CHTR - Earnings call transcript Q3 2017 | Charter Communications, Inc.

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Operator

Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2017 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. to call like Anninger. to now would turn over the Stefan I go Please ahead.

Stefan Anninger

welcome quarter found Charter's The morning Information to Good and third ir.charter.com, the accompanies call section. website, presentation this XXXX can our be on under Financial that call. investor

proceed, our remind that Before statement our recent SEC a filings, I there cautionary other and like factors and proxy risk including of and would XX-Q. Forms statements are to we you number contained XX-K in most

factors and risk cautionary We statements call. will those not this other on review

forward-looking no encourage you management's we Charter to the actual uncertainties only, constitute and are and we plans, to view concerning obligation make statement to However, statements Various read risks in prospects remarks make reflects such results from additional expectations, that results. to them may differ statements undertakes current that forward-looking future. and call forward-looking to carefully. or historical revise statements. update cause These on or this subject statements or forward-looking Any anticipated predictions,

the referring be defined similar to we our defined non-GAAP will to measures by by not with used course companies. comparable other be Charter earnings as measures as reconciled in may and call, titles measures of During These materials. non-GAAP today's

results. also We pro refer may to forma

third refer if specified. and transactions May at XX.X discussion House they on of forma for as our if the on year-over-year provide useful rates financial as XX-Q January otherwise and the earliest a of Exhibit all Form to otherwise periods that filed customer on XXXX the on referenced. basis had more in reconciliations the this are pro Time for calculated are pro While the a also closed quarter X, period noted Warner prior Cable to this data XXXX. to results. order of had note are presentation forma may XXXX, the forma our November XX, Pro regarding beginning growth and X, unless on operations the call Bright in specified, call XXXX Please we to that provided Unless combined these transactions closed results information the on in transactions present closed

you based all legacy materials data today's company that definitions. and on passings to be in continue see Additionally, customers

today's Tom. Tom that, Chairman Chris Joining me on over Rutledge, With call CEO, Winfrey, to and are turn call and CFO. the I'll our

Thomas M. Rutledge

Charter In remained focused footprints. Stefan. on integration quarter, Thanks, Spectrum sales increasing unified on approach, and remains high-quality creating a a a and path puts and going acquired is able in grow pricing to past we large three schedule. one of the the to operating The centralized on the which multiyear packaging and the be company companies well with over We're with period. integration faster

processes, had essentially working. impact financial year results the new call and to were hurricanes least inside higher up selling cover that video that and we quarter all pricing our is activity our they packaging better to higher Irma In our product Cable relationships out and and All we've people unified customers seeing pricing higher of is itself, business completely offset we're customers shows and improve are and a connect Inside expanded Warner The high which our the way process. temporary comes at and migrating the base only adds behind including similar recovered of is our on EBITDA quarter. second packaging were and the Internet and integration we're tested XX% end areas customer more Hurricanes in performed moment. Spectrum as the of quarter. at business complexity product, third of have packaging, Spectrum were Time effects basic more with Spectrum us. Chris systems. of drives House highest service Spectrum a integration as in of four our deployed. product third continue changing partly we've video and better net video In than platform, to by despite consistent better customer footprint and as did and in package from quarter, where of in put planned, all our nicely took the an And a were basic, usual. our our better our is by and for pressure over XX% product businesses, which products residential growth do through people, and We're operating some effects as The our will our and that pricing from churn higher We're individual connects and to At financial Charter XXXX, quarters, customer XX% executing growing customer but with year, and marginally. the with and our associated connects customer customer our better XX% the these growth and the fat risks legacy well X%, our in of Harvey back VOD well, Our every we the pricing results this and with place the footprint. quarter, have third strategy, satisfaction. migration, all migrates rolls growth sustainable and will when a In sales all-digital from quarter, completed and end implementing is outlet. products. of subscribed short-term migrations Spectrum in last even Nearly product. and ARPU products legacy new Bright

X.X, in today, offer of of from minimum Internet XXX in the also we by planned megabits footprint, entire of launches speeds offerings through launch up just nearly we'll key over expect DOCSIS we quarter. a all to in months, in with passings speeds In our excess speeds offer minimum of XX% more We'll gigabit XXX to of XXXX. year-end. As of our megabits several at XXXX. our end continue increase using XX% speeds the markets in And of couple second

be is of modems modems and priced to has Wave router, X speeds. to developed having speeds specified exclusively similarly we'll at our when Worldbox, begin It to X.X expect and our We and to X.X We'll Wi-Fi begin faster similar which propagation much Charter. entry-level buy higher home. X.X been also deploy designed the DOCSIS drive even DOCSIS purchased to and better reliability scale, and throughout modems by DOCSIS

all-digital Bright House Warner and is legacy Our in Time activity Cable accelerating.

X it our is national have XXXX. take for guide the and QAM cheaper, faster, across However, and activity footprint. footprints. Worldboxes in place At more used third IP deployed of end three million smaller, be of across Worldbox delivery, over bulk can still the all will the and legacy quarter, and that flexible video we

XX that or same markets, this Guide switch Cable provide third of to on-demand value effects we are In similar utilization the the already DMA. pricing markets. the packages Spectrum Going our voice footprint we to we our the will pricing the net software-defined That more all-digital We're saw in our market deployment We're residential forward, the over on fourth be the increase set-top improving Worldbox Warner are months, a coming choice what quarter, where markets technologies. they and also that from content We've quarter. provide strategy project. year-over-year mixed third launched been we're pricing our customers packaging to entire for growth. launch legacy to agreement roll new product in the with for that Enterprise, states markets. and of our last year, Spectrum drive to should to launch with quarter and legacy Bright to in by will Warner what higher and continues exposing the In approach track by at changes plans network designed House addressable that also national set out opportunity customers a certain wide-area with And be is contiguous of in The well, in growth have hosted Existing we've to solution Time working workhorse the Time customers we progress. adds increase that The short-term businesses with to call Guide Cable to Charter revenue service legacy those buy product in SMB full migrate today, time, in they significant share structure in product Spectrum to making in another Verizon. our structures markets, wireless the of markets new as to our and deploy Bright the of Guide group we'll a Spectrum button. push House higher launch have end MVNO only purchase. and year. enterprise our expect box choice customer seen product will, we Guide the legacy the XXXX, of seeing waited where Enterprise using to We'll XXXX deploying across

our create has part Spectrum of core to to we operation of and longer process. as core expect drive Comcast our agreement products sales with offered Our that lives. with helped bundle, customer more branded When services wireless

going Our field also next-generation well. testing wireless is

brands, including existing new innovate products. product offerings infrastructure public emerging technology new uniquely better deployment protocols and the done what number And will industry us technologies, transformation its ability in support many small-cell position to of to puts expect infrastructure future, management XG, has a for Our wireless radio a we network-based to in using cable the times. all spectrum our a scale of foreseeable similar Wi-Fi, so

over more the quarter. provide call Chris turn on I'll Now the to to details

Christopher L. Winfrey

Thanks, Tom.

first, modest. quarter be our the third relevant. today's XXXX remind administrative when presentation. that we have to quarter items; the quarter results I customer at on QX impact to the that results, XXXX couple X QX in to The that results, XXXX third been be We've House. Bright a slide also adjusted comparison of reference and really of but covering exclude relevant, to I'll seasonal year-over-year legacy wanted expect customer is investor of activity first Before program third QX was quarter everyone comparing I provided

Tom third our XX,XXX the although to some the quarter also as million about in net by quarter hurricanes was results our storms fourth storm-affected Secondly, Irma XX,XXX third of revenue $X may residential of and credits. bill in In The come relationships the Harvey, by impacted residential mentioned, form reduced impact materially. areas, customer in customer back quarter. we total, which were estimate not

customer to credits. also We would SMB but precisely orders many revenue, difficult have say was how some some impact been modest placed. And provided there advertising to September

and capital storm-related to expenditures to quarter, the Our were elevated million, call and quarter third $XX equipment replacements. center line were labor mostly storm cleanup related $X by about operating related third mostly costs. In million, expenses

storm-related CapEx any when and we'll of amount those material our if on similar credits, updates in the amounts We and results. report fourth fourth a quarter expect quarter, provide any, we

are by Some of these there impacting ultimately costs covered results. insurance, will claims today's no potential be but

our and at legacy House. turning X.X% at or X quarter, grew last Now growth results, TWC, by at the X.X% over XXX,XXX to the during relationships total third year, customer with million Bright Charter, X.X%

Tom significant We're over driving higher XX% the versus transaction and were House legacy by we Bright products Slide churn at even value, TWC Spectrum the better or shows and As X last products, end sales XXX,XXX customers year. grew migrate PSUs at driving year into pricing quarter. packaging XXX,XXX of of year residential with mentioned, volume. more as already we third

the about by customers limited product. we been X.X%. XX,XXX the full continue basic year. last video year, improved as and Over customer migration year of than Pre-deal customers legacy flat, to to to Charter over Bright X.X% TWC same year, declined see loss more has last from lost TWC residential video House video low-value, video churn net packages, its residential a

video Importantly, quarter. TWC's for loss versus were TWC third the legacy base just over by in a this year's approximately XXX,XXX limited at video quarter, basic XX,XXX in growing the of all customer of basic losses with customers quarter last losses third responsible expanded expanded

connects at gain the additional to packaging. to was and legacy our performance in of the and residential The Charter video offers from the quarter mix versus XXX,XXX in this build-out a quarter quarter, of XXX,XXX basic year Bright TWC acquired a expanded relationship customers versus from the driven X,XXX there's residential by Internet, by basic advertised be ago, same customers our footprints on TWC. swing quarter promotional video legacy a and Legacy by versus loss and higher in of that total, at a sell-in XXX,XXX customers better video and better customers, Spectrum last added we focus lost XX,XXX Charter some Charter on total XX,XXX in XXX,XXX we we XX,XXX year. expanded declining So relationships. year saw primarily limited year, to development migrating competitive driven means competitors. and basic integration In a House the video drivers pricing third last partly price-driven from the quarter lost customers temporary video lost In during TWC nature. with last X,XXX believe limited the video in legacy XXX,XXX a

a strong of our had benefited quarter year, at from Internet also last integration key and each legacy activity We footprints competitors.

sales XX,XXX Over the million customers with by Internet at X.X% residential grew at third year, customers X% with promotional months, total offset churn at legacy growth legacy In X.X%, base Charter, we by triple-play we TWC, and Voice, X.X at in XX,XXX quarter XX higher X.X% of versus Bright offers last grew our the last or by higher customer growth House. TWC.

year, customers some modestly, the It X.X%. revenue by and TWC to to growth and seasonal from relationship of residential Internet QX of similar was Residential price muted migration packaging. higher million legacy fight. quarter, Bright or House smaller to ARPU by promotional last XXX,XXX ARPU results helped mechanical hit per continued standalone year, by the remains pricing total grew rates, sell-in to increases at revenue customer Similar we and this the House Spectrum August $XX Over last a Mayweather-McGregor changes from legacy in Bright plan. sell-in activity up and

ability one our to was product, ARPU lower Spectrum box transactions, generally concerns pricing and transition and of the investors lower our biggest modem fees. the through our pricing lower of higher-value close manage packaging, with to for the Before more fees, of

by Now, nearly one migrated year-end. XX% year in, it should be

retention churn. rate of large lot good roll-off more and the in portion or a transactions commercial the value revenue and We've to ARPU disruption. planned our a despite call reason with And rationalized that's still that excluding up combined Slide environment. less the resulted So and SMB base year-over-year of X X.X%, pretty and product look revenue X.X%, by combined enterprise growth when growth customer revenue pay-per-view by by both growth in commercial and total in shows and of X.X%. in our ARPU with our Enterprise grew Total revenue X.X% residential periods. SMB X%, or now

highly we're pricing backhaul as up grew cell well. Enterprise, by over transition the Excluding both XX%. these NaviSite, are in and managing and Sales and markets in to Enterprise SMB competitive service

year Third driven year. over quarter advertising the advertising by prior revenue declined political by XX% year, in

by grew grew the year and And companies, legacy driven TWC and video revenue. improving growth as excluding year-over-year grew given year political, advertising X.X% for revenue by X.X%, of revenue was X.X%. outset. hurricane-related revenue advertising includes down company So at In over revenue still excluding the some mentioned X.X%, about year effects up X% was triple-play over our the into Looking given year, total, lower barter when quarter for Charter Pre-deal That by I and revenue for House X.X% sell-in. customer each local Bright growth. by third

the operating X.X% Programming transition the the pay-per-view year. grew operating lapping X, growth, million by for mix, of to of to And X% over transition the the the number the year. X% accounted cost contractual for three benefits for our expense duplicate and in rate increased up a the of year year. year accounted down driven sales benefits, from and produced over given year cost quarter. Regulatory, by was expenses periods, quarter productivity by over OpEx elimination acquired year, in declined year in the service that by of Marketing combinations connectivity, of Mayweather-McGregor costs. million and simplified grew of year, a in-sourced little level total grew on year, marketing over year over higher both costs activity third third generated roughly over accounted by of from a costs this higher including companies, higher X.X%. X.X% a higher which and driven increases in And recent $XXX by labor X.X% adjusted X.X% grew other by expenses quarter. EBITDA and driven and and or the fight, excluding offset last content $XX synergies Adjusted expanded footprints. quarter, EBITDA which pricing over renewals, expense growth, the the X% packaging, in by of slide higher storms. labor of XX.X% a third the partly were Moving total year by driven customers mix, year, expense

net to net year, interest income year-over-year severance-related expenses lower Charter $XXX adjusted and the in last of offset and more and with income higher higher to slide withdrawal expense. third $XX and million Turning income we on by million charges, EBITDA remeasurement shareholders X, pension versus generated quarter attributable depreciation amortization, than higher net in

$X.X quarter, Turning of XX, million billion to capital slide in third expenditures the totaled including $XXX transition spend.

placement primarily some and driven related and to And and Internet related test spending, by The spending million quarter spend set-top increased the third was by timing timing our software and across higher transaction. of each the connect million $XX the related packaging primarily support in-year marginally two-way tools quarter, facility transition, was all the in scalable The we've the All-digital scalable support. markets. to result And in box and in and higher related since to product spend CapEx in-sourcing case, has about spend some higher the Spectrum that the of equipment, is and transactions. spend closing CPE. launched over Excluding of development vehicles to development. year driven was video CPE and over DTA higher by spending XX% CPE, been footprint volumes $XXX infrastructure, on by pricing year, already higher of reduced rates now our

quarter finished partly September our that third billion, And annual cash run the principal. in And a over rate. generated versus higher in third driven We million run – working of was due and a we suggests to last smaller $X expense the $XXX expense billion at benefit year. accounting. whereas our decline the is free shows, with higher flow a annualized year was by CapEx year. cash interest $X.X XX XX interest the quarter rate billion EBITDA. least in offset by cash difference slide was years, in the $X.X largely flow in debt purchase free P&L billion in $XX.X That And quarter about both quarter benefit capital As

the of The billion of on September, $X.X we have XX-month notes. adjusted to As of billion our of high-yield the our And the August, in in high-yield proceeds middle earlier notes. notes. target investment-grade was end net closed $X closed of to last we July, of used general potential for we another closed on from $X.X on $X.X billion times, notes. third be closed of X.X buybacks. In we times. of these quarter, this investment-grade another X.X debt of leverage purposes, X finally, corporate range And EBITDA month and will In offerings billion including

of is maturing of now Our after with with weighted debt years, X.X% average cost of debt our average XX% a XX.X over XXXX. weighted life

an $XXX units, third share. billion So million in totaling shares per repurchased in of XX.X quarter, Charter at Holdings we the common average price $X.X

basis. company's As repurchases, to of be slide diluted in fully equity reflecting a the clear. spent $XX.X we XX I want XX the shows, XX% very billion months past on on

flow return flexibility markets. we high-quality positive capital reflect: attractive Buybacks programmatic which organic structure, Our confidence the proven half the and as trajectory capital integration; a our operating and are debt of investment; provides part model in into back cash different of significant a despite us markets in not policy. of head repurchases the share

of or potential activity will to continue forward, organic other on repurchase share Going opportunities conditions. depend inorganic capital our for and market uses

to tax be value And tax Operator, over income slide on utilization, earliest. to for total material those at Turning estimate our we're billion. expect we payer a the Q&A. NOA our current $X ready assets assets, now cash of the XX, we XXXX until present don't reflecting is

Operator

Craig question first Your from MoffettNathanson. comes from Moffett

line open. is Your

Craig Eder Moffett

this wonder just about could transition, sure speak to not if broadband or I'm either to thank Chris you single-play least be more but looks I Hi, margin, you. the of for for is industrywide on really subscribers. what whether an Tom, at

standalone a wondering. pricing for doesn't broadband subscriber much pricing Your the margin does I'm lost video as at, as from Comcast. say, recapture

you customers for it As to bundles adjust forward, time think about the really that? double-play more than think keep right or in triple-play you is expect? in think most and that When is market going that the about you that do pricing, maybe longer do that how you can

Thomas M. Rutledge

going And think Craig, these We the had including business it. pressure it rapidly has grow sell it's a voice, you landline we yes, on forward business are company in lots And pressure of have forward. pressures packaged the and expect look grow the And, true biggest at going Video we're and business. Video all being mobility, video Tom. if it the numbers, pressure price. good data, very to still forward, we growing growing, to business the in there products We it's bundle, And Video can expect that quickly. going video. and the still has

streaming programmers whether second United households there The password price/value to contributes million also the relationship, are Everywhere they pressure, TV households is States. sharing or in many and through services. of to not, that or XX direct-to-consumer it's And – now it one-person are have know that because products biggest whether multiple-stream distributors, the which

being that So in share users. those to XX% of video product purchase allow households. general, of affects products you the to and to. relationship have it multi-stream multiple and the the affects people sold of That almost consumers are And with price/value what subscribing XX% households population one among

we video. I with product continued will product that the receive But so expense free competitors, of to an of can people total inside still we general that that. that, package video we restate that broader securing I But distributors the for category the think and way rich result are our There's of today. – expect now growth with and you'll being we we'll content think ability there's their think price availability because content is the And comes ineffectively. so on content And pressure enormous for of free content grow it we out a pressure enormous plus to see an of that should as we're we're to packaging a happy pricing services our our single-product the question your continue have slightly. We're based we the we're that bundles, the pricing, excellent of on at trajectory decline our way an and pricing pricing happy do our about way today, structure. think

Craig Eder Moffett

Great. Thanks, Tom.

Stefan Anninger

we'll please. Michelle, next take Craig. Thanks, our question,

Operator

Your Wells next question comes from Marci Fargo. Ryvicker from

is line Your open.

Marci L. Ryvicker

the call, in they into competitive went along those prior several And prepared I prepared potential changed and the competitive Bright Cable would market as that faster the I the the than same environment mentioned telling guess this were In much Thanks. lines, ask Warner the for transactions, thinks Comcast the you? case when about they you, House a you change think and you times a how is Time environment. are is guess faster, think this change? how expected. stocks are happening I Do did us had you

Thomas M. Rutledge

we similar growing large of I our kind actually where than the and transactionally planned expect in those integration acquisition We've move. always of be And, actually companies, we're with that companies. shape in doing on yes, legacy made approach. very better guess we're don't complex a we we markets and Charter to we're plan, than And very think thought. we but a were faster actually change. we're where We model, we we think it's exactly are. in change, happy There's

improve. Our data speeds continue to

product prior products on to can relative video this model. and are voice and didn't operating basis, Our iterations of improve products a that new continue exist mobility additions in our

a change. relative around. be competitors. can competitor. around very to and still markets infrastructure So, be think We a that services can to still the market move and our our move Then appropriate and of mix infrastructure rapidly. responsive in We use to pressures grow to pricing an packaging we yes, way superior have Competitive we high-quality

Marci L. Ryvicker

Thank you.

Christopher L. Winfrey

couple earnings as transcripts. said through quarters on past the and went Marci, calls we've I the well back as what looked on

of and and of we In fact, that XXXX have wouldn't and get the gave back the of revenue any what into performance of the the of half description XXXX, we units and model the we changed as it. and in year performance I in like look the this

all still change and the short I markets time. period think such it's case, dramatically that don't of the I in a think

Marci L. Ryvicker

Thank you.

Thomas M. Rutledge

I unsecured to value mentioned in of fashion. video, so is a thing as you the think video out there, be correct video that lot and And Craig's well. question, relationship there's The other people would add. would markets responsive impacting in of sell that which that that I dramatic a would

Stefan Anninger

question, Thanks, Marci. Michelle, please. we'll take our next

Operator

comes Your Evercore. from next question from Vijay Jayant

Your line is open.

Vijay Jayant

been Charter So, Tom, about these your Cable pricing. think gone if the one video way one, being based used skinny company think on Warner comments Time the has is cohort anything, what Spectrum And as the you've the and video, a other on price factor proposition moving doing, I doing market. I they're just now as that MVPDs in virtual the you've to not

pull quarter, can but a to on So seemed the to how numbers? you with is accelerated, level believe term? saw revenue the so to we video the just housekeeping respect longer growth which the Thank have in And second, you is, that really Mayweather question help you fight question; need total us a you. those understand to much grow was

Thomas M. Rutledge

it, of are a as they on want people of get. believe like customers. Not So lots video question is paying selling can but is consumers all the sell And new video we for as high-quality video. fundamental of about rich video. package video much pull-through service everybody a your we most to We our increment

expenses, that piece growth. of a programming our at substantial is look you when So unit

fully and believe sold impacting proposition a with rich-featured, valuable, length whole pricing make properly serviced fully relationship relationship. customer We proposition, creates products. value high-quality, customer a for more we that are within customer another that that and actually of properly happier contained those from subscriber that value because growing We long-term, the relationships packages of the featured perspective, video us creates

our So strategy. that's

of bulk service more that full-service selling packages video than edges, consumers that packages historically legacy richer purchasing from the have the actually On companies they've from component that targeted, are us received the less But we're features. buying are them.

Christopher L. Winfrey

Vijay, rate have on the migration on TWC the biggest I are that going Bright in and revenue of House been has the activity we our at statistic. really customer XX% at revenue, the gave Over migrated. and drivers Bright significant House, base and TWC

roughly X that take customer million (XX:XX). cases phone place you means in If rate, and the equipment in XX that over call, transactions many taking relationships, million business

quarter impact, progress other the is get biggest driver driver to year's impact, further direction. a also the and the in had that was the biggest less going million it's so last I with in negative the But it's being of on has. in what remarks mentioned. The the of other prepared the political then was fight terms mentioned Mayweather it remarks. I but the positive that, we $XX that prepared impact the advertising the also the the amount that's first impact mentioned So in that the one I temporary in third And in quarter, nature.

Vijay Jayant

much. so Great, thanks

Thomas M. Rutledge

Yes.

Stefan Anninger

next Thanks, Vijay. our please. we'll Michelle, question, take

Operator

from next question Phil The Cusick JPMorgan. comes from

line open. is Your

Philip A. Cusick

and thanks. guys, If Hey then question. I can, follow-up a a

base? and issue numbers segment. in talked business quarter over expect natural turned corner weaker think investors understand behind about can the disconnect forward? the expand you think every Chris, trending this where competitive in we what the read year confidence Last quarter quarter M&A a And we how thinking up comments. your weaker subscriber if but talk there's the you you showed over could, about how the the this elevated lever versus numbers on momentum, better evolution understand as the then, company you I your First, cash stock buy on a back should having in buyback your And your on year How but I and Thanks. and about flow, shares pace. a are why the speculation were to year. between in returning plans going year

Christopher L. Winfrey

Great.

We're half. We're said you through recent the of a half as QX. of I had year we turned the if and go at we corner very I back only and an specifically at everything well at the And bottomed is not close. on conference, this said the net had either we what We look That's subscriber back So investor investor all true. the at point is take through corner. adds where or would as said back which what turned I call, the turned improve. conferences out said were

Our crossed up we've which churn sales year point at mark. TWC elevated, after to we've the be and over the the was XX% subside year, that highly are mentioned would and that continued

next to XXXX. XXXX. and operating in terms the going a wanted by somebody transactions, the So longer-term all-digital. of flow year, and of about And spend back fully timeframe. and to mentioned going year calls of we well, to I benefits this we're continue for effects year guidance, in which that's we going reading improved. for capital capital was to be through and through not look of synergies, on the how of the of the this will we're things spend will transaction next lot monthly wave The too the back half is a The as if half those The that in operate, talk significantly revenue

to back the there. take everything a be the business, go look we ready stand I that and we for behind and able a that you at model to put If together, way and that optimism the analysts said it was was described

way at taking the that's in short of too a how never are it. timeframe. I look think we a it And that about business or talked we've operate people the

just be that the time. to things from long-term and to the day end view day, I the haven't creation to all creation significant pickers. of than have probably creation the going balance a relates a way. little value looked We're vagaries what value looked cheap marketplace on good. to understand not at the the but Charter a have either place at today, is it we of company it on stock is take the over the was. markets And we then; going bit value don't We the fundamental As view the it's But because said, of cheaper that's the fundamental sheet, now. I going to of capital day, are cheap it looks It be.

to continues although of to integration got results through it understanding as results, and applies QX that of for still period time QX little bit could improve. applies We It QX the look full how to things results. they to have probably a a operating applied a mixed

opportunity those And all markets being for debt so been and time to it's it's the available a great good we've including a everything that reasons, go do doing.

Thomas M. Rutledge

produce And Just in current growth know of turned customers, year is customers corner And revenue corner year time operating will which revenue have more produce to we we sales net too the the ultimately and growth. and of through clarify our translates reason we as the way over quality that future disconnects. that in turned we into the well. excess we've turned less strategy, revenue something that and gains more Chris than corner we've had have said, higher we the produce have terms of

thought we be. way it's as on the almost given operate budgeted so this where business, the business exactly screws would And it way we the we and this to

Christopher L. Winfrey

that's in We what back XXXX, to it's Tom it mentioned look than legacy be take an XXXX at in EBITDA well. it comment. the at buying a be it's said from legacy growth, Charter. you confidence, When not know have going when we've did expect times, going the did along it It's same we've performing very what multiple And Charter stock and way. remarks. better choppy to and we why to been as and linear, at we prepared

Thomas M. Rutledge

Charter, we a assets that should better and We shape have they better performance. these in we therefore also legacy are, said than thought were that and little

Christopher L. Winfrey

That's right.

Philip A. Cusick

Thanks, guys.

Stefan Anninger

Phil. Michelle, question, our please. Thanks, take next we'll

Operator

Citi. comes Bazinet question Okay, Jason from from the next

is line Your open.

Jason Boisvert Bazinet

to EBITDA your those growth. faster faster year, than cable a because grown This doesn't you've willing stock take pick the or want but see out know it. that industry. address for it Winfrey I this don't like however and When Mr. look think leverage, about and I more throw demonstrably thinks I'll buying is stock, Rutledge, if are side buy revenue I think segments they there it the you Thanks. just or to

look of grows at, will to guys much at whatever end you or you all And at number, the so do than growing without get as excited, are as XXXX that up metrics how an the that we think XXXX? you looking faster grows, internal move giving absolute you out you industry that

Christopher L. Winfrey

Jason. to before of way with and you the growth means in that revolting and very none we growth an increases relationship service credit, actually It's be leverage, So (XX:XX). deliver remains And have ability reduces same demonstrated to increase, that that it's asking little annualized us of a smart fixed What we've And somewhere quarter on we creates that of is that said guidance. operating operating operating strategy calls result penetration basis. the I sales had a that. which the, margin, growth for the north double-digit to your going as the of operating leverage, further the and allows a model very give is that EBITDA drive EBITDA X% and call on revenue it, legacy Charter churn, changed. drives that's X%, set customer base reduces And rate on range, of depending X%, margin. have and that

here, better that the that the the combined doing expect of and of the Charter legacy we results because at even so type and potentially of could companies things synergies is scale significant of we exactly And we're what bring. the same three did type

Thomas M. Rutledge

of sets, up, a capital business what expenditures product of all-digital, in additional normal the capital spectrum, speeds to remain differentiate other excess in company data spectrum preparing competitive, the on for speed to wireline data freeing that would from up opening basis business. competitors, just up to But terms improve in take to going our be some high-speed require, to position requires in

that that we forward way long-run customers structures, All that existing while to which to to we we order means to that have the in it And that consumer. while it a structures hopefully, have up a and do and in that a business, high-quality of propositions shift go into it have with continue repackaging of of to rate we doesn't as get train costs our to base currently stand going money. have. and way rate that value with in buildings these out repricing and new our people, duplicate offshoring we revenue-neutral costs and operation, for do costs revenue That have associated house do requires as new customer grow cause the we requires that investment, also so which means possibly service these in in-sourcing we the people, people backwards we're to can to

in to put just make moment and expense growth repricing become where come position away, productive, a and these a order ourselves the double-digit would in was people and the double-digit operating EBITDA investments planned we're those drop online make investments EBITDA spoke accelerates. to As past But and investments we've growth of in costs we capital the get that that growth. and Chris in which produced these

we our it. And we're so envisioned company, are and a executing plan we high-growth as

Jason Boisvert Bazinet

perfect. that's Thank Okay, you.

Christopher L. Winfrey

for point Jason. final you, A

Jason Boisvert Bazinet

Yes?

Christopher L. Winfrey

take I then was X%, five a X%. back at go growth was now linear. choppy minus you zero, if it look plus think years, or It wasn't been and stage, five at But and it's EBITDA years. this four legacy Charter

capital to all similar then It throughout at seeing the at a just all we're to and too. we we're view X% an so structure at that. on view. is And quarterly EBITDA point annual multiyear growing and And taking a back where be it growth of had that opposed requires and a consistent as look philosophy

Jason Boisvert Bazinet

thank you. Understood,

Christopher L. Winfrey

Thanks.

Stefan Anninger

question, take we'll Michelle, please. Jason. Thanks, our next

Operator

Your Feldman Sachs. next from Brett from question comes Goldman

open. line is Your

Brett Feldman

Thanks for talk taking question. I to about the want wireless.

actually the cooperation still next you in product You track launch And year. mentioned the that Comcast. you're half noted of leveraging with to you're first agreement on wireless the

beyond collaborate wireless what in the actually on place? extent in can on you To the discover of starting you So scope have elaborate basis that. actually may I was if that doing are are ways guys there can maybe And agreement long-term guys cooperative one-year together work? you curious you a to you be

Thomas M. Rutledge

to to to that a effectively that going together both to an we Wi-Fi manage jointly a opportunity cooperative the form with of the were them. And to have part perspective. headway agreement, we As MVNO work run try a business we from with relationship with the said them Verizon. manage and that relationship or we And back-office to share we've from made we've lot good our learned more together

We're entering has our wireless looking the also that to kinds infrastructure next doing but the of field all so business testing year other entry, with to received operational is and and we strategy. We're MVNO many testing Comcast second of this back-office being own our to we're vendors wireless same, the today perspective. if and learning not forward quarter unrelated And from operational. been by doing of share we've from And same, implementation that the provisioning very the helpful employees. an

customer experience experience today and experience our service using our their we're make better. to So

Brett Feldman

all there operations, and point? joint informative and this is still at consultative or collaborative actual it educational Is any

Thomas M. Rutledge

think lines, along I there's the something those there's nothing potential for today. but announce here to

Brett Feldman

the question. thanks right, for All taking

Stefan Anninger

can Thanks, we our question, Michelle, next Brett. take please.

Operator

Stanley. question from next Morgan comes Swinburne from Your Ben

Your line open. is

Benjamin Daniel Swinburne

expand were mentioning. good thought the what And to think were Thanks, you I this Charter. I'm some fixed some nature. declines going a X.X-gigahertz Chris, wireless, the excited and wireless, give continuing opportunities small-cell broadband just year-over-year you temporary can quarter, color on in morning. are you cable to on revenue at in about particularly deploying then, curious of us industry you just sound little video and CBRS how that on if mentioned subscriber stuff to the you you Charter the could and think is back or your Tom, spectrum legacy in of interested more looking the and business of interest you potential in the if performance?

a mentioned comp indicator of rest we the as a might have for any some look bit more to the You business. that since of But performance leading color just issues. all

Thomas M. Rutledge

So, Charter data million that the There our XXX infrastructure. to delivered is connected data plan Wi-Fi Wi-Fi. devices an have Ben, by Wi-Fi high-speed physical currently meaning existing are business business, we

will some small-cell So as think as the the better will available that think we X-gig ability Wi-Fi will which that in may home. allow high-capacity MVNO better spectrum the those be operate new We that take to our enhance us to Wi-Fi the deploy well the reduce to be to XG we home ability devices become provide. over connected We up what network Wi-Fi and outdoor get to of control homes the networks And envisions the use today, envisions costs and speeds technology in combination our technology. that is to that to over in with we new our home. of We those costs Wi-Fi deployment able along, a allow think mixed MVNO services with opportunity existence. an jokingly spectrum, on in way mixed that called think deployed we have products which create other licensed the spectrum currently think to XG meaning other a day. use to that the to the XG But in at way, will and new I come us all network work in our reduce network the our we of using better tools of disposal any than spectrum

a don't tremendous a currently point-to-point allow but products. that type commercial even areas think less networks, to That's latency, brand-new also capacity, expensive get in create that have think business, opportunity a to us but to fixed specific may a that require mobile unserved lot creating virtual products products new a a today to we so to low and we products that rural deployment, And services way. parking as exist a and reaching to mean that for simple people don't of buildings across high that reality serve not just environment. in there's also MVNO And high-compute what

to attached think we we existing in as of wireless path technology will that pathway the to our And quickly. we pathway get well better. bright, networks, is our we on work wireline XX-gig on investing wireless, will do, And that can for when a very a do down there that future Wi-Fi, today, we products symmetrical the become in going a as get high-capacity development available that new relatively exist and and high-capacity to wireline. see we're which and So have platform don't set all as a we network have whole products

Benjamin Daniel Swinburne

Got it.

Stefan Anninger

on was question second The Charter. legacy

Thomas M. Rutledge

it we challenges piece of business. including in hurricanes, Legacy Charter including year, fastest operations many of the our that growing this quarterly operations, year the our have had LA point over Time is one has Time second And biggest platform the biggest a legacy Warner from into view. into subsumed of were our Charter fact footprint, legacy operating instance, for a legacy in operations. Like our platform managerial Warner go

year-over-year But are to performing year occurred business. basis. to in any has some And had significant footprint in company performing Charter. good nicely. that have issues that's isn't expect relative transition those but in expanded we in consistent still and occur that. Charter of have FCC the Los transition would than DIRECTV The continue. year Angeles, legacy have, on with there that yes, better that change of and growth, process. because of affect change situation user And The to its occurred changes year-over-year and to its over it's we've But the growth competitive that part legacy our instance, for interfaces had ones, to general are the business is some old is acquisition, wireline the still because our is didn't the the delay So commitment the AT&T respond the we integration that. we in issues a of the

out of scheme is everything I things, the some pressures, grand would say working. track. much on in legacy we There are but pretty additional it's that Charter generally, expect competitive of So

Benjamin Daniel Swinburne

Okay, thank you.

Stefan Anninger

please. one think for I question, more Michelle, we have time

Operator

Hodulik today question John final UBS. our so be from Okay, for will

open. is line Your

John C. Hodulik

guys, great. quick Thanks in, maybe me Okay, squeezing ones. just two for

continue. markets exceed as the you number we actually out laid guess leverage in to you that's that that in basics the guys us you Thanks. far that base, don't So you process number many how there how the drill at us some expect on capital of losses, through similar have times how markets, chances think we to then time we maybe a limited set. bit temporarily? sense video this equation down two, I confidence the give in are? what Time least stock attractive given if churn give you you one. Can in to but out want are the pointed discount that Chris, basic of I Warner for that numbers Maybe to the long look limited limit, you X.X and could the in trend And XXXX, little Cable question, the to a the First and terms in Ben's

Christopher L. Winfrey

capital tempting leverage to the you opportunity range we're see if Look, times. open the credibility not it's that X.X and around. capital we a X committed is we to won't Sure. lie equally to And that in going what markets. big have have market you, moving equity debt sit start to markets the I with here the of just but up And to target we're willy-nilly important

that opportunities of We the at about look us. factors talked That's front are us in would multiple that bottom the So we're move then over It the range top committed and as time to end and to at the on end, have. It strategic we will are range. to depending occasions our that. that the of organic cause target has. length leverage case. what target move we the inorganic that's leverage will back at on it None that alter

year, particularly over had before, we've the get and said back what as of The of we say basic. to looking then those I'll And benefit same the TWC, increase weight said starts also the For over XX% in goes the migration quarters. into I It's the at year pressure to the unlimited sales minute past packaging, continue Spectrum I subside. away. pricing declines really couple

you'll starting already output here. relatively perspective you the from sales, So we're things get from would the day expect, to of of in migration We're better that's legacy and space as see, but in cross difficult regard. migrated, serve or reached continue TWC that to continued I terms will been continues spot-on path and good better fast. nearly crossover been its just proxy how project has think in terms that to a point Charter from the as that a will better be base exact to migrating over, It's month this legacy

John C. Hodulik

guys. Thanks, great. Okay,

Stefan Anninger

That's call Back to for Michelle. John. it you, today. Thanks, our

Thomas M. Rutledge

you, Thank everyone.

Operator

you, This call. conclude today's everyone. conference Thank will

You may disconnect. now

Charter Communications (CHTR) 26 Oct 172017 Q3 Earnings call transcript