Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Broadband Q1 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder this conference is being recorded. I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer. Please go ahead.

Good morning. 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.

Thank you, Courtnee, and good morning to all of you out there. Today speaking on the call besides myself, we'll have Liberty Broadband's Chief Accounting and Principal Financial Officer, Brian Wendling. Also during the Q&A, we will answer questions related to Liberty TripAdvisor. Ron Duncan, CEO of GCI; and Pete Pounds, the CFO of GCI will also be available to answer questions. So turning now to Liberty Broadband. In March, Liberty Broadband began participating in Charter's buyback, holding our fully diluted ownership at 26%. Through April, we had received nearly $1 billion of proceeds and we used these proceeds to repurchase 6.1 million LBRDK shares from February through April at an average price per share of $152.30 per share. We view this as having meaningful value creation for our shareholders with the LBRD NAV discount running about 19% and allowing us to have a look-through purchase price on Charter of about $516 per share. While our quarterly repurchases may fluctuate due to the timing of cash received and et cetera, we expect that our LBRD repurchases to match or exceed the after-tax proceeds we receive from sales of Charter shares on an annual basis. I would remind you, in 2021, we expect only 5% to 7% tax leakage on any Charter share sales due to some tax loss carryforwards. Looking now at Charter itself, we are approaching the five-year mark of the purchase of Time Warner Cable and Bright House. The EV of Charter has gone up over $100 billion through this period. And our total gain in Charter, prior to the time in which we began selling into their buyback, was nearly $30 billion and we're up over 4 times on our initial investment.

Thank you, Greg. At quarter end, Liberty Broadband had consolidated cash and cash equivalents of $1.2 billion, which includes $51 million of cash at GCI. The value of our Charter investment at Liberty Broadband as of yesterday's close was $39 billion. And at quarter end, Liberty Broadband had a total principal amount of debt of $4.6 billion. GCI's strong results and the $180 million revolver pay down in the current quarter led to meaningful de-levering with leverage as defined in GCI's credit agreement of 3.4 times. GCI has substantial cushion under its maximum leverage covenant of 6.5 times. Liberty Broadband has $300 million of undrawn margin loan capacity and GCI has $422 million of undrawn capacity on its line of credit. Note the above amounts exclude the indemnification obligation and the preferred stock. Turning to GCI's results. GCI had a great first quarter. Revenue grew 5% and adjusted OIBDA grew 11% to $96 million, the company's highest ever quarterly adjusted OIBDA, driven by demand for data across the consumer and business divisions, and lower costs associated with reduced bad debt and health care expenses combined with prior cost savings initiatives. Note that Q1 2020 included $9 million of one-time revenue related to services provided in 2019. Adjusting for this one-time prior year benefit revenue and adjusted OIBDA would have grown by 9% and 24%, respectively. Operationally, GCI added over 15,000 consumer revenue-generating cable modem subscribers and 6,000 consumer revenue-generating wireless subscribers over the last year. On the rural health care front, we received $175 million in payments during the quarter related to the funding years ended June 30, 2019 and 2020, which we used to pay down our revolver. We continue to work with the FCC on rates and payments for the funding year ending 6/30/2021. As mentioned last quarter, we received a new FCC order in January that gives rate certainty to Alaska providers for funding years ending in June 2022 and 2023. And we expect to have a shorter period between service delivery and cash collection going forward. With that, I'll turn the call back over to Greg.

Thank you, Brian. To the listening audience, we appreciate your continued interest in Liberty Broadband and Liberty TripAdvisor.

Perfect. Thank you. We start with our first question from James Ratcliffe, Evercore ISI. Please go ahead. Your line is open.

Thank you. I’ve two for Ron and Pete on GCI; and then Greg one for you on Liberty Trip. On GCI, can you talk about the potential tailwinds from the emergency broadband program? And also more generally, what sort of the potential benefits and risks you see of increased government support for broadband infrastructure. And Greg on LTRP, the spread to me my math is 35%-plus. Any way to get cash to tackle that spread? I know that Certares gets a say. And the recent history with margin loans has been what eventful shall we say. But are there other structures or options you use? And just broadly, how much of a priority is that spread for you? Thanks.

Do you want to go in the order they were asked Greg or you want to take yours first?

Sure. That sounds great, Ron. If you guys want to take a shot that would be great.

All right. Sort of a two-part question the first on the emergency broadband program, which will add in Alaska a $75 a month credit for any consumer of broadband, who has in some way been impacted by COVID. Ordinarily, you would expect a very strong uptick from something like that. We're a participant in the Lifeline Wireline telephone program and we have a substantial number of customers for that. I'm a little cautious as to how much upside to expect from the broadband program in terms of new subscribers just because we've done so well in the last 15 months with the pandemic and added so many subscribers. Ultimately, you hit a limit to how many are out there. I suspect there will be a substantial number who use the program to their benefit. How many new subscribers that adds is hard to say. I will also throw in one caveat to really substantial growth coming from that program and that's a generalized industry-wide modem shortage. The chip problem has led to a shortage of modems. We have some capacity to continue expanding. But we won't get through much more than the third quarter even at current growth rates if we don't get delivery on some of our pending modem orders. And that's an industry-wide problem. With respect to the amount of money flowing into the industry under the potential new congressional acts, my concern is there's more money than can be absorbed by industry capacity. There simply isn't enough fiber components cable and workforce available to deploy $100 billion nationwide at the pace that people seem to expect deployment. And I worry about expectations getting out in front of reality. Those amounts really should be delivered, but I think we're a long way from knowing what the actual results are.

Thanks, Ron, thank you. So, on the LTrip discount, as you know there is relatively limited volume in LTrip. And it has fluctuated from being a premium at various times to a discount. And it was made more complicated by the structure we have and the uncertainty around Certares. And if you go back and remember when Liberty Trip was spun away from Liberty Ventures it actually had that margin loan. We twice restructured it to try and manage our downside once through a variable forward and once through encouraging a large dividend at Trip, both of which reduced our balances, yet we still ran into trouble in the bottom of the pandemic. So, we are cautious in our capital structure. We're very excited about what we've put in place, because we feel it's relatively bulletproof. And we have increased our upside in the potential at TRIP after the restructuring with Certares. So after clearing up that capital structure and aligning us with TRIP more appropriately, we will look at alternatives on things we can do about cleaning up the discount. But I think a lot of it is going to be educating the market about, how that alignment has improved and how we are better positioned going forward with that runway and the uncertainty removed.

Great. Thank you.

Our next question is from Bentley Cross, TD Securities. Your line is open. Please go ahead.

Two if I may first for Greg. Charter participated a little bit more aggressively or maybe a lot more aggressively than most in the RDOF program. Wondering your thoughts on kind of what the difference in view was between Charter and the rest of the industry or allowed them to be a little more aggressive there? And then secondly on GCI, 2020 results and then this quarter again seemed to be a lot better than what was originally contemplated in the merger docs. Wondering your view on what had been the major puts and takes and what's the upside from here? Thank you.

So on RDOF, I think it's really a function of a couple of things. First, I think the Charter management team have shown their ability to operate effectively in many of these rural markets and know how to drive their cost attractively and in terms of their cost to connect their cost to service. And so their opportunity to go after some of these was attractive. Secondly, the capital structure we have candidly allowed us to be more aggressive because we had flexibility and extend the runway of growth and being rewarded for that as we've got a shareholder base which has seen our growth and understands it and appreciates it. All of those were very effective.

I guess the second half of that is mine then. In terms of GCI's improved performance, I think there really are two key components. The most important one long term is probably the improvement of the regulatory situation surrounding the rural health care environment up here and the fact that we're now able to get paid for the services that we are rendering to our rural health care customers and that we have a reasonably good degree of rate certainty going forward. That overhang and the first write-offs that we had taken to accommodate the rate reductions and then the rate recoveries when they came back in had a substantial impact in the turnaround between 2019 and 2020. We see that as a stable business going forward with some continued growth, and I feel very strongly that that's a good platform for us that will help to continue to drive the business. The second huge improvement and the turn from 2019 through 2021 of course is on the consumer side with the growth in cable modems. And I think we have to be cautious to figure out how much of that is pandemic-related. Obviously, the pandemic drove a substantially increased demand for data volumes. It also reduced the vacancy rate and thus increased the household formation rate because people weren't being evicted or not being evicted from their apartments. And it drove down our bad debt because people are paying for their cable modems. How all of that plays out, once the stimulus benefits and the stimulus protections phase out is harder to see. So it's difficult for me to call what the post-pandemic impact on GCI will be, but we're cautious because hidden beneath the veil of the strong stimulus performance is a weak Alaska economy. So I'm a little cautious there. I am bullish about continued growth of wireless going forward. Our 5G network in Alaska is vastly superior to all the other wireless networks up here and that's what's being reflected in the wireless growth. So kind of a mixed bag there.

Yeah. If I could add, I think Ron is underselling. While clearly stimulus, improved regulatory, pandemic demand were all big factors, I think the GCI management team has done a good job of focusing the business expense reductions, exiting some noncore businesses, focus on its broadband strength and demand. And as Ron did note, the improved wireless offering with the strongest network in Alaska also have created to a far better business up there just hardened prepared to capitalize on the opportunities.

That's greater comments. Thank you.

Our next question is from Mike Rollins, Citi. Your line is open. Please go ahead.

Thanks and good morning. Two questions. First, is there an opportunity to revisit the ownership cap discussion with Charter? And does the cap being enforced at 26% influence how you view the structure of Liberty Broadband and whether or not you would just rather own Charter shares directly instead of through Liberty Broadband? And then also just curious you mentioned 5G. If you could describe if you're seeing any new use cases from your customers in the early days of the 5G network. Thanks.

So, I'll let Ron touch on the 5G in a moment. On the 26% cap, we did have discussions. We were offered some alternatives to increase the cap. We looked at those as unattractive relative to repurchasing our own stock at a 19% discount. There's nothing to say we can't revisit some of those discussions down the road. But at the moment we like paying a 5% to 7% tax and repurchasing our own stock at 19% discount to the underlying Charter. So, you ask why one should choose LBRD over Charter. I think that's exactly it. You're purchasing at a 19% discount to the underlying Charter and you have the opportunity to see us accrete. As Charter accretes its own share count or decreases its share count and accretes its share price hopefully we have the opportunity to add even more attractively on a more leveraged basis with a discounted share repurchase. So, we like Charter. We really like LBRD.

And on the 5G in spite of the industry hype I think it's early to be seeing any material impact from new use cases. The population of 5G devices relative to the overall wireless population is still less than 10%. I think most of our users are using 5G as faster speed and it is blazingly faster speed as much as 10 times faster for some of our users. And that's the selling point today. We're not seeing dramatic new use cases evolve. That doesn't mean that won't happen or it won't accelerate as we get a denser population of 5G devices. But in terms of what's driving our sales and what's driving the revenue it's the speed and the network quality right now.

Thank you.

Our last question is from Matthew Harrigan from Benchmark. Please go ahead, your line is open.

Thank you. Ron already answered my 5G question. But on the relative buyback effect Greg made the point in the last call that I guess amusingly you're actually increasing the number of Charter shares owned per LBRDA share as a result of the net effect of the buyback activity. Does that disappear when you exhaust that NOL? I mean are you still going to have only that very slight tax leakage moving forward for an intermediate period or is that just kind of a short-term thing? And then apart from the very favorable napkin math is there anything in Washington from a tax vantage point or regulatory vantage point that could motivate you to get something done sooner rather than later? I know everything is pretty nebulous this early in the administration, but you and John Malone have always been very savvy on that to say the least.

Thank you for the question and the compliment. On the tax rate we think it will tip up marginally in 2022, but will still be very attractive relative to certainly the current discount. When you do share repurchase it's always you have two minds. One mind is take advantage of a low price. And the second mind is to get your own stock up. We for the moment are happy to take advantage of that share price discount the NAV discount and take advantage of what we know will be a large flow of capital approaching $3 billion a year from Charter. So, I look at this as likely to be a as you said a napkin value creator. And we like napkin value creators. Because if they're pretty simple to understand even we can get it and hopefully the market will get it too. So, we're enthused about continuing to repurchase at this discounted value. And to the degree it shrinks well we can re-evaluate and talk about other alternatives. But at the moment we're going to lean in with all we got.

And then as far as Washington?

I have no idea what's going to happen to the Biden tax rates. It seems to be all in flux. I do not anticipate it will have a major impact overall on what we're doing but there's certainly a lot of fog.

Thanks Gerg.

Thank you. And with that operator I think we're done for today. Thank you again to all of the listeners. Thank you for your interest in the Liberty companies. And we hope to speak with you next quarter again if not sooner.

This concludes today's call. Thank you for your participation. You may now disconnect.