Liberty Broadband Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the GCI Liberty 2020 T1 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session, and at the time, if you have a question, please press star 1 on your telephone. As a reminder, this conference is being recorded as of February 26, 2020. I would now like to turn the conference over to Courtney Chung, Chief Portfolio Officer and Senior Vice President of Investor Relations. Please go ahead, ma'am.

Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in our most recent Form 10-K and Form 10-Q filed with the SEC. These forward-looking statements speak only as the date of this call and GCI Liberty, Liberty Broadband, and Liberty Trip Advisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in GCI Liberty, Liberty Broadband, or Liberty Trip Advisor's expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. On today's call, we will discuss certain non-GAAP financial measures for GCI Liberty, including adjusted OIDDA and adjusted OIDDA margin. Information regarding the comparable gap 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, which is available on GCI Liberty's website. Now I'd like to turn the call over to GCI Liberty's President and CEO, Greg Maffei.

Thank you. Thank you, Courtney. Good afternoon to all. Today, speaking on the call, we will have GCI Liberty's Chief Accounting Officer and Principal Financial Officer Brian Lennon. GCI's CFO Pete Pounds will also be available during the Q&A to answer questions related to Liberty Broadband and Liberty Trip Advisor. First, I hope you're all safe and healthy. I'd also like to thank all of our employees and management teams for their hard work and support through this COVID-19 crisis. So, let me begin by turning to GCI Liberty. At GCI, the team, has been very focused on keeping Alaskans connected during the pandemic. Their strong network has withstood substantial increases in network traffic. They have been providing free entry-level data plans for new customers and free upgrades for existing customers. And in particular, they're offering free data plans and Wi-Fi equipment for K-12 students and teachers. Part of that is that they are participating in the SEC's Keep Americans Pledged program, a connected pledge with other carriers across the nation. GCI's business model and the cable business model in general has proved resilient, and the first quarter results were excellent. As a part of those results, they also announced the official launch of their first 5G service in Anchorage. You'll hear more about that from Pete Hounds and some of the results in a minute. So turning the lending tree, they reported solid first quarter results on Tuesday. They did launch the SBA Lending Marketplace to match small businesses in need with lenders to facilitate access to funds under the PPP program, so they're doing their part during the pandemic as well. They announced a $1 million donation through the LendingTree Foundation for pandemic relief. They experienced relatively good performance in home and insurance in Q1, and the consumer segment was more challenging. Their diversification has helped them weather has gone more effectively than many others in their space. They do have a strong balance sheet and liquidity position with $51 million of cash off in hand and $370 million of capacity under their revolving credit facility. Turning over to Liberty Broadband, Charter had an outstanding quarter. Like GCI, Charter has pledged to keep Americans connected during this crisis and they committed to a number of authors to help those impacted by the pandemic, including students and educators and small and medium businesses. They also opened up Wi-Fi hotspots for public use. They offered prioritizing requests from the government, healthcare, and educational institutions for new connections, upgrades, and services as they try and help people get through this crisis. The significant investments network that they've made over the last several years moving to an all digital network, et cetera, upgrading, to Dr. 3.1 have allowed their network to perform very well during this time. Like GCI, despite the substantial increase in network traffic, levels remain well below maximum capability. The quarter at GCI was very operationally strong. They added 580,000 residential and SMB customers, the highest in their history. Part of those were due to these offers I mentioned above, for example, on the educational side, but the inherent growth was strong. Revenue was up 4.8%, and adjusted capital was up 8.4%. Pre-cash flow grew by over 100%. During the quarter, Charter repurchased 5.2 million shares for $2.6 billion. On the liquidity front, Charter was very well positioned as well, with $2.9 billion of cash and 4.4%. $7 billion billed under Trubalva, and they successfully had a couple of bond offerings in the last few weeks at very attractive rates. Turning to TripAdvisor, I'll mention that they have released their results, but they have not had their conference call yet, which is scheduled for tomorrow morning, so I'll avoid commenting on that. I will comment lastly on Liberty TripAdvisor, which on March 16th announced an investment by Sartaris of $325 million of 8% cumulative redeemable preferred stock. Greg O'Hare, the founder of Certale's joined the TRIP and Liberty TRIP boards. We also borrowed $40 million against a new variable prepaid forward and we used the proceeds from the Certale's investment borrowings under the variable prepaid forward and some small amount of cash on hand to repay the full amount outstanding under our large margin loan. We have no margin loan today. and we have a much better setup for the longer term with this Atari's investment. This investment better positions us to withstand the market volatility and economic volatility, particularly in the travel space. So with that, I'm going to turn it over to Brian to discuss GCI Liberty's financials.