Q1 2024 Liberty TripAdvisor Holdings Inc Earnings Call - Q&A

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Operator: Welcome to Liberty Broadband's 2024 Q1 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a question and answer session. At that time, if you have a question, please press Star 1 on your telephone. As a reminder, this conference will be recorded on May 8th. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead.

Welcome to Liberty broadband 2024, Q1 earnings call.

Claire Adams: During the presentation, all participants will be in a listen only mode.

Claire Adams: Afterwards, we will conduct a question and answer session.

Claire Adams: At time at that time, if you have a question. Please press star one on your telephone.

Operator: As a reminder, this conference will be recorded may 8th I.

Operator: I would now like to turn the call over to Claire Adams Senior manager of Investor Relations. Please go ahead.

Claire Adams: Good morning, before we begin we'd like to remind everyone that this call includes certain forward looking statements.

Claire Adams: Good morning. 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 of the 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 statement contained herein to reflect any change in Liberty Broadband's or Liberty Tripadvisor's expectations with regard to or any change in events, conditions, or circumstances on which any such statement is based.

Claire Adams: Private Securities Litigation Reform Act of 1995.

Claire Adams: 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, 10-Q sounds about 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 the Green Street advisor expressly disclaim any obligation or undertaking to meet any update.

Claire Adams: The 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.

Claire Adams: On today's call, we will discuss certain non-GAAP financial measures for Liberty Broadband, including adjusted oil. Information regarding the comparable gap metrics, along with the required definitions and reconciliations, including a 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, Libre's President and CEO. Thank you.

Claire Adams: On today's call, we'll discuss certain non-GAAP financial measures from Liberty broadband, including adjusted OIBDA.

Claire Adams: 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 the earnings releases from prior periods, which are available on Liberty broadband website.

Claire Adams: Now I'd like to introduce Greg Maffei, Liberty's, President and CEO.

Claire Adams: Thank you, Claire, and good morning to all. Today, speaking on the call, we will have Liberty Broadband's Chief Accounting and Principal Financial Officer, Brian Wendling. Ron Duncan, CEO of GCI, and Pete Pounds, CFO of GCI, will also be available to answer questions. Also, during Q&A, we will be available to answer questions related to Liberty Trip Advisor.

Greg Maffei: Clare and good morning to all.

Claire Adams: Today speaking on the call, we will have Liberty broadband chief accounting and principal financial Officer, Brian Wendling.

Speaker Change: Ron Duncan CEO of GCI and Pete pounds.

Claire Adams: Oh GCI will also be available to answer questions.

Claire Adams: Also during Q&A, we will be available to answer questions related to Liberty Tripadvisor.

Greg Maffei: So beginning with Liberty Broadband, similar to last year, earlier this year, we remained under the 26% fully delivered ownership cap, largely due to Charter's annual compensation grant. We do expect to resume sales into Charter by back this summer. And we also expect that the majority of proceeds which have historically gone to LBRD purchases will continue to go somewhere in the future. We will evaluate the best use as we receive proceeds, but I do expect in the near term, we will have a greater focus on debt reduction, so you might see some of us have a reduced pace of buyback in the near term. Looking at Charter itself, internet ads have been challenged across the industry with lower growth across the board in the first quarter. Charter experienced a 72,000 subscriber net loss.

Claire Adams: So beginning with Liberty broadband similar to last year early in the year, we remain under the 26% fully diluted ownership cap largely due to charters annual compensation grants.

Greg Maffei: We do expect to resume sales into charters buyback this summer.

Greg Maffei: And we also expect that the majority of proceeds which have historically gone to <unk> purchases will continue.

Greg Maffei: Some are going in the future.

Greg Maffei: We'll evaluate the best uses we received proceeds but I do expect in the near term, we will have a greater focus on debt reduction. So you might see some of us have a reduced pace of buyback in the near term.

Greg Maffei: Looking at charter itself.

Greg Maffei: Internet ads have been challenged across the industry with lower growth across the board in the first quarter.

Greg Maffei: Charter experienced a 72000 subscribers 2000 subscriber net loss.

Greg Maffei: Largely from continued elevated competition.

Greg Maffei: largely due to continued elevated competition, early headwinds from the upcoming ACP expiration, and reduced move activity given, among other things, historically high interest rates. However, churn does remain at historically low levels, and the company did experience solid EBITDA growth at 2.8% in the first quarter. We are comfortable management can achieve EBITDA growth throughout the year while investing in the business, and despite facing industry pressures, and they'll achieve that largely due to expense management, which is working quite well. The mobile bright spot continues to form nicely.

Greg Maffei: Early headwinds from the upcoming ACP exploration and reduced move activity given among other things historically high interest rates mortgage rates are the.

Greg Maffei: <unk> does remain at historically low levels.

Greg Maffei: And the company getting spot experienced solid EBIT growth at two 8% in the first quarter.

Greg Maffei: We are comfortable management can achieve EBITDA growth throughout the year, while investing in the business.

Greg Maffei: And despite facing industry pressures and all achieved that largely due to expense management, which is working quite well.

Greg Maffei: Mobile bright spot continues to perform nicely.

Greg Maffei: Charter surpassed $8 million in total mobile lines, and mobile service revenue accelerated 38% versus the prior year. We're quite pleased with the Spectrum 1 performance, and we're seeing improving mobile EBITDA as the promotional lines continue to roll off and the business achieves economies of scale. The Anytime Upgrade Program is going to expand our market opportunity. And we do see increased stickiness with customers. Internet churn is down versus the prior year. As many of you know, unfortunately, the ACP program was not renewed.

Greg Maffei: Charter surpassed 8 million total mobile lines and mobile service revenue accelerated to 38% versus the prior year.

Greg Maffei: Quite pleased with the spectrum one performance.

Greg Maffei: And we're seeing improving mobile internet and the promotional lines continue to roll off and the business achieve economies of scale.

Greg Maffei: The anytime upgrade program is going to expand our market opportunity.

Greg Maffei: And we do see increased stickiness with customers Internet churn is down versus the prior year.

Greg Maffei: As many of you know unfortunately, the ACP program was not renewed.

Greg Maffei: In light of that, Charter is offering a range of options to retain ATP customers, including the Spectrum Internet Assist Program, the Internet 100 product, and a retention offer of free mobile for one year. Looking briefly at the balance sheet at Charter, we do expect leverage will move toward the midpoint of the 4 to 4.5 leverage target while maintaining the buyback. Turning briefly to L-Trip. Many of you may have seen that we filed a 13-D this morning which outlined the cessation of transaction discussions with third parties.

Greg Maffei: In light of that charter is offering a range of options to retain ACB customers, including the sector spectrum Internet assist program, the Internet 100 product and a retention officer of free mobile for one year.

Greg Maffei: Looking briefly at the balance sheet at charter, we do expect leverage will move toward the midpoint of the four to four five leverage target, while maintaining our buyback this year.

Greg Maffei: Turning briefly altra.

Greg Maffei: Many of you may have seen that we filed the 13D this morning, which outlines a season.

Greg Maffei: Transaction discussions with third parties.

Greg Maffei: We do continue to discuss strategic alternatives with TripAdvisor's special... We will not be able to comment further on this unless definitive documents are executed or discussions terminated. Looking at TripAdvisor itself, TripAdvisor had a good start to the first quarter, but it did also offer more muted guidance on its call this morning. Traveling experiences remain high priorities for consumers despite geopolitical activity and inflationary pressures. At Brand TripAdvisor, hotel metaperformance was driven by sustained pricing strength, offset by lower click volume.

Greg Maffei: We do continue to discuss strategic alternatives with Tripadvisor Special Committee.

Greg Maffei: We will not be able to comment further on this unless definitive documents are executed or discussions in Germany.

Greg Maffei: Looking at Tripadvisor itself.

Greg Maffei: Tripadvisor had a good start with the first quarter, but it all did also offer more muted guidance on its call. This morning.

Greg Maffei: Travelling experiences remain high priorities for consumers, despite geopolitical activity and inflationary pressures.

Greg Maffei: Pressures.

Greg Maffei: At brand Tripadvisor Hotel meta performance was driven by sustained pricing strength offset by lower click volumes.

Greg Maffei: Trip's AI tool is continuing to scale very well. The addition of bookable experiences embedded in itineraries is generating 50% higher average revenue. Viator itself saw record app downloads. Conversion Growth and App Books. So with that, I'll turn it over to Brian.

Greg Maffei: Trips AI tool is continuing to scale very well and the addition of bookable experiences embedded in itineraries and generating 50% higher average revenue per user.

Brian: Find tour itself saw a record app downloads conversion growth and bookings.

Greg Maffei: With that I'll turn it over to Brian to discuss the financials. Thank you Greg at quarter end Liberty broadband had consolidated cash and cash equivalents of $108 million, which includes a $70 million of cash.

Brian Wendling: At quarter end, Liberty Broadband had consolidated cash and cash equivalents of $108 million, which included $70 million of cash. The value of our charter investment based on our shares held as of May 1 and the charter share price at yesterday's close was $12.3 billion. At quarter end, Liberty Broadband had a total principal amount of debt of $3.8 million. Note this excludes the preferred stock.

Brian Wendling: At GCI.

Brian Wendling: The value of our charter investment based on our shares held as of May one and charter share price at yesterday's close was $12 3 billion at.

Brian Wendling: At quarter end Liberty broadband had a total principal amount of debt of $3 8 billion note. This excludes the preferred stock.

Brian Wendling: Looking quickly at GCI, GCI's revenue and adjusted OIBD were flat in the first quarter. Growth in data revenue in both business and consumer sides was offset by declines in other revenue. The decline in other revenue was primarily driven by declines in video revenue. We note though that the video business does not generate meaningful revenue, and does not meaningfully impact margins or free cash flow.

Brian Wendling: Looking quickly at GCI GTI as revenue and adjusted OIBDA were flat in the first quarter growth in data revenue in both.

Brian Wendling: And consumer sides, what was offset by declines in other revenue the decline in the other revenue was primarily driven by declines in video revenue.

Brian Wendling: We note, though that the video business does not generate meaning it does not meaningfully impact margins or free cash flow.

Greg Maffei: Over the last year, adjusted for the reclassification from GCI Business, GCI Consumers added 3,500 revenue-generating wireless subs and saw a small decline of 200 cable motors. GCI paid down its revolver by $60 million during the quarter using strong cash from operations. At quarter end, leverage, as defined by its credit agreement, was 2.8 times, and GCI's credit facility had $457 million of undrawn capacity, net of letters of credit. Subsequent to quarter end, GCI distributed $150 million of delivery broadband, funded with cash on hand and drawing under its revolver.

Brian Wendling: Over the last year adjusted for the reclassification from GCI business GCI consumers added 3500 revenue generating wireless subs and saw a small decline of 200 cable modem customers.

Greg Maffei: GCI GCI pay down its revolver by $60 million during the quarter using strong cash from operations.

Greg Maffei: At quarter end and Leverages defined by its credit agreement was two eight times and GCI as credit facility had $457 million of Undrawn capacity net of letters of credit.

Greg Maffei: Subsequent to quarter end GCI distributed $150 million of Liberty broadband funded with cash on hand, and drawing under its revolver.

Greg Maffei: These proceeds were used to pay down the Charter Margin Loan and were therefore net debt neutral to Liberty Broadband. Pro forma for the dividend payment, GCI's leverage was just under 3.2 times with $327 million of undrawn capacity under its revolve, net of letters of credit. And with that, I'll turn the call back over to Greg.

Greg Maffei: These proceeds were used to pay down the charter margin loan and we are therefore net debt neutral to liberty broadband.

Greg Maffei: Pro forma for the dividend payment Gci's leverage was just under three two times with $327 million of Undrawn capacity under its revolver.

Greg Maffei: Net of letters of credit and with that I'll turn the call back over to Greg.

Greg Maffei: Thanks, Brian.

Greg Maffei: Thanks, Brian, and to the listening audience, we appreciate your continued interest in Liberty Broadband and Liberty Tripadvisor. And with that, Operator, I'd like to open the call.

Greg Maffei: And to the listening audience. We appreciate your continued interest in Liberty broadband and Liberty Tripadvisor and with that operator, I'd like to open the call for questions.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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 start button. Our first question today comes from Ben Swinburne of Morgan Stanley. Please proceed with your question.

Speaker Change: Thank you at this time, we'll be conducting a 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 your line is in the question queue you.

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

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: Okay.

Operator: Our first question today comes from Ben Swinburne of Morgan Stanley. Please proceed with your question.

Ben Swinburne: Thanks, Hello, again, Greg a couple of questions on charter yesterday, there was a bipartisan group of Senators introduced some and ACP extension Act.

Ben Swinburne: Thanks. Hello again.

Greg Maffei: Greg, a couple questions on charter. Yesterday, a bipartisan group of senators introduced an ACP extension act in the Senate. I don't know if you mentioned anything in your prepared remarks on this front, but I'm curious if you have any, if there's any ray of hope here that there might be a last minute kick save on ACP. And then, similarly, on charter, you know, you could probably make an argument.

Greg Maffei: In the Senate obviously.

Greg Maffei: No. If you you Didnt mentioned anything in in your prepared remarks on this front of I'm curious if you have any if there's any ray of hope here that there might be a kick save last minute on ACP and then similarly on charter.

Greg Maffei: Probably make an argument and I don't know if you would agree probably not given the liberty lens that maybe deleveraging would be better for the equity value than buying back stock here I'm. Just curious you know what your position is on that when you think about interest rates and kind of what the credit markets look like right now relative to the stock price and the company's free cash flow generation.

Greg Maffei: I don't know if you would agree, probably not, given the liberty lens, that maybe deleveraging would be better for the equity value than buying back stock here. I'm just curious, you know, what your position is on that when you think about interest rates and kind of what the credit markets look like right now relative to the stock price and the company's free cash flow generation. Thanks a lot.

Greg Maffei: Thanks, a lot.

Greg Maffei: I have to say I only just heard a little bit about the and the Senate on the ACP extension, don't know much to comment beyond it. I think there's always hope, but, you know, there is certainly a, while there is some consensus both among Republicans and Democrats for extending it, there also seems to be many procedural issues that are, you know, why it might get tied up and therefore, you know, we can't certainly count on it, you may, have noticed that both Our comments said in the near term we expect, more of the cash flow we get from charter through buybacks to reduce our debt at Liberty Broadband and I think you may have heard also that charter expect to take its leverage level down from the closer to 4 or 5 to the middle of that 4 to 4 or 5 range.

Greg Maffei: I have to say I, only just heard a little bit about the.

Greg Maffei: But after the center on the ACP extension don't know much to comment beyond it I think there's always hope, but you know.

Greg Maffei: There is certainly a a while there is some consensus both among Republicans and Democrats for extending it. There also seems to be many procedural issues. There are you know why it might get tied up in and therefore, we can't certainly count on it.

Greg Maffei: On the leverage question I think Ben.

Greg Maffei: You may have.

Greg Maffei: I have noticed that both.

Greg Maffei: Our comments said when the near term we expect to use.

Greg Maffei: More of the cash flow, we get from charter through buybacks to reduce our debt at Liberty broadband and <unk>.

Greg Maffei: You may have heard also that charter expected tickets Lebron shoveled level down from the closer to four five to the middle of that four to four five range. So I think that I've heard you at least to the degree that well I think the <unk>.

Greg Maffei: So I think they have heard you at least to the degree that while I think the company can support these levels of debt, both companies, we feel just to show the marketplace that we're responsive and the higher cost of interest, we're going to do some work on both sides to reduce the overall leverage.

Greg Maffei: A company can support these levels of debt both companies.

Greg Maffei: We feel just to show the marketplace that we're responsive and the higher cost of interest we're going to do some work both sides of the sites to reduce the overall leverage.

Speaker Change: Okay. Thank you.

Jeff Load: The next question comes from Jeff load a check of pivotal research group. Please proceed with your question.

Operator: The next question comes from Jeff Lodacek of Pivotal Research Group. Please proceed with your question.

Jeff Lodacek: Good morning again. I'll also focus on Charter. Charter's EBITDA valuation is about as cheap as it's ever been, the discount to the telcos or most of the telcos. Just wanted to get your thoughts, Greg, on the idea that maybe Charter should think about slowing down its footprint expansion and freeing up cash to do larger share repurchases. And then, assuming ACP does happen, how successful do you think Charter's gonna be with the tools that it has in not seeing some sort of ARPU hit in the second and third quarter and keeping most of those subscribers? Thanks. Thanks for the question.

Jeff Lodacek: Good morning, again also focus on charter.

Jeff Lodacek: Charters EBITA valuations, it's about as cheap as it's ever been it's.

Jeff Lodacek: As a discount to the telcos are most of the telcos just wondering to get your thoughts Greg on the idea that may be charged to think about slowing down its scope for expansion and freeing up cash to do a larger share repurchases and then you know assuming ACP does happen in.

Jeff Lodacek: How successful do you think charter is gonna be with the tools that it has and are not seeing some sort of ARP, who hit in the second and third quarter and keeping most of those oh, So that's us. Thanks.

Greg Maffei: Thanks for the question, Jeff The I think on the question of slowdown look these are attractive opportunities that they have under bes and other programs, but they are being more.

Greg Maffei: Thanks for the question, Jeff. I think on the question of slowdown, look, these are attractive opportunities that they have under B and other programs, but they are being more thoughtful about them given the alternatives and given the general move towards the market wishing to see free cash flow versus line extension. So I think Chris and his team have rightly had a very thoughtful, balanced approach to ACP. You know, I think there are a bunch of programs which are attractive and should be able to do things to mitigate the loss. I do not think they anticipate big declines in ASP, or average revenue per customer, given what we have and how many customers we have and what those programs are like.

Greg Maffei: Thoughtful about them given the alternatives and given the general move towards the market wishing to see free cash flow.

Greg Maffei: Versus versus line extension, so I think there are.

Greg Maffei: Chris and team have had a very thoughtful balanced approach.

Greg Maffei: On ACP.

Greg Maffei:

Greg Maffei: You know I think there are a bunch of programs which are attractive.

Greg Maffei: Attractive.

Greg Maffei: And will it shouldn't be able to do things to mitigate the loss I do not I do not think they anticipate Matt you know big declines in.

Greg Maffei: A S. P. Your average revenue per customer given our what we have and how many customers we have and what those programs are likely to achieve.

Speaker Change: Alright, thank you.

Speaker Change: Thanks, Jeff.

Greg Maffei: The next question comes from Barton Crockett of Rosenblatt Securities. Please proceed with your question.

Operator: The next question comes from Barton Crockett of Rosenblatt Securities. Please proceed with your question.

Barton Crockett: Okay, thanks for taking the time to answer the question. I also wanted to ask you, Greg, for thoughts on a cable question, which is: the growth of mobile seems to be kind of the bright spot in the industry right now with headwinds on broadband and pay TV at the moment, and you know there's certainly been some great arguments put out by Charter about the success of some of the buy one, get one free programs and the conversion on that.

Barton Crockett: Okay. Thanks for taking the question I also wanted to ask you crack for her thoughts on our cable question, which is the.

Barton Crockett: The growth of mobile.

Barton Crockett: It seems to be kind of the bright spot in the industry right now with some headwinds on broadband and pay TV at the moment and.

Barton Crockett: You know Theres certainly been some you know great arguments put out by charter about the success of some of the buy one get one free programs and the conversion on that.

Barton Crockett: So, Greg, I'm just wondering from your perspective, you know, given that mobile's a great growth story, but it's still pretty small, not material, not really moving the needle in terms of investor sentiment. Do you think that there's an opportunity to invest more in mobile to move quicker, to make it more material, to pursue that future where, you know, your cable companies are the dominant kind of mobile providers like they were with the plain old-fashioned telephone in years past? Do you think there's scope to do that? Just your thoughts. That would be interesting.

Barton Crockett: So Greg I was just wondering from your perspective.

Barton Crockett: You know given that mobile is a great growth story, but it's still pretty small and not material not really moving the needle in terms of investor sentiment.

Barton Crockett: Do you think that there is an opportunity to invest more in mobile to move quicker to make it more material to pursue that future where your cable companies are the dominant kind of mobile providers like they were with plain old fashioned telephone.

Barton Crockett: In years passed do you think there's scope to do that.

Barton Crockett: Just your thoughts there would be interesting.

Greg Maffei: Thanks for the question Barton.

Greg Maffei: Thanks for the question, Barton. Look, I think you're right to note that mobile has been the bright spot, and Charter really has been the most aggressive pursuer of that in the space among the cable companies. So I'm not sure how much more they can put their foot on the gas. I think, just in general, there's reduced activity coming into stores. All of that, it's just there's been a slower process.

Greg Maffei: Look I think you're right to note note that mobile has been the bright spot and charter really has been the most.

Greg Maffei: Aggressive pursuer of that in the space among the cable companies, so I'm not sure how much more.

Greg Maffei: They can put their foot on the gas the I think just in general there's reduced activity coming into stores all of that its just theres been a slower process. So they're probably getting as much out of mobile as they can right now and they are.

Greg Maffei: So they're probably getting as much out of mobile as they can right now, and they are continuing to push that product hard. And I do see future success. I remain quite bullish on their growth in mobile and how long they'll be able to continue to take share.

Greg Maffei: <unk> two.

Greg Maffei: Push that product chart, and I do see future success.

Greg Maffei: Remain quite bullish on their growth in mobile and how long they'll be able to continue to take share.

Speaker Change: Okay, and then if I could switch gears and just ask on Liberty broadband now given kind of the depressed valuation for our cable assets all over the place.

Barton Crockett: Okay, and then if I could switch gears and just ask about Liberty Broadband, you know, given the kind of depressed valuations for cable assets all over the place, is there an opportunity for Liberty Broadband to look at rolling up other cable companies?

Speaker Change: Is there an opportunity for Liberty broadband to look at rolling up other cable companies.

Speaker Change: You know generally if there is some opportunity there as the door really close on that thought at this moment.

Greg Maffei: You know, generally, is there some opportunity there? Is that door really closed on that thought at this moment? Hey Barton, I don't think the door is closed.

Greg Maffei: Hey, Barton I don't think the door is closed but in general given the synergies that.

Greg Maffei: Barton, I don't think the door is closed, but in general, given the synergies that Charter has, I think in most cases we'd be better off trying to pursue it with Charter or through Charter than doing it directly. But you can't say never. There could be one that makes more sense for us for one reason or another, or Charter's appetite is less likely. But in general, I think we're quite aligned that it's an attractive opportunity, but there aren't an enormous number that are available now that would be appealing, even given Charter's synergies.

Greg Maffei: Charter has I think in most cases, we'd be better off trying to pursue it through with charter or through charter than doing it directly but you can't say never there could be one that makes more sense for us for one reason or another or charterers appetite is less likely but.

Greg Maffei: In General I think we're quite aligned that it's an attractive opportunity, but there are an enormous number that are available now that would be appealing even given charter's synergies.

Speaker Change: Okay. Thank you.

Speaker Change: Thank you.

Greg Maffei: The next question is from Michael Rollins of Citi. Please proceed with your question.

Operator: The next question is from Michael Rowlands of Citi. Please proceed with your question.

Michael Rowlands: Thanks, and good morning, just one liberty broadband another question regarding just the broader.

Michael Rowlands: Thanks and good morning. This is Liberty Broadband. Another question regarding just the broader issues that you're currently assessing: what do you think the factors are that are driving that discount? And when you discuss the way the board is prioritizing the possibility of shrinking that discount and the methods that you want to use to do that.

Michael Rowlands: And you can discount that you're currently assessing what the factors are that are driving.

Michael Rowlands: That discount.

Michael Rowlands: And can you discuss the.

Michael Rowlands: Way to borders prioritizing the possibility of shrink net discount.

Michael Rowlands: And the message that you want to use to do that.

Michael Rowlands: Yeah, I think we've talked about how these discounts have risen in the past there are fewer it appears there are fewer funds, which arbitrage the opportunity there's more higher cost to borrow and some of those things are.

Greg Maffei: Yeah, I think, you know, we've talked about how these discounts have arisen in the past. There are fewer, it appears there are fewer funds which arbitrage the opportunity. There's a higher cost to borrow on some of those things.

Greg Maffei: You know, we've talked about all that. We're really not the key market participants to judge, but that will be here. As for what we're doing, generally, what we do is we take advantage of the discount by doing share repurchase at the discounted price. And we find that attractive.

Greg Maffei: We've talked about all of that we're really not the key market participants to judge, but that's we'll be here on our up what we're doing generally what we do is we take advantage of the discount by doing share repurchase.

Greg Maffei: At the discounted number and we find that attractive obviously that slow a little bit with the pace of charters buyback itself and.

Greg Maffei: Obviously, that's slow a little bit with the pace of charter buyback itself, and that's our primary fuel for doing incremental buyback, though we do get free cashflow at FGCI also. The ultimate mitigation of that usually comes in the form of what we've done with LSXM and SXM, or what we did with Liberty Expedia and Expedia, or what we did with Elmedia and DirecTV, where we eventually somehow spin and combine, or if it's already spun, combine our holding company with the opco and end up with a fully valued stock. So that's the ultimate resolution, and in the interim, the primary means is share repurchase to try and take advantage.

Greg Maffei: And that's our primary fuel for doing incremental buyback, though we do get free cash flow type GCI also.

Greg Maffei: <unk>.

Greg Maffei: The ultimate mitigation of that usually comes in the form of what we've done with our six seven S X M or what we did win.

Greg Maffei: Pretty expedient Expedia or what we did with Bell media and direct T V, where we edge eventually somehow spin and combine up or if it's already spun combine our holdco with the Opco and ended up with a fully valued stock. So that's the ultimate resolution and in the interim the primary means is share repurchase to try and take advantage of it.

Greg Maffei: And in terms of that resolution... Is there a significant amount of OPEC synergy or other considerations in the case of Liberty Broadband that investors should be mindful of? Oh, yes, Liberty Broadband has an

Greg Maffei: And in terms of that resolution.

Greg Maffei: Is there a significant amount of opex synergy or other considerations in the case of Liberty broadband that investors should be mindful of.

Greg Maffei: Liberty broadband Hasnt event has a some corporate overhead which would be eliminated in a any kind of a transaction and there are I suspect would be synergies between GCI in charter and GCI has the ability to do more effective purchases of programming more.

Greg Maffei: Liberty Broadband has some corporate overhead which would be eliminated in any kind of a transaction, and there, I suspect, would be synergies between GCI and Charter and GCI's ability to make more effective purchases of programming, and more effective purchases of any network elements that would probably be more efficient than GCI can do on a stand-alone basis. So, yes, there are probably some synergies.

Greg Maffei: Sector purchases of any network elements that would probably be more efficient than GCI can do on a standalone basis. So yes, there are probably some synergies there.

Greg Maffei: Thanks.

Greg Maffei: Our last question today comes from Jeff <unk> of Cove Street Capital. Please proceed with your question.

Operator: Our last question today comes from Jeff Bronchik of Cove Street Capital. Please proceed with your question.

Jeff Bronchik: Good morning, Greg. How are you? I'm going to talk about TRIP, and my quick question would be to you is, do you think the negotiations have taken a, what I call a, paramount-like situation where really, the interest is in buying the L-Trip for control, and that's meeting resistance from taking out all shareholders, or is that not relevant?

Jeff Bronchik: Good morning, Greg how are you I'm going to talk about trips and my quick question would be to you is do you think.

Jeff Bronchik: The negotiation taken a what I call a paramount like situation where.

Jeff Bronchik: Really the interest is in buying the L trip for control and that's meeting resistance.

Jeff Bronchik: From taking up all shareholders or is that not relevant.

Greg Maffei: I don't know enough about paramount, what's going on or not going on there I only read what I read and I can't I can't make the analogy or not.

Greg Maffei: I don't know enough about Paramount, what's going on or not going on there. I only read what I read, so I can't make the analogy or not.

Greg Maffei: I can say we had productive discussions with the Special Committee. We continue to have those discussions, and I don't think there is tension about any kind of a Liberty Trip premium versus trip. I don't think we've seen that tension in the discussions, and I'm afraid I really can't comment further than that.

Greg Maffei: Can say is we had a productive discussions with the special Committee. We continue to have those discussions and I don't think there is tension about any kind of a liberty trip premium versus trip I don't think we've seen that tension in the discussions and I'm afraid I really can't comment further than that.

Jeff Bronchik: Paramount, we're obviously someone with the blight to buy the Redstone stake and not have to offer all other shareholders anything. That would be my rep. Thank you.

Greg Maffei: Paramount, where obviously someone with the light to buy at the Redstone stake and not have to offer all other shareholders anything would be my reference, but thank you.

Greg Maffei: In general, I mean, you know, just to add one last point: we have worked hard to try and make sure that we treat all shareholders fairly and not disadvantage them, and I certainly haven't sought some big premium from my B position. We thought about trying and make this the best possible transaction for all shareholders. With that operator, I think we're done, and thank you to our listening audience once again, and thank you for your interest in Liberty Broadband and Liberty Trip, and we look forward to speaking with you again next quarter, if not sooner.

Jeff Bronchik: In General I mean, you know well just.

Greg Maffei: One last point, we have worked hard to try and make sure that we treat all shareholders fairly or not.

Greg Maffei: Disadvantaged and I certainly haven't sought some big premium for might be position, we've thought to try and make this the best possible transaction for all shareholders.

Speaker Change: Thank you.

Greg Maffei: In Q.

Greg Maffei: With that operator, I think we're done and thank you to our listening audience. Once again and thank you for your interest in Liberty broadband and Liberty trip and we look forward to speaking with you again next quarter if not sooner.

Greg Maffei: Yeah.

Speaker Change: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

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