Liberty Broadband Corporation

Gentlemen, thank you for standing by. Welcome to the Liberty Broadband 2022 Q1 earnings call. During the presentation, all participants will be in a listen-only mode. Afterward, we will conduct a question and answer session. At that time, if you have a question, please press star 1 on your telephone. As a reminder, this conference is being recorded May 6. I would now like to turn the conference over to Courtney Chun, Chief Portfolio Officer. Please go ahead.

Courtney Chun Good morning. 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 filed by Liberty Broadband and Liberty Trip Advisor with the SEC. These forward-looking statements make only as of the date of this call, and 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 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 Liberty Broadband, including adjusted OIDA. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary note and schedules one and two, can be found in the earnings press release issued today, as well as earnings releases for prior periods, which are available on Liberty Broadband's website. Now I'd like to turn the call over to Liberty President and CEO, Greg Masay.

Thank you, Courtney, and good morning to the listening audience. Today, speaking on the call, we will also have Liberty Broadband's Chief Accounting and Principal Financial Officer Brian Wendling and Ron Duncan, CEO of GCI, and Pete Pound, CFO of GCI, will be available to answer questions. Also during the Q&A, we'll be happy to answer questions related to Liberty Trip Advisor. So beginning with Liberty Broadband, from the first of February through the end of April, we repurchased 5.1 million Liberty Broadband shares for $718 million. Over the same period, we received $753 million of proceeds from charter share sales. This reflects two months of share sales as noted last quarter because we did not participate in the charter buyback in February. The average look-through price to charter on these repurchases was $451 per share. As a reminder, the annual tax rate on our charter share sales for 2022 is expected to be, and 2023, is expected between 7% and 9%. For tax purposes, the shares sales back to charter are treated as dividend income and eligible for 65% dividends received deduction. Our tax basis in the charter shares is reduced by the amount of DRD on a share by share basis. It will result in a gradual increase in our tax rate over time. Please note, we are not providing specific tax guidance beyond 2023 now because of the many variables outside of our control, including the cadence and timing, of Charter's prices, share of purchases, the pricing of those share of purchases, tax reform, et cetera. I'd also note that at LBRD we sold the subsidiary Skyhook and received approximately $170 million of net proceeds on May 2nd. The Charter itself, they had reported strong financial results in the first quarter with revenue and EBITDA both up 5%. and free cash flow up 9%, excluding a litigation payment. Notably, the mobile momentum continues there, adding 373,000 lines in the first quarter. Charter continues to leverage its fixed network to drive an additional value to mobile customers, adding features such as mobile boost and CBRS small cells in the future. We remain confident in the hybrid capital efficient approach to Charter's mobile rollout. Broadband net ads were softer at 185,000 in the first quarter, reflecting a low churn and low, therefore, sales opportunity environment across the industry. We had expected moderation of broadband demand coming out of COVID, and that's obviously been exacerbated by the lack of move opportunities in the market today. There are market fears about FWA and fiber have surely compressed cable multiples. Charter is voting with its feet and aggressively pursuing its active buyback. We are similarly bullish on the opportunity, and it seems like the market has at least gotten a bounce over the last couple of days and recognized that perhaps was overdone. Notably, Charter also unveiled a JV with Comcast to develop a next-gen streaming platform. We think this provides a compelling path forward on video. and a means of benefiting from revenue streams that are ancillary to linear video. This new operating platform will streamline and aggregate experience for optimal customer user interface and the like, and will enable a transition to IP delivery for video, allow additional spectrum to be deployed in other ways, particularly broadband. Turning to TripAdvisor, we had a strong start to the year. January was impacted by Omicron, but we Business material improved throughout the quarter. In Q1, the consolidated revenue reached 70% of 2019. It's post-COVID peak. HM&P and E&D segments combined reached 75% of their 2019 levels, and we exited Q1 at 88% of the 2019 levels in March. The HM&P segment exited actually at 76% of the 2019 revenue, And the E&D segment exceeded the 2019 levels, growing 229% year-over-year and reaching 115% of 2019 levels. We continue to leverage high CPCs to drive paid traffic in the auction and are generating good returns in that auction. We also experienced very positive gross booking value at Experiences. and a key operating metric. European travel is returning, and we're seeing signs that Europe is almost at a par with North America as a destination. And we are also seeing strong repeat booking rates among the 2021 acquired cohorts, so the customers we acquired in 2021. Lastly, at TRIP, we were thrilled to announce Matt Goldberg is joining as CEO on July 1st. The market seems to agree. He has long history as a proven operator, most recently at Trade Desk. He has experience in travel, media, and digital content. And we want to thank Steve Kaufer for his long tenure as founder and CEO. And with that, let me turn it over to Brian to discuss the financials.