Charter Communications, Inc.

Hello, and welcome to the Chartered Communications Q3 conference call. We ask that you please hold all questions until the completion of the formal remarks, at which time you'll 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'll now pass you over to Stephan Andrew.

Thanks, Operator, and welcome, everyone. The presentation that accompanies this call can be found on our website at ir.charter.com. I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, which we encourage you to read carefully. Various remarks that we make on this call concerning expectations, predictions, plans, and prospects constitute forward-looking statements, which 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. On today's call, we have Chris Winfrey, our President and CEO, and Jessica Fisher, our CFO. With that, let's turn the call over to Chris.

Thanks, Stephan. During the third quarter, we added 63,000 Internet customers as we continue to benefit from growth in both our existing footprint and new subsidized rural footprint. We also added nearly 600,000 Spectrum mobile lines benefiting from our Spectrum One offering. At the end of the third quarter, we had over 7 million total mobile lines and over 12% of our internet customers now have mobile service. We expect mobile penetration to meaningfully grow over the next several years as the quality and the value of our converged connectivity service gains wider recognition. Revenue is essentially flat year over year with some temporary headwinds within the quarter. and adjusted EBITDA grew at 0.7% year-over-year, moving past the low point last quarter. We expect that upward trend to continue as we realize the benefit of our operating investments. More importantly, we're making significant progress against the multi-year strategic initiatives we outlined late last year. Our footprint expansion initiative remains on track. We expect to add approximately 300,000 new subsidized rural passings in 2023 and to accelerate that pace in 2024. Our penetration gains in subsidized rural passings continues to grow at a better than expected pace. At the 12-month mark, our rural builds are achieving nearly 50% penetrations, faster than our initial expectations. Our execution initiative also continues to progress, and we remain committed to prioritizing the customer experience. We continue to see the benefits of our investments in employee tenure and training, including better employee retention, higher quality service transactions, and better sales yields. Additionally, the increasing digitization of our service platforms for both customers and employees will further reduce transactions, driving higher levels of customer satisfaction and employee satisfaction, driving tenure and quality. And finally, our evolution initiative, which is comprised of our network evolution project, our convergence efforts, and our video product transformation, all of which remain on track. Our network evolution project continues to progress well and will allow us to maintain our fastest Internet and Wi-Fi service claims in front of customers and competitors everywhere we operate. Unlike the telcos, which prioritize the most attractive footprints for upgrades, our multi-gig speed offerings will be available across our entire footprint. Our network evolution is good for the communities we serve, and it's good for Charter. And excluding the benefit of any savings that result from the project, we continue to expect our network evolution to cost a very low $100 per passing. We're very much on target. Whether we finish our network evolution initiative by the end of 2025 or mid-2026 will really depend on the supply chain for distributed access architecture components and managing annual capital spend given the larger customer growth opportunity and construction speed of RDOF, where we're ahead of the build requirements and will end up with more passings than originally expected, state grants, and hopefully bead passings. However, I want to reiterate and be very clear that where state bead rules are not conducive to private investment, we will not participate in those states. Our converged product offering also continues to evolve and succeed. Spectrum One is performing well and offers the fastest connectivity with differentiated features like mobile speed boost and the Spectrum mobile network. Spectrum One also offers significant savings for customers with market-leading pricing at both promotion and retail. Finally, turning to the evolution of our video product, earlier this month we launched our Zumo platform across our entire footprint. This industry-leading video platform allows our customers to access their linear and direct-to-consumer video content with unified search and discovery within one easy-to-use interface. Combined with our Spectrum TV app, the most viewed linear MVPD streaming service in the US, Zumo is now our go-to-market platform for new video sales. In September, we announced an agreement to carry Disney's linear networks and direct-to-consumer services for our customers. This new hybrid distribution model is good for consumers, and we believe a significant step forward for the video ecosystem. For Charter, the agreement adds value to our video packages, and better aligns linear content in DTC apps, which will be included for free in our video products. We also maintain flexibility to offer lower-cost packages. Disney gets broader distribution of its DTC products with ad revenues from our video customers and upgrades subscriptions to ad-free. We'll also sell Disney's DTC apps to our Internet customers, including via Zumo, over time. Together with Disney, we created a glide path to bridge from linear video into new growth with both linear and DTC services. Disney and ESPN were a key first step to repairing the video ecosystem, but our goal is to have a product that is valuable and that we're proud to sell. We plan to modernize all of our distribution agreements upon renewal in a way that works for customers. That means packaging flexibility, value, and not asking customers or us to pay twice for similar DTC and linear programming. If programmers insist on customers paying twice, we just won't carry those channels. but, you know, we'd still be happy to sell their content in an a la carte app, same way as they do. Our goal is to modernize these agreements quietly and seamlessly for our mutual customer base. Our new hybrid distribution model, combined with Zumo's content-forward interface, provides a clear path to solve key customer issues of choice, value, and utility with seamless linear DTC and DSLOD integration and advanced search and discovery functionality. For charter and programmers, this creates a state-of-the-art video marketplace supported by our scaled distribution, sales, and service infrastructure. And we believe a glide path to broader distribution, better economics, and more choice for everyone. Through expansion, network evolution, convergence, video transformation, and investing in quality, we are executing successfully the strategy we laid out last December. Our strategy remains to provide the highest quality products we then price and package in customer-friendly ways to drive higher penetration of our services across our footprint. We then combine that with investments in high-quality service, which also increases our competitiveness to acquire more customers. Ultimately, continued execution of our strategy will drive significant long-term value for shareholders, and we continue to make good progress. Before handing the call over to Jessica, I want to note that earlier this week, we announced Tom Rutledge's plan to retirement and and that Eric Zenterhofer is reassuming the non-executive chairman role at Charter. I'm pleased that Tom will remain as Director Emeritus and grateful to Tom, Eric, and our full board, including two of the most successful cable investors in Liberty Media and Advanced Newhouse, for their work to achieve a smooth CEO transition for Charter. Jessica?