Thank you for standing by. And welcome to Altice USA Q1 2020 Results Presentation. [Operator Instructions] I would now like to turn the call over to your host, Nick Brown. Please go ahead, sir.

Hello, everyone. And thank you for joining. In a moment, I'll hand over to Altice USA's CEO, Dexter Goei; and CFO, Mike Grau, who will take you through the presentation, and then we'll move to Q&A. As today's presentation may contain forward-looking statements, please read the disclaimer on Page 2. The slides are available on the company's website, and a replay of the call will be made available. And now, I'll hand over to Dexter.

Thanks, Nick. Hello, everyone. Starting, just jumping straight into Slide 3. I first wanted to take a moment to thank the entire Altice USA team, who has been working tirelessly to keep our communities connected. As an essential service in this time of crisis, our products, broadband, TV, mobile, news, play a critical role, and it's a responsibility we take very seriously. Through a variety of programs, including free Altice Advantage, broadband for students, free WiFi for students, schools and first responders and the FCC pledge, we've been keeping customers and communities safe and connected during this time of need. While it is certainly an unprecedented time for all, I'm inspired by the ongoing dedication and work ethic displayed by our teams each and every day. I'll get into more detail about our community efforts shortly, so let me summarize our Q1 highlights. Total revenue growth of 2.2% in Q1 was driven by the strength of our core broadband business, which grew 14% year-over-year. We have seen record demand for our broadband service, achieving the best ever quarterly performance with 50,000 broadband net additions, excluding Altice Advantage. Additionally, the pace of voluntary broadband speed upgrades almost doubled in March month-on-month, and we saw a 24% increase in network data usage. To support this ongoing network demand, we accelerate our deployment of 1 gig speeds, which is now available in more than half of our Optimum footprint and over 75% of the Suddenlink footprint. Adjusted EBITDA was flat year-over-year and up 1%, excluding mobile losses, and we saw strong growth in free cash flow, up 80% year-over-year. Given the severe dislocation in our share price following this market selloff, we opportunistically accelerated our share repurchases for this year, completing $750 million in the first quarter and over $1 billion, including April…

Thank you, Dexter, and thank you, everyone, for joining our call. We certainly hope you're all staying safe and well. On Slide 12, you can see that Altice USA's adjusted EBITDA margins in the first quarter of 2020 are in line with last year, excluding mobile losses at 43.1%. Our margins would be higher except for the recent Cheddar acquisition, which has slightly diluted the margins since this business only just turned breakeven. And remember, this represents about a 10 percentage point increase from when we first acquired Suddenlink and Cablevision, and we have been able to sustain margins at these elevated levels while investing in all of our new growth initiatives. In Q1, our net EBITDA impact from COVID was relatively low, and we estimate it to be less than $10 million. Our EBITDA less CapEx margin reflects added capital outlays related to our fiber investments beginning towards the end of 2018, but we expect additional opportunity to expand our operating free cash flow margin going forward. As Dexter mentioned earlier, the mix shift towards broadband is also contributing positively, offsetting the video customer loss and programming cost inflation and aided further by additional efficiency measures, which we continue to adopt every year. Turning to Slide 13. We can see a breakdown of cash capital expenditures, which decreased year-over-year, partly due to lower mobile investments given the initial associated launch CapEx costs. Our total capital intensity was 12.2% in Q1. But without fiber and new home build investments, this would have been less than 9%. We still expect that upon the completion of our fiber build, we will be able to reduce CapEx significantly with additional opportunity of further reducing OpEx as well. But given the permitting delays that Dexter mentioned, the fiber rollout will likely be slower than…

[Operator Instructions] The first question comes from the line of Philip Cusick with JPMorgan.

One clarification first. Dexter, I thought I heard you say in your prepared remarks, I think you're looking for growth in revenue and EBITDA as well as free cash flow this year. Did I hear that right? Or was I mistaken?

Yes. I mean, listen, we've obviously withdrawn our guidance since we -- in this level of uncertainty today. We can't really forecast what we think is going to happen throughout the rest of the year. But what we see today, we continue to expect the revenue and EBITDA growth this year.

Got it. Okay. It seems a little confusing. And then maybe just talk about the strength of broadband in the first quarter. Did you see a pull forward of seasonality in the sort of summer months or summer homes of Eastern Long Island? Or was there other things going on sort of pre-COVID that was driving that?

No. I think -- listen, I think there was obviously some acceleration of people who are coming back to their summer homes quicker than usual. But by and large, we saw a lot of new subscribers coming on board. People that typically have been not connected to us or I would assume also not connected to anyone who used to use most of their broadband connectivity in the office or on mobile. And so we saw a resurgence there, significant. And it's really a tale of 2 little shifts in terms of time periods, which is the Optimum footprint went into lockdown, let's call it, March 20 but probably more like middle of March. And so we saw very strong increased activity in the Optimum footprint going through the end of March [ going ] the beginning of April. And then many of the -- of our Western and Midwestern states, didn't come into lockdown until towards the end of March, beginning of April. And so we are seeing right now a very, very strong performance coming from the West markets today. What is clear is there's one additional trend that's happening, which is as the gross add numbers start to slow down on the Optimum footprint given the resurgence in March, we're seeing churn rates fall even quicker, right, which has not surprised us given that people are in lock down, people are not moving. There's much, much less voluntary churn and people want to maintain the stability of their existing service. So we're really seeing benefits from all fronts in terms of the lockdown relative to our residential business.

Okay. And one more, if I can. You saw broadband revenue per user accelerated pretty dramatically. How much of that is either a price increase or a change in allocation versus sort of real incoming demand of people shifting upward? Was that upshift material enough to impact the growth rate?

Yes. That's a great question. Yes. So if you -- just trying to break it down a little bit. About 4 to 5 percentage points of that 10 of that -- sorry, of that 14 is allocations based on our rack rates, right? So that's an accounting change. But we've been consistently in those double-digit revenue growth numbers, but true cash numbers is about 10%. The remainder of it is about half of it is up tiering, true up tiering and subscriptions. About 1/4 of it is volume based, and 1/4 of it is the price increase.

The next question comes from the line of Craig Moffett with MoffettNathanson.

Two questions, if I could. One, just to follow-up on the last question. How much headroom do you think there is with respect to broadband ARPU? You're now over $70. I know there's an allocation element of that, hides that to some extent, from at least bundled customers. But what have you learned about broadband price sensitivity and how do you think about the sustainability of broadband price increases going forward?

Craig, listen, I think we continue to be very optimistic of our product runway. In terms of where our subscribers were 4, 4.5 years ago when we showed up and where they are today, they've increased their speeds about 3x, 3.5x. But really going from -- particularly on the Optimum footprint on an average speed of closer to 50 megs moving up nicely to an average now in total at Altice USA of about 220. But if you look at our subscriber base today, one, everyone is, on the gross add side, is primarily taking 200 megabits and above. And the 1 gig product is starting to get very strong traction in its early days here in the Optimum footprint. But more importantly, we have about 2.8 million of our subscribers who are taking 200 megs or below today. And in terms of the rate that we're seeing in terms of upsell and gross adds taking higher speeds, we would anticipate that, that continues to grow very nicely to higher speeds. And we're at the cusp really of doing a very strong launch in our fiber-to-the-home. That starts really kind of with a couple of products, but really, the centerpiece being the 1 gig fiber product. But obviously, with the ability to go up all the way up to 10 gigs based on our current infrastructure that we're building out today, right? So the product road map gets -- obviously, people keep on always saying, why do I need more. But everyone keeps on getting more and more, right? So we feel very good about the medium term here that we're going to continue to sustain very good ARPU growth here on broadband.

And on video, if I could just pivot to video for a second, there's been a lot of talk lately about sports and who owes whom money. I wonder if you could just comment a bit on what your latest thinking is with respect to obligations to regional sports networks when games are off the air and national sports networks, like ESPN, when games are off the air? And how you think those disputes are likely to be resolved?

Well, to be clear, we owe people money, right, as opposed to a lot of people owing us money on this stuff. Listen, we've had initial discussions with all of the major sports programmers, both on a regional and national basis. So we're engaging with them currently on this discussion. You may have seen the New York AG has reached out to distributors to start providing some relief to customers, given that there's a lack of sports programming. We're in complete agreement with New York AG. And so this becomes a contract by contract discussion with each one of the providers. I can't give you particular insights because every single contract looks quite different from the other, but we'd expect to get some relief for sure.

The next question comes from the line of Brett Feldman with Goldman Sachs.

I'm going to follow-up on video. I thought I heard you say during the prepared remarks that video losses had moderated this quarter, but maybe I misheard. And so I'm curious if that's correct. And then just even thinking beyond that, you consider the country being in a recession, the New York market is pretty tough in particular. Obviously, we don't have sports. I think a lot of people assume that that's going to lead to greater pressures on video subscriptions over time. I'm wondering if you agree. And maybe just more broadly, are you rethinking where video fits in your bundle? Are you maybe more motivated to be bundling some of the OTT offers [ brought off ] in video here would be really appreciated.

Sure, Brett. Listen, I think to be clear, we published the numbers in Q1. And in April, we've seen a slowdown in those losses, right? So I can't call it for the rest of the year nor even the rest of the quarter. But given the trends that we're seeing in the Residential business, where we're continually seeing very good traction on the broadband product and a slowdown in churn rates by and large period, and then a slowdown in our video losses as well, it bodes well at least in terms of our video performance relative to what we saw in the first quarter, right? We're showing in the first quarter about a 5.4% loss for the year, which is a couple of hundred basis points north of where we typically have been for the last 2 or 3 years. And so hopefully, we'll do better than that, but that's probably our high watermark for the year based on what we see today in terms of video losses. In terms of how we think about the product, I mentioned that we do have -- we continue to have a very, very attractive video customer base in terms of aging and profitability. So that's a product and a service dynamic that we'll continue to be very focused on. What's clear, and I think what's very clear with our peers, is that the gross add dynamics are not very attractive, right? And so to your point, do we want to start teaming up more with OTT providers? Absolutely. We're in all those discussions, as you may expect. And clearly, video on promo in terms of onboarding double and triple plays are less attractive for us today. And it shows really in our attachment rates, which is the loss that we've seen in terms of acceleration of video RGU losses is really a reduction in the attachment rates on gross adds. But more importantly, it's not related to an acceleration in cord shaving at all, right? So we are not seeing a massive acceleration in cord shaving. The product continues to have very strong stickiness particularly in our Optimum footprint. And given that in our Suddenlink footprint, there is less attractive, let's call it, competition from satellite. We're seeing very good resilience on our existing base in terms of the churn of their video product. We're all about trying to make sure that we maximize profitability and cash flow. So this whole focus on making sure that we are harvesting our existing subscriber base profitably and making sure that we're giving alternatives to our customers, attractive alternatives to our customers, on the gross add side is really the dynamic that we're going into right now.

The next question comes from the line of Benjamin Swinburne with Morgan Stanley.

Two questions. Maybe on broadband, to start. Obviously, real strength in the business. I'm just curious, the ability of your company to continue to install at the same rate you've been going at in terms of self-installation capacity, labor force. I know you guys have taken, I think, some wages up for your frontline workers. It seems like there's a real opportunity, particularly against FiOS to take a lot of share. I know you mentioned marketing spending is down for you guys. I'm just wondering how you're thinking about taking advantage of this opportunity and also the capacity of the organization to sort of meet demand in broadband during this sort of stay-at-home pandemic that we're working through. And then I have a follow-up for you guys.

Sure. Listen, on the broadband side, I think it's very clear. We've taken a lot of safety precautions here in terms of customer-facing technicians with the proper PP&E, making pre-calls to ensure customers aren't sick, prioritizing and limiting residential services, visits within urban and hotspot areas. So all those things, we feel as if we have done everything that we can to properly put safety first for our technicians. To that end, yes, it's true. We understand that FiOS has reduced significantly its installed workforce. And we may have seen some benefit from that. But the reactions that we've seen in Q1, really March, and we've continued to see here in April, has got nothing to do really with the FiOS zone versus the non-FiOS zone . We've seen great demand across the board across all of our geographies, right? So I think our ability to continue to install, yes, it is a challenge, particularly with all the safety measures that we're putting in place. There's a percentage of our workforce that is offline on the technician side that we're continuing to look to either replenish or use subcontractors to help us meet the strong demand. What we have seen in April is relative to March is a slowdown in the gross adds coming in the East, but an even slower slowdown in the churn rates in the East, which has really driven great economics for the East in the month of April. And throughout the Suddenlink footprint, we continue to see very, very strong demand on the gross add side, and we're meeting that. I would think that as states look to reopen here, let's call it, over the next couple of months, we will continue to be able to meet nicely through workforce management the demand and the service requirements. I think that the opportunity remains, obviously, on self-installed going forward, which we do very little of today. So that is clearly an upgrade. As we continue to roll out new products, new set-top boxes, new technologies with fiber-to-home, we haven't really focused on the self-installed because we don't have a ubiquitous product necessarily to go after in terms of big volumes. But that is clearly on our road map of workforce training, is to get that up and running.

Got it. Thank you for the disclosure in the deck on advertising and your B2B business. It's very helpful. I'm just curious, I realize visibility is low. But do you have any update for us on how either Advertising and/or commercial revenue trends are in early Q2, 1 month in, just to help us think about the pace of the year?

Yes. Listen, I think it's clear, at least in terms of our expectations today based on what we see, that the advertising business is going to go through its trough this year in the second quarter, right? April is down significantly relative to expectations that we started the year on and down year-over-year. I think probably -- I don't know what the right numbers are going to be, but somewhere around 30% plus down in Advertising revenues year-over-year in Q2 probably makes -- it's a good starting point, right? We'll see how that develops. And as certain markets open up quicker than others, particularly obviously, the Optimum market, that will lead to a quicker recovery of that. We've run a bunch of scenarios internally in terms of when we think the markets continue to come -- or will start to come back on the Advertising side. And I think we feel pretty comfortable in terms of a down case scenario, which is leading us to withdraw revenue guidance but basically call for revenue growth, no matter what, for the year. On the commercial side, the interesting thing is we don't see an acceleration necessarily in churn, not material, at least in any shape or form. But obviously, gross adds are down. Now gross adds, particularly in the Optimum footprint, are a small number, given that we do have 70% of the SMB market in the Optimum footprint. So it's not a huge revenue impactor that growth adds are slowing. And on the West side, we continue to see very good performance since they were late on lockdown and they're going to be early in terms of reopening, right? So the SMB Suddenlink seems very resilient. The enterprise side, the Lightpath seems very resilient. Obviously, gross new orders, which have an approximately 6 month lead time to install, have slowed down. So that's going to impact revenues in the second half of the year and going into 2021, but not materially. It's really SMBs in the Optimum footprint. And we're monitoring very closely. Obviously, pledge and New Jersey has gone out and has a no disconnect policy. All of these are impacting what we would call typically nonpay disconnects or our forecast on what potentially bad debt could be. But today, it's too early to call in terms of what the impact is. But we're not seeing a draconian effect on our SMB business today.

The next question comes from the line of John Hodulik with UBS.

First, a couple of follow-ups on the high-speed data side. Dexter, you just finished off with the Keep America Connected (sic) [Keep Americans Connected] number -- or idea. Do you have a number for the number of subs that have sort of appealed to that program? And is that included within the net adds that you guys announced? Number two, obviously, a lot of great data points that you gave on that side. Is there -- putting it all together, can that 14% high-speed data revenue growth accelerate as we look into -- from first quarter into second quarter? And then second question is on the mobile strategy. When do you think you'll get access to the T-Mobile network? What has to happen? And can we expect, given the store closures, just sort of relatively few net adds until we get to that point and start adding -- open the stores and add those new subscribers on that new network?

Sure. On the pledge, we had about 6,000 subscribers in the first quarter. That number has accelerated going into April. What we're seeing towards the end of April now is that number is slowing down. We're in kind of the mid-20,000s right now as of the end of April. But the rate of, let's call it, pledgers has slowed down materially over the last week. It's interesting to say that about 30% of our pledgers are actually paying their bills and are current on their bill. So people have -- it's a little bit weird, which is once people identify themselves as a pledger, they're classified as a pledger, even though they're paying, which should probably take them out of the pledger, right? So -- but the stats are about 30% of those guys are actually paying their bill and are current. In terms of the HFC revenue growth, I don't want to call that we think we can accelerate it. It's a very, very strong number. Again, it's more like 9% to 10% on a cash basis versus 14% on an accounting basis. But we do clearly view this double digit, high single-digit pathway as very sustainable for the medium term given our product road map and given where our subscriber base is in terms of average speeds today. And given that we do have 2.8 million subscribers that are taking 200 million -- 200 megabits or less today. So that's important to continue to remember. On the T-Mobile side, I can't call it in terms of when we're going to be on their network. We've started discussions about a month ago. They've been very productive. We're in discussions on 5G as well. The letter of the contract is, we need to be treated like other Sprint customers who…

The next question comes from the line of James Ratcliffe with Evercore.

Two if I could. One following up on mobile. Can you talk about how the sales that go on gross adds and subscribers for Optimum customers versus non-Optimum and if that's matched your expectations on that front? And secondly, just to be clear on the CapEx spend. So should we basically think about the lower CapEx guidance as dollars that will be spent that just got -- get spent in '21 rather than '20?

Sure. On the gross add side, listen, we're trending about 2x quicker than our peers in terms of the attachment rate relative to our existing subscriber base since launch. So that's been great in terms of just pure statistics. But I think as I've mentioned on previous calls, on the last call, we were hopeful for a better take-up rate on mobile period. And so we're clearly looking at all our distribution channel and trying to see how we can accelerate the penetration there. We are very focused on our existing subscriber base. And so the $20 price point was very attractive. We've come off that. And so that is now $30 or $35. And we're going to go back to a promo coming back in May. So we'll see on how that does, but this is a business that we want to continue to develop. Obviously, what we were guiding towards in terms of mobile losses for the year, we expect to beat that number given what's happening right now in terms -- our marketing spends have come down, our cost of doing business has come down given the retail closure, et cetera. So this is going to be a continued work in progress, but we're cautiously optimistic about the success on mobile because we'd like to push volumes a lot more quicker. In terms of our CapEx, is there some time shift in CapEx? Absolutely. As Mike mentioned, we are running into permitting issues on FTTH, which -- given that many of the communities are shut. And so that is going to get shifted -- that CapEx spend is going to get shifted into 2021 as we continue to accelerate. But there are other things that we're doing in terms of CapEx that is reducing our CapEx budget. As an example, just as I mentioned, the video attachment rates for gross adds have come down, particularly in the Optimum footprint. That's driving lower CPE costs, right? And so that in itself is helping also as we guide you guys to sub $1.3 billion of CapEx this year. I suspect that as we move into 2021, that those trends of lower attachment rates will probably hang in there as well. And so just purely on terms of CPE cost, our CPE costs are going to be coming down.

The next question comes from the line of Michael Rollins with Citi.

Two questions, if I could. First, just going back to the video discussion. If we look at video revenues year-over-year, they're down about 7% in dollars, programming expense dollars up 4%. Can you talk about what you're doing on the video pricing to try to recover some of the programming cost increases? And maybe why there's this variance that's happening between the video revs and the programming expenses. And then secondly, did you mention earlier, and I apologize if I missed it, the specific bad debt expense for reserves that you've taken to date?

So I'll let Mike talk about the reserves. Just to be clear on the video ARPU, as we mentioned, we saw a 4% to 5% increase on the 14% increase in data accounting ARPU growth, that is coming straight out of video ARPU, right? It's really in terms of the accounting allocation of our rack rates, and we can't get any more scientific than that. It is the way it is. So in terms of our 7% video revenue ARPU decline, that is way overstated. It's about 2% to 3% of that is accounting. And then on top of that, obviously, you have the sub numbers that are coming down that's driving video ARPU because the difference between an existing subscriber and a gross add subscriber is material in terms of the ARPU that's allocated on video. So how are we dealing with trying to catch up on some of this differential where programming is up 4% and accounting video ARPU is down 7%. We're very, very focused on the gross margin and EBITDA equation there. Very, very focused on making sure that the bundle economics makes sense as we roll up promos and look at the survivability, the medium- to long-term survivability of our customers, and really emphasizing broadband plus OTT options as a real alternative to a bundle because the data subscriber or the triple play subscriber, funnily enough, are the more attractive subscribers from a long-term basis in terms of the value, the lifetime value of a subscriber. The double-play guy tends to be less attractive, right? That really depends on pricing and mix of what you're doing in your promos. And so we're very, very focused on that. And then obviously, on the programming cost side of the equation, this is something where we think we continue to work very well at trying to push the growth rates down. And given the trends in this business, I do think the entire sector with our peers feels like there's an opportunity for us to continue to make that slow down the programming cost inflation.

On the allowance of bad debt that you asked about, we did not disclose the specific number around that nor are we going to, but we did disclose the estimated COVID impact on our 1Q EBITDA was somewhere in the neighborhood of $10 million or a little less than that. Any incremental bad debt reserves would be captured in there. We're looking at this closely. We're monitoring it literally every day, looking at the things you'd expect us to be looking at, the daily cash receipts and how that's trending month-to-month versus prior year. We're looking at the aging of our receivables. To date, we're not seeing a lot of differences, so we've been kind of reassured by that. Now the kind of pressures that are building in the economy around this, like as they build, they don't diminish over time. So we could see a little more pressure in 2Q. We're not seeing it to date through April in terms of our trending cash receipts. So -- and I think we tried to make the point in our presentation that the sectors where we're most vulnerable, being News and Advertising, specifically local advertising, and then the SMBs, are relatively small portions of our revenue base. So we've looked at it very critically. We've looked at a lot of different data points, and we've made our best judgment on what we needed to do. We did book some incremental bad debt expense in the quarter. It was a relatively modest number, and we'll keep monitoring it going through 2Q. Like so many other things we're talking about, a lot is dependent, of course, on how soon the economy and the different states start to open up their markets.

The next question comes from the line of Jonathan Chaplin with New Street Research.

Dexter, I'm wondering if you can give us an update on what the average usage has grown to for broadband-only subs and for the guys that have -- that take video from you. And I'm wondering, as you look at the guys that have connected over the course of the last month that were wireless only, how much of the shift in usage you think is structural? And so how many of those previously wireless-only households do you think you might be able to hang on to when isolation ends? And then also a quick follow-up on broadband subscriber trends. They were obviously phenomenal this quarter. Do you think you've pulled growth forward from the second half of the year into the first half of the year? Or do you think you could end up with record net adds for the entire year?

My team is going to kill me on my last answer to that question, Jonathan. On the update relative to usage, I mean, we clearly were on broadband-only about 400 gigabits of usage per subscriber before the pandemic. We're now above 500 gigabits, right? So that's, let's call it, a 25% increase in usage of broadband-only subscribers. And I'm not calling the peak because that's going to continue to grow. But it's very good statistic point relative to the entire data usage of our network is about up 24%. We've seen surges in the East, which have gone up about 35%, even 40% at times. But in the West, we've only seen surges about 15% in the first quarter. And that, again, I think that we'll update that number for the second quarter because the West was slow on the lockdown and so the subscriber dynamics that we saw in the East in March, we're seeing in the West now in April. In terms of lockdown ending and those who were wireless-only subscribers before, funnily enough, I'm cautiously optimistic here. I don't think those guys unsubscribe from us. I think given what's happened and given the dynamics that we expect for the very near and medium future, that work from home is going to be clearly part of our lives for quite a bit of time until, obviously, testing comes in and vaccinations and those types of things. But that's -- those are going to be, I think, time periods are a lot longer than just reopening dates that the states are throwing out there. So I believe that we're going to hold on to a super majority of those customers that used to not be our customers or anyone's customer. Relating to our record numbers, did we pull forward?…

The final question comes from the line of Doug Mitchelson from Crédit Suisse.

A few questions, Dexter. You sort of sparked my curiosity on the self-installs. You talked about the lack of ubiquitous products holding you back sort of historically from pursuing self-installs, but it's on the map. Can you just give us a sense of timing? Does It take a year, 2 years, 3 years? I know you're very focused on efficiencies. And you also said broadband-only are more attractive lifetime value of customer now. Is that really sort of a different in just acquisition costs going to the home and putting a couple of set-top boxes in? And I don't know if you're willing to share the difference in acquisition cost between a double-play and a single play, but it's really kind of a remarkable state of play to be at the point where you could say sort of broadband-only is higher lifetime. And then I've got one follow-up.

Sure. Listen, on the self-install, I think that given all the things we're doing from a network standpoint and from a user interface standpoint, which the mix is changing and that we are extremely stable on the Altice One side today and where I think we're at about 18% penetration, growing at 1% to 2% per quarter. We are probably within 12 months of starting a real push on the self-install side, right? So I would expect in 2021 in terms of our customer service road map, we're going to have a fiber box gateway available for people to think about self-installing. And then also the Altice One or straight modem product on the DOCSIS product. It's just that we've been so focused with so many balls up in the air. But this is something that has not been a priority for us, given all those things we're doing. On the broadband-only side, I think what's happening is as bundling has gotten more aggressive, particularly on a double play, those economics are getting worse and worse, right? So you'd much rather take a single play, whatever it's 200, 300, 400 megabit or even 1 gig at a promo offer then at a very aggressive promo offer on double play, where the economics when it comes to set-top boxes cost of install. And the programming costs and the continued growth of those programming costs over the lifeline of a subscriber, as you model that out, even though the churn rates are better on the double-play relative to single-play based on today, and I think we need to fast forward a couple of years from now to see if those churn rates really are better on the double play. But the promo economics are not very attractive, right? So as you run your numbers and you look at a free cash flow IRR, your free cash flow IRR is more attractive on a single broadband.

Super interesting. So the last thing is, I'm trying to relate the stock buyback to leverage versus the leverage guidance. If I use your current net debt, you need about 5% EBITDA growth in the second half of the year to hit the 5x leverage ratio. I know you don't want me to pin you down on EBITDA growth in the back half of the year. And I think you get a couple of points from political there as well. The way I guess I wanted to ask it is, is there any sort of change to debt throughout the year or anything that we can put in our pocket beyond political in the back half of the year that we should think about when we're doing that relationship between sort of the buyback ability and the leverage guidance?

Well, I mean, you're right. I mean, the advertising sector is, in terms of revenue and EBITDA growth, is the biggest question mark in terms of volatility of our numbers. And then as a secondary concern is really all about bad debt, non pays and conversion of, let's call it, pledgers and those types of things. So it's really difficult for us to -- the talk varies with a lot of transparency around our EBITDA numbers because even though you do see a big falloff in advertising revenue and you can associate your margin that you want to do with it. We're doing a lot of things on the OpEx side, right? We've listed a lot of things that we've talked about in terms of cost of distribution has come down significantly, media spend has come down. Work from home, obviously, has led to reduced OpEx costs. We're revisiting all of our real estate-related stuff. We've obviously also visited employee, employee benefits, employee salaries. Lots of things. It's a whole laundry list of things that we are dealing with. So the OpEx savings is to what you can't see today in your numbers. So as you think about a 5% EBITDA growth number, that gets you to the $1.7 billion. And you're focusing on revenues, you can't just focus on revenues. There's a lot of things happening on the OpEx side. So yes, I don't think we're ready to give you more clarity than that today. So we've made a lot of decisions over the last 6 weeks relating to OpEx that are going to continue to flow through the year, which is why we've kept the guidance relating to EBITDA margins, we believe, EBITDA margins are going to continue to grow. I think that's it.

I will now turn it back over for closing remarks.

Thank you, everyone, for joining. Let us know if you have any follow-up questions. Otherwise, we look forward to catching up with you virtually in the next few weeks. Thank you.

Thank you.

This concludes today's conference call, you may now disconnect.