Charter Communications, Inc.

To all sides on hold, we appreciate your patience and ask that you continue to stand by. Your conference will begin in a few moments. Music Please stand by, your program is about to begin. If you need assistance during your conference today, please press star zero. Hello and welcome to Charter Communications first quarter 2023 investor call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I will now turn the call over to Stephan Anninger.

Good morning, and welcome to Charter's second quarter 2023 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 our 10-Q filed 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 Chris Winfrey, our President and CEO, Tom Rutledge, our Executive Chairman, and Jessica Fisher, our CFO. With that, let's turn the call over to Chris.

Thanks, Stephan. During the second quarter, we added 77,000 internet customers, and we continue to benefit from our Spectrum One offering and our network expansion initiatives. We also added 648,000 Spectrum mobile lines. At the end of the second quarter, we had over 6.6 million total mobile lines. Over 11% of our internet customers now have mobile service, and we expect mobile penetration to meaningfully grow over the next several years. Spectrum Mobile is the nation's fastest mobile service. We see mobile lines as an extension of our Wi-Fi and seamless connectivity service, and we expect our increasing convergence capabilities will contribute to further Internet growth. We're pleased with the progress of our growth initiatives and our performance in the second quarter, and we maintain EBITDA despite the significant employee investments we made through 2022, which will start generating growth benefits later this year. We remain focused on our three key strategic initiatives, evolution, expansion, and execution, each of which is designed to help us grow our business, and each of which remains very much on plan. Our network evolution plan is progressing well and offers us significant benefits. First, it'll allow us to maintain our fastest internet and Wi-Fi service claims in front of our customers and competitors everywhere we operate. With symmetrical and multi-gig speeds via DOCSIS 4.0, and the ability to provide 25, 50, or even 100 gigabit per second speeds with fiber on demand. This evolution path also creates fallow upstream and downstream capacity for years, driving lower node split capital. And by upgrading the actives and amplifiers and nodes and converting analog optics to digital, we lower our future operating and maintenance expenses, all at a very low cost, much of which is funded from capital and operating cost savings over time. Unlike telco companies who prioritize more attractive footprints for their upgrades, our deployment is across our entire footprint. The cable industry's nearly ubiquitous deployment of a tremendous amount of spectrum to each home will provide the scale platform for software and product developers to create new bandwidth intensive, low latency, high compute services. This uniform deployment of network capabilities is what cable's always done to lead the development of new technologies on our networks at scale. And that unique approach is what has and will maintain our competitiveness into the future. So our network evolution is good for the communities we serve, and it's good for Charter. So far, the execution of this large fiscal upgrade has gone well, and capital costs are coming in on target. Excluding the benefit of any network savings, we continue to expect to spend $100 per passing. Our converged product offering also continues to evolve. Spectrum One is performing well in the marketplace, It offers the fastest connectivity and includes differentiated features like mobile speed boost and spectrum mobile network, each of which run on our advanced Wi-Fi product. Today, over 45% of our internet customers have our advanced Wi-Fi product, and over 75% of our mobile customers now attach to the spectrum mobile network outside of their homes, providing higher speeds with more reliability to customers with lower cost to charters. Spectrum One also offers significant savings for customers, with market-leading pricing at both promotion and retail. We're excited for the upcoming release of the Zumo product, which I believe will be an industry-leading platform for customers to access all of their linear and DTC video content with unified search and discovery. Together with our Spectrum TV app, the most viewed linear MVPD streaming service in the U.S., Zumo will be our go-to-market platform for new video sales. We're currently conducting field trials of the product, and we remain on track for deployment later this year. Our expansion initiative with subsidized rural construction is also on plan. Penetration gains and subsidized rural passings continues to grow at a better pace than planned. Charter is the largest and fastest growing rural provider in the nation. Our scale and reputation as a rural builder positions us well for winning additional state and local funds, and we hope significant BID infrastructure funding. Although the rules and recommendations from NTIA on BID funding differ from successful programs currently deployed by the states in which we operate, we'll work with key stakeholders and government officials to reach a place where the rules are still conducive to private investment. And finally, we remain committed to the execution of our core operating strategy, which prioritizes customer experience and satisfaction, driving faster customer growth. We continue to see the benefits of our investments in training and tenure, including better employee retention, higher quality service transactions, and better sales yields. Additionally, the increasing digitization of our customer service platforms will further reduce transactions. There's been a lot of discussion about what artificial intelligence and machine learning could do to improve products and business models. Charter already uses advanced analytics and machine learning in various stages and forms across sales, service, and network operations. And we expect to continue our investments in AI, machine learning, and digital service in ways that meet customers where and how they want to receive service and continually enhance tools for our sales and service employees to simplify their jobs. Ultimately, AI will improve both customer and employee satisfaction and enhance our operating efficiency by driving fewer physical service transactions, lower cost, and lower churn for years to come. Our operating strategy is focused on running our business for long-term value creation for our shareholders, which includes two of the cable industry's most successful investors. Simply put, our operating strategy is founded on having great products, pricing, and packaging that creates value for customers and is very difficult for competitors to replicate, so that we get more products into each household and drive more penetration across the network, which lowers our cost to serve. And then combine that with investments in high-quality service which also increases our competitiveness to acquire more customers. We have a great team here at Charter, and we're committed to disciplined execution and investment in this operating strategy, which we believe is good for customers, employees, and the communities we serve, and will drive significant long-term value creation for shareholders. With that, I'll turn the call over to Jessica.