WideOpenWest, Inc.

Good day and thank you for standing by. Welcome to Wide Open West second quarter 2021 earnings call. At this time, all participants are in listen-only mode. After the speaker's 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. If you require further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mr. Andrew Poulsen, Vice President of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us for our second quarter 2021 earnings call. With me today is Theresa Elder, WOW's Chief Executive Officer, and John Rego, WOW's Chief Financial Officer. Before we get started, I'd like to remind everyone that during our call, we will make some forward-looking statements about our expected operating results, our business strategy, the expected effects of the pending transactions to sell five service areas that we announced on June 30, 2021, and other matters relating to our business. These forward-looking statements are made in reliance on the safe harbor provisions of the federal securities laws and are subject to known and unknown risks, uncertainties, and other factors that may cause our actual operating results, financial position, or performance to be materially different from those expressed or implied in our forward-looking statements. You are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update such forward-looking statements. For additional information concerning factors that could affect our financial results or cause actual results to differ materially from our forward-looking statements, please refer to our filings with the SEC, including the risk factor section of our Form 10-K filed at the SEC, as well as the forward-looking statement section of our press release. In addition, please note that on today's call and in the press release we issued this morning, we may refer to certain non-GAAP financial measures. While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for our historical reported results can be found in our earnings release and our trending schedules, which can be found on our website. Now, I'll turn the call over to WOW's Chief Executive Officer, Theresa Elder.

Thanks, Andrew. Welcome to WOW's second quarter earnings call. In addition to our press release and quarterly trending schedule that are available on the investor relations page on our website, we have also included a presentation to complement our prepared remarks. WOW delivered great second quarter results, including our seventh consecutive quarter of record high-speed data revenues. continued growth in our adjusted EBITDA and EBITDA margins, and a significant increase in our free cash flow. At the end of the quarter, we reached agreements to sell five service areas in two transactions valued at approximately $1.8 billion that we believe will deliver significant benefits to our company and shareholders by enhancing our overall financial strength and flexibility. In the second quarter, total revenues increased nearly 2% from the same period last year to $287 million. The increase was driven by our high-speed data business, where revenues grew by 14% year over year to $156 million. more than offsetting the decline in video and telephony revenues during the quarter and driving adjusted EBITDA to 118 million, up more than 16% from the same period last year. Not only are we executing on our strategy and growing our business, our employees continue to recognize WOW as a great place to work. Once again, we have been named one of the best and brightest companies to work for in Atlanta, Chicago, and Detroit. Our employees are one of our main differentiators that enable us to provide exceptional customer service. All of these achievements highlight a successful first half of 2021 and underscore the strengths and future prospects of our broadband first growth strategy. The following statistics demonstrate our execution during the second quarter of the year, with all of the charts showing both year-over-year and sequential improvements. During the second quarter, we added 3,400 high-speed data RGUs, bringing our total number of HSD RGUs to over 826,000. The number of net ads, while showing growth, was slightly below our expectations for the quarter, reflecting lighter-than-expected connects. However, we are still positive about our outlook for the year as we continue to benefit from historically low levels of terms. We did not see as significant of an improvement in our growth from our commercial businesses, and businesses are still not yet back to pre-COVID levels. We are beginning to see improvement there as more businesses cautiously reopen. The federal EBD program, which launched mid-May, has seen strong adoption with more than 7,800 customers participating year-to-date. The program has predominantly resulted in existing WOW customers upgrading to higher data speeds rather than attracting new customers. HSD ARPU increased in the second quarter due, once again, primarily to customers purchasing higher data speeds. HSD ARPU was 6320. up from 57.10, or nearly 11%, versus the same period last year. During the second quarter, all key statistics continued to trend upward as we grew our total number of subscribers again this quarter, highlighting the consistency of our historically low churn. Another great indicator for the success of our broadband-first strategy is that we have maintained a high sell-in rate of 87% of new subscribers purchasing our HSD-only service. And not only is broadband becoming more important, but customers are requiring higher data speeds. In the second quarter of 2021, 89% of new customers purchase speeds of 200 meg or higher, which increased for the third quarter in a row, reflecting the underlying growth in demand for high-speed data. Our edge-out strategy continues to deliver growth in homes passed and RGUs and is delivering increasingly positive penetration rates. Penetration for both the 2019 and 2020 edge-out vintages increased again this quarter, with the 2019 vintages increasing to 17.9%, up from 17.3% last quarter, and the 2020 vintages increasing to 19.5%, up from 17.7% last quarter. We are continuing to see incremental improvements and acceleration of edge-outs and expect those trends to continue in the back half of this year. And lastly, before I hand the call over to John, I would like to go into some detail about the two transactions we announced at the end of June. I'll focus on reiterating the benefits we expect the transactions to deliver for our business and our shareholders. As we highlighted when we announced the transaction, the divestitures will generate gross proceeds of approximately $1.8 billion at an implied combined multiple of 11 times adjusted EBITDA. These transactions continue what we have done over the company's history, strategically buying and selling markets in our business. They also highlight the tremendous value and attractiveness of our service areas and provide us with increased financial capacity and enhanced flexibility to expand our position as a trusted provider of fast, reliable, and affordable broadband products and services, while also creating significant shareholder value. The divestitures represent a significant step towards strengthening WOW's balance sheet and providing the capital to support our strategic growth. We expect to use the proceeds to reduce our debt and continue to invest in our broadband-first strategy. The investment will support increasing penetration through edge-outs, as well as building out our infrastructure in greenfield markets. Our advanced IP-based network enables us to enter new, less competitive, non-adjacent markets and deliver both broadband and our IPTV service, WOW TV+, or other streaming alternatives through the fiber-to-the-home technology. These greenfield opportunities, in addition to edge-outs, allow WOW to bring our fast and reliable service to new customers. We are working towards completing the transactions before the end of the year. We have also begun to restructure our sales and product organizations to reflect the fact that upon completion of these transactions, we will be a smaller company. Accordingly, we have moved our sales organization to our Chief Customer Experience Officer, Don Chena, and our product organization to our Chief Technology Officer, Henry Herkowitz. We believe this is an important initial step towards increasing the efficiency of our structure and better aligning it with the future size and strategic focus of the post-transaction WOW. As a result of this change, our Chief Commercial Officer role was eliminated. To conclude, I'm excited about the continued execution of our broadband first strategy and our continued progress in strengthening our financial position. I'm also pleased with our success in driving top line growth and EBITDA while delivering fast, reliable and affordable broadband products and services to our customers and opportunities to our employees. Now I'll turn the call over to John, who will go over our financial results in more detail.