcast, we think could be a winner. Finally, 2023 has been an important year of investment. We believe this investment is excellent in establishing the foundation for our ongoing growth, and there are opportunities which will be attractive headed forward, both upgrading and expanding our network, and we are pleased with the progress that was made across all these initiatives and confident that these investments will drive long-term results for Charter shareholders. Let me turn to Liberty TripAdvisor.

I'd also note that zummo went live a month ago.

Our video platform, which allows convenient access to both linear and.

DTC content with unified search and excellent discovery interface, we're excited for it.

<unk> of sumo across both charter and Comcast, we think could be a winner.

Speaker 3: Finally, 23 has been an important year of investment. We believe this investment is excellent in establishing the foundation for our on-growing growth and their opportunities, which will be attractive, headed for both upgrading and expanding our network. And we are pleased with the progress that was made across all these initiatives and confident that these investments will drive long-term results for charter share.

Finally.

23 has been an important year of investment. We believe this investment is excellent and establishing the foundation for our ongoing growth and there are opportunities, which will be attractive for both upgrading and expanding our network and we are pleased with the progress that was made across all of these initiatives and confident that these <unk>.

<unk> will drive long term results for charter shareholders.

Speaker 3: Let me turn to Liberty Trip Advisor. As I noted, Trip Advisor hasn't reported their third quarter's oath, so I'm not going to comment on that. But we do feel good about the business in a strategic direction.

Greg Maffei: As I noted, TripAdvisor hasn't reported their third quarter results, so I'm not gonna comment on that, but we do feel good about the business and its strategic direction. Liberty TripAdvisor did move to OTC trading on 30 October. This was due to non-compliance with some of the NASDAQ listing requirements. We did look at the range of alternatives and believe transitioning to OTC was the best course of action, and we do not anticipate this will have an impact or change Liberty TripAdvisor's business operations or strategy. And with that, let me turn it over to Brian to discuss the financials.

Let me turn to Liberty Tripadvisor as I noted.

Advisor hasn't reported their third quarters out so I'm not going to comment on that but we do feel good about the business and our strategic direction.

Speaker 3: Liberty TripAdvisor did move to OTC trading on October 30th. This was due to compliance. Noncompliance was some of the NASDAQ listing requirements.

Liberty Tripadvisor did move to OTC trading on October 30th.

This was due to compliance noncompliance with some of the NASDAQ listing requirements.

Speaker 3: We did look at the range of alternatives and believe transition to OTC was the best course of action and we do not anticipate this will have an impact or change Liberty Trips business operations or strategy. And with that, let me turn it over to Brian to discuss.

We did look at a range of alternatives and believe transitioned to OTC was the best course of action.

And we do not anticipate this will have an impact or change liberty trips business operations or strategy and with that let me turn it over to Brian to discuss the financials.

Brian Wendling: Thank you, Greg. At quarter end, Liberty Broadband had consolidated cash and cash equivalents of $88 million. This includes $38 million of cash at GCI. As of November 2, the value of our Charter investment was $19.4 billion. At quarter end, Liberty Broadband had total principal amount of debt of $3.9 billion. Note, this excludes the preferred, the preferred stock and the remaining indemnification obligation. After quarter end, the remaining LI LLC Charter exchangeable debentures will be redeemed, and a final indemnification payment will be made to Qurate Retail. Looking at GCI, revenue was down 3% for the quarter, and Adjusted OIBDA was relatively flat. Strength in business data revenue was offset by declines in video and voice revenue and lower handset sales year-over-year, which impacts revenue but does not significantly impact margins.

Speaker 3: Thank you, Greg. At quarter-end Liberty Broadband, had consolidated cash and cash equivalent of $88 million. This includes $38 million of cash at GCI. As of November 2nd, the value of our charter investment was 19.4 billion.

Thank you Greg.

At quarter end Liberty broadband had consolidated cash and cash equivalents of 88 million.

This includes $38 million of cash at GCI.

As of November 2nd the value of our charter investment was $19 4 billion and.

Speaker 4: And a quarter-an Liberty broadband had total principal amount of debt of 3.9 billion. Note this excludes the preferred stock and the remaining indemnification.

And at quarter end Liberty broadband had total principal amount of debt of $3 9 million note. This excludes the preferred the preferred stock and the remaining indemnification obligation.

Speaker 4: After quarter end, the remaining LI-LLC Charter Exchangeable Defenders will be redeemed and a final and identification payment will be made to curate.

After quarter end, the remaining ally LLC charter exchangeable debentures will be redeemed in our final indemnification payment will be made to curate retail.

Speaker 4: Looking at GCI, revenue was down 3% for the quarter and adjusted the way that it was relatively flat. Strength in business data revenue was offset by declines in video and voice revenue and lower hands that sales year over year, which impacts revenue but does not significantly impact March.

Looking at GCI revenue was down 3% for the quarter and adjusted OIBDA was relatively flat straw.

Strength in business data revenue was offset by declines in video and voice revenue and lower handset sales year over year, which impacts revenue, but not does not significantly impact margins. We also had the impact of a three month fiber break in June that affect that Gci's data video and wireless services provided on the <unk>.

Brian Wendling: We also had the impact of a 3-month fiber break in June that affected GCI's data, video, and wireless services provided on the North Slope in Western Alaska. The fiber break impacted both consumer and business revenue, and in the aggregate, negatively impacted revenue by approximately $5 million, with a modest impact on Adjusted OIBDA. The fiber break has since been fully repaired, which is good news. GCI has also been successful in moving consumers to its converged GCI Plus product offering, which combines GCI's flagship data product with their wireless offering and provides significant savings to the customers. This has negatively impacted GCI's ARPU, but benefits churn, as GCI customers who bundle internet and mobile have nearly 50% lower churn than standalone customers.

Speaker 4: We also had the impact of a three month fiber break in June that affected GCI's data, video, and wireless services provided on the North Slope and Western Alaska.

Slope and western Alaska, the fiber break impacted both consumer and business revenue.

Speaker 4: The fiber break impacted both consumer and business revenue, and in the aggregate, negatively impacted revenue by approximately $5 million, with a modest impact on adjusted wealth.

And in the aggregate negatively impacted revenue by approximately $5 million with a modest impact on adjusted OIBDA.

The fiber break has since been fully repaired which is good news.

Speaker 4: The fiber break has since been fully repaired, which is good news. GCI has also been successful in moving customers to its converged GCI plus product offering, which combines GCI's flagship data product with their wireless offering and provides significant savings to the customers.

GCI has also been successful in moving cost consumers towards converged GCI, plus product offering which combines GCI as flagship data product with their wireless offering and provides significant savings to the customers.

Speaker 4: This has negatively impacted GCI's R-POO, but benefits churn as GPI customers who bundle internet and mobile have nearly 50% lower churn than stand alone.

This has negatively impacted GCI is our food, but benefits churn as GPI customers, who bundle internet and mobile have nearly 50% lower churn than standalone customers.

Brian Wendling: We expect, and GCI expects margins on the products to increase over time as customers upgrade their services. Over the last year, GCI has added 3,800 revenue generating wireless subscribers and 2,100 revenue generating cable modem customers. Year to date, Liberty Broadband has received $65 million in dividends from GCI. Leverage, as defined in its credit agreement, was 3x at quarter end, and GCI has $397 million of undrawn capacity on its revolver. And with that, I'll turn the call back over to Greg.

Speaker 4: We expect, and GCI expects, margins on the products to increase over time as customers upgrade their service.

We expect to GCI expects margins on the products to increase over time as customers upgrade their services.

Over the last year GCI has added 3800 revenue generating wireless subscribers in 'twenty 100 revenue generating cable modem customers.

Speaker 4: Over the last year, GCI has added 3,800 revenue generating wireless subscribers and 2,100 revenue generating cable motor.

Speaker 4: Year to date, the rebroad ban has received 65 million indivitance from GCR.

Year to date Liberty broadband has received 65 million in dividends from GCI.

Speaker 4: Leverage is defined in its credit agreement, was three times at quarter-end, and GCI has 397 million of undrawn capacity on its revolver. And with that, I'll turn the call back over to great. And with that, I'll turn the call back over to great.

Leverage as defined in its credit agreement was three times at quarter end and GCI has $397 million of undrawn capacity on its revolver and with.

That I will turn the call back over to Greg Thanks, Brian.

Greg Maffei: Thanks, Brian. We look forward to seeing many of you next week at our annual Investor Day on Thursday, 9 November, in New York. Additional information is available on our website. John Malone and I will be hosting our annual Q&A session. If you would like to submit questions in advance, you can email investorday@libertymedia.com. We appreciate your continued interest in Liberty Broadband and Liberty TripAdvisor. And with that, operator, I would open the line for questions.

Speaker 3: We look forward to seeing many of you next week at our annual investor day on Thursday, November 9th in New York. Additional information is available on our website. John Malone and I will be hosting our annual Q&A session. If you would like to submit questions in advance, you can email and investorday at LibertyMedia.com.

We look forward to seeing many of you next week at our annual Investor Day on Thursday November 9th in New York Additional information is available on our website, John Malone and I will be hosting our annual Q&A session. If you would like to submit questions. In advance you can email investor day at Liberty Media Dot Com. We appreciate your Kinder.

Speaker 3: We appreciate your continued interest in Liberty Broadband and Liberty Trip Advisor. And with that operator, I would open the line for questions.

And your interest in Liberty broadband and Liberty Tripadvisor and with that operator, I would open the line for questions.

Operator: Thank you. We will now conduct our question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Kutgun Maral with Evercore ISI. Please state your question.

Thank you.

Speaker 1: We will now conduct our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad.

We'll now conduct a question and answer session.

I would like to ask a question. Please press star one on your telephone keypad.

Speaker 1: The confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the line.

Confirmation tone will indicate that your line is in the question queue.

You May press Star two if you would like to remove your question from the queue.

Speaker 1: for participants using speaker equipment, it may be necessary to pick up your handset before pressing the start.

Using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker 1: Our first question comes from Kutkun Mural with Evercore ISI, please state your question.

Our first question comes from could good morale with Evercore ISI. Please state your question.

Kutgun Maral: Great. Thanks for taking the question. A familiar one related to Charter. The discount seems to have recently widened quite meaningfully to historically high levels. Has that changed your approach or outlook on buybacks at Liberty Broadband? And whether it makes sense to maybe pursue opportunities to get more cash to the company to help fund these repurchases, whether it's levering up or exploring some flexibility with GCI? Thank you.

Speaker 5: Great, thanks for taking the question. A familiar one really had the charter. The discount seems to have recently widened quite meaningfully to historically high levels. Has that changed your approach or outlook on bybacks at Liberty Broadband? And whether it makes sense to maybe pursue opportunities to get more cash to the company to help fund these repurchases, whether it's levering up or exploring some flexibility with GCI. Thank you.

Great. Thanks for taking the question a familiar one related to charter the discount seems to have recently widened quite meaningfully to historically high levels. How has that changed your approach or outlook on buybacks that liberty broadband and whether it makes sense to maybe pursue opportunities to get more cash.

The company to help fund these repurchases, whether it's levering up or exploring some flexibility with GCI. Thank you.

Greg Maffei: Thank you for the question. I think the widening of the discount, while unfortunate, actually does make our strategy of share repurchase that much more attractive. We are trying to maintain a careful balance of utilizing our cash received from Charter for, as I said, the vast majority for buybacks, but also being prudent on debt levels, particularly given the increased cost. While we have very attractive pricing on our margin loans, the reality is underlying rates have gone up, and so that it's more expensive to maintain those. So we're trying to play that carefully. That's also made it probably more expensive to look at other alternatives for how to capture that, the advantage of that discount through third-party debt or something. But we will, we are looking at all those alternatives, and we'll certainly keep them in mind.

Thank you for the question.

Speaker 3: I think the widening of the discount, while unfortunate, actually does make our strategy of share purchase that much more attractive.

I think the widening of the discount while unfortunate actually does make our strategy of share repurchase that much more attractive.

Speaker 3: We are trying to maintain a careful balance of utilizing our cash received from Charter for, as I said, the vast majority for buybacks, but also being prudent on debt levels, particularly given the increased cost.

We are trying to maintain a careful balance of utilizing our cash received from charter for as I said, the vast majority for buybacks, but also being prudent on debt levels, particularly.

Given the increased cost while we are very attractive pricing on our margin loans. The reality is underlying rates have gone up and so that it's more expensive to maintain.

Speaker 3: But we have very attractive pricing on our margin loans. The reality is underlying rate to gone up.

Speaker 3: so that it's more expensive to maintain those. So we're trying to play that carefully. That's also made it probably more expensive to look at other alternatives for

Those so we're trying to play that carefully that's also made it probably more expensive to look at other alternatives for us.

Speaker 3: how to capture the advantage of that discount through third-party debt or something. But we are looking at all those alternatives and we'll certainly keep them in mind.

How to capture that the advantage of that discount to third party data or something but we what we are looking at all those alternatives and we'll certainly keep them in line.

Kutgun Maral: Thank you.

Thank you.

Operator: Thank you. Our next question comes from Ben Swinburne with Morgan Stanley. Please state your question.

Speaker 1: Thank you for your next question. Come from Ben Swinburn with Morgan Family. Please stay.

Thank you. Our next question comes from Ben Swinburne with Morgan Stanley. Please state your question.

Ben Swinburne: Thanks. Greg, how do we—should we be thinking about Liberty Broadband as a vehicle for, you know, sort of cable or fiber asset acquisitions? And I ask that because, you know, obviously, we see the cost of capital has gone up, but, you know, there were a lot of businesses funded on cheaper debt, you know, to compete with cable operators, et cetera, take advantage of broadband. There's a lot of fiber that's gone on the ground. Some of that stuff might come to market, and I didn't know if you thought we should be thinking about Liberty, you know, like we might think of other, of, of sort of private equity vehicles out there that might be looking at picking up fiber assets, telecom assets, or cable assets that might come to market, even if small.

Speaker 6: Thanks. Greg, should we be thinking about Liberty Broadbin as a vehicle for cable or fiber asset acquisitions? And I asked that because obviously we see the cost. The capital has gone up, but there were a lot of businesses funded on cheaper debt to compete with.

Thanks.

Greg.

How do we should we be thinking about liberty broadband as a vehicle for sure.

For a cable or fiber asset acquisitions, and I ask that because.

Obviously, we see the cost of capital has gone up but.

There were a lot of businesses funded on cheaper debt.

Pete.

Speaker 6: cable operators, et cetera, take advantage of broadness on a fiber that's gone on the ground. Sometimes stuff might come to market, and I didn't know if you thought we should be thinking about liberty, like we might think of other, of all sort of private equity vehicles out there that might be looking at picking up fiber assets or telecom assets or cable assets that might come to market even if small. And I just had a follow up on the charter front.

Cable operators et cetera take advantage of Brian There's a lot of fiber it's going on the ground.

Stuff might come to market and I didn't know if he thought we should be thinking about liberty.

We might think about there.

Equity vehicles out there that might be looking at picking up fiber assets or telecom assets, our cable assets and might come to market and even if it's small.

Ben Swinburne: I just had a follow-up on the Charter front.

And then I just had a follow up on the charter front.

Greg Maffei: Yeah. So Ben, thanks for the question. I think, look, we're looking at Charter as our primary vehicle for an investment in cable. Obviously, there are special situations like GCI, where we thought it was attractive, it could achieve something, and there may be other special situations that come up that we would look at. We are looking all the time, but I guess I should say we would execute on. Your point about the cost of capital going up is correct, and that's hurt others probably more than even it's hurt us, so they do create these opportunities. But I would note, as we saw in the prior question, we've also seen an expansion of the discount, which means that we're, we have a very attractive opportunity to buy what we think is a very attractive asset in Charter at a discount.

Speaker 3: Yeah, so Ben, thanks for the question. I think look, we're...

Yes, so Ben Thanks for the question I think look we're.

Speaker 3: Look at Charter as our primary vehicle for an investment in cable. Obviously, there are special situations like GCI where we thought it was attractive. It could achieve something. And there may be other special situations that come up that we would look at. We are looking all the time, but I guess I should say we would execute.

Look at charter as our primary vehicle for an investment in cable obviously, there are special situations like GCI, where we thought it was attractive to achieve something and there may be other special situations that come up that we would look at.

We are looking all the time, but I guess I should say, we would execute on your point about the cost of capital going up is correct and that's hurt others, probably more than even it's hurt us. So they do create these opportunities, but I would note as we saw on the prior question. We've also seen a expansion of the discount which means that where.

Speaker 3: Your point about the cost of capital going up is correct. And that's hurt others probably more than even it's hurt us. So they're do create these opportunities. But I would note, as we saw in the prior question, we've also seen a expansion of the discount, which means that we're...

Speaker 3: We have a very attractive opportunity to buy what we think is a very attractive asset in charter at a discount. So, you know, suddenly that alternative gets more attractive as well. So you're going to weigh all those various factors. Yeah. Thanks. Not a problem. I'm not telling you we ain't doing it, but I'm not telling. I'm also saying the bar got higher.

We have a very attractive opportunity to buy what we think is a very attractive asset and charter at a discount so you know.

Greg Maffei: You know, suddenly that alternative gets more attractive as well, so you're going to weigh all those various factors.

Suddenly that alternative gets more attractive as well. So you are going to weigh all those various factors.

Ben Swinburne: Mm-hmm. Yeah, makes sense.

Thanks.

Greg Maffei: And I'm not telling you we ain't doing it, but I'm not telling... I'm also saying the bar got higher.

I'm not telling you we are doing it but I'm not I'm also saying the bar got higher yes.

Ben Swinburne: Yeah, that makes sense. And then, you know, interestingly, if you look at Charter, one of the things they told us last week is there's gonna be more CapEx, you know, in the near term, which all else equal, lowers their buyback capacity, which lowers the cash you get to buy back your stock. I know you know all this already.

Speaker 6: Yeah, that makes sense. And then, you know, interestingly, if you look at Charger, we see a lot there.

Yes.

And then.

Interestingly, if you look at charter.

Speaker 6: One of the things they told us last week is there's going to be more cap backs, you know, in the near term, which all else equal lowers their buyback capacity, which lowers the cash you get to buy back your stock. I know you know all this already. I guess, I guess as an interesting point of view. I'm actually on the board and the finance committee, so I am aware of these factors. No, of course, of course. Yeah. As for the broader, the broader group.

One of the things they told US last week as it can be more capex you know in the near term.

Which all else equal lowers their buyback capacity, which lowers the cash you get to buyback your stock I know you know this already.

Greg Maffei: Yeah.

Ben Swinburne: I guess, as an-

Yes, I guess it is as it is.

Greg Maffei: I'm actually on the board and the finance committee, so I am aware of these facts.

Actually on the board and the Finance Committee, so I am aware of the fact.

Ben Swinburne: No, of course.

Greg Maffei: Thank you.

Ben Swinburne: Of course. Yeah. As for the broader, the broader group. You know, I guess the question is: Why are you so comfortable, because you sound more than comfortable, that this is the right strategy? That to the, you know, put your foot on the gas and then it's kind of, I'm gonna overstate it, but spend as much money as you can, as quickly as you can, for the benefit of the long-term value creation when you have, you know, in your case, a double discount, arguably-

As for the broader the broader group.

The I guess the question is why are you so comfortable because you sound more than comfortable.

Speaker 6: The, uh, you know, I guess the question is why are you so comfortable? Cause you sound more than comfortable.

Speaker 6: That this is the right strategy that you know put your foot on the gas and it's kind of I'm going to overstate it, but spend as much money as you can as quickly as you can.

That this is the right strategy that says you know put your foot on the gas, but it is kind of a I'm going to overstate it but spend as much money as you can as quickly as you can.

Speaker 6: or the benefit of the long term value creation when you have, you know, in your case, a double discount, arguably going on with

For the benefit of the long term value creation. When you have you know.

Your case, the double discount arguably going on with the charter.

Greg Maffei: Yeah

Ben Swinburne: ... going on with, Charter.

Greg Maffei: Yeah, and I would agree, there's tension there, because the buyback has gotten more attractive. Charter is cheaper than it has been at many historical levels, and as you note, Liberty Broadband, further cheaper. I think we look at the longer strategic value and the longer economic opportunity, that's there, and we probably were not, you know, we can continue to play all of these, but we do look at the opportunity that may be done with these rural programs, particularly how they're subsidized, that that opportunity is now, and that is worthwhile. And we are also, I think, with High Split, not only creating more econ opportunity, but also putting a further moat around the business.

Speaker 3: Yeah, and I would agree there's tension there, because...

Yeah, and I would I agree there is tension there.

<unk>.

Speaker 3: The buyback has gotten more attractive charter as cheaper than it has been at many historical levels and as you know Liberty Broadband further cheap.

The buyback is gotten more attractive charter is cheaper than it has been at many historical levels and as you know liberty broadband further cheaper.

Speaker 3: I think we look at the longer strategic value and the longer economic opportunity that's there. And we probably were not, you know, we can continue to play all of these, but we do look at the opportunity that may be done with these world programs, particularly how they're subsidized, that that opportunity is now, and that is worthwhile. And we are also, I think, with high split, not only.

I think we look at the longer strategic value and the longer economic opportunity.

That's there and we probably were not we.

We can continue to play off all of these but we do look as the opportunity that may be done with these world programs, particularly how theyre subsidized that that opportunity is now.

And that is worthwhile and we are also I think with high split not only.

Speaker 3: not only creating more economic opportunity, but also putting up further mode around the business. So those are important and those yield attractive economic opportunities and we will continue to try and also take advantage of the discount. So there are three sets at least of attractive investment opportunities and we're trying to waive it to all those against the long-term growth and which ones are going to be available when.

Not only creating more economic acuity, but also putting up further moat around the business. So those are important.

Greg Maffei: So those are important, and those yield attractive economic opportunities, and we will continue to try and also take advantage of the discount. So there are, you know, three sets, at least, of attractive investment opportunities, and we're trying to weigh between all those against the long-term growth, and which ones are going to be available when.

And those yields attractive economic opportunities and we will continue to try and also take advantage of the discount. So there are you know.

Three sets at least of attractive investment opportunities and we're trying to weigh between all of those against the long term growth.

And which ones are going to be available when.

Yeah.

[Company Representative] (GCI): Okay, fair enough. Thank you.

Ben Swinburne: Okay, fair enough. Thank you.

Okay fair enough. Thank you.

Greg Maffei: Yeah.

Yes.

Brian Wendling: Thank you. And our last question comes from Michael Rollins with Citi. Please state your question.

Operator: Thank you. And our last question comes from Michael Rollins with Citi. Please state your question.

Speaker 1: Thank you. And our last question comes from Michael Rollins with Citi Police.

Thank you and our last question comes from Michael Rollins with Citi. Please state your question.

Michael Rollins: Thanks, and good morning. 2, if I could. First, on GCI, can you share how the business has benefited and the customers of the business have benefited from ACP? And how you see that playing out over time in terms of whether that gets incremental funding from Congress. And then just on the broader strategic front, you know, last quarter, Greg, you made a comment that it could be logical at some point to combine Liberty Broadband and Charter. Just curious on your latest thoughts on that, and what would be the catalyst to make that logical in terms of, you know, timing and function? Thanks.

Speaker 5: Thanks and good morning, two if I could first on GCI. Can you share how the business has...

Thanks, and good morning, two if I could first on <unk>.

<unk> can you share how the business has.

Then it's bigger than the customers that the business had benefited from ECP and how you see that playing out over time in terms of whether that.

Speaker 5: The customers of the business have benefited from ACP.

Speaker 5: And how you see that playing out over time in terms of whether that gets incremental funding from Congress. And then just on the broader strategic front, last quarter.

Gets incremental funding from Congress and then.

Just on the broader strategic front last quarter, Greg you made a comment that it could be larger call at some point to combine liberty broadband and charter just curious in your latest thoughts on that and what would be the catalyst to make that logical in terms of.

Speaker 5: Greg, you made a comment that it could be logical at some point to combine Liberty broadband and charter. Just curious and your latest thoughts on that. And what would be the catalyst to make that logical in terms of timing and function? Thanks.

Timing and function.

Greg Maffei: I'll handle the second question first, and then I'll let either Ron or Pete comment on ACP, or if they don't want, Brian and I can take a shot. But on Liberty Broadband combining with Charter, I think you look, we've had these holding companies that we think have done very well and been very beneficial, in some cases, taking advantage of things like share repurchase or ridden growth in the underlying asset. But in many cases, we've also, at some point, merged them in and closed the gap between their trading. Examples of that would be, close example would be Liberty Media and DirecTV, Liberty Expedia and Expedia. Certainly cases we've gone that along the way. What's been proposed between LSXM and and SiriusXM.

Speaker 3: I'll handle the second question first and I'll let either Ron or Pete comment on ACP or if they want Brian and I can take a shot. But on Liberty Broadband, combining with Charter, I think you look, we've had these holding companies.

I'll handle the second question first and then I'll, let either Ron or Pete Com.

Comment on ACP or if they didn't want Brian I can take a shot but on liberty broadband combining with charter I think you look we've had these holding companies that we think have done very well and been very beneficial in some cases, taking advantage of things like share repurchase or written growth in the underlying ad.

Speaker 3: that we think have done very well and been very beneficial in some cases taken advantage of things like share repurchase.

Speaker 3: or ridden growth in the underlying asset, but in many cases, we've also, at some point, merged them in and closed the gap between their trading.

But in many cases, we've also at some point.

Merge them in and close the gap between their trading examples of that would be.

Speaker 3: examples of that would be close example, be limited and direct TV, liberty, expedia and expedia. Certainly cases we've gone that along the way, what's been proposed between LSXM and serious XM.

Close example would be <unk>, and Directv Liberty Expedia and Expedia.

Really cases, we've gone that along the way what's been proposed between <unk> and Sirius.

Greg Maffei: We do that when we think the logical path is pursued on why we should be independent, and it would be more beneficial to merge these entities. That day could clearly come somewhere down the road for Charter, probably will come based on our history, but we don't think that day is today. On GCI and on ACP, do Pete or Ron, do you want to take a shot?

Sirius XM.

Speaker 3: We do that when we think the logical path is pursued on why we should be independent, and it would be more beneficial to merge the identity.

We do that when we think the.

The logical path is.

Pursued on why we should be independent and it would be more beneficial to merge these entities that they could clearly come somewhere down the road for charter probably will come based on our history, but we don't think that day is today.

Speaker 3: That day could fully come somewhere down the road for charter probably will come based on our history, but we don't think that day is today

On GCI and.

Speaker 3: on GCI and on ACP to Pete or Ron, do you want to take a shot?

ACP to Pete or Ron do you want take a shot.

Yeah.

[Company Representative] (GCI): Yeah, I think... Ron, are you there or? Yeah, I'll go ahead.

Pete Pounds: Yeah, I think... Ron, are you there or? Yeah, I'll go ahead.

Yeah, I think Ron are you there.

Speaker 3: yeah i'll go ahead i'm not a search we're gonna let him get a pass unless he chooses to uh... to step into we'll let you go peat unless ron decides to want to pre-empt

Greg Maffei: Ron had knee surgery, so we're gonna let him get a pass unless he chooses to step in. So we'll let you go, Pete, unless Ron decides he wants to preempt.

Oh go ahead go ahead research, we're going to let them get a pass unless he chooses to to to step in so we will let you go Pete unless Ron decides he wants to preempt.

[Company Representative] (GCI): Sure. Yeah, I think, look, the ACP program's been a good program, helping lower-income people get good, broadband connectivity. It has been helpful for us, as far as bad debt reduction, as it's eliminated, that aspect of revenue coming in. The longevity, we'll have to see. There's kind of some upheaval that is very, very difficult to predict, how that will all pan out as far as this program going forward. But, it's been a relatively small program, but very beneficial to several thousand of our customers.

Pete Pounds: Sure. Yeah, I think, look, the ACP program's been a good program, helping lower-income people get good, broadband connectivity. It has been helpful for us, as far as bad debt reduction, as it's eliminated, that aspect of revenue coming in. The longevity, we'll have to see. There's kind of some upheaval that is very, very difficult to predict, how that will all pan out as far as this program going forward. But, it's been a relatively small program, but very beneficial to several thousand of our customers.

Speaker 7: Yeah, I think what the ATP program's been a good program, helping lower income people get good broadband connectivity. It has been helpful for us as far as bad debt reduction as it's eliminated that aspect of revenue coming in.

Yeah, I think look the ACP program. It's been a good program are helping lower income people get good broadband connectivity. It has been helpful for us as far as bad debt reduction as it is eliminated.

Broad aspect our revenue are coming in.

Speaker 7: The longevity will have to see there's kind of some upheaval that is very very difficult to predict how that will all pan out as far as this program going forward but it's been a relatively small program but very beneficial to several thousand of our customers.

The longevity, we'll have to see.

There's kind of some upheaval that is very very difficult to predict.

How how that will all pan out as far as this program going forward, but.

It's been a a.

A relatively small program, but very beneficial to.

Several thousand of our customers.

Greg Maffei: Yeah, I would just add, if I can, on that, as far as going forward, clearly, there's a lot of popularity in this program in Washington, as far as we can tell. But there also is obviously a lot of dysfunction on what will get funded, what and what timeframe in Washington. So hard to guess how that plays out.

Speaker 3: Yeah, I would just add, if like, then on that, that as far as going forward, clearly if there's a lot of popularity in this program in Washington, as far as we can tell, but there also is obviously a lot of dysfunction of what will get funded and what time frame in Washington. So hard to guess how that plays out.

Yes, I would just add if I then on that debt.

As far as going forward clearly if there is a lot of popularity in this program in Washington as far as we can tell.

But there also is obviously a lot of dysfunction of what will get funded and what timeframe in Washington, So hard to guess how that plays out.

Michael Rollins: Thanks.

Thanks.

Greg Maffei: Thank you. Operator, I think that's we are done with the questions for the day. To our listening audience, thank you for your interest in Liberty Broadband and Liberty TripAdvisor. We look forward to speaking with you, next quarter, if we don't see you in New York. And with that, operator, I think we're done.

Speaker 3: Thank you, operator. I think that's, we are done with the questions for the day to our listening audience. Thank you for your interest in Liberty Broadband and Liberty Trip Advisor. We look forward to speaking with you next quarter if we don't see you in New York. Thank you.

Thank you operator, I think we are done with the questions for the day to our listening audience. Thank you for your interest in Liberty broadband and Liberty Tripadvisor, We look forward to speaking with you.

Next quarter, if we don't see you in New York.

With that operator, I think we're done.

Brian Wendling: Thank you. And that concludes today's call. All parties may disconnect. Have a good day.

Operator: Thank you. And that concludes today's call. All parties may disconnect. Have a good day.

Speaker 1: Thank you and I conclude today's call to all part of the May disconnect to have a

Thank you and that concludes today's call. All parties may disconnect have a good day.

Q3 2023 Liberty Broadband Corp Earnings Call

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