Charter Communications, Inc.

Hello and welcome to Charter Communications' second quarter 2026 investor conference 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 Stefan Anninger.

Thanks, operator, and welcome, everyone. The presentation that accompanies this call can be found on our website, 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, and 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 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. As a reminder, 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, and Jessica Fischer, our CFO. With that, let's turn the call over to Chris.

Thanks, Stefan. During the second quarter, we added over 400,000 Spectrum mobile lines, making that 1.7 million lines over the last 12 months, a growth of 16%. We now have over 12.5 million mobile lines and remain the fastest growing mobile provider in our footprint. Our video customer losses continue to improve, with our 21,000 video customer loss significantly better than last year. We now have the best video product and value in the marketplace. In internet, we have a fully deployed and fully converged gigabit plus network across our entire footprint. But competition for new customers from expanded competitive footprint remains high. Our second quarter internet customer loss of 172,000 was higher than a year ago, similar to what we saw in the first quarter. Revenue was down 1.7% year over year, driven by lower residential revenue. Second quarter EBITDA, excluding Cox transition expenses, declined by 3.2%. Softer gross additions remains the primary driver of our internet customer growth weakness, while churn remain largely unchanged. and while internet customer growth is taking longer to reverse, the growth of new competition will subside. We expect to stabilize and return to broadband growth over time with our better converged connectivity product and pricing, higher demand for speed, data and reliability, and as our NPS scores improve, benefiting both churn and sales. Thank you for joining us. AI service and cost benefits are also beginning to ramp, and we're implementing a series of additional cost management measures. Jessica will circle back on her free cash flow profile and outlook in a moment. So let me highlight what we're doing right now, day to day, to win in the marketplace. A recent change to our marketing and sales channel focus has been the redoubling of our efforts to improve our internet funnel and yield by focusing first on the internet sale, with a growing focus on mobile and video upgrades thereafter. and that bundling, of course, drives significant value and churn benefits. Internet customers that also purchase our mobile product churn nearly 40% less than internet customers who don't have mobile. And the more lines per account, the greater the churn reduction. Today, our mobile customer penetration of internet is about 20% with an average of just below two lines per mobile customer. So significant upside remains for mobile penetration and lines in broadband churn reduction. Internet customers that purchase our video product similarly churn over 40% less, and activation of our programmer app inclusion offer further reduces churn across all broadband relationship tenures. Currently, 55% of our eligible video customers have activated at least one of our inclusion apps, with over four apps activated on average. We're also focused on improving customer satisfaction and resulting NPS. Good prices and saving customers money is a key driver of NPS, and that starts with internet pricing with available price locks when including our mobile and video services, including our $1,000 savings guarantee for new and existing customers with mobile. Service and reliability are the other top drivers of NPS. We believe our service capabilities are unique, anchored by a 100% U.S.-based sales and service team, and that provides a significant upside. Our digital service capabilities are set to meet customers where and how they want to be serviced. And when automated, we're ensuring that Channel delivers the same quality as the top 10% of our agents. When onsite service is needed, we guarantee same-day service or we provide a credit. The reality is we're now often arriving within two hours of calls. And we see tangible examples of where we increasingly delight customers with our service. At the same time, we have real opportunities for improvement and reliability, how we communicate with customers, and what I call paper cuts in the service experience. At Charter, we've already made the investment in the service infrastructure, our employees and capabilities, and we'll turn that investment into a better service reputation. Changing perception takes time, but the organization is increasingly focused on customer satisfaction and we're incentivized around NPS. We're doing the right things from a resource allocation, customer mindset, and organizational perspective to make that happen. That includes adding complimentary talent from Cox. On September 1st, Nick Jeffrey will join as Chief Operating Officer alongside the talented team we have today. Turn into the Cox transaction. We're now hoping to close mid to late August. Our operating strategy of product investment and innovation, saving customers money, and onshoring our service capabilities has allowed us to be successful in M&A. Recently, investors have been asking us about what might come next, but the reality is we have a large transaction right in front of us now, which creates significant value. We have a fully developed integration plan for Cox, and we have confidence in our ability to execute well and at a faster pace than previous integrations. We expect to grow the asset. Shortly after close, we'll launch our spectrum pricing and packaging within the Cox footprint. We expect to drive better internet customer performance and unit growth acceleration with very underpenetrated mobile and video. Our lower product pricing, including our $1,000 savings guarantee for new and existing customers when taking mobile, will help drive higher household product penetration, maintaining healthy Cox household ARPU. That's despite their higher individual product prices today. We expect our pricing and packaging to drive lower churn, higher customer satisfaction, and better NPS. The bundling and migration approach we'll deploy at Cox is the same we successfully used with Bresnan in 2013, TWC and Bright House in 2016, and with ourselves really over the past two years. We also expect significant B2B upside by leveraging what each company does well with a long runway for growth and acceleration. The addition of Cox's hospitality capabilities, Segra, RapidScale, and a long-standing investment in its B2B infrastructure will benefit the broader spectrum. We still expect run rate transaction expense synergies of at least $800 million per year. And while we'll update that estimate after close, I think it'll grow to a billion dollars. As a reminder, transaction synergies do not include any benefit from operating or capital expenditure synergies. Separate from those synergies in procurement and overhead, there will also be a significant number of new frontline hires. We're now recruiting well over 1,000 new residential and business sales jobs in Cox territories, which will drive higher sales. We couldn't hire these jobs until we had better visibility on a likely closing date with California. Across sales, retention, and customer service, over the next year, we'll onshore and insource all call center activity, Moving the platform to 24-7 coverage for service in Cox markets. This will bring work back to the U.S., and in-source work that is currently handled by a significant number of offshore contractors. We expect to absorb most, if not all, of this offshore volume from Cox through existing spectrum operating efficiencies and digital capabilities. Following the closing of the Cox transaction, I want to frame what we'll represent as an industry partner for innovation. will have roughly 1.3 million miles of network with over 70 million passings, with a fully converged multi-gig internet and mobile offering available to all of those passings. We'll have approximately 37 million customers, meaning a selling opportunity of nearly 35 million passings without a relationship today. Together, we'll generate approximately $67 billion in revenue and approximately $28 billion in EBITDA. Spectrum will operate under two MVNOs with the best mobile networks in the country and the only fully converged capability in our footprint. Today, there are approximately 164 million mobile lines in our footprint and only 13 million of those will be Spectrum Mobile, 8% penetration with a faster, lower cost mobile product. So while we're growing mobile quickly, there's still a very large growth opportunity in front of us. Thank you for joining us. We're taking a multifaceted approach to delevering, which Jessica will discuss in a few minutes. But the plan is to both delever earlier and further, but not forego the buyback opportunity at what is a historically low valuation, all of which provides a robust backdrop to a broad segment of shareholders and bondholders who benefit from our free cash flow growth and capital allocation. Stepping back from maintaining an optimal capital structure, the biggest value driver opportunity for us going forward is returning to growth. And our recipe for winning in the marketplace is simple. Deliver the best connectivity at the best overall value with the best service. Our network is a unique and strategic asset which can't be replicated. It offers converged service at 100% of our footprint with gigabit speeds and low latency everywhere. Our speed and reliability are set to improve dramatically over the next few years as we complete our network evolution. When you look at both our wireline and converged network and the traffic we already deliver today, it's clear we're more than just America's connectivity company. We provide the mission-critical AI infrastructure that will ultimately demand our superior speed, reliability, and low latency capabilities. We expect to be a significant beneficiary of AI through network demand, data center connectivity, our own service capabilities and cost structure, and the potential utilization of our edge data centers, which have fiber, primary and backup power, and cooling in space. As we complete our network evolution, we'll have over 250 megawatts of available capacity without additional investment, and capacity for much more at a very low cost with future potential partners. And while our focus is squarely on broadband, we also have separate resources focused on developing new revenue streams and ensuring we can develop network capabilities and products that others cannot replicate. With that, I'll hand it over to Jessica.