Q4 2023 Charter Communications Inc Earnings Call

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Operator: Hello, and welcome to the Charter Communications Q4 conference call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will 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.

Hello, and welcome to the Charter Communications Q4 conference call. We ask that you. Please hold all questions until the completion of the formal remarks at 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.

Stefan Anninger: I would now like to turn the call over to Stefan Anninger. Thanks, operator, and welcome, everyone. The presentation that accompanies this call can be found on our website, ir.charter.com. I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, which we encourage you to read carefully. Various remarks that we make on today's call concerning expectations, predictions, plans, and prospects constitute forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated. Any forward-looking statements reflect management's current view only, and CHRTR undertakes no obligation to revise or update such statements. On today's call, we have Chris Winfrey, our President and CEO, and Jessica Fischer, our CF. With that, let's turn the call over to Chris. Thanks, Stefan.

I would now like to turn the call over to Stefan manager.

Stefan: Thanks, operator, and welcome everyone. The presentation that accompanies this call can be found on our website IR dot charter dot com I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, which we encourage you to read carefully.

Stefan: Remarks that we make on today's call concerning expectations predictions plans and prospects constitute forward looking statements, which 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.

Stefan: Such statements on today's call, we have Chris Winfrey, our president and CEO and Jessica Fisher, our CFO with that let's turn the call over to Chris. Thanks, Stephan in 2023, we added 155000 Internet customers and we added nearly $2 5 million spectrum mobile lines for growth of nearly 50.

Chris Winfrey: In 2023, we added 155,000 internet customers, and we added nearly 2.5 million Spectrum Mobile lines for growth of nearly 50%. At the end of 2023, we had more than 7.7 million total mobile lines. Only 13% of our Internet customers now have mobile service, and we expect mobile penetration to meaningfully grow over the next several years as the quality and value of our converged connectivity services gains wider recognition. Revenue was up by 1% in 2023, while EBITDA grew by 1.3% and 2.5% when excluding advertisers. While we're executing well on our long-term strategic initiatives, and Spectrum One is working to drive mobile growth, internet growth in our existing footprint has been challenging, driven by, admittedly, more persistent competition from fixed wireless and similar levels of wireline overbuild activity. Small changes and gross additions in churn in a low transaction environment have driven outsized impacts to net gains, which was clearly the case as we moved through the last quarter. I own that.

Stefan: <unk>.

Stefan: At the end of 2023, we had more than $7 7 million total mobile lines.

Stefan: Only 13% of our Internet customers now have mobile service and we expect mobile penetration to meaningfully grow over the next several years as the quality and value of our converged connectivity services gains wider recognition.

Stefan: <unk> was up by 1% in 2023, while EBITDA grew by one 3% and two 5% when excluding advertising.

Stefan: While we are executing well on our long term strategic initiatives and spectrum. One is working to drive mobile growth Internet growth in our existing footprint has been challenging driven by admittedly more persistent competition from fixed wireless and similar levels of wireline overbuilt activity.

Stefan: Small changes in gross additions and churn and a low transaction environment have driven an outsized impact to net gains which was clearly the case as we move through the last quarter I own that so let me start with what we believe on the competitive environment and then what we're doing to drive long term growth by delivering high quality products and services at a great price.

Chris Winfrey: So let me start with what we believe about the competitive environment and then what we're doing to drive long-term growth by delivering high quality products and service at a great price. Fixed wireless access, while an inferior product with limited capacity and geographic coverage which is fluid, is often marketed by the phone companies at a perceived lower price to their existing customers. However, we continue to believe the impact of fixed wireless is temporary.

Stefan: Fixed wireless access while an inferior product with limited capacity in.

Stefan: In geographic coverage, which is fluid is often marketed by the phone companies at a perceived lower price to their existing customers.

Stefan: We continue to believe the impact from fixed wireless as temporary our internet product is faster and more reliable our pricing is lower when similarly bundled with mobile customer bandwidth needs continue to increase.

Chris Winfrey: Our internet product is faster and more reliable, and our pricing is lower when bundled with mobile. Customer bandwidth needs continue to increase, and MNOs will face capacity challenges and will be required to allocate their spectrum and capital to maintain profitable mobile services. While we can't promise when that happens, I believe bandwidth needs to increase, and quality and value win. On the Wireline Overbuild front, we continue to compete well. However, overbilled impact tends to be limited to a few percentage points of internet penetration during the first year of a new overbilled vintage coming online. It's painful, but it's tied to the pace of over-production.

<unk> will face capacity challenges that will be required to allocate their spectrum and capital to maintain profitable mobile services.

Stefan: We can't promise when that happens I believe bandwidth needs increase in quality and value win.

Stefan: On the wireline overbuilt front, we continue to compete well.

Stefan: <unk> impact tends to be limited to a few percentage points of internet penetration during the first year of a new overbuilt vintage coming online, it's painful, but it's tied to the pace of overbuilt.

Chris Winfrey: We don't see overbuilders reaching their penetration and ROI goals within our footprint now or in the future. They don't have the same ubiquitous convergence capabilities as we do. Their lower-cost passings have likely been built. Some of the planned overbuild was duplicative between operators, meaning less opportunity. And incremental financing costs have increased, putting even more pressure on overbill to return.

Stefan: We don't see overbuilding, reaching their penetration and ROI goals now within our footprint now or in the future.

Stefan: I don't have the same ubiquitous convergence capabilities as we do the lower cost passengers have likely been built some of the planned overbuild was duplicative between operators, meaning less opportunity and incremental financing cost have increased putting even more pressure on overbuilding returns. We also expect bead passengers will provide better capital allocation and all.

Chris Winfrey: We also expect bead passing will provide better capital allocation and ROI for many of these offerings. Our assumption is that our competitors are rational economic players with shareholders and balance sheets which require adequate return on investment. That isn't within our control, so we are focused on the key strategic initiatives that enhance our long-term competitiveness and growth capabilities, and we expect to return to a more normalized internet growth over time. Just over a year from when we detailed those initiatives, I wanted to remind everyone of their rationale and update you on their status as laid out on this slide. Our footprint expansion is beating our pacing, penetration, ARPU, and ROI targets. New construction will help drive internet customer growth despite the temporary challenges I mentioned within our existing footprint.

Stefan: Roy for many of these operators.

Stefan: Our assumption is that our competitors are rational economic players with shareholders and balance sheets, which require adequate return on investment that isn't within our control. So we are focused on the key strategic initiatives that enhance our long term competitiveness and growth capabilities and we expect to return to a more normalized internet growth overtime.

Stefan: Just over a year from when we detailed those initiatives I wanted to remind everyone of their rationale and update you on their status as laid out on slide four.

Stefan: Our footprint expansion is beating our pacing penetration <unk> and ROI targets, new construction will help drive internet customer growth. Despite the temporary challenges I mentioned within our existing footprint two.

Chris Winfrey: 2023 Subsidized Rural Customer Growth was already over $100,000. Our penetration also continues to grow at a better-than-expected pace, and we'll activate more subsidized rural passes this year, both of which Jessica will cover. BEAD will provide additional opportunities, although the potential is uncertain given our concerns regarding how states will apply NTIA guidelines, and will focus BEAD investments in states where the rules are conducive to private investment.

Stefan: 2023, subsidize rural customer growth was already over 100000 or penetration also continues to grow at a better than expected pace and we'll cover more will activate more subsidized rural passengers. This year, both of which Jessica will cover.

Stefan: <unk> will provide additional opportunities although the potential was uncertain given our concerns regarding how states will apply NTIA guidelines.

Stefan: We will focus bead investments in states, where the rules are conducive to private investment.

Outside of the World. We also have accelerated greenfield market field, <unk> and serviceability builds expanding our existing footprint in both residential and commercial passing.

Chris Winfrey: Outside of rural, we also have accelerated greenfield, market fill-in, and serviceability builds, expanding our existing footprint in both residential and commercial passes. Penetration curves and returns here are similarly strong and predictable with a lower billed cost. We also remain committed to prioritizing the customer experience via our execution initiative, which is intended to enhance frontline employees' tenure while simultaneously investing in digitization, all to drive better sales yields, higher quality transactions, lower overall service transactions, and higher levels of customer satisfaction. Our targeted investments in employees over the last two years resulted in a significant reduction in employee attrition in 2023. Our investments in the digitization of services are also driving... In 2024, we have a number of new automated platforms that are launching to facilitate better service for customers and better digital and AI tools for agents to enhance service quality and the quality of their day-to-day jobs. And finally, our Evolution Initiative, which includes our Network Evolution Project, our Convergence Efforts, and our Video Product Development, all remain on pause.

Stefan: Penetration curves and returns here are similarly, strong and predictable with a lower build cost.

Stefan: We also remain committed to prioritizing the customer experience via our execution initiative, which is intended to enhance frontline employees tenure, while simultaneously investing in digitization all to drive better sales yields higher quality transactions, lower overall service transactions and higher levels of customer satisfaction.

Stefan: Our targeted investments in employees over the last two years resulted in a significant reduction in employee attrition in 2023.

Stefan: Our investments in the Digitization of service is also driving efficiencies and.

Stefan: In 2024, we have a number of new automated platforms that are launching to facilitate better service for customers and better digital and AI tools for agents to enhance service quality and the quality of their day to day jobs.

Stefan: And finally, our evolution initiative, which includes our network evolution project convergence efforts and our video product development all remain on course.

Stefan: We fully launched symmetrical speed tiers in two markets and currently launching in six more completing our step one markets will also begin to work in our step two markets with D. A a later this year.

Stefan: Putting the benefit of any savings that result from the project. We continue to expect our network evolution to cost a very low $100 per passing and we expect to complete the project in 2026, so fast ubiquitous low cost upgrade of our capabilities, which our competitors can't replicate.

Chris Winfrey: We've fully launched symmetrical speed tiers in two markets and are currently launching in six more, completing our step one market. We'll also begin to work in our Step 2 markets with DAA later this year. Excluding the benefit of any savings that result from the project, we continue to expect our network evolution to cost a very low $100 per pass.

Stefan: Our converged product offering also continues to evolve and grow spectrum, one is performing well and offers the fastest connectivity with differentiated features like mobile speed boost and the spectrum mobile network.

Stefan: Spectrum, one also offer significant savings for customers with market, leading pricing at both promotion and at retail.

Chris Winfrey: We expect to complete the project in 2026, so a fast, ubiquitous, low-cost upgrade of our capabilities, which our competitors can't grapple with. Our converged product offering also continues to evolve and grow. Spectrum One is performing well and offers the fastest connectivity with differentiated features like mobile speed boost and the Spectrum Mobile Network.

Stefan: Spectrum, one customers, reaching their first anniversary are performing ahead of our expectations.

Stefan: We will continue to evolve our converged offering in 2024 with additional features and capabilities.

Stefan: Finally, turning to the evolution of our video product in October we launched the zumba platform across our entire footprint. This industry, leading video platform allows our customers to access their linear and direct to consumer video content with unified search and discovery within one easy to use interface.

Chris Winfrey: Spectrum One also offers significant savings for customers, with market-leading pricing at both promotion and at retail. Spectrum One customers reaching their first anniversary are performing ahead of our expectations. We'll continue to evolve our CONVERGE offering in 2024 with additional features and capabilities. Finally, turning to the evolution of our video product, in October, we launched the Zumo platform across our entire footprint. This industry-leading video platform allows our customers to access their linear and direct-to-consumer video content with unified search and discovery within one easy-to-use interface. Combined with our Spectrum TV app, the most viewed linear NVPD streaming service in the U.S., XUMO is our go-to-market platform for new video sales. We're approaching 1 million deployed Sumo boxes since launch, and we've been getting great customer feedback, and we can keep improving our attach rate. In early January, Disney Plus became available to all Spectrum TV Select customers nationwide at no additional cost. And in the next several months, ESPN Plus and VIX, a Spanish-language DTC product, will both become available to certain TV Select customers at no extra cost.

Stefan: Combined with our spectrum TV app, the most viewed linear mvpds streaming service in the U S. Zuma was our go to market platform from new video sales.

Stefan: We're approaching $1 million deployed to more boxes since launch and we've been getting great customer feedback and we can keep approving improving our attach rates.

Stefan: In early January Disney plus became available to all spectrum TV select customers nationwide at no additional cost and in the next several months ESPN, plus and VIX, a Spanish language DTC product will both become available to certain TV select customers at no extra cost. This new hybrid distribution model is good for consumers and we plan to modernize all.

Stefan: Our distribution agreements upon renewal that means packaging flexibility value and not asking customers our charter to pay twice for similar DTC and linear programming.

Stefan: Our new hybrid distribution model combined with zoom most content Ford interface provides a clear path to solve key customer issues of choice value and utility with seamless linear DTC in asphalt integration and advanced search and discovery functionality.

Stefan: When we reflect on our key initiatives and what we believe are the short term market challenges, we're acting as long term charter shareholders to maximize value. So we have a posture of expectancy and excitement for the opportunity to execute on initiatives that enhance our long term growth rate and value for charter shareholders.

Chris Winfrey: This new hybrid distribution model is good for consumers, and we plan to modernize all of our distribution agreements upon renewal. That means packaging flexibility, value, and not asking customers or Charter to pay twice for similar DTC and linear programming. Our new hybrid distribution model combined with XUMO's content-forward interface provides a clear path to solve key customer issues of choice, value, and utility with seamless linear, DTC, and SVOD integration and advanced search and discovery functionality.

In the short term, we are leaving no stone unturned as it relates to our go to market approach ultimately the speed at which we can return to a more normalized broadband growth rate hinges on the assumption that our competitors capital's not limitless for poor ROI projects and frankly, our execution on our strategic initiatives. So we're keeping our heads down and executing on it.

Stefan: Clear strategy to ensure we can offer customers the best products and services across our entire footprint, all while saving customers money not only now but in the future and with that I'll turn the call over to Jessica.

Chris Winfrey: When we reflect on our key initiatives and what we believe are the short-term market challenges, we're acting as long-term charter shareholders to maximize value. So we have a posture of expectancy and excitement for the opportunity to execute on initiatives that enhance our long-term growth rate and value for charter shareholders. In the short term, we are leaving no stone unturned as it relates to our go-to-market approach.

Jessica Fisher: Thanks Scott.

Jessica Fisher: Let's turn to our customer with all time high Tech.

Jessica Fisher: Including residential and F&B relapsed 61000 internet customers in the fourth quarter My video customers declined by 247000.

Jessica Fisher: In mobile we added 546000 mobile lines and wireline blades customers declined by 251000.

Jessica Fisher: I expect on one product continued to perform well customers that signed up for our spectrum, one product and that point quite at 2022 reached their 12 month anniversary of the past quarter.

Chris Winfrey: Ultimately, the speed at which we can return to a more normalized broadband growth rate hinges on the assumption that our competitive capital is not limitless for poor ROI projects and, frankly, our execution on our strategic initiatives. So we're keeping our heads down and executing on a clear strategy to ensure we can offer customers the best products and services across our entire footprint, all while saving customers money, not only now but in the future. And with that, I'll turn the call over to Jessica.

Jessica Fisher: This promotional roll off didn't drive incremental internet churn in the quarter, we had slightly lower in level line gross adds year over year tied to internet guys progression.

Jessica Fisher: With him about where churn rate year over year and flat sequentially.

Jessica Fisher: We continue to see healthy data usage at our spectrum, one professional lines and remain confident that these lines will perform well as long term customers.

Jessica Fisher: Turning to overall, we ended the year with 420000 subsidized for all passing and grid, they're passing by 295000 in 2023 in line with our target and by 105000 in the fourth quarter alone an acceleration from the 78000 reactivated during the third quarter.

Jessica Fischer: Thanks, Chris. Let's turn to our customer results on slide six. Including residential and S&B, we lost 61,000 internet customers in the fourth quarter, while video customers declined by 257,000. In mobile, we added 546,000 mobile lines, and wireline voice customers declined by 251,000. Our Spectrum One product continued to perform well. Customers that signed up for our Spectrum One product in the fourth quarter of 2022 reached their 12-month anniversary this past quarter. Those promotional roll-offs didn't drive incremental internet churn.

Jessica Fisher: Customer growth and I stopped stature off that path also accelerated with 34000 net customer additions in the quarter.

Jessica Fisher: And slide 13 shows we're generating customer penetrations of close to 50% and cohorts that have reached by past 12 months Mike.

Jessica Fisher: In 2024, and we expect to activate approximately 450000 in subsidized are all passing about 50% more than in 2023 with seasonality in the first part are tied to the winter weather.

Jessica Fisher: Slide 12 shows that so far with additional state that we expect we will have committed to build approximately 1.75 million subsidize for all passing.

Jessica Fischer: In the quarter, we had slightly lower mobile line growth year over year tied to internet gross addition, with a lower turn rate year over year and flat sequentially. We continue to see healthy data usage on our Spectrum One promotional lines and remain confident that these lines will perform well as long-term customers. Turning to rural, we ended the year with 420,000 subsidized rural passes and grew those passes by 295,000 in 2023, in line with our target. And by 105,000 in the fourth quarter alone, an acceleration from the 78,000 we activated during the third quarter. Customer growth in our subsidized rural footprint also accelerated, with 34,000 net customer additions in the quarter.

Jessica Fisher: We also ask that kind of art off though to be completed by the end of 2026 two years ahead of schedule.

Jessica Fisher: Moving to our financial results starting on slide seven over the last year residential customers declined by 3% with video only customers try and partly offset by new customer growth driven by Internet.

Jessica Fisher: Residential revenue per customer relationship was up 0.1% year over year, given promotional rates step up rate adjustment and the growth of spectrum, Melbourne, mostly offset by a higher mix of non video customers and growth of lower priced video packages within our base.

Jessica Fisher: As slide seven shows in total residential revenue was flat year over year residential Internet ARPA grew by two 2% year over year led by three 4% when excluding the impact of spectrum, one GAAP revenue allocation out of Internet and mobile.

Jessica Fischer: As slide 13 shows, we're generating customer penetrations of close to 50% in cohorts that have reached or passed the 12-month mark. In 2024, we expect to activate approximately 450,000 new subsidized rural passes, about 50% more than in 2023, with seasonality in the first quarter tied to winter weather. Slide 12 shows that so far, with additional state bids that we expect, we will have committed to build approximately 1.75 million subsidized rural passes.

Jessica Fisher: Turning to commercial SMB revenue declined by 9% year over year.

Jessica Fisher: Collecting monthly F&B revenue per SMB customer, primarily due to a higher mix of lower priced video packages and although a number of police lines per F&B catch man.

Jessica Fisher: These factors were partly offset by F&B customer growth of <unk>, 7% year over year.

Jessica Fisher: Enterprise revenue grew three 8% year over year, driven by enterprise PSU growth at six 5% year over year.

Jessica Fischer: We also expect our RDoF build to be completed by the end of 2026, two years ahead of schedule. Moving to financial results, starting on slide seven. Over the last year, residential customers declined by 0.3%, with video-only customer churn partly offset by new customer growth driven by the internet. Residential revenue per customer relationship was up 0.1% year over year, given promotional rate step-ups, rate adjustments, and the growth of Spectrum Mobile, mostly offset by a higher mix of non-video customers and growth of lower-priced video packages within our base. As slide 7 shows, in total, residential revenue was flat year over year.

Jessica Fisher: Excluding all wholesale revenue enterprise revenue grew by six 1%.

Fourth quarter advertising revenue declined by 23, 4% or $130 million year over year due to less political revenue.

Jessica Fisher: Core AD revenue was down 7% year over year due to a more challenged advertising market, partly offset by our growing advanced advertising capabilities.

Jessica Fisher: Other revenue grew by 24, 4% year over year, driven by higher mobile device out.

Jessica Fisher: And in total consolidated fourth quarter revenue was up 3% year over year and up one 3% year over year when excluding advertising.

Jessica Fisher: Okay.

Jessica Fisher: Moving to operating expenses and adjusted EBITDA on slide eight in the fourth quarter total operating expenses declined by 7% year over year.

Jessica Fischer: Residential internet ARPU grew by 2.2% year over year, but by 3.4% when excluding the impact of Spectrum 1 gap revenue allocation out of internet into mobile. Turning to commercial, SMB revenue declined by 0.9% year-over-year, reflecting lower monthly SMB revenue per SMB customer, primarily due to a higher mix of lower-priced video packages and a lower number of voice lines per SMB customer. These factors were partly offset by S&B customer growth of 0.7% year over year. Enterprise revenue grew 3.8% year-over-year, driven by enterprise PSU growth of 6.5% year-over-year. Excluding all wholesale revenue, enterprise revenue grew by 6.1%. However, fourth quarter advertising revenue declined by 23.4% or $130 million year over year due to lower political revenue.

Jessica Fisher: Programming costs declined by 10, 6% year over year due to a decline in video customers at six 8% year over year and a higher mix of lighter video packages.

Jessica Fisher: These factors were partly offset by higher programming right.

Jessica Fisher: The full year 2024, and we expect programming cost per video customer to grow in the 1% to 2% range year over year with our video package mix being the largest variable.

Other cost of revenue increased by 15%, primarily driven by higher mobile device sale and other mobile direct costs, partly offset by lower AD sales cost.

Jessica Fisher: Cost to service customers increased by two 1% year over year, driven by additional activity to support the growth of spectrum up all partly offset by productivity improvements, including from 10 year investment and lower service transactions per customer.

Jessica Fisher: Looking forward I would note that our previous investments related to job structure of pay and benefits to build a more scaled and longer tenured workforce are now largely complete and service transaction trends here back on trajectory after the programming dispute in September.

Sales and marketing costs declined by one 6%, primarily driven by lower labor costs.

Jessica Fischer: Core ad revenue was down 0.7% year-over-year due to a more challenged advertising market, partly offset by our growing advanced advertising capabilities. Other revenue grew by 24.4% year-over-year, driven by higher mobile device sales. And in total, consolidated fourth-quarter revenue was up 0.3% year over year and up 1.3% year over year when excluding advertising. Moving to operating expenses and adjusted EBITDA on slide 8. In the fourth quarter, total operating expenses declined by 0.7% year over year.

Jessica Fisher: Finally, other expenses grew by one 5% driven by labor costs.

Jessica Fisher: Adjusted EBITDA grew by one 6% year over year in the quarter and by three 6% when excluding advertising.

Jessica Fisher: Turning to net income on slide nine we generated $1 $1 billion of net income attributable to charter shareholders in the fourth quarter down.

Jessica Fisher: Down from $1 $2 billion last year, driven by a pension re measurement loss and higher interest expense, partly offset by a gain on the sale of towers and higher adjusted EBITA.

Jessica Fisher: Turning to slide 10 capital expenditures totaled $2 $9 billion in the fourth quarter, just below last year's fourth quarter spend.

Jessica Fisher: Line extension spend totaled $978 million $50 million higher than last year, driven by our subsidized Royal construction initiative and increased residential and commercial greenfeld's end market fell in opportunity.

Jessica Fischer: Programming costs declined by 10.6% year over year due to a decline in video customers of 6.8% year over year and a higher mix of lighter video packages. However, these factors were partly offset by higher programming rates. For the full year 2024, we expect programming costs per video customer to grow in the 1 to 2% range year over year, with our video package mix being the largest variable. Other costs of revenue increased by 15 percent, primarily driven by higher mobile device sales and other mobile direct costs, partly offset by lower ad sales costs.

Jessica Fisher: Fourth quarter capital expenditures, excluding line extensions totaled $1 $9 billion compared to 2 billion in the fourth quarter of 2022.

Jessica Fisher: Driven by lower spend on scalable infrastructure and lower spend on CPE due to purchase timing.

Offset by higher spend on upgrade rebuild primarily network evolution.

Jessica Fisher: For the full year 2023, we spent $11 $1 billion.

Jessica Fisher: Looking ahead at full year 2024, we expect capital expenditures to total between 12.2 and $12 $4 billion, including line extensions of approximately $4 $5 billion and network evolution spend of approximately $1 6 billion.

Jessica Fischer: Cost-to-serve customers increased by 2.1% year-over-year, driven by additional activity to support the growth of Spectrum Mobile, partly offset by productivity improvements, including from 10-year investments, and lower service transactions per customer. Looking forward, I would note that our previous investments related to job structure, pay, and benefits to build a more skilled and longer-tenured workforce are now largely complete, and service transaction trends are back on trajectory after the programming dispute in September Sales and marketing costs declined by 1.6%, primarily driven by lower labor costs.

Jessica Fisher: On slide 11, we've provided our current expectations for capital spending through the year 2027, excluding any possible mine extension spend associated with the <unk> program.

Jessica Fisher: That's why I devised our spending into three categories line extension network evolution and core Capex spend.

Jessica Fisher: As the slide shows we expect Capex spend of just over $12 million in 2024 to fall to approximately $8 billion by 2027.

Jessica Fisher: Our line extension Capex includes spending for Greenfield market sell in and serviceability belts from my legacy footprint driving continued expansion of residential and commercial passing.

Jessica Fischer: Finally, other expenses grew by 1.5% driven by labor. Adjusted EBITDA grew by 1.6% year over year in the quarter and by 3.6% when excluding advertising. Turning to net income on slide 9, we generated $1.1 billion of net income attributable to charter shareholders in the fourth quarter, down from $1.2 billion last year, driven by a pension remeasurement loss and higher interest expense, partly offset by a gain on the sale of towers and higher adjusted EBITDA. Turning to slide 10, capital expenditures totaled $2.9 billion in the fourth quarter, just below last year's fourth quarter spend. Line extension spend totaled $978 million, $50 million higher than last year, driven by our subsidized rural construction initiative and increased residential and commercial greenfield and market fill-in opportunities. Fourth quarter capital expenditures excluding line extensions totaled $1.9 billion compared to $2 billion in the fourth quarter of 2022, driven by lower spend on scalable infrastructure and lower spend on CPE due to purchase timing, partly offset by higher spend on upgrade and rebuild, primarily network For the full year 2023, we will spend $11.1 billion.

Jessica Fisher: In turn our non royall passing scale should continue to be robust and similar to 2023 growth subject to the pace of overall housing growth.

Jessica Fisher: These past things are natural extensions of our pocket, so and try and network and have a long track record of low cost per passing and reliable penetration trends to contribute to growth at attractive rois.

Jessica Fisher: We've not included the potential impact of beat in the passing figures on slide 12 or in our Capex outlook on slide 11, given the regulatory and bidding uncertainty associated with the program.

Jessica Fisher: We don't expect any potential be billed subject to acceptable guidelines as Chris mentioned to begin until 2025.

Jessica Fisher: Similar to our peers and competitors are success in be it will be an overlay to our capital expenditure outlook.

Jessica Fisher: Turning to network evolution, where our long term capital expenditures outlook remains essentially unchanged. We continue to expect to spend approximately $100 per passing to evolve our network to offer multi gigabit speeds.

Jessica Fisher: Finally core capital expenditures, which excludes line extensions and network evolution has remained consistent as a percentage of revenues since 2021 and following the completion of our network evolution initiative capital expenditures, excluding line extensions as a percentage of revenue should decline to below 2022 level.

Jessica Fisher: Which has important long term cash flow implications.

Jessica Fisher: Turning to free cash flow on slide 14 free cash flow in the fourth quarter totaled $1 $1 billion, a decrease of $75 million compared to last year. The decline was primarily driven by a less favorable change in accrued expenses related to capital expenditures, partly offset by an increase in <unk>.

Jessica Fischer: Looking ahead to full year 2024, we expect capital expenditures to total between $12.2 and $12.4 billion, including line extensions of approximately $4.5 billion and network evolution spend of approximately $1.6 billion. On slide 11, we've provided our current expectations for capital spending through the year 2027, excluding any possible line extension spend associated with the DEED program. The slide divides our spending into three categories, line extensions, network evolution, and core CapEx spend. As the slide shows, we expect CapEx spend of just over $12 billion in 2024 to fall to approximately $8 billion by 2027.

Jessica Fisher: Cash flows from operating activities and a decrease in capital expenditures.

Jessica Fisher: Just a brief comment on cash taxes for 2024 before turning to the balance sheet. We currently expect our calendar year 2020 for cash tax payments under current legislation to land between $1 5 billion and $1 $9 million, depending on a number of factors.

Jessica Fisher: We finished the quarter with $97 $6 billion in debt principal in the first weeks of 2024, we redeemed all of our outstanding 2020 for a senior secured floating rate notes and paid in full all of our outstanding 2024 senior secured notes. So we no longer have any significant debt maturities due in 2024.

Jessica Fisher: Sure.

Jessica Fisher: Our current run rate annualized cash interest is $5 $2 billion.

Jessica Fischer: Our line extension CAPEX includes spending for greenfield, market fill-in, and serviceability builds from our legacy footprint, driving continued expansion of residential and commercial passing. In turn, our non-rural passing growth should continue to be robust and similar to 2023 growth, subject to the pace of overall housing growth. These passings are natural extensions or pocket fill-ins to our network and have a long track record of low cost per passing and reliable penetration trends to contribute to growth at attractive ROI. We've not included the potential impact of BEAD in the passing figures on slide 12 or in our CAPEX outlook on slide 11, given the regulatory and bidding uncertainty associated with the program.

Jessica Fisher: Given our long dated and 86% fixed rate debt structure, our sensitivity to higher rates is relatively low if we refinance all of our debt due in the next three years at current rates the impact to our run rate interest expense would be less than $90 million or 2% of that run rate interest expense.

Jessica Fisher: As of the end of the fourth quarter, our ratio of net debt to last 12 month adjusted EBITDA was $4 four two times and we intend to stay at or just below the high end of our four to four five times target leverage range.

Jessica Fisher: During the quarter, we repurchased $3 2 million charter shares and charter holdings common units totaling $1 $3 billion at an average price of $419 per share.

Before turning the call over to Q&A I want to make a few comments regarding the affordable connectivity program for Internet and mobile customers.

Jessica Fisher: While we still hope the ACP program will be allocated additional funding, we're well aware that the program could enter this spring and we're designing programs to assist those that are on the ACP program.

Jessica Fischer: We don't expect any potential bead builds subject to acceptable guidelines, as Chris mentioned, to begin until 2025, and similar to our peers and competitors, our success in bead will be an overlay to our capital expenditure outlook. Turning to network evolution, where our long-term capital expenditures outlook remains essentially unchanged, we continue to expect to spend approximately $100 per pass to evolve our network to offer multi-gigabit speeds. Finally, core capital expenditures, which excludes line extensions and network evolution, have remained consistent as a percentage of revenue since 2021. And following the completion of our network evolution initiative, capital expenditures excluding line extensions as a percentage of revenue should decline to below the 2022 level, which has important long-term cash flow implications. Turning to free cash flow on slide 14, free cash flow in the fourth quarter totaled $1.1 billion, a decrease of $75 million compared to last year. The decline was primarily driven by a less favorable change in accrued expenses related to capital expenditures, partly offset by an increase in net cash flows from operating activities and a decrease in capital expenditures.

Jessica Fisher: There is no doubt that the end of the program would be disruptive from any nonetheless, we will have the full benefit of our high quality sales and retention for us as well as our mobile product, which saves customers hundreds of dollars to preserve connection.

Jessica Fisher: With the continued temporary impact from fixed wireless and the potential end of ACP. We may continue to face short term customer growth headwinds as we enter 2024.

Jessica Fisher: Despite these short term challenges, we are competing well and are focused on driving healthy EBITDA growth in 2024.

Jessica Fisher: A component of that has been to reflect inflation and our pricing while preserving value to our customers.

Jessica Fisher: We're also actively managing expenses and we believe we can do so without impacting our sales service and broader growth initiatives.

Jessica Fisher: But most importantly, we remain focused on the long term and a return to more normalized internet growth.

Jessica Fisher: We have what we believe are the best products at the best prices in our industry and we remain underpenetrated relative to our long term potential.

Jessica Fisher: Taking advantage of that opportunity is what will ultimately create the most shareholder value.

Jessica Fischer: Just a brief comment on cash taxes for 2024 before turning to the balance sheet. We currently expect our calendar year 2024 cash tax payments, under current legislation, to land between $1.5 billion and $1.9 billion, depending on a number of factors. We finished the quarter with $97.6 billion in debt principal.

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

Speaker Change: At this time, if you'd like to ask a question. Please press star five on your Touchtone phone.

Speaker Change: You may remove yourself from the queue at any time by pressing star five.

Again that is star five to ask a question.

Speaker Change: We'll pause for a moment to allow questions to queue.

Speaker Change: Okay.

Speaker Change: Thank you. Our first question will come from Jonathan Chaplin with New Street Research. Your line is now open.

Speaker Change: Okay.

Jessica Fischer: In the first weeks of 2024, we redeemed all of our outstanding 2024 Senior Secured Floating Rate notes and paid in full all of our outstanding 2024 Senior Secured notes. As a result, we no longer have any significant debt maturities due in 2024. Our current run rate annualized cash interest is $5.2 billion.

Jonathan Chaplin: Thanks, guys, one for Chris and one for Jessica for Chris I'm wondering if you can give us some context on whether there was a change in competitive dynamics in the fourth quarter as we look out.

Jonathan Chaplin: Across the fixed wireless guys.

Jonathan Chaplin: And the fiber guys it seemed pretty steady over the course of the last few quarters sort of competitive pressures that seem to stabilize and I'm wondering if there was just a bigger focus on.

Jessica Fischer: Given our long-dated and 86% fixed-rate debt structure, our sensitivity to higher rates is relatively low. If we refinanced all of our debt due in the next three years at current rates, the impact on our run-rate interest expense would be less than $90 million, or 2% of that run-rate interest expense. As of the end of the fourth quarter, our ratio of net debt to last 12-month adjusted EBITDA was 4.42 times, and we intend to stay at or just below the high end of our 4 to 4.5 times target leverage range. During the quarter, we repurchased 3.2 million charter shares in Charter Holdings Common Unit for $1.3 billion at an average price of $419 per share.

Jonathan Chaplin: From fixed wireless or potentially fiber in your market specifically.

Jonathan Chaplin: And then for Jessica the cash tax guidance as is.

Is great if bonus depreciation is expanded.

Jonathan Chaplin: Funded this year.

Jonathan Chaplin: How much of that cash tax.

Jonathan Chaplin: Yes.

Jonathan Chaplin: <unk> go down by thank you.

Jonathan Chaplin: Good.

So you know in terms of the competitive environment in the fourth quarter. As you mentioned, we saw some continued expansion of fixed wireless footprint within the quarter. We also saw a heavier competitive marketing and some aggressive promotions from both fixed where I was and from the overbuilt.

As you know Jonathan slight impact to gross adds and churn in this case it was particularly on the gross adds front.

Jessica Fischer: Before turning the call over to Q&A, I want to make a few comments regarding the Affordable Connectivity Program for Internet and Mobile Customers. While we still hope the ACP program will be allocated additional funding, we're well aware that the program could end this spring, and we're designing programs to assist those that are on the ACP program. There is no doubt that the end of the program would be disruptive for many.

It can drive what appear to be outsized changes to net adds, especially when net adds were slightly positive or slightly negative really has an outsized impact.

Jonathan Chaplin: As you know we are of course forced focus very much on the long term, but that doesn't mean that we're not focused on the short term either particularly what was going on inside of the fourth quarter. So as I mentioned in the prepared remarks, we're really leaving no stone unturned on potential ways to improve go to market in the short term, particularly addressing gross adds in the existing footprint.

Jessica Fischer: Nonetheless, we will have the full benefit of our high-quality sales and retention force, as well as our mobile product, which saves customers hundreds of dollars to preserve connections. With the continued temporary impact from fixed wireless and the potential end of ACP, we may continue to face short-term customer growth headwinds as we enter 2024. Despite those short-term challenges, we are competing well and are focused on driving healthy EBITDA growth in 2024. A component of that has been to reflect inflation in our pricing while preserving value for our customers.

Jonathan Chaplin: We're doing all of that though looking at all aspects, but trying to make sure that we do that in a controlled fashion that don't overreact, either given that it is small changes that are driving an outsized impact here.

And I I'd add on you know the environment wasn't consistent through the quarter early on we had some carryover from the Disney dispute in the August rate event that we talked about and last quarter's call. We.

Jonathan Chaplin: We had expected in November and December to recover to the levels that we had seen going into that event and they didn't but as we exited the quarter. We saw December slightly negative.

Jessica Fischer: We're also actively managing expenses, and we believe we can do so without impacting our sales, service, and broader growth initiatives. But most importantly, we remain focused on the long term and a return to more normalized internet growth. We have what we believe are the best products at the best prices in our industry, and we remain underpenetrated relative to our long-term potential. Taking advantage of that opportunity is what will ultimately create the most shareholder value. Operator, we're now ready for Q&A. At this time, if you would like to ask a question, please press star 5 on your touchtone phone. You may remove yourself from the queue at any time by pressing star 5.

In January and it adds are consistent with what we saw in December.

Jonathan Chaplin: So that environment does.

Jonathan Chaplin: It does continue.

Jonathan Chaplin: On the cash tax side, Jonathan you know.

Jonathan Chaplin: It's not just bonus it's also R&D and interest expense deductions that will impact us.

Jonathan Chaplin: But I would say the reforms that are being considered.

Jonathan Chaplin: The economics of our investments in connecting Rural America, and upgrading the network and so we are we are fully in support of them I think it's a little premature to adjust our guidance, but given the investments that we're making we do expect there to be a material benefit to cash taxes.

Operator: Again, that is star five to ask a question. We'll pause for a moment to allow the questions to queue, www.chartercommunications.com. Thank you. Our first question will come from Jonathan Chaplin with New Street Research. Your line is now open. Thanks, guys.

Jonathan Chaplin: If the if the legislation were to go through.

Speaker Change: Great. Thanks, guys.

Luke: Thanks, Jonathan Luke will take our next question. Please.

Luke: Our next question will come from the line of Craig Moffett with Moffett Nathan Your line is now open.

Jonathan Chaplin: Chris, I'm wondering if you can give us some context on whether there was a change in competitive dynamics in the fourth quarter. As we look out across the fixed wireless guys and the fiber guys, it seemed, you know, pretty steady over the course of the last few quarters, the sort of competitive pressures that seemed to stabilize. And I'm wondering if there was just a bigger focus from fixed wireless or potentially fiber in your market specifically. And then, for Jessica, the cash tax guidance is great. If bonus depreciation is extended this year, how much would that cash tax go down by?

Craig Eder Moffett: Hi, Thank you.

Craig Eder Moffett: A couple of questions Jessica. Thank you for the comments you made about ACP I'm wondering if you can just try to quantify a little bit more for us the number of ACP subscribers that you have and if you have insight into how many of those are new subscribers versus previously we're paying subscribers and.

Craig Eder Moffett: And then I Wonder if you could also just comment.

Craig Eder Moffett: <unk>.

Craig Eder Moffett: T mobile indicated that they expect a 150 100 to 150000 fewer net adds per quarter.

Craig Eder Moffett: In fixed wireless how do you think about that flowing into your footprint and does that inform the way you think about that.

Chris Winfrey: Thank you. Good So, you know, in terms of the competitive environment in the fourth quarter, as you mentioned, we saw some continued expansion of the fixed wireless footprint within the quarter. We also saw heavier competitive marketing and some aggressive promotions from both fixed wireless and from the overbuilders. As you know, Jonathan, slight impacts to gross ads and churn, in this case, particularly on the gross ads front, can drive what appear to be outsized changes to net ads, especially when net ads are slightly positive or slightly negative, really have an outsized impact. As you know, we're, of course, focused very much on the long term, but that doesn't mean that we're not focused on the short term either, particularly what was going on inside of the fourth quarter.

The broadband growth rate going forward.

Speaker Change: So maybe I start off with ACP and just take a step back.

Speaker Change: And then just can have can answer what you were requesting to ACP program I think as everybody knows it really has brought internet connectivity to customers, who would not have been able to have access to broadband otherwise, but more importantly, it's allowed customers, who would've been coming in and out of the broadband marketplace given affordability issues too.

Speaker Change: <unk> connected consistently so we really think as you know it's been an effective program. We're proud to be the largest ACP provider in the country. We still we're hopeful that the ACP can be refunded in order to keep households.

Speaker Change: That are in the program today connected to the Internet, but if it's not refunded Craig we're going to work very hard to keep customers connected and we've been working on this possibility for some time, we have significant tools to save customers hundreds or even thousands of dollars as Jessica mentioned.

Chris Winfrey: And so, as I mentioned in my prepared remarks, we're really leaving no stone unturned on potential ways to improve and go to market in the short term, particularly addressing gross ads and the existing footprint. We're doing all that, though, looking at all aspects, but trying to make sure that we do that in a controlled fashion and don't overreact either, given that it is small changes that are driving an outsized impact here. Yeah, and I'd add, you know, the environment wasn't consistent through the quarter. Early on, we had some carryover from the Disney dispute and the August raid event that we talked about in last quarter's call. We had expected November and December to recover to the levels that we had seen going into that event, and they didn't.

Speaker Change: I'd highlight that.

Speaker Change: Keep in mind, most of our ACP customers were internet customers before the ECP program again and in the meantime.

Speaker Change: Having said all that it's actually pretty challenging for us to predict the impact that a potential end of the program is going to have to our customer disconnects, but we're going to report that consistently over time.

Speaker Change: Yeah.

Speaker Change: So on the numbers side, Craig we have a little over 5 million households that received the ACP benefit I'm all for wireline Internet.

Speaker Change: Very few of those customers used <unk> to upgrade to higher speeds or take more psus when they began receiving the benefit.

Chris Winfrey: But as we exited the quarter, we saw December slightly negative, and January net ads are consistent with what we saw in December. So that environment does continue. On the cash tax side, Jonathan, you know, it's not just bonus; it's also R&D and interest expense deductions that will impact us. But I would say the reforms that are being considered support the economics of our investments in connecting rural America and upgrading the network. And so we are fully in support of them.

But many do have our flagship speed or higher or do you take other services from us so.

Speaker Change:

Speaker Change: And.

Speaker Change: I guess.

Speaker Change: The funding will continue through April.

Speaker Change: Well, we'll try to keep people informed.

Speaker Change: As we move through the process, but from our perspective, there's not a lot of visibility at this point.

Speaker Change: Anything that might happen when when the program ends and then we're still focused on trying to make sure that ACP is refunded and I still think there's a strong possibility that it could be the case, yeah do you want to talk to the fixed wireless slower net add guidance sure.

Jessica Fischer: I think it's a little premature to adjust our guidance. But given the investments that we're making, we do expect there to be a material benefit to cash tax if the legislation were to go through. Great, thanks guys. Thanks, Jonathan.

Speaker Change: So we noted the same thing that you saw Craig.

Jessica Fischer: Luke, we'll take our next question, please. Our next question will come from the line of Craig Moffett with Moffett-Nathanson. Your line is now open. Hi, thank you.

Speaker Change: I think the bigger point there is that there is a rational approach to the marketplace and the utilization of spectrum.

I believe a recognition that there's a limited amount of capacity that bandwidth needs are increasing I think that was the bigger takeaway from us. It is very difficult for us to sit back and take a look at the geographic footprint of fixed wireless access because it almost changes by the day in terms of sector availability.

Craig Eder Moffett: A couple of questions. Jessica, thank you for the comments you made about ACP. I'm wondering if you can just try to quantify a little bit more for us the number of ACP subscribers that you have, and if you have insight into how many of those are new subscribers versus previously paying subscribers. And then I wonder if you could also just comment on T-Mobile indicating that they expect 100,000 to 150,000 fewer net ads per quarter in fixed wireless. How do you think about that flowing into your footprint, and does that inform the way you think about the broadband growth rate going forward? So maybe I start off with ACP and just take a step back, you know, and then Jessica can answer what you're requesting.

Speaker Change: On radios in terms of capacity and where they're actively marketing and where they're not and then you have the additional.

Speaker Change: The rural footprint versus urban and suburban and what would be offered proof for us versus on footprint.

Speaker Change: And the split between residential and commercial which makes it pretty difficult thing to mathematically cascade that into an impact for us.

Speaker Change: But I thought it was I thought it was rational herbicide and I thought it made a lot of sense.

Speaker Change: And I think it's consistent with what we've always thought.

Frankly, the piece that's been more difficult is just the timing in terms of where that capacity has reached and.

Chris Winfrey: The ACP program, I think, as everybody knows, it really has brought internet connectivity to customers who would not have been able to have access to broadband otherwise. But more importantly, it's allowed customers who would have been, you know, coming in and out of the broadband marketplace given affordability issues to remain connected consistently. So we really think, as you know, it's been an effective program. We're proud to be the largest ACP provider in the country.

Speaker Change: It's been a little bit harder to predict that we would like but I took that as a segue that you did is that it should have some positive impact on our existing footprint.

Speaker Change: Okay.

Speaker Change: Thanks, Craig.

Craig Eder Moffett: Yeah look we'll take our next question please.

Craig Eder Moffett: Our next question will come from the line of Benjamin Swinburne with Morgan Stanley. Your line is now open.

Speaker Change: Good morning.

Speaker Change: Chris a question for you on Capex, and then I wanted ask Jessica about sort of EBITDA growth.

Chris Winfrey: We're still hopeful that the ACP can be refunded in order to keep households that are in the program today connected to the internet. But if it's not refunded, Craig, we're going to work very hard to keep customers connected. And we've been working on this possibility for some time. We have significant tools to save customers hundreds or even thousands of dollars, as Jessica mentioned. And I'd highlight that, you know, keep in mind, most of our ACP customers were internet customers before the ACP program began. And in the meantime, you know, having said all that, it's actually pretty challenging for us to predict the impact that a potential end of the program is going to have on our customer disconnections. But we're going to address that consistently over time.

Benjamin Daniel Swinburne: Chris you've been around the cable industry for a long time. So I know you are aware that kind of investment priorities can change over time and I'm. Just curious why you felt it made sense to sort of guide out to 2027.

Just because you're in a competitive dynamic industry and want to evolve your strategy over time and.

Benjamin Daniel Swinburne: And it did seem like you guys have.

Benjamin Daniel Swinburne: Disagree, but it seems like you've prioritized the line extensions over getting network evolution done by 25, So I know, we thought it might slip into 'twenty six but now it's definitely slipping into 2006 I just wanted to understand your thought process. There if that was tied to kind of equipment availability or just the strategic decision.

Chris Winfrey: Yeah, and so on the numbers side, Craig, we have a little over five million households that receive the ACP benefit, all for wireline internet. Very few of those customers used ACPA to upgrade to higher speeds or take more PSUs when they began receiving the benefits, but many do have our flagship speed or higher or take other services from us, and I guess. The funding will continue through April.

Speaker Change: And then Jessica there's an expectation that 24 is a good EBITDA growth year for charter given the investments you've made in Opex. I think you cited three 5% growth in Q4 ex advertising anything you can tell us to help us think about financial performance for the business.

Speaker Change: And 'twenty four would be appreciated thanks, everyone.

Speaker Change: Sure.

Jessica Fischer: We'll try to keep people informed as we move through the process. But from our perspective, there's not a lot of visibility at this point as to anything that might happen when the program ends. In the end, you know, we're still focused on trying to make sure that ACP is refunded. And I still think there's a strong possibility that could be the case.

Speaker Change: So Ben I think.

Speaker Change: Leading into the last earnings call.

Jessica Fisher: We had been listening to shareholder feedback about the.

Ben: The difficulty people were having of projecting long term capex trends given the significant capital investment opportunities that we have.

Chris Winfrey: Yeah. Do you want to talk to the fixed wireless slower net ad guidance? Sure. So we noted the same thing that you saw, Craig. I think the bigger point from us is that there is a rational approach to the marketplace and the utilization of spectrum and, I believe, a recognition that there is a limited amount of capacity and that bandwidth needs are increasing. I think that was the bigger takeaway from us. It's very difficult for us to sit back and take a look at the geographic footprint of fixed wireless access because it almost changes by the day in terms of sector availability, radius in terms of capacity and where they're actively marketing and where they're not. And then you have the additional... rural footprint versus urban and suburban, and what would be off-footprint for us versus on-footprint, and the split between residential and commercial, which makes it pretty difficult But I thought what was said was rational, and I thought it made a lot of sense.

Speaker Change: And you're right typically we would never provide a multi year outlook.

Speaker Change: About the only guidance that we've historically provided is in your Capex guidance. So these are these are unique opportunities that don't come around very often the opportunity to have subsidized rural build having the largest expansion of broadband and cable footprint really since the 19 eighties is unique in its generation on I think we felt that investors need.

Speaker Change: Good to see the size and magnitude of what we were already committed to and be to have a very articulated outline of the returns of those investments, which jessica's provided we had been providing that all that information, especially will be provided over the past two years, but to do it in a single spot so people can.

Speaker Change: Wrap their heads around both the quantum that exist.

Speaker Change: The investment returns that are attached to that investment and that it doesn't go on into perpetuity and there is a real nice set up for what this is all about which is free cash flow growth and so while we typically like to keep our cards close to our chest to preserve both flexibility and to maintain our competitive <unk>.

Chris Winfrey: And I think it's consistent with what we've always thought. The piece that's been more difficult is just the timing in terms of where that capacity has reached. It's been a little bit harder to predict than we would like.

Speaker Change: Last year, we felt there was a trade off here to make sure that our shareholders with us the people understood the value of.

Chris Winfrey: But I took that in the same way that you did, that it should have some positive impact on our existing footprint. Thanks, Craig. Yes. Luke, we'll take our next question, please. Our next question will come from the line of Benjamin Swinburne with Morgan Stanley. Your line is now open. Good morning.

The returns of the investment that we're making and so there's a balance here between.

Speaker Change:

Speaker Change: One hand, having the flexibility to always make the right decisions to generate long term free cash flow and making sure that we're responsive to shareholder feedback along the way and that we can demonstrate the long term value so people take comfort with that.

Speaker Change: In terms of the prioritization of line extensions over the DAA.

Benjamin Daniel Swinburne: Chris, I have a question for you on CapEx, and then I want to ask Jessica about sort of EBITDA growth. Chris, you've been around the cable industry for a long time, so I know you are aware that the kind of investment priorities can change over time. Curious why you felt it made sense to sort of guide out to 2027, just because, you know, you're in a competitive, dynamic industry and want to evolve your strategy over time. And I did seem like you guys have, and you can disagree, but it seems like you've prioritized the line extensions over getting network evolution done by 25. So I know we thought it might slip into 26, but now it's definitely slipping into 26.

DAA or DOCSIS four upgrade it wasn't so much about prioritization. It was really about the certification of the DAA equipment, taking a little bit longer which is pushing out the timeline for the rollout and so the tradeoff. We had is could you do it.

Speaker Change: One two gigahertz high split off grid under what we call an integrated C. Mtl's environment to do more of that footprint to keep the original pace, where should we slow it down just a tad to make sure that we allowed for a.

Speaker Change: Catch up of the DAA certification process. So that you can move to high split.

Speaker Change: With distributed access architecture as well as the one eight gigahertz and the rollout of DOCSIS four O. We chose the latter to make sure that we were having.

Speaker Change: Having as much of a footprint with the full capabilities of DOCSIS four over time.

Speaker Change: If.

Speaker Change: The caveat is if we get into a couple of years from now received opportunities to put capital forward.

Chris Winfrey: Just wanted to understand your thought process there, if that was equipment availability or just a strategic decision. And then, Jessica, there's an expectation that 24 will be a good EBITDA growth year for Charter, given the investments you've made in OPEX. I think you cited 3.5% growth in Q4X advertising. Anything you can tell us to help us think about financial performance for the business in 24? Sure. So Ben, I think, leading into the last earnings call, we had been listening to shareholder feedback about the difficulty people are having with projecting long-term CapEx trends given the significant capital investment opportunities that we have. And you're right. Typically, we would never provide a multi-year outlook.

Speaker Change: Well of course do that but this is this is our best view of where we're going to spend capital.

Speaker Change: And we thought it was worthwhile to show that to make sure people understand that it doesn't the higher level of capital expenditure doesn't go on into perpetuity.

Speaker Change: Yeah.

Speaker Change: On the EBITA performance and <unk>.

2024.

Speaker Change: <unk>.

Speaker Change: I guess.

Speaker Change: And again I'm not going to give EBITDA guidance, but I think we can talk about the few things.

You do have a political advertising year and then as it is a tailwind.

Though we have the until we fully lapped the investments that we made in the employee population and from an expense outlook perspective.

Speaker Change: I think my expectation is that we'll be able to keep the cost to serve essentially.

Speaker Change: Essentially flat on an absolute basis.

Chris Winfrey: And about the only guidance that we've historically provided is in-year CAPEX guidance. But these are unique opportunities that don't come around very often. The opportunity to have subsidized rural build, and the largest expansion of broadband and cable footprint, really, since the 1980s, is unique, and it's generational. And I think we felt that investors needed to see, A, the size and magnitude of what we were already committed to, and B, to have a very articulated outline of the returns of those investments, which Jessica provided. We've been providing that, you know, all that information is essentially what we've provided over the past two years. But to do it in a single spot, so people could wrap their heads around both the quantum that exists, the investment returns that are attached to that investment, and that it doesn't go on into perpetuity, and that there is a real nice setup for what this is all about, which is free cash flow growth.

Speaker Change: And in sales and marketing you might have some growth, but it'll be small in the in the 2% to 3% range.

Speaker Change: And then.

Speaker Change: We continue as I said in my remarks, we're taking a look at expenses all across the business to identify areas, where we can be more efficient.

Speaker Change: And reduced costs without impacting our service levels and our sales capability.

Speaker Change: So we we fully understand that.

Speaker Change: We need to maintain EBIT growth in this environment and strong EBITDA growth coming into what as you know it should be a stronger year.

Speaker Change: Okay.

In order to be able to continue focusing on what we want for the long term, which is to be able to invest to grow in the long term and to return to the ads and internet customer growth in the long term so.

Speaker Change: So I think the dynamics in the background are happening to make that growth happen.

Speaker Change: And that's.

And that's where we are.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks, Ken Thanks, Ben look we'll take our next question. Please.

Speaker Change: Next question will come from the line of John Hodulik with UBS. Your line is now open.

John C. Hodulik: Great. Thanks, Thanks for that color Jessica just to follow up on on EBITDA growth and one of the components of revenue per customer it's been relatively flat for the last couple of quarters and there's a lot of moving parts in terms of pricing and customers rolling off spectrum, one but.

Chris Winfrey: And so, while we typically like to keep our cards close to our chest to preserve both flexibility and to maintain our competitive posture, we felt there was a trade-off here to make sure that our shareholders were with us, and that people understood the value of the returns on the investment that we're making. And so, there's a balance here between, on the one hand, having the flexibility to always make the right decisions to generate long-term free cash flow and making sure that we're responsive to shareholder feedback along the way and that we can demonstrate long-term value so people take comfort with that. You know, in terms of the prioritization of line extensions over the DAA or DOCSIS IV upgrade, it wasn't so much about prioritization.

John C. Hodulik: How did should we think about progressing through.

John C. Hodulik: 24, especially with the most.

John C. Hodulik: Most recent data price increase in August and.

John C. Hodulik: Leave your.

John C. Hodulik: Are you seeing power in the broadband market has changed given the new sort of competitive landscape, we have or can you continue to push pricing.

John C. Hodulik: Glad that lapsed mid year number one and then on the mobile strategy.

John C. Hodulik: Anything you can tell us about what mobile is doing in terms of lowering churn in the broadband market is it is it also helping you in terms of new connections and driving new subscribers or just really churn reduction and then anything we should expect to change as you sort of procedure.

John C. Hodulik: Build out measures youre, taking to add your own capacity.

Speaker Change: Yeah, So I'll start with our Po.

Speaker Change: When you look at average revenue per customer over all the time the biggest the biggest factor that's keeping it flat is the rate of video penetration.

Chris Winfrey: It was really about the certification of the DAA equipment taking a little bit longer, which was pushing out the timeline for the rollout. And so the tradeoff we had was, could you do it at the 1.2 gigahertz high split upgrade under what we call an integrated CMTS environment and do more of that footprint to keep the original pace, or should we slow it down just a tad to make sure that we allowed for a catch-up of the DAA certification process so that you could move to high split with distributed access architecture, as well as 1.8 gigahertz in We chose the latter to make sure that we were having as much of the footprint with the full capabilities of DOCSIS IV over time.

Speaker Change: What matters there is the extent to which we can retain video customers with some of the packaging and pricing strategies that we have if you isolate and you sort of pull out.

Speaker Change: On the internet or pill.

You can see even in the remarks that I made on the corner that the Internet continues to grow and when you pull out the spectrum one mobile allocation.

Speaker Change: <unk> to grow at a rate, that's consistent or even a little higher than historical levels.

Speaker Change: The on the mobile side, you know I talked about it on the last call.

As you had so because we've sort of lapped the free online.

Speaker Change: Offer.

Speaker Change: The number of free lines that we have in the system over the course of 2024.

Chris Winfrey: You know, the caveat is, if we get into, you know, a couple years from now, we see opportunities to pull capital forward, we'll, of course, do that, but this is our best view of where we're going to spend capital, and we thought it was worthwhile to show that to make sure people understand that higher level of capital expenditure doesn't go on into perpetuity. Yeah, on the EBITDA performance inside of 2024. I'll give you, I'm not going to give Eva guidance, but I think we can talk about a few things.

Speaker Change: It's more steady than it was in 2023.

Speaker Change: It's more steady than it was in 2023.

Speaker Change: So you'll also see that that the impact of that mobile allocation over to on the internet should steady overtime.

Speaker Change: And you'll have just as a matter of math more paying customers in the base.

Speaker Change: As a proportion relative to the free lines.

Speaker Change: So I think.

Speaker Change: That's the piece there I don't know, Chris you want to talk about pricing power sure.

<unk> our fundamental view.

Speaker Change: Has it changed that in the long term keeping.

Jessica Fischer: So you do have a political advertising year that is a tailwind. We have, so we've fully lapped the investments that we made in the employee population, and from an expense outlook perspective, I think my expectation is that we'll be able to keep costs to serve essentially flat on an absolute basis. And in sales and marketing, you might have some growth, but it'll be small in the 2% to 3% range.

Speaker Change: Prices as low as you can both enhances your ability to grow in that store long term objective it reduces churn and it reduces the likelihood that somebody views you as an attractive overbuilt candidates or fundamental views haven't changed.

Speaker Change: Said that we have had inflationary pressures.

And then passing that through to the best of our ability to the extent that our pricing is lower than it is for the most part approach across the industry I view that as a positive long term capacity question and affirmative devoted to growth.

Jessica Fischer: And, you know, we continue to take a look at expenses all across the business to identify areas where we can be more efficient and reduce costs without impacting our service levels or our sales capabilities. And so we fully understand that we need to maintain EBITDA growth in this environment and strong EBITDA growth coming into what, as you note, should be a stronger year, in order to be able to continue focusing on what we want for the long term, which is to be able to invest, to grow in the long term, and to return to that sort of internet customer growth in the long term. So, I think the dynamics in the background are happening to make that growth happen. That's where we are now. Thank you. Thanks, Ben. Thanks, Ben. Luke, we'll take our next question, please.

Speaker Change: To grow but.

Speaker Change: It doesn't mean that we're immune to inflation that doesn't mean that we're not willing to pass through increases as we need to and there's a balance here as well that in an environment, where we're investing so much into expansion, making sure that we need to maintain the EBITDA growth rates. So that we can keep that engine going it matters to us and it matters to our shareholders and they were folk.

Speaker Change: Just on that in parallel so there's a balance that's taking place and I think we're going to not only the good position overall, but I think a very good relative position in terms of the overall market.

Speaker Change: You've seen different operators across the sector are moving their prices up over time, as well and I think that demonstrates that there is real value to the product and theres a need to recover cost along the way, it's a it's a capital intensive business.

John C. Hodulik: Our next question will come from the line of John Hodulik with UBS. Your line is now open. Great. Thanks. And thanks for that, Tyler, and Jessica.

Speaker Change: And then your last question on John is a mobile churn.

Jessica Fischer: Just a follow-up on EBITDA growth and one of the components, revenue per customer. It's been relatively flat for the last couple of quarters. And there are a lot of moving parts in terms of pricing and customers rolling off Spectrum 1. But, you know, how should we think about progressing through 24, especially with the, I think, the most recent data price increase in August? And how do you believe your pricing power in the broadband market has changed given the new sort of competitive landscape we have? Or can you continue to push prices, you know, as that lapsed mid-year, number one?

Speaker Change: The contribution of mobile to the broadband business. The biggest factor so far as you highlight it really has been a significant and a very material amount of true reduction that takes place one of those customers who are attached mobiles I mentioned and totaled 13% of our base today.

Speaker Change: And I'd offer you two pieces one is on the positive side. It is dramatic due to a reduction on the just to be balanced there is theres still self selection that exists inside that base. So I wanted to be careful that we don't overplay the benefit there on what's still a relatively small portion of our internet base and growing and has big upside the new connects.

Jessica Fischer: And then on the mobile strategy, you know, anything you can tell us about what mobile is doing in terms of, you know, lowering churn in the broadband market? Is it also helping you in terms of new connections and driving new subscribers or just really churn reduction? And then anything we should expect to change as you, you know, sort of proceed with some of the build-out measures you're taking to add your own? Yeah, so I'll start with ARPU.

Speaker Change: <unk>.

Speaker Change: Those new Internet connects you take the mobile percentage of our mobile acquisition mix that comes from new customers has risen over the years.

Speaker Change: Is that because we do a better job of selling into call center attaching or is it because mobile is actually driving gross adds.

Speaker Change: In this environment, where you have so many different moving parts.

Jessica Fischer: When you look at average revenue per customer overall, John, the biggest factor that's keeping it flat is the rate of video penetration. So what matters there is the extent to which we can retain video customers with some of the package and pricing strategies that we have. If you isolate and sort of pull out Internet ARPU, you can see even in the remarks that I made about the quarter that Internet ARPU continues to grow. And when you pull out the Spectrum 1 mobile allocation, it continues to grow at a rate that's consistent or even a little higher than the historical level. On the mobile side, I talked about it on the last call.

Speaker Change: I'm not comfortable telling you that it's been a big driver as of yet of new sales, but I think I think that's the opportunity not only for churn reduction, but as convergence continues to take hold as these products work together in a way that our competitors can't replicate the ability to use.

Speaker Change: Spectrum, one the combination of broadband and Internet Wi Fi and <unk> as our backup radios. The slowest portion of our network and have the fastest overall connectivity service and seamless connectivity powerful and I think it has the ability to not just reduce churn which is already doing today.

Speaker Change: They drive you know acquisition over time, and so early on but.

Speaker Change: Still very exciting.

Speaker Change: Okay. Thank you.

Jessica Fischer: As you have, so because we've sort of lapped the free line offer, the number of free lines that we have in the system over the course of 2024 is more steady than it was in 2023. So you'll also see that the impact of that mobile allocation over to the internet should be steady over time. And you'll have, as a matter of math, more paying customers in the base as a proportion relative to the free lines. Um, so I, I think. That's the piece I was looking for.

Speaker Change: Yeah. Thanks, John Luke will take our next question. Please thanks.

Speaker Change: Okay.

Speaker Change: Our next question will come from the lineup Peter Zaffino with Wolfe Research. Your line is now open.

Peter Zaffino: Good morning, I have a couple of questions on the subject of growth investment.

Peter Zaffino: Slide 11 discusses our cost per core passing in your forecast.

2000 2500.

Peter Zaffino: Struck me is high relative to historical core processing and even relative to fiber expansion and just wanted to see what you could share about your assumptions for penetration in <unk>.

Chris Winfrey: I don't know, Chris. Do you want to talk about pricing power? Sure. And, you know, in broadband, our fundamental view hasn't changed, that in the long term, keeping your prices as low as you can both enhances your ability to grow, and that's still our long-term objective, it reduces churn, and it reduces the likelihood that somebody views you as an attractive overbuilt candidate. So our fundamental views haven't changed. Having said that, we've had inflationary pressures, and we've been passing that through to the best of our ability. To the extent that our pricing is lower, and it is for the most part across the industry, I view that as a positive long-term capacity issue and from an ability to grow. But that doesn't mean that we're immune to inflation.

Peter Zaffino: That footprint and then on a related note again on core growth investment.

Peter Zaffino: But moving over to bead, we've seen big increases over the last couple of years since the money for bead was allocated.

Peter Zaffino: And the availability of an uptake of fixed wireless services over mid band.

Peter Zaffino: We expect more increases in the availability of Leo satellite services, not just starlink, but amazons product and so I'm wondering if your outlook for penetration.

Potential bead footprint is moderating and if that affects your appetite at all thank you.

Peter Zaffino: Yeah.

Speaker Change: Yes, so I'll start on that cost per passing question what's.

Speaker Change: What's that what what you see there is related to the mix between commercial and even in an enterprise passing and residential passing.

Chris Winfrey: It doesn't mean that we're not willing to pass through increases as we need to. And there's a balance here as well, that in an environment where we're investing so much in expansion, making sure that we do maintain EBITDA growth rates so that we can keep that engine going, it matters to us, and it matters to our shareholders, and we're focused on that in parallel. So there's a balance that's taking place, and I think we're not only in a good position overall but, I think, a very good relative position. In terms of the overall market, you've seen different operators across the sector moving their prices up over time as well, and I think that demonstrates that there's real value to the product, and there's a need to recover costs along the way. It's a capital-intensive business.

So that the cost per rescue passing that lives inside of that is closer to $1500.

Speaker Change: What's happening is that there are.

Speaker Change: I'm going to say, a smaller number but a larger dollar amount of.

Commercial type things that are included in the mix that drives the average cost per passing.

Speaker Change: To be a little bit higher and we were just trying to give enough information there to get you to a reasonable path things estimate so that so you can model off of that what what gains you would generate from the from the bill.

Speaker Change: Then in terms of the penetration Peter the there's very different types of build that sits in there I mean service ability versus where a customer calls us effectively for a one off for two or three additional line extensions.

Chris Winfrey: And then your last question, John, is mobile churn. The contribution of mobile to the broadband business, the biggest factor so far, as you highlighted, really has been a significant and a very material amount of churn reduction that takes place among those customers who attach mobile. As I mentioned, it's only 13% of our base today, and I'd offer you two pieces.

Speaker Change: Penetration of about 85% and as it should be and other areas, where greenfield or market fill in where penetrations can range anywhere between 45% to 70%.

Speaker Change: At a lower cost per passing is Jessica highlighted in some of the other extension buildup, we do so.

Chris Winfrey: One is on the positive side; it is dramatic, the churn reduction. On the just-to-be-balanced side, there's still self-selection that exists inside that base, so I want to be careful that we don't overplay the benefit there on what's still a relatively small portion of our internet base, and growing, and has a big upside. The new connects, you know, those new internet connects who take mobile, that percentage of our mobile acquisition mix that comes from new customers has risen over the years. Is that because we do a better job of selling in the call center and attaching, or is it because mobile is actually driving gross ads? In this environment, where you have so many different moving parts, I'm not comfortable telling you that it's been a big driver of new sales yet, but I think that's the opportunity, not only for churn reduction but, as convergence continues to take hold, as these products work together in a way that our competitors can't replicate, the ability to use.

There is a very very attractive they always have been theres nothing really new there.

Speaker Change: And somewhat tied to that you asked about.

Speaker Change: Our views on penetration generally, but in the context of feed with fixed wireless access or lower orbit satellite Leo.

Speaker Change: I think the let me start with Leo.

Speaker Change: This is a inexpensive.

Speaker Change: Offering on a per month basis expensive from a CPU standpoint, and it needs to be because the foreign if.

Speaker Change: If I told you our network was going to fall to the ground every six to eight years and burn up you'd tell me, that's a pretty capital intensive business that needs to be priced appropriately and it is I think Leo Hasnt really good use in certain cases.

Speaker Change: But it's typically not going to be where our fiber based network is deployed and so it's not something that really has risen too much in terms of our thinking and penetration fixed wireless access.

Speaker Change: It's shown us that you can have lower quality in an inferior service at a low price for low incremental price and theres a market for that but our penetration expectations for art off and for subsidized rural and what we feed it to beat.

Chris Winfrey: Spectrum One is a combination of broadband internet, Wi-Fi, and 5G as our backup radio. It's the slowest portion of our network, but it has the fastest overall connectivity service and seamless connectivity. I think it's powerful, and I think it has the ability to not just reduce churn, which it's already doing today, but to actually drive, you know, acquisition over time. And so we're early on, but it's still very exciting. All right, thank you. Thanks, John. Luke, we'll take our next question, please.

Already low in terms of what we built into our models compared to what I think ultimately we will achieve and so I think that's already reflected inside of our our penetrations. If you think about just at the 12 month, Mark where we're approaching close to close to 50%.

Speaker Change: Subsidizes rural passengers.

Peter Cepino: Thanks. Our next question will come from the line of Peter Cepino with Wolf Research. Your line is now open. Good morning.

Speaker Change: Our initial thoughts for we'd be at half of that was in a year.

Speaker Change: So we're way ahead of that and I think the terminal penetration would be higher than what we thought at Argos. Despite the fact that theres, an admittedly stronger fixed wireless access presence now than there was three or four years ago. When we made those commitments.

Chris Winfrey: I have a couple of questions on the subject of growth investment. Slide 11 discusses a cost for core passing in your forecast of $2,000 to $2,500, and that struck me as high relative to historical core passings and even relative to fiber expansion. So I wanted to see what you could share about your assumptions for penetration and ARPU in that footprint. And then on a related note, again on core growth investment, but moving over to bead, we've seen big increases over the last couple of years since the money for bead was allocated to the availability and uptake of fixed wireless services over midband. We expect more increases in the availability of LEO satellite services, not just Starlink, but Amazon's product. And so I'm wondering if your outlook for penetration in that potential bead footprint is moderating, and if that affects your appetite at all. Thank you.

Speaker Change: All of our big roundabout way to say I think it's factored into all of our thinking and I don't think it changes our view in terms of.

Speaker Change: Where we will ultimately get to terminal penetration because we werent.

Speaker Change: We weren't overly aggressive in what we assumed yeah and you know what.

Speaker Change: We mentioned the less than 50% I heard that the 50% or so at about the 12 month, Mark but as you can see and what we provide and all of the cohorts that we're saying we're still growing at a good rate at that point. So it's not as though you've reached the customers are going to get your product and then we're not seeing additional growth.

Speaker Change: <unk> seen good growth in those markets even at that vintage.

Speaker Change: It's early but it's going well.

Speaker Change: Okay.

Operator, we will take our next question please.

Speaker Change: Our next question comes from the line of Sebastian <unk> with J P. Morgan. Your line is now open.

Chris Winfrey: Yeah, so I'll start on the cost per passing question. What you see there is related to the mix between commercial and even enterprise passing and residential passing. So, the cost per resi passing that lives inside of that is closer to $1,500. What's happening is that there are, I'm going to say, a smaller number but a larger dollar amount of commercial passings that are included in the mix that drive the average cost per passing to be a little bit higher, and we're just trying to give you enough information there to get you to a reasonable passing estimate so that you can model off And then in terms of penetration, Peter, there are very different types of build that sits in there.

Sebastian: Hi, Thanks for taking the question I just wanted to follow up on the competitive environment.

Sebastian: Based upon the previous response, just any help on thinking about the fixed wireless impact in terms of your or is that just isolated or the competitive environment that has perhaps shifted in four Q and persistent into January that isolated in your non fiber overlap territories.

Speaker Change: Are you seeing that as well be somewhat impactful in terms of share as well and the one gig markets and a quick follow up to that any update we can get an overlap for fiber as it stands exiting of the year.

Speaker Change: Then on the <unk> build out obviously your peer Comcast have been testing along with you for quite a while but they are live in Philadelphia is perhaps as well as some other markets any update on how the team is thinking about <unk> and how you are perhaps offload strategy over the next several years. Thank you.

Chris Winfrey: I mean, serviceability, which is where a customer calls us for a one-off or two or three additional line extensions. The penetration on that's 85 percent, as it should be. And other areas where greenfield or markets fill in, where penetrations can range anywhere between 45 and 70 percent at a lower cost for passing, as Jessica highlighted in some of the other extension builds that we do. So the returns are very, very attractive. They always have been.

So there's a lot there, especially on it but.

Speaker Change: But here we go.

So fixed wireless act impact it is.

Speaker Change: It's where they are deployed and that's in both fiber and non fiber overlap, it's more acute and the non fiber overlap because it's the first time that somebody has had what they view as a as an.

Chris Winfrey: There's nothing really new there. And somewhat tied to that, you asked about our views on penetration generally, but in the context of BEAD with fixed wireless access or low earth orbit satellite LEO. I think the, let me start with LEO.

Speaker Change: No alternative other than DSL and so it has the novelty factor in the non overbuilt footprint.

Speaker Change: Similar to a fiber overbuild that has an immediate short term impact when it's new into the marketplace. So it has a more pronounced impact there, but I think the overbuild was the wireline over builders would tell you the fixed where all of a sudden pack fixed fixed wireless access probably has had an impact on them as well. So it's not that it doesn't have an impact entered overbuild territory.

Chris Winfrey: This is an expensive offering on a month-per-month basis, expensive from a CPE standpoint, and it needs to be, because if I told you our network was going to fall to the ground every six to eight years and burn up, you'd tell me that it's a pretty capital-intensive business, and it needs to be priced appropriately, and it is. I think LEO has a really good use in certain cases, but it's typically not going to be where our fiber-based network is deployed, and so it's not something that really has risen too much in terms of our thinking about penetration. Fixed wireless access, it's shown us that you can have lower quality and inferior service at a low price or a low incremental price, and there's a market for that, but our penetration expectations for RDOF and for subsidized rural and what will feed into BEAD were already low in terms of what we built into our models compared to what I think we will ultimately achieve, and so I think that's already reflected in our penetrations.

Speaker Change: It is much more pronounced in an area, where the overbuilt doesn't exist are overbilled percentage.

Speaker Change: In our 10-K today, I think we disclosed as well.

Speaker Change: Roughly 50% in terms of overbuild and then as it relates to <unk>, we are fully deployed and active.

Speaker Change: With thousands of a.

Radio access networks out on the strand and MD use in one large market today, and we're expanding into another market at some point this year.

Speaker Change: And that's going very well and the.

The pacing of that really is dictated by a few things one is our relationship with Verizon is good and strong the economics are great.

Speaker Change: And this is normal ROI based deployments or it'll be there.

Speaker Change: The returns will be there, where we deployed but interestingly the more penetrated we become the more attractive the returns get and so from a deployment of capital perspective, <unk> is very exciting it's a very clear mathematical return, but in an environment, where we're deploying as much capital as we are and we have so much active activity on the outside plant.

Chris Winfrey: If you think about just at the 12-month mark, where we're approaching close to 50% in these subsidized rural passes, our initial thoughts were we'd be at half of that within a year, and so we're way ahead of that, and I think the terminal penetration would be higher than what we thought at RDoF, despite the fact that there's an admittedly stronger fixed wireless access presence now than there was, you know, three, four years So, in a roundabout way, to say I think it's factored into all of our thinking, and I don't think it changes our view in terms of where we'll ultimately get to for terminal penetration because we weren't overly aggressive in what we were doing. Yeah, And I, you know.

Speaker Change: In terms of high split upgrade and construction of new networks, we're just pacing it along the way to manage all of those factors.

Speaker Change: And the way that we can think about deployment of <unk>, but we're going to fully deploy it. It's exciting it has a great return the depth at which we employed in each market. If it really is a function of utilization.

Speaker Change: <unk> on a geographically specific area.

Speaker Change: T D.

Attractive agreement and the great relationship that we have with Verizon today, so strategic to us. So all those factors play into the timing.

Jessica Fischer: We mentioned the 50% or so at about the 12-month-plus mark, but as you can see from what we provided and all of the cohorts that we're seeing, we're still growing at a good rate at that point. So it's not as though you've reached the customers who are going to get your product, and then we're not seeing additional growth. We're still seeing good growth in those markets, even at that mentality. It's early, but it's going well.

Speaker Change: Thank you.

Speaker Change: That was our last question I'll now turn the call back over to Stefan Andrew.

Stefan Anninger: Thanks, operator, thanks, everyone. We'll see you next quarter. Thank you very much.

Stefan Anninger: [noise] [music].

Operator: Operator, we'll take our next question, please. Your next question comes from the line of Sebastian Opeti with J.P. Morgan. Your line is now open.

Sebastian Opeti: Hi, thanks for taking the question. I just wanted to follow up on the competitive environment. Just based upon the previous response, any help in thinking about the fixed wireless impact in terms of your, is that just isolated, or the competitive environment that has perhaps shifted in 4Q and persisted into January, is that isolated in your non-fiber overlap territories or are you seeing that as well be somewhat impactful in terms of share as well in the one gig market? And a quick follow-up to that, any update we can get on overlap for fiber as it stands And then on the CBRS build-out, obviously, your peer Comcast has been testing along with you for quite a while, but they're live in Philadelphia, perhaps as well as some other markets. Any update on how the team's thinking about CBRS and how you're perhaps offloading your strategy over the next several years? Thank you. There's a lot there, but here we go.

Chris Winfrey: So Fixed Wireless Impact, it's where they've deployed, and it's in both fiber and non-fiber overlap. It's more acute in the non-fiber overlap because it's the first time that somebody's had what they view as an alternative other than DSL. And so it has a novelty factor in the non-overbuild footprint that is similar to a fiber overbuild that has an immediate, short-term impact when it's new to the marketplace. So it has a more pronounced impact there, but I think the overbuilders, the wireline overbuilders, would tell you that fixed wireless access probably has had an impact on them as well. So it's not that it doesn't have an impact in an overbuilt territory, but it's just much more pronounced in an area where the overbuild doesn't exist.

Chris Winfrey: Our overbill percentage in our 10k today, I think we disclosed as well that it's roughly 50% in terms of overbill. And then as it relates to CBRS, we are, you know, fully deployed and active, you know, with thousands of Radio Access Networks out on the Strand and MDUs in one large market today, and we're expanding into another market at some point this year, and that's going very well. And the pacing of that is really dictated by a few things.

Chris Winfrey: One is that our relationship with Verizon is good and strong. The economics are great. And this is an ROI-based deployment, so it'll be there. The returns will be there when we deploy. But interestingly, the more penetrated we become, the more attractive the returns get. And so from a deployment of capital perspective, CBRS is very exciting. It's a very clear mathematical return.

[music].

Chris Winfrey: But in an environment where we're deploying as much capital as we are, and we have so much active activity on the outside plant, in terms of high split upgrade and construction of new networks, you know, we're just pacing it along the way to manage all those factors, in the way that we think about the deployment of CVRS. But we're going to fully deploy it. It's exciting.

Chris Winfrey: It has a great return. The depth at which we employ it in each market, you know, really is a function of utilization in a geographically specific area and the attractive agreement and the great relationship that we have with Verizon today. So that's strategic to us. So all those factors play into the timing. Thank you.

Stefan Anninger: That was our last question. I'll now turn the call back over to Stefan Anninger. Thanks, operator. Thanks, everyone. We'll see you next quarter. Thank you very much.

Operator: Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I would now like to turn the call over to Stefan Anninger. Thanks, operator, and welcome, everyone. The presentation that accompanies this call can be found on our website, ir.charter.com. I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, which we encourage you to read carefully. Various remarks that we make on today's call concerning expectations, predictions, plans, and prospects constitute forward-looking statements, which are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated. Any forward-looking statements reflect management's current view only, and CHRTR undertakes no obligation to revise or update such statements. On today's call, we have Chris Winfrey, our President and CEO, and Jessica Fischer, our CF. With that, let's turn the call over to Chris. Thanks, Stefan.

Chris Winfrey: In 2023, we added 155,000 internet customers, and we added nearly 2.5 million Spectrum Mobile lines for growth of nearly 50%. At the end of 2023, we had more than 7.7 million total mobile lines. Only 13% of our internet customers now have mobile service, and we expect mobile penetration to meaningfully grow over the next several years as the quality and value of our converged connectivity services gain wider recognition. Revenue was up by 1% in 2023, while EBITDA grew by 1.3% and 2.5% when excluding advertising. While we're executing well on our long-term strategic initiatives, and Spectrum One is working to drive mobile growth, internet growth in our existing footprint has been challenging, driven by, admittedly, more persistent competition from fixed wireless and similar levels of wireline overbuild activity. Small changes and gross additions in churn in a low transaction environment have driven outsized impacts to net gains, which was clearly the case as we moved through the last quarter. I own that.

Chris Winfrey: So let me start with what we believe about the competitive environment and then what we're doing to drive long-term growth by delivering high quality products and service at a great price. Fixed wireless access, while an inferior product with limited capacity and geographic coverage which is fluid, is often marketed by the phone companies at a perceived lower price to their existing customers. However, we continue to believe the impact of fixed wireless is temporary.

Stefan Anninger: Hello, and welcome to the Charter Communications Q4 conference call. We ask that you. Please hold all questions until the completion of the formal remarks at 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.

Chris Winfrey: Our internet product is faster and more reliable, and our pricing is lower when bundled with mobile. Customer bandwidth needs continue to increase, and MNOs will face capacity challenges and will be required to allocate their spectrum and capital to maintain profitable mobile services. While we can't promise when that happens, I believe bandwidth needs to increase, and quality and value win. On the Wireline Overbuild front, we continue to compete well. However, overbilled impact tends to be limited to a few percentage points of internet penetration during the first year of a new overbilled vintage coming online. It's painful, but it's tied to the pace of overbuilders... We don't see overbuilders reaching their penetration and ROI goals within our footprint now or in the future. They don't have the same ubiquitous convergence capabilities as we do.

Stefan Anninger: I would now like to turn the call over to Steffen manager.

Steffen: Thanks, operator, and welcome everyone. The presentation that accompanies this call can be found on our website IR dot charter dot com I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, which we encourage you to read carefully.

Steffen: Remarks that we make on today's call concerning expectations predictions plans and prospects constitute forward looking statements, which 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.

Chris Winfrey: Their lower-cost passings have likely been built. Some of the planned overbuild was duplicative between operators, meaning less opportunity. And incremental financing costs have increased, putting even more pressure on overbill to return.

Steffen: Such statements on today's call, we have Chris Winfrey, our president and CEO and Jessica Fisher, our CFO with that let's turn the call over to Chris. Thanks, Stephan in 2023, we added 155000 Internet customers and we added nearly $2 5 million spectrum mobile lines for growth of nearly 50.

Chris Winfrey: We also expect bead passing will provide better capital allocation and ROI for many of these offerings. Our assumption is that our competitors are rational economic players with shareholders and balance sheets which require adequate return on investment. That isn't within our control, so we are focused on the key strategic initiatives that enhance our long-term competitiveness and growth capabilities, and we expect to return to a more normalized internet growth over time. Just over a year from when we detailed those initiatives, I wanted to remind everyone of their rationale and update you on their status as laid out on this slide. Our footprint expansion is beating our pacing, penetration, ARPU, and ROI targets. New construction will help drive internet customer growth despite the temporary challenges I mentioned within our existing footprint.

Steffen: <unk>.

Steffen: At the end of 2023, we had more than $7 7 million total mobile lines.

Steffen: Only 13% of our Internet customers now have mobile service and we expect mobile penetration to meaningfully grow over the next several years as the quality and value of our converged connectivity services gains wider recognition.

Steffen: <unk> was up by 1% in 2023, while EBITDA grew by one 3% and two 5% when excluding advertising.

Steffen: While we are executing well on our long term strategic initiatives and spectrum. One is working to drive mobile growth Internet growth in our existing footprint has been challenging driven by admittedly more persistent competition from fixed wireless and similar levels of wireline overbuild activity.

Steffen: Small changes in gross additions and churn and a low transaction environment drove an outsized impacts to net gains which was clearly the case as we move through the last quarter, Ireland that so let me start with what we believe on the competitive environment and then what we're doing to drive long term growth by delivering high quality products and services at a great price.

Chris Winfrey: 2023 Subsidized Rural Customer Growth was already over $100,000. Our penetration also continues to grow at a better-than-expected pace, and we'll activate more subsidized rural passes this year, both of which Jessica will cover. BEAD will provide additional opportunities, although the potential is uncertain given our concerns regarding how states will apply NTIA guidelines, and will focus BEAD investments in states where the rules are conducive to private investment.

Steffen: Fixed wireless access while an inferior product with limited capacity in.

Steffen: In geographic coverage, which is fluid is often marketed by the phone companies at a perceived lower price to their existing customers.

Steffen: We continue to believe the impact from fixed wireless as temporary our internet product is faster and more reliable our pricing is lower when similarly bundled with mobile customer bandwidth needs continue to increase.

Chris Winfrey: Outside of rural, we also have accelerated greenfield, market fill-in, and serviceability builds, expanding our existing footprint in both residential and commercial pastures. Penetration curves and returns here are similarly strong and predictable with a lower billed cost. We also remain committed to prioritizing the customer experience via our execution initiative, which is intended to enhance frontline employees' tenure while simultaneously investing in digitization, all to drive better sales yields, higher quality transactions, lower overall service transactions, and higher levels of customer satisfaction. Our targeted investments in employees over the last two years resulted in a significant reduction in employee attrition in 2023. Our investments in the digitization of services are also driving... In 2024, we have a number of new automated platforms that are launching to facilitate better service for customers and better digital and AI tools for agents to enhance service quality and the quality of their day-to-day jobs. And finally, our Evolution Initiative, which includes our Network Evolution Project, our Convergence Efforts, and our Video Product Development, all remain on course.

Steffen: <unk> will face capacity challenges that will be required to allocate their spectrum and capital to maintain profitable mobile services.

Steffen: We can't promise when that happens I believe bandwidth needs increase in quality and value win.

Steffen: On the wireline overbuilt front, we continue to compete well.

<unk> impact tends to be limited to a few percentage points of internet penetration during the first year of a new overbuilt vintage coming online, it's painful, but it's tied to the pace of overbuilt.

Steffen: We don't see over builders, reaching their penetration and ROI goals now within our footprint now or in the future.

Steffen: I don't have the same ubiquitous convergence capabilities as we do the lower cost pass things have likely been built some of the planned overbuild was duplicative between operators, meaning less opportunity and incremental financing costs have increased putting even more pressure on overbuilding returns. We also expect bead pass things will provide better capital allocation and all.

Steffen: ROI for many of these operators.

Steffen: Our assumption is that our competitors are rational economic players with shareholders and balance sheets, which require adequate return on investment that isn't within our control. So we are focused on the key strategic initiatives that enhance our long term competitiveness and growth capabilities and we expect to return to a more normalized internet growth overtime.

Just over a year from when we detailed those initiatives I wanted to remind everyone of their rationale and update you on their status as laid out on slide four.

Chris Winfrey: We've fully launched Symmetrical Speed Tiers in two markets and are currently launching in six more, completing our Step 1 mark. We'll also begin to work in our Step 2 markets with DAA later this year. Excluding the benefit of any savings that result from the project, we continue to expect our network evolution to cost a very low $100 per pass.

Steffen: Our footprint expansion is beating our pacing penetration <unk> and ROI targets, new construction will help drive internet customer growth. Despite the temporary challenges I mentioned within our existing footprint two.

<unk> 2023, subsidize rural customer growth was already over 100000 or penetration also continues to grow at a better than expected pace and we'll cover more will activate more subsidized rural passengers. This year, both of which Jessica will cover.

Chris Winfrey: We expect to complete the project in 2026, so a fast, ubiquitous, low-cost upgrade of our capabilities, which our competitors can't replicate. Our converged product offering also continues to evolve and grow. Spectrum One is performing well and offers the fastest connectivity with differentiated features like mobile speed boost and the Spectrum Mobile Network.

Steffen: <unk> will provide additional opportunities although the potential was uncertain given our concerns regarding how states will apply NTIA guidelines.

Steffen: We will focus bead investments in states, where the rules are conducive to private investment.

Steffen: Outside of the room, we also have accelerated greenfield market failed <unk> and serviceability builds expanding our existing footprint in both residential and commercial passes.

Chris Winfrey: Spectrum One also offers significant savings for customers, with market-leading pricing at both promotion and at retail. Spectrum One customers, reaching their first anniversary, are performing ahead of our expectations. We'll continue to evolve our CONVERGE offering in 2024 with additional features and capabilities. Finally, turning to the evolution of our video product, in October, we launched the XUMO platform across our entire footprint. This industry-leading video platform allows our customers to access their linear and direct-to-consumer video content with unified search and discovery within one easy-to-use interface. Combined with our Spectrum TV app, the most viewed linear MVPD streaming service in the U.S., XUMO is our go-to-market platform for new video sales. We're approaching 1 million deployed Sumo boxes since launch, and we've been getting great customer feedback, and we can keep improving our attach rate. In early January, Disney Plus became available to all Spectrum TV Select customers nationwide at no additional cost. And in the next several months, ESPN Plus and VIX, a Spanish-language DTC product, will both become available to certain TV Select customers at no extra cost.

Steffen: Penetration curves and returns here are similarly, strong and predictable with a lower build cost.

Steffen: We also remain committed to prioritizing the customer experience via our execution initiative, which is intended to enhance frontline employees tenure, while simultaneously investing in digitization all to drive better sales yields higher quality transactions, lower overall service transactions and higher levels of customer satisfaction.

Steffen: Our targeted investments in employees over the last two years resulted in a significant reduction in employee attrition in 2023.

Steffen: Our investments in the Digitization of service is also driving efficiencies and.

Steffen: In 2024, we have a number of new automated platforms that are launching to facilitate better service for customers and better digital and AI tools for agents to enhance service quality and the quality of their day to day jobs.

Steffen: And finally, our evolution initiative, which includes our network evolution project, a convergence efforts and our video product development all remain on course.

Steffen: We fully launched symmetrical speed tiers in two markets and currently launching in six more completing our step one markets.

Chris Winfrey: This new hybrid distribution model is good for consumers, and we plan to modernize all of our distribution agreements upon renewal. That means packaging flexibility, value, and not asking customers or charters to pay twice for similar DTC and linear programs. Our new hybrid distribution model combined with XUMO's content-forward interface provides a clear path to solve key customer issues of choice, value, and utility with seamless linear DTC and SVOD integration and advanced search and discovery functionality.

Steffen: So began to work in our step two markets with DAA later this year.

Steffen: Putting the benefit of any savings that result from the project. We continue to expect our network evolution to cost a very low $100 per passing and we expect to complete the project in 2026, so fast ubiquitous low cost upgrade of our capabilities, which our competitors can't replicate.

Our converged product offering also continues to evolve and grow spectrum, one is performing well and offers the fastest connectivity with differentiated features like mobile speed boost and the spectrum mobile network.

Chris Winfrey: When we reflect on our key initiatives and what we believe are the short-term market challenges, we're acting as long-term charter shareholders to maximize value. So we have a posture of expectancy and excitement for the opportunity to execute on initiatives that enhance our long-term growth rate and value for charter shareholders. In the short term, we are leaving no stone unturned as it relates to our go-to-market approach.

Steffen: Spectrum, one also offer significant savings for customers with market, leading pricing at both promotion and at retail.

Spectrum, one customers, reaching their first anniversary are performing ahead of our expectations.

Steffen: We will continue to evolve our converged offering in 2024 with additional features and capabilities.

Steffen: Finally, turning to the evolution of our video product in October we launched the zumba platform across our entire footprint. This industry, leading video platform allows our customers to access their linear and direct to consumer video content with unified search and discovery within one easy to use interface.

Chris Winfrey: Ultimately, the speed at which we can return to a more normalized broadband growth rate hinges on the assumption that our competitive capital is not limitless for poor ROI projects and, frankly, our execution on our strategic initiative. So we're keeping our heads down and executing on a clear strategy to ensure we can offer customers the best products and services across our entire footprint, all while saving customers money, not only now but in the future. And with that, I'll turn the call over to Jessica.

Steffen: Combined with our spectrum TV app, the most viewed linear mvpds streaming service in the U S. Zuma is our go to market platform from new video sales.

Steffen: We're approaching $1 million deployed tumor boxes since launch and we've been getting great customer feedback and we can keep approving improving our attach rates.

Jessica Fischer: Thanks, Chris. Now, let's turn to our customer results on slide 6. Including residential and S&B, we lost 61,000 internet customers in the fourth quarter, while video customers declined by 257,000. In mobile, we added 546,000 mobile lines, and wireline voice customers declined by 251,000. Our Spectrum One product continued to perform well. Customers that signed up for our Spectrum One product in the fourth quarter of 2022 reached their 12-month anniversary this past quarter. Those promotional roll-offs didn't drive incremental internet churn.

Steffen: In early January Disney plus became available to all spectrum TV select customers nationwide at no additional cost and in the next several months ESPN, plus and VIX, a Spanish language DTC product will both become available to certain TV select customers at no extra cost. This new hybrid distribution model is good for consumers and we plan to modernize all.

Steffen: Our distribution agreements upon renewal that means packaging flexibility value and not asking customers our charter to pay twice for similar DTC and linear programming.

Steffen: Our new hybrid distribution model combined with zoom most content forward interface provides a clear path to solve key customer issues of choice value and utility with seamless linear DTC in asphalt integration and advanced search and discovery functionality.

Jessica Fischer: In the quarter, we had slightly lower mobile line growth year over year tied to internet gross addition, with a lower turn rate year over year and flat sequentially. We continue to see healthy data usage on our Spectrum One promotional lines and remain confident that these lines will perform well as long-term customers. Turning to rural, we ended the year with 420,000 subsidized rural passes and grew those passes by 295,000 in 2023, in line with our target. And by 105,000 in the fourth quarter alone, an acceleration from the 78,000 we activated during the third quarter. Customer growth in our subsidized rural footprint also accelerated, with 34,000 net customer additions in the quarter.

Steffen: When we reflect on our key initiatives and what we believe are the short term market challenges, we're acting as long term charter shareholders to maximize value. So we have a posture of expectancy and excitement for the opportunity to execute on initiatives that enhance our long term growth rate and value for charter shareholders.

Steffen: In the short term, we are leaving no stone unturned as it relates to our go to market approach ultimately the speed at which we can return to a more normalized broadband growth rate hinges on the assumption that our competitive capital is not limitless for poor ROI projects.

Steffen: Frankly, our execution on our strategic initiatives. So we're keeping our heads down and executing on a clear strategy to ensure we can offer customers the best products and services across our entire footprint, all while saving customers money not only now but in the future and with that I'll turn the call over to Jessica.

Jessica Fisher: Thanks Scott.

Jessica Fischer: As slide 13 shows, we're generating customer penetrations of close to 50% in cohorts that have reached or passed the 12-month mark. In 2024, we expect to activate approximately 450,000 new subsidized rural passes, about 50% more than in 2023, with seasonality in the first quarter tied to winter weather. Slide 12 shows that, so far, with additional state bids that we expect, we will have committed to build approximately 1.75 million subsidized rural passes.

Jessica Fisher: Let's turn to our customers are satisfied text.

Including residential and F&B relapsed 61000 internet customers in the fourth quarter video customers declined by 247000.

Jessica Fisher: We added 546000 mobile lines and wireline customers declined by 251000.

Jessica Fisher: I expect on one product continued to perform well customers signed up for our spectrum one product in a point quite at 2020 to reach their 12 month anniversary this past quarter.

Jessica Fisher: Those promotional Rollouts didn't drive incremental internet churn in the quarter, we had slightly lower mobile line gross adds year over year tied to internet guys progression with a lower churn rate year over year and flat sequentially.

Jessica Fischer: We also expect our RDoF build to be completed by the end of 2026, two years ahead of schedule. Moving to financial results, starting on slide seven. Over the last year, residential customers declined by 0.3%, with video-only customer churn partly offset by new customer growth driven by the internet. Residential revenue per customer relationship was up 0.1% year over year, given promotional rate step-ups, rate adjustments, and the growth of Spectrum Mobile, mostly offset by a higher mix of non-video customers and growth of lower-priced video packages within our base. As slide 7 shows, in total, residential revenue was flat year over year.

We continue to see healthy data usage at our spectrum, one professional lines and remain confident that these lines will perform well as long term customers.

Jessica Fisher: Turning to <unk>, we ended the year with 420000 subsidized for all passing and greater passing by 295000 in 2023 in line with our target and by 105000 in the fourth quarter alone and acceleration from the 78000 reactivated during the third quarter.

Jessica Fisher: Customer growth in our subsidize for outside also accelerated with 34000 net customer additions in the quarter.

Jessica Fisher: And slide 13 shows we're generating customer penetrations up close to 50% and cohorts that have reached by past 12 landmarks and.

Jessica Fischer: Residential internet ARPU grew by 2.2% year over year, but by 3.4% when excluding the impact of Spectrum 1 gap revenue allocation out of internet into mobile. Turning to commercial, SMB revenue declined by 0.9% year over year, reflecting lower monthly SMB revenue per SMB customer, primarily due to a higher mix of lower-priced video packages and a lower number of voice lines per SMB customer. These factors were partly offset by S&B customer growth of 0.7% year over year. Enterprise revenue grew 3.8% year-over-year, driven by enterprise PSU growth of 6.5% year-over-year. Excluding all wholesale revenue, enterprise revenue grew by 6.1%. However, fourth quarter advertising revenue declined by 23.4% or $130 million year over year due to lower political revenue.

Jessica Fisher: In 2024, and we expect to activate approximately 450000 in subsidized Earl passing about 50% more than in 2023 with seasonality in the first quarter are tied to the winter weather.

Jessica Fisher: Slide 12 shows that so far with additional state that we expect we will have committed to build approximately $175 million subsidize royal passing.

Jessica Fisher: We also expect <unk> to be completed by the end of 2026 two years ahead of schedule.

Jessica Fisher: Moving to financial results starting on slide seven over the last year residential customers declined by 3% with video all my customary China, partly offset by new customer growth driven by Internet.

Jessica Fisher: Residential revenue per customer relationship was up 1% year over year, given promotional rate step ups rate adjustments and the growth of spectrum mobile, mostly offset by a higher mix of non video customers and growth of lower priced video packages within our base.

Jessica Fischer: Core ad revenue was down 0.7% year-over-year due to a more challenged advertising market, partly offset by our growing advanced advertising capabilities. Other revenue grew by 24.4% year-over-year, driven by higher mobile device sales. And in total, consolidated fourth-quarter revenue was up 0.3% year over year and up 1.3% year over year when excluding advertising. Moving to operating expenses and adjusted EBITDA on slide 8. In the fourth quarter, total operating expenses declined by 0.7% year over year.

Jessica Fisher: As slide seven shows in total residential revenue was flat year over year residential Internet ARPA grew by two 2% year over year led by three 4% when excluding the impact of spectrum, one GAAP revenue allocation out of Internet and mobile.

Jessica Fisher: Turning to commercial SMB revenue declined by 9% year over year, reflecting lower monthly F&B revenue per SMB customer, primarily due to a higher mix of lower priced video packages and a lower number ethylene find per F&B customary in these.

Jessica Fisher: These factors were partly offset by F&B customer growth of <unk>, 7% year over year.

Jessica Fischer: Programming costs declined by 10.6% year over year due to a decline in video customers of 6.8% year over year and a higher mix of lighter video packages. However, these factors were partly offset by higher programming rates. For the full year 2024, we expect programming costs per video customer to grow in the 1 to 2% range year over year, with our video package mix being the largest variable. Other costs of revenue increased by 15 percent, primarily driven by higher mobile device sales and other mobile direct costs, partly offset by lower ad sales costs.

Jessica Fisher: Enterprise revenue grew three 8% year over year, driven by enterprise PSU growth at six 5% year over year.

Jessica Fisher: Excluding all wholesale revenue enterprise revenue grew by six 1%.

Jessica Fisher: Fourth quarter advertising revenue declined by 23, 4% or $130 million year over year due to less political revenue.

Jessica Fisher: Core AD revenue was down 7% year over year due to a more challenged advertising market, partly offset by our growing advanced advertising capabilities.

Jessica Fisher: Other revenue grew by 24, 4% year over year, driven by higher mobile device sale.

Jessica Fisher: And in total consolidated fourth quarter revenue was up 3% year over year and up one 3% year over year when excluding advertising.

Jessica Fischer: Cost-to-serve customers increased by 2.1% year-over-year, driven by additional activity to support the growth of Spectrum Mobile, partly offset by productivity improvements, including from 10-year investments, and lower service transactions per customer. Looking forward, I would note that our previous investments related to job structure, pay, and benefits to build a more skilled and longer-tenured workforce are now largely complete, and service transaction trends are back on trajectory after the programming dispute in September Sales and marketing costs declined by 1.6%, primarily driven by lower labor costs.

Jessica Fisher: Yeah.

Jessica Fisher: Moving to operating expenses and adjusted EBITDA on slide eight in the fourth quarter total operating expenses declined by 7% year over year.

Jessica Fisher: Programming costs declined by 10, 6% year over year due to a decline in video customers at six 8% year over year and a higher mix of lighter video packages.

Jessica Fisher: These factors were partly offset by higher programming rates.

Jessica Fisher: For the full year 2024, and we expect programming cost per video customer to grow in the 1% to 2% range year over year with our video package mix being the largest area of Paul.

Jessica Fisher: Other cost of revenue increased by 15%, primarily driven by higher mobile device sale and other mobile direct costs, partly offset by lower AD sales cost.

Jessica Fischer: Finally, other expenses grew by 1.5% driven by labor. Adjusted EBITDA grew by 1.6% year over year in the quarter and by 3.6% when excluding advertising. Turning to net income on slide 9, we generated $1.1 billion of net income attributable to charter shareholders in the fourth quarter, down from $1.2 billion last year, driven by a pension remeasurement loss and higher interest expense, partly offset by a gain on the sale of towers and higher adjusted EBITDA. Turning to slide 10, capital expenditures totaled $2.9 billion in the fourth quarter, just below last year's fourth quarter spend. Line extension spend totaled $978 million, $50 million higher than last year, driven by our subsidized rural construction initiative and increased residential and commercial greenfield and market fill-in opportunities.

Jessica Fisher: Cost to service customers increased by two 1% year over year, driven by additional activity to support the growth in spectrum mobile, partly offset by productivity improvements, including from tenure investment and lower service transactions per customer.

Jessica Fisher: Looking forward I would note that our previous investments related to job structure of pay and benefits to build a more scaled and longer tenured workforce are now largely complete and service transaction trends are back on trajectory. After the programming dispute in September.

Jessica Fisher: Sales and marketing costs declined by one 6%, primarily driven by lower labor costs.

Jessica Fisher: Finally, other expenses grew by one 5% driven by labor costs.

Adjusted EBITDA grew by one 6% year over year in the quarter and by three 6% when excluding advertising.

Turning to net income on slide nine we generated $1 $1 billion of net income attributable to charter shareholders in the fourth quarter.

Jessica Fisher: Down from $1 $2 billion last year, driven by a pension re measurement loss and higher interest expense, partly offset by a gain on the sale of towers and higher adjusted EBITDA.

Jessica Fischer: Fourth quarter capital expenditures excluding line extensions totaled $1.9 billion compared to $2 billion in the fourth quarter of 2022, driven by lower spend on scalable infrastructure and lower spend on CPE due to purchase timing, partly offset by higher spend on upgrade and rebuild, primarily network evolution. For the full year 2023, we spent $11.1 billion. Looking ahead to full year 2024, we expect capital expenditures to total between $12.2 and $12.4 billion, including line extensions of approximately $4.5 billion and network evolution spend of approximately $1.6 billion. On slide 11, we've provided our current expectations for capital spending through the year 2027, excluding any possible line extension spend associated with the DEED program. The slide divides our spending into three categories, line extensions, network evolution, and core CapEx spend.

Jessica Fisher: Turning to slide 10 capital expenditures totaled $2 $9 billion in the fourth quarter, just below last year's fourth quarter spend.

Jessica Fisher: Line extension spend totaled $978 million $50 million higher than last year, driven by our subsidized royal construction initiatives and increased residential and commercial greenfield and market sell and opportunity.

Jessica Fisher: Fourth quarter capital expenditures, excluding line extensions totaled $1 9 billion compared to 2 billion in the fourth quarter of 2022.

Jessica Fisher: Driven by lower spend on scalable infrastructure and lower spend on CPE data purchase timing.

Jessica Fisher: We offset by higher spend on upgrade rebuild primarily network evolution.

Jessica Fisher: For the full year 2023, we spent $11 1 billion.

Jessica Fisher: Looking ahead at full year 2024, we expect capital expenditures to total between 12, two and $12 $4 billion, including line extensions of approximately $4 $5 billion and network evolution spend of approximately $1 6 billion.

Jessica Fischer: As the slide shows, we expect CapEx spend of just over $12 billion in 2024 to fall to approximately $8 billion by 2027. Our line extension CAPEX includes spending for greenfield, market fill-in, and serviceability builds from our legacy footprint, driving continued expansion of residential and commercial broadband. In turn, our non-rural passing growth should continue to be robust and similar to 2023 growth, subject to the pace of overall housing growth. These passings are natural extensions or pocket fill-ins to our network and have a long track record of low cost per passing and reliable penetration trends to contribute to growth at an attractive ROI. We've not included the potential impact of BEAD in the passing figures on slide 12 or in our CAPEX outlook on slide 11, given the regulatory and bidding uncertainty associated with the program.

Jessica Fisher: On slide 11, we've provided our current expectations for capital spending through the year 2027, excluding any possible mine extension spend associated with the <unk> program.

Jessica Fisher: That's why I devised our spending into three categories line extensions network evolution and core Capex spend.

As the slide shows we expect Capex spend of just over $12 billion in 2024 to fall to approximately $8 billion by 2027.

Jessica Fisher: Our line extension Capex includes spending for Greenfield market, so in and serviceability belts from our legacy footprint driving continued expansion of residential and commercial passing.

Jessica Fisher: In turn our non rural path things growth should continue to be robust and similar to 2023 growth subject to the pace of overall housing growth.

Jessica Fisher: These past things are natural extensions of our pocket, so and try and network and have a long track record of low cost per passing and reliable penetration trends to contribute growth at attractive rois.

Jessica Fisher: We have not included the potential impact of beat in the passing figures on slide 12 or in our Capex outlook on slide 11, given the regulatory and bidding uncertainty associated with the program.

Jessica Fischer: We don't expect any potential bead builds subject to acceptable guidelines, as Chris mentioned, to begin until 2025, and similar to our peers and competitors, our success in bead will be an overlay to our capital expenditure outlook. Turning to network evolution, where our long-term capital expenditures outlook remains essentially unchanged, we continue to expect to spend approximately $100 per pass to evolve our network to offer multi-gigabit speeds. Finally, core capital expenditures, which excludes line extensions and network evolution, have remained consistent as a percentage of revenue since 2021. And following the completion of our network evolution initiative, capital expenditures excluding line extensions as a percentage of revenue should decline to below the 2022 level, which has important long-term cash flow implications. Turning to free cash flow on slide 14, free cash flow in the fourth quarter totaled $1.1 billion, a decrease of $75 million compared to last year. The decline was primarily driven by a less favorable change in accrued expenses related to capital expenditures, partly offset by an increase in net cash flows from operating activities and a decrease in capital expenditures.

Jessica Fisher: We don't expect any potential <unk> build subject to acceptable guidelines as Chris mentioned to begin until 2025.

Jessica Fisher: Similar to our peers and competitors are success in be it will be an overlay to our capital expenditure outlook.

Jessica Fisher: Turning to network evolution, where our long term capital expenditures outlook remains essentially unchanged. We continue to expect to spend approximately $100 per path and to evolve our network to offer multi gigabit speeds.

Jessica Fisher: Finally core capital expenditures, which excludes line extensions and network evolution has remained consistent as a percentage of revenues since 2021 and following the completion of our network evolution initiative capital expenditures, excluding line extensions as a percentage of revenue should decline to below 2022 level.

Jessica Fisher: Which has important long term cash flow implications.

Jessica Fisher: Turning to free cash flow on slide 14 free cash flow in the fourth quarter totaled $1 $1 billion, a decrease of $75 million compared to last year. The decline was primarily driven by a less favorable change in accrued expenses related to capital expenditures, partly offset by an increase in <unk>.

Jessica Fisher: Cash flows from operating activities and a decrease in capital expenditures.

Jessica Fischer: Just a brief comment on cash taxes for 2024 before turning to the balance sheet. We currently expect our calendar year 2024 cash tax payments under current legislation to land between $1.5 billion and $1.9 billion, depending on a number of factors. We finished the quarter with $97.6 billion in debt principal.

Just a brief comment on cash taxes for 2024 before turning to the balance sheet. We currently expect our calendar year 2020 for cash tax payments under current legislation to land between $1 5 billion and $1 $9 million, depending on a number of factors.

Jessica Fisher: We finished the quarter with $97 6 billion in debt principal in the first weeks of 2024, we redeemed all of our outstanding 2024 senior secured floating rate notes and paid in full all of our outstanding 2024 senior secured notes. So we no longer have any significant debt maturities due in 2024.

Jessica Fischer: In the first weeks of 2024, we redeemed all of our outstanding 2024 Senior Secured Floating Rate notes and paid in full all of our outstanding 2024 Senior Secured notes. As a result, we no longer have any significant debt maturities due in 2024. Our current run rate annualized cash interest is $5.2 billion. Given our long-dated and 86% fixed rate debt structure, our sensitivity to higher rates is relatively low. If we refinanced all of our debt due in the next three years at current rates, the impact on our run rate interest expense would be less than $90 million, or 2% of that run rate interest expense. As of the end of the fourth quarter, our ratio of net debt to last 12-month adjusted EBITDA was 4.42 times, and we intend to stay at or just below the high end of our 4 to 4.5 times target leverage range. During the quarter, we repurchased 3.2 million charter shares in Charter Holdings Common Unit for $1.3 billion at an average price of $419 per share.

Jessica Fisher: Sure.

Jessica Fisher: Our current run rate annualized cash interest is $5 $2 billion.

Jessica Fisher: Given our long dated and 86% fixed rate debt structure, our sensitivity to higher rates is relatively low if we refinance all of our debt due in the next three years at current rates the impact to our run rate interest expense would be less than $90 million or 2% of that run rate interest expense.

Jessica Fisher: As of the end of the fourth quarter, our ratio of net debt to last 12 month adjusted EBITDA was $4 four two times and we intend to stay at or just below the high end of our four to four five times target leverage range.

Jessica Fisher: During the quarter, we repurchased $3 2 million charter shares and charter holdings common units totaling $1 $3 billion at an average price of $419 per share.

Jessica Fischer: Before turning the call over to Q&A, I want to make a few comments regarding the Affordable Connectivity Program for Internet and Mobile Customers. While we still hope the ACP program will be allocated additional funding, we're well aware that the program could end this spring, and we're designing programs to assist those that are on the ACP program. There is no doubt that the end of the program would be disruptive for many.

Speaker Change: Before turning the call over to Q&A I want to make a few comments regarding the affordable connectivity program for Internet and mobile customers.

Speaker Change: While we still hope the ACP program will be allocated additional funding, we're well aware that the program could enter this spring and we're designing programs to assist those that are on the ACP program.

Speaker Change: There is no doubt that the end of the program would be disruptive from any nonetheless, we will have the full benefit of our high quality sales and retention for us as well as our mobile product, which saves customers hundreds of dollars to preserve connections.

Jessica Fischer: Nonetheless, we will have the full benefit of our high-quality sales and retention force, as well as our mobile product, which saves customers hundreds of dollars to preserve connections. With the continued temporary impact from fixed wireless and the potential end of ACP, we may continue to face short-term customer growth headwinds as we enter 2024. Despite those short-term challenges, we are competing well and are focused on driving healthy EBITDA growth in 2024. A component of that has been to reflect inflation in our pricing while preserving value for our customers.

Speaker Change: With the continued temporary impact from fixed wireless and the potential end of ACP. We may continue to face short term customer growth headwinds as we enter 2024.

Speaker Change: Despite these short term challenges, we are competing well and are focused on driving healthy EBITDA growth in 2024.

A component of that has been to reflect inflation and our pricing while preserving value to our customers.

Jessica Fischer: We're also actively managing expenses, and we believe we can do so without impacting our sales, service, and broader growth initiatives. But most importantly, we remain focused on the long term and a return to more normalized internet growth. We have what we believe are the best products at the best prices in our industry, and we remain underpenetrated relative to our long-term potential. Taking advantage of that opportunity is what will ultimately create the most shareholder value. Operator, we're now ready for Q&A. At this time, if you would like to ask a question, please press star 5 on your touchtone phone. You may remove yourself from the queue at any time by pressing star 5.

We're also actively managing expenses and we believe we can do so without impacting our sales service and broader growth initiatives.

But most importantly, we remain focused on the long term and a return to more normalized internet growth.

Speaker Change: We have what we believe are the best products at the best prices in our industry and we remain underpenetrated relative to our long term potential.

Speaker Change: Taking advantage of that opportunity is what will ultimately create the most shareholder value.

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

At this time, if you'd like to ask a question. Please press star five on your Touchtone phone.

You may remove yourself from the queue at any time by pressing star five.

Operator: Again, that is star five to ask a question. We'll pause for a moment to allow the questions to queue...

Speaker Change: Again that is star five to ask a question.

Speaker Change: We will pause for a moment to allow questions to queue.

Jonathan Chaplin: Thank you. Our first question will come from Jonathan Chaplin with New Street Research. Your line is now open. Thanks, guys. One for Chris and one for Jessica.

Speaker Change: Okay.

Speaker Change: Thank you. Our first question will come from Jonathan Chaplin with New Street Research. Your line is now open.

Speaker Change: Okay.

Jonathan Chaplin: Thanks, guys one for Chris.

One for Jessica for Chris I'm wondering if you can give us some context on whether there was a change in competitive dynamics in the fourth quarter as we look out.

Chris Winfrey: Chris, I'm wondering if you can give us some context on whether there was a change in competitive dynamics in the fourth quarter. As we look out across the fixed wireless guys and the fiber guys, it seemed, you know, pretty steady over the course of the last few quarters, the sort of competitive pressures that seemed to stabilize. And I'm wondering if there was just a bigger focus from fixed wireless or potentially fiber in your market specifically. And then, for Jessica, the cash tax guidance is great. If bonus depreciation is extended this year, how much would that cash tax go down by? Thank you.

Speaker Change: Across the fixed wireless guidance.

Jonathan Chaplin: And the fiber guys it seemed pretty steady over the course of the last few quarters sort of competitive pressures that seem to stabilize and I'm wondering if there was just a bigger focus on.

Jonathan Chaplin: From fixed wireless or potentially fiber in your market specifically.

Jonathan Chaplin: And then for Jessica the cash tax guidance as.

Jonathan Chaplin: Is great if bonus depreciation is expanded.

Jonathan Chaplin: We ended this year.

Jonathan Chaplin: How much of that cash tax.

Go down by thank you.

Chris Winfrey: So, you know, in terms of the competitive environment in the fourth quarter, as you mentioned, we saw some continued expansion of the fixed wireless footprint within the quarter. We also saw heavier competitive marketing and some aggressive promotions from both fixed wireless and from the overbuilders. As you know, Jonathan, slight impacts to gross ads and churn, particularly on the gross ads front, can drive what appear to be outsized changes to net ads, especially when net ads are slightly positive or slightly negative, really have an outsized impact.

Jonathan Chaplin: Good.

Jonathan Chaplin: So you know in terms of the competitive environment in the fourth quarter. As you mentioned, we saw some continued expansion of fixed wireless footprint within the quarter. We also saw a heavier competitive market and some aggressive promotions from both fixed where I was and from the overbuilt.

Jonathan Chaplin: As you know Jonathan slight impact to gross adds and churn in this case it was particularly on the gross adds front.

Jonathan Chaplin: Can drive what appear to be outsized changes to net adds especially with net adds were slightly positive or slightly negative really has an outsized impact.

Chris Winfrey: As you know, we're, of course, focused very much on the long term, but that doesn't mean that we're not focused on the short term either, particularly what was going on inside of the fourth quarter. And so, as I mentioned in the prepared remarks, we're really leaving no stone unturned on potential ways to improve go-to-market in the short term, particularly addressing gross ads in the existing footprint. We're doing all that, though, looking at all aspects, but trying to make sure that we do that in a controlled fashion and don't overreact either, given that it is small changes that are driving an outsized impact here. Yeah, and I'd add, you know, the environment wasn't consistent through the quarter. Early on, we had some carryover from the Disney dispute and the August raid event that we talked about in last quarter's call. We had expected November and December to recover to the levels that we had seen going into that event, and they didn't.

Jonathan Chaplin: As you know we are of course forced focused very much on the long term, but that doesn't mean that we're not focused on the short term either particularly what was going on inside of the fourth quarter. So as I mentioned in the prepared remarks, we're really leaving no stone unturned on potential ways to improve go to market in the short term, particularly addressing gross adds in the existing footprint.

Jonathan Chaplin: We're doing all of that though looking at all aspects, but trying to make sure that we do that in a controlled fashion that don't overreact, either given that it is small changes that are driving an outsized impact here.

Speaker Change: I I'd add on you know the environment wasn't consistent through the quarter early on we had some carryover from the Disney dispute in the August rate event that we talked about in last quarter's call.

Speaker Change: We had expected in November and December to recover to the levels that we had seen going into that event and they didn't but.

Chris Winfrey: But as we exited the quarter, we saw December slightly negative, and January net ads are consistent with what we saw in December. So that environment does continue. On the cash tax side, Jonathan, you know, it's not just bonus; it's also R&D and interest expense deductions that will impact us. But I would say the reforms that are being considered support the economics of our investments in connecting rural America and upgrading the network. And so we are fully in support of them.

Speaker Change: But as we exited the quarter, we saw December slightly negative in January and it adds are consistent with what we saw in December.

Speaker Change: So that environment does.

Speaker Change: Does it continue.

On the cash tax side, Jonathan you know.

It's not just bonus is also R&D and interest expense deductions that will impact us but.

Speaker Change: But I would say the reforms that are being considered support the economics of our investments in connecting Rural America and upgrading the network and so we are we are fully in support of them.

Jessica Fischer: I think it's a little premature to adjust our guidance. But given the investments that we're making, we do expect there to be a material benefit to cash tax if the legislation were to go through. Great, thanks guys. Thanks, Jonathan.

Speaker Change: It's a little premature to adjust our guidance, but given the investments that we're making we do expect there to be immaterial benefit to cash taxes.

Speaker Change: If the if the legislation were to go through.

Speaker Change: Great. Thanks, guys.

Luke: Thanks, Jonathan Luke will take our next question. Please.

Jonathan Chaplin: Luke, we'll take our next question, please. Our next question will come from the line of Craig Moffett with Moffett-Nathanson. Your line is now open. Hi, thank you.

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

Craig Eder Moffett: Hi, Thank you.

Craig Eder Moffett: A couple of questions. Jessica, thank you for the comments you made about ACP. I'm wondering if you can just try to quantify a little bit more for us the number of ACP subscribers that you have, and if you have insight into how many of those are new subscribers versus previously paying subscribers. And then I wonder if you could also just comment on T-Mobile indicating that they expect 100,000 to 150,000 fewer net ads per quarter in fixed wireless. How do you think about that flowing into your footprint, and does that inform the way you think about the broadband growth rate going forward? So maybe I start off with ACP and just take a step back, you know, and then Jessica can answer what you're requesting.

A couple of questions Jessica. Thank you for the comments you made about ACP I'm wondering if you could just try to quantify a little bit more for us the number of ACP subscribers that you have and if you have insight into how many of those are new subscribers versus previously we're paying subscribers.

And then I Wonder if you could also just comment about.

Craig Eder Moffett: T mobile indicated that they expect a 150 100 to 150000 fewer net adds per quarter.

Craig Eder Moffett: In fixed wireless how do you think about that flowing into your footprint and does that inform the way you think about.

Craig Eder Moffett: The broadband growth rate going forward.

Speaker Change: So maybe I start off with ACP and just take a step back.

Speaker Change: And then just can I can answer what you were requesting to ACP program I think as everybody knows it really has brought internet connectivity to customers, who would not have been able to have access to broadband otherwise, but more importantly, it's allowed customers, who would've been coming in and out of the broadband marketplace given affordability issues to remain.

Chris Winfrey: The ACP program, I think, as everybody knows, it really has brought internet connectivity to customers who would not have been able to have access to broadband otherwise. But more importantly, it's allowed customers who would have been, you know, coming in and out of the broadband marketplace given affordability issues to remain connected consistently. So we really think, as you know, it's been an effective program. We're proud to be the largest ACP provider in the country.

Speaker Change: Connected consistently so we really think as you know it's been an effective program. We're proud to be the largest ACP provider in the country. We still we're hopeful that the ACP can be refunded in order to keep households.

Chris Winfrey: We're still hopeful that the ACP can be refunded in order to keep households that are in the program today connected to the internet. But if it's not refunded, Craig, we're going to work very hard to keep customers connected. And we've been working on this possibility for some time. We have significant tools to save customers hundreds or even thousands of dollars, as Jessica mentioned.

Speaker Change: That are in the program today connected to the Internet, but if it's not refunded Craig we're going to work very hard to keep customers connected and we've been working on this possibility for some time, we have significant tools to save customers hundreds or even thousands of dollars as Jessica mentioned.

Jessica Fischer: And I'd highlight that, you know, keep in mind, most of our ACP customers were internet customers before the ACP program began. And in the meantime, you know, having said all that, it's actually pretty challenging for us to predict the impact that a potential end of the program is going to have on our customer disconnections. But we're going to report that consistently over time. Yeah, and so on the numbers side, Craig, we have a little over five million households that receive the ACP benefit, all for wireline internet. Very few of those customers used ACPA to upgrade to higher speeds or take more PSUs when they began receiving the benefits, but many do have our flagship speed or higher or take other services from us, and I guess. The funding will continue through April.

Speaker Change: I'd highlight that.

Speaker Change: Keep in mind, most of our ACP customers were internet customers before the ACP program again and.

Speaker Change: In the meantime, you know having said all that it's actually pretty challenging for us to predict the impact that a potential end of the program is going to have to our customer disconnects, but we're going to report that consistently over time.

Speaker Change: Yeah. It is.

Speaker Change: So on the numbers side, Craig we have a little over 5 million households that received the ACP benefit I'm all for wireline Internet.

Speaker Change: Very few of those customers used <unk> to upgrade to higher speeds or take more psus when they began receiving the benefit.

Speaker Change: But many do have our flagship speed or higher or do you take other services from us so.

Speaker Change:

And.

Speaker Change: I guess.

Speaker Change: The funding will continue through April.

Jessica Fischer: We'll try to keep people informed as we move through the process. But from our perspective, there's not a lot of visibility at this point. As to anything that might happen when the program ends. In the end, you know, we're still focused on trying to make sure that ACP is refunded, and I still think there's a strong possibility that could be the case. Yeah. Do you want to talk to the fixed wireless slower net ad guidance? Sure.

Speaker Change: Well, we'll try to keep people informed.

Speaker Change: As we move through the process.

Speaker Change: But from our perspective, there's not a lot of visibility at this point.

As to anything that might happen when when the program ends.

Speaker Change: We're still focused on trying to make sure that ACP is refunded and I still think there's a strong possibility that could be the case.

Speaker Change: Do you want to talk to the fixed wireless slower net add guidance sure.

Speaker Change: So we noted the same thing that you saw Craig.

Chris Winfrey: So we noted the same thing that you saw, Craig. I think the bigger point there is that there is a rational approach to the marketplace and the utilization of spectrum and, I believe, a recognition that there is a limited amount of capacity and that bandwidth needs are increasing. I think that was the bigger takeaway from us. It's very difficult for us to sit back and take a look at the geographic footprint of fixed wireless access because it almost changes by the day in terms of sector availability, radius in terms of capacity, and where they're actively marketing and where they're not. And then you have the additional... rural footprint versus urban and suburban, and what would be off footprint for us versus on footprint, and the split between residential and commercial, which makes it pretty difficult to mathematically cascade that into an impact for us. But I thought what was said was rational, and I thought it made a lot of sense.

Speaker Change: I think the bigger point there is that there is a rational approach to the marketplace and the utilization of spectrum.

I believe a recognition that there is a limited amount of capacity that bandwidth needs are increasing I think that was the bigger takeaway from us it's very difficult for us to sit back and take a look at the geographic footprint and fixed wireless access because it almost changes by the day in terms of sector availability on on radios in terms of capacity and where they're actively marketing it.

Speaker Change: Where they're not and then you have the additional.

Speaker Change: The rural footprint versus urban and suburban and what would be our footprint for us versus on footprint.

Speaker Change: And the split between residential and commercial which makes it pretty difficult thing to mathematically cascade that into an impact for us.

Speaker Change: But I thought it was I thought it was rational what we started and I thought it made a lot of sense.

Chris Winfrey: And I think it's consistent with what we've always thought. But frankly, the piece that's been more difficult is just the timing in terms of where that capacity has reached, and it's been a little bit harder to predict than we would like. But I took that the same way that you did, that it should have some positive impact on our existing footprint. Thanks, Craig. Yep. Luke, we'll take our next question, please. Our next question will come from the line of Benjamin Swinburne with Morgan Stanley. Your line is now open. Good morning.

Speaker Change: And I think it's consistent with what we've always thought.

Speaker Change: Frankly, the piece that's been more difficult is just the timing in terms of where that capacity is reached.

Speaker Change: It's been a little bit harder to predict than we would like but I took that as the same way that you did is that it should have some positive impact on our existing footprint.

Speaker Change: Thanks, Craig.

Yeah look we'll take our next question please.

Speaker Change: Next question will come from the line of Benjamin Swinburne with Morgan Stanley. Your line is now open.

Benjamin Daniel Swinburne: Good morning.

Benjamin Daniel Swinburne: Chris, I have a question for you on CapEx, and then I want to ask Jessica about sort of EBITDA growth. Chris, you've been around the cable industry for a long time, so I know you are aware that the kind of investment priorities can change over time. Curious why you felt it made sense to sort of guide out to 2027 just because you're in a competitive, dynamic industry and want to evolve your strategy over time. And I did seem like you guys have, and you can disagree, but it seems like you've prioritized the line extensions over getting network evolution done by 25. So I know we thought it might slip into 26, but now it's definitely slipping into 26.

Benjamin Daniel Swinburne: Chris a question for you on Capex, and then I wanted ask Jessica about sort of EBITDA growth.

Benjamin Daniel Swinburne: Chris you've been around the cable industry for a long time. So I know you are aware that kind of investment priorities can change over time and I'm. Just curious why you felt it made sense to sort of guide out to 2027.

Benjamin Daniel Swinburne: Just because you're in a competitive dynamic industry and want to evolve your strategy over time.

Benjamin Daniel Swinburne: And it did seem like you guys have.

Benjamin Daniel Swinburne: And you can disagree, but it seems like you've prioritized the line extensions over getting network evolution done by 25. So I know, we thought it might slip into 'twenty six but now it's definitely slipping into 2006 I just wanted to understand your thought process. There if that was.

Chris Winfrey: Just wanted to understand your thought process there, if that was equipment availability or just a strategic decision. And then, Jessica, there's an expectation that 24 is a good EBITDA growth year for Charter, given the investments you've made in OPEX. I think you cited 3.5% growth in Q4X advertising. Anything you can tell us to help us think about financial performance for the business in 24. Sure.

Benjamin Daniel Swinburne: The kind of equipment availability or just the strategic decision and.

Benjamin Daniel Swinburne: Jessica there's an expectation that 24 is a good EBITDA growth year for charter given the investments you've made in Opex. I think you cited three 5% growth in Q4 ex advertising anything you can tell us to help us think about financial performance for the business.

Speaker Change: And 'twenty four would be appreciated thanks, everyone.

Jessica Fischer: So Ben, I think, leading into the last earnings call, we had been listening to shareholder feedback about the difficulty people are having with projecting long-term CapEx trends given the significant capital investment opportunities that we have. And you're right. Typically, we would never provide a multi-year outlook, and about the only guidance that we've historically provided is in-year CAPEX guidance. But these are unique opportunities that don't come around very often.

Speaker Change: Sure.

Jessica Fisher: So Ben I think.

Jessica Fisher: Leading into the last earnings call.

Jessica Fisher: We had been listening to shareholder feedback about the.

Ben: The difficulty people were having of projecting long term capex trends given the significant capital investment opportunities that we have.

Speaker Change: And you're right typically we would never provide a multi year outlook.

About the only guidance that we've historically provided is in your Capex guidance for these are these are unique opportunities that don't come around very often the opportunity to have subsidizes rural build and the largest expansion of broadband and cable footprint really since the 19 eighties is unique in its generation all I think we felt that investors need.

Chris Winfrey: The opportunity to have subsidized rural build, and the largest expansion of broadband and cable footprint, really, since the 1980s, is unique, and it's generational. And I think we felt that investors needed to see, A, the size and magnitude of what we were already committed to, and B, to have a very articulated outline of the returns of those investments, which Jessica provided. We've been providing that, you know, all that information is essentially what we've provided over the past two years, but to do it in a single spot, so people could wrap their heads around both the quantum that exists, the investment returns that are attached to that investment, and that it doesn't go on into perpetuity, and that there is a real nice setup for what this is all about, which is free cashflow growth.

Speaker Change: Good to see the size and magnitude of what we were already committed to and be to have a very articulated outline of the returns of those investments, which jessica's provided we had been providing that all that information, especially will be provided over the past two years, but to do it in a single spot so people can.

Wrap their heads around both the quantum that exist.

Speaker Change: The investment returns that are attached to that investment and that it doesn't go on into perpetuity and there is a real nice set up for what this is all about which is free cash flow growth and so while we typically like to keep our cards close to our chest to preserve both flexibility and to maintain our competitive <unk>.

Chris Winfrey: And so while we typically like to keep our cards close to our chest to preserve both flexibility and to maintain our competitive posture, we felt there was a trade-off here to make sure that our shareholders were with us and that people understood the value of the returns on the investment that we're making. And so there's a balance here between, on the one hand, having the flexibility to always make the right decisions to generate long-term free cash flow and making sure that we're responsive to shareholder feedback along the way and that we can demonstrate long-term values so people take comfort with that. You know, in terms of the prioritization of line extensions over the DAA or DOCSIS IV upgrade, it wasn't so much about prioritization.

Speaker Change: Last year, we felt there was a tradeoff here to make sure that our shareholders with us as a people understood the value of.

Speaker Change: The returns of the investments that we're making and so there's a balance here between.

Speaker Change: One hand, having the flexibility to always make the right decisions to generate long term free cash flow and making sure that we're responsive to shareholder feedback along the way.

Speaker Change: We can demonstrate the long term value so people take comfort with that.

Speaker Change: Terms of the prioritization of line extensions over the.

Speaker Change: DAA or DOCSIS four upgrade it wasn't so much about prioritization. It was really about the certification of the DAA equipment, taking a little bit longer which is pushing out the timeline for the rollout and so the tradeoff. We had is could you do it.

Chris Winfrey: It was really about the certification of the DAA equipment taking a little bit longer, which was pushing out the timeline for the rollout. And so the tradeoff we had was whether you could do it at the 1.2 gigahertz high split upgrade under what we call an integrated CMTS environment and do more of that footprint to keep the original pace, or should we slow it down just a tad to make sure that we allowed for a catch-up of the DAA certification process so that you could move to high split with distributed access architecture as well as 1.8 gigahertz in the We chose the latter to make sure that we were having as much of the footprint with the full capabilities of DOCSIS IV over time.

Speaker Change: One two gigahertz high split off grid under what we call an integrated <unk> environment to do more of that footprint to keep the original pace, where should we slow it down just a tad to make sure that we allowed for a catch.

Speaker Change: Catch up of the DAA certification process. So that you can move to high split.

Speaker Change: With distributed access architecture as well as the one eight gigahertz and the rollout of DOCSIS four <unk>, we chose the latter to make sure that we were.

Speaker Change: Having as much of a footprint with the full capabilities of DOCSIS four over time.

You know, the caveat is if we get into, you know, a couple years from now, and we see opportunities to pull capital forward, we'll, of course, do that, but this is our best view of where we're going to spend capital. And we thought it was worthwhile to show that to make sure people understand that a higher level of capital expenditure doesn't go on into perpetuity. Yeah, on the EBITDA performance inside of 2024. I'll give, I'm not going to give Eva some guidance, but I think we can talk about a few things. You do have a political advertising year that is a tailwind. We fully repaid the investments that we made in the employee population, and from an expense outlook perspective, I think my expectation is that we'll be able to keep costs down.

Speaker Change: If.

The caveat is if we get into a couple of years from now received opportunities to put capital forward.

Speaker Change: Well of course do that but this is our best view of where we're going to spend capital.

Speaker Change: And we thought it was worthwhile to show that to make sure people understand that it doesn't the higher level of capital expenditure doesn't go on into perpetuity.

Thank you.

Speaker Change: On the EBITA performance inside of 2024.

<unk>.

Speaker Change: Hey, guys.

Speaker Change: And again I'm not going to give EBITDA guidance, but I think we can talk about that a few things.

Speaker Change: You do have a political advertising year on that.

It is a tailwind although we have a so we fully lapped the investments that we made in the employee population and from an expense outlook perspective.

Speaker Change: My expectation is that we'll be able to keep the cost to serve.