CHTR - Earnings call transcript Q2 2019 | Charter Communications, Inc.

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Operator

Good morning. My name is Jessa and I will be your conference operator today. At this time, I would like to welcome everyone to Charter’s Second Quarter Investor 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. you. Thank Instructions] [Operator

your begin conference. may You

Stefan Anninger

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

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

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

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

of course will to in non-GAAP as These today’s we the by comparable may During to not non-GAAP reconciled earnings materials. Charter, be defined our as be measures defined and referring measures, call, also with are year-over-year on by measures used companies. that otherwise specified. the other unless noted basis titles growth all calculated rates this Please in similar and a call note presentation on

Chris On Tom Chairman CFO. our Winfrey, and today’s have CEO we call, and Rutledge,

With to turn let’s that, the over call Tom.

Tom Rutledge

morning. Good

strong. Our core is business connectivity

industry-leading X.X over customer per continue well customer year-over-year improving customer customer expect to lower centralized cable and we it, million over from satisfaction, and million we transactions of resulting of execute strategy customer fewer under to ways X year-over-year. operating and service churn, continue growth relationships the We our benefit growth Internet operations in in consolidating including

capital over In accelerating customers mobile we beginning We Internet last And including effects. combined high by free quarter, XX%. and penetrate clear as We drive over our X.X%, yielded XX% that’s over net added X% quality, of cash we lower a marketplace. strong attractively-priced investment cable growth had added and satisfaction months. retention resonate and nearly nearly the positive EBITDA growth adjusted is XXX,XXX of lines, remain mobile a cable financial flow XX also expenditures in the customer XXX,XXX Spectrum to with customers. over gain And the of we have number with when product which growth service-oriented XXX,XXX year-over-year on our focused of and relationships, We grew pathway higher customer customer a Mobile. second initiatives with over our to with cable

Our handled was quality quarter, in-house down billing experience. field service-related techs, driving insourced rolls high by of second well customer X% the XX% and year-over-year. XX% were by total by over XX% down calls an nearly with year-over-year agents, phone and truck rolls over and our In improved call truck in-house is workforce handled with volume our

plans to call environment, billing lower costs. gone service remain on quality XX meaning service We’ve virtualization track. center one instances from Our better and front-end

with quickly over our now volume. ramping sales customer XX% is Our self-installation self-installations also program representing of

platforms are successful. selling also online service increasingly Our and becoming

transaction terms reducing All selling allowing or service our which many of by with and reduce customers experience volumes, per to years cost meaningful impact are core platforms of business, now on enhanced for us come. skilled employees, including on to highly all these initiatives to relationship our having their interact through customer customer friction and either service digital

Spectrum May, overall at we’ve quarter, the over improving with selling late positive of we ultimate brand our since Your launching transactional Mobile In machine on sales Your impact in with pleased Device second X.X stores. availability Bring relationship our to With of the generate sales. expanded last of Spectrum select of Mobile by Device progress of lines Spectrum channels, and our are our recognition our million Own Own a all to Bring the sales the goal the was available Mobile faster September we’re only product, We using visiting with made Previously, program driving growth. of year. end program

channels. capabilities. device a customers. customers expand we Now, continue while focus service to year, small to inbound, bringing of key their and Mobile online mobile Charter Spectrum purchase on can sales and we’ll all our Spectrum retail, of Mobile’s availability channels, medium Mobile the business own remains of our through including our this and broadening work our direct Later

fiber develop continue our remain to hybrid focused network cost-efficient a opportunities pathway also to and and we that. our core wireline have asset, on coax We to do capacity, its

and capacity X.X, infrastructure gig relatively superior for a service expanded and speed. DOCSIS delivers scalable, today low allows low network called Duplex, have we latency path also And low that XX and symmetrical with throughput. cost latency further upgrade speeds Full superiority, Our

meaningfully path XK such network more than to virtual efficient can our by high such choice is gigahertz our throughput capacity, developing XXX latency to up low capacity, reality products to and be us our And faster be use doing medical and on of to a educational of as from positions time, that network to achieved over the video, a of wide can array and as we’re that cases. Specifically, megahertz cost competitors. development expand and increase which all continue for total we X applications, gaming,

So, now, Chris. I’ll to the turn over call

Chris Winfrey

Tom. Thanks,

residential of residential XXX,XXX residential quarter. growth SMB Internet million Slide results XXX,XXX, X.X% residential mobile by of to customers, Spectrum higher of today’s ARPU Legacy end were second XX% wireline the at XXX,XXX and – our the our quarter. by XXX,XXX declined the Turning continued in growth quarter, in to the presentation, lines. we XXX,XXX and declined voice And and customer months grew X over units the added including by video last relationship packaging year-over-year. Charter, in to relationships increase SMB, by and on grew XX and by total second customer Including X in pricing

the meaningfully House Legacy Charter better total Bright with penetrations quarter, footprint. a year-over-year relationship X.X% above Legacy in added of growth legacy were Internet in rates year’s disconnect just net Both the customers second year-over-year. residential than growth of we highest quarter, customer Internet, XXX,XXX second Internet higher X.X% despite last seasonal resulting of residential residential the and respectively quarter, TWC and X.X% in additions In

mirror So, taken while year-over-year has TWC’s rate is growth of growth of good, the Charter size Internet relative time rates X.X% impacts Legacy the residential that consolidated and the results. it footprint for to still

continue right customer customer relationship Key we ability XXXX. customer growth the and truck full across accelerate and the per churn in year all per metrics remain to and for like residential customer, Internet moving calls in our the to direction company rolls are of confident

overall video last our lower video gross relationship additions. the Similar Over residential decline churn churn, year, declined we a total to from benefited year-over-year, but offset video Internet by and in X.X%. that by customers was

our drives for loss, continue to grow Internet at an our and reduces rates. It bundle, sales for strategy and expect and transition services, residential in fixed Despite we driven In and standalone part lower over following business quarter, we bundle flow some our to time. of our mobile in integral selling as to XXX,XXX connectivity healthy mobile the customers profit connectivity market it services. substitution the continued by churn video as in remains EBITDA And less a cash the lost generally. video of wireline sell-in voice, even part drives

sales XXX,XXX the in all Bring mobile a Device XXXX, by quarter across we first awareness Own capabilities brand mobile, occurred in of quarter. Turning to nice our and lines driven quarter versus expansion late added Your channels, the so the XXX,XXX acceleration in growing of which

with healthy Gig lines As had mix lines. a By of June Unlimited we and of both XXX,XXX XXth, the

So, Mobile And time, it it to services. of not standalone mobile to will that, believe product launch opportunities on once our of become connectivity this expect sales business retention, the there unique Spectrum also and nicely mobile improve that scale. of is results expect and further a the economics meaningful a ramping promising. offer be basis to only connectivity we and remain beyond Over we be profitable our we early reaches driver

Those rate grew we revenue XXX,XXX customers campaign residential X.X%. roll-off X.X% relationship Residential total promotional video and lower by customer ARPU adjustments. SPP and of Choice in grew $XX Over non-video mix second last quarter. the and a and our offset revenue a or partly mix of rate customers, the base of by Stream higher within year-over-year, higher given a year, by benefits million year-over-year per were migration lower pay-per-view

Keep X Slide our growth resulted mobile our our combined cable that ARPU reflect with mind in shows in residential any cable growth ARPU not year-over-year X.X%. does of revenue. customer revenue growth

in products and the continues TWC revenue last total combined commercial, SMB the to grew re-pricing quarter, by to in quarter. revenue the Turning X.X% second grew from by Bright and effect revenue our slow. X.X%, of faster SMB than SMB as House enterprise Legacy

revenue Enterprise X%. was by up

grew enterprise XX% by Navisite, with PSU growth and backhaul X.X%, year-over-year. nearly cell Excluding

stage Our the the two of pressures term. own packaging and businesses in more pricing ARPU enterprise pricing residential years similar transition, over done SMB group to near the customers competitive what to its and our earlier of last we��ve is at moving process enterprise an in and

with In second being EIP Second year-over-year driven year-over-year. quarter year-over-year declined was that second in by and XXXX. pay-per-view. totaled consolidated Mobile in revenue X.X% revenue due in revenue delinquent X.X% year-over-year of quarter advertising million less revenue XX.X% $XXX X.X% accounts, the and is cable or revenue growth X.X% when Other fewer $XXX advertising exclusively which primarily bad with revenue up reflected debt million fees lower quarter, declined revenue. late of lower from by device total, also excluding to revenue political

expenses by $XXX operating grew X.X% operating to quarter, the in total Moving Slide million on X, second or expenses year-over-year.

X.X%, operating X.X% was lower a mix rates, programming Choice can X.X%. programing of of grew higher overall X.X% that such year-over-year, as back offset Despite original lighter in year-over-year increased video pay-per-view of packages that CPE our some impact. video content connectivity the growth rate, the and Excluding expenses higher and and rate growth programming have fees order. half Stream, and X.X% expenses decline sold a do to we video expense mobile, by increased this driven year-over-year, produced was vary and a cost cost, roughly to regulatory by in of and Regulatory, year. by which franchise subscriber of renewals due Programming customers, lower and

essentially year-over-year service mentioned, year-over-year. a customers core as X.X% customer which to by to were service bad cost flat we per our service cost our And excluding improvement, Tom some operating debt lowering of to are customers growth. number compared improvements to X.X% strategy. efficiency Even relationship declined Cost is meaningfully through relationship

stand from to overhead and were $XXX X.X% expense. EIP EBITDA expenses EBITDA including with tied device cost million, and enterprise totaled by essentially growth software $XXX the operating costs. of revenue expenses the other expenses the X.X% X.X% by acquisition our second in insurance, EBITDA start-up a political property and marketing its revenue, cost Mobile comprised grew Cable grew the quarter. of total flat adjusted by usage and million to were negative driven costs, of and including subscriber cable of rate our roughly and in I up expenses impact personnel operate up mobile loss X.X%, XXXX cost portion own JV associated business, Comcast. and company were taxes year-over-year quarter, and including device Cable advertising the net when And mobile adjusted the the mentioned,

expense, lower loss attributable on second interest Slide was The depreciation income by year. versus primarily on GAAP to quarter $XXX offset non-cash driven amortization and greater expense. generated higher income last million net and increase net instruments to a the million Charter expense, and in X, shareholders higher by $XXX year-over-year higher adjusted financial of Turning partly EBITDA we tax

in declining year-over-year, CapEx and is newer capital mix the deployed the of the million migrations to over digital quarter, boxes just boxless in X, billion effect lower outlets. and sales, Slide life video infrastructure, by higher of $X.X our capital in year-over-year primarily expenditures driven due SPP by to average the last all CapEx lower also There of with XXXX. cable fewer installation self-installation, year of and of bandwidth positive video CPE the the second benefit associated completion increasing by completion DOCSIS scalable X.X lower $XXX and Turning totaled under driven XXXX,

offset Support and our by declining investments for was conditions. to and accounted $XX driven insourcing mostly extensions spend build spending related million CapEx and capital we also integration, on footprint quarter, continue to out cable of for was line and merger which was partly fulfill lower in retail our spent higher as by with mobile We to related support and by for JV is in mobile-related driven which some this Comcast. upgrades that software, is

total of XXXX, our the a $X CapEx that’s cable despite rate roughly As year. in reflects first lower full of internal the this year for plan half a in reminder, billion and XXXX run

including generated the flow we shows $XXX this of just cash consolidated of free XX in quarter, under $X.X mobile. million billion launch investment of Slide

was quarter, a which payables from and to billing the nearly a pushed generated of mentioned. during time we impact CapEx was lower for million EBITDA versus $X.X our the and simplify reduce I second from second cash cable driven free mobile, primarily adjusted partly CapEx by out from billion bill due $XXX few days. The bill contribution year’s Excluding and to timing, year-over-year cable a lower of standardizing by offset was $XXX the quarter. flow, million last growth capital receivables payments up continued and cash residential one-time increase and that And that our working lower by customers negative cycle higher cable customer related collections

cash full change half a working move we these cash free flow. calls, to in our our to free calendar capital, beneficial year year, results. cable neutral more on driven to net be flow by expect XXXX expect And changes I have this our to reasons year to in I as capital the neutral second beyond capital working year this the would impact negative, discussed full Although should be of we

mobile $XX.X needs rates, mobile quarter to working as continue handset-related debt add trend due continue principal. customers, expect in finished drives to On the which we capital foreseeable growth the growth future that for and accelerate with side, the billion to we we

interest, of issuing earlier impact yield including notes month, grade billion. cash run $X.X the investment is rate high annualized current and Our this

of at of the times. of high the net below X.X our to As or debt to end cable-only quarter, times of end X.X EBITDA stay to the X XX-month leverage our intend adjusted second at X.XX upfront was range and at be which was looking last investment more to end We it’s mobile in and conservative declining. QX than we include the leverage, the

repurchased Charter share. price X.X Since per price During average $X the of units we we’ve share. XX% common shares about totaling quarter, an at repurchased of of equity Holdings $XXX average an $XXX Charter’s and per million billion at September Charter of XXXX,

a all the now in future, model, operating our balance together work infrastructure growing long And capabilities, to our reflect periods So, over our to network and time. we strategy expect and of results sheet continue with products ancillary core to our asset on customers for, service cash with with a good to use of, and equity value and tax-advantaged of flow grow our so lot to top returns. connectivity services levered

Q&A. Operator, we’re now ready for

Operator

you. Ben Stanley. first the of Instructions] question ahead. Your go Thank from [Operator Morgan from Please line Swinburne comes

Ben Swinburne

I sort that But Chris, that you’re Wi-Fi you to wondering, think also see on through as mentioned, product? and there know that. move full And bandwidth accelerate? Thank as offload continue reiterated manage second Hey. are mode just the in And come footprint push? business now a marketing BYOD you’re your opportunities back mobile the on expect sort first half $X you. of the your we more then, about I you get of you ask May, – but to you you couple of full of in just for to to that supporting, year, profitability push your the channels to Good about just we question, And I’m or think costs going ability guys as a Are morning. should know and CapEx, introduced I below to and billion. because, in the if I I as use you are of we about to at you sales year. run-rating to the better terms of wanted sort questions. sales devices across wanted

got in or to get about $X billion to $X $X half second accrue to spend You’ve the billion billion.

given So, – know curious guys. driving trends of was half sub of just what’s Thank sort step second if CapEx, maybe that there in we you, are? what up the sort

Tom Rutledge

we’ll grow just ability available, Yes I accelerate the quarter. device a say mode And a sales mobile will to getting will of it our more supported Alright. will would with second Ben, our we mode? Yes. sales business in the grow so are all with we’re the full channels that inventory. accelerate? sales – rate rapid and ability to of continue think full end to at our we that at fully

we’re there there are devices, We from not in but a share, nearly XXX% of the market terms of devices. distribution

do higher a our at And our so, higher business expect to And we transaction the through accelerate. to mobile close sales and expect rate. in volume we ability

basis. like is, of improve spectrum and on significant a don’t the our per that Wi-Fi on using using will basis, opportunities traffic Wi-Fi, are terms a There unit CBRS, portion already network like to per spectrum cost relative offload experimenting I I In XXXX. which a bandwidth meaningful year I that I a traffic. think, expect with customer is but that free additional this on that mean But be also in contributor a Wi-Fi expect is on of we’re on don’t to basis,

Chris Winfrey

if at all course cable ended Ben, coming tend we’re to off X.X, of large traditional of back digital. XXXX, DOCSIS the through big as integration on CapEx, a you expenditure, does projects, it cycle year. it At take a related the to investment be the look capital pretty end

of projects I later It doesn’t that this pushed spend what of our need had that done. than, not year, ROI good get out frankly, and planning and some budgeted and they’re so, little mean spending even capable business has the And think that it for we bit don’t to a they that for. is

done hopeful we’re a business. going benefits challenge it’s the sort capital But little billion. get to bit of to $X and it’s good it to to a that be the spend that get way, a because of So, can perverse in

at $X is below still just that’s for So, time spending will but billion. in tell, or goal our now

Ben Swinburne

Thank both. Okay. you,

Chris Winfrey

Yes. before, for just way, And CapEx, by to it I be I’ve but…. said the cable clear. that’s know

Operator

Your from go Craig ahead. next the question Please MoffettNathanson. of comes line from Moffett

Craig Moffett

Two could. Thank if I questions, you. Hi.

were First, some there I’m insight into were you had color very assets. if – submitted margin in then just at share your at what certain bull that obviously, just on interested some the you And reports and wondering could second, is, that this case story. point, a bid you least expansion. assets you had Sprint for for focused been you can to that shares add if

as margins are what in still why about could quite wonder expand given best-in-class this the down your the the But see quickly some forward, in from observations share sector some just we those if particularly some there at hoped. perhaps any some XX that for not are did than to lower margins shouldn’t points I margins Your reason expect trajectory quarter, numbers had you now. as your road? kinds of margins point you Is going

Tom Rutledge

about Well, months us I read of lot give the you and don’t want color. over you’ve reports many weeks, any of them weren’t last But and to a accurate. several

margin terms margin In of seeing expansion, expansion. we are

expected of predominant nature today. We margin the machine because see are products the occurring more of expansion, our selling in that’s that to and

significant But impacts a our can you of serve. cost to from getting We’re ways. get variety high margins

your free is cut valuation could a in think flow But the to ability greater the machine asset our we You grow. by cash your industry-leading And growth so long have significantly run, has an impact growth, inhibit that high that on and dramatically, a generation, but having builder. costs we margin.

means. the less in relatively by-flows be customer network digital your said, in with customer average to – which cost gross videos that That to environment per associated allocated cost all-digital and expect the the bigger self-service margin serve to capable down. perspective. margin because, is the goes service, margin a deeper trying your change continue therefore, by country and, as the market, that we costs over is activity business. And company low highest a there penetrate means cost takes from our using to transaction into the to And not are we’re out go base [ph] margins that’s any cost improve your So, of now you an in using

and our of higher is So, capital the fundamental output we intensity, higher operating cash lower flow, business margins. think free

Chris Winfrey

what highest basis. be but gross given is growth Just said, what to basis, also Tom target to good a flow on pretty strategy. is piggyback per only not on And on share opportunity our free a about we cash industry, in feel the that the operating the

Craig Moffett

Thanks.

Chris Winfrey

Thanks Craig.

Operator

ahead. comes go the of question from line Please Hodulik Your UBS. John from next

John Hodulik

Okay, great.

First to look quick have for at is of or parties those pretty it on video to Spectrum and strategy, is characterize and the we’ve at strategy the the want forward? I guys to of sense seems on own it comment you you customers maybe Spectrum and Choice here just change of footprint? of eventually say, you strategy, service outside about the the heard your It active upcoming CBAD at auctions? certainly video expect would providing And follow-ups are sort been video. of But of from CBRS, customers change And as from or ecosystem of sort question a but looked continue And lot then, sort wireless makes Stream Tom, looking to couple don’t longer-term and going at guys more And would on to terms one relates your talk on pace clear Obviously, and to reports. from you you would in a at it I a then, focus in strategy? should also accelerating. wireless in CBRS profitability. have How press we increase the think opportunities more of look at Comcast AT&T that you third mix

Tom Rutledge

wireless, terms to plans don’t we outside today in serve our of have of footprint. So,

move do a in venture Comcast, wireless you We and Customers fundamentally footprint and you regional companies us national footprint nationwide. from providing, so with a a services buy have platform, have two joint on that operator As similar know, companies who are on of we’re wireless relationships our companies. new wireless wired out regional and assets wireless course. products Of broadband using and is customer to all fundamental relationships use inside video customers. third-party drive our our our spectrum? today and drive remain overall line physical our customer those objective But the and can We existing infrastructure. Would physical to our

There other CBRS. for mobile customers. ability at them. improve services take a way, us, of cost-efficient provide opportunities to the specific we are locations, to develop will, looking are to extent to advantage in in our We our they high-capacity And

really free. video not a lot today the as our that unencrypted standalone a to a is consume attribute is best to with Our is the services a look of strategy of of We the want at content overall bundle a still connectivity business. it of consumers at companies problem and video the of that today We the that supply it established look an we and it as of product, bundle through and a have with look We essentially and video everywhere at look on standalone customer consumers. we’ve as all – sharing free. put which essentially with it’s kinds customer. for video as make video compete TV value business but video hard as have easy to don’t be of The business. their it the in relationship. free over-the-air our service all attribute And available lot for at to There to antennas, excessive are television, free, available can everywhere, through password and received which streams relationship

from gross as perspective. business. a we’d not that a And product a our in standalone to that go connectivity, enhancement look think margin business. to And I But margins we so, we individual as gross underwater at of line have don’t want

John Hodulik

Got Tom. it. Thanks

Operator

go comes Your Chaplin next Jonathan ahead. the Research. Please Street of question from from line New

Jonathan Chaplin

broadband year the year. wondering I’m Thanks. sub Two And curious, a video, that for the trend if sub the from why different up this – Thanks. Chris, is of get get there reason just you to you in contribution half half in generate continue the first profitability of that on second ones quick flow Generally, than you on scale, flow how Chris. any And adds more then, guys on when cash today? from year. a is just your the the Tom, cash video from contribution comment following wireless wouldn’t

Chris Winfrey

is answer going And one Second I deep. interesting I think too question. how without that an

of the second the business its going models trends right, that year generally the add the but you’re accelerating all growth in relationship would how and think cash is for doing well. significant contribution your nothing And the broadband, half. exactly pull that There contribution, is goal. a as be mobile the than full I is over second a opposing opportunity moving we’ve to up, margin we way the time, to well And direction converge, customer overall to goal to the EBITDA year. move networks of I is would of its end reasons those Tom where I’m not it. is including the right we through rate see the get and relationship comparing two right. that But We’ll Internet not the down into a pretty cash you’re did Internet declining to that well. the also implies half All say, think and in but the where look flow that what premise Yes, have think to to the at our higher that’s wireless Cash a your is. better all in seasonality, I video going our that right expect from and effects flow aspect the would trends. contribution And to its customer way you on is CapEx, other utility But for once you in think scale. it’s spoke reached Tom cross. contribution When contribution the to So, half the about on basis, mobile operating which normal standalone target just at be will are lines the going I point through contribution that – why as went earlier as not. time, tend first flow change about what the to exists. and metrics and I

margin contribution, customer a you it look on drives but that network is the at you our the as video, so, a relationships. network a it, just as with can of attribute that carry you is which product business And an can overall also look described ultimately and standalone

Jonathan Chaplin

Thank you.

Chris Winfrey

Jonathan. Thanks,

Operator

next question Merrill Jessica Your go Bank comes from Lynch. line Please the America from Reif of of ahead. Ehrlich

Jessica Reif Ehrlich

Thank you. elaborate up suite said said but follow upgrade know you like, new on on you you Yes, to, you I gigahertz. in to something also Tom, services. Can I your wanted your a X to remarks. hi. prepared you whole to and plans could, alluded of just products

what’s [indiscernible]. and guess, cost do you – plan, what the timeframe, I So, what’s

Tom Rutledge

as Well, $XX say, to home just did every XX for we currently capacity a right gig front passed, significant have, now. gig it, per I so in of and would and is we can everywhere we development a the amount network sitting that and network occur there’s product think Yes. within that that home upgraded making capable than that of less X passed we which million that available we’re X

costs go And have development make the X in we cost have don’t we what certain fact, the of gig call actually because so, have business immediately costs, it. the volume and your data network because out the And we everywhere, the any our of in upgrade network. to have come of through so contention continuously upgrading much of network capacity to network more plans we

so, that services products last and high which compute, to intensity very services our pathway compute over high low more than upgrade is latency, of high the asset distributed we capacity, we long great a develop that has but can very capital to we be have time describe, new the as is efficiently relatively I’m over saying make a even And term. of result competitors. are business did. future and can that hard All the And come inexpensive out a

Jessica Reif Ehrlich

Thank you.

Chris Winfrey

Jessica. Thanks,

Operator

JPMorgan. the Your from Cusick or comes Please line from next question Philip go ahead.

Philip Cusick

double-digit to broadband expressed happen accelerating revenue as trends having you you’ve about broadband I’m you about changes Chris, And are But talked versus what thanks. weaken? hard the business we’ve without this before, Hi, sort and talked still lot from growth then, for about to price, especially broadband confidence pricing, as back can and a adds quarter? the the half in that happening Thanks. growth to more change seeing this needs last taking in video get a time in that you’ve of this business. year the think second, but slow stable

Chris Winfrey

question. second the Repeat

question Your revenues double-digit or? broadband was

Philip Cusick

Yes.

and So, growth you. down of that broadband we is video to get trends it. sort double-digit dragging Thank as revenue broadband with weekend,

Chris Winfrey

Got with the it. let me And question. first start

sure I think mentioned, conference pretty not on at whether your call it is I a last the QX disconnect quarter. whether earnings seasonal is it or was

seasonal evaluate success strategy a had a quarter, fraught. to trying disconnect good based QX. We year-over-year little on So, multi-year really the a in a it’s of

way. and relationship year. working the of be down a It’s customer in I is platforms, every will types or think that first all also the issues. for accelerated legacy across good a that of still churn of different during commented; number growth true And were expect so back across it’s different half churn. coming we just metrics better. full true last Internet going year, single of through churn major south of integration X type I Three are companies We three churn the half that, different also

is that’s net we’re not improved your the or all pretty sales think have And increase that to pretty means while confident to we’re more quarter. adds. a in And heading mean single talking a you we’ve that so, business, where It that’s we’re And need year, doesn’t which maintain than we’re a it’s guaranteed, given single been do quarter. It where everything about for is and heading. confident. I important

GAAP mind keep in relates to growth, As all reallocate it us to products. these revenue across broadband forces revenue double-digit that

amount of in a because additional that time higher wouldn’t either makes expected. growth and getting rate, to on growth of play are more the the more product a revenue relationship the change we I is that. So, service have some megabit too that we looking the or than XXX single extent amount through single difference What bigger going at the of bill into a line on uptakes, of which speed spend fair that’s of probably coming we customer much because

think for broadband be that video and it. to or a think a where I healthy into that’s moving leave potential for I think voice the and broadband rate back it’s a the to time. going really Whether with of ability or long grow long not GAAP healthy not, I period business across are the has time, at and allocations I’d

Philip Cusick

are down then like, and down Can I units is it if be clarify second? that churn well? year-over-year, for must flat a as sales sounds

Chris Winfrey

go back So, you if said. I to what

Philip Cusick

think be sales, I would sales are With down. showing more margins would efficient if better than they’re

Chris Winfrey

Margins move. small are up, not what, X.X% year-over-year in a cable, and that’s

And so, I know. don’t

if it if remarks matters, growing I X.X% Legacy even the at attractive. Bright take it’s is, healthy at and growing it a the to is think I Charter mentioned What rate, it. disclosed it’s X.X% growth get not think at think the great like you House a about you where Xs because look pretty growth we’d in rates, high the I but TWC in prepared and and growing I

so, anything the I the second systemic that occurring TWC think quarter And in footprint. slightly And sales, point, there. lower your in having don’t to there’s of was

year. it just now I and throughout think stride hitting We’re we’ll our at the look

Philip Cusick

thank you. Okay,

Chris Winfrey

Phil. Thanks,

Operator

of go Goldman Please next ahead. Your question line comes Feldman from from Brett the Sachs.

Brett Feldman

there impact. terms opportunity subscriber And seem the mentioned on to else Were billing color any just through anything it being our models? in you need we backdrop the capital should thinking or ARPUs the for Yes. would trends, broadband improved needle mover Warner more on competitive trends. ebbs we like, Time migration working biggest Or your Thanks. is it question then, Because in the other work for that, that’s within was with the And follow-up and a there adjust of as whether normal cycle or we impacts, a any standardization, legacy just it business? to the just incremental is biggest that be that footprint the subsidiary, flows about? around

Tom Rutledge

So, Rutledge. Brett, Tom

our performance assets should of that’s the I [indiscernible] and Warner nothing or that of Bright environment House, think specific that expectation. the marketplace see converge, competitive and impact. the all Time the we about Charter Cable And that there’s

issues higher consolidated we consolidated workflow and the think results call So, we’re we today. that have similar And get output, improve platform. some and than can across kind execution sales to have upon what are flow there us we that and as but that And get has we company still a flow, so time, we that be we of getting that will we’ll anticipate the a which converged taken there.

Chris Winfrey

just the it’s having impact billing impact actually the has to really receive, impact. small there but on that no we standardization, a impact a no churn And it’s impact the had the There is over service a number call. Brett, subs. meaningful on no we per there is than But And capital It working of reduction mentioned a is a expect had significant to capital financial so to as change, expect result that billing other time. of I less ARPU. calls working calls on

company. long-term net-net, it the should a one-time benefit and of change So, the for be

Brett Feldman

you. Thank

Operator

Your next Please question Jayant comes Vijay line go Evercore. of from ahead. from the

Vijay Jayant

Mostly Thanks. for Chris. probably

question So, sub trend. the obviously, there is a margins about given lot of

So, I to to quarter, a you comment advertising from negative I just wanted there X.X% come that, was a made in EBITDA. understand. quite back impact growth second to didn’t

was operating quarter and grow X%, So, up that if negative property understand to Is can so, other And the help that? taxes the more us run rate, that. about which I and contribution? you Thanks. advertising normally X% want this second, like some expenses, [indiscernible]. new just had And

Chris Winfrey

Sure.

to of advertisers. impact the political from that’s related costs net advertising, X.X% So, EBITDA the

have We’re just last advertising is, into you The year. taking margin didn’t people you are been X.X% costs don’t cable year, advertising revenue impacting, to year. to if for the provided that some effects higher. to EBITDA It’s this through didn’t in reason non-political that account advertising say the without political you a I And political as just attached when well. there political would flow have want I have

just take people I same think the the at for on provide can in an I we question do this related we’ll it basis. a look to to? was quarter, am So, probably sorry apples-to-apples QX wanted second and so QX and

Vijay Jayant

Other.

Chris Winfrey

Oddly casualty Other contract expenses. this related labor. enough, where I force by Property flowing expense the weeds, expense of to is us through but is some being cash actually that know in-sourcing our through truth. labor Yes. driven the as your and it’s insourcing is opposed property in insurance

not next Now year time the that to labor the QX, I’m QX. tail the towards my you, telling new run not that that’s beyond, is into insourcing think, we’re over rate. out the of you end I levels, hope and telling target I’m force looking

Vijay Jayant

so Thanks much. Great.

Operator

Your go of next Credit from Mitchelson ahead. Doug comes line from Suisse. question Please the

Doug Mitchelson

baseline obviously, for here do piracy the week services of take and the not-too-distant future, end so side on guess, cheaper programmers Disney is the you in basis. got increases you’re our know of price to next video stays okay get that to anyway. with video business, those And something if of I let’s product to price look is margin if just any bending that trying you through sort programmers of companies pay price you you’ve Fox of outside out Do enough, Tom, say, what, much. tougher cost it and want so keep services not customer the terms in the the unchanged at of Thanks is what per sort and, you the and on the costs of and raising your because going AT&T a at to sort other of that’s opportunity curve think an push basically of year. TV do a or the connectivity sort there or get the they’re company programming our dollar gross

on thought sort any how of costs to and it manage would So, helpful? strategy video just programming be around

Tom Rutledge

And to I strongly feel I’m raising I Well, to the like both not prices don’t be really customers. trying ways. funny. our

speak, overall equity, affects overall satisfaction what brand price relationship that the and Our from, our and it they customers us to don’t affects value and attribute our know is the customer. so and with it the to coming where our increase

asking disconnect is think, rates not hitting the video business. very I so, and a way to And manage to attractive people

your programmers would for you if to through with of you price maintain a pass sort of integrity hand, other customer, fight product. don’t the On some lot

video aren’t a wish fact, it alienated my a destroyed a lot you of programming and reason and yet programmers. point increase go you price you’ve customers, get look I have for free have their actually and where really the don’t happening. to the your act price programming if people. Everywhere, over everywhere And line. the the prices gone it able no virtual relationship it through the impossible content security anywhere, say and What of revenue That if customers excess from prices wasn’t and through available happening air, to been generate by revenues product streams they the and difference gone And, TV at price XX% really being the the and balancing able to being reason there sold that, of price and that’s increases on that reason whatsoever. revenue. is to of makes of realize raise where it’s product in view. is And And has their XX% is to the the lose I you in not price-value that multi-channel you value companies, do absolutely So, providers all Everywhere, is sorts are changes is and between through TV increases

have to I they industry increases, continuous so and the for their expect content price their of benefit their future. manage and my still we wish content customers have pushing would So, would And don’t want lot the foreseeable that video copyright fighting through instead that of price. a be think and own we to

Vijay Jayant

of be of are you quantification but us the sort any you over piracy at in are traffic the obvious might fingertips, sort can see increases piracy? broadband. you Tom, your have Or on you relative to seeing can sort of something in This there give what not people doing time? Is

Tom Rutledge

Yes, to essentially, And are massive. customers that it’s are TV. watching all video lost the still

Vijay Jayant

Thank Alright. you, interesting. Very much. Alright. Tom. you Thank very

Operator

Bank. Please comes Bryan Kraft ahead. question next from Your Deutsche line from the of go

Bryan Kraft

morning. good two. Hi, had I

into other per retail service I be it, million to modified? footprint allow agreement switching agreement question Chris, own? And have is Verizon’s expect you continue you wireless one customers point, complete is, network this, less build-out? capacity over tail MVNO CapEx question. to or the flow to existing we off little your rate incorporate mobile words, out build beyond own does other year, if would at had as between In have it next we and model MVNO licensed should the year call to about infrastructure you then, spectrum, your network $XXX cash were than some Thanks. at this own network your as first it the your quarter does capacity and a free think The

Chris Winfrey

We primarily of it So, retail of year. function is be by really upgrade. XXX% a the end this done footprint won’t the mobile CapEx,

year, So, think will of of but first I half continue has it. some life at a finite next it that least the to for attached

on elevated talk MVNO, and comes It about tying piece business positive So, the in first home, but an of we that software we aggressively strand. that a CBRS that what’s development implication won’t build went on And some way we some as an based that we implication associated the or all was high-quality any promising did is unlicensed current cell work call non-recurring. from It give the the that, particularly to also small have is, or what the through ROI last are us, you There this would through come small we XXX% be CapEx to ability using SIM called And any Tom looks disappear. spectrum, or licensed But to be that with that to other in your won’t would on that, would build really relates it at that CapEx the which cell testing have traffic. and extent offload ROI, is point. believe, would CapEx it to MVNO, is that a going get that our dual down. and the largely under into business should as question.

Tom Rutledge

And add mobile that’s XX% the of would in I all our all Wi-Fi the network. carried And to currently thing, bids bits on platform being the wireless is other the that carriers. true all of Bryan, of the are

customer is they’re who they’re discussion are using if Netflix still a last said time, They average watching a only and for And over had, watching but paying or some just XXX I it month. for and a so, watching customer last is month. or service And broadband the free free. la our it gigs at TV, other for you average we using look gigs is who our XXX over

average using gigs XXX gigs. the and is And customer so, between cellular XXX

offload trend So, service continue. network perspective. occurring cost and an already advantage expect to we from tremendous have investment that on you it our go this of we and of take and And

Operator

comes Please McCormack the Your line next of question Mike from ahead. Guggenheim go Partners. from

Mike McCormack

like all it might just presume what Thanks. we frame seeing that guys. far? Maybe about from as just And Hi, taking talking into so need a gig, plans, the product. that’s those might When required far demographic what’s longer And how about are real a up? thinking on know CapEx I to know, the homes Stream then, as the ubiquitous X having do to term, success-based if quick about guaranteed you experience at X be gig standpoint the about [indiscernible] you’re we comment you the neighborhood, think the there from thinking then, maybe what Tom, standpoint, answer. I products, you that? there a the get Thanks.

Tom Rutledge

Stream products. rate to video are and cost push price the more for The products to content That’s issue, expensive driven consumers. companies buttons. is of bundle Stream trying we So, selling very about proportionally talked we the

over are top customers the and or to And necessarily lot go a free how it, who can’t doing it know consider take there don’t wouldn’t of afford so, that.

like there from to have would Most existing really And increment. and downgrading the on save to the And from consumers all. they’re both money. Stream packages so, going it’s it

trying market at science. generally income consumers products pretty Stream are And to it’s we’re to And a targeting so, it’s we not smartly but constrained. perfect good are those that, who

full to to be tension And to strategies sell and there’s trying the we’re marketplace trying those and So, at just packages same time responsive in constrained. the sell who video needs. between our to a Stream consumers’ income are to playing

contractual know And either. to I it where relationships goes. know it I don’t take will So, allow us where don’t our

that opportunity in do capacity a as our investments. foreseeable for required. that of long-run current and don’t environment and you capital trends don’t of of look increasing, going relatively to lot With the regard material the model, expect in have outsized a any have current is in to we’re But consumption throughput rate products in plant today’s upgrade a a operating in there new at create data already marketplace, work sort small growth to we the the anticipate, throughput capital of the we can’t if with we data even think We plant, future. trend capital the in of changes sort of result

Mike McCormack

Thanks, Tom.

Operator

the comes Barclays. ahead. Your from go question Please Kannan from line of last Venkateshwar

Kannan Venkateshwar

for you. I one one Thank guess for Chris Tom. and

on guess So, expense of programing the some I on that account the of you’re the Chris, is new content exclusives. producing

been I and that think in they mid-single fees number has growing show I franchise recently. up line think digit the

So, long content? do of expressed elevated from expect should to an potentially terms become I And, interest that cable Tom, other think be assets in available. line we they perspective, in you’ve your how if

you. priorities? to wireless, thoughts there wanted you updated on just up do do how if to So, get opportunities are relative up, priorities come your that stack those Thank

Chris Winfrey

the well as the On I that prepared take had, look as a Q you think, the in in I all original remarks expense, content the line. in if programming of tiniest drivers it’s at, what’s the

industry And digit the of accounting. of being content We’re asset, that’s amortized talking typical a function the production of single the millions. life is which over cost

when be inside to of relates it’s it’s in to our as So, not a it going way, not at and QX material look driver significant particularly any you it programming.

third it We small. driver category. in just or largest fourth it very mentioned the very, that think because was So, I

Tom Rutledge

going your is it advantages business that and to M&A, connectivity well think it’s cost to it infrastructure important the from great second think positioned therefore, business I opportunities look, allows can’t an makes cable asset and capacity And business you’re deployed. doing has more through scale think if having question what’s so, And a massive cable. more about replicated move wonderful are perspective I forward be and there a be and, it’s you I to the fully that easily

easy the Obviously, what look and you I in environment asset mobile, future most small asset. to don’t on have the any about small. streets would that small because, don’t the depends is And a – the distribution to byways fully high business the business a to available, great upgrade efficient wireless very already I capacity, but pretty at as upgrade, even cable data so, the the available. do costs, on much have and And technologies were it think of cells it platform. provider predominant valuable as through are Wi-Fi we and are if makes become would gives today it for We mobile vehicle cable a the know cell our everywhere need other any cable cell as distributed M&A business. do network any We that a I

Kannan Venkateshwar

Thank you.

Chris Winfrey

you. Thank

Tom Rutledge

Thanks being today. on the everyone for call

Operator

you. for will Thank Thank you participation. This today’s conclude conference call. your

You may now disconnect.

Charter Communications (CHTR) 26 Jul 192019 Q2 Earnings call transcript