Charter Communications, Inc.

Good day and thank you for standing by. Welcome to the Charter Third Quarter 2021 Investor Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your speaker today, Stephan Anninger. Please go ahead, sir.

Good morning, and welcome to Charter's third quarter 2021 investor call. The presentation that accompanies this call can be found on our website, ir.charter.com, under the financial information section. Before we proceed, I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, including our most recent 10-K, and also our 10-Q file this morning. We will not review those risk factors and other cautionary statements on this call. However, we encourage you to read them carefully. Various remarks that we make on this call concerning expectations, predictions, plans, and prospects constitute forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results. Any forward-looking statements reflect management's current view only and Charter undertakes no obligation to revise or update such statements or to make additional forward-looking statements in the future. During the course of today's call, we will be referring to non-GAAP measures as defined and reconciled in our earnings materials. These non-GAAP measures, as defined by Charter, may not be comparable to measures with similar titles used by other companies. Please also note that all growth rates noted on this call and in the presentation are calculated on a year-over-year basis unless otherwise specified. On today's call, we have Tom Rutledge, Chairman and CEO, Chris Winfrey, our COO, and Jessica Fisher, our CFO. With that, let's turn the call over to Tom.

Good morning, and thank you, Stephan. We performed well in the third quarter with good customer growth and very strong financial results. However, we're operating in an unusual environment where the market effects of COVID-19 have not yet normalized. Market churn remains historically low such that net gains are being driven by much lower transaction activity. Despite that, for the full quarter, we added 185,000 customer relationships with customer growth of 3.3% year-over-year. We also added 265,000 internet customers in the quarter and 1.3 million over the last year for a year-over-year growth of 4.4%. We added 244,000 mobile lines And supported by lower churn and a more tenured customer base, we grew our adjusted EBITDA by a strong 13.9% and our quarterly free cash flow by over $700 million year over year. Our view is that we have a long and robust runway of customer growth ahead of us. Today, our network passes over 54 million homes and businesses, and we're doing business with approximately 32 million of them. leaving us with over 20 million opportunities to create new customer relationships. There are also approximately 120 million mobile broadband lines in our footprint, and we're currently serving 3.2 million of those. We're currently very under-penetrated. Looking forward, we remain focused on improving both the quality and value of our products as data usage in the home and outside the home continues to increase at a rapid pace. Earlier this month, we launched our new and highly attractive unlimited multi-line pricing structure, which allows customers to save even more on their mobile bills. Early next year, we will launch a field trial of our CBRS small cells in a full market area, allowing participants to attach to our CBRS small cell access points when they are outside of Wi-Fi coverage, providing our Spectrum mobile customers with even faster speeds. while improving the economics of our mobile business. We also continue to deliver improving wireline connectivity products. Today, over 70% of our internet customers subscribe to tiers that provide 200 megabits or more of speed. And our new Wi-Fi 6 routers and Spectrum Wi-Fi pods, managed by our advanced home Wi-Fi platform and our MySpectrum app, provide customers with complete home coverage and greater control of their home networks and connected devices. As expected, we continue to see very high demand for data by our customers. During the quarter, non-video internet customers used over 600 gigabytes per month, stable as of late, but more than 30% higher than pre-pandemic levels. And today, close to 20% of our non-video internet customers use a terabyte or more of data per month. In order to increase the capacity and speed on our network for next generation products and services, we've developed a multifaceted approach to our network evolution comprised of a number of technologies which will be deployed where they make the most sense strategically and economically, delivering the very fastest speeds and lowest latency at the lowest cost and time to deploy. We continue to expand our capacity by splitting nodes but we have a cost-effective approach to deliver multi-gigabit speeds in the downstream and a gigabit per second symmetrical speeds in both downstream and upstream directions, all using our deployed DOCSIS 3.1 platform. And high splits, which are currently being tested in market, not only allow for increased speeds in the near term, but are also a capital-efficient way as they currently use deployed DOCSIS 3.1 customer premises equipment and reduce the need for node splits, which require an average consumer bandwidth utilization, which were required as consumer bandwidth utilization increased. So what I'm saying there is that the high split actually uses the capital that was needed for node splits. We also continue to actively develop our DOCSIS 4.0 technology plant architecture and rollout, which allows us to cost-effectively and cost-efficiently offer greater gigabit speeds in both the downstream and upstream. And of course, we're already using fiber to the home technology in a number of use cases across our footprint, including rural areas such as our RDOF build, and in MDUs and greenfield build areas where the economics make sense. Ultimately, our plant will be comprised of the most bandwidth-rich and cost-effective technologies, enabling us to deliver the fastest speeds in the industry in a more cost-efficient manner than competitors, ubiquitously across 24 million passings and growing. So with our network and product capabilities, We remain confident in our ability to grow our customers, penetration, EBITDA, and free cash flow for many years to come. Before turning the call over to Chris, I want to make a few comments about our recently announced management changes and promotions. On October 19th, we announced that John Bickham had been appointed vice chairman ahead of his previously announced retirement at the end of 2022. I've worked with John for three decades, and at every turn, his knowledge, leadership, and steady hand have not only contributed greatly to the success of the companies we led, but made a profound impact on the growth of our industry. I'm grateful that John will continue to serve Charter in his new capacity as strategic advisor to me and the executive team. We also recently announced that Chris Winfrey had been promoted Chief Operating Officer. Over the past 11 years, Chris's influence on Charter has expanded far beyond that of a typical CFO. He's been actively involved in all our business operations, and that deep knowledge, combined with his previous operational experience in Europe, will serve as well as Charter's next chief operating officer. And John's guidance as vice chairman will help ensure a successful transition for Chris into the COO role. As Chris moves to COO, we've also promoted Jessica Fisher, previously Executive Vice President of Finance to Chief Financial Officer. Jessica's leadership and financial expertise has benefited Charter for many years, both in her roles at Charter and while at E&Y, where she was a key advisor during our 2016 transactions. In her new role, Jessica will have an even greater impact on Charter's success. Finally, Rich DiGeronimo, our Chief Product and Technology Officer, adds oversight of network and software operations to his current responsibilities, leading the product and technology organization. With expanded responsibility, Rich will both shape the customer experience and lead our network's critical evolution into the 10G future, delivering to our customers a superior broadband connectivity experience. Now I'll turn the call over to Chris.