Consolidated Communications Holdings, Inc.

Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Consolidated Communications third quarter earnings conference call. Please be advised that today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I will now turn the call over to Jennifer Spaudy, Senior Vice President of Investor Relations and Corporate Communications. Jennifer, you may begin your conference.

Thank you and good morning. I'd like to welcome everyone to Consolidated Communications Third Quarter 2021 Earnings Call. On the call today are Bob Udell, President and Chief Executive Officer, and Steve Childers, our Chief Financial Officer. Bob's comments today will highlight our strategic initiatives and our progress with our fiber builds. Steve will provide details on our third quarter financial performance and an update on guidance for 2021. Following their prepared remarks, we will open the call up for questions. Before we proceed, I'll remind you our earnings release, financial statements, and earnings presentation are all posted on the investor relations section of our website, which can be found at ir.consolidated.com. Please review the Safe Harbor provisions on slide two of our presentation. Today's discussion includes statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. A discussion of factors that may affect future results is contained in consolidated filings with the SEC. We will file our 10-Q on Friday. Today's discussion will also include certain non-GAAP financial measures. Our earnings release includes reconciliations of these measures to the nearest gap equivalent. I will now turn the call over to Bob Udell.

Thank you, Jennifer, and good morning, everyone. The third quarter was another important step in our multi-year value creation fiber expansion plan. We achieved the 10th consecutive quarter of broadband year-over-year revenue growth. We upgraded 97,000 passings to fiber gig-capable service in the recent quarter and completed 219,000 upgrades year-to-date. We are on track to exceed the aggressive plan we set of 300,000 fiber upgrades for this year. These network upgrades are the path forward for growth and depict the first phase of our transformation, which is just beginning to take shape. Today, I will provide an update on our fiber build plan, starting on slide four. Our five-year plan includes is to upgrade 1.6 million or over 70% of our total passings by the end of 2025. You can see the planned progression of this build on slide four, and that we plan to upgrade 400,000 passings next year in 2022. More than 1 million passings will be upgraded in Northern New England alone, where more than 90% of our markets have a single or no competitor. We have a tremendous cost advantage, especially in New England, where approximately 80% of our fiber is aerial and in close proximity to our existing fiber backbone facilities. We're also leveraging our diverse footprint of suburban and rural markets with additional fiber to the prem builds in Texas, California, Minnesota, Illinois, and Pennsylvania. This expansion supports each of our three customer channels, including consumer, revenue, and carrier, giving us three bites of the revenue apple. In addition to the high percentage of aerial plant in New England, we have a number of fiber deployment advantages, including our incumbent position, our robust near net fiber networks, and existing conduit capacity for buried facilities. We built 1,700 miles of new fiber in the third quarter and more than 4,000 miles so far this year. We added more than 4,000 net one gig subscribers in the third quarter and have increased fiber subscribers by over 20% year to date. We are now hyper-focused on implementing our enhanced digital technology to aid the customer experience and ramp our sales and marketing efforts. Our fiber cohort penetration targets are outlined on slide five. We expect to achieve 4% cohort penetration 12 months after passings are upgraded in a quarter, 24% after 24 months, and we expect to approach 33% after 36 months in the life of an individual cohort. As we've discussed in the past, in some markets we are confident we can achieve duopoly parity with penetration in the low 40% range over a five-year horizon. Our go-to-market strategy has been well tested, and we have exciting news coming in mid-November related to a brand launch. With our new brand launch, we will offer an entirely transformed customer experience, which is designed to make broadband easy. We are offering superior gig symmetrical speeds, the strongest whole home mesh Wi-Fi capabilities the industry offers, no data caps, no contracts, and an extremely competitive price point for symmetrical gig internet. We have the capacity to install fiber services within three days of order, and we have a dedicated premium customer support channel measured by NPS scores for performance and productivity. We are significantly enhancing our digital sales engine, in the next 30 days and rolling out an enhanced customer installation process. Our strategy is to win subscribers at the neighborhood level and provide a frictionless digital order experience. We're also connecting with our customers at local events through community meetings, both in person and virtually. Now, the investments we are making in our digital transformation projects will give us and our customers new, intuitive, self-serve options, making it easy to do business with us in the way customers want. These tools will also significantly enhance the customer experience throughout our service delivery process. In the third quarter, we experienced the highest number of online transactions in our history as we enabled new web-based order entry tools specifically for Northern New England Fiber customers. This digital flow-through delivers end-to-end automation of all provisioning and order processing functions, including messaging to customers regarding the status of their orders. This is a powerful combination of neighborhood-level live interaction coupled with the latest digital technology capable of delivering the fastest symmetrical speeds in market, but also a truly differentiated customer experience. All of this is key to the value proposition of our new fiber services. And there's more to come. Along with our new digital storefront, we will roll out a new brand representing a superior fiber product and a transformed customer experience, giving customers exactly what they have been asking for from their broadband service provider. We are very excited to launch our new brand within the next 30 days and the differentiated customer experience, which it represents, which will enable us to become the broadband provider of choice. Now turning to our commercial and carrier channel, this business continues to be an important part of our strategy as we leverage our fiber network investments to grow commercial and carrier data transport revenue. We've continued a long track record of growth in data revenue, which grew 1.1% year over year as we edge out our network. We actually grew on net billings by roughly 1400 or 11% year over year, and we completed nearly 200 on net extensions of our fiber network in the recent quarter. In fact, 90% of our new sales across our markets are on net, which correlates to higher margins, increased opportunity to upsell, and a greater ability to ensure the best customer experience. Now, this ultimately contributes to customer satisfaction and strong retention. We see good sales activity around our ProConnect unified communications and SD-WAN services as leading business solutions. Our commercial go-to-market strategy leverages our expansive fiber network and our solutions-based sales approach, allowing us to become a trusted advisor to our customers while providing simple solutions to complex problems. We leverage three distinct commercial sales channels, including direct and agent, as well as wholesale. Our carrier team is focused on the emerging 5G network opportunities across our regions and with all major carriers. The carrier product mix, like commercial, is weighted towards Ethernet, and we are seeing more interest in carrier-grade wave solutions as well. Our highly experienced sales team continues to capitalize on new Ethernet and backhaul growth opportunities while proactively managing second-generation contracts and price compression in an increasingly competitive landscape. We continue to be optimistic about business recovery from the pandemic and are pleased with the receptiveness for customer in-person meetings and resulting projects. Our strong balance sheet enables us to support this channel and commit the capital needed to grow the business with the highest return. I'll now turn the call over to Steve, who will provide more insight on our third quarter financial results. Steve?