Liberty Broadband Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Broadband 2021 Third Quarter Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star 1 on your telephone. As a reminder, this conference is being recorded November the 4th. I would now like to turn the conference over to Courtney Chun, Chief Portfolio Officer. Please go ahead.

Thank you. Before we begin, we'd like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent forms 10-K and 10-Q, filed by Liberty Broadband and Liberty TripAdvisor with the SEC. These forward-looking statements speak only as of the date of this call, and Liberty Broadband and Liberty TripAdvisor expressly disclaim any obligation or undertaking to to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in Liberty Broadband or Liberty Trip Advisors' 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 Liberty Broadband, including adjusted OIPDA, information regarding the comparable GAAP metrics, along with the required definitions and reconciliations, including preliminary note and Schedules 1 and 2, can be found in the earnings press release issued today, as well as earnings releases for prior periods, which are available on Liberty Broadband's website. Now I'd like to turn the call over to Greg Buffett, Liberty's President and CEO.

Thank you, Courtney, and good morning to all of you. Today, speaking on the call, we will have Liberty Broadband's Chief Accounting Officer and Principal Financial Officer, Brian Wendling, Ron Duncan, CEO of GCI, and Pete Pounds, CFO of GCI, will also be available to answer questions. Also during the Q&A, we will answer questions related to Liberty TripAdvisor. But please do note, TripAdvisor has not yet reported its Q3 results, so we will be unable to comment on the current quarter. So looking at Liberty Broadband, we continue to receive meaningful cash flow from the participation in charters buybacks. holding our fully diluted ownership at 26%. From the 1st of August to the end of October, we received $1.2 billion of proceeds from Charter. We do believe the market reaction to the Q3 results was overblown, and Charter is well positioned against competition, including that from fiber overbuilders. And we remain bullish, reflected in our own repurchases. From August 1st to October 31st, we repurchased 5.3 million LBRD shares for $935 million over the same period at an average price per share of $177.50. If you look at the look-through price to charter, that's approximately $589 per share over this period. And year-to-date purchases have been at an average look-through price of $547 per share, which compares favorably to yesterday's close of $692 per share. Since LBRD began selling into the charter buyback earlier this year, we have received total proceeds of $3.2 billion, representing 35% of our $9.1 billion investment in charter. Let me note that that $9.1 billion reflects the conversion of our legacy Time Warner cable shares into charter as well. Liberty Broadband has repurchased 20 million shares for $3.3 billion in at $164.52 per share year-to-date, and therefore has retired over 10% of its outstanding shares. Looking at the NAV accretion, the LBRD NAV per share is up 6.6% year-to-date compared to charter up 4.3%. I do want to remind you that the tax rate on our charter share sales for 2021 is about 5% to 7%. Looking at Charter itself, it delivered outstanding financial results in the third quarter. Revenue was up 9.2%, but it was up 14% over the prior year. Free cash flow increased 41%, an increase of over $700 million versus the prior year. Charter reported more free cash flow in the third quarter than it reported in all of 2018. And LTM Charter has generated 8.5% billion of free cash flow. Charter had good subscriber growth in the quarter, adding 265,000 broadband customers, despite a relatively low churn environment, which provided fewer sales opportunities. We like when people move because we think we get an opportunity to sell them, and we sell them more effectively and gain market share. So when periods of low movement, low customer activity, we do well financially, but have less opportunity to sell them new services. Turning to mobile, Charter added 244,000 new mobile lines in the third quarter, and we continue to believe they're poised to take more share. Last month, Charter launched new pricing programs for multi-line accounts. At $30 per line for an unlimited family plan, Charter offers best value in the industry for consumers. I note that that compares against pricing for large MNOs, which can result in saving as high as $20 to $40 per line for accounts with two to three lines.