Liberty Broadband Corp Q3 FY2023 earnings call

• Resumed selling into Charter buyback in October, received $48M proceeds, deployed $13.1M into Liberty Broadband buyback. - Charter added 63 broadband net adds, 31,000 rural net adds, 594,000 mobile lines; successful Disney resolution, Zomo video platform launched. - Liberty TripAdvisor moved to OTC trading on 10/30 due to NASDAQ non-compliance, no impact on business operations.

For GCI: Revenue was down 3% for the quarter with adjusted OIBDA relatively flat. Strength in business data revenue was offset by declines in video and voice revenue and lower handset sales. A 3-month fiber break in June negatively impacted revenue by approximately $5 million. GCI has been successful in moving consumers to its converged GCI+ product offering, adding 3,800 revenue-generating wireless subscribers and 2,100 revenue-generating cable modem customers over the last year. Year-to-date, Liberty Broadband has received $65 million in dividends from GCI. Leverage was 3x at quarter end, and GCI had $397 million of undrawn capacity on its revolver.

• Anticipate continuing to buy back LBRDA and K shares with after-tax proceeds from Charter throughout the rest of the year. - Believe investments in Charter are foundation for growth, driving long-term results.

• Risks mentioned in Forms 10-K and 10-Q. - Transition of Liberty TripAdvisor to OTC not expected to affect business operations.

Q: A similar one related to Charter. The discount seems to have recently widened quite meaningfully to historically high levels. Has that changed your approach or outlook on buybacks at Liberty Broadband? And whether it makes sense to maybe pursue opportunities to get more cash to the company to help fund these repurchases, whether it's levering up or exploring some flexibility with GCI?

A: Thank you for the question. I think the widening the discount while unfortunate actually does make our strategy of share repurchase that much more attractive. We are trying to maintain a careful balance of utilizing our cash received from Charter for, as I said, the vast majority for buybacks, but also being prudent on debt levels, particularly given the increased cost. While we have very attractive pricing on our margin loans, the reality is underlying rates have gone up, and so that's more expensive to maintain those. So we're trying to play that carefully. That's also made it probably more expensive to look at other alternatives for how to capture that advantage of that discount through third-party debt or something. But we are looking at all those alternatives, and we'll certainly keep them in mind.

Q: Two, if I could. First, on GCI, can you share how the business has benefited in -- the customers of the business have benefited from ACP? And how you see that playing out over time in terms of whether that gets incremental funding from Congress? And then just on the broader strategic front. Last quarter, Greg, you made a comment that it could be logical at some point to combine Liberty Broadband and Charter. Just curious on your latest thoughts on that? And what would be the catalyst to make that logical in terms of timing and function?

A: I'll handle the second question first, and then I'll let either Ron or Pete comment on ACP or if they don't want, Brian and I can take a shot. But on Liberty Broadband combining with Charter. I think you look, we've had these holding companies that we think have done very well and been very beneficial in some taking advantage of things like share repurchase or written growth in the underlying asset. But in many cases, we've also, at some point, merge them in and close the gap between their trading. Examples of that would be -- closed example be Liberty Media and DIRECTV, Liberty Expedia and Expedia, certainly cases we've gone that along the way, what's been proposed between LSXM and SiriusXM. We do that when we think the logical path is pursued on why we should be independent, and it would be more beneficial to merge these entities. That day could clearly come somewhere down the road for Charter, probably will come based on our Street, but we don't think that day is today. On GCI and on ACP to Pete or Ron, do you want to take a shot? Brian Wendling: Yes. I think Ron, are you there? Gregory Maffei: We're going to let him get it pass unless he chooses to step in. So we'll let you go, Pete, unless Ron decides that he wants to preempt. Ronald Duncan: Yes. I think what the ACP program has been a good program, helping lower-income people get good broadband connectivity. It has been helpful for us as far as bad debt reduction as it's eliminated that aspect of revenue coming in. The longevity, we'll have to see, there's kind of some upheaval that is very, very difficult to predict how that will all pan out as far as this program going forward. But it's been a relatively small program, but very beneficial to several thousand of our customers. Gregory Maffei: Yes. I would just add, if I can, Ben, on that, as far as going forward, clearly, there's a lot of popularity in this program in Washington as far as we can tell. But there also is obviously a lot of dysfunction of what will get funded and what time frame in Washington. So hard to guess how that plays out.