Liberty Broadband Corp Q4 FY2023 earnings call

• Liberty Broadband resumed repurchasing shares using Charter sale proceeds. Charter had near-term headwinds in broadband unit growth, but Spectrum One drove mobile growth and rural expansion beat targets. - Liberty Trip filed an amendment to its 13D, authorized to engage in acquisition discussions. TripAdvisor had strong 2023 operating results, especially in the back half, with Viator reaching break-even profitability earlier than anticipated and revenue diversification.

Liberty Broadband resumed repurchasing its shares using proceeds from Charter share sales, with $385 million received from Charter sales from Nov 1 to end Jan and $255 million spent on LBRD repurchases. For GCI, 2023 full-year revenue was $931 million, up 1%, and adjusted OIBDA was $361 million; Q4 revenue was flat and adjusted OIBDA decreased 1%. In 2023, GCI spent $216 million on capital expenditures net of grant funding, and 2024 net capital expenditures are expected to be approximately $200 million for rural connectivity investments.

• Liberty Broadband updated its tax rate guidance for 2024 Charter sales to low double digits. - GCI's 2024 net capital expenditures are expected to be approximately $200 million for middle- and last-mile connectivity and rural network expansion.

• Uncertainty regarding whether the ACP program will be discontinued and its potential impact on Charter and GCI, including possible customer churn and revenue changes.

Q: What are your expectations as to whether or not the ACP program will be discontinued? And can you share your thoughts on the possible implications for each of GCI and Charter?

A: Whether ACP will be renewed is uncertain. Impact on Charter is hard to speculate, but demand for bandwidth has grown. For GCI, minimal impact on wired side, but wireless side may have competitive opportunity.

Q: Just given the comments on being a long-term investor in Charter, does the current price for Charter change Liberty's interest to sell shares into Charter's buyback when needed to stay under the 26% cap?

A: Believe based on discount, still inclined to repurchase LBRD.

Q: I was curious about your thought on some of the new skinny bundles or streaming bundles that are emerging from the media companies in terms of the legality or the appropriateness in an antitrust perspective. So specifically, the skinny sports bundle from Disney, Warner Bros, Fox, do you believe that Charter would have rights to offer the same kind of bundle or not? And do you think there's any kind of antitrust questions there?

A: Uncertain about antitrust implications, but thinks it's potentially positive for Charter as a distributor.

Q: I ask you the question I asked John back in November on Charter, which is why is 4.5x still the right leverage level. I think I know what your answer is, but obviously, the market has spoken, at least for now, on where they -- what they're thinking on Charter stock. So I'd be curious if there's a scenario where you think lower leverage is actually optimal. And then looking back on the Disney dispute, and you mentioned it in your prepared remarks that that's weighed on subs. Do you think that the objectives and the sort of what was extracted from that agreement by Charter has been worth some of the disruption in the business?

A: Weighing shareholder views on leverage, currently confident 4.5x is right. Disney dispute is long-term bet, beneficial for video business long term.

Q: I had 2 really around the cap stack. But on the first one, with the 20.51s, the half coupon, obviously, coupon that are put on callable from March '25, what is the kind of base case plan to deal with those, assuming that there isn't any sort of transaction? I would think you'd need to have a plan in place given the low cash balance at Liberty Trip right now. And then the second question I had was just in theory, if with respect to any acquisition discussions Certares was involved, would that need to be disclosed to the market or not?

A: Monitoring strategies for dealing with 20.51s, not disclosing details. Disclosed being approached under 13D rules, won't comment further until more.

Q: With the depressed stock being callable from next month, 6 weeks away, do you have any intention to call it?

A: Refer to earlier comments, evaluating all alternatives, won't disclose intention.

Q: The statement that fixed wireless is competitive now but won't be over the longer term. Can you -- do you have any kind of sense in your mind of how long it is before fixed wireless ceases to become competitive and becomes more kind of a source of win back for cable?

A: Fixed wireless competitiveness will change over time as broadband demands grow and network performance changes, T-Mobile has shown capacity limitations.