Q3 2022 Charter Communications Inc Earnings Call

October 28, 2022

[music].

Okay.

Hello and.

Welcome to the charter Communications third quarter 2022, Investor call. We ask that you. Please hold all questions until the completion of the formal remarks.

Which time, you'll be given instructions for the question and answer session.

Also as a reminder, this conference is being recorded today. If you have any objections. Please disconnect at this time I will now turn the call over to Stefan <unk>. Please go ahead.

Good morning, and welcome to Charter's third quarter 2022, Investor call. The presentation that accompanies this call can be found on our website IR charter dot com under the financial information section.

Before we proceed I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, including our most recent 10-K and also our 10-Q filed this morning we.

We will not review those risk factors and other cautionary statements on this call. However, we encourage you to read them carefully various remarks that we make on this call concerning expectations predictions plans and prospects constitute forward looking statements.

These forward looking statements are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results.

Any forward looking statements reflect management's current view only and charter undertakes no obligation to revise or update such statements or to make additional forward looking statements in the future.

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

Please also note that all growth rates noted on this call and in the presentation are calculated on a year over year basis, unless otherwise specified on today's call. We have Tom Rutledge, Chairman and CEO , Chris Winfrey, Our COO and Jessica Fisher, our CFO with that let's turn the call over to Tom.

Thank you Stephan as I look at our current advanced offerings, our future product plans.

And the under penetration of our network, we are well positioned to grow our business at very attractive rates for many years to come during the quarter. We added 75000 internet customers customer relationship churn remains very low due to current consumer behavior and while the lower year over year connect activity improve connects remained challenged.

Due to the low activity environment.

We continue to see very strong mobile line growth with net additions of 396000.

First quarter yet.

Over the last year, we've grown our mobile lives by nearly 50% and as of the end of the quarter, we had nearly $4 7 million total mobile lines.

Our opportunity in mobile is very large and we're still at the beginning of developing that business today, we only captured 28% of the combined household spend on wireline and mobile connectivity within our footprint.

So we remain significantly underpenetrated versus the opportunity in front of us and we are delivering the fastest internet the fastest Wi Fi speeds in the nation and the fastest mobile speeds when combined with Wi Fi all the while serving customers saving customers I should say thousands of dollars a year.

Today, we are close to $500 million devices connected to our network. The vast majority of which are connected to us wirelessly.

Ultimately I expect that virtually all devices connected to our network will connect wirelessly.

We've continued to improve our services. We also remain focused on evolving our network to offer the fastest speeds in the most cost and time efficient manner data usage continues to grow at a fast pace internet customers, who do not buy traditional video from us use nearly 700 gigabytes per month nearly <unk>.

25% of those customers use a terabyte or more of data per month downstream traffic still dominates usage at a ratio of 14 to one versus upstream traffic.

In the near term, we're implementing implementing spectrum split upgrades, which expand our plant capacity by Directionally and allow us to allocate more bandwidth to the upstream.

All using our existing DOCSIS three one infrastructure in turn we will be able to offer our customers higher symmetrical speeds and multi gigabit speeds in the downstream.

Our network evolution path also include stock to support that.

We can maintain a state of the art network that delivers the most compelling converged connectivity services and a capital and time efficient manner internally and in turn offer those advanced services to consumers at a highly attractive prices.

As you May know.

I plan to step down as CEO on December one at that time, Chris Winfrey will become our new CEO I will become executive chairman.

Been personally fulfilling to lead charter over the last 10 years, we've grown our company through innovation and strategic investments that position chartered to provide the best connectivity products and services available today everywhere, we operate our products have continually evolve and change the world. During my career from the carriage of broadcast signals when I began.

To the development of robust video and multichannel cable networks and from the early days of broadband Internet and voice to now offering fully ubiquitous wireless connectivity. We continue to drive new uses for our networks to bring value to consumers and our opportunity to innovate and grow is greater today than ever before.

Having worked closely with Chris for more than 10 years I know that he is the right choice to be our next CEO .

He will serve charter with both vision and skill, leaving the company to New Heights, Chris's leadership and expertise in both operations and finance have been pivotal to charters growth and success over the past 10 years. He has repeatedly demonstrated in a strategic insight and teen market level.

Industry awareness to drive our organization to perform at the highest level and with that I'll turn the call over to Chris.

Thanks, Tom and thanks for the kind words, and both honored and excited about the opportunity to continue to help try to grow and to create shareholder value as the incoming CEO .

It has also been a privilege for all of US here at charter to work for and learned from Tom over the past 10 years. His leadership is the reason charter just as it does today.

Answered all of us here to keep reinventing cable.

Fortunate that he will continue to do the same as our executive chairman.

So Tom covered the quarterly headlines so I thought I'd give some additional market color.

While our Internet net additions improved from last quarter. They remained below last year. The largest driver by far is the activity level remains low total churn and voluntary churn were slightly lower year over year and we're at all time lows for third quarter.

Non pay and move return remains well below pre pandemic levels. Those are market issues that also reduce our selling opportunities.

While we've seen some improving trends gross additions also remained down across the footprint by similar amounts in both overbuild and non over build areas similar to what we've seen past few quarters.

In terms of competitive impact some of the lower gross additions, we see probably relate to DSL conversion going to a new entrant fixed wireless instead of coming to us given the issues with fixed wireless product reliability and scalability and usage trends, we expect those customers to find their way back to us over the long term.

We've also seen a similar pace of fiber overbuild, but reported telco internet numbers confirm what we saw a small mix issue from newly overbuilt footprint no different from the past.

I'd also note that we have seen a small amount of market share returned to mobile only service over the past several quarters the reversal of some COVID-19 effects.

So we're in a unique moment the opposite of the one we saw in 2020 and early 2021 in fact.

Transaction volume will eventually pick up in several of our Internet net adds in the meantime, we're growing mobile at record rates, even in a low volume environment by saving customers thousands of dollars that growth is also good for broadband.

So we've remained well positioned our fixed and mobile broadband services continued to converge technically and operationally in our spectrum, one offering launched earlier this month exemplifies that.

As Tom mentioned, we have a path to drive significantly higher speeds at a much faster pace and at much lower cost than our competitors and we can sustain good revenue growth lower cost of service per customer relationship for many years.

I've been in the cable industry for almost 25 years at charter for over 10 years.

Played a key role in developing our operating strategy, so our recipe for creating shareholder value through better products pricing and packaging and service coupled with a levered equity return strategy will remain intact, but.

At the same time I do think the CEO transition will be a good opportunity for us both in this market and with the transition taking place to update investors on what I expect over the next few years, including details of our network evolution plan convergence capabilities service experience for customers and a real expansion and build out plans.

Lot to cover so I look forward to a virtual event with the investment community that we will schedule for a date following the CEO transition in December .

Now I'll turn the call over to Jessica.

Thanks, Chris.

Before discussing our third quarter results I want to mention that these results do not include any impact related to hurricane in which hit the east coast in late September .

Initially approximately $1 million of our customers' lots or that's primarily because of power outages that our crews worked hard to get to our network and reconnect customers and they did a great job.

Rod Lee speaking our plant third allows us the time and service was restored to nearly all impacted customers in a relatively short period of time.

And while we expect our fourth quarter results to contained from Bill credits, some incremental capex related to plant replacement and some incremental operating expense related to destroy cleanup and call Center labor, we expect the overall impact of hurricane in our financial and customer numbers will be very small.

Let's turn to customer results on slide five.

Including residential and SMB, we added 75000 internet customers in the third quarter.

Video customers declined by 204000 in the third quarter are following a program and pass through increase in the second quarter wireline voice declined by 271000.

And we added a record 396000 mobile lines, despite the lower number of selling opportunities from our reduced activity levels. We continue to drive mobile growth with our high quality attractively priced service looking forward, we expect our new spectrum, one offer to drive accelerating mobile line growth.

Moving to financial results starting on slide six over the last year residential customers grew by 123000 are <unk>.

4% year over year.

Residential revenue per customer relationship with flat year over year with promotional rate step ups and rate adjustments offset by a higher mix of non video customers hiring expanded basic video losses in the last several quarters and accelerated growth of lower priced video packages within our base.

Our year over year residential revenue per customer relationship credits was lower this quarter than last given the timing of rate adjustments in this year versus last and the mixed factors I just mentioned.

So keep in mind that our residential RPI does not reflect any mobile revenue.

As slide six shows residential revenue grew by 7% year over year.

Turning to commercial SMB revenue grew by one 9% year over year, reflecting SMB customer growth of three 3%.

Enterprise revenue was up by two 6% year over year or by five 2% year over year when excluding some one time fees from the prior period.

A benefit last year.

Excluding all wholesale revenue enterprise revenue grew by 9%.

And enterprise <unk> grew by four 9% year over year.

Third quarter advertising revenue grew by 23% year over year, primarily driven by political revenue.

Core AD revenue was flat year over year with lower national and local advertising revenue offset by our growing advanced advertising capabilities.

Mobile revenue totaled $750 million with $303 million that that revenue being device revenue.

Other revenue declined by two 1% year over year, primarily driven by lower video CPE sold to customers, mostly offset by Royal construction initiatives subsidy subsidies.

In total consolidated third quarter revenue was up three 1% year over year.

Moving to operating expenses on <unk>.

And EBITDA on slide seven in Q3 total operating expenses grew by $278 million or three 5% year over year.

Programming costs declined by three 8% year over year due to a decline in video customers at three 8% year over year and a higher mix of lighter video packages, partly offset by higher programming rates.

Looking at the full year 2022, we now expect programming cost per video customer to grow in the low single digit percentage range.

Regulatory connectivity and produced content declined seven 4% year over year, primarily driven by lower of video CPE sold to customers.

For the full year 2022, we now expect regulatory connectivity and produced content expense to decline in the mid to high single digit percentage range.

Cost to service customers increased by four 4% year over year.

Excluding bad debt from both years cost to service customers grew by 3%, primarily due to higher fuel and freight costs, partly offset by productivity improvement.

While bad debt and non pay churn were higher year over year, both remained well below pre COVID-19 levels.

We now expect cost to service customers in expense growth for the second half of 2020 to be more consistent with growth in the first half of 2022.

Marketing expenses grew by nine 3% year over year, primarily due to higher staffing levels and wages as charter focuses on providing better service to new and existing customers.

Full year 2022, we now expect marketing expense to grow in the high single digit percentage range.

Mobile expenses totaled $846 million and were comprised of mobile device cost tied to device revenue customer acquisition and service and operating costs.

And other expenses increased by four 4%, primarily driven by higher labor costs higher advertising sales expense related to political revenue and higher computer software expense, partly offset by lower corporate costs this quarter.

Adjusted EBITDA grew by two 4% year over year in the quarter.

Turning to net income on slide eight we generated $1 $2 billion of net income attributable to charter shareholders in the third quarter essentially flat with last year with higher adjusted EBITDA offset by higher interest expense.

Turning to slide nine capital expenditures totaled $2 $4 billion in the third quarter above last year's third quarter signed up $1 $9 billion.

Most of that increase was driven by $525 million of spend on our rural construction initiative in the quarter and the vast majority of that spend is accounted for in line extension.

In rural we've accelerated our work out in design nationally to allow for additional time for the process of securing all access.

In addition, our access to inventory is improving so we're carrying a more appropriate amount of inventory to support the belt.

As a result, we now expect to spend approximately $1 $5 billion. This year on the Royal construction initiatives.

We spent $96 million on mobile related Capex, which is mostly accounted for in support capital and scalable infrastructure and was driven by investments in back office systems.

Core cable Capex, which excludes our rural mobile Capex increased from $1 $7 billion last year to $1 $8 billion. This quarter, driven by modestly higher CPE and scalable infrastructure spending we continue to expect core cable capital expenditures to be between seven one and $7 3 billion.

For the full year 2022.

As slide 10 shows we generated $1 $5 billion of consolidated free cash flow this quarter versus $2 $5 billion in the third quarter of last year the.

The decline was primarily driven by higher cash tax payments and higher capex, mostly driven by our rural construction initiatives excluding.

Excluding cash taxes, our royal construction initiatives and litigation settlement free cash flow grew by 5% year over year.

We finished the quarter with $96 8 billion in debt principal our current run rate annualized cash interest is at $4 $8 billion as of the end of the third quarter our ratio of net debt to last 12 month adjusted EBITDA was $4 four eight times.

We intend to stay at or just below the high end of our four to four five times target leverage range.

During the during the quarter, we repurchased $5 8 million charter shares and charter holdings common units totaling about $2 $6 billion at an average price of $445 per share.

Operator, we're now ready for Q&A.

Thank you at this time, if you would like to ask a question. Please press star one on your Touchtone phone you may remove yourself from the queue at any time by pressing star Q again that is star one to ask a question, we will pause for a moment to allow questions to queue.

Thank you. Our first question will come from Doug Mitchelson with Credit Suisse. Your line is now open.

Thanks, So much I think.

Two questions have been talking about a career and Chris congratulations.

I wanted to ask about spectrum one first.

And Tom It reminds me of when you launched the Triple play.

<unk> five is back with pharmacy universe, where we're launching in.

It looked like a really intriguing price and value for customers, but also kind of lower than.

Perhaps prior promotions, so I'm, just hoping that you know.

And Chris can walk through the strategy behind the spectrum one promotion.

The financial impact relative to your prior promotional strategies and then separately Christa I know, it's early and you're indicating that you're going to update us in December like how broadly.

Are you considering.

Our strategy shifts obviously your investors.

Combination of nervous and excited about changes that that might take place I mean is there scope to.

Rapid we accelerate.

Capital spending or a different pricing strategies, how why does the net here in terms of what you are considering as this revolution or evolution. Thank you.

Thanks, Doug.

Yes, your memory is good.

Ill turn the answer over to Chris but.

When the Triple play was first announced there was a lot of skepticism.

And.

And some people thought it was foolish, but it turned out to be quite successful.

So I think there is similarly, maybe a little confusion out there about what spectrum one is.

And really it's.

Our first attempt to knit may evolve over time, but expect to one packages seamless connectivity with their products and they all work better together, it's offered at a first year promotional price.

As a result, our pricing of the underlying products, whether that's internet events Wi Fi and mobile it has not changed even after that promotional period spectrum, one creates values for customers in a way that our competitors really can't replicate pretty similar to what was the design of Tom's original Triple play.

We also attach additional products for mobile lines to that promotional selling so contrary to what I think is maybe a fair we have not lowered our pricing in the marketplace, nor do we believe that we need to.

Doug on strategy shift in the prepared remarks, I wanted to be clear because I understand that's out there as well as I've been.

He player in developing our operating strategy here with Tom and John Decrement, others over the past decade.

And just because somebody gives you a new title doesn't mean that your view on just fundamentally how to create shareholder value changes overnight, so pretty committed to all things that we're doing today in terms of our strategy around products pricing package service as I am.

Mentioned, our capital structure.

A little bit of a handle that as well as your balance sheet M&A strategy. So I don't expect any seismic shifts I've always thought.

That if we're going to do something anyway in terms of capital might as well go get after it. So you can grow faster and so if there's opportunities to.

The accelerate what we're already doing we will do that but I don't think people should expect any fundamental changes in views on how we operate the business or how we create value for shareholders.

Thank you.

Thanks, Doug Katy we will take our next question. Please.

Thank you. Our next question will come from Benjamin Swinburne with Morgan Stanley . Your line is now open.

Thank you.

Tom I'm sure, we will Miss you more than you'll Miss us but.

Please stay in touch.

Yes, I guess sticking.

Sticking with the wireless.

And the network.

Chris last quarter you were.

Sure.

Willing to highlight to us that maybe we on the sell side I've got the wireless economics wrong.

Obviously, you've gotten you've got the spectrum one plan in the market, which seems to be doing what you hoped it would which is drive faster growth I'm sure. We'll see more of that in Q4 the losses in wireless I know product P&l's are of limited use to some extent, but it looks like there'll be pretty flattish year on year. This year I'm just wondering if any way you can sort of take us into the cost structure.

On the wireless side speak to the network offload opportunities and is there any way to help us think about as you continue down. This convergence path is there a timeline towards EBITDA, starting to inflect and really benefit from the wireless revenue scale, you're building because it sounds like we're not it looks like we're not going to see that at least in the near term and then I'm just wondering what are the returns youre.

Seeing on the high split activity so far.

And you mentioned DOCSIS four Tom did in his prepared remarks do you have a sort of a timeline do you want to sort of lay out for us or how you think about the benefits of high split in DOCSIS four over the course of the next few years to the business.

So.

Two quick things and then I'm going to pass it over to Jessica on spectrum. One we didn't launch that until October so it had no impact on our Q3 results.

And on your question regarding high split we're going to go into lots of detail in December so I'm going to try to be quiet today around all of that Theres nothing shocking.

I think Tom.

Tom and others may elaborate on the benefits of high split, but will give a more detailed plan in December the questions on the mobile I'm going to hand that over to Jessica around the financials on mobile and she can go through that.

So mobile EBITDA losses remained due to a few things the first one I'm sure you saw this is our best quarter yet.

For mobile growth and we continue to have.

In addition, our customer acquisition cost because of that that way on mobile EBITDA.

Also we did see both in mobile and in the cable side increases in bad debt in the year over year.

And so there's some of that that's impacting our mobile EBITDA and we did implement a new system earlier in the year I think Tom has talked about it and we're still sort of working through the last of the costs related to having implemented that system and so there's a little a little weight there that I think will come down.

As we settle into a bit more.

But the key here is that you should know that gross margin in the mobile product continues to be very good and as Chris mentioned spectrum, one while it offers a promotional price on mobile.

Both selling additional lines in with that promotional offer.

And at our rack rate, which not rollouts to in 12 months, we make very solid margins off of the mobile business.

Because of that we remain profitable remained profitable in that business absent the gross caught.

And even with the promotional pricing to drive overall customer relationships.

And thank you everyone.

Yes at a high level.

On spectrum splits.

What what they essentially do is give you the opportunity to increase.

The speeds and upstream speeds significantly.

And to offer products symmetrically.

Pretty low capital costs, when we did DOCSIS three one you remember we spent about $9 of homes passed not counting CPE.

And which was $450 million approximately to get the plant ready. This is going to cost a little more than that but it's still a relatively low cost capital investment that gives you a significant increase in capacity.

It leaves you in a pathway, where you can continue to invest.

With additional technologies, including DOCSIS support auto to even further enhance the capability of the network.

Pretty capital efficient way.

That gives you a massive capacity and moves us to the <unk> world, we've been talking about over time.

As a.

<unk> concept.

It takes away additional operating costs as well as additional capital costs. When you make these investments because the augmentation in the network that you have to do.

For growth I talked in my prepared remarks about how much capacity people are using that capacity.

Used continues to go up.

So this and we have a normal capital budget.

Associated with that growth and capacity and when you do these.

Spectrum split upgrades you get that capacity included with that investments. So you don't have to make the augmentation investment.

So it's a very efficient way of Av.

Ubiquitously deploying lots of capability.

Across your entire footprint.

Cable industry in general will have that capacity across its entire footprint.

Relatively quickly.

And I think given what we've seen in the field implementations that have happened. So far are confident in the capital efficiency of the implementation.

As well as our ability to do it at speed.

Both grown versus even I would say, where we were last quarter or the quarter before.

So very good progress in what we and.

And what we've seen both.

Both in the field and from the supplier community as to how that upgrade well be able to be executed.

Thank you so much.

Thanks, Ben Kt or we will take our next question. Please.

Thank you. Our next question will come from Craig Moffett with Moffett Nathanson. Your line is now open.

Thank you.

First congratulations to you Tom and and also to you Chris on the transition.

Two questions if I could.

Tom just a personal question for you can you elaborate a little bit on the timing of your decision. What made you decide now was the right time.

And then second with respect to broadband.

What are you seeing in terms of broadband costs.

You're obviously doing a lot at the edges of your network.

That would I think give you good insight into labor costs and the implications of cost of capital.

What are you seeing both for you and would you suspect quarter fiber overbuild, there is that our competitors and does it have any implications for how you think about the <unk>.

Our das build.

Are there any of those markets that as costs have risen are now less attractive.

And potentially less interesting to continue to pursue.

Okay. There's a lot in those crushed in that question.

First with regard to my timing.

Two years ago put in my contract.

That.

On August 15th of this year I would have an option in my employment agreement too.

Again, the process of <unk>.

Transitioning to executive chairman and giving up the CEO role I.

Chose that date two years ago, because it was the 50th anniversary of my Bill.

Beginning in cable as a technician working my way through college and $19 72. So.

You know I have personal.

Meaning to me and I thought it was a milestone a couple of years ago.

That.

I might want to exercise and then the other thought I had was at the end of this executive.

Chairmanship 70 years old and I thought well.

Maybe I should think about.

Not working after that age.

And.

But on the other hand I was.

I Love this business and I love, what the future.

As for this business.

There is tremendous opportunity.

<unk>.

I wanted to see it through but it's going to it's just such a good business, it's going to go on so long debt.

It's time to pass the baton.

So that's how I came to the decision.

I mean.

To your sort of.

Broadband cost questions, yes, there are cost issues.

We've.

Had to deal with those costs and they are in our numbers.

In this quarter you can see that.

There is some inflationary pressure out there and there have been labor force dislocations as a result of Covid and the economic policies that the countries employed to deal with it.

<unk>.

There are significant but.

<unk>.

Our strategy from a pricing and packaging perspective is to to.

To be the value provider and to make these products work together at lower prices.

Good value for consumers and to use our ability to drive market share.

Is the primary driver of our revenue.

That said, we have been passing through.

Video price increases we pass through recently of broadband.

Price increase.

As a result of the inflationary pressures that we've seen at the same time it doesn't negate the way our primary.

<unk>.

Revenue opportunity is developing which is to create more customers faster.

And to create those customers with more products associated with each connection so that our <unk> and revenue go up together and Thats. The primary driver of our revenue strategy our cost strategy.

No.

Real.

<unk>.

We are working in art off to develop.

Uh huh.

Higher costs than we anticipated, but we've also had more success than we anticipated in terms of both.

Both penetration and the number of passengers that we can develop a walk of the Argos projects that we've built.

So net net our cost.

As what we thought it would be.

On a per passenger basis, but it.

It does create.

Pressure and difficulty or.

People to attract labor and to get things done.

And so we're having issues ourselves with supply chain.

The development of a workforce.

And and how we do the work and in what order we do work.

Being impacted by.

The labor market.

And the supply market.

So.

I do think it has.

The cost of money and the cost of labor and the cost of everything will affect.

Our competitors ability to build as well.

Yeah. The advantage that we have there and against many of them at scale.

Lee.

When it comes share being able to acquire and then to move supply around the areas where we are.

We're ready and most paper put out.

That we have.

We continue to have a very good ability to do that.

And really on the cost of capital side. The advantage that we have is a large amount of free cash flow that we're.

Able to deploy really with a relatively small portion of them to execute on these build so we're not beholden to borrowing on a regular basis to fund our developments.

And some others in the market are.

So I think we continue to be well positioned in the rural belts are actually performing.

At least as well or actually better than we expected and from a financial perspective, I'm still confident in where we are on the returns that we had.

Had it had said that we would have against those now.

Thank you and again, congratulations to you and to Chris Tom.

For the transition.

Thank you Thanks, Craig Kandi will take our next question. Please.

Thank you. Our next question will come from Philip Cusick with Jpmorgan. Your line is now open.

Hi, guys. Thank you a couple of follow ups, if I can Chris looking forward to your event in December I know you addressed somewhat.

A couple of things a minute ago, but I noticed you didn't mentioned updates on core network capital intensity or leverage targets as part of this transition which are things that we hear people asking about in the market any changes to consider here that you can give us a little preview on and then second I know, it's early but Jessica can you follow up on that those rural initiatives.

And the contribution there to broadband subs.

How should we think about capital spending for for art off in other rural initiatives next year. Thank you.

So I'll take the first one I think Jessica mentioned in her prepared remarks, our view on core capital intensity.

In terms of outlook and she wouldn't have said that if we didn't collectively believes that that is the case now and going forward. So.

She mentioned, excluding rural and that there may be some lumpiness as it relates to the timing of exactly how you get high split it supply chain and inventory and all that but.

The core capital intensity.

<unk> continues to decline.

The leverage target I'd heard that rumor out in the marketplace I find it a little bit funny, because I've been at four five times since Switzerland.

Germany since charter four five times and.

At a levered equity strategy for a really long time, probably over 20 years.

And I helped put that together here at charter and we have good growth.

In the interest rates are we're talking about different factor probably less for us as charter today than when I got here at charter so our views on how to create value through the operating strategy.

How does the pair that with the balance sheet and menu strategy and our Levered equity strategy that.

That hasnt changed and I mentioned the same thing in the prepared remarks is while we're on the topic.

One of the other topic is out there and I think Doug was going there is.

Do I believe that we need to do a fiber overbuild for our entire network no I don't I don't think it makes a lot of sense to have operate two networks, which is what a lot of the over builders have had to do when they got into it we have a really good path forward. It doesn't mean that we don't do fiber redo fiber on the increment there maybe portions of the network longer term that we decided it's economical.

Do that but for the most part.

In fact in its entirety of the parts that Tom laid out is the path.

And we're not I don't see any reason why somebody would want to go too.

Fiber overbuild perfectly otherwise good network that can be upgraded a dramatically lower cost and have the same capabilities.

On the right side.

I guess on your first question the contribution to broadband subs, certainly we are seeing broadband subs coming in off of them.

There were real belt that we're executing already I think.

<unk> said that we will start providing some more detailed information about the rural Belk, and we werent quite ready to do that this quarter, but I would expect.

Going into year end.

Some better information, it's not the entire growth in broadband.

The growth that you see are the 75000 additions reflects growth off of our legacy footprint as well.

As some of our smaller amounts of incremental growth off of the broadband subs.

But we are doing very well in those markets that we build out as far as thinking about how you should think about rural for next year I don't want to front run giving guidance on that piece just yet I would tell you that I think what we did in this year to try to accelerate walk out and design.

It's certainly in an effort to be able to build.

The rural builds out at a good pace, which I think is both consistent with what strategically we'd like to do.

Because having the passengers and sort of sooner than later is that it's good for the business.

And from a regulatory perspective, we are certainly doing everything we can to meet expectations on that side as well and in.

And placing the Bill then service, but I don't on that basis sort of have a number to give you for next strategy to tell you that I would expect our pace to continue to be.

Strong because we're trying to build what we need to pump.

Quickly, we're able to do so.

Thank you and congratulations again, Tom and Chris that's well deserved.

Thank you.

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

Thank you. Our next question will come from Jonathan Chaplin with New Street. Your line is now open.

Thanks.

And Tom to add my congratulations to the rest it's been an incredible run I only wish stock was where it was a year ago.

As you are heading out the door, maybe it will be by December holding dumps and congratulations to you as well Chris.

I'm wondering if you can give us.

You mentioned that.

You Havent change prices online.

Packages, where plants and you don't really see the spectrum, one off with a price cut I'm wondering if you can comment on the pricing environment.

More broadly around your from your competitors and how you think the introduction of fixed wireless broadband into the market, maybe maybe impacting industry pricing more broadly and then.

Tom you sort of reiterated what charter strategy has been clearly.

For two years, which is to drive growth with volumes.

And to be very measured on price.

And it's been clear, how that's been sort of a hallmark of creating long term value.

Pre chartered for a long time.

Help us think about the pace at which EBITDA would grow in.

In an environment, where volumes are just going to be potentially lower for a while.

And you're continuing to take a measured approach to pricing.

Yes.

I'll jump in first you said, we haven't changed that sorry, if I just wanted to correct. We said I think we haven't lowered.

Our pricing you know Tom mentioned.

We have a pass through some of the inflationary cost increases and that includes broadband.

It should be indicative.

Thinking about that and then on the fixed wireless I'm just throwing a few pieces here.

Others.

The rest of the fixed wireless access.

The pricing really is designed for a full suite bundle of multiple local lines and in some cases high priced mobile lines combined with.

Wireless access so I think the right comparison is if you take a look at our existing pricing.

September with broadband and mobile lines, because that's a comparable comparisons were now respect for one.

Pair that to the combined fixed wireless access offers and I think that's the best way to take a look at it when you do that youll see that were dramatically not only.

Lower in terms of price higher in terms of value, but the quality of the product is not really comparable.

So I think that's the right way to think about those.

Yes, I guess I would just add that.

Yeah.

<unk> for our ability to continue to grow.

Against that.

The market share is significant I said in my prepared remarks that we're 28% penetrated in terms of dollar takeout.

Consumer spend for mobile.

For broadband combined and so we have this big physical infrastructure, where every customer we connect to it.

Requires no real significant.

Capital.

Dennis.

Opportunity for us to drive growth using that network with superior products at attractive prices.

Is huge and the dollar value of what's in front of us is huge.

And so that's the big opportunity in our structure.

It really hasnt changed the fact that we have.

<unk> associated with our broadband products now.

And our combined product really means that.

You have very high priced mobile products with very small usage on a bandwidth basis.

And we can add those into our product mix very attractively.

For consumers and.

And when we look at what consumers are spending we can save those consumers a lot of money. So that's that's the basic concept and.

It Hasnt changed and what has changed is the technologies, we're using and the product sets and how they are combined but.

The basic notion of.

There is a huge marketplace with a lot of spend in it and we're not getting much of it.

We'd like to get more and we will.

And I guess in terms of how that then translates into EBITDA trajectory Jonathan.

I don't think it will come as a surprise to anyone that based on the lower broadband customer growth that we've had over the last year really coming out of there really accelerated growth in those customers and pull forward during COVID-19.

You mean that we had kind of a higher revenue growth followed by on what's likely to be somewhat lower revenue growth versus that COVID-19 time period, but.

But I think based on what Tom talked about that then as we sort of execute on the converged connectivity plan and as we see some return to normalcy in the market. We certainly expect that in the medium to longer time that that will pick back up and so that youll have that increasing revenue growth again.

Similar on the expense side, we certainly have seen some impact and I think we called out some of the impact of inflation in.

The financials and Q3.

But we think that that sort of.

Once again sort of is it is it temporary con John growth.

That is consistent with what people had.

We think that people expect.

But it will be followed by a return to more normal levels and so ultimately in the medium and long term I think that the trajectory of EBIT growth it back closer to pre pandemic levels.

But I acknowledge that I think that there could be a little bit of slowness in the macros in the short term.

That's great. Thanks, Jessica I appreciate that.

Thanks, Jonathan we will take our next question. Please.

Thank you. Our next question will come from Vijay Jayant with Evercore. Your line is now open.

Thanks, My congratulations to you both.

I had a just a couple of questions. One you talked about a broadband rate increase I mean, we haven't seen it on in the market at any any details on what the magnitude of that is and obviously you know our booth for broadband seems to be a big focus.

For all of Us given.

Sort of flattish unit growth, so any any sense on what that could drive.

Broadband <unk> and in 'twenty three.

And then just for housekeeping was there any impact on the broadband net adds for the quarter. Thanks, so much.

So I'll take the last one of those first there was some impact of the EBITDA ACP conversion on broadband in the quarter. It was much smaller than it was last quarter and.

And we expect it to be much smaller going forward. So I don't think we'll call it out and all separately.

And I I would call you know internet ARPA growth in the year over year overall are totally flat, but internet auto was up two 2% and.

If you included mobile and overall our pill.

It would've been up $1 60 versus last year. So we think that there is sort of <unk> growth happening in the market.

Largely driven by mix issues and by our ability to penetrate the market further on the mobile side.

Driving through additional I'll say real growth of the business beyond just what you can get from a pricing perspective.

So we feel like we're doing well there.

Think that we'll give guidance on what ARPA growth, we expect going forward.

But that's what that's what we're seeing what we're seeing now.

Great. Thanks, so much.

Alright, Thanks, Vijay we will take our next question. Please.

Thank you. Our next question will come from Peter Zaffino with Wolfe Research. Your line is now open.

Hi, Thank you.

Two questions, one mobile historically charter and Comcast, who said that mobile primarily.

Added by existing customers and I'm wondering if it's fair to assume that spectrum one represents an intent.

Invest what you've called the high mobile contribution margin on the incremental subs.

Customer acquisitions and converged customers.

Whether that is a solution for this broadband problem separately I just wondered if you could comment on the sequential growth it looks to me like broadband commercial and mobile adjust.

Adjusting for a view of the ABB losses grew.

It grew less than $50 million sequentially.

I'm a square this with your leverage I'm sure. It's not your view that that is the future and so any comments on sequential growth would be helpful. Thank you.

We made and Peter to the first part of your question I would say yes.

We expect.

To be able to broadband growth through.

It's a complicated sale obviously.

But yes.

You mentioned the.

Spectrum, one solution to the broadband versus issue, we have right now and I think it can be additive, but it's not the solution to the problem right now is market activity.

I know that's not the.

The fashionable thing to say right now, but the biggest problem we face as market activity is when that comes back I think that's the solution to the broadband growth and the spectrum. One has the opportunity as Tom said to drive incremental internet growth as well as still today. The biggest source of mobile growth is by far the upgrades to our existing internet.

Which should benefit that base as well.

On sequential growth I guess I would point out a couple of things one I highlighted in the prepared remarks, which was that.

The.

Growth that we saw in Q2 was impacted by pricing.

Pricing adjustments that we had taken for video.

Video pass through and the way that those overlapped year over year, you actually had the impact of two in the second quarter.

Versus only one in the third quarter. So that's part of what was happening there there also.

Enterprise commercial.

There was a one time item that was a benefit in last year.

But you don't have them this year that sort of pressured this growth rates in the year over year.

Alright, and then in the sequential quarter. So some of what Youre seeing there is just sort of the impact of lumpiness not not overall growth trajectory.

The leverage point, I would say that where were sitting right now.

Free cash flow yield on equity.

Is so high that I think that continuing to do share buybacks presents.

Significant opportunity for the company just based on where we're sitting on that point.

And the overall capital structure I think has been an advantage to the company in the long term.

And so.

Don't see I don't see where we are on even in what might be temporarily pressured growth environment.

Being a reason to move off of where we've been.

From a leverage standpoint or share buyback strategy.

And so consistent with what I said, we certainly expect it to stay at the top of about four to four five times leverage ratio.

Thank you and Tom Thanks for a great decade of charter.

Thank you.

Thanks, Peter will take our next question please.

Thank you. Our next question will come from Brett Feldman with Goldman Sachs. Your line is now open.

Thanks, and I'll just echo my congrats to Tom and Chris My first question here, It's our fault for Jessica you mentioned the merits of continuing to buy back your stock at these levels Youre deaths also trading at significant discounts to par I am wondering if that could also be an accretive opportunity to buy back some of your debt out of the market and then we've seen cord cutting.

Pick up on a year over year basis at your business. It had most other operators businesses I'm curious if you could give us some insight as to what's driving meaning we know that there has been fewer and fewer gross connects over the last several years I'm wondering if you're actually seeing an uplift in people cutting the cord, meaning they get rid of their pay TV, but remain with you as a customer for <unk>.

And thank you.

Yeah.

So on the debt repurchase question I also have noticed that I got into it.

And a discount in the market.

Do we do modeling consistently as to what we think the best option as between the two is on <unk>.

Particularly given our plans to stay at the top end of the of our leverage range.

And so I won't comment on anything in particular that we plan to get out, but we do certainly noticed that.

Well, we'll continue to do our modeling and we'll make the next decision based on what appears appropriate given where the market sets the time on that.

Cord cutting.

The biggest driver here is the pricing of a video or video and <unk>.

The fact that we're having to pass through programming rate increases, which still continue to be outsized even relative to inflation.

It means that customers have a difficulty affording it even if it's really something that they'd like to have it so yes.

Predominantly is driving.

Driving downgrades.

A video, but not disconnected broaden the non children and routine.

Turning to connectivity.

And in many cases we.

We disconnect the video customer.

Downgraded video customer and sell them on mobile package at the same time.

And they actually end up saving money.

Obviously, because they have.

No video or they buy a smaller video package from us in many cases.

But they also end up.

Driving <unk> up in the sense that they buy mobile.

And.

And that mobile is a good value for them and their overall household spend savings savings.

Thank you.

Thanks, Brett Katy we will take our last question. Please.

Thank you our last question will come from Michael Rollins with Citi. Your line is now open.

Thanks.

Two questions first if I could revisit new York to discussion as Youre looking at that relationship.

Broadband <unk> and volume performance in the quarter does this signify that theres, just greater price sensitivity to grow the broadband base going forward.

And then secondly, if the U S goes into recession, how should investors think about the sensitivity.

In terms of charters Kpis and financial performance.

And as Youre, describing to our customers are trading down in video is there a risk that that accelerates or that customer stepped down their broadband tiers.

Okay.

Well I'll try to answer that.

I've been through a lot of recessions in my career.

I have a hard time remember remember him I'm remembering them because they.

Our business performed well during them.

And the reason is our products are really attractive even when consumers are under stress.

Obviously, there is a certain amount of.

<unk> stressed that you can't overcome.

And.

And video I think will be challenged but on the other hand it is.

So very attractive product.

You are unemployed.

And.

And it's it's still even at the high price that it is a good value.

Relative to other forms of entertainment.

No.

But the reality is that.

And the risk.

Recessionary environment when people become more price sensitive the value proposition that we offer with our everyday pricing is superior to what they can get elsewhere, which means that we actually become more attractive when people are more conscious of the price.

They are paying for other products and so.

Uh huh.

I'm not that worried about a recession from our company's perspective.

And there might be some some impacts that you would see in basically the advertising.

Enterprise enterprise, but the performance that we could get in mobile, particularly given our pricing there.

Would be good.

Even if it had video downgrades on the other side.

The margins in mobile actually better than the margins in video. So you get you get.

Some advantage of more customers moving into the into the mobile side of the business as well.

So we're not hoping for a recession.

But we'll be fine.

On broadband, it's a staple product, which insulates it turns out but unlike many others, we have not been pushing speed upgrades for the purpose of just generating great.

It's really been about when a customer wants a higher speed or feels the need to higher speed. That's when it's been offered and thats been offered an attractive rate and so the risk of a downgrade of the speed upgrades I think is mitigated with us because we haven't artificially driven that into the base.

And on the subject of price sensitivity are you just are you seeing more sensitivity in price to grow broadband based on the net.

Level going forward.

I mean, I think we've said that the issue in broadband is activity.

It hasn't been that Theres additional price sensitivity, it's just that there's not a lot of movement in the market overall.

And so I don't think that that scenario is significantly different than what it's been before we've only compete at.

All across our footprint.

And we continue to do that today and then the price sensitivity of that competition is not it's not significantly different than it was in the past price has always been important and continues to be important.

Why having packages that provide value to consumer helps us to grow subscribers and has helped us over time to grow subscribers.

At a faster pace than our competitors.

The way I would.

If there were price tissues with broadband you'd see broadband disconnects.

They are at historic lows.

Thanks, Mike Katie back to you.

Thank you ladies and gentlemen. This concludes today's event you may now disconnect.

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Yes.

Hello, and welcome to the charter Communications third quarter 2022, Investor call. We ask that you. Please hold all questions until the completion of the formal remarks.

Which time, you'll be given instructions for the question and answer session.

Also as a reminder, this conference is being recorded today. If you have any objections. Please disconnect at this time I will now turn the call over to Stefan <unk>. Please go ahead.

Good morning, and welcome to Charter's third quarter 2022, Investor call presentation that accompanies this call can be found on our website IR charter dot com under the financial information section.

We will not review those risk factors and other cautionary statements on this call. However, we encourage you to read them carefully.

Remarks that we make on this call concerning expectations predictions plans and prospects constitute forward looking statements. These forward looking statements are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results any forward.

Looking statements reflect management's current view only and charter undertakes no obligation to revise or update such statements or to make additional forward looking statements in the future.

Please also note that all growth rates noted on this call and in the presentation are calculated on a year over year basis, unless otherwise specified.

On today's call, we have Tom Rutledge, Chairman and CEO , Chris Winfrey, our COO and Jessica Fisher, our CFO with that let's turn the call over to Tom.

Thank you Steffen.

I look at our current advanced offerings, our future product plans.

Due to the low activity environment.

We continue to see very strong mobile line growth with net additions of 396000, our best quarter, yet over the last year, we've grown our mobile lives by nearly 50% and as.

As of the end of the quarter, we had nearly $4 7 million total mobile lines.

So we remain significantly underpenetrated versus the opportunity in front of us and we're delivering the fastest internet and the fastest Wi Fi speeds in the nation and the fastest mobile speeds when combined with Wi Fi all the while serving customers saving customers I should say thousands of dollars a year.

Today, we are close to 500 million devices connected to our network. The vast majority of which are connected to us wirelessly.

Ultimately I expect that virtually all devices connected to our network will connect wirelessly.

To continue to improve our services. We also remain focused on evolving our network to offer the fastest speeds in the most cost and time efficient manner data usage continues to grow.

Fast pace Internet customers, who do not buy traditional video from US used nearly 700 gigabytes per month, nearly 25% of those customers use a terabyte or more of data per month downstream traffic still dominates usage at a ratio of 14 to one versus upstream traffic.

In the near term were implemented implementing spectrum split upgrades, which expand our plant capacity by Directionally and allow us to allocate more bandwidth to the upstream.

All using our existing DOCSIS three one infrastructure in turn will be able to offer our customers higher symmetrical speeds and multi gigabit speeds in the downstream.

Our network evolution path also includes DOCSIS bore that out.

As you May know.

I plan to step down as CEO on December one at that time, Chris Winfrey will become our new CEO I will become executive chairman.

Personally fulfilling to lead charter over the last 10 years, we've grown our company through innovation and strategic investments that position charter to provide the best connectivity products and services available today everywhere we operate.

Alex have continually evolve and change the world during my career from the carriage of broadcast signals when I began to the development of robust video and multichannel cable networks and from the early days of broadband Internet and voice to now offering fully ubiquitous wireless connectivity. We continue to drive new uses for our networks to bring.

Value to consumers and our opportunity to innovate and grow is greater today than ever before.

Having worked closely with Chris for more than 10 years I know that he is the right choice to be our next CEO .

Steve will serve charter with both vision and skill, leading the company to new Heights, Chris's leadership and expertise in both operations and finance have been pivotal to charters growth and success over the past 10 years. He has repeatedly demonstrated an eight strategic insight and keen market in level and industry awareness to drive our.

And to perform at the highest level and with that I'll turn the call over to Chris.

Thanks, Tom and thanks for the kind words, and both honored and excited about the opportunity to continue to help try to grow and to create shareholder value as the incoming CEO .

It has also been a privilege for all of US here at charter to work for and learned from Tom over the past 10 years. His leadership is the recent charter just as it does today and he has mentored all of US here to keep reinventing cable and we're fortunate that he'll continue to do the same as our executive chairman.

So Tom covered the quarterly headlines so I thought I'd give some additional market color.

While our Internet net additions improved from last quarter. They remained below last year.

A large driver by far is the activity level remains low total churn and voluntary churn were slightly lower year over year and were at all time lows for third quarter.

Non pay and move return remains well below pre pandemic levels. Those are market issues that also reduce our selling opportunities.

While we've seen some improving trends gross additions also remained down across the footprint by similar amounts in both overbuild and non overbuild areas similar to what we've seen past few quarters.

In terms of competitive impact some of the lower gross additions received probably relate to DSL conversion going to a new entrant fixed wireless instead of coming to us given.

Given the issues with fixed wireless product reliability, and scalability and usage trends, we expect those customers to find their way back to us over the long term.

We've also seen a similar pace of fiber overbuild.

Reported telco Internet numbers confirm what we saw a small mix issue from newly overbuilt footprint no different from the past.

I'd also note that we have seen a small amount of market share return to mobile only service over the past several quarters the reversal of some COVID-19 effects.

So wondering unique moment the opposite of the one we saw in 2020 and early 2021 in fact market transaction volume will eventually pick up in several of our Internet net adds in the meantime, we're growing mobile at record rates, even in a low volume environment by saving customers thousands of dollars.

Growth is also good for broadband.

I've been in the cable industry for almost 25 years at charter for over 10 years.

Lot to cover so I look forward to a virtual event with the investment community that we will schedule for a date following the CEO transition in December .

Now I'll turn the call over to Jessica.

Thanks, Chris.

Before discussing our third quarter results I want to mention that today's results do not include any impact related to hurricane in which hit the east coast in late September .

Initially approximately $1 million of our customers lost service, primarily because of power outages that our crews worked hard to prepare our networks and reconnect customers and they did a great job.

Rodley speaking our plant third while despite the charm and service was restored to nearly all impacted customers in a relatively short period of time.

And while we expect our fourth quarter results to contain some bill credits some incremental capex related to plant replacement and some incremental operating expense related to store cleanup and call Center labor, we expect the overall impact of hurricane in on our financial and customer numbers will be very small.

Let's turn to customer results on slide five.

Including residential and SMB, we added 75000 internet customers in the third quarter.

Video customers declined by 204000 in the third quarter. Following a programming pass through increase in the second quarter wireline voice declined by 271000.

Moving to financial results starting on slide six over the last year residential customers grew by 123000 or 4% year over year.

Residential revenue per customer relationship was flat year over year with promotional rate step ups and rate adjustments offset by a higher mix of non video customers higher expanded basic video losses in the last several quarters and accelerated growth of lower priced video packages within our base.

Our year over year residential revenue per customer relationship growth was lower this quarter than last given the timing of rate adjustments in this year versus last and the mix factors I just mentioned.

So keep in mind that our residential or it does not reflect any mobile revenue.

As slide six shows residential revenue grew by 7% year over year.

Turning to commercial SMB revenue grew by one 9% year over year, reflecting SMB customer growth of three 3%.

Enterprise revenue was up by two 6% year over year or by five 2% year over year when excluding some one time fees from the prior period.

Which were a benefit last year.

Excluding all wholesale revenue enterprise revenue grew by 9%.

And enterprise <unk> grew by four 9% year over year.

Third quarter advertising revenue grew by 23% year over year, primarily driven by political revenue.

Core AD revenue was flat year over year with lower in national and local advertising revenue offset by our growing advanced advertising capabilities.

Mobile revenue totaled $750 million with $303 million at that revenue being device revenue.

Other revenue declined by two 1% year over year, primarily driven by lower video CPE sold to customers, mostly offset by Royal construction initiatives subsidy subsidies.

In total consolidated third quarter revenue was up three 1% year over year.

Moving to operating expenses on <unk>.

And EBITDA on slide seven in Q3 total operating expenses grew by $278 million or three 5% year over year.

Programming costs declined by three 8% year over year due to a decline in video customers had three 8% year over year and a higher mix of lighter video packages, partly offset by higher programming rates.

Looking at the full year 2022, we now expect programming cost per video customer to grow in the low single digit percentage range.

Regulatory connectivity and produced content declined seven 4% year over year, primarily driven by lower of video CPE sold to customers.

For the full year 2022, we now expect regulatory connectivity and produced content expense to decline in the mid to high single digit percentage range.

Cost to service customers increased by four 4% year over year.

Excluding bad debt from both years cost to service customers grew by 3%, primarily due to higher fuel and freight costs, partly offset by productivity improvements.

And while bad debt and non pay churn were higher year over year, both remained well below pre COVID-19 levels.

We now expect cost to service customers expense growth for the second half of 2022 to be more consistent with growth in the first half of 2022.

Marketing expenses grew by nine 3% year over year, primarily due to higher staffing levels and wages as charter focuses on providing better service to new and existing customers.

For the full year 2022, we now expect marketing expense to grow in the high single digit percentage range.

Mobile expenses totaled $846 million and were comprised of mobile device cost tied to device revenue customer acquisition and servicing operating cost.

Adjusted EBITDA grew by two 4% year over year in the quarter.

Turning to slide nine capital expenditures totaled $2 $4 billion in the third quarter above last year's third quarter spend of $1 $9 billion.

Most of that increase was driven by $525 million of spend on our rural construction initiatives in the quarter and the vast majority of that spend is accounted for in line extension.

In rural we've accelerated our walkout and design nationally to allow for additional time for the process of securing all access.

In addition, our access to inventory is improving so we're carrying a more appropriate amount of inventory to support the belt.

As a result, we now expect to spend approximately $1 $5 billion. This year I never all construction initiatives.

We spent $96 million on mobile related Capex, which is mostly accounted for in support capital and scalable infrastructure and was driven by investments in back office systems.

Core cable Capex, which excludes our borough and mobile Capex increased from $1 $7 billion last year to $1 $8 billion. This quarter, driven by modestly higher CPE and scalable infrastructure spending we continue to expect core cable capital expenditures to be between seven one and $7 3 billion.

For the full year 2022.

As slide 10 shows we generated $1 5 billion of consolidated free cash flow this quarter versus $2 $5 billion in the third quarter of last year the.

The decline was primarily driven by higher cash tax payments and higher capex, mostly driven by our rural construction initiatives excluding.

Excluding cash taxes, our royal construction initiatives and litigation settlement free cash flow grew by 5% year over year.

We finished the quarter with $96 $8 billion in debt principal our current run rate annualized cash interest is at $4 $8 billion as of the end of the third quarter our ratio of net debt to last 12 month. Adjusted EBITDA was 4.48 times, we intend to stay at or just below the high end.

Of our four to four five times target leverage range.

During the quarter, we repurchased $5 8 million charter shares and charter holdings common units totaling about $2 $6 billion at an average price of $445 per share.

Operator, we're now ready for Q&A.

Thank you. Our first question will come from Doug Mitchelson with Credit Suisse. Your line is now open.

Thanks, So much I think.

Perhaps two questions I mean, Tom what a career and Chris Congratulations.

I wanted to ask about spectrum one first.

And Tom It reminds me of when you launched the Triple play with the 2005 back with <unk>, we're launching and.

It looked like a really intriguing price and value for customers, but also kind of lower than.

Perhaps prior promotions, so I'm, just hoping that you know.

And Chris can walk through the strategy behind the spectrum one promotion in.

The financial impact relative to your prior promotional strategies and then separately Christa I know, it's early and you're indicating that you're going to update us in December like how broadly.

Are you considering.

But our strategy shifts obviously investors are kind of a combination of nervous and excited about changes that that might take place I mean is there scope to go.

Rapidly accelerate.

Capital spending or a different pricing strategies, how why does that matter here in terms of what you are considering as this revolution or evolution. Thank you.

Thanks, Doug.

Yes, your memory is good.

Ill turn the answer over to Chris but.

When the Triple play was first announced there was a lot of skepticism.

And.

And some people thought it was foolish, but it turned out to be quite successful.

So I think there is similarly, maybe a little confusion out there about what spectrum one is.

And really it's.

Our first attempt in that may evolve over time, but it's factual one packages seamless connectivity with their products and they all work better together. It is offered at a first year promotional price.

And as a result, our pricing of the underlying products, whether that's internet defense Wi Fi and mobile it has not changed even after that promotional period spectrum, one creates values for customers in a way that our competitors really can't replicate pretty similar to what was the design of Tom's original Triple play.

We also attach additional products or mobile lines to that promotional selling so contrary to what I think is maybe a fair we have not lowered our pricing in the marketplace.

Nor do we believe that we need to.

Doug on strategy shift I mean in the prepared remarks, I wanted to be clear because I understand thats out there as well.

I've been.

He player in developing our operating strategy here with Tom and John spectrum, and others over the past decade.

Just because somebody gives you a new title doesn't mean that your view on just fundamentally how to create shareholder value changes overnight, so pretty committed to all things that we're doing today in terms of our strategy and our products pricing package service.

As I mentioned, our capital structure. So you had a little bit of a hand in that as well in your balance sheet M&A strategy. So I don't expect any seismic shifts I've always thought.

That if we were going to do something anyway in terms of capital might as well go get after it. So you can grow faster so if there's opportunities to.

To accelerate what we're already doing we will do that but I don't think people should expect any fundamental changes in views on how we operate the business or how we create value for shareholders.

Thank you.

Thanks, Doug Katy we will take our next question. Please.

Thank you. Our next question will come from Benjamin Swinburne with Morgan Stanley . Your line is now open.

Thank you and congrats Tom I'm sure, we will Miss you more than you'll Miss us but.

Please stay in touch.

Yes, I guess sticking.

Sticking with the wireless.

And the network.

Chris last quarter U.

Sure.

Willing to highlight to us that maybe we on the sell side I've got the wireless economics wrong.

Obviously, you've gotten you've got the spectrum one plan in the market, which seems to be doing what you hoped it would which is drive faster growth I'm sure, we'll see more of that in Q4.

The losses in wireless and I know product P&l's are of limited use to some extent, but it looks like there'll be pretty flattish year on year. This year I'm. Just wondering is there way you can sort of take us into the cost structure on the wireless side speak to the network offload opportunities and is there any way to help us think about as you continue down this convergence path is there a timeline towards.

EBITDA, starting to inflect and really benefit from the wireless revenue scale, you're building because it sounds like it looks like we're not going to see that at least in the near term and then I'm. Just wondering what are the returns youre seeing on the high split activity so far.

And you mentioned DOCSIS four Tom did in his prepared remarks do you have a sort of a timeline you want to sort of lay out for us or how you think about the benefits of high split in DOCSIS four over the course of the next few years to the business.

So.

Two quick things and then I'm going to pass it over to Jessica on the spectrum. One we didn't launch that until October so it had no impact on our Q3 results.

And on your question regarding high split we're going to go into lots of detail in December so I'm going to try to be quiet today around all of that Theres nothing shocking.

Okay.

Tom and others may elaborate on the benefits of high split, but we will give a more detailed plan in December the questions on the mobile I'm going to hand that over to Jessica around the financials on mobile and she can go through that.

Yes.

Mobile EBITDA losses remained due to a few things the first one I'm sure you saw this is our best quarter yet.

Our mobile growth and we continue to have additional sort of customer acquisition cost because of that that way on mobile EBITDA.

Also we did see both in mobile and in the cable side increases in bad debt in the year over year.

And so theres some of that that's impacting our mobile EBITDA and we did implement a new system. The earlier in the year I think Tom has talked about it and we're still sort of working through the last of the costs related to having implemented that system and so there's a little a little weight there that I think will come down.

As we settle into a bit more.

But the key here is that you should know that gross margin in the mobile product continues to be very good and as Chris mentioned spectrum. One Mylan offers a promotional price on mobile.

Both selling additional lines in with that promotional offer.

And at our rack rate, which not relative to in 12 months, we make very solid margins off of the mobile business.

Because of that we remain part will remain profitable in that business absent the gross caught.

And even with the promotional pricing to drive overall customer relationship.

And thank you everyone.

Yes at a high level.

On spectrum splits.

What what they essentially do is give you the opportunity to increase the speed.

<unk> and upstream speeds significantly.

And to offer products symmetrically.

Pretty low capital costs, when we did DOCSIS three one you remember we spent about $9 of home passed not counting CPE.

It leaves you in a pathway, where you can continue to invest.

With additional technologies, including DOCSIS support auto to even further enhance the capability of the network had a pretty capital efficient way.

Uh huh.

That gives you a massive capacity and moves us to the <unk> world, we've been talking about over time.

As a general concept.

It takes away additional operating costs as well as additional capital costs. When you make these investments because the augmentation in the network that you have to do.

For growth I talked in my prepared remarks about how much capacity people are using that capacity.

Used continues to go up.

So this and we have a normal capital budget.

Associated with that growth and capacity and when you do these.

<unk>.

Spectrum split upgrades you'd get that capacity.

<unk> with that investment so you don't have to make the augmentation investment.

So it's a very efficient way up.

Ubiquitously deploying lots of capability.

Across your entire footprint.

Cable industry in general will have that capacity across its entire footprint.

Relatively quickly.

And I think given what we've seen in the field implementations that have happened since our confidence and the capital efficiency of that implementation.

As well as our ability to do it at speed.

Both grown versus even I would say, where we were at last quarter as a quarter before.

So very good progress in what we used in and.

What we've seen.

Both in the field and from the supplier community as to how that upgrade well be able to be executed.

Thank you so much.

Thanks, Ben Kt or we will take our next question. Please.

Thank you. Our next question will come from Craig Moffett with Moffett Nathanson. Your line is now open.

Thank you.

First congratulations to you Tom and and also to you Chris on the transition.

Two questions if I could.

Ah.

Tom just a personal question for you can you elaborate a little bit on the timing of your decision. What made you decide now was the right time.

And then second with respect to broadband.

What are you seeing in terms of broadband costs.

You're obviously doing a lot at the edges of your network.

That would I think gives you a good insight into labor costs and the implications of cost of capital.

What are you seeing both for you and would you suspect for fiber overbuild. There is that our competitors and does it have any implications for how you think about the <unk>.

<unk> build.

Are there any of those markets that as costs have risen are now less attractive.

Potentially less interesting to continue to pursue.

Hey, there's a lot in those crushed in that question.

First with regard to my timing.

Two years ago put in my contract.

That.

On August 15th of this year I would have an option in my employment agreement to begin the process of.

Transitioning to executive chairman and giving up the CEO role I chose that date two years ago, because it was the 50th anniversary of my.

Beginning in cable as a technician working my way through college and $19 72. So.

You know I have personal.

Meaning to me and I thought it was a milestone a couple of years ago.

That.

I might want to exercise and then the other thought I had was at the end of this executive.

Chairmanship I E 70 years old and I thought well.

Maybe I should think about.

Not working after that age.

And.

But on the other hand I was.

I Love this business and I love, what the future.

Is for this business and.

There is tremendous opportunity.

<unk>.

I want to see it through but it's going to it's just such a good business, it's going to go on so long debt.

It's time to pass the baton.

So that's how I came to the decision.

I mean.

To your sort of.

Broadband cost questions, yes, there are cost issues.

We've.

Had to deal with those costs and they are in our numbers.

In this quarter you can see that.

There is some inflationary pressure out there and there have been labor force dislocations as a result of Covid and the economic policies that the countries employed to deal with it.

<unk>.

They are significant but.

<unk>.

Our strategy from a pricing and packaging perspective is to.

To be the value provider and to make these products work together at lower prices.

Good value for consumers and to use our ability to drive market share.

As the primary driver of our revenue.

That said, we have been passing through.

Video price increases we pass through recently of broadband.

Price increase.

It was a result of the inflationary pressures that we've seen at the same time it doesn't negate the way our primary.

Revenue opportunity is developing which is to create more customers faster.

And to create those customers with more products associated with each connection so that our <unk> revenue go up together and Thats. The primary driver of our revenue strategy our cost strategy.

No.

Real.

<unk>.

We are working in art off to develop.

We have had higher costs than we anticipated, but we've also had more success than we anticipated in terms of.

Both penetration and the number of passengers that we can develop off of the Argos projects that we've built.

So net net our cost.

As what we thought it would be on a per passenger basis, but.

It does create press.

Pressure and difficulty or.

People to attract labor and to get things done.

So we're having issues ourselves with supply chain.

The development of a workforce.

And and how we do the work and in what order we do the work.

Is being impacted by.

The labor market.

And the supply market.

I do think it is the cost of money and the cost of labor and the cost of everything will affect.

Our competitors ability to build as well.

The advantage that we have there and against many of them at scale.

When it comes to being able to.

Acquirer and then to move supply around the areas, where we're ready and most paper put out I think that we have.

We continue to have a very good ability to do that.

And really on the cost of capital side. The advantage that we have is a large amount of free cash flow.

Able to deploy really with a relatively small portion of on to execute on these belt. So we're not beholden to borrowing on a regular basis to fund our balances.

As some others in the market are.

So I think we continue to be well positioned there were all built they are actually performing.

At least as well.

Better than we expected and from a financial perspective, I'm still confident in where we are on the returns that we have.

It had said that we would have against those now.

Thank you and again, congratulations to you and to Chris Tom.

<unk> for the transition.

Thank you Thanks, Craig Kandi will take our next question. Please.

Thank you. Our next question will come from Philip Cusick with Jpmorgan. Your line is now open.

Hi, guys. Thank you a couple of follow ups, if I can Chris looking forward to your event in December I know you addressed somewhat.

And then second I know, it's early but Jessica can you follow up on that those rural initiatives and the contribution there to broadband subs.

How should we think about capital spending for for art off in other rural initiatives next year. Thank you.

So I'll take the first one I think Jessica mentioned in her prepared remarks, our view of our core capital intensity.

In terms of outlook and she wouldn't have set that as if we didn't collectively believes that this is the case now and going forward. So.

She mentioned, excluding rural and that there may be some lumpiness as it relates to the timing of exactly how you get high split it supply chain and inventory and all that but.

Core capital intensity is.

<unk> continues to decline the leverage target I'd heard that rumor out in the marketplace.

Funded.

A little bit funny, because I've been at four five times since Switzerland.

Germany.

Charter four five times and on a levered.

Equity strategy for a really long time, probably over 20 years.

And I helped put that together here at charter and we have good growth.

In the interest rates are we're talking about different factor probably less for us as charter today than when I got here with charter so our views on how to create value through the operating strategy.

How does the pair that with the balance sheet, and then a strategy and a levered equity strategy that.

That hasnt changed and I mentioned the same thing in the prepared remarks is while we're on the topic I know that.

One of the other topic is out there and I think Doug was going there do.

Do I believe that we need to do a fiber overbuild for our entire network no I don't I don't think it makes a lot of sense to have operate two networks, which is worth a lot of the over builders have had to do when they got into it we haven't really good path forward. It doesn't mean that we don't do fiber redo fiber on the increment.

Portions of the network longer term that we decided economical to do that but for the most part.

In fact in its entirety of the path that Tom laid out is the path.

And we're not I don't see any reason why somebody would want to go too.

Fiber overbuild perfectly otherwise good network that can be upgraded and dramatically lower cost and have the same capabilities.

On the right rural side.

I guess on your first question the contribution to broadband subs, certainly we are seeing broadband subs coming in off of.

There were real belt that we're executing already I think.

<unk> said that we will start providing some more detailed information about the rural Belk, and we weren't quite ready to do that this quarter, but I would expect.

Going into year end.

Some better information, it's not the entire growth in broadband so the growth that you see are the 75000 additions reflects growth off of our legacy footprint as well.

As some of our smaller amount of the incremental growth offers of broadband subs.

It's certainly in an effort to be able to build the rural builds out.

Good pace, which I think is both consistent with what strategically we'd like to do.

Because having the passengers into service sooner than later is that it's good for the business.

And from a regulatory perspective, we are certainly doing everything we can to meet.

Expectations on that side as well.

And placing the Bill then service, but I don't on that basis sort of have a number to give you for next strategy to tell you that I wouldn't expect our pace to continue to be.

Strong because we're trying to build what we need to pump.

Quickly, we're able to do so.

Thank you and congratulations again, Tom and Chris that's well deserved.

Thanks, Phil Katy we will take our next question. Please.

Thank you. Our next question will come from Jonathan Chaplin with New Street. Your line is now open.

Thanks.

Tom to add my congratulations to the rest it's been an incredible run I only wish stock was where it was a year ago.

As you are heading out the door, maybe it will be by December holding dumps and congratulations to you as well Chris.

I'm wondering if you can give us so you mentioned that.

You Havent change prices on any of your packages, where plants and you don't really see the spectrum one off with a price cut I'm wondering if you can comment on the pricing environment.

More broadly around your from your competitors and how you think the introduction of fixed wireless broadband into the market, maybe maybe impacting industry pricing more broadly and then.

Tom you sort of reiterated what childhood strategy has been clearly.

For <unk>, which is to drive growth with volumes.

And to be very measured on price.

It's been clear, how that's been sort of a hallmark of creating long term value.

For chartered for a long time.

Help us think about the pace at which EBITDA would grow.

In an environment, where volumes are just going to be potentially lower for a while.

If you and you're continuing to take a measured approach to pricing.

<unk>.

I'll jump in first and then you.

We said, we haven't changed our sorry, I just wanted to correct. We said I think we haven't lowered.

Our pricing you know Tom mentioned.

We have a pass through some of the inflationary cost increases and that includes broadband.

It should be indicative.

Thinking about that and then on the fixed wireless I'm just throwing a few pieces here.

Others.

For the rest of the fixed wireless access.

The pricing really is designed for a full suite bundle of multiple local lines and in some cases high price mogul lines combined with the SEC.

Wireless access so I think the right comparison is if you take a look at our existing pricing.

September with broadband and mobile lines, because that's a comparable comparisons were now respect for one.

<unk> to that too.

Combined fixed wireless access offers and I think that's the best way to take a look at it when you do that youll see that were dramatically not only.

Lower in terms of price higher in terms of value, but the quality of the product is not really comparable.

I think that's the right way to think about those.

Yes, I guess I would just add that.

Yeah.

<unk> opportunity for our ability to continue to grow.

Against that.

The market share is significant I said in my prepared remarks that we're 28% penetrated in terms of dollar takeout.

Consumer spend for mobile ads.

For broadband combined and so we have this big physical infrastructure.

Every customer we connect to it.

Requires no real significant.

Capital.

Dennis.

Opportunity for us to drive growth using that network with superior products at attractive prices.

Is huge and the dollar value of what's in front of us is huge.

And so that's the big opportunity in our structure.

And it really hasnt changed the fact that we have.

<unk> associated with our broadband products now.

And our combined product really means that.

You have very high priced mobile products with very small usage on a bandwidth basis.

And we can add those into our product mix very attractively.

For consumers and a and when we look at what consumers are spending we can save those consumers a lot of money. So that's that's the basic concept and.

It Hasnt changed and what has changed is the technologies, we're using and the product sets and how they are combined but.

The basic notion of.

So its a huge marketplace with a lot of spend in it and we're not getting much of it.

We'd like to get more and we will.

And I guess in terms of how that then translates into EBITDA trajectory Jonathan.

I don't think it will come as it <unk>.

Hi to anyone that based on the lower broadband customer growth that we've had over the last year really coming out of there really accelerated growth in those customers and pull forward during COVID-19.

Will mean that we had kind of higher revenue growth followed by what's likely to be somewhat lower revenue growth versus that COVID-19 time period, but.

But I think based on what Tom talked about that then as we sort of execute on the converged connectivity plan and as we see it as a return to normalcy in the market. We certainly expect that in the medium to longer time that that will pick back up and so that youll have that increasing revenue growth again.

Similar on the expense side, we certainly have seen some impact and I think we called out some of the impact of inflation in.

The financials and Q3.

We think that that sort of once again sort of is it is a temporary crunch on growth.

That is consistent with what people had.

What we what we think that people expect.

But it will be followed by a return to more normal levels and so ultimately in the medium and long term I think that they treated factory EBIT growth it back closer to pre pandemic levels.

I acknowledge that.

That I think that there could be a little bit.

Known as the macros in the in the short term.

That's great. Thanks, Jessica I appreciate that.

Thanks, Jonathan we will take our next question. Please.

Thank you. Our next question will come from Vijay Jayant with Evercore. Your line is now open.

Thanks, My congratulations to you both.

I had a just a couple of questions in one.

Talked about a broadband rate increase I mean, we haven't seen it on in the market at any any details on what the magnitude of that is and obviously you know our booth for broadband seems to be a big focus for all of us given sort of flattish unit growth. So any any sense on what that could drive.

Broadband <unk> and 'twenty three.

And then just for housekeeping was there any impact on the broadband net adds for the quarter. Thanks, so much.

So I'll take the last one of those first there was some impact of the <unk> conversion on broadband in the quarter. It was much smaller than it was last quarter.

And we expect it to be much smaller going forward. So I don't think we'll call it out separately.

And I I would call you know internet ARPA growth in the year over year overall are totally flat, but internet or to live up to 2%.

You included mobile and overall our pill.

Would've been up $1 60 versus last year or so.

We think that there is sort of ARPA growth happening in the market really largely driven by mix issues and by our ability to penetrate the market further on the mobile side and driving through additional I'll say real growth of the business beyond just what you can get from a pricing perspective.

So we feel like we're doing well there I don't think that will give guidance on what ARPA growth, we expect going forward.

But that's what.

That's what we're seeing what we're seeing now.

Great. Thanks, so much.

Alright, Thanks, Vijay we will take our next question. Please.

Thank you. Our next question will come from Peter Zaffino with Wolfe Research. Your line is now open.

Hi, Thank you too.

Two questions one mobile.

Totally charter and Comcast who've said that mobiles, primarily.

Added by existing customers and I'm wondering if it's fair to assume that spectrum one represents an intent.

Invest what you've called the high mobile contribution margin on the incremental sub.

Customer acquisitions and converged customers.

Whether that is the solution for this broadband problem separately I just wondered if you could comment on the sequential growth it looks to me like broadband commercial and mobile adjust.

Adjusting for a view of the ABB losses grew.

Grew less than $50 million sequentially.

The square this with your leverage I'm sure. It's not just a view that that is the future and so let me comment on sequential growth would be helpful. Thank you.

And then Peter to the first part of your question I would say yes.

We expect.

To be able to broadband growth through.

It's a complicated sale obviously.

But yes.

You mentioned the.

Spectrum, one solution to the broadband versus issue, we have right now and I think it can be additive, but it's not the solution to the problem right now is market activity.

I know that's not the.

The fashionable thing to say right now, but the biggest problem. We face market activity is when that comes back I think that's the solution to the broadband growth and the spectrum. One has the opportunity as Tom said to drive incremental internet growth as well as still today. The biggest source of mobile growth is by far the upgrades to our existing internet.

Which should benefit that base as well.

On sequential growth I guess I would point out a couple of things one I highlighted in the prepared remarks, which was that.

The.

Growth that we saw in Q2 was impacted by pricing.

Pricing adjustments that we had taken for.

Video pass through and the way that those overlapped year over year, you actually had the impact of two in the second quarter.

Versus only one in the first quarter, so that that that's part of what was happening there there also.

In enterprise commercial.

There was a one time item that was a benefit in last year.

But you don't have in this year that sort of pressured this growth rates in the year over year.

Alright, and then in the sequential quarter. So some of what Youre seeing there is just sort of the impact of lumpiness not not overall growth trajectory.

The leverage point, I would say that where were sitting right now.

Free cash flow yield on equity.

Is so high that I think they're continuing to do share buybacks presents.

Significant opportunity for the company just based on where we're sitting on that point.

And the overall capital structure I think has been an advantage to the company in a long time.

And so.

See I don't see where we are uneven and what might be temporarily pressured growth environment.

Being a reason to move off of where we've been from a.

Leverage standpoint or share buyback strategy.

And so consistent with what I thought we certainly expect it to stay at the top of a four to four five times leverage ratio.

Thank you and Tom Thanks for a great decade of charter.

Thank you.

Thanks, Peter we will take our next question. Please.

Thank you. Our next question will come from Brett Feldman with Goldman Sachs. Your line is now open.

Thanks, and I'll, just echo my congrats to Tom and Chris.

First question here, it's our fault for Jessica you mentioned the merits of continuing to buy back your stock at these levels Youre debts also trading at significant discounts to par I am wondering if that could also be an accretive opportunity to buy back some of your debt out of the market and then we've seen cord cutting pick up on a year over year basis that your business is at most other operators businesses.

I'm curious if you could give us some insight as to what's driving that meaning we know that there has been fewer and fewer gross connects over the last several years I'm wondering if you're actually seeing an uplift in people cutting the cord, meaning they get rid of their pay TV, but remain with you as a customer for broadband. Thank you.

Yeah.

So on the debt repurchase question I also have noticed that our debt is trading at a discount in the market.

Do we do modeling consistently as to what we think the best option as between the two is on <unk>.

Particularly given our plans to stay at the top end of the of our leverage range.

And so I won't comment on anything in particular that we plan to do but we do certainly noticed that.

Well, we'll continue to do our modeling and we'll make the next decision based on what appears appropriate given where the market sits at that moment.

Cord cutting.

The biggest driver here is the pricing of a video or video and the fact that we're having to pass through programming rate increases, which still continue to be outsized even relative to inflation.

It means that customers have a difficulty affording it even if it's really something that they'd like to have it so yes.

Predominantly is driven driving.

Driving downgrades.

A video, but not disconnects of Brian the notches.

Turning to connectivity.

And in many cases we.

We disconnected video customer.

Downgrade, a video customer and sell them on mobile package at the same time.

And they actually end up saving money.

Obviously, because they have.

No video or they buy a smaller video package from us in many cases.

But they also end up.

Driving <unk> up in the sense that they buy mobile.

And.

And that mobile is a good value for them and their overall hospital spend savings savings.

Thank you.

Thanks, Brett Kt will take our last question. Please.

Thank you our last question will come from Michael Rollins with Citi. Your line is now open.

Thanks.

Two questions first if I could revisit the <unk> discussion as Youre looking at that relationship between broadband <unk> volume performance in the quarter does this signify that theres, just greater price sensitivity to grow the broadband base going forward.

And then secondly, if the U S goes into recession, how should investors think about the sensitivity.

In terms of charters Kpis and financial performance.

And as you are describing to our customers are trading down in video is there a risk that that accelerates or that customer stepped down their broadband tiers.

Okay.

Well I'll try to answer that.

I've been through a lot of recessions in my career and I have a hard time, Herman remember him I'm remembering them because.

Our business performed well during them.

And the reason is our products are really attractive even when consumers are under stress.

Obviously, there is a certain amount of.

Stressed that you can't overcome.

And video I think will be challenged but on the other hand.

It's a very attractive product.

You are unemployed.

Uh huh.

And it's still even at the high price that it is a good value.

Relative to other forms of entertainment.

So.

But the reality is that.

In our.

They're paying for other products and so.

Uh huh.

I'm not that worried about a recession from our company's perspective.

And there might be some kind of impacts that you would see in states like advertising or enterprise enterprise, but the performance that we could get in mobile, particularly given our pricing there.

Would be good.

Even if it had video downgrades on the other side.

The margins in novel actually better than the margins in video. So you get you get some advantage as more customers moving into the into the mobile side of the business as well.

So we're not hoping for a recession.

But we'll be fine.

On broadband, it's a staple product, which it relates it turns out but unlike many we have not been pushing speed upgrades for the purpose of just generating great.

It's really been about when a customer wants a higher speed or feels the need a higher speed. That's when it's been offered and thats been offered an attractive rate and so the risk of a downgrade of the speed upgrades I think is mitigated with us because we haven't artificially driven that into the base.

And on the subject of price sensitivity are you just are you seeing more sensitivity in price to grow broadband based on the net.

Level going forward.

I mean, I think we've said that the issue in broadband is activity.

It hasn't been that there's additional price sensitivity, it's just that there's not a lot of movement in the market overall.

And so.

I don't think that that scenario is significantly different than what it's been that's why we've always competed.

All across our footprint.

And we continue to do that today and as the price sensitivity of that competition is not it's not significantly different than it was in the past prices always unimportant that continues to be important.

And that's why having packages that provide value to consumer helps us to grow subscribers and has helped us over time to grow subscribers.

At a faster pace than our competitors.

The way I would.

There were price tissues with broadband you'd see broadband disconnects.

They are at historic lows.

Thanks, Mike Katie back to you.

Thank you ladies and gentlemen. This concludes today's event you may now disconnect.

Q3 2022 Charter Communications Inc Earnings Call

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