WideOpenWest, 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 wide open West third quarter 2021 earnings conference call. 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'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. Andrew Posen, you may begin your conference.

Thank you. Good morning, everyone, and thank you for joining us for our third 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 recently closed transaction to sell five service areas that we announced on June 30th, 2021, and other matters related to our business. These forward-looking statements are made in reliance of the safe harbor provisions of the federal securities law 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 factors section of our Form 10-K filed with 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 historical reported results can be found in our earnings releases 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 third 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. Last week, we announced the completion of the sale of our Chicago, Evansville, and Anne Arundel service areas to Astound Broadband. This follows the sale of our two Ohio service areas to Atlantic Broadband, which closed on September 1st. We are really pleased with how quickly both transactions closed. Combined, the sale of these markets generated $1.8 billion in gross proceeds for WOW, which were used to significantly reduce our debt by approximately $1.5 billion, strengthen our financial position, and better enable us to make significant greenfield investments funded by free cash flow generated by the business. Our broadband first strategy continues to yield positive results, as evidenced by another strong quarter of performance for WAP. To help you better understand our third quarter results and compare them to our historical performance, we have adjusted our trending schedule to reflect a pro forma view, which excludes the five service areas that we sold. Furthermore, the metrics and results referenced on this call and in our accompanying presentation also exclude the service areas we have recently divested. In the third quarter, total pro forma revenues were $184 million, up slightly compared to the same period last year. driven by growth in high-speed data revenues, which grew by 15% year over year on a pro forma basis to $103.3 million. This growth was partially offset by the decline in video telephony revenues during the quarter. Proforma adjusted EBITDA increased 6% to $66.7 million in the third quarter, compared to the same period last year, driven largely by the growth in our high-speed data revenue. Third quarter, Proforma adjusted EBITDA margin was 36.3%. We continued to report both sequential and year-over-year improvements across all the categories shown on this slide, demonstrating the strength of our core broadband business. During the third quarter, we added 1,600 high-speed data RGUs, bringing our total number of HSD RGUs to over 509,000. Although we saw slower HSD subscriber growth during the quarter, our levels of churn remained low and we increased the total number of subscribers during the quarter. Now that we have enhanced our balance sheet following the completion of the service area divestitures, we are in a very strong position to more aggressively invest in our broadband first strategy, which we expect will result in a re-acceleration of HSD subscriber growth in 2022. We will provide greater detail on these initiatives at our Investor Day in December. When competing specifically for broadband customers, our key differentiators are the strength and reliability of our network, which can deliver speeds of one gig across our footprint. Our exceptional customer service, which is consistently recognized by our customers. And lastly, our ability to deliver our service at a competitive price. All of these are possible because of our talented and passionate people. We have maintained a sell-in rate of approximately 87% of new customers purchasing our HSD-only service for the fifth consecutive quarter, which we view as another great indicator of our broadband strategy's success. When coupled with our low churn, this demonstrates the value our customers see in WOW's service. Not only is broadband becoming more important, but customers are requiring higher data speeds. In the third quarter of 2021, 87% of new customers purchased speeds of 200 meg or higher, reflecting the continued demand for high-speed data. HSD ARPU increased to 6770 in the third quarter. Our HSD revenue during the period included a $2.9 million previously deferred revenue. Excluding that revenue, our HSD ARPU would be $65.80, an 8% increase from the same period last year, driven predominantly by customers purchasing higher data speeds. Our edge-out strategy continues to deliver growth in homes past and RGUs and increasingly positive penetration rates. Penetration for both the 2019 and 2020 edge-out vintages also increased this quarter, with the 2019 vintages increasing to 18.8%, up from 17.8% in the second quarter, and the 2020 vintages increasing to 20.6%, up from 17.6% in the second quarter. We are continuing to see incremental improvements and acceleration of edge outs and expect those trends to continue. You can especially see why we are so optimistic about our edge out strategy based on the results we are seeing so far this year with the 2021 vintage of new homes past. Even though it is a relatively small sample size, penetration rates of our 2021 vintages have increased to 21.1% this year, up from 15.4% at the end of the second quarter. This is a great indicator for our core business, demonstrating the strength and opportunity for growth following the divestiture of the five markets. To conclude, I'm really excited and pleased about the continued successful execution of our broadband first strategy and the progress we've made in strengthening our financial position following the divestitures. The success of our core broadband-first business in driving high-speed data is clearly evident in the continued growth of our top line and EBITDA, driven by our ability to deliver fast, reliable, and affordable broadband products and services to new and existing customers. I look forward to giving you an update on our strategy and outlook at our Investor Day on December 9th. Now I'll turn the call over to John, who will go over our financial results in more detail.