Q4 2023 Liberty TripAdvisor Holdings Inc Earnings Call Q&A

Operator: Welcome to the Liberty Broadband 2023 Year-End Earnings Call. During the presentation, all participants will be in a listen-only mode.

Welcome to the Liberty broadband 2023 year end 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 keypad. As a reminder, this conference is being recorded today February 16th 2024.

Operator: Afterward, we will conduct a question-and-answer session. At that time, if you have a question, please press star 1 on your telephone keypad. As a reminder, this conference is being recorded today, February 16, 2024. I would now like to turn the call over to Shane Kleinstein, Senior Vice President of Investor Relations. Please go ahead.

Now I'd like to turn the call over to Shane Glenn <unk> Senior Vice President of 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, followed 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 statement contained herein to reflect any change in Liberty Broadband's or Liberty Tripadvisor's expectations with regard thereto, or any change in events, conditions, or circumstances on which any such statement is based.

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, and actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent forms 10-K, followed by Liberty broadband and Liberty Tripadvisor with the.

C C.

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 trip advisers expectations with regard there to or any change in events conditions or a circumstance.

Says 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 OIDA. Information regarding the comparable GAAP metrics, along with the 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 turn the call over to Greg Maffei, Liberty's President and CEO. Thank you, Shane, and good morning.

On today's call will discuss certain non-GAAP financial measures for Liberty broadband, including adjusted OIBDA.

Information regarding the comparable GAAP metrics, along with the 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 would like to turn the call over to Greg Maffei, Liberty's President and CEO.

Thank you Shane and good morning.

Greg Maffei: Today, speaking on the call, we will also have Liberty Broadband's Chief Accounting Officer and Principal Financial Officer, Brian Wendling. Ron Duncan, CEO of GCI, and Pete Pounds of GCI will also be available to answer questions. During Q&A, we will also be available to answer questions related to Liberty TripAdvisor. So I'm going to begin with Liberty Broadband. We resumed repurchases of our Liberty Broadband shares using proceeds from the charter share repurchase sales in October.

Today speaking on the call. We will have also Liberty broadband Chief Accounting Officer, and principal financial Officer, Brian Wendling.

Ron Duncan CEO of GCI, and Pete pounds of C. C. GCI will also be available to answer questions.

During Q&A, we will also be available to answer questions related to Liberty trip advisor, so I'm going to begin with Liberty broadband.

We resumed repurchases of our Liberty broadband shares using proceeds from the charter share repurchases sales in October.

Greg Maffei: From the 1st of November, excuse me, the 1st of November to the end of January, we repurchased $385 million of proceeds, received $385 million of proceeds from charter sales, and spent $255 million on LBRD repurchases. Number last year under our 25, 26% fully diluted ownership cap. The early 2024 grants that Charter made slowed down their repurchases or our requirements to be repurchased, and therefore, we do not expect to sell into the Charter buyback in the next few months. Once we exceed the cap of 26%, we plan to resume the LBRD buyback. Looking at Charter itself, we certainly acknowledge there were near-term headwinds, and the quarter which impacted broadband unit growth. The fourth quarter also felt the delayed impact from the Disney dispute at the end of the third quarter.

From the first of November.

So first of all wondering November to the end of January we repurchased $385 million of proceeds received during these $5 million of proceeds from charter sales.

And spent $255 million L. B R D repurchases.

Similar to last year under our 25, 26% fully diluted ownership cap.

The early 'twenty 2020 for grants the charter made slowed down their purchases or our requirements to be repurchased and therefore, we do not expect to sell into the charter back buyback in the next few months.

Once we exceed the cap of 26% we plan to pursue the L. B R D buyback.

Looking at charter itself.

We certainly acknowledge there were near term headwinds.

In the quarter, which impacted broadband unit growth.

The fourth quarter was also.

She felt the delayed impact from the Disney dispute at the end of the third quarter.

Greg Maffei: There's been a consistent trend in 2023 of increased competition for fixed wireless, but we do believe the competitive noise will lessen over time. Fixed wireless access will have capacity issues over the long term, and the operators have been clear on their limitations, and we do believe that bandwidth demands will continue to increase among consumers, which will favor higher speeds. We are long-term shareholders. We are confident that strategic investments that Charter is making will generate excellent returns and accelerate growth over the next few periods. Charter assets will provide the highest speeds and the best converged offering at the most competitive prices for consumers. Spectrum One is continuing to drive mobile growth and reduce churn. Charter was able to add 2.5 million mobile line net ads during 2023. That's nearly 50% growth over the prior year, and we saw no uptick in churn from the initial cohorts who were rolling off the promotional periods in the fourth quarter. As you would expect, internet plus mobile customers are stickier than internet-only customers.

Theres been a consistent trend in 2023 of increased competition from fixed wireless, but we do believe.

The competitive noise will lessen over time.

Fixed wireless access will have.

Capacity issues over the long term and the operators have been clear on their limitations and we do believe that.

Bandwidth demands will continue to increase among consumers, which will favor higher speeds.

We are long term shareholders.

We are confident the strategic investments that charter was making will generate excellent returns and accelerate growth.

Over the next few periods.

Charter assets will provide the highest speeds and the converged off of a converged offering at the most competitive prices for consumers.

Spectrum, one is continuing to drive mobile growth and reducing churn.

Charter was able to at $2 5 million mobile line net adds during 2023.

Nearly 50% growth over the prior year.

And we saw no uptick in churn from the initial cohorts, who are rolling off the promotional periods in the fourth quarter.

As you would expect the Internet plus mobile customers are stickier than internet only customers.

Greg Maffei: Now the positive news; Charter's world expansion is beating penetration, ARPU, and ROI targets. The network evolution of Charter remains on course, with fast, low-cost upgrades at about $100 per pass. We don't believe competitors can replicate that upgrade path over their footprint. As management has outlined, the long-term CAPEX outlook, excluding bead, is expected to maturely step down from 2027 to a normalized level. Let me touch on Liberty Trip. We filed an amendment to our 13D.

The other positive news the rural expansion is beating penetration <unk> and ROIC targets.

The network evolution of charter remains on course with fast low cost upgrades at about $100 per passing.

We don't believe competitors can replicate that upgrade path over their footprint footprint.

As management has outlined.

The long term capex outlook, excluding bead.

Expect it to materially stepped down from.

From 2027 to normalized levels.

Let me touch on Liberty trip.

We filed an amendment to our 13D.

Yeah.

Greg Maffei: We were authorized by the board to engage in acquisition discussions, and we will not comment further on those discussions unless definitive documents are executed or discussions are terminated. Looking at TripAdvisor itself, TripAdvisor had strong 2023 operating results, particularly in the back half; Q4 revenue was up 10% over the prior year. Q4 Evident and Margin Expansion Exceeded Expectations, There was outperformance at the recently renamed brand TripAdvisor. The Viator break-even profitability was reached earlier than anticipated.

We were authorized by the board to engage in acquisition discussions.

And we will not comment further on those discussions unless definitive documents are executed or discussions or terminated.

Looking at Tripadvisor itself.

Tripadvisor had a strong 2023 operating <unk>.

Results, particularly in the back half.

Q4 revenue was up 10% over the prior year.

Q4, EBITDA and margin expansion exceeded exceeded expectations.

There was outperformance at the recently renamed brand Tripadvisor.

<unk> via towards breakeven profitability was reached.

Earlier than anticipated.

Greg Maffei: And there were marketing efficiencies at Brand, Tripadvisor, and Viator that allowed us to have better than expected performance. And we continue to move on cost-shading actions, which are improving margins. We've seen great successful diversification of the revenue at TripAdvisor with the Viator and the Fork, nearly 50% of 2023 revenue. By comparison, they were less than 10% in 2015, and its experiences are now half, almost half the level of Brand Tripadvisor. We've also seen increased repeat rates among customers. For example, at Viator, the Q4 gross booking value from repeat customers exceeded new travelers for the first time.

And they were marketing efficiencies at brand Tripadvisor and Viator.

It allowed us to have better than expected performance and we continue to move on cost saving actions, which are improving margins.

We've seen great successful diversification of the revenue at Tripadvisor with the biotech and the fork.

Nearly being 50% of 2023 revenue.

In comparison, they were less than 10% in 2015.

And it's experiences are now half almost half the level of brand Tripadvisor.

We've also seen increased repeat rates among customers for example at viator.

Q4, gross booking value from repeat customers exceeded new travelers for the first time.

Brian: Management is focused on long-term strategic opportunities and Gen AI-driven product enhancements like TripTools to drive engagement and growth, and we are optimistic about those results. And with that, I'll turn it over to Brian to discuss the finale. Thank you, Greg.

Management is focused on long term strategic opportunities.

N Gen AI, driven product enhancements like trip tools to drive engagement and growth.

We think we are optimistic about those results and with that I'll turn it over to Brian to discuss the financials.

Brian: At quarter end, Liberty Broadband had consolidated cash and cash equivalents of $158 million, which included $79 million of cash at GCI. The value of our charter investment based on our shares held as of February 1st and charter share prices of yesterday's close was $13.5 million. Liberty Broadband had a total principal amount of debt of $3.8 billion.

Thank you Greg at quarter end Liberty broadband had consolidated cash and cash equivalents of $158 million, which includes $79 million of cash at GCI. The.

The value of our charter investment based on our shares held as of February 1st.

Charter share price as of yesterday's close was $13 5 billion.

At quarter end Liberty broadband had a total principal amount of debt of $3 8 billion note that this excludes the preferred stock.

Brian: We are updating our annual tax rate guidance on our charter sales for 2024 to low double digits. This conservatively assumes the DRD dividend received deduction does not apply to charter sales for the book minimum tax under the Inflation Reduction Act. We are accruing for this higher tax rate, pending additional guidance from the IRS and Treasury. I note that any book minimum tax paid for 2024 will carry forward to offset regular income tax in future years to the extent regular income tax exceeds, making this more of a timing impact.

We are updating our annual tax rate guidance on our charter sales for 2024 to low double digits.

It was conservative look conservatively assumes the D. R. D dividend received deduction does not apply to charter sales for the book minimum tax under the inflation reduction Act. We are accruing for this higher tax rate in 2024, well additional guidance from the IRS and Treasury is pending.

I note that any book minimum tax paid for 2024 will carry forward to offset regular income tax in future years to the extent regular income tax exceeds the book minimum tax.

This is more of a timing impact.

Brian: Consistent with prior years, we're not providing specific tax guidance beyond that. Looking at GCI, 2023 was a good year for the company, with record revenue and adjusted... GCI generated solid free cash flow and distributed $65 million in dividends to Liberty Broadcasting. For the full-year revenue and adjusted OIB, revenue grew 1% to $931 million and $361 million, respectively, driven by the strong performance in business data revenue, offset by declines in other revenue, primarily video and audio. In the fourth quarter, revenue was flat, and adjusted to EBITDA decreased 1%.

Consistent with prior years, we're not providing specific tax guidance beyond the current year.

Looking at G. C. I 2023 was a good year for the company with record revenue and adjusted OIBDA GCI generated solid free cash flow and distributed $65 million dividends to liberty broadband during the year.

For the full year revenue and adjusted OIBDA grew 1% to $931 million and $361 million, respectively, driven by the strong.

Performance in business data revenue offset by declines in other revenue, primarily video and voice and.

In the fourth quarter revenue was flat and adjusted OIBDA decreased 1%.

Brian: While we continue to see strong business data growth, this was offset by declines in other revenue and increased costs, primarily in S&P. Operationally, GCI added 1,400 consumer cable modem subscribers and 4,800 consumer wireless customers. GCI's leverage as defined in its credit agreement was 2.9 times at year-end, and GCI had $397 million of undrawn capacity under its revolver. We'd note that subsequent to year-end, GCI paid down an incremental $40 million under its revolving door. In 2023, GCI spent $216 million on capital expenditures, net of proceeds received from federal and state grant funding.

While we continue to see strong business data growth. This was offset by declines in other revenue and increased costs primarily in SG&A.

Operationally GCI added 1400, consumer cable modem subscribers and 4800 consumer wireless customers in 2023.

Gci's leverage as defined in its credit agreement was two nine times at year end.

<unk> has $397 million of Undrawn capacity under its revolver.

Note that subsequent to year end GCI paid down an incremental $40 million under its revolving credit facility.

In 2023, Juicy I spent $216 million on capital expenditures net of proceeds received from federal and state Grant funding.

Brian: This is above prior expectations, largely due to the timing of receiving certain grants. GCI's net capital expenditures for 2024 are expected to be approximately $200 million related to additional high-returning investments in middle and last mile connectivity with continued network expansion in our most important markets in rural Alaska, including Bethel and the AU Illusions Fiber Project. Taking a proactive approach to rural connectivity projects is critical to securing necessary government funding.

This is above prior expectations largely due to the timing of receiving certain grant proceeds G.

<unk> net capital expenditures for 2024 are expected to be approximately $200 million related to additional high returning investments in middle and last mile connectivity with continued network expansion and our most important markets in rural Alaska, including Bethel and the au Aleutians fiber projects.

Taking a proactive approach in rural connectivity projects is critical to securing necessary government funding.

And with that I'll turn the call back over to Greg.

Thank you Brian.

And to our listening audience. We appreciate your continued interest in Liberty broadband and Liberty Tripadvisor.

Greg Maffei: And with that, I'll turn the call back over to Greg. Thank you, Brian. And to our listening audience, we appreciate your continued interest in Liberty Broadband and Liberty Tripadvisor. And with that, operator, I'd like to open the line for questions. Our first questions come from the line of Michael Rollins with Citi. Please proceed with your question. Thanks. Good morning.

And with that operator, I'd like to open the line for questions.

Thank you we will now be conducting a question and answer session. Our first question comes from the line of Michael Rollins with Citi. Please proceed with your questions.

Thanks. Good morning, two questions first what are your expectation as to whether or not ETP program will be discontinued and can you share your thoughts on the possible implications for each of the GCI and charter.

Greg Maffei: Two questions. First, what are your expectations as to whether or not the ACP program will be implemented? Can you share your thoughts on the possible implications for each of GCI and Charter? Secondly, given the comments on being a long-term investor in Charter, does the current price for Charter change Liberty's interest to sell shares into Charter's buyback when needed to stay under the 26% cap? Thank you for the question. I'll address ACP and the impact of charter, my expectations, and Ron, maybe you'd like to talk about ACP and the potential impact of GCI, and then I'll come back and talk about buyback. So, uh. You know, whether the ACP will be renewed or not is certainly a guess into the future. The Wooley World of Washington; there is an enormous amount of support for it among many of the congressmen and senators, to our knowledge, and many of them are in red states, which actually receive a majority of the ACP proceeds.

And then secondly, just given the comments on being a long term investor in charter.

The current price for charter change Liberty's interest to sell shares into charters buyback when needed to stay under 26% cap. Thanks.

Thank you for the question I'll address ACP.

And in.

And the impact of charter.

My expectations, and then Ron maybe you'd like to talk about ACP and potential impact to GCI.

And then I'll come back and talk about buyback.

So.

Whether ACP will be renewed or not is a certainly a guess into the.

The Willie World of Washington.

There is a enormous amount of support for demand.

Many.

The cause of the congressmen and senators to our knowledge and many of them are in Red States, which actually receive a majority of the proceeds.

Greg Maffei: So there is some reason for optimism, but trying to assume that there is a path forward that is clear and crisp in Washington is something that's beyond my capability, impact A little unknown, many of the ACP customers at Charter were customers prior to the ACP program. We think the demands for bandwidth, the requirements that customers have for bandwidth, have grown. One of the complaints among some people in Washington is that this is a subsidy program which isn't necessary because customers want the bandwidth, and that is a reason why some may not vote against it. That, of course, is helpful for us in securing ACP funding, but it may also be correct that it indicates most customers will continue to take our broadband, even in the absence of ACP. So it's hard to speculate on how much impact eliminating ACP would have or the cessation of ACP would have, but it's clearly not a positive on the margin. Ron, would you want to add anything?

So there is some reason for optimism, but trying to assume that there was a path forward that is clear and crisp in Washington is something that's beyond my capabilities.

The.

Impact.

A little unknown many of the ACP customers at charter where customers prior to the ACP program.

We think the demand for bandwidth.

Requirements that customers have for bandwidth or only a crown.

One of the complaints amongst some.

Uh huh.

People in Washington is that this is a subsidy program, which isn't necessarily because.

Our customers want the bandwidth.

That is a reason why some may not vote against that of course is not.

It's helpful for us in getting securing ACP funding, but it may also be correct that indicates most customers will continue to.

Take our broadband even in the absence of ACP.

It's hard to speculate on how much impact.

Eliminating ACP would have or the cessation of the ACP would have but its not a positive on the margin.

Ron would you want to add anything.

Ron: Just briefly, we're expecting minimal impact from an ACP discontinuance at GCI. Most of the customers on ACP were broadband customers, to begin with, and we have budgeted a slight increase in bad debt and anticipate probably a little bit of an uptick in churn. What we were doing, reduced the churn ratio among customers who may struggle from bill to bill. But at the end of the day, I doubt that the effects of the ship are acceptable on the broadband side. We do believe there's an upside opportunity on wireless because, nationwide, half of ACP goes to wireless providers. And with our GCI Plus offering in the market being hugely less expensive than the least expensive AT&T and Verizon wireless offerings. The disappearance of ACP for wireless should create a competitive opportunity for us to grow wireless subs at the expense of AT&T and Verizon as they phase their customers off of ACP. So we see more positive things coming out of it from the wireless side. We expect very little impact on the wired side.

Just briefly we're expecting minimal impact from an HCP discontinuance of GCI in most of the customers on ACP were broadband customers to begin with.

We have budgeted a slight increase in bad debt and anticipate probably a little bit of an uptick in churn I think ACP for us was doing more to reduce the churn ratio among customers, who may struggle from bill to bill, but at the end of the day.

The effects of the ACP shift will be perceptible on the broadband side. We do believe there is an upside opportunity on wireless because nationwide half of ACP goes to wireless providers.

And with our GCI plus offering in the market being.

Hugely less expensive than the worse than the least expensive of AT&T and Verizon wireless offerings. The disappearance of ACP for wireless should create a competitive opportunity for us to grow wireless subs at the expense of AT&T and Verizon as they face their customers off of a C. P. So we see more pause.

Coming out of it from the wireless side.

Very little impact on the wired side.

Greg Maffei: I'd just add on that all those statements about wireless and the impact are likely to have the same impact or affected charter was how we're pushing that, our Spectrum One program. On the buyback issue, I think it is. The case that we believe is long-term interesting and the question about whether to raise, you know, seek to raise the cap or continue to read and therefore not sell in shares to Charter or continue to buy back at our own on the LBRD. I think, look, you see us spending the majority of proceeds from Charter on LBRD repurchases. We've also seen some amount of debt reduction at LBRD, and the reality is, because we're buying at a substantial discount to the LBRD price via the LBRD price to the underlying charter, we still have the same set of incentives to use our capital for share of purchase and LBRD rather than raise the cap today because the discount is so much larger than the tax leak. So I'm not sure it actually changes our program.

I'd just add on that but all those statements about wireless and the impact are likely to have the same impact or effect of charter was.

How we're pushing that.

Our spectrum spectrum one program.

On the buyback issue I think it's.

The case that we believe Carter's long term interesting.

And the question about whether to raise seek to raise the cap or.

We're continuing to read and therefore, not selling shares to charter or continue to buy back at around <unk>.

Our own on the LPR D. I think look you see us spending the majority of proceeds.

From charter L.

L B already repurchases, you've also seen some amount of debt.

Debt reduction and <unk> use of the capital for that.

And the reality is is because we're buying at a.

Substantial discount to the <unk> price via the LBO D price to the underlying charter.

We still have the same set of incentives to use our capital for share repurchase and that'll be our D rather than raise the cap today.

Because the discount is so much larger than the tax leakage, so I'm not sure it actually changes our program.

Thanks.

Thank you and our next.

Our next questions come from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your questions.

Greg Maffei: Our next questions come from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your question. Okay, thanks for taking the question. I was curious about some of the new skinny bundles or streaming bundles that are emerging from the media companies in terms of their legality or the appropriateness from an antitrust perspective. Specifically, the skinny sports bundle from Disney, Warner Brothers, and Fox.

Okay, all right. Thanks for taking the question.

I guess two things one just kind of big picture for Greg and then another kind of nuts and bolts on.

Numbers.

Bigger picture question, Greg is I was curious about your thoughts on that.

The new skinny bundles or streaming bundle.

That are emerging from the media companies in terms of.

The legality or the appropriateness in an anti trust perspective so.

Specifically, the skinny sports bundle fun Disney Warner Brothers Fox.

Greg Maffei: Do you believe that Charter would have the right to offer the same kind of bundle or not? And do you think there's any kind of antitrust questions there? Similarly, I guess there are some reports that Comcast and Paramount have been discussing, perhaps combining their streaming efforts, and their streaming services include a lot of content from the broadcast networks, NBC, and CBS.

Do you believe that charter would have rights to offer the same kind of bundle or not.

And do you think theres any kind of antitrust question there.

I guess there were some reports that Comcast and Paramount have been discussing.

Perhaps combining screening efforts and their streaming services include a lot of content from the broadcast networks NBC CBS.

Greg Maffei: There's a prohibition at the FCC on dual network ownership and some antitrust, I think, questions about the video market there. So, you know, how do you feel about antitrust and do you think that ends up being an issue that affects this? So that's kind of the big picture question, and I'll come back later with just a small numbers question. Okay, Barton, you know I'm only good at the big picture, so thank you for starting with that. The skinny bundles, I'm not sure how skinny that bundle is, and I'm also uncertain about the antitrust implications. I've heard knowledgeable observers on both sides of Pine, and I've not dug into it enough to have a firm view of my own.

There's a prohibition at the FCC on dual network ownership ban some antitrust I think questions about the video market there.

So how do you feel about antitrust and do you think that ends up being an issue that affects that so that's kind of the big picture question.

And then I'll come back later with you with just a small numbers question.

Okay important you know.

I'm only going to pick up.

Good on the Big picture. So thank you for starting with that.

The skinny bundles I'm not sure how skinny bundle is.

But and I'm also uncertain about the antitrust implications I've heard.

Knowledgeable observers on both sides of pine and I really have.

<unk> dug into it enough to have a firm view of my own.

The question about.

Greg Maffei: I think there is potentially an opportunity for us to be a distributor of that, and, you know, has a long-term positive than that we're making margin without risk, and we are continuing to drive demand for broadband as those packages shift. So I think in the, well, it's, you know, we certainly have not seen all of it at Charter and made a full evaluation of where it'll go. On the margin, it feels positive to me, both as an economic opportunity and as something that drives broadband.

Charter I think there is potentially an opportunity.

Sure as bundles are created that we are a distributor of that.

And.

It has long term positive then that we're making margin without risk and we are.

Continuing to drive.

Demand for.

Broadband <unk>.

Those packages shift so I think in the while it's we certainly have not seen all of it a charter and made a full evaluation of what it'll go on the margin. It feels positive to me, both as an economic opportunity and it's something which drives broadband.

Brian: Okay. Great. And then just the numbers question.

Okay, Great and then.

Brian: I want to make sure I'm clear. When you say 200 million on CapEx this year, is that comparable to the 216, or is that just on, you know, the expansion, and the actual comparable number would be something different? There's that. And then, you know, your commentary on the tax rate for sales of charter shares. Just, I mean, can you give us just a number?

The numbers question I wanted to make sure I'm clear when you say 200 million on Capex. This year is that comparable to the 2016 or is that just on.

The expansion in the actual comparable number would be something different there's that and then your commentary on the tax rate for.

Sales of our charter shares.

I mean can you give us just like a number I'm not sure I quite followed what I should assume for tax rate now.

Greg Maffei: I'm not sure I quite followed what, you know, I should assume for a tax rate. Yeah, on the tax rate. We're just giving you low double digits at this point, Barton. And then on the CapEx, yes, it's a comparable number, the 200 to the 200. Okay, thank you. Thank you. Our next questions come from the line of Ben Swinburne with Morgan Stanley. Please proceed with your question. Thank you. Good morning, Greg.

Yeah on the Italian Ron Yeah got it Brian. Thank you saturate. It we're just giving you a low double digits at this point Barton.

And then on the Capex, yes, it's a comparable it's comparable number the 200 to 216.

Okay. Thank you.

Thank you our next questions come from the line of Ben Swinburne with Morgan Stanley. Please proceed with your questions.

Thank you good morning, Greg I think that I think these are big picture. So I think for you [laughter].

Greg Maffei: I think I think these are the big picture things. So I think for you. Don't don't scare me with those details.

If you don't don't scare me were those details come out better.

Greg Maffei: Come on. I ask you the question I asked John back in November on Charter, which is, you know, why is four and a half times, you know, still the right leverage level? I think I know what your answer is, but obviously the market has spoken, at least for now, on where they think on charter stock. I'd be curious if there's a scenario where you think lower leverage is actually optimal, and then uh... looking back on the Disney dispute, and you mentioned in your prepared remarks about that weight on the sub, Do you think that the objectives and the sort of what was extracted from that agreement by Charter have been worth some Again, you know, broadband net ads have an outsized impact on Charter stock versus their video business. I'm just wondering how you feel about that.

I ask you. The question I asked John back in November on Charter, which is you know why is four and a half times still the right leverage level I think I know what your answer is but obviously the market is.

Cause has spoken at least for now on where they you know what.

What theyre thinking on charter stock so would be curious if you if there's a scenario where you think lower leverage is actually optimal.

And then you know looking back on the Disney dispute.

And you mentioned it in your prepared remarks that that's that's weighed on subs.

Do you think that the objectives and the and sort of what was extracted from that agreement by charter has been worse some of the disruption in the business again.

Broadband net adds have an outsized impact on charter stock versus their video business. So I'm just wondering how you reflect on that.

Greg Maffei: Um, you know, I'll start with the obviously the leverage part, the question, you know, is certainly we have some shareholders asking the question, and we're weighing, you know, the relative merits, but we have at the starter management team shown the board, I think, multiple scenarios about what lower leverage or higher leverage might mean. And for the moment, we're pretty confident that riding the course, given the, you know, diversity of maturities, the length of maturities, the likely movement in interest rates, that even under most scenarios, we're better off holding the four and a half times leverage. It's certainly a question that's open, you know, in the sense of the FAR. In general, we are responsive to our shareholders. I think the, I can say for the 26% holder, and I think probably, not speaking for them, but correctly relaying their views for the 12% holder at Advance Newhouse, I think we're in agreement with management's proposal that four and a half's the right number.

I'll start with you obviously with the leverage part the quest.

Question.

You know is certainly we have some shareholders asking a question and we're weighing.

The relative merits, but we have.

At the broader management team has shown the board I think multiple scenarios about what lower leverage or higher leverage might mean and for the moment, we're pretty confident that right and of course given the.

Diversity of maturities the length of maturities the likely movement in interest rates.

That even under most scenarios.

We're better off holding the four five times leverage.

It's certainly a question Thats open.

The sensitive part.

We are responsive to our shareholders in general.

Thank the.

I can say for the 26% holder and I think probably not speaking for them, but correctly relaying their views for the 12% holder in advanced in class I think we're in agreement with management's proposal four and a half the right number.

Greg Maffei: But we certainly look at it, and to the degree that there was massive pushback from shareholders, you'd want to pay attention. But I don't think we've received that yet. I think we've received questions on the margin. Um, I, you know, and I think what's happened to the stock price is not a function, it may be exacerbated by the leverage, but it's a function of perception of broadband growth and how we're doing competitively in the marketplace rather than net leverage. Yeah. Uh, Disney.

But we certainly look at it and to the degree that there was massive pushback from shareholders. You would you want to pay attention I don't think we've received that yet I think we've received questions on the margin.

And I think what's happened to the stock price is not a function there may be exacerbated by the leverage but it's a function of reception of broadband growth and how we're doing competitively in the marketplace rather than back leverage yeah.

Uh huh.

Disney.

Greg Maffei: Look, it's a long-term bet. It's a long-term play, rather than just what do we feel the impact of in a quarter or, you know, rolling bleeding into a second quarter on how to have a stable video business where we are more aligned and partnered with people like Disney. And I think you can make the same argument as we get to the sports bundle, that if it occurs or when it occurs, having ourselves aligned with them, having a role where we can be a distributor of that, and having a role in these over-the-top offerings is the right strategy for the long term, and I think management still stands by that view, and I think we're on the same page. Thank you. Thank you. Our next questions come from the line of Alex Nordhagen with Ballyathony. Please proceed with your question. Thank you for taking my questions, really around the cap stack. On the first one, it would be 2051s, the half-coupon, I'm saying coupons that are put and callable from March 25.

Look I I, it's a long term that it's a long term play.

Other than just what do we feel that impact in a quarter or.

Rowling bleeding into a second quarter on how to have a stable.

The video business, where we are more aligned and partnered with.

People like Disney and I think you can make the same argument as we get to the sports bundle that having that that.

Or when it occurs having.

Having ourselves aligned with them, having a role where we can be a distributor that.

And having a role in these over the top.

Offerings is the right strategy for long term and I think management still stands by about by that view and I think we're on the same page.

Got it thank you.

Thank you our next questions come from the line of Alex Nord hanging with Bally asked me. Please proceed with your questions.

Alright, Thank you for taking my questions I have two.

Really around the cap stack, but on the first one with the 2050 ones off coupon upside coupons that are callable from March 25.

Alex Nordhagen: What is the base case plan to deal with those, assuming that there isn't any sort of transaction? I would think you'd need to have a plan in place given the low cash balance at Liberty Trip right now. And then the second question I had was, just in theory, if, with respect to any acquisition discussions, Sir Torres was involved, would that need to be disclosed to the market or not? Thanks. Um, Ben, are you there?

What is the kind of base case plan to deal with those assuming that there isn't any sort of transaction I would think you would need to have a plan in place given the low cash balance Liberty trip right now and then the second question I had was.

Just in theory, if with respect to any acquisition discussions sitars was involved with that need to be disclosed to the market or not thanks.

Ben are you there or do you want to touch on the.

Greg Maffei: Do you want to touch on our plans? I think, you know, we're evaluating. We're not going to go into detail, but Ben, what would you want to add? Yeah, I think we monitor it regularly, Alex. We think about what the different strategies are for addressing either a repayment of those securities or an extension of maturity, but we're probably not going to go into details.

Our plans I think we're a value and we're not gonna go reveal all but what would you want to add.

Yeah, I think we monitor it regularly Alex.

We think about what the different strategies are for addressing either repayment of those securities or an extension of maturity.

We're probably not going to go into detail at this time.

Greg Maffei: And, you know, on, on. I think I've said I wouldn't comment on it further, but I'll just say, you know, I think the disclosure we made about being approached is the only disclosure we'll make until we comment further, and whether or not it was Sitaris or anybody else who made the offer is really beyond what we're going to reveal today and what we're obligated, we think, under the 13D Disclosure Okay. Thanks, Craig. And if I may just ask a follow-up question then, with the PrevSoc being callable from next month, six weeks away, do you have any intention to call it? I think I'd refer to Ben's comments earlier. We're evaluating all these things, we're looking at all our alternatives, but until such time as we make that move, we are not going, if we do, we would not, we're not going to disclose it.

Andrew.

On on.

I think I've said I wouldn't comment on any further but I'll just say you know.

I think the disclosure we made.

About being approached.

Is.

The only disclosure will make until we comment further on whether or not it was.

Tourists or anybody else, who made the offer is really oh beyond what we're willing to reveal today and what we are obligated we think under the 13D disclosure rules.

Okay.

Thanks, Greg and if I may just ask a follow up then would be good.

The prevalence of being being callable from next month six weeks away do you have any intention to call that.

I think I'd refer to Ben's comments earlier, we were evaluating all of these things we're looking at all our alternatives, but until such time as we make that move we are not going to if we do we would not.

We're not going to disclose our intention.

Greg Maffei: All right. Thank you very much. I appreciate it. Sorry to be unsatisfactory, but at least I know you tried.

Alright. Thank you very much I appreciate it says Oh, sorry, sorry to be unsatisfying, but at least which would be I know you tried it.

Greg Maffei: Thank you. Our last questions will come from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your questions. Okay, thanks. So I took the opportunity to come back. Um, right, just hopefully this qualifies as a big picture. Um, just for you.

Thank you our last question will come from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your questions.

Okay. Thanks, Todd sorry.

Or does it come back.

Frank just hopefully this qualifies as big picture.

Just for you I'm just curious the statement that fixed wireless is competitive now that won't be.

Greg Maffei: I'm curious, you know, the statement that fixed wireless is competitive now but won't be in the longer term. Can you, do you have any kind of sense in your mind of how long it will be before fixed wireless ceases to become competitive and becomes more kind of a source of win-back for cable? I say that just, you know, thinking that there's a lot of consumers out there that are feeling pretty stretched and, you know, I think would be pretty sticky for a low-priced service, but there are technical constraints. So what do you think is the timing here? Yeah, and Barton, I think I would, the way you initially stated the premise that Fixed Wireless isn't competitive, I would say that differently. I would say that there are certainly customers for whom fixed wireless is the answer they believe they need.

Over the longer term.

Can you do you have any kind of sense in your mind, how long it is before fixed wireless ceases to become.

Competitive and it becomes more kind of a source of went back for cable.

I say that just you know thinking that there's a lot of.

Consumers out there that are feeling pretty stretched.

And you know I think would be pretty sticky for a low price service, but they're technical constraint. So what do you think is the timing here.

God, Oh pardon I think I would the way you. Initially stated the premise that fixed wireless is a competitive I would say that differently I would say that there are certainly customers for whom fixed wireless is the answer they believe they need.

Greg Maffei: I think that customer set will be reduced over time as broadband demands grow, and potentially as FWA becomes less interesting as that network... more users and performance is less attractive or less. I think it's a relative thing, the relative attractiveness and the relative need for increased bandwidth, the relative attractors of that network, and the relative needs among consumers for more bandwidth. I think those will shift in our favor over time. And then the question of when capacity T-Mobile has been pretty clear about how many they're willing to go out with. You can judge how quickly it is Verizon has been less clear. I would argue Verizon has been less clear about a lot of their plans in this space.

I think that customer set will be reduced overtime as broadband demands grow.

And potentially as SWA becomes less interesting as that network as more users and performance is less attractive or less.

That's performance.

Not saying, it's a binary.

Thing I'm thinking it's a relative thing the relative attractiveness on the relative need for increased bandwidth.

Relative attractiveness of that network and the relative needs among consumers for more bandwidth I think those shift in our favor over time.

And then the question of when capacity is constrained I mean T mobile has been pretty clear about what how many they wanted to go out with and you can judge how quickly. It is Verizon has been less clear.

I would argue horizons means less clear about a lot of their plants in this space.

But if.

Greg Maffei: But if you look at reasonable expectations and what the run rate is, you can make your own judgment about when that starts to slow down. We've already seen it slow a little, and we've already seen TMO on the margin begin to increase prices for FWA, which seems to suggest that there, they're not at levitation, but they're recognizing that there's not an unlimited amount of past V-Core FW.

If you look at what reasonable expectations on what the run rate as you can make your own judgment about when that starts to slow down we've already seen it slow a little and we've already seen T. Mo in the on the margin begin to increase prices.

February which seems to suggest that there no.

That limitation, but they're recognizing that there's not an unlimited amount of coke capacity core at February.

Greg Maffei: Okay, thanks. Thank you. I believe that is our last question today. Thank you all for joining. Thank you all for your interest in Liberty Broadband and Liberty TripAdvisor. And with that, Operator, we will end today's call. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

Okay. Thanks.

Thank you.

I believe that is our last question today.

Thank you all for joining.

Thank you all for your interest in Liberty broadband and Liberty Tripadvisor.

And with that operator, we will end today's call.

Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time enjoy the rest of your day.

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