Ladies and gentlemen, thank you for standing by. Welcome to the GCI Liberty 2020 Q3 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 November 09. I would like to now turn the conference over to Courtnee Chun, Chief Portfolio Officer. Please go ahead.

Thank you. Good morning. Before we begin, we'd like to remind everyone 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 our most recent Forms 10-K and 10-Q filed with the SEC. These forward-looking statements speak only as of the date of this call, and GCI Liberty, Liberty Broadband and Liberty TripAdvisor expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in GCI Liberty, Liberty Broadband or Liberty TripAdvisor'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 GCI Liberty, including adjusted OIBDA and adjusted OIBDA margin. Information regarding the comparable GAAP metrics, along with required definitions and reconciliations, including preliminary note and schedules 1 and 2, can be found in the earnings press release issued today, which is available on the GCI Liberty website. Please remember to register for our Virtual Liberty Investor Meeting. On Thursday, November 19, we will cover Liberty Media and Liberty TripAdvisor. On Friday, November 20, will include Qurate, GCI Liberty and Liberty Broadband from 11 A.M. to 2 P.M. Eastern on both days. After the presentations on both days, John Malone and Greg Maffei, along with presenting CEOs, will host a Q&A session. Please pre-submit questions by Friday, November 13 to investorday@libertymedia.com. You can find a link to register and all of these details on our homepages. Now, I'd like to turn the call over to Greg Maffei, our President and CEO.

Thank you, Courtnee and good morning to all. Today, speaking on the call, we will also have GCI Liberty's Chief Accounting and Principal Officer, Brian Wendling; and GCI's CFO, Pete Pounds. Also during Q&A, we will be available to answer questions related to Liberty Broadband and Liberty TripAdvisor. First, I'd like to give a few updates on the proposed combination between GCI Liberty and Liberty Broadband. The HSR waiting period expired on October 9. The FCC approved the transaction on October 23, which will become final on December 2, if there aren't any applicable challenges. We are still waiting on Regulatory Commission of Alaska approval. We filed our application with them on September 16, and are looking to expedite that as quickly as we can. The proxy for the transaction went effective on October 30. And our special meeting for the shareholder vote is scheduled for December 15.

Thanks, Greg. At quarter-end, GCI Liberty had consolidated cash and cash equivalents of $553 million, which includes $105 million of cash held at the GCI OpCo level. The value of the public equity securities at GCI Liberty as of yesterday's close was $10.9 billion, which includes our $3.4 billion interest in Charter, $6.4 billion interest in Liberty Broadband and a $1.1 billion interest in LendingTree. At quarter-end, GCI Liberty had a total principal amount of debt of $3.2 billion, which is relatively unchanged from last quarter. This includes the $1.3 billion margin loan outstanding against Liberty Broadband shares, which is fully drawn, the Charter exchangeable debentures and $1.4 billion of debt, including finance leases and tower obligations at GCI. GCI's leverage at quarter-end, as defined in its credit agreement, was 3.7 times compared to a maximum allowable leverage of 6.5 times. GCI had $271 million undrawn borrowing capacity at quarter-end. Note that the above amounts exclude the indemnification obligation to Qurate and the outstanding preferred stock. After quarter-end, GCI, LLC, a subsidiary of GCI Liberty, raised $600 million of senior notes due 2028. The proceeds from this debt raise, along with cash on hand and borrowings under the senior credit facility were used to redeem all outstanding principal of its existing senior notes due 2024 and 2025. GCI, LLC also amended its existing senior credit facility in October, extending the maturity to 2025 and increasing total borrowing capacity to $950 million. You'll likely note that corporate and other expenses were elevated during the quarter, largely due to expenses related to the proposed GCI Liberty and Liberty Broadband combination. And lastly, you will note in our 10-Q, which will be released later today that we sold our interest in Evite during the quarter. With that, I'll turn it over to Pete to talk about GCI's operating results.

Thanks, Brian. Starting with COVID-19. Thus far, we have not experienced any uptick in bad debt expense. At the same time, we've benefited from increased demand for our corporate data network and lower healthcare costs. This has resulted in positive financial outcomes as we remain committed to ensuring we meet all the connectivity needs of our customers. We continue to work with educational facilities to ensure that Alaskan students have the access to the connectivity that they need. With the start of the school year, we worked with school districts across the state to bring connectivity to approximately 4,000 low income students or students who otherwise would not have had access to school online.

Thank you, Brian and thank you, Pete. We hope you will all join us for our Virtual Liberty Investor Meetings on November 19 and 20. We do appreciate your continued interest in GCI Liberty, Liberty Broadband and Liberty TripAdvisor. And with that, operator, we'd like to open the line for questions.

And we'll go ahead and take our first question now from James Ratcliffe with Evercore ISI.

Good morning. Thanks for taking the question. Greg, given your position in the cable industry, can you give us your thoughts on what if it turns out -- looks to be a sort of split government with a Democratic administration could mean for cable, particularly in the areas of -- on the M&A front and regulation? Thanks.

Thank you for the question, James. Well, I suspect anything that looks somewhat like the current regime is probably pretty good for cable. Cable has done, in my judgment, an excellent job of supplying broadband connectivity during the pandemic and admirably increased capacity and increased number of lines and handled the growth in upstream and downstream traffic very well. So, continuing that trend and letting cable do what it can do well I think is a positive. That having been said, I would note that during the prior administration, which at various times had Democrat control of all three branches or the two branches of the legislature and the executive branch, Charter was able to operate very well equally under a Title II regulation. So, I remain optimistic. On the M&A front, realistically, there is not that much M&A for Charter to do. There are only a couple of large scale cable companies which are not Comcast or Charter. And I think most of those would probably be still substantially small enough that I wouldn't anticipate that there would be enormous antitrust issues given the regional nature of the business, but that remains to be seen.

Thank you.

We'll take our next question from Zack Silver with B. Riley.

Okay. Great. Thanks for taking the question. The first one is just any update on the discussions with Charter about increasing the cap on the equity ownership there. And if not, are there any other mechanisms available where you guys wouldn't have to take a tax hit on selling Charter shares to get back under the cap?

So, we are in discussions with the company and directors about modifications to the cap. And I think those will probably be productive. But I want to emphasize that our tax rate, if we were forced to divest shares, because of the nature of how we hold the stock effectively be treated as a dividend treatment and our tax rate would be 8%-ish and given the 20%-plus discount, I don't view, while we are not interested in really selling our Charter shares, I also -- a forced sale which -- for which we were still 12% in the money in terms of the trade-off if we did further repurchases would not be the worst result. So, while I am optimistic we will reach some resolution with the company that will be positive. I also note that if we are unable to reach a resolution, it is not the worst outcome.

Okay. That makes sense. And then one more, if I could. Just around fixed wireless. I mean, Verizon continues to be optimistic on 5G Home and soon T-Mo will roll out a pretty aggressive plan with its home internet offering. And just curious, Greg, whether you have had a change of heart around fixed wireless as a competitive threat direct at cable?

No. I mean, I don't think they've rollout. Is more competition a positive? I think that cable has shown it's very able to operate very well during this time. Cable has done a great job of providing connectivity. Cable is going to extend its footprint into new regions, partly fueled by the RDOF. So, I think cable has done an excellent job of growing its footprint and serving its customers and serving potential future customers. We'll see what happens on fixed wireless. As far as I can tell, and I don't know what's inside the head of the Verizon management, but it appears to be that they're backing off from some of the 28 and 38-gig. They're emphasizing. And most people seem to think that T-Mo's efforts in the mid-band are more effective. So, to be seen, but I don't view it in the near-term as a massive competitive threat to our business.

Got it. Thank you very much.

Our next question comes from Bentley Cross with TD Securities.

Do we have the question, operator? Or did we lose somebody?

Mr. Cross, you now have an open line.

A quick question for the GCI folks. Wondering if Alaska Communications' privatization might change any dynamics in the market, or do you have any thoughts on it in general.

This is Ron. I guess, I'll take that one. We would expect some increase in the competitive nature of the market. But we'll have a long lead time. It will probably be several years before they are able to -- I mean, it'll take them a while to close and then they'll have to make substantial investments. I would expect we'd see some more fiber in their networks. But we're pretty confident in the quality of our product offerings and the superiority of the hybrid fiber coax plant and the network that we have designed. And that combined with our bundled products, I suspect, will leave us in a position where it won't have a huge impact on us. Although, we are planning for some increased competitive sets activity in the market once it's closed and after they've made some investments.

Thanks for the candor.

Our next question comes from Matthew Harrigan with Benchmark. Please go ahead.

Thank you. Ajit Pai despite being a pretty libertarian guy at various points just really talked about how the cable industry had an almost unfair advantage with the small cell topology and it's really wasteful just in the U.S. economic perspective from everyone else to do these duplicative builds. Do you think -- as you pointed out, Verizon, there's definitely a move toward the mid-band growth? I mean, do you think that there's an increasing awareness on the part of some of the mobile companies that they'd like to work -- obviously, specifically Verizon, that they likely work something out with cable on the small cell side? And are you drawing any inferences from your experience up in Alaska, which is obviously in the lead far from the U.S. vantage point? Thank you.

Thank you. I missed the first part. You said -- who said we had an unfair advantage?

Ajit Pai, the FCC Chairman.

Yeah. I didn't hear Ajit. Okay. Look, it's nice that the FCC Commissioner thinks that we have the right technology. I believe, Charter's goal is to serve its customers well. And for the benefit of the nation, having more ways that people can connect is not a terrible thing. I think we have an excellent service and an excellent network with a lot of capabilities. And I've said that we're looking to extend that network. How 5G interacts and how 5G operates on top of it, I think we could be a good partner. As you note, we already are Verizon's partner through the MVNO relationship. And you've seen us look to extend some of our network capabilities by purchases of spectrum, CBRS spectrum. So, I think, they can work pretty well together hand in glove. Ron, I don't know if you would add anything to that based on our 5G experience in Alaska.

Well, we've said all along that 5G was going to be as much a backhaul game, as it was a wireless networks game. And I think part of the reason that we're doing well with our 5G up here and we've got the jump on other folks is that HFC plant gives us a much better backhaul network. So, we're confident in cable's ability to drive 5G wireless. And in the long run, either have a superior competitive platform or have our competitors come to us because only the cable industry can really drive the kind of last 100-foot backhaul that you need for the 5G small cells.

Thanks, Greg. Thanks, Ron.

Thank you.

Our last question comes from Ben Phillips with Savoie Capital.

Hi. Good day. Quick question. I'm kind of new to the story, so I just wanted to get some color around the $575 million convertible notes, the 2.75% converts due 2050. Just a little more color on what that transaction is and what that all means for the cap structure. Thank you.

I'll let Ben Oren talk about the convertible note.

I think with respect to the convertible notes, first call date is in 2023. And so, as we take a look at the ability to refinance those opportunistically between now and that date, continue to watch the Charter share price and determine all the best windows.

We're happy to take it offline if you need more details on that.

Yeah. I'd appreciate that.

Thank you. I think there's one more question. Is that correct, operator?

Yes. We'll take our last question from Michael Bunyaner with TLF Capital.

Thank you for including me. Good morning and congratulations on excellent results.

Thank you.

I have a question related to Charter's network. I believe this past quarter over 80% of individuals essentially self-installed, which clearly is changing the economics of servicing an average customer. Could you just walk us through what does that mean in terms of the economics of managing the network on an ongoing basis, because I would think that this would be a significant savings on a per unit basis?

Yeah. It's a great question. I think if you look back two years ago, we were something like 38%, sub 40% self-install. And during the most recent quarter, we were, as you noted, over 80%. That's probably a couple of things. One, that is a great testament to the work that the Charter team has done on improving self-install capacity and making that process simpler for customers and better -- and us making it simpler for them and managing it more easily. I also think it's probably somewhat driven by the pandemic. The reality is that people don't necessarily want to see cable installers coming to their home. So like many things in the pandemic, things born of necessity have become more convenient and more driven and more digital and more self-reliant. That has also probably been somewhat the case impacted by the fact that some of our competition really almost shutdown and were not doing any installs. They didn't have truck rolls and nor did they have the same self-install capacities or ease-of-use that Charter did. So, all of that contributed to an acceleration in the growth of self-install. That has really reduced our cost of install. I'm not sure if that will have as much an impact on the ongoing cost once they're installed, because I'm not sure the network management is really that substantially different. But I think it's both been a reduction in cost and an ability for us to gain market share during the time of COVID.

If I may just -- to follow-up in terms of market share penetration. We were running at Charter just about 50% of the homes passed. What do you think ultimately because of the quality of the service, as well as the quality of the install and now having the call centers essentially in the U.S., what kind of penetration over time could we reach and/or what do you think would be a reasonable goal, I don't know, three to five years from now?

I'm not sure that the Charter management has set that goal or we have that forecast. I know -- I've heard Tom Rutledge believe that ultimately it could get to two-third penetration, but he didn't have a timeframe for that. But I appreciate the BHAG, the big hairy audacious goal, that is because that's obviously a lot of market share gain. But I do think that cable has an advantage. And if you've seen the fact that we'll have added nearly -- probably during this year, during the last 12 months added something like almost 8% to 9% growth in its customer count in during the last 12 months. I'm not sure that's going to continue to accelerate at the same rate, but that shows the potential that is there to grow, because that share point has probably gone up 2% or 3% during the last 12, 18 months. How high -- how long it's going to take and how that slows as we hopefully exit pandemic, I don't know. But I'm still bullish on our ability to increase share. I think Tom is as well.

Again, thank you very, very much. And congratulations to everyone.

Thank you.

So, with that, operator, I think we're done. Thank you again all for your continued interest in the Liberty family, and we look forward to speaking with you either next quarter, if not sooner.

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