Q2 2024 Liberty TripAdvisor Holdings Inc Earnings Call

August 8, 2024

Conference Center Representative: Conference Center. How can I help you?

Operator: Welcome to the Liberty Broadband 2024 Q2 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session.

Welcome to the Liberty Broadband 2024 Q2 Earnings Call.

Operator: 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 1 on your telephone keypad. As a reminder, this conference is being recorded today, August 8, 2024. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead.

Operator: In 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 1 on your telephone keypad. As a reminder, this conference is being recorded today, August 8, 2024. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead. Thank you.

Operator: During the presentation, all participants will be in a listen-only mode.

Operator: At that time, if you have a question, please press star one on your telephone keypad.

Operator: Afterwards, 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, August 8, 2024. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please go ahead.

Caller: I would like to connect to the Liberty Tripadvisor. Call, please.

Operator: As a reminder, this conference is being recorded today, August 8th, 2024.

Claire Adams: I would now like to turn the call over to Claire Adams, Senior Manager and Investor Relations. Please go ahead. Good morning.

Conference Center Representative: What is your first and last name? Rachel Wismeth

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 Form 10-K and 10-Q filed by Liberty Broadband and Liberty Tripadvisor with the FBI. 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.

Caller: Rachel Smith

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. 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.

Claire Adams: Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements in the meeting 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 Form 10-K and 10-K held by Liberty Broadband and Liberty Tripadvisor with the SEC. Before looking statements, speak only out of the date of this call, and Liberty Broadband and Liberty Tripadvisor expressly display any obligation or undertaking to disseminate any updates to revisions to any forward-looking statement contained herein to reflect any change in Liberty Broadband or Liberty Tripadvisor's expectations with regard there to, or any change in events, conditions, or circumstances on which any such statement is based.

Claire Adams: good morning before we beg we'd like to remind everyone that this call includ arch forward-looking statements in the meaneting of the private securities legigation reform onethousand nine five

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Claire Adams: 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 Tripadvisor with the FEC.

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Operator: Welcome to the Liberty Broadband 2024 Q2 earnings call. During the presentation, all participants will be in a listen-only mode.

Claire Adams: 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.

Claire Adams: 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.

Claire Adams: On today's call, we will discuss certain non-GAAP financial measures for Liberty Broadband, including Adjusted Width Up. Information regarding the comparable 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, Liberties President and CEO.

Claire Adams: On today's call, we will discuss certain non-GAAP financial measures for Liberty Broadband, including adjusted WISA. 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 introduce Greg Maffei, Liberties President and CEO.

Claire Adams: On today's call, we'll discuss certain non-GAB financial measures for Liberty Broadband, including adjustments. Information regarding the comparable GAB metrics along with required definitions and reconciliation, including preliminary note and schedules one and two, can be found in the earnings press release issued today as well as earnings release. This is for prior periods which are available on Liberty Broadband website.

Claire Adams: On today's call, we will discuss certain non-GAAP financial measures for Liberty Broadband, including adjusted ODSP.

Claire Adams: Information regarding the Comparable Gap 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.

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, August 8, 2024. I would now like to turn the call over to Claire Adams, Senior Manager, Investor Relations. Please do so.

Greg McCay: Now I'd like to introduce Greg McCay at Liberty's President and CEO. Thank you, Claire. Good morning to all our listeners.

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

Greg Maffei: Thank you, Claire. Good morning to all our listeners. 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 Pound, CFO of GCI, will also be available to answer questions, and during Q&A, we will answer questions if there are any related to Liberty Tripadvisor. So, beginning first with Liberty Broadband, in July, we issued $860 million in a 308 charter exchangeable.

Greg McCay: Today, speaking of the call, we will have Liberty Broadband's Chief Accounting and Principal Financial Officer, Brian Wendling; Ron Duncan, CEO of GCI; and Pete Pound, CEO of GCI, who will also be available to answer questions. And during Q&A, we will answer questions if there are any related to Liberty Tripadvisor.

Claire Adams: Thank you, Claire.

Greg Maffei: and good morning to all our listeners. 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 Pound, CFO of GCI, will also be available to answer questions.

Greg Maffei: And during Q&A, we will answer questions if there are any related to Liberty Tripadvisor.

Greg McCay: So beginning first with Liberty Broadband in July, we issued 860 million of a 3 and 8 Charter exchangeables. We used the proceeds from that offering to repay 540 million under our charter margin loan and repurchase 300 million of our existing 3 and 8 exchangeables. We also extended the margin loan maturity to 2027, and our 2026 debt maturities are now spread through 2028. As a result of these actions, we expect substantial savings.

Claire Adams: On today's call, we will discuss certain non-GAAP financial measures for Liberty Broadband, including adjusted WIDSA. 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 introduce Greg Maffei, Liberties President and CEO.

Greg Maffei: We used the proceeds from that offering to repay $540 million under our Charter Margin Loan and repurchase $300 million of our existing 3-8 and 1-8th Exchange Loans. We've also extended the margin loan maturity to 2027, and our 2020 six debt maturities are now spread through 2020, as a result of these actions. We resumed our sales at Liberty Broadband into charters back in June. With the proceeds, we will continue to take a prudent approach to retiring debt, and that is our current focus.

Greg Maffei: We used the proceeds from that offering to repay $540 million under our Charter Margin Loan and repurchase $300 million of our existing 3-Eighths and 1-Eighths Exchange. We've also extended the margin loan maturity to 2027, and our 2020 six debt maturities are now spread through 2020. As a result of these actions, we expect.

Greg Maffei: Thank you, Claire. Good morning to all our listeners. 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 Pound, CFO of GCI, will also be available to answer questions, and during Q&A, we will answer questions if there are any related to Liberty Tripadvisor. So, beginning first with Liberty Broadband. In July, we issued $860 million in a 308 charter exchangeable.

Speaker Change: So, beginning first with Liberty Broadband.

Greg Maffei: In July , we issued $860 million of a 3-1-8 charter exchangeables. We used the proceeds from that offering to repay $540 million under our charter margin loan and repurchase $300 million of our existing 3-1-8 exchangeables.

Greg Maffei: We've also extended the margin loan maturity to 2027.

Greg Maffei: And our 2020 six debt maturities are now spread through 2028.

Greg Maffei: As a result of these actions, we expect substantial interest savings.

Greg McCay: We resumed our sales at Liberty Broadband into Charter's 5 back in June. With the proceeds, we will continue to take a prudent approach about retiring debt, and that is our current focus. We will also evaluate those LBRD buybacks as cash bills from charter share repurchases. They had well-received strong results in the quarter against the competitive backdrop and the exploration of the ACP program. They reported a net subscriber loss of 149,000 broadband subs. But the majority of those were due to ACP, and the broadband trend did improve throughout the quarter, with the lowest net loss in June.

Greg Maffei: We resumed our sales at Liberty Broadband into charters back in June, and with the proceeds, we will continue to take a prudent approach about retiring debt, and that is our current focus. We will also evaluate those LBRD buybacks as cash bills from charter share repurchases, looking at the underlying company. They had well-received strong results in the quarter against a competitive backdrop and the expiration of the ACP program. They reported a net subscriber loss of 149,000 broadband subscribers, but the majority of those were due to ACP. The broadband trend did improve throughout the quarter with the lowest net loss in years.

Greg Maffei: We resumed our sales at Liberty Broadband into charters back in June; with the proceeds, we will continue to take a prudent approach about retiring debt, and that is our current focus. We will also evaluate those LBRD buybacks as cash bills from charter share repurchase. Uh... Charter, looking at the underlying company, they had well received strong results in the quarter against a competitive backdrop and the expiration of the ACP program. They reported a net subscriber loss of 149,000 broadband subscribers, but the majority of those were due to ACP. The broadband trend did improve throughout the quarter with the lowest net loss in years.

Speaker Change: We resumed our sales at Liberty Broadband into charters buyback in June .

Greg Maffei: With the proceeds, we will continue to take a prudent approach about retiring debt, and that is our current focus. We will also evaluate those LBRD buybacks as cash bills from charter sharer purchases.

Greg Maffei: We will also evaluate those LBRD buybacks as cash bills from charter share repurchase. Uh... Charter looking at the underlying company. They had well-received strong results in the quarter against a competitive backdrop and the expiration of the ACP program. They reported a net subscriber loss of 149,000 broadband subscribers, but the majority of those were due to ACP. The broadband trend did improve throughout the quarter with the lowest net loss in years.

Greg Maffei: They had well-received strong results in the quarter against a competitive backdrop and the expiration of the ACP program. They reported a net subscriber loss of 149,000 broadband subs.

Greg Maffei: But the majority of those were due to ACP.

Greg Maffei: The broadband trend did improve throughout the quarter with the lowest net loss in June .

Greg McCay: We tried to report its solidarity of a growth of 2.6% for the prior year and a 100 basis point margin improved. Management did a great job of expense management, working with the growing realization impacts of that in the second quarter. They continue to manage the cost structure without sacrifice and growth. Mobile achieved its profitability for the first time, an important milestone that reinforces the value of the mobile offering. Charter reported 557 mobile blinded additions. The Anytime Upgrade program is driving our prove as customers increasingly chose Unlimited Plus plan. The phone bioprogrammed for multi-line households to move more easily to Spectrum Mobile is also being very effective.

Greg Maffei: Charter reported solid EBITDA growth of 2.6% versus the prior year and a 100 basis point margin improvement. Management did a great job of expense management, working with the growing Realization impacts of that in the second quarter. They continue to manage the cost structure without sacrifice. Mobile achieved its profitability for the first time, an important milestone that reinforces the value of the mobile offering. Charter reported 557 mobile line net additions. The Anytime Upgrade Program is driving ARPU as customers increasingly choose the Unlimited Plus Plan. The phone buyout program for multi-line households to move more easily to SpectraMobile is also being very effective.

Greg Maffei: Charter reported solid inhibited growth of 2.6% versus the prior year and 100 basis point margin improvement. Management did a great job of expense management working with the growing Realization impacts of that in the second quarter. They continue to manage the cost structure without sacrifice. Mobile achieved its profitability for the first time, an important milestone that reinforces the value of the mobile offering. Charter reported 557 mobile devices lying at addition.

Greg Maffei: Charter reported solid EBITDA growth of 2.6% versus the prior year and a 100 basis point margin improvement. Management did a great job of expense management working with the growing Realization impacts of that in the second quarter. They continue to manage the cost structure without sacrifice. Mobile achieved its profitability for the first time, an important milestone that reinforces the value of the mobile offering. Charter reported 557 mobile devices lying at addition.

Greg Maffei: Charter reported solid inhibited growth of 2.6% versus the prior year and a hundred basis point margin improvement.

Greg Maffei: Management did a great job of expense management working with the growing realization impacts of that in the second quarter. They continue to manage the cost structure without sacrificing growth.

Greg Maffei: Mobile achieved its profitability for the first time, an important milestone that reinforces the value of the mobile offering.

Greg Maffei: Charter reported 557 mobile line net additions.

Greg Maffei: The Anytime Upgrade Program is driving ARPU as customers increasingly choose the Unlimited Plus Plan. The Phone Bio Program for Multiline Households to move more easily to Spectrum Mobile is also being very effective. We expect continued EBITDA growth in the back half of the year. We will see the AC impact mostly in the third quarter and some in the fourth, but believe Charter is managing that transition effectively. The cost initiatives continue to support the highest margins to date, and we do expect to see political spending ramp up through the year. We also expect to see continued strong mobile performance. Charter reduced leverage during the quarter to 4.32 times.

Greg Maffei: The Anytime Upgrade Program is driving ARPU as customers increasingly choose the Unlimited Plus Plan. The phone buyout program for multi-line households to move more easily to Spectrum Mobile is also being very effective. We expect continued EBITDA growth in the back half of the year. We will see the AC impact mostly in the third quarter and some in the fourth, but believe Charter is managing that transition effectively. The cost initiatives continue to support the highest margins to date, and we do expect to see political spending ramp up through the year. We also expect to see continued strong mobile performance. Charter reduced leverage during the quarter to 4.32 times.

Greg Maffei: The Anytime Upgrade Program is driving ARPU as customers increasingly chose Unlimited Plus Plan.

Greg Maffei: the phone biioprogram for multilline households to move more easily to spectctor mobile is also being very effective

Greg McCay: We expect continued Ibutta growth to the back half of the year. We will see the AC impact mostly in the third quarter and some in the fourth, but believe Charter is managing that transaction effectively. The cost initiatives continue to support the highest margin to date, and we do expect to see political spending ramped to the year. We also expect to see continued strong mobile performance. Charter reduced leverage during the quarter to 4.32 times. Charter expected to continue to move closer to the middle of the target of the four to four and a half times leverage range throughout the year.

Greg Maffei: We expect continued EBITDA growth in the back half of the year. We will see the AC impact mostly in the third quarter and some in the fourth, but believe Charter is managing that transition effectively. The cost initiatives continue to support the highest margins to date, and we do expect to see political spending ramp up through the year. We also expect to see continued strong mobile performance. Charter reduced leverage during the quarter to 4.32 times. Charter expects to continue to move closer to the middle of the target of the 4 to 4.5 times leverage range throughout. Turning now to Liberty Trip.

Greg Maffei: We expect continued EBITDA growth to the back half of the year. We will see the AC impact mostly in the third quarter and some in the fourth, but believe Charter is managing that transition effectively.

Greg Maffei: The cost initiatives continue to support the highest margins to date, and we do expect to see political spending ramped through the year. We also expect to see continued strong mobile performance. Charter reduced leverage during the quarter to 4.32 times.

Greg Maffei: The Charter expects to continue to move closer to the middle of the target of the 4 to 4.5 times leverage range throughout. Turning now to Liberty Trip. We continue to evaluate strategic alternatives with TripAdvisor's special committee. We will not be able to comment further until or unless definitive documents are executed or discussions take place looking at TripAdvisor itself. During the quarter, it felt continued pressure on Hotel Meta in Brand TripAdvisor from both SEO and SEM structural challenges with weaker demand and increased competition.

Greg Maffei: The Charter expects to continue to move closer to the middle of the target of the 4 to 4.5 times leverage range throughout. Turning now to Liberty Trip. We continue to evaluate strategic alternatives with TripAdvisor's Special Committee. We will not be able to comment further until or unless definitive documents are executed or discussions take place looking at TripAdvisor itself. During the quarter, it felt continued pressure on Hotel Meta and Grand Trip Advisor from both SCO and SCM structural challenges with weaker demand and increased competition.

Greg Maffei: and Charter expects to continue to move closer to the middle of the target of the 4 to 4.5 times leverage range throughout the year.

Greg McCay: Turning down to Liberty Trip, we continue to evaluate strategic alternatives with TripAdvisor Special Committee, and we will not be able to comment further until or unless the definitive documents are executed for discussions terminated. Looking at TripAdvisor itself during the quarter, it felt continued pressure on hotel meta in brand TripAdvisor from both SCO and SEM structural challenges, with weaker demand and increased competition. However, positive early votes from strategy work launched last year are beginning to take hold. We've seen a growing share of app users and direct channel activity where there's more monetization opportunity available. Members using Trip's planning tool have a 15 times higher output than the platform-wide average.

Greg Maffei: We continue to evaluate strategic alternatives with TripAdvisor's Special Committee. We will not be able to comment further until or unless definitive documents are executed or discussions take place looking at TripAdvisor itself. During the quarter, TripAdvisor felt continued pressure on Hotel Meta and Grand Trip Advisor from both SCO and SCM structural challenges with weaker demand and increased competition.

Greg Maffei: Turning now to Liberty Trip.

Greg Maffei: we continue to evaluate strategic alternatives with trip advisor special committee

Greg Maffei: and we will not be able to comment further until or unless definitive documents are executed or discussions terminate.

Greg Maffei: looking at priadvisor itself

Greg Maffei: During the quarter, it felt continued pressure on HotelMedic in Brand TripAdvisor from both SEO and SEM structural challenges with weaker demand and increased competition.

Greg Maffei: However, positive early votes from strategy work launched last year are beginning to take hold. We've seen a growing share of app users and direct channel activity where there's more monetization opportunities available. Members using TRIPS Planning Tool have a 15 times higher ARPU than the platform-wide average. This strategy is designed to drive mix-shift over time from legacy offerings to focus on member value, a differentiated app experience, and engaging product value. For example, AI-powered review summaries and hotel booking directly into the app and user upgrades are much more effective and better monetization opportunities for us.

Greg Maffei: However, positive early revolts from strategy work launched last year are beginning to take hold. We've seen a growing share of app users and direct channel activity where there's more monetization opportunities available. Members using TRIPS Planning Tool have a 15 times higher ARPU than the platform-wide average. The strategy is designed to drive mix-shift over time from legacy offerings to focus on member value, a differentiated app experience, and engaging product value. For example, AI-powered review summaries and hotel booking directly into the app and user upgrades are much more effective and better monetization opportunities for us.

Greg Maffei: However, positive early revolts from strategy work launched last year are beginning to take hold. We've seen a growing share of app users and direct channel activity where there's more monetization opportunities available. Members using TRIPS Planning Tool have a 15 times higher ARPU than the platform-wide average. This strategy is designed to drive a makeshift over time from legacy offerings to focus on member value, a differentiated app experience, and engaging product value. So with that, I'll turn it over to you.

Greg Maffei: However,

Greg Maffei: Positive early revolts from strategy work launched last year are beginning to take hold. We've seen a growing share of app users and direct channel activity where there's more monetization opportunity available.

Greg Maffei: members using tripps planning tool have a fifteen times higher arpu than the platform wide average

Greg McCay: Strategy is designed to mix drive-mix shift over time from legacy offerings to focus on member value, a differentiated app experience, and engaging product features. For example, AI-powered review summaries and hotel booking directly into the app, and user upgrades are much more effective and better monetization opportunities for us. Looking at the other businesses within Trip, via tour in the fork both increase their competition rather to the product mix. Via tour saw a doubling of active bookers who log into the app, which led to higher conversion, better repeat rates, and GBB growth.

Greg Maffei: The strategy is designed to drive mix shift over time from legacy offerings to focus on member value, a differentiated app experience, and engaging product features.

Greg Maffei: For example, AI-powered review summaries and hotel booking directly into the app and user upgrades are much more effective and better monetization opportunities for us.

Greg Maffei: Looking at the other businesses within TRIP, Viator and The Fork both increased their contribution to the profit mix. Viator saw a doubling of active bookers who logged into the app, which led to higher conversion, better repeat rates, and GBV growth.

Greg Maffei: Looking at the other businesses within TRIP, Viator and The Fork both increased their contribution to the profit mix. Viator saw a doubling of active bookers who log into the app, which led to higher conversion, better repeat rates, and GBV growth.

Speaker Change: Looking at the other businesses within TRIP, Viator and The Fork both increased their contribution to the profit mix. Viator saw a doubling of active bookers who log into the app, which led to higher conversion, better repeat rates, and GBV growth.

Brian Wendling: So, with that, I'll turn it over to Brian to discuss it. Thank you, Greg. At quarter end, Liberty Broadband had consolidated cash and cash equivalents of 73 million, which includes 47 million of cash at GCI. Value of our charter investment based on our share's health is of August first, and charter share price as of yesterday's close was 16.2 billion. And at quarter end, Liberty Broadband had a total principal amount of debt of 3.7 billion, including the debt at GCI.

Unnamed: So with that, I'll turn it over to you.

Greg Maffei: So with that, I'll turn it over to you.

Brian Wendling: Thank you, Greg. At quarter end, Liberty Broadband had consolidated cash and cash equivalents of $73 million, which included $47 million of cash at GCI. The value of our charter investment based on our shares held as of August 1st and the charter share price as of yesterday's close was $16.2 billion, and at quarter end, Liberty Broadband had a total principal amount of debt of $3.7 billion, including the debt at GCI. Note that this excludes the preferred stock.

Brian Wendling: Thank you, Greg. At quarter end, Liberty Broadband had consolidated cash and cash equivalents of $73 million, which included $47 million of cash at GCI. The value of our charter investment based on our shares held as of August 1st and the charter share price as of yesterday's close was $16.2 billion. Looking quickly at GCI, revenue is up $ million over the prior year, driven by continued strength in data sales, particularly to our rural health care and school customers, partially offset by declines in wireless and other revenue.

Unnamed: Thank you, Greg. At quarter-end, Liberty Broadband had consolidated cash and cash equivalents of $73 million, which included $47 million of cash at GCI. The value of our charter investment based on our shares held as of August 1st and the charter share price as of yesterday's close was $16.2 billion, and at quarter end, Liberty Broadband had a total principal amount of debt of $3.7 billion, including the debt at GCI. Note that this excludes the preferred stock.

Speaker Change: So with that, I'll turn it over to Brian to discuss it with an answer.

Brian Wendling: thank you greg at quarter end liberty broadband hhad consolidated cash and cash covalland of seventy three million

Brian Wendling: which includes $47 million of cash at GPI.

Brian Wendling: The value of our charter investment based on our shares held as of August 1st and charter share price as of yesterday's close was $16.2 billion.

Brian Wendling: And at quarter end, Liberty Broadband had a total principal amount of debt of $3.7 billion including the debt at GCI. Note that this excludes the preferred stock.

Brian Wendling: Note that this excludes the preferred stock. Looking quickly at GCI, revenue is up a million over the prior year, driven by continued strength and data sales, particularly to our rural health care and school customers, partially offset by declines in wireless and other revenue. Adjusted oivated decreased 6 million due to higher operating costs, as well as increased SGA expense from labor-related costs and increased professional services. Over the last year, adjusted for the reclassification from GCI business, GCI consumers saw the decline of 1,000 revenue generating wireless subs; cable modems subscribers declined by 2,500, mostly driven by the expiration of the ACP program.

Brian Wendling: Looking quickly at GCI, revenue is up a million over the prior year, driven by continued strength in data sales, particularly to our rural health care and school customers, partially offset by declines in wireless and other revenues. However, adjusted OEBDA decreased $6 million due to higher operating costs as well as increased SG&A expense from labor-related costs and increased professional service. Over the last year, adjusted for the reclassification from GCI Business, we saw a decline of 1,000 revenue-generating wireless subs; cable modem subscribers declined by 2,500, mostly driven by the expiration of the ACP program.

Unnamed: Looking quickly at GCI, revenue is up a million over the prior year, driven by continued strength in data sales, particularly to our rural health care and school customers, partially offset by declines in wireless and other revenue. However, adjusted OIBDA decreased $6 million due to higher operating costs as well as increased SG&A expense from labor-related costs and increased professional service. Over the last year, adjusted for the reclassification from GCI Business, the EastJet consumer saw a decline of 1,000 revenue-generating wireless subs; cable modem subscribers declined by 2,500, mostly driven by the expiration of the ACP program.

Speaker Change: looking quickly at gcii revenue is up a million over the prior year driven by continued strength of data sales

Brian Wendling: particularly to our rural health care and school customers, partially offset by declines in wireless and other revenue.

Brian Wendling: Adjusted OEBDA decreased $6 million due to higher operating costs as well as increased SG&A expense from labor-related costs and increased professional services. Over the last year, adjusted for the reclassification from GCI Business. These consumers saw a decline of 1,000 revenue-generating wireless subscribers; cable modem subscribers declined by 2,500, mostly driven by the expiration of the ACP program. During the quarter, GCI distributed $150 million to Liberty Broadband, funded with cash on hand and drawing under its revolver. These proceeds were used to pay down the Charter Margin Loan and were therefore net-net neutral to Liberty Broadband. We had $347 million of undrawn capacity.

Speaker Change: adjusted evida decreased six million due to higheroperating costs as well as increased gna expense from labor-related costs in increased professional services

Brian Wendling: Over the last year, adjusted for the reclassification from GCI Business, GCI consumers saw a decline of 1,000 revenue-generating wireless subs. Cable modem subscribers declined by 2,500, mostly driven by the expiration of the ACP program.

Brian Wendling: During the quarter, GCI distributed a 150 million delivery broadband, funded with cash on hand and drawing under its revolver. These proceeds were used to pay down the Charter Margin loan and were therefore net neutral delivery broadband. The quarter end GCI's leverage was at 3.2 times, with sufficient cushion in relation to the 6.5 times maximum net leverage covenant threshold, stipulated in the credit facility. We had 347 million of undrawn capacity under the GCI revolver, net of letters of credit.

Unnamed: During the quarter, GCI distributed $150 million to Liberty Broadband, funded with cash on hand and drawing under its revolver. These proceeds were used to pay down the Charter Margin Loan and were therefore net-neutral to Liberty Broadband. At quarter end, GCI's leverage was at 3.2 times with sufficient cushion in relation to the 6.5 times maximum net leverage covenant threshold stipulated in the credit facility, and we had 347 million of undrawn capacity. C.I. Revolver, net of Letters of Credit. With that, I'll turn the call back over to Greg. Thanks.

Brian Wendling: During the quarter, GCI distributed $150 million to Liberty Broadband, funded with cash on hand and drawing under its revolver. These proceeds were used to pay down the Charter Margin Loan and were therefore net-net neutral to Liberty Broadband. At quarter end, GCI's leverage was at 3.2 times with sufficient cushion in relation to the 6.5 times maximum net leverage covenant threshold stipulated in the credit facility. Additionally, we had 347 million of undrawn capacity. CCI revolver, net of letters of credit. With that, I'll turn the call back over to Greg.

Brian Wendling: At quarter end, GCI's leverage was at 3.2 times with sufficient cushion in relation to the 6.5 times maximum net leverage covenant threshold stipulated in the credit facility.

Brian Wendling: And we had 347 million of undrawn capacity under...

Greg McCay: With that, I'll turn the call back over to Greg. Thanks, Brian.

Brian Wendling: or the GCI Revolver, net of letters of credit.

Greg Maffei: Our annual investor day will be Thursday, November 14th in New York. Note: We moved to a new location. See you at the Jazz at Lincoln Center. Save the date. Additional details will be forthcoming soon. We hope to see many of you there. And with that, Operator, I'll open the line for questions.

Greg McCay: Our annual investor today will be Thursday, November 14th, in New York. No, we move to a new location. See you at the Jazz at Lincoln Center. Save the date. Additional details will be forthcoming soon. We hope to see many of you there.

Brian Wendling: With that, I'll turn the call back over to Greg. Thanks, Brian .

Speaker Change: Our annual investor day will be Thursday, November 14th in New York. Note we moved to a new location. See you at the Jazz at Lincoln Center. Save the date. Additional details will be forthcoming soon. We hope to see many of you there. And with that, operator, I'll open the line for questions.

Operator: Note: We moved to a new location.

Operator: And with that operator, I'll open the line for questions. 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. The confirmation tone will indicate your line is in the question queue. May press star two if you would like to remove your question from the queue. For participants using speaker equipment, and maybe necessary to pick up your handset before pressing the star keys.

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 list. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. Our first questions come from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your questions.

Speaker Change: 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.

Speaker Change: The 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 star keys.

Bart and Crockett: Our first questions come from the line of Bart and Crockett with the Rosenblatt Securities. Please proceed with your questions. Okay, thank you for taking my questions. There were a couple of things I was kind of interested in. See if we can address them here.

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

Speaker Change: Our first questions come from the line of Barton Crockett with Rosenblatt Securities. Please proceed with your questions.

Barton Crockett: Okay, thank you for taking my questions. Um, there were a couple of things I was kind of interested in seeing if we could address them here. 1 is I'm curious about the wireless business at and then perhaps a longer term thought for charter. So, my question is this: To what degree is GCI, you know, really focused on subsidizing kind of device purchases? Just update us on that as we go into what may be a bigger kind of upgrade cycle with the presence of the iPhone 16 and, you know, and also, if you have any thoughts about what you expect there in terms of the size of that cycle for and then, you know, for Charter and, I guess, over to Greg just more broadly.

Barton Crockett: Okay, thank you for taking my questions. There were a couple of things I was kind of interested in seeing if we could address them here. One is, I'm curious about the wireless business at GCI and then perhaps a longer term thought for Charter. So, my question is, to what degree is GCI really focused on subsidizing these kinds of device purchases? Just update us on that as we go into what may be a bigger kind of upgrade cycle with the AI presence on the iPhone 16.

Barton Crockett: Okay, thank you for taking my questions.

Bart and Crockett: One is, I'm curious about the wireless business at GCI and then perhaps a longer term thought for Charter. So my question is, this is to what degree is GCI, you know, really focused on subsidizing kind of device purchases? Just update us on that as we go into what may be a bigger kind of upgrade cycle with the AI presence on the iPhone 16. And, you know, and also if you have any thoughts about what you expect there in terms of the size of that cycle for GCI.

Barton Crockett: There were a couple of things I was kind of interested in, to see if we can address them here. One is...

Speaker Change: I'm curious about the

Speaker Change: the wireless business at gci and then perhaps a longer-term thought for charter

Speaker Change: So, my question is this.

Speaker Change: To what degree is GCI, you know, really focused on subsidizing kind of device purchases? Just update us on that as we go into what may be a bigger kind of upgrade cycle with the AI presence on the iPhone 16.

Barton Crockett: And, you know, and also, if you have any thoughts about what you expect there in terms of the size of that cycle for GCI and then, you know, for Charter, and I guess over to Greg, just more broadly, I mean, obviously, Charter's not doing the device subsidies at the level that the major wireless carriers are today. But, you know, one could imagine over time as Charter and the cable peers get bigger and wireless, they will want to, you know, compete in more kind of toe to toe on that basis.

Speaker Change: and also if you have any thoughts about what you expect there in terms of the size of that.

Bart and Crockett: And then, you know, for Charter and I guess over to Greg, just more broadly, I mean, obviously Charter is not doing the device subsidies, you know, at the level that the major wireless carriers are today. But, you know, one could imagine over time as the charter and the capable peers get bigger and wireless, that they all want to, you know, compete in more kind of toe to toe on that basis. And I was just wondering, you know, Greg, if you agree that that's going to be the general direction. And if so, you know, any thoughts about how the road there might progress slowly, quickly, any steps that could be kind of transitioning, transitioning over there.

Speaker Change: cycle for GCI. And then, you know, for Charter, and I guess over to Greg, just more broadly, I mean, obviously Charter's not doing the device subsidies, you know, at the level that the major wireless carriers are today.

Barton Crockett: I mean, obviously Charter's not doing the device subsidies, you know, at the level that the major wireless carriers are today, but, you know, I could imagine over time as Charter and the capable peers get bigger and wireless, they will want to compete in more kind of toe to toe on that basis. And I was just wondering, you know, Greg, if you agree that that's going to be the general direction and, if so, any thoughts about how the road there might progress slowly and quickly, any steps that could kind of transition you and transition you over there.

Speaker Change: But, you know, one could imagine over time as the charter and the cable peers get bigger and wireless, that they will want to, you know, compete in more kind of toe-to-toe on that basis.

Barton Crockett: And I was just wondering, you know, Greg, if you agree that that's going to be the general direction and, if so, any thoughts about how the road there might progress slowly or quickly, any steps that could kind of transition you or move you over there.

Barton Crockett: And I was just wondering, you know, Greg, if you agree that that's gonna be the general direction, and if so, you know, any thoughts about how the road there might progress slowly, quickly, any steps that could kind of transition you over there.

Greg Maffei: Thanks, Barton. Ron, do you want to take the GCI wireless part of that?

Greg McCay: Thanks, Barton.

Ron Duncan: Ron, do you want to take the GCI wireless part of that? Sure, I can do that. And obviously, Barton is, you know, GCI is a mobile network operator, not an MVNO-like Charter, so we have a different cost structure. We've got a much higher gross margin in EBITOP percentage because we own the network. We're not paying somebody else for it. And we've also got a much higher market share at this point than Charter does. We're probably 40% of the Alaska mobile market overall, and it's one of our two core businesses, along with consumer businesses, along with consumer data.

Operator: Thanks Barton. Ron, do you want to take the GCI wireless part of that?

Ron Duncan: Sure, I can do that. And obviously, Barton, as you know, GCI is a mobile network operator, not an MVNO like Charter, so we have a different cost structure. We've got a much higher gross margin and EBITDA percentage because we own the network; we're not paying somebody else for it. And we've also got a much higher market share at this point than Charter does, probably 40% of the Alaska mobile market overall. And it's one of our two core businesses for consumer businesses, along with consumer data. As such, we pretty much have to match or at least be competitive with the majors.

Ron Duncan: Sure, I can do that. And obviously, Barton, as you know, JCI is a mobile network operator, not an MVNO-like charter, so we have a different cost structure. We've got a much higher gross margin and EBITDA percentage because we own the network. We're not paying somebody else for it. And we've also got a much higher market share at this point than Charter does, probably 40% of the Alaska mobile market overall. And it's one of our two core businesses for consumer businesses, along with consumer data.

Speaker Change: Sure, I can do that. And obviously, Barton, as you know, JCI is a mobile network operator, not a MVNO-like charter, so we have a different cost structure. We've got a much higher.

Speaker Change: gross margin and EBITDA percentage because we own the network. We're not paying somebody else for it. And we've also got a much higher market share at this point than Charter does.

Speaker Change: probably 40% of the Alaska mobile market overall and it's one of our two core businesses for consumer businesses along with consumer data.

Ron Duncan: As such, we pretty much have to match or at least be competitive with the majors, and our principal competitors, AT&T and Verizon, are not a material player in the market up there. So we pretty much have to match AT&T device subsidies in order to avoid losing subscribers to them when there's a refresh cycle. In the last couple of years, we've extended the device subsidies from two-year contracts to three-year contracts. That's given us a little lower turnover and a little more stability.

Ron Duncan: As such, we pretty much have to match where at least be competitive with the majors, and our principal competitors AT&T, Verizon, is not a material player in the market up there. So we pretty much have to match AT&T device subsidies in order to avoid losing subs to them when there's a refresh cycle. In the last couple of years, we've extended the device subsidies from two-year contracts to three-year contracts. That's given us a little lower turnover and a little more stability. We're evaluating right now, but we think that if there's an accelerated device cycle, this fall is a result of AI features, particularly in the Apple phones.

Speaker Change: As such, we pretty much have to match.

Ron Duncan: And our principal competitor is AT&T. Verizon is not a material player in the market up there. So we pretty much have to match AT&T device subsidies in order to avoid losing subscribers to them when there's a refresh cycle. In the last couple of years, we've extended the device subsidies from two-year contracts to three-year contracts. That's given us a little lower turnover and a little more stability.

Speaker Change: or at least be competitive with.

Speaker Change: The majors and our principal competitors, AT&T, Verizon, is not a material player in the market up there. So we pretty much have to match AT&T device subsidies in order to avoid losing subs to them when there's a refresh cycle.

Speaker Change: In the last couple of years, we've extended the device subsidies from two-year contracts to three-year contracts. That's given us a little lower turnover and a little more stability. We're evaluating right now, but we think that if there's an accelerated device cycle,

Ron Duncan: We're evaluating right now, but we think that if there's an accelerated device cycle this fall as a result of AI features, particularly in Apple phones, it may be an opportunity to grab some more share. We've got a better network in Anchorage and in most of Alaska than AT&T does. People choose us for that reason, and we're trying to figure out whether enhancing device subsidies a little bit would allow us to gain more share. If we weren't relatively competitive with AT&T, we'd keep the low margin or the low cost portion of the customer base, but we wouldn't be able to maintain the 40% statewide market share.

Operator: This fall as a result of AI features.

Ron Duncan: It may be an opportunity to grab some more share. We've got a better network in Anchorage and in most of Alaska than AT&T does. People choose us for that reason, and we've been trying to figure out whether enhancing device subsidies a little bit would allow us to gain more share. If we weren't relatively competitive with AT&T, we'd keep the low margin of the low-cost portion of the customer base, but we wouldn't be able to maintain the 40% statewide market share.

Speaker Change: particularly in the Apple phones, it may be an opportunity to grab some more share.

Speaker Change: We've got a better network.

Speaker Change: Anchorage and in most of Alaska than AT&T does. People choose us for that reason and we're trying to figure out whether enhancing device subsidies a little bit.

Speaker Change: would allow us to gain more share. If we were relatively competitive with AT&T, we'd keep the low margin of the low cost portion of the customer base, but we wouldn't be able to maintain the 40% statewide market share. Greg, back to you.

Greg Maffei: Greg, back to you. Thanks, Ron. So I think

Greg Maffei: Greg, back to you. Thanks, Ron. So I think...

Greg McCay: Greg, back to you.

Barton Crockett: Thanks Ron. So, as you rightly know, Charter has not had to offer the kind of subsidies for handsets that many other competitors in the mobile space have had to offer. I think that's largely because of the attractive pricing of the Spectrum Plus offering, particularly the year-free line, but even after that, the relative savings of being a Charter subscriber and having Spectrum Plus for your mobile as well are very attractive compared to the alternatives.

Greg Maffei: Thanks Ron. So, as you rightly know, Charter has not had to offer the kind of subsidies for handsets that many other competitors in the mobile space have had to offer. I think that's largely because of the attractive pricing of the Spectrum Plus offering, particularly the year-free line, but even after that, the relative savings of being a Charter subscriber and having Spectrum Plus for your mobile as well are very attractive compared to the alternative.

Greg McCay: Thanks, Ron. So I think, as you rightly know, Charter has not had to offer the kind of subsidies for hand-tests that many other competitors in the local space have. I think that's largely because of the attractive pricing of the Spectral Plus offering, particularly obviously the year-free line, but even post that, the relative savings of being a Charter subscriber and having Spectrum Plus or your mobile as well is very attractive compared to the alternatives.

Barton Crockett: Thanks, Ron. I think

Barton Crockett: Thanks, Ron. So I think, as you rightly know, Charter has not had...

Speaker Change: to offer the kind of subsidies for handsets that many other competitors in the mobile space have.

Barton Crockett: I think that's largely because of the attractive pricing of the Spectrum Plus offering, particularly, obviously, the year-free line, but even post that.

Barton Crockett: The Relative Savings of Being a Charter Subscriber

Speaker Change: and having Spectrum Plus for your mobile as well is very attractive compared to the alternative, so I don't see Charter, you can't predict how the market will go entirely, but I don't see Charter offering or needing to offer the kind of subsidies that other people have because of the attractiveness of the combined offering.

Greg McCay: So I don't see Charter; you can't predict how the market will go entirely, but I don't see Charter offering or needing to offer the kind of subsidies that other people have because of the attractiveness of the combined offering.

Greg Maffei: So I don't see Charter... can't predict how the market will go entirely, but I don't see Charter offering or needing to offer the kind of subsidies that other people have because of the attractiveness of the combined offer.

Barton Crockett: So I don't see Charter... can't predict how the market will go entirely, but I don't see Charter offering or needing to offer the kind of subsidies that other people have because of the attractiveness of the combined offer.

Bart and Crockett: Okay, thank you. Thank you.

Speaker Change: Thank you.

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

Speaker Change: okay thank you

Ben Swenberg: Our next questions come from the line of Ben Swenberg with Morgan Stanley. Please proceed with your questions.

Speaker Change: Thank you. Our next questions come from the line of Ben Swinburne with Morgan Stanley . Please proceed with your questions.

Ben Swenberg: Greg, I wanted to get your thoughts just generally on some of the action we're seeing competitively in telecom in the US, particularly Team-Obel's acquisition of or JVI, I guess I should say, with Luma and Metronet and how that impacts your perspective on Charter, both when we think about private and public market multiples, which obviously are pretty far apart right now, and this is just competitively whether you think the level of fiber and converged competition is something that is going to be potentially a headwind for Charter over time. Thanks so much. Yeah, thanks for the question, Ben.

Barton Crockett: Greg, I wanted to get your thoughts just generally on some of the action we're seeing competitively in telecom in the U.S., particularly T-Mobile's acquisition of, or JV, I guess I should say, with Loomis and Metronet, and how that impacts sort of your perspective on charter, both when we think about kind of private and public market multiples, which are obviously pretty far apart right now, and this just competitively, whether, you Thanks so much.

Greg Maffei: Greg, I wanted to get your thoughts just generally on some of the action we're seeing competitively in telecom in the U.S., particularly T-Mobile's acquisition of, or JV, I guess I should say, with Loomis and Metronet, and how that impacts sort of your perspective on charter, both when we think about kind of private and public market multiples, which are obviously pretty far apart right now, and this just competitively, whether, you Thanks so much.

Greg Maffei: Greg, I wanted to get your thoughts just generally on some of the action we're seeing competitively in telecom in the U.S., particularly T-Mobile's acquisition of, or JV, I guess I should say, with Loomis and Metronet, and how that impacts sort of your perspective on charter, both when we think about kind of private and public market multiples, which obviously are pretty far apart right now, and then just competitively, whether, you Thanks so much.

Speaker Change: Greg, I wanted to get your thoughts just generally on some of the action we're seeing competitively in telecom in the US, particularly T-Mobile's acquisition of.

Barton Crockett: or JV, I guess I should say, with Loomis and Metronet and how that impacts sort of your perspective on charter, both when we think about kind of private and public market multiples, which obviously are pretty far apart right now.

Speaker Change: And this just competitively, whether, you know, you think the level of fiber and converged competition is something that is going to be potentially a headwind for Charter over time. Thanks so much.

Greg Maffei: Thanks for the question, Ben. I think the actions of T-Mobile and, really, many of the mobile players, talking about offering increased fiber activity is a validation of the need for fixed lines and that mobile alone is a less attractive proposition, and the combined offering that a Charter has, with its broadband network and its MVNO relationship, is very attractive. When you look at these things that they're doing, they're mostly kind of around the edges.

Greg McCay: I think the actions of T-Mobile and really of many of the mobile players talking about offering a fiber, increased fiber activity is a validation of the need for fixed lines and the mobile alone is a less attractive proposition. And with its broadband network and its ambient relationship, is very attractive. When you look at these things that they're doing, they're mostly kind of around the edges. They're not big time entrance. And in general, we've seen less activity in fiber buildouts, whether it's because the easy pickings are done or because some of the players who were more levered players have slowed down or just competitive in the markets. We've not seen big optics.

Greg Maffei: Really, many of the mobile players talking about offering increased fiber activity is a validation of the need for fixed lines and that mobile alone is a less attractive proposition, with its broadband network and its MVNO relationship is very attractive. When you look at these things that they're doing, they're mostly kind of around the edges.

Greg Maffei: I think the actions of T-Mobile and...

Speaker Change: really, of many of the mobile players, talking about offering increased fiber activity is a validation of the need for fixed lines and that mobile alone is a less attractive proposition.

Greg Maffei: and the combined offering that Charter has.

Greg Maffei: with its broadband network and its MVNO relationship is very attractive.

Greg Maffei: They're not big-time entrants, and in general, we've seen less activity in fiber build-outs, whether it's because the easy pickings are done, or because some of the players who were more levered players have slowed down, or just competitive in the markets. We haven't seen big upticks. What we are seeing though is interest from those players in being a broadband player, of having a broadband fixed line. So I think it's a validation of Charter's strategy to be first and foremost a fixed line provider and then, off that, MP&O, which is very attractive, and it's a much more nibble around the edges for people like TMO with the JV that they're doing.

Greg Maffei: They're not big-time entrants, and in general, we've seen less activity in fiber build-outs, whether it's because the easy pickings are done or because some of the players who were more levered players have slowed down or just competitive in the markets. We haven't seen big upticks. What we are seeing, though, is interest from those players in being a broadband player, of having a broadband fixed line. So I think it's a validation of Charter's strategy to be first and foremost a fixed line provider and then off that MP&O, which is very attractive, and it's a much more nibble around the edges for people like TMO with the JV that they're doing.

Greg Maffei: You know when you look at these things that they're doing they're mostly kind of around the edges They're not big time entrance and in general we've seen less activity in fiber buildouts whether it's because

Greg Maffei: you know, the easy pickings are done or because some of the players who were more levered players have slowed down or just competitive in the markets, we've not seen big upticks.

Greg McCay: But we are seeing though is interest from those players of being a broadband, of having a broadband fixed line. So I think it's a validation of charter strategy to be first and foremost a fixed line provider and then off that MVO, which is very attractive. And it's a much more nibble around the edges for people like T-Mobile with the JV there that they're doing. Makes sense.

Greg Maffei: What we are seeing, though, is...

Greg Maffei: interest from those players of being a broadband, of having a broadband fixed line. So I think it's a validation of charter strategy.

Greg Maffei: to be, first and foremost, a fixed-line provider and then off that MP&O, which is very attractive. And it's a much more nibble-around-the-edges for people like TMO with the JV that they're doing.

Ron Duncan: Makes sense. I just had one follow-up to Ron. Since he mentioned it, I was going to ask anyway, what's your view on the AI phone cycles? That's another big debate. Do you think this is something consumers are going to be eager to acquire, or are you taking the opposite, that maybe the market's a little ahead of itself on optimism here?

Barton Crockett: Makes sense. I just had one follow-up to Ron. Since he mentioned it, I was going to ask anyway, what's your view on the AI phone cycles? That's another big debate. Do you think this is something consumers are going to be eager to acquire, or are you taking the opposite, that maybe the market's a little ahead of itself on optimism here?

Ben Swinburne: Makes sense. I just had one follow-up to Ron. Since he mentioned it, I was going to ask anyway, what's your view on the AI phone cycles? That's another big debate. Do you think this is something consumers are going to be eager to acquire, or are you taking the opposite, that maybe the market's a little ahead of itself on optimism here?

Ben Swenberg: And I just had one follow-up to Ron. He mentioned that I was going to ask anyway. What's your view on sort of the AI phone cycles? That's another big debate. You think this is something consumers are going to be eager to acquire? Or are you taking sort of the opposite, that maybe the market's older the head of itself on optimism here?

Operator: Thanks a lot.

Operator: Makes sense. And I just had one follow-up to Ron, since he mentioned it, I was going to ask anyway. What's your view on sort of the AI phone cycles? That's another big debate. Do you think this is something consumers are going to be eager to acquire, or are you taking sort of the opposite, that maybe the market is a little ahead of itself on optimism here?

Ron Duncan: I think there's probably more optimism than is merited, but we're expecting a bigger than usual upgrade cycle this time around. In part because there really haven't been that many earth-shaking changes to the iOS app in the last several cycles. So the difference between 12 and 15 wasn't all that significant. And we've definitely seen reduced upgrades. As I said, we've seen our average cycle, our average turnover, and the customer go from two years to something close to three years. I think there's enough buzz around the AI that, regardless of how good the product really is, more people will try it this time.

Ron Duncan: I think there's probably more optimism than is merited, but we're expecting a bigger than usual upgrade cycle this time around, in part because there really haven't been that many earth-shaking changes to the iOS app in the last several cycles, so the difference between a 12 and a 15 wasn't all that significant, and we've definitely seen reduced upgrades. As I said, we've seen our average cycle, our average turnover on the customer, go from two years to something close to three years. I think there's enough buzz around AI that regardless of how, or if it's not real, the buzz will create more consumer interest, and more people may try it.

Operator: can

Speaker Change: I think there's probably more optimism than is merited, but we're expecting a bigger than usual upgrade cycle.

Speaker Change: this time around.

Speaker Change: in part because there really haven't been.

Speaker Change: that many earth-shaking changes to the iOS app in the last several cycles, so the difference between a 12 and a 15 wasn't all that significant, and we've definitely seen reduced upgrades. As I said, we've seen our average

Speaker Change: cycle, our average turnover on the customer go from two years to something close to three years.

Speaker Change: I think there's enough buzz around the AI that regardless of how...

Ron Duncan: Whether it's a 50% increase over last time, I don't know. We're trying to assess that and prepare for how much inventory, but I definitely think that even if it's not real, the buzz will create more consumer interest than more people may try. Last time being the 5G upgrade cycles that you're referring to? Yeah.

Speaker Change: good the product really is, more people will try it this time. Whether it's a 50% increase over last time, I don't know. We're trying to assess that and prepare for how much inventory. But I definitely think that even if it's not real, the buzz will create more consumer interest and more people may try it.

Ron Duncan: Last time being the 5G upgrade cycle that you're referring to.

Ron Duncan: Last time being the 5G upgrade cycle that you're referring to. Yeah. Yeah. Got it.

Ben Swinburne: Thanks a lot.

Ron: Last time being the 5G upgrade cycle that you're referring to? Yeah. Yeah, got it. Thanks a lot.

Ben Swenberg: Thanks a lot. Thank you.

Alex Nordhagen: Thank you. Our final questions will come from the line of Alex Nordhagen with Ballyasny Asset Management. Please proceed with your question.

Operator: Thank you. Our final questions will come from the line of Alex Nordhagen with Ballyasny Asset Management. Please proceed with your question.

Alex Nordhagen: Our final questions will come from the line of Alex Nordhagen with Valley Asset Management. Please proceed with your questions. Great.

Speaker Change: Thank you. Our final questions will come from the line of Alex Nordhagen with Ballyasny Asset Management. Please proceed with your questions.

Greg Maffei: Great. Thank you very much for taking my question today. I have a question specifically regarding Liberty Tripadvisor, and that's with respect to the Series A preferred stock. Is the current expectation that this instrument will simply just remain outstanding past the end of March next year and accrue its dividend at the penalty rate of 12% versus the current 8%? Thank you.

Alex Nordhagen: Great. Thank you very much for taking my question today. I have a question specifically regarding Liberty Tripadvisor, and that's with respect to the Series A preferred stock. Is the current expectation that this instrument will simply just remain outstanding past the end of March next year and accrue its dividend at the penalty rate of 12% versus the current 8%? Thank you.

Alex Nordhagen: Thank you very much for taking my question today. I have a question specifically regarding the utility Trip Advisor. And with respect to the Series A preferred stock, is the current expectation that this instrument will simply just remain outstanding past the end of March next year and accrue its dividend at the penalty rate of 12% versus the current eight. Thank you.

Alex Nordhagen: Great, thank you very much for taking my question today. I have a question specifically regarding OT TripAdvisor.

Speaker Change: And that's with respect to the Series A Preferred Stock.

Operator: Welcome to the Liberty Broadband 2024 Q2 earnings call. During the presentation all participants will be in a listen only mode. Afterwards we will conduct a question and answer session.

Alex Nordhagen: Is the current expectation that this instrument will simply just remain outstanding past the end of March next year and accrue its dividend at a penalty rate of 12% versus the current 8%? Thank you.

Operator: 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 August 8th, 2024.

Greg McCay: I think we're, as we've said, we're in discussions with Tripadvisor and with Surtaris about transactions that might arise, so it's, I can't comment on whether that will be the result. Like all I can tell you is, is that there are active discussions between Surtaris, Tripadvisor, and ourselves.

Greg Maffei: Yeah, I think, uh... We're, as we've said, we're in discussions with TripAdvisor and with Sertari about transactions that might arise. So it's, I can't comment on whether that will be the result. All I can tell you is that there are active discussions between Sertari, TripAdvisor and ourselves.

Greg Maffei: Yeah, I think, uh... We're, as we've said, in discussions with TripAdvisor and with Sertari about transactions that might arise. So I can't comment on whether that will be the result. All I can tell you is that there are active discussions between Sertari, TripAdvisor, and ourselves.

Alex Nordhagen: Yeah, I think, uh... We're, as we've said, in discussions with TripAdvisor and with Sertari's about transactions that might arise, so I can't comment on whether that will be the result. All I can tell you is that there are active discussions between Sertari's, TripAdvisor, and ourselves.

Greg Maffei: Okay, great. Thank you. And just to follow up, if I may, would you like to share the opinion somehow that the Liberty Tripadvisor kind of holding structure of the trip shares weighs on Tripadvisor stock?

Alex Nordhagen: Okay, great. Thank you. And just to follow up, if I may, would you like to share the opinion somehow that just the Liberty TripAdvisor kind of holding structure of the trip shares weighs on Tripadvisor stocks?

Greg Maffei: Yeah, I think...

Claire Adams: I would now like to turn the call over to Claire Adams senior manager and investor relations. Please go ahead. Good morning.

Greg Maffei: where, as we've said, we're in discussions with Tripadvisor and with Sertaris about transactions that might arise, so it's

Claire Adams: Before we begin we'd like to remind everyone that this call includes certain forward-looking statements in the meeting 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 10K and 10K held by Liberty Broadband and Liberty Tripadvisor with the SEC. Before looking statements speak only out of the date of this call and Liberty Broadband and Liberty Tripadvisor expressly display any obligation or undertaking to disseminate any updates to revisions to any forward-looking statement contained herein to reflect any change in Liberty Broadband or Liberty Tripadvisor's expectations with regard there to or any change in events, conditions, or circumstances on which any such statement is based.

Speaker Change: I can't comment on whether that will be the result. All I can tell you is that there are active discussions between Sertari's TripAdvisor and ourselves.

Greg McCay: Okay, great, thank you, and just to follow up, if I may, would you like to share the opinion of it somehow that just the Liberty Tripadvisor kind of holding structure of the trip shares ways on Tripadvisor stock? I would, I think at this point, the potential issues around Liberty Tripadvisor are probably a cloud on the Tripadvisor's stock; that's probably a fair statement, yes.

Speaker Change: Okay, great. Thank you. And just to follow up, if I may, would you like share the opinion that some have that just the Liberty TripAdvisor kind of holding structure of the TripShares weighs on TripAdvisor stock?

Greg Maffei: I think at this point the potential issues around Liberty Tripadvisor are probably a cloud on Tripadvisor stock. That's probably a fair statement.

Greg Maffei: I would think at this point, the potential issues around Liberty Tripadvisor are probably a cloud on Tripadvisor stock. That's probably a fair statement.

Greg Maffei: I would think at this point the potential issues around Liberty Tripadvisor are probably a cloud on Tripadvisor's dock. That's probably a fair statement.

Speaker Change: I think at this point the potential issues around Liberty Tripadvisor are probably a cloud on the Tripadvisor stock. That's probably a fair statement, yes.

Claire Adams: On today's call we'll discuss certain non-GAB financial measures for Liberty Broadband including adjustments. Information regarding the comparable GAB metrics along with required definitions and reconciliation including preliminary note and schedules one and two can be found in the earnings press release issue today as well as earnings release. This is for prior periods which are available on Liberty Broadband Web site.

Alex Nordhagen: All right, thanks very much, Greg. Appreciate it. Thank you.

Alex Nordhagen: Thanks very much, Fred. I appreciate it.

Fred: Thanks very much, Fred. I appreciate it.

Operator: Thank you to our listening audience for your interest in Liberty Broadband and Liberty Tripadvisor. We hope to speak with you next quarter, if not sooner.

Greg McCay: Thank you to our listening audience for your interest in Liberty Broadband and Liberty Tripadvisor.

Operator: All right. Thanks very much, Fred. Appreciate it. Thank you.

Operator: Thank you to our listening audience for your interest in Liberty Broadband and Liberty Tripadvisor. We hope to speak with you next quarter, if not sooner.

Operator: We hope to speak with you next quarter, if not sooner.

Operator: Thank you; this does include today's teleconference. We appreciate your participation.

Operator: Thank you. This does conclude today's teleconference. We appreciate your participation.

Operator: 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. Summer of 2016 New videos every Monday

Operator: 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.

Greg McCay: Now I'd like to introduce Greg McCay at Liberty's President and CEO. Thank you Claire. Good morning to all our listeners.

Operator: hello

Operator: You may disconnect your lines at this time. Enjoy the rest of your day.

Operator: 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.

Greg McCay: Today speaking of the call we will have Liberty Broadband's Chief Accounting and Principal Financial Officer Brian Wendling, Ron Duncan, CEO of GCI and Pete Pound, CEO of GCI will also be available to answer questions. And during Q&A we will answer questions if there are any related to Liberty Tripadvisor.

Unnamed: A A A A A A A A A A A A A A A A A A A A A A A

Greg McCay: So beginning first with Liberty Broadband in July we issued 860 million of a 3 and 8 charter exchangeables. We used the proceeds from that offering to repay 540 million under our charter margin loan and repurchase 300 million of our existing 3 and 8 exchangeables. We also extended the margin loan maturity to 2027 and our 2026 debt maturities are now spread through 2028. As a result of these actions we expect substantial savings.

Greg McCay: We resumed our sales at Liberty Broadband into charter's 5 back in June. With the proceeds we will continue to take a prudent approach about retiring debt and that is our current focus. We will also evaluate those LBRD buybacks as cash bills from charter share repurchases.

Greg McCay: They had well received strong results in the quarter against the competitive backdrop and the exploration of the ACP program. They reported a net subscriber loss of 149,000 broadband subs. But the majority of those were due to ACP and the broadband trend did improve throughout the quarter with the lowest net loss in June. We tried to report its solidarity of a growth of 2.6% for the prior year and a 100 basis point margin improved. Management did a great job of expense management working with the growing realization impacts of that in the second quarter. They continue to manage the cost structure without sacrifice and growth.

Greg McCay: Mobile achieved its profitability for the first time, an important milestone that reinforces the value of the mobile offering. Charter reported 557 mobile blinded additions. The Anytime Upgrade program is driving our prove as customers increasingly chose unlimited plus plan. The phone bioprogrammed for multi-line households to move more easily to spectrum mobile is also being very effective.

Greg McCay: Turning down to Liberty Trip, we continue to evaluate strategic alternatives with TripAdvisor Special Committee, and we will not be able to comment further until or unless the definitive documents are executed for discussions terminated. Looking at TripAdvisor itself during the quarter it felt continued pressure on hotel meta in brand TripAdvisor from both SCO and SEM structural challenges with weaker demand and increased competition. However, positive early votes from strategy work launched last year are beginning to take hold.

Greg McCay: We've seen a growing share of app users and direct channel activity where there's more monetization opportunity available. Members using Trip's planning tool have a 15 times higher output than the platform-wide average. Strategy is designed to mix drive-mix shift over time from legacy offerings to focus on member value, a differentiated app experience, and engaging product features. For example, AI-powered review summaries and hotel booking directly into the app and user upgrades are much more effective and better monetization opportunities for us.

Greg McCay: Looking at the other businesses within Trip, via tour in the fork both increase their competition rather to the product mix, via tour saw a doubling of active bookers who log into the app which led to higher conversion, better repeat rates, and GBB growth.

Brian Wendling: So with that, I'll turn it over to Brian to discuss it. Thank you Greg. At quarter end, Liberty Broadband had consolidated cash and cash equivalents of 73 million which includes 47 million of cash at GCI. Value of our charter investment based on our share's health is of August first and charter share price as of yesterday's close was 16.2 billion. And at quarter end, Liberty Broadband had a total principal amount of debt of 3.7 billion including the debt at GCI.

Brian Wendling: Note that this excludes the preferred stock. Looking quickly at GCI, revenue is up a million over the prior year driven by continued strength and data sales, particularly to our rural health care and school customers, partially offset by declines in wireless and other revenue. Adjusted oivated decreased 6 million due to higher operating costs as well as increased SGA expense from labor-related costs and increased professional services. Over the last year adjusted for the reclassification from GCI business, GCI consumers saw the decline of a 1,000 revenue generating wireless subs, cable modems, subscribers declined by 2500, mostly driven by the expiration of the ACP program.

Brian Wendling: During the quarter, GCI distributed a 150 million delivery broadband, funded with cash on hand and drawing under its revolver. These proceeds were used to pay down the Charter Margin loan and were therefore net neutral delivery broadband. The quarter end GCI's leverage was at 3.2 times with sufficient cushion in relation to the 6.5 times maximum net leverage covenant threshold, stipulated in the credit facility. We had 347 million of undrawn capacity under the GCI revolver, net of letters of credit. With that, I'll turn the call back over to Greg. Thanks, Brian.

Greg McCay: Our annual investor today will be Thursday, November 14th in New York. No, we move to a new location. See you at the Jazz and Lincoln Center.

Greg McCay: Save the date. Additional details will be forthcoming soon. We hope to see many of you there.

Operator: And with that operator, I'll open the line for questions. 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. The confirmation tone will indicate your line is in the question queue. May press star two if you would like to remove your question from the queue. For participants using speaker equipment, and maybe necessary to pick up your handset before pressing the star keys.

Bart Crockett: Our first questions come from the line of Bart and Crockett with the Rosenblatt securities. Please proceed with your questions. Okay, thank you for taking my questions. There were a couple of things I was kind of interested in. See if we can address them here.

Bart Crockett: One is, I'm curious about the wireless business at GCI and then perhaps a longer term thought for charter. So my question is this is to what degree is GCI, you know, really focused on subsidizing kind of device purchases? Just update us on that as we go into what may be a bigger kind of upgrade cycle with the AI presence on the iPhone 16. And, you know, and also if you have any thoughts about what you expect there in terms of the size of that cycle for GCI.

Bart Crockett: And then, you know, for charter and I guess over to Greg, just more broadly, I mean, obviously charter is not doing the device subsidies, you know, at the level that the major wireless carriers are today. But, you know, one could imagine over time as the charter and the capable peers get bigger and wireless, that they all want to, you know, compete in more kind of toe to toe on that basis. And I was just wondering, you know, Greg, if you agree that that's going to be the general direction. And if so, you know, any thoughts about how the road there might progress slowly, quickly, any steps that could be kind of transitioning, transitioning over there. Thanks, Barton.

Ron Duncan: Ron, do you want to take the GCI wireless part of that? Sure, I can do that. And obviously Barton is, you know, GCI is a mobile network operator, not an MVNO-like charter, so we have a different cost structure. We've got a much higher gross margin in EBITOP percentage because we own the network. We're not paying somebody else for it. And we've also got a much higher market share at this point than Charter does.

Ron Duncan: We're probably 40% of the Alaska mobile market overall, and it's one of our two core businesses along with consumer businesses along with consumer data. As such, we pretty much have to match where at least be competitive with the majors and our principal competitors AT&T Verizon is not a material player in the market up there. So we pretty much have to match AT&T device subsidies in order to avoid losing subs to them when there's a refresh cycle.

Ron Duncan: In the last couple of years, we've extended the device subsidies from two-year contracts to three-year contracts. That's given us a little lower turnover and a little more stability. We're evaluating right now, but we think that if there's an accelerated device cycle, this fall is a result of AI features, particularly in the Apple phones. It may be an opportunity to grab some more share. We've got a better network in Anchorage and in most of Alaska than AT&T does. People choose us for that reason, and we've trying to figure out whether enhancing device subsidies a little bit would allow us to gain more share.

Ron Duncan: If we weren't relatively competitive with AT&T, we'd keep the low margin of the low cost portion of the customer base, but we wouldn't be able to maintain the 40% statewide market share.

Greg McCay: Greg, back to you. Thanks, Ron. So I think as you rightly know, Charter has not had to offer the kind of subsidies for hand-tests that many other competitors in the local space have. I think that's largely because of the attractive pricing of the spectral plus offering, particularly obviously the year-free line, but even post that, the relative savings of being a Charter subscriber and having Spectrum Plus or your mobile as well is very attractive compared to the alternatives.

Greg McCay: So I don't see Charter, you can't predict how the market will go entirely, but I don't see Charter offering or needing to offer the kind of subsidies that other people have because of the attractiveness of the combined offering. Okay, thank you. Thank you.

Ben Swenberg: Our next questions come from the line of Ben Swenberg with Morgan Stanley. Please proceed with your questions.

Greg McCay: Greg, I wanted to get your thoughts just generally on some of the action we're seeing competitively in telecom in the US, particularly team-obels acquisition of or JVI, I guess I should say, with Luma and Metronet and how that impacts your perspective on Charter, both when we think about private and public market multiples, which obviously are pretty far apart right now, and this is just competitively whether you think the level of fiber and converged competition is something that is going to be potentially a headwind for Charter over time. Thanks so much.

Greg McCay: Yeah, thanks for the question, Ben. I think the actions of T-Mobile and really of many of the mobile players talking about offering a fiber, increased fiber activity is a validation of the need for fixed lines and the mobile alone is a less attractive proposition. And with its broadband network and its ambient relationship is very attractive. When you look at these things that they're doing, they're mostly kind of around the edges. They're not big time entrance.

Greg McCay: And in general, we've seen less activity in fiber buildouts, whether it's because the easy pickings are done or because some of the players who were more levered players have slowed down or just competitive in the markets, we've not seen big optics. But we are seeing though is interest from those players of being a broadband, of having a broadband fixed line. So I think it's a validation of charter strategy to be first and foremost a fixed line provider and then off that MVO, which is very attractive. And it's a much more nibble around the edges for people like T-Mobile with the JV there that they're doing. Makes sense.

Ron Duncan: And I just had one follow up to Ron. He mentioned that I was going to ask anyway, what's your view on sort of the AI phone cycles? That's another big debate. You think this is something consumers are going to be eager to acquire? Or are you taking sort of the opposite that maybe the market's older the head of itself on optimism here? I think there's probably more optimism than is merited, but we're expecting a bigger than usual upgrade cycle this time around.

Ron Duncan: In part because there really haven't been that many earth shaking changes to the iOS app in the last several cycles. So the difference between 12 and 15 wasn't all that significant. And we've definitely seen reduced upgrades. As I said, we've seen our average cycle, our average turnover and the customer go from two years to something close to three years. I think there's enough buzz around the AI that regardless of how good the product really is, more people will try it this time.

Ron Duncan: Thank you.

Alex Nordhagen: Our final questions will come from the line of Alex Nordhagen with Valley Asset Management. Please proceed with your questions. Great.

Greg McCay: Thank you very much for taking my question today. I have a question specifically regarding the utility trip advisor. And with respect to the Series A preferred stock, is the current expectation that this instrument will simply just remain outstanding past the end of March next year and accrue its dividend at the penalty rate is 12% versus the current eight. Thank you. I think we're, as we've said, we're in discussions with Tripadvisor and with Surtaris about transactions that might arise, so it's, I can't comment on whether that will be the result, like all I can tell you is, is that there are active discussions between Surtaris Tripadvisor and ourselves.

Greg McCay: Okay, great, thank you, and just to follow up if I may, would you like to share the opinion of it somehow that just the Liberty Tripadvisor kind of holding structure of the trip shares ways on Tripadvisor stock? I would, I think at this point, the potential issues around Liberty Tripadvisor are probably a cloud on the Tripadvisor's stock, that's probably a fair statement, yes. All right, thanks very much, Greg, appreciate it. Thank you.

Greg McCay: Thank you to our listening audience for your interest in Liberty Broadband and Liberty Tripadvisor. We hope to speak with you next quarter, if not sooner. Thank you, this does include today's teleconference. We appreciate your participation. You may disconnect your lines at this time, enjoy the rest of your day.

Q2 2024 Liberty TripAdvisor Holdings Inc Earnings Call

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