Ladies and gentlemen, thank you for standing by and welcome to Charter's First Quarter 2020 Investor Call. At this time, all participants are in a listen-only mode. And after the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I'd now like to hand the conference over to your speaker today, Stefan Anninger. Please go ahead.

Good morning and welcome to Charter's first quarter 2020 Investor Call. The presentation that accompanies this call can be found on our website, ir.charter.com under the Financial Information section. Before we proceed, I would like to remind you that there are a number of risk factors and other cautionary statements contained in our SEC filings, including our most recent 10-K and also our 10-Q filed this morning. We will not review those risk factors and other cautionary statements on this call. However, we encourage you to read them carefully. Various remarks that we make on this call concerning expectations, predictions, plans and prospects constitute forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from historical or anticipated results. Any forward-looking statements reflect management's current view only and Charter undertakes no obligation to revise or update such statements or to make additional forward-looking statements in the future. During the course of today's call, we will be referring to non-GAAP measures, as defined and reconciled in our earnings materials. These non-GAAP measures, as defined by Charter may not be comparable to measures with similar titles used by other companies. Please also note that all growth rates noted on this call and in the presentation are calculated on a year-over-year basis, unless otherwise specified. On today's call we have Tom Rutledge, Chairman and CEO, and Chris Winfrey, our CFO. With that let's turn the call over to Tom.

Thank you, Stefan. First, on behalf of all of us at Charter, let me express our concerns for those who have been impacted by the COVID-19 crisis in our local communities we serve, as we endure together an extremely serious health, social and economic crisis. The hard work and dedication of Charter’s 95,000 employees has been remarkable. We're all proud of how we're serving our customers at this time. Charter's employees are in trucks, in the field, call centers, dispatch network operation centers, their homes, and retail stores, where we provide customer equipment and numerous support functions that enable our company to service our customers. We remain focused on our customers and communities and we've been able to deliver our connectivity services without interruption to our customers across the country. We know our role as a provider of communication services and the importance of keeping connectivity services fully functioning for both new and existing households and businesses, which enable social distancing, including remote working, distance learning, telehealth services and family communications. In mid-March as part of our effort to keep America connected during this crisis, we pledged to do a number of things. We committed to offer Spectrum Internet for free for 60 days to households with students or educators, who do not already have a Spectrum Internet subscription. We recently announced that we are extending the availability of this offering through June 30. As of March 31, we added approximately 120,000 customers connected under this offer, with many more installed in April. By the end of the school year, we expect that this offer will have helped approximately 400,000 students and teachers, and their families continue schooling through remote learning. For 60 days, we also committed to suspend collection activities, not terminate service for residential or small or medium…

Thanks, Tom. Our first quarter results were strong and reflect where we were heading as a company before the COVID-19 crisis started here in the U.S. Our residential customer relationship net additions increased versus the prior year in each month of the first quarter, and we were driving increasingly efficient operations given our customer friendly operating strategy and growing our free cash flow quickly. Residential revenue grew by 4.2% in the quarter, primarily driven by accelerating relationship growth in similar PSU bundled and video mix trends we've been seeing over several quarters. SMB revenue grew by 5.4%. Enterprise revenue declined by 3.2% year-over-year, driven by the sale of Navisite and by continued pressure from the wholesale side of the business. Excluding both cell tower backhaul and Navisite, enterprise grew by 6.9%. First quarter advertising revenue grew by 5.7% driven by political. In the month of March, non-political advertising revenue declined by 18.7% year-over-year, primarily due to COVID-19 related softness, including the abrupt postponement of sporting events. Mobile revenue totaled $258 million with $131 million of that being device revenue. In total consolidated first quarter revenue was up 4.8% year-over-year. Moving to operating expenses in the first quarter; total operating expenses grew by $191 million or 2.7% year-over-year. Cable operating expenses excluding mobile grew by 1.1% year-over-year or 1.7%, excluding Navisite, that's despite faster relationship and revenue growth. Programming increased 0.9% year-over-year, reflecting the same rate, volume and mix considerations that we've seen and talked about in prior quarters and we also had over $20 million of non-recurring programming benefits this quarter. Regulatory connectivity and produced content expenses decreased by 1.7% year-over-year, driven by lower regulatory fees and a $20 million benefit from the timing of sports rights payments. Cost of service customers increased by 1.4% year-over-year, compared to 4.5% customer…

[Operator Instructions]. And our first question comes from the line of Craig Moffett with MoffettNathanson. Go ahead please. Your line is open.

Hi, thank you. I wanted to sort of take a bigger picture question for a moment, just given the strength of your results and the enviable position that you find yourself in of having a business that is relatively resilient in this kind of a market, what are the things that you can do, that sort of take advantage of the dislocation, whether it's more edge-outs, potentially acquisitions, a faster move in acquiring spectrum and trying to take some share in wireless, how do you think about using this dislocation as a way to make your business stronger, when we come out the other side of this disruption?

Craig, obviously we think about that every day and we have some cash on hand to be opportunistic, if there is an opportunity that would require investment. But, the biggest opportunity we see, is to continue doing what we're doing and just doing it better and well and being able to execute better and well and continue to succeed in the marketplace. Our biggest opportunity as a company is to continue to create customer relationships, and we think that we have a great set of assets that we've put together and invested in properly and therefore, we have advantages in terms of the products that we can sell relative to others at the moment, and we have a high quality, high skilled workforce that's capable of generating and operating activity, and that's our biggest direct upside, and we think we could continue to operate well and execute well going forward and to the extent that we're better at that than others, we create more value, more quickly.

Thank you, that's helpful. If I could just ask another, maybe slightly more prosaic question just given all the attention being paid to sports right now, can you just talk about the way you'd like to see the issue of sports payments to RSNs and national sports networks work out and the pressure to rebate to customers and that sort of thing?

Yes. Well look, I mean we've talked for years about the reality of programming costs and how sports drives the bulk of the programming cost. If you look at our average cost of programming per customer in the high $60 range on average, that's the wholesale cost that we're planning for customer. My guess is that, if sports was not involved in the negotiations for the creation of that cost, that it would be less than half of what it is. So sports is the major driver in the cost of content, and obviously it makes the whole product difficult to sell because of the cost that consumers have to pay and the effect of -- I mean just simply, it's a very expensive product and people have a hard time paying for it. The reality is that, we would love to pass through the sports programming costs back to the customer, if it isn't paid or the events don't occur. There is still a big question about whether the games are going to be playing, and if they are played, most likely, the costs will not be rebated to the customers. So, I don't -- at this point in time, we have a structure in the industry in how we pay for content. It's all bundled together and tied together contractually and we have very little control over directly. So we'd love to see our customers relieved if they can be. Ultimately, it's the athletes who are getting the money and at some point, somebody has to give up their money and give it back to the customer and that hasn't happened yet.

Thanks, Tom.

Thanks, Craig. James, we will take our next question, please?

Our next question comes from the line of Vijay Jayant with Evercore. Go ahead please. Your line is open.

Thanks. Tom, given that you obviously have exposure across the country, can you just talk about how the markets are different for areas like New York and California, where lockdown started early and compared to the other markets, are you sort of seeing any sort of green shoots, as some of these states start opening up and any sort of change in direction of business? And then just a simple question on the network, obviously, it's highly resilient right now, but I'm assuming that from the work-from-home orders right now that data transfer is becoming more symmetrical and your upstream on your network is not conducive for that kind of thing, I think. Can you sort of help us think about, is there any stress on the network from that side and what needs to be done, if any? Thanks.

Well in terms of variation by various parts of the country, obviously there are reopenings occurring and we're preparing to operate differently in different parts of the country, depending on what the local regulatory climate is with regard to what's allowed from a business practice perspective. As an essential business, we've been operating the whole time, and obviously we have to keep our business running. So we've been running it under the tightest conditions that exist in terms of what we can do and how we have to take care of our employees and how we have to take care of our customers. So as we begin to see places opening up, we are preparing to respond to the local markets individually and to project our capability locally. I can't tell you that I can see at this moment any differences from one location to another, in terms of -- New York City's a unique place, but it's unique in every way, always is, but broadly speaking, we've been locked down everywhere until now and...

We are growing market share everywhere.

We are growing consistently everywhere. Now in terms of the future of the network and the load on it, we've been able to handle the very quick change in demand and one interesting thing about -- the demand has gone up a lot in terms of network utilization, but it's also spread out. You build your network to maximum peak utilization and not total utilization. So it's the Mother's Day call effect from a network build perspective. You build for the one day a year, when you need every bit of your network. And the network has been built and it's absorbed what we think of, as a year's worth of augmentation in a few weeks. But the general trend that we now see in a few weeks, has been going on for quite a long time, and we expect it to continue. And so we have a pathway in terms of our assets to developing what we think the future communications is, including an upstream capability, as upstream utilization continues to grow. So that's what we call 10G, it's also called DOCSIS 4.0, in terms of the way we describe it from a specifications perspective. But we are still rapidly moving down the path of augmenting our networks in smart ways and capital efficient ways to continue to allow capacity to grow and to create new products that are hard to even envision, and we think that we're very well positioned to do that over the long term, it's going to require continued investment, but a proportional investment that's significantly less than any sort of brand-new build. So we think we're in a great position to make those investments and to realize the benefits of them, and to create the new products that are going to come from the. But we don't have an immediate upstream problem and we don't have a downstream problem, we have opportunities in both places in the long run.

Thanks so much.

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

Our next question comes from the line of Mike McCormack from Guggenheim Partners. Go ahead please. Your line is open.

Hey guys, thanks. Tom, maybe just a quick question on Spectrum. I know you mentioned the FCC's move recently. Does that change your appetite in any way for the CBRS spectrum auction later this year? And then thinking about sports rights, I know you touched on it briefly, but what are your thoughts, just more generally, on the value of sports rights coming out of all this? Thanks.

Well, in terms of the -- good -- I understand your question, are you saying that the FCC's 6 gigahertz WiFi Spectrum affect our valuation of CBRS? The answer is no. They're really separate notions. I look at the 6 gigahertz spectrum as inside-house type spectrum; so all of our products are delivered wirelessly. So the real issue is mobility versus stationary or sedentary behavior, and the 6 gigahertz spectrum is really for in-house, high capacity use for a whole new set of products that will come along. The CBRS spectrum really allows for a more efficient use of the mobile platform, at least the way we look at it. Although it could be used indoors as well and it could be used indoors, both for mobile service and enterprise environments and externally and so we see them as separate notions and separate values and it hasn't affected -- one hasn't affected the other, in our view. Regarding sports rights, everybody misses sports and it really -- it obviously is an extremely valuable product and it is the glue that holds the bundle together, and you know, assuming that sports come back and that leagues generally play, the secular trends that are going on shouldn't change, in my view, the same forces will exist going forward that existed before the crisis. So absent a complete collapse of the sports business, I don't see a major change.

Thanks, Mike. We will take our next question, James, please.

Our next question comes from the line of Michael Rollins with Citi. Go ahead please. Your line is open.

Thanks and good morning. I was curious if you could frame some of the scenarios that you were running for your SMB customers and trying to think through the exposure and how you frame the bad debt reserves in the quarter? Thanks.

Sure.

Yes, go ahead.

Mike, on the SMB; I mean, I'd just put it a little bit in perspective, it's 8.5% of our revenue and so you can get to some pretty wicked scenarios and it's still doesn't have that material of an impact to the company. Certainly, when you're talking about liquidity our balance sheet perspective. It has an impact on the revenue growth rate for the entire company and so I think, given some of the stats that I was providing inside the prepared remarks, the idea was that people can take your own view of how bad, in particular, that segment of bars, restaurants and theaters could be hit and for how long and that will give you some sensitivity of what the trough looks like. We are not anymore than anybody else in terms of the depth and duration of the recession, but that's why we wanted to give some of those starts to give a framework for you think about it. The second question was -- first one was SMB, the second was?

How you are seeing the bad debt.

Well, every company has had to modify to new GAAP standard, which requires you to estimate your bad debt reserves for the receivables that you have at a period of time, as opposed to when they age. And so you've heard everybody talk about that this quarter. We're no different. We had in total between cable mobile, about $30 million of additional bad debt as an estimate for what might not be payable on the accounts receivables that existed at the time of close. In Q2, let me start maybe back with the first objective. Our goal through all of this, is A, to do well by the customer, by providing good offers for remote education, as well as for in this case, keep America connected pledge. But our goal is also not going to be to quickly get into a collection environment and cut them off. Our goal is going to be to keep these customers. And in the second quarter, to the extent that we work with the customer to right-size their receivable, some of that could impact the revenue recognition inside of Q2, and some of that for a financed a portion that they may need to pay back over time, could impact our estimate for bad debt reserve. That will apply for residential and SMB. And so, when I mentioned in the prepared remarks that we're going to have a lot of technical accounting and reporting issues to deal with in Q2, it's true, but we're going to be focused on not the accounting outcome or how Q2 is going to look, we're going to be focused on what's the right long-term outcome for the customers, and for the company and make sure that the accounting does what's appropriate on the back end. But I think will be a little bit of noise and we'll make sure that we disclosed any revenue impacts in any bad debt impacts in our Q2 reporting.

So, that's kind of an accounting explanation. The way I look at bad debt is have you created customers and that you keep them and do they pay you? And if you create customers and they pay you, that's good and if you don't get a lot of bad debt. And, when I look at the customers that we're creating, we have -- they're taking our high quality products in the residential space and they, from a profile perspective, they look like the customers that we've always created, and so they're going to be affected by the macro climate, obviously, but we have products that we can sell to those customers that have value regardless of what -- where they fall in the income range, we sell to very poor people and we sell to very rich people and we have a product mix that can work across the entire marketplace. So, I'm confident that we can create valuable customer relationships through time. Even in the small business arena, we're still creating customers today, and even in -- if you think about the restaurant business which is closed, the vast majority of those customer relationships are still intact. They still want websites and they may have taken out businesses or whatever, but even if the business is closed, doesn't mean that they don't want to have a relationship with us.

Thank you.

Thanks, Mike. James, we will take our next question.

And our next question comes from the line of Peter Supino with Bernstein. Go ahead please. Your line is open.

Hey, thank you. When you all analyze the improvements in churn, what are the drivers of that other than the all-digital upgrade that we've talked about at length and the in-sourcing of customer service? I wonder if your performance in the Legacy Charter territories continues to provide any helpful data to answer this question?

What's good for churn? Look churn was before the impact of COVID, our churn was coming down steadily and we've all -- everything we've done post-COVID has been consistent with the strategies that we had before, in terms of having high quality service, high quality products, high quality workers, in-sourced in the United States, who are trained and capable of providing excellent service. If you do that, you have less activity, and the ultimate value proposition that drives the cost to serve is activity. I mean, if you can -- if your service is better and your products have longer lives, inherently, you have less activity per dollar of revenue generated, which means that you have a higher margin or lower cost to serve. And churn is one of the measurement of customer satisfaction. It's also a measure of mobility in the economy and other things of that nature, but all of those things being held constant, if your churn rate is going down, it means your customer satisfaction is going up, because your products are better and that's been our objective in terms of managing the company and still is. So the legacy Charter platform, churn was coming down and legacy Time Warner platform and legacy Bright House platform, churn was coming down across all of those businesses, and cost to serve was coming down too because of the self-installation models and all digital models in terms of digital type flows that we created, allow for ease from a consumer perspective of dealing with us and less friction than the actual transaction, because a point is necessary to keep for that process to occur, and all of that creates less activity and higher satisfaction, which is a very virtuous cycle in the sense that, if you have less activity and you have less failure in your activities, meaning you have less service calls, you will have less missed appointments, you actually create more satisfaction, which extends subscriber life even longer, which by itself, reduces activity. So that was the path we were on and it's still, I believe in the path we're on. It's a little bit confused by the volume that we're currently under. We've had an enormous uptick in activity in the last two months due to sales. And interestingly, we've created in the last 60 days, 10,000 new broadband customers a day, so 600,000 customers in 60 days. That's a lot of work and we've done that pretty seamlessly.

Thank you.

Thanks, Peter. Operator, we'll take our next question, please.

Our next question comes from the line of Jonathan Chaplin with New Street Research. Go ahead please. Your line is open.

Thanks. Two quick ones, if I may. Tom for you, you mentioned that the importance of the sort of the secular trends in sports haven't changed. I'm wondering if you can touch on some of the secular trends in the business that you think have changed, how the business is going to look different when we come out of the current environment? And then, Chris, I think you said that non-programming costs were down year-over-year when you exclude the COVID impact from wages and bad debt, is that a trend that you would have expected to continue throughout the year, but for the impact of the pandemic? And then, should we annualize that $30 million and $25 million of COVID related impact or does it sort of flow differently as we go through the year? Thank you.

So Jonathan, on secular change. I would say it this way, I don't know that they're permanently changed, but they are permanently advanced. Meaning, we took years of secular change and compressed it into a very short period of time, and we're not going to go back to the original trend line. We may have just moved way up the trend line. And I think network utilization is one of those, and I think customer self-serve is the other and the cost to serve, as a result of that. We were already fairly down -- far down the road in the customer self-service model, and we were fortunate when we got hit with what we did, and with the marketing tactics that we employed, that we were able to actually deal with it, because we had started the quarter in the 55% range, I think of self-installation and we were about at 70%, when everything changed, and we're over 90% now of self-installation. So the fact that we were already at 70%, allowed us to get to 90% with a fair degree of operational efficiency. And so we were prepared fortunately at that moment. But I think that's a big change in the business going forward and I think people using Zoom and other kinds of two-way communications in a work like environment in their homes is probably advanced by a number of years for the long term.

And Jonathan, you -- go ahead.

I was going to say, just a follow-up on that and this is probably directed at you Chris, going from 55% to 90%, what does that do for margins in a year or maybe two years when we get out of this environment? How much are margins structurally higher because of that?

Yes, I don't want to get into a percentage margin discussion. But the cost of a self-installation is about a third of the cost of a professional install and the benefit of that ensures to both OpEx and CapEx, depending on what type of installation it is. So it's significant. But keep in mind that we were already at 55%, we would have been at 70% by the end of the quarter, absent the acceleration. Your second question was on non-programming expense. There is marketing, there is advertising expense, there's enterprise expenses in this, so I prefer to think about cost to service customers, which is really the residential and SMB cost to provide network operations, field operations and customer service operations to call centers and billing. Just the bulk of our costs. That cost, as I mentioned in the prepared remarks, absent leaving side just bad debt was down year-over-year in gross dollars, and it was down as a per relationship basis. And I know I've cautioned in the past that what we're committed to is, that per relationship to cost to serve is going to continue to decline, and I've been hesitant to say that the dollar cost to serve, excluding bad that would also decline on a gross basis. Clearly, it would've inside of Q1 year-over-year and given that we do expect -- once we get beyond April, April has been a high activity month. We think that transaction -- sales transactions and move churn and all of the different service transactions will start to slow down. And so that could actually accelerate excluding bad debt, the cost to serve declines year-over-year, certainly on a per relationship basis. So, I think the trends there are good and they continue -- there is an increase in the amount of our labor expense, because we accelerated the path that Tom was already putting the company on, to a $20 minimum wage and that was $30 million in the quarter for really a month and a half of expense. So yes, that will get annualized at the appropriate rate. But I think that's a small dollar amount relative to the amount of transactions that come out of the business and I think our operating strategy fully funds that, and the acceleration of the adoption of self-service and self-install are very helpful and making that viable for not just our employees, but for all stakeholders.

Great. Thanks, Chris.

Thanks, Jonathan. Operator, we'll take our next question, please.

Our next question comes from the line of Ben Swinburne with Morgan Stanley. Go ahead please. Your line is open.

Thanks, good morning. I just want to ask you both about two comments you made in the prepared remarks. Tom, you've been in the business for a long time and you've been through lots of cycles and I don't think I'm breaking news to say that the cable company historically has not had the best customer reputation and even reputation with sort of regulators and politicians. And you mentioned sort of the reputational benefits that the company is seeing, I'm just wondering if you have sort of conviction in that being sustainable or any real data behind that, because obviously that has not been the lens with which cable operators historically have been looked at? And then, Chris, you were talking about capital allocation and the buyback. You mentioned organic or inorganic opportunities. Just wondering, if you could just take a minute to remind us of kind of your M&A framework and sort of the kinds of things you guys historically have talked about either being interested in or not interested just so we can flesh out that comment a little bit more. If you're willing? Thanks.

Well, Ben, I -- and I've always loved the cable industry and what it does. And I've always thought that it has done great things consistently. As you think about the upsides of our reputation, we transform telecommunications and if you think -- I remember just 15 years ago, 20 years ago the average wireline phone bill was $75 in the New York area, today it's $9.99. And if you look at what the cost of broadband was, particularly on a per-gigabit basis, think about dial-up, AOL dial-up in the year 2001, when they acquired Time Warner, was $20 bucks a month, then you got 56K. The cost of broadband has gone way down and the telecommunications outputs of the investments that the cable industry has made have been tremendous in terms of the benefits that it's created for consumers. Nobody likes paying their cable bill and nobody likes paying for programming costs, and that's always been a difficult aspect of our business, since we've had competition in video, since the rise of satellite and the cable industry had to divest itself of programming essentially, because of the vertical integration rules. The programming cost have increased massively, because programming is a copyright, which is a legal monopoly and they've had pricing power over a competitive video business and consumers don't like that and -- but now you have the rise of a-la-carte direct-to-consumer programming in Netflix and Warner Home Media and Disney and so forth, and so a lot of our customers have the video they want to buy at prices they want to pay and so I think it's -- the biggest driver of negativity in the cable business I think has been the price of video, and to some extent that's breaking up. So I'm relatively optimistic about our status and I think that when you really look at it objectively, we have done great things and I think that the facilities based competition model that we have in the country has done a really great job of producing really high quality communication services consumers.

Then on the M&A framework, on the inorganic side, I think the prospect is probably more actionable on the organic side, some of the things that Tom has also talked about in the past, but on the inorganic side would be M&A. Nothing has changed with the way that we think about opportunities we -- as Tom just mentioned, we love cable. At the right price we would do cable all day long and that means tack-ons, which means do frequently as we can, as well as bigger acquisitions. That hasn't been the case today. They are mostly family, controlled or family owned and so that will be not in our hands, that will be in the hands of others who decide that. We have looked all around to see if there's anything on the content side, we haven't found anything that really matches up well with our assets and capabilities. Other than some of the local news that we've expanded to organically and that makes a lot of sense for us, and particularly in this environment, it has been a big asset. We've thought a lot about wireless. I think in the assets that we have, the ability to deploy small cells, the attractive MVNO that we have, we haven't found a scenario that made a whole lot of sense for us or for the industry. There are cases that we can take a look at to accelerate growth, whether that's in enterprise or whether that's in wireless technology, where we've made some minority and some joint investments with Comcast. Same would apply to advertising, but none of those are going to be particularly material. They will be great for those segments of business and the ability to accelerate growth hopefully, but it's not going to be something that really materially shows up on the balance sheet and impacts our liquidity. All of which leads you back to and I think unless Tom has got something got something else he'd add, leads you back to -- we think the organic opportunities and if you can't buy somebody else's cable stock, buying more of your stock at some point in the future is probably between organic and that is where we have ended up in the meantime.

Thank you, both.

Thanks, Ben. James, will take our next question, please.

Our next question comes from the line of Jessica Reif Ehrlich from Bank of America. Go ahead please. Your line is open.

Thanks. I was just wondering, if you could talk about maybe some of the new offers for customers? I think I saw something that you're doing with Sirius. Could you talk about any plans you have for Peacock? Do you need to wait for your NBCU renewal at the end of the year? And then finally In terms of customer offers does the AT&T promo offer for HBO impact the way you would sell or offer HBO?

I had a hard time hearing. So the first question was any new offers including, I think the Sirius trial that we've run out in the marketplace was the question there. And then the second was Peacock, and whether that needs to -- that could happen now or needs to wait until the future renewal. And the third was the HBO Max, to the extent that it impacts the way that we sell the -- or package the HBO product.

In terms of our offer strategy, I wouldn't disclose those before we do them. We experiment with various offers through time. But not to minimize our marketing prowess, but we -- ultimately it's -- do you have good products and are they worth that cost and that's what affects your ability to sell and succeed in the marketplace. But we experiment with the marketing tactics all the time, and Sirius is one of them, and so we don't have any announcements about future tactics that we might employ. In terms of Peacock, we have ongoing discussions with NBC and we haven't concluded anything yet. In terms of HBO Max, we just completed an agreement with AT&T, and we're going to convert our customers who have HBO to the new product and then we're going to market the new product as part of our overall video offering. And we look forward to doing that.

Thanks, Jessica. Operator, we'll take our last question please.

And our last question comes from the line of John Hodulik from UBS. Go ahead please. Your line is open.

Great. I'll make it quick. First, I guess just two quick ones. First, Chris on the comment on the March advertising I guess – or April advertising I guess you said it's twice as – variance is twice what you saw in March. Is that – I mean that were down sort of 36% so far in April and any color you could give on what you think – how the quarter is going to shape up there? And then on the CapEx question, you said given the outbreak, it will likely come in lighter than you previously expected, which is already lower capital intensity. Any magnitude of change there and if you could give us any color on the buckets would be great too? Thanks.

So the -- and the April comment that I made was really not related to the percentage decline year-over-year, it was really the variance to our, what would have been our expectation. So $30 million we had literally come off the books in March. It was already sold, came off the books. So over twice that, that came off the books for April. We think that will probably be the trough in April, small, start recovery in May and maybe depending on how they openings occur, June start to come back. So Q2 is going to be a rough advertising. It's not a big part of our business, but it's going to be a rough advertising quarter. We do think as things come back online, there'll be some pent-up demand for advertising on the core local, which for us has been growing, our core business has been growing at 3% to 4% year-over-year, on top of that there will be pent-up demand. So whenever the market opens back up and a lot of that tied to the health of SMBs and when the recession or when the distancing starts to open back up, Q2 will be the rougher point, and then the back half of the year will have political advertising, which takes a little bit -- for a full-year perspective, takes a little bit of the sting out of the collapse that we're seeing inside of Q2. And there's nothing about us that's unique there. The CapEx side, I think, it's way too early. I think all we're signaling at this point is that, we've been focused on a lot of different activities right now and there is the possibility that some of the programs that we've had, it might be slightly delayed. Construction could be slightly delayed. Your installation CapEx certainly -- on one hand, going to be lower, because of a lower unit cost, because self-installation on the other hand. We're doing a lot of installations. The volume is very-very high as Tom mentioned. So, there's a lot of moving parts there, but if we had to guess, I will probably be slightly off relative to the dollar amount that we intend to spend. I think Craig asked at the very beginning of the Q&A, are there areas that we could accelerate our spend, given the strength of our balance sheet and the strength of the business and we'll be moving from a reactive mode into very much a proactive to thinking about how -- what are the things that we could do longer term to even take more advantage of the assets we have. So, I don't want to prejudice too much other than to say, right now and the path that we are on, it probably looks like it would be slight minimal lower dollar amount than we intended to spend.

The thing I would say about capital spending is, we talked about it in terms of pressure testing really, and we haven't changed our commitment to the projects that we're building and the products that we're building, and we're continuing to take the business forward. But a lot of our capital is success based, and so it's modulated automatically by customer creation. And so to the extent that the market moves around based on the macroeconomic effects, so does capital.

Got it. Thanks guys.

Operator, that concludes our call.

Thank you all very much.

And ladies and gentlemen, this does conclude today's call. We do thank you for your participation. You may now disconnect.