Company Name: Charter Communications Inc

Company Ticker: CHTR US Equity

Date: 2023-09-01

Webcast to Discuss Status of Distribution Agreement with

Disney

Company Participants
FINAL

Christopher Winfrey, President and Chief Executive Officer

Jessica Fischer, Chief Financial Officer
Rich DiGeronimo, President, Product and Technology
Stefan Anninger, Investor Relations

Other Participants
Benjamin Swinburne, Analyst
Craig Moffett, Analyst
Jonathan Chaplin, Analyst
Philip Cusick, Analyst
Unidentified Participant

Presentation
Operator
Bloomberg Transcript

Hello, and welcome to the Charter Communications Conference Call. We ask that you
please hold all questions until the completion of the formal remarks, at which time we'll
give instructions for the question-and-answer session. Also as a reminder, this conference
call is being recorded today. If you have any objections, please disconnect at this time.

I'll now turn over the call to Stefan Anninger.

Stefan Anninger {BIO 15867691 <GO>}

Thanks, operator and welcome everyone. 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 review carefully. Various remarks that we make on this call constitute
forward-looking statements which are subject to risks and uncertainties. Any forward-
looking statements reflect management's current view only and Charter undertakes no
obligation to update such statements.

On today's call, we have Chris Winfrey, our President and CEO; Rich DiGeronimo, our
President of Product and Technology; and Jessica Fischer, our CFO.

With that, I will turn the call over to Chris.

Page 1 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

Christopher Winfrey {BIO 16326284 <GO>}

Thanks, Stefan, and thank you all for joining the call. I recognize the timing isn't ideal for
many of you. Programmers choose exploration dates to drive the most leverage for them
by inconveniencing our collective customers. I'd like to start with the message for those of
you on this call who are also our video customers. I'm sorry that Disney is removed its
programming from your lineup and for the majority, who don't actively watch Disney
content, I'm sorry, Disney has made you pay for channels, you don't watch.
FINAL

We've almost always avoided these kinds of disputes and disruption to your service, but
we had to draw a line in the sand on your behalf. We haven't been able to stop
programmers from increasing the cost of their channels and your packages, but we think
that making sure you get value and flexibility in the programming you pay for well that's
worth fighting for. So thanks for your patience.

For our shareholders, analysts and other constituencies, let me say first how disappointed
we are to be in this position. We've generally been able to manage relationships with our
programming partners behind the scenes in respect to quality product that Disney
produces and its management team, but the video ecosystem is broken. Over the last five
years alone that linear video industry, including both traditional and Virtual MVPDs has lost
nearly 25 million customers, almost 25% of total industry customers. It's staggering. I'm
disappointed that Disney so far has insisted on higher prices, forcing customers to take
their products when they don't want them or can't afford them, and asking us to require
customers to pay for direct-to-consumer apps, their linear fees already pay for.

We know there's a better path. We also believe that Disney and Charter are uniquely
Bloomberg Transcript

capable to lead the way. So we are on the edge of a precipice we are either moving
forward with a new collaborative video model or we are moving on. This is not a typical
carriage dispute. It's significant for Charter and we think it's even more significant for
programmers and the broader video ecosystem. We've proposed a model to Disney, that
we believe creates better alignment for the industry and better products for customers, a
model that can both stabilize linear video and create a clear growth path for direct-to-
consumer video, it's a more customer-friendly and financially attractive end-state for
programmers.

Given how much of the expenses tied up in sports, Disney have to lead instead of
pursuing the same playbook, which drives a vicious cycle of video customer declines.
Ultimately Disney gave us a choice, to either carry on with the bad path for consumers or
to look to completely new video models for our customers. Because we've reached the
point of indifference under the current industry model we have a unique ability to stand
for a deal where Disney and Charter cooperate to create video products that are valuable
and relevant to consumers.

With this situation, it didn't come about overnight, and it isn't one programmer's fault.
Early on the video industry had the opportunity to embrace changes in the way
consumers access content through concepts like TV Everywhere. As an industry, we failed
to come together quickly to create that consumer-friendly product. Programmers then
made high-value content available for anyone to access on websites and soon thereafter

Page 2 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

through emerging streaming applications such as Hulu which was initially free. At the
same time programmers believe that their content libraries could create so-called
incremental streaming service revenues by selling this content to Netflix. And that content,
originally created for the multi-channel video universe was removed from those who paid
for it, and devalued in as far environments with no programmer branding on the content
they produced, no advertising and very little content security. All driving massive
cannibalization of traditional, multi-channel video products by SVOD providers, while
programmers are still pushed up linear pricing.
FINAL

Programmers also deployed their own a la carte direct-to-consumer streaming services,

which initially eliminated advertising revenue and had little security fostering password
sharing. The capital markets rewarded eyeballs, and as a result, programmers then pulled
the content back from third-party services like Netflix to hold exclusively for their own DTC
services. And they also continue to raise rates for the traditional products carried by
MVPDs to fund their DTC efforts. They enforce packaging and carriage restrictions, while
they sell their own direct-to-consumer products a la carte and require the carriage of little
watched channels through the practice of tying putting even more pressure on the
traditional multi-channel video universe.

And when capital markets turn their focus back to profitability programmers began raising
rates on ad-free versions of their DTC services enabled ad-supported versions of their
DTC products, again started to syndicate content back to SVODs, and only now after many
years of massive password sharing our programmers talking about reining in this
enormous problem. And ironically, they're now discussing the benefits of DTC bundling.
All the while programmers have asked linear video customers to fund their mistakes. So
that's the well-known story of how we got here without a coherent DTC strategy with
programmers constantly chasing the wins in the capital markets, and we believe the time
Bloomberg Transcript

for a more coherent strategy is now.

And Rich DiGeronimo, our President of Product and Technology will cover why we are
here and our solutions.

Rich DiGeronimo {BIO 18976238 <GO>}

As Chris mentioned, the multichannel video ecosystem has lost nearly 25% of customers
over the past five years, while Charter's video customer base has declined only by about
10% over the same time period. So why is Charter outperforming its peers? First and
foremost, we have not given up on video, like so many others, while the financial benefits
from video have deteriorated, we continue to believe that a compelling Charter branded
video product offering can be an important part of our portfolio of connectivity services.

We also believe there are strategic option value in serving a large audience of video
customers as the ecosystem evolves and potentially reconstitutes into a more consumer-
friendly model. Second reason we have lost fewer customers than others is we offer
flexibility in our pricing and packaging approach. Many Charter customers have opted for
lower-price content based upon their viewership needs and for affordability. However, this
flexibility is very much limited by programmer's carriage packaging requirements,
including how they tie content.

Page 3 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

And third, we have a high-quality video product. Whether you want every channel,
expanded basic or smaller packages on a traditional set-top box or on a retail streaming
device like Roku, Apple TV, Samsung TV, Xbox or XUMO we have it all. There aren't many
scaled distribution channels that can provide that breadth of content especially Live TV,
and that level of functionality. But the overarching problem with multichannel video is its
lack of affordability due to expensive programming and inability for distributors to offer
lower-priced packages to suit the needs of customers.
FINAL

We have a large group of customers subscribing to video packages that do not include
sports or other Disney content. Disney wants us to pay license fees for customers that do
not receive its services which leads to more price increases. We could not get comfortable
forcing that on customers. So, why Disney? And why Charter? And why now? For us, we
are at a crossroads, economic indifference really with our video product offering and
Disney is at a crossroads with its DTC apps in traditional linear TV strategy.

Over the past four years, Disney's cable portfolio has seen significant viewership declines,
across sports, general entertainment and most dramatically in children's programming
where Disney created a direct-to-consumer substitute for children's content Disney Plus.
These DTC substitutes for linear TV which MVPDs and their customers have essentially
funded have been used to create exclusive content on programmer direct-to-consumer
apps and we believe has driven the movement of viewership from linear TV. We believe
that if a programmer's linear content and our similar exclusive content is available and its
direct-to-consumer app then that app should be included with the associated linear
package.

Disney has acknowledged that the most sensible financial outcome for Disney content
Bloomberg Transcript

and specifically ESPN is a hybrid approach, whereby it is able to retain a sizable portion of
today's linear television revenue from the cable bundle including Charter's business, while
incrementally growing in the DTC streaming space.

We believe that Charter and Disney are ideal partners to establish a hybrid linear TV and
direct-to-consumer model. As Charter is a pure-play connectivity company. Charter has
the necessary scale and presence in key markets like New York and LA, and Disney has a
key asset in ESPN as it's widely seen as the linchpin for the evolution of the video
ecosystem. As the negotiation process for a new affiliation agreement with Disney started
earlier this year, Disney offered Charter, a traditional longer-term agreement with higher
license fees, high penetration minimum payments, even less packaging flexibility than we
have today, and even floated the idea of acquiring distribution and payment for their
direct-to-consumer apps to our linear video customers.

Disney's offer would have created a massive price increase for both customers who watch
Disney content and many who do not. There are often ignored the realities of today's
video business and would accelerate the decline of our video customers. So we offered
Disney something different. The opportunity to create a partnership that we believe could
transform the industry and help restore our mutual video business to grow. Our offer
included several components. We agreed to Disney's supposed market rate increases but
requested carriage flexibility relative to their asks. We also agreed to support ESPN going

Page 4 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

direct-to-consumer, so as long as Disney's ad-supported direct-to-consumer video

applications were made available to our package linear customers at no additional cost.

This was coupled with a commitment for Charter to market Disney direct-to-consumer
products to our broadband customers. This new distribution model could bring significant
benefits to Disney, Charter, our customers, and the overall industry. For Disney, we believe
it provides a glide path to manage its migration pace to a larger direct-to-consumer
business including the linchpin ESPN. It stems linear subscription and advertising revenue
FINAL

losses, preserves at risk linear TV cash flow and potentially the traditional TV ecosystem,
reduces DTC churn by pairing these direct-to-consumer apps with a linear subscription,
likely drives more upgrades within its DTC apps, increases DTC ad revenue and leverages
Charter's significant marketing and sales engine to distribute direct-to-consumer apps to
Charter's broadband-only customers.

Ultimately, it provides a more sustainable revenue stream for Disney, because it works
better for customers. For Charter, this new model renews our incentive to grow linear
video relationships with a much more compelling value proposition where all linear TV
and complementary direct-to-consumer apps are included.

It enhances our flexibility to provide customers with packaging choices which help attract
and retain price-sensitive linear customers and drive package upgrades in the future. It
also provides new incentives to sell direct-to-consumer subscriptions to our broadband-
only customers. For consumers, this model creates the compelling video product we all
want, while providing a strong value proposition for a high-quality product. We can create
a blueprint for programmers and distributors that also works for customers. We all win.
Bloomberg Transcript

Disney was unwilling to agree to the transformative partnership we offered. They rejected
proposals that we believe were good for customers and would have stabilized Disney's
linear business while allowing it to grow its DTC business. Disney simply reverted to the
tired playbook trying to squeeze every last dollar out of the linear customer with no
regard to the going concern of their video cash flow engine. And yesterday, Disney
removed its content from Charter's video customers. We are still hopeful that Charter can
reach an agreement with Disney, one that would benefit both companies and our
customers.

With that, I'll turn the call over to Jessica.

Jessica Fischer {BIO 22149274 <GO>}

Thanks, Rich. Well, Rich covered our offer to Disney. I'll briefly discuss where things
currently stand and potential customer and financial impacts to Charter in a prolonged
dispute. While we made some small steps in our affiliation agreement negotiation, Disney
continue to insist that we pay for Disney content on an even higher number of video
customers than we pay on today and which would require us to pay license fees for
customers not receiving any Disney content.

Disney also introduced other DTC bundle requirements that would have created
incremental cost for Charter and our customers further straining our ability to

Page 5 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

economically sell and retain video subscribers. Given the impasse in broader strategic
questions that Disney reported in the press, we offered a shorter extension of the current
contract with some incremental relief on penetration minimums that would allow us to
continue to provide flexible options to consumers.

Our offer was predicated on a dedicated effort by both parties to develop and
operationalize a transformational long-term plan. Disney declined. Our video business is
already challenged, renewing a traditional distribution deal beyond the short timeframe,
FINAL

particularly with the pricing and packaging required by Disney's current offers would
result in an even more rapid deterioration of our video business.

It could turn our video product from an asset to our connectivity business to a liability. We
believe the model we are proposing can create growth opportunities for both Charter and
Disney. Without Disney carriage, we need to pivot to other video models to drive value for
our connectivity relationships. As time passes in this dispute, a portion of Charter's
customers who watch significant Disney and ESPN content will drop their video service.
Our incentive to carry Disney will decrease and because of that the likelihood of a
permanent drop will increase. So we are at the edge of the precipice which Disney itself
forecasted. This is not a classic carriage dispute. We are hoping that our shareholders will
weigh in and support a better path forward for the video ecosystem.

The loss of Disney video content would have a wide range of potential impacts to Charter.
It's very difficult to predict impact to customers and financials with any certainty, but I will
walk through the key points to consider moving forward. Approximately 25% of our total
video customers are regularly engaged with Disney content, at about half of those
customers are highly engaged with Disney content. We are currently working with the
Bloomberg Transcript

most engaged of those viewers to find alternative video solutions while Disney content is
not available in our packages and if the loss becomes permanent, Charter will pivot to
alternative video solutions.

The impact to video and Internet net additions is difficult to predict, however, we
anticipate a portion of Disney video customers may cancel their video service as time
goes on, and while we expect the vast majority of those video customers to retain their
overall relationship with Charter, the current situation could impact some broadband
customers as well.

Going forward, we would expect video sales to decline if Disney content is permanently
removed from our packages. If we are moving on without Disney, we still have a powerful
distribution and service capabilities and we'll be happy to package programmers, DTC
services including through platforms XUMO, Apple TV or Roku, so long as it works for our
customers and our shareholders.

We anticipate some video-related revenue loss as a result of the dispute, given the
expected decline in video customers and any potential credits or rate adjustments to
video customers even if the outage is brief. In addition, we would expect reduced
advertising revenues related to the lost content. On the cost side, we expect significant

Page 6 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

reductions to programming expense given the license fees we paid to Disney, which we
expected to be over $2.2 billion for 2023, absent the current this year.

Offsetting some of that in the short term, we expect to incur higher cost to handle a large
number of customer calls. There's also the alternative path that we laid out. A
transformative deal with Disney could stabilize customer losses in our video business and
open the door to utilizing our full distribution capabilities to drive growth in DTC services
for our broadband-only customers as well, enhancing our cash flow from both video and
FINAL

broadband-only customers.

As Rich laid out, we think that is the best path, that path is the best one for Disney and the
broader ecosystem too. However, if we are unable to come to a deal and ultimately move
on from the traditional video business, the margin profile of our business should improve
and its capital needs should decline.

With that, I'll turn it back over to Chris for closing remarks.

Christopher Winfrey {BIO 16326284 <GO>}

Thanks, Jessica. We didn't take any of the decisions that got us here lately. We think the
opportunity for customers and all of us as market participants including shareholders is
too big, too important and too timely to pass up. I'm optimistic, we can find a path forward
with Disney. We have tremendous respect for their products, brand and management
team, but we need to move quickly forward together or move on. If we move on, as
Jessica mentioned, some of our video customers will go elsewhere, but for the majority of
our video customers who aren't actively engaged with Disney and ESPN product, we
believe that subscription revenue will be lost for Disney.
Bloomberg Transcript

And at that point, you have to wonder why we would ever pay ABC[ph] broadcast station
of retransmission fee again. With the most expensive piece of content and its time
requirements for moves[ph] that would create new flexibility interesting linear packaging
and pricing capabilities for non-sports customers, alternative video combinations through
a la carte, DTCs and potentially other partnerships, which can add value to our
connectivity bundles, based on viewer interest in budget.

And we will take a few questions now, but we will stay away from any more detailed
potential deal terms. Operator?

Questions And Answers

Operator
(Operator Instructions) Thank you. Our first question comes from Craig Moffett with
MoffettNathanson. You may please unmute your line.

Q - Craig Moffett {BIO 5987555 <GO>}

Page 7 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

Hi. Thank you. Two questions. First, can you describe Disney's response to the proposal
that you laid out for the alternative video model? Is it -- did they simply reject the concept
out of hand or did you get to the point of discussing the concept and were unable to
reach agreement on the terms of the proposal? And then, was there an intermediate
proposal of any kind like, decoupling sports and programming and moving to something
closer to a la carte here for sports that they rejected and that you proposed or was your
proposal simply the new video model that you discussed?

A - Christopher Winfrey
FINAL

{BIO 16326284 <GO>}

Yeah. Hey Craig, this is Chris. I'm going to try to balance being transparent where possible
without damaging the potential future discussions, we hope to have with Disney. And you
know, we've had ongoing discussions with Disney and they've been constructive for
months, and I think there is elements of what we are doing. In fact, a lot of what we are
doing that they would say is creative and thoughtful. And I don't think there is a debate
that the linear video business has issues. I don't think there is a debate that both parties
want to glide path to a direct-to-consumer space, that also makes sense in combination
with linear video.

But I think the issue comes down to uncertainty around short-term cash flows, it comes
down to precedent and it comes down to unwillingness to lean into the benefits that Rich
laid out. And so the natural tenancy, you know, and uncertainty is to model in all the
potential negatives and not to consider any of the positives and I think that's frankly the
issue that we had. Our proposals, I know overnight, there was some press outlets that
were asking, did we try to push for ESPN being put into our RSN model, which we
announced a few weeks ago or into some type of a la carte, that was not the case. I would
love that. I think that would be very constructive for consumers. But we knew that was a
stretch too far. We never put something like that on the table.
Bloomberg Transcript

We really are trying to enhance the value of the expanded basic product, what we call
Select Today, and give customers real value both today and in the future and really
unchanged -- programmers generally from -- that they had reservations about going DTC,
because that's where they want to go and the simple solution to that is to preserve the
linear video system, make sure that they get the full value of what they're already paying
for. And the temptation to force content down the customer's throats, even if they're not
watching it with high penetration minimums and inclusion in packages and then maybe
getting them to pay twice through DTCs, it appears to be tempting. And we just couldn't
do that. We couldn't do that to our customers and if that's the path that we are heading
down, we think relative to that scenario, there's plenty of other potential innovative paths
that we can go and we can move on.

A - Rich DiGeronimo {BIO 18976238 <GO>}

Great. And then one thing I would add is, and as Jessica mentioned, we did offer a shorter
term extension to the agreement with some flexibility improvements just given the nature
of the video ecosystem right now and that was rejected.

Q - Craig Moffett {BIO 5987555 <GO>}

Got it.

Page 8 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

A - Stefan Anninger {BIO 15867691 <GO>}

Thanks, Craig. We'll take our next question, please.

Operator
Our next question comes from Ben Swinburne with Morgan Stanley. Your line is now open.
FINAL

Q - Benjamin Swinburne {BIO 5489854 <GO>}

Thanks, good morning. Can you guys hear me, okay?

A - Christopher Winfrey {BIO 16326284 <GO>}

Hey, Ben. Yeah.

Q - Benjamin Swinburne {BIO 5489854 <GO>}

Great. Yeah, two questions. I guess, first on your business. Maybe for Jessica. Can you help
us think about the potential impact on broadband and wireless, a bit more? 25% of your
video customers, I'd imagine a lot of those are bundled, if not the vast majority. What are
you guys doing to sort of put and to play some tactics to try to ensure you don't lose
connectivity customers and any sort of help in thinking about the impact there or the next
couple of months assuming this or longer assuming this drags on?

A - Christopher Winfrey {BIO 16326284 <GO>}

Ben, I'll actually take that.
Bloomberg Transcript

Q - Benjamin Swinburne {BIO 5489854 <GO>}

Sure.

A - Christopher Winfrey {BIO 16326284 <GO>}

Look, the connectivity services that we provide are valuable, you're right. A lot of those
engaged viewers are also broadband customers. But this is different than what it was years
ago because there are so many different alternatives that are out there and available that
you can get on a flick of the wrist, that's available out there. That doesn't mean we want
that to happen. So as time goes on, we'll have a strategy developed to make sure that we
treat customers appropriately and fairly as it relates to credit. That's the first step.

The second step is, if that's not enough to keep them temporarily in place under the
current video product and we will help them downgrade the video product and we will
actually help them with alternative sources of video content, where they can go get the
channels that they're looking for. Plenty of it exists, and it exists in different forms in
different places and I think longer-term, if that's where we ended up, and that we ended
up moving on, I'd expect to have a pretty attractive commercial relationship for us to be
able to enable that type of migration, but I not really thought about this as a significant risk
to our broadband or connectivity solutions because of the quality of what we provide
together with the mobile and broadband standalone and bundled. But also because of

Page 9 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

the wide, wide availability of this content in different forms, which is new relative to just a
few years ago.

A - Jessica Fischer {BIO 22149274 <GO>}

Ben, one thing, I also add it. Ben, just we removed bundled discounts for our packages a
couple of years ago. So as a result, even if you do have customers who are pulling owing
video the impact that has on the pricing on broadband in our existence today is minimal.
FINAL

Q - Benjamin Swinburne {BIO 5489854 <GO>}

Okay. That's very helpful. Thank you. And I guess my second one is, I think your discussion
Chris, of how we got here is spot on, particularly around programmers kind of devaluing
their networks as they move to content to streaming, but I would actually push back a bit
on the ESPN point in that context. ESPN is pretty distinct from ESPN Plus. I think most of
the premium rights are on ESPN. So is this -- and just listening to your and Rich's
presentation specifically to Disney, it seems like the ESPN piece, which is where all the
bulk of the cost is for you and your customers, is really about packaging flexibility.

I know you sort of push back on the RSN comparison, but I just wonder if you could talk a
little bit more about that because it seems like that's if we sort of distill this down maybe
the heart of the issue, and then if I can just continue the line of thought on sort of the
devaluing point. It would seem like this is -- that there are other programmers, I won't
need to name them here who have -- which have engaged in that strategy even more
significantly than Disney. So does this -- is this a leading indicator of where Charter is
going to go in the future with those other programmer relationships?

A - Christopher Winfrey {BIO 16326284 <GO>}

Bloomberg Transcript

So on the last question, simply put, yes. And we always thought that Disney was in a
position to be in a leadership role for the entire industry precisely because of the reason
that you mentioned is that ESPN to date hasn't gone direct-to-consumer, but they've also
been very vocal that they're going to go there. And that it's just a matter of -- it's not a
question of if it's a question of when -- and when you're entering into a multi-year deal
and you have a very, very, very high priced piece of content to several channels that are
associated with it, that is forced to be put into consumers, the majority of which don't
actively engage with that content and they are forced to pay for it.

The idea that somebody has publicly said repeatedly that it is going to go direct-to-
consumer and you are signing up to that type of long-term deal. It also, that's-- untenable.
And in addition to that, it also drags along because of ESPN being ESPN it drags along a
bunch of channels that aren't watched, that are high-cost that are fully available and then
some alternative forms at a cheaper price. And our customers are again forced to pay
high prices for that content and whether they watch it or not.

And so when you put that whole package together, I agree with what you said that ESPN
hasn't gone there, but if you are entering into a multi-year deal and you knew what you
knew, and you have all the other economic impacts that I just described, it's no way you
can enter into a multi-year agreement that forces that time of cost on all of your customers

Page 10 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

knowing that in a la carte model is effectively coming and that would be probably better
served for almost all the customers if they wanted to go there over-time.

A - Rich DiGeronimo {BIO 18976238 <GO>}

I think it's important also just to reinforce the amount of overlapping content that exists on
the direct-to-consumer apps. If you look at Disney Plus and if you look at Hulu SVOD
compared to the Disney Channel in general entertainment, channels there -- it's a lot of
overlap. They've also (inaudible) content away from those linear TV channels into those
FINAL

direct-to-consumer apps which are very similar by nature.

Q - Benjamin Swinburne {BIO 5489854 <GO>}

Yeah. Thank you. It's all fair points.

A - Christopher Winfrey {BIO 16326284 <GO>}

Thanks, Ben.

A - Stefan Anninger {BIO 15867691 <GO>}

Thanks, Ben. Luke, we'll take our next question, please.

Operator
Our next question will come from Philip Cusick with JP Morgan. You may unmute your
line.
Bloomberg Transcript

Q - Philip Cusick {BIO 5507514 <GO>}

Hi, guys. Thank you. Two quick ones. Well, do you plan to -- I wasn't sure what you said,
Chris, where you immediately pass through the savings from the Disney affiliate fee
decline to customer bills, or do you plan to credit people as they call? And then second,
do you still find it a goal to add more broadband customers this year than last? Thank you
very much.

A - Christopher Winfrey {BIO 16326284 <GO>}

All right. So we just did -- Disney pulled its signals last night and we were disappointed
that we got there. We are still developing the plan to how to go about making sure that
we treat customers appropriately with credits over time, and so as we have more
information on that, we'll announce it, but just know that we are going to do what's not
only required but what's fair to our customers over time.

The second question is related to our goals. Our goal is still to have higher Internet net
adds this year relative to last year and that's at this point in time clearly, how this moves
about, how that changes over time could impact that. I don't think that will be the case,
but certainly, as we sit here today our goals of having higher Internet net gains versus last
year remains.

Page 11 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

Q - Philip Cusick {BIO 5507514 <GO>}

Thanks, Chris.

A - Christopher Winfrey {BIO 16326284 <GO>}

Thanks, Phil.
FINAL

A - Rich DiGeronimo {BIO 18976238 <GO>}

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

Operator
Our next question comes from Jonathan Chaplin with New Street Research. Your line is
now open.

Q - Jonathan Chaplin {BIO 4279061 <GO>}

Thanks. It's a remedial question for Jessica. Since I haven't sort of managed through one
of the throughout content dispute like this for you guys before. It's a way to think about it
that the -- you'll have a reduction in content costs of $2.2 billion, and a reduction in
revenues that's equal. The only net reduction in revenue would be what you lose in
advertising revenue, leaving aside whatever the impact is on subscriber trends, on
broadband subscriber trends.

A - Jessica Fischer {BIO 22149274 <GO>}

Bloomberg Transcript

So, see Jonathan I don't think so, and it's because the amount of revenue that you lose is
really based on how many customers actually cancel the service as well as any credit or
other price adjustment that you would give. So clearly, all of the programming expense
related to Disney comes out, but on the revenue side, you have you have both impacts to
your number of customers and impacts to what you're charging on a customer-by-
customer basis. You're quite right that advertising revenue also could be impacted,
though, I think that for the advertising that we sell on the Disney networks today, a fair
amount of that advertising revenue which just gets shifted to other advertising avails on
other networks, and wouldn't necessarily come totally out of the system.

And then the other place to think about it is in the other costs sort -- the other costs that
you incurred to support customers, right. So you might have some costs related to the
calls that you're taking in as part of the -- as part of the dispute itself. But overall, the
number of customers that you're supporting with cost-to-serve and the sales and
marketing expense related to selling content to new customers also would come down as
part of the way we sort of think about the overall impact of the video business.

A - Christopher Winfrey {BIO 16326284 <GO>}

Jonathan, if you take even a longer-term picture, today the overall packaging and pricing
of video is burdened by ESPN and all the other Disney content for customers that aren't
viewing it. And so I wouldn't confuse what we need to do in a short-term environment as it
relates to credits versus how a new video product would be packaged and priced in the

Page 12 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

future in an unburdened way, in a way that creates flexibility, lower prices, but maybe it
should be actually a more healthy margin business on the increment for those customers
where it's valuable, and then you add-in all these other ways that you can package around
it with DTC and other places.

I mean, you could have a smaller, but much more attractive business and allow customers
that have an interest in that heavier content to be able to go find it elsewhere. I think that's
a real viable path for us.
FINAL

Q - Jonathan Chaplin {BIO 4279061 <GO>}

One quick follow-up for you, Chris, just on sort of the strategy behind all of this. My sense
is in the old days when carriage disputes happened like this, it would be a stand-off for a
few weeks and then they would get resolved, but more recently, it seems like, when
content goes dark, it often, that's the end of the relationship, it doesn't come back. We've
never -- I've never seen this happen with Disney content though. Does that make it
different from the trend do you think? Do you think the sort of the most likely scenarios
that you are sort of moving on without Disney or does the fact it's Disney content, make it
something -- this is something that has to be resolved, it's just -- it will just take time.

A - Christopher Winfrey {BIO 16326284 <GO>}

So lot in that question.

Q - Jonathan Chaplin {BIO 4279061 <GO>}

Yeah.
Bloomberg Transcript

A - Christopher Winfrey {BIO 16326284 <GO>}

You know, of anything of scale in my entire time here at Charter, we've never gone dark.
We've never had signals pulled and certainly nothing at the size. So it's not something that
we came too lightly in terms of not agreeing to. We thought we are untenable proposals
from Disney. But our goal still remains to go get something that works for customers,
works for Disney, works for the broader programming community and works for us. But if
that's going to happen, it has to happen very quick, because I think, as Jessica mentioned
in some of her prepared remarks that the more time that goes on, we are going to help
those bundled video connectivity customers find a new home for their video product,
preserve the connectivity relationship and as that takes place, the likelihood that we are
going to be willing to foist those high-cost on average, and even lesser viewed population
of Disney content goes down.

And so our likelihood of being willing to do a deal decreases over time as those
downgrades to video occur and our likelihood of heading into a moving on scenario with
completely different video product structure that is described goes up significantly. So our
goal is to try to resolve this fast, but as more time goes on, I think that are used for the
other scenario.

Q - Jonathan Chaplin {BIO 4279061 <GO>}

Got it. Thanks guys. I appreciate it.

Page 13 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

A - Christopher Winfrey {BIO 16326284 <GO>}

Yeah.

A - Stefan Anninger {BIO 15867691 <GO>}

Thanks, Jonathan. We'll take our last question, please. Luke?
FINAL

Operator
Our last question will come from Vijay Jayant with Evercore ISI. Your line is now open.

Q - Unidentified Participant
Hey, good morning. This is (inaudible) on for Vijay. Thanks for taking the questions. Two if I
could. First, Chris, I know you said that you won't get into potential deal terms, but I have
to ask, what can you share? And what you envision would be the economics in this new
model where you would bundle Disney's ad-supported streaming apps into packaged
linear products, presumably, you're looking for some sort of revenue-share on both
advertising and subscription as well as low wholesale rates to offer these products to your
customers that. Any detail you can share would be much appreciated for us to understand
this new potential industry structure.

And second, can you talk a little bit more about what moving on from video fully entails?
This is mean potentially not inking a Disney deal without more transformational
component, or is it more about leaning on alternate video solutions like XUMO or maybe
passing on through more of these costs consumers than you have historically? I'm just
trying to better understand how far you're willing to go. Thank you.
Bloomberg Transcript

A - Christopher Winfrey {BIO 16326284 <GO>}

Yeah. On your second question, the answer is yes to both of those. If we would moving on
without Disney content permanently, and it would be looking to our existing distribution
platforms of Roku, Apple TV and then eventually XUMO to be able to create new
packages for general entertainment with more flexibility and did only for consumers to
add-on a la carte, direct-to-consumer packages as they see fit. Your first question, we are
not going to get into any specific deal economics, but I can answer what you asked pretty
simply which is for our existing expanded basic customers who pay for the broad package
of Disney and ESPN content that construct that they would receive the associated direct-
to-consumer apps for free inside of their package there would be no additional revenue-
share to us and there would be no additional cost to us or the consumer.

As it relates to what we've committed to market as part of the deal that we proposed to
our broadband customers, of course, you'd end up with a revenue share there, but we
would have a real commitment to grow market, and I think could be powerful to our
broadband-only customers individual or packages in a DTC content, which for us is an
alternative video model. And so when I talk about the glide path for Disney, which clears
the way for ESPN to go direct-to-consumer in a way that's friendly and it doesn't
completely cannibalize their larger linear video revenues that they have, it also works for
us, because it creates a glide path for us to create new marketing channels for new types

Page 14 of 15
 Company Name: Charter Communications Inc
Company Ticker: CHTR US Equity
Date: 2023-09-01

of video products and the reality is that you have customers who are living in both worlds
and this creates that type of environments where you have a really elegant glide path for
all the different parties.

And you have economic incentives that are aligned for the first time in a really long time
and that's what we've been missing. That's what this creates and it creates not only
alignment between the distributors and the programmers, but it creates a more valuable
product for consumers that actually makes quite a bit of sense in terms of how they use
FINAL

the products.

Q - Unidentified Participant
Understood. Thank you so much.

A - Christopher Winfrey {BIO 16326284 <GO>}

With that, we'll wrap it up. Again, I will start -- I'll finish where we started, which was we are
sorry for the short notice for the call. This wasn't something that we planned or expected.
We know the timing is not great. I sincerely apologize to anybody on the call who is a
video customer of Charter. We've never had this take place before and it wasn't our intent
and we are doing this as a way to try to ultimately help customers long term. So, thank you
very much.

A - Stefan Anninger {BIO 15867691 <GO>}

Thanks, everyone. Luke, that concludes our call.
Bloomberg Transcript

This transcript may not be 100 percent accurate and may contain misspellings and other
inaccuracies. This transcript is provided "as is", without express or implied warranties of
any kind. Bloomberg retains all rights to this transcript and provides it solely for your
personal, non-commercial use. Bloomberg, its suppliers and third-party agents shall have
no liability for errors in this transcript or for lost profits, losses, or direct, indirect,
incidental, consequential, special or punitive damages in connection with the furnishing,
performance or use of such transcript. Neither the information nor any opinion expressed
in this transcript constitutes a solicitation of the purchase or sale of securities or
commodities. Any opinion expressed in the transcript does not necessarily reflect the
views of Bloomberg LP. © COPYRIGHT 2023, BLOOMBERG LP. All rights reserved. Any
reproduction, redistribution or retransmission is expressly prohibited.

Page 15 of 15