Ladies and gentlemen, thank you for standing by, and welcome to the Altice USA Q3 2020 Results Presentation. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Nick Brown. Thank you. Please go ahead, sir.

Hello, everyone, and thank you for joining. In a moment, I'll hand you 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. Dexter, please go ahead.

Thanks, Nick, and hello, everyone. Before we begin, I once again want to take the opportunity to thank the Altice USA team. I'm very proud of the ongoing commitment displayed by our employees in navigating this uniquely difficult time, and we delivered another great quarter together. Starting with a summary on Slide 3. Total revenue was flat year-over-year due to the adjustments for anticipated 9 months of regional sports network credits. If not for this revenue adjustment, we would have grown 3% in Q3. I'll come back to this in a moment. Separately, this quarter, our business was impacted by Hurricane Isaias in the New York Tristate area and Hurricane Laura, which mostly hit Louisiana and the Gulf Coast. We mainly saw disruptions from down power lines and damaged cable strands interrupting service for some of our customers for which we have issued customer credits. Further adjusting revenue for these storm credits, underlying revenue growth would have been a strong 3.7% in the third quarter, a significant acceleration from growth in the first half of the year. Our revenue outperformance was driven by broadband revenue growth of 15.6% year-over-year. We saw strong demand for our broadband services with net additions of 26,000, even with the storm disruptions or 32,000 adjusted for storms. Our acquisition of Service Electric, which closed in July, contributed another 30,000 additional customers in the quarter. Contributing to this growth was our successful completion of the 1-gig rollout of Optimum, making 1-gig service available across the entire New York Tristate area. In Business Services, we continue to see resilience amongst both our SMB and Lightpath enterprise customers. In news and advertising, we had a strong recovery, helped by political revenue and improved local advertising. Our strong performance led to an acceleration in adjusted EBITDA growth to 5.5% year-over-year or 6.3% year-over-year, ex-mobile, and up to 7.7% further adjusting for the storms' impact. Our free cash flow of $458 million was up 176% year-over-year, helping us deliver $1.46 billion in free cash flow year-to-date, which is already well ahead of the $1.2 billion generated for the full year 2019. We continue to take advantage of the attractive valuation in our share price, completing approximately $450 million in share repurchases in Q3, totaling just over $1.8 billion year-to-date through the third quarter. We have raised our target guidance to $2 billion or higher share repurchase for the full year from $1.7 billion previously. On the outlook, more broadly, we continue to expect revenue and adjusted EBITDA growth this year. We maintain our CapEx guide of less than $1.3 billion and target year-end net leverage of 4.5 to 5x. To wrap up the summary, I want to say we remain incredibly optimistic about the strength of our core business, and we continue to focus on opportunities to drive value for shareholders. Turning to Slide 4, you can see our underlying revenue growth remains strong in this environment, demonstrating the defensiveness of our business. Total revenue was flat at minus 0.2% year-over-year. The RSN revenue credits of $79 million booked this quarter represents an estimate of what we expect to refund to customers when we realize rebates from the RSNs due to fewer games being delivered year-to-date because of Major League Baseball's decision to shorten the season. These RSN credits did not impact reported EBITDA nor cash flow since we will have a corresponding reduction in programming costs. In Q4, we anticipate further RSN credits to reflect the corresponding impact on the last 3 months of the year, which we expect to be approximately one-third of the amount we recorded in Q3. And the Q3 number, again, was a year-to-date number for the entire year. Excluding these RSN credits, we achieved 3% total revenue growth in the third quarter. Further excluding the impact of storm credits, which totaled about $16 million this quarter, total revenue growth would have been 3.7%. Residential revenue declined 1.6% year-over-year, including the RSN credits, but would have grown 2.3% adjusted for that or 3% further adjusted for the storm credit. Business services grew at 1.3% year-over-year, but would have grown 1.8% adjusting for the RSN credits and 2.4% further adjusted for the storm credits. We are also extremely pleased with the recovery in News and Advertising, where revenue grew 5.2% year-over-year. All in all, we are very pleased with the results, and we continue to believe that our businesses are well positioned in this environment. Turning to Slide 5. We once again delivered strong subscriber results. Altice USA added 8,000 unique residential customers in the quarter, including 26,000 residential broadband customers compared to a year ago when we reported flat unique customers and 15,000 residential broadband additions. The storms had a negative impact of about 6,000 subscribers. So in the absence of these storms, we would have grown customer relationships by 14,000, with over 32,000 broadband net adds. The impact of Hurricane Delta, in October, which hit the Louisiana area right after Hurricane Laura, is likely to have similar customer impact in Q4, given the severity of the damage in the region of Delta compounding on Laura. Note that these figures exclude Service Electric, which added another 34,000 customers to our base, including 30,000 broadband customers in the quarter. The adjusted subscriber results shown here exclude customers who would have otherwise been disconnected in adherence with our normal disconnect policy of greater than 90 days in the absence of the FCC Pledge and New Jersey Executive Order. Making these adjustments, we still would have reported 5,000 customer relationship net adds and 23,000 broadband net adds. We continue to benefit from increased market share gains, including from DSL and mobile-only households. In summary, we feel extremely good about the underlying momentum in our customer growth metrics. Slide 6 provides a more detailed breakdown of the bridge between our reported and adjusted customer metrics. We have been really pleased with our progress in retaining Pledge customers. And as of the end of Q3, we only had a small number of customers remaining on the Pledge. Recall that last quarter, we had about 10,000 customers on the Pledge who are past due on their payment by greater than 90 days. We are now below 3,000 as we had success in various retention initiatives implemented to retain the customers and begin receiving payments again. On video, we saw an accelerated pace of disconnect compared to the prior year. This was mostly due to lower gross add video attachments as well as disconnecting the video products for some of our customers associated with the Pledge and the New Jersey Executive Order as we work through our various retention programs. Turning to Slide 7. We continue to see our network performing very well, even with heavier usage during the pandemic. Our broadband speed upgrades remain elevated, up 45% year-over-year. Average monthly data usage per customer was up 44% year-over-year, averaging approximately 420 gigabytes per customer per month in Q3. And our broadband-only customers use nearly 530 gigabytes of data per month. Twenty-nine percent of our gross additions took 1-gig broadband speeds in areas where it was available, up from 24% in the second quarter, and we remain very optimistic about the 1-gig opportunity. And following the commercial launch of our fiber double and triple offering, I'm pleased to say our fiber sell-in rates, the portion of gross additions taking fiber-to-the-home in areas where it's available, is already at 44%, up from 28% in Q2 2020, ending the quarter with just over 16,000 customers and representing an enormous growth and cost-saving opportunity. Additionally, 60% of our fiber gross adds are taking the 1-gig product, which is a higher proportion of customers taking the 1-gig on our HFC plan, representing a great monetization opportunity. To summarize, we're very pleased with our network performance, and we remain focused on continuously monitoring and upgrading our network to support demand. Turning to Slide 8. We are pleased to announce that we completed our 1-gig rollout this quarter with 1-gig services now available across 100% of the Optimum footprint. We more than doubled 1-gig availability year-over-year to 92% of our consolidated Altice USA footprint, up from 76% at the end of the second quarter. Our 1-gig customer penetration increased to 5.7% in Q3, up from 3.7% in Q2, and we continue to see a lot of room to drive penetration, upselling customers to higher speed tiers. Increasing 1-gig availability across the rest of Optimum's footprint through the rest of 2020 increases our broadband opportunity to continue to upsell to higher speeds. Our average download speeds continued to increase to 262 megabits. But about 60% of our base today still only have internet speeds of 200 megabits or lower, representing a meaningful opportunity for us to continue to deliver faster speeds to customers. Turning to Slide 9. We wanted to remind you once more of our long-term network strategy. We are focused on upgrading our existing networks, new build edge-outs and pursuing additional footprint expansion opportunities. In addition to completing our 1-gig DOCSIS 3.1 upgrade for the Optimum footprint, we have now passed over 900,000 homes passed today ready for service for FTTH. And we're targeting upgrading the entire Optimum footprint, which totals about 5 million homes passed, to further improve the customer experience, significantly reduce costs longer term and drive revenue growth as we upsell. In Suddenlink, about 80% of our homes are 1-gig enabled over HFC, but that means we have a sizable upgrade opportunity remaining with approximately 400,000 homes, which can be upgraded for 1-gig capacity cost-effectively and further increase our penetration from approximately 30% today on those 400,000 homes. Our network edge-out strategy is focused primarily in our Suddenlink footprint, where we have seen extremely strong traction in capturing market share as soon as we roll out new-build. On average, we reached about 40% penetration within 12 months of a new-build, a remarkable result that gives us a lot of optimism and comfort in our strategy. We are currently adding 150,000-plus homes passed annually and are focused on increasing the level of new-build activity going forward, which will help drive future customer and revenue growth. Finally, an additional footprint expansion opportunity beyond edge-outs: we completed our purchase of Service Electric, which added another 70,000 homes passed to our footprint. As I've shared before, we continue to look for other cable M&A opportunities to expand. We have also filed for the upcoming FCC RDOF auction, which starts this week, where we look for opportunities to invest in network builds in rural areas with partial subsidy by government, should the return on investment be attractive. Turning to our mobile business on Slide 10. We launched flexible data plans this quarter, offering our consumers the flexibility to choose any of our three very affordable tiered data plans at 1 GB for $12; 3 GB for $20; or unlimited at $40 per month. Our mix-and-match capability will accommodate customers and families with all types of data usage needs. We added 18,000 mobile net additions for the third quarter, ending the quarter with 162,000 lines. Our momentum remains slowed by retail store closures due to the pandemic, with nearly half of our stores still closed, but we have managed to reach 3.5% penetration as a percentage of our total unique residential customer base. We remain focused on improving customer experience and broadening our product offerings, with the continued expansion of our handset lineup and launching our 5G service. We continue to see an early indication of churn reduction in mobile during stay-at-home and remain excited about the opportunity for further churn reduction from bundling with our cable offering. On Slide 11, turning to Business Services, we saw resilience and recovery in both our SMB and Lightpath businesses. Total Business Services revenue grew 1.3% or 1.8% adjusted for $2 million in RSN credits and 2.4% if we further adjust for the storm credits. Lightpath grew 2.6% and SMB and other grew 0.8% year-over-year. At Lightpath, we continue to see increased sales and customer engagement to the education, health care and government verticals and a benefit from shorter sales cycles during the work-from-home environment. We also launched our SD-WAN product suite, which helped contribute nearly 49% revenue growth in our managed services offerings year-over-year. In our SMB business, Q3 represented the first quarter this year that we saw positive net additions in the SMB space. Our e-commerce sales activities have increased, which lowers our cost of customer acquisition. Obviously, there is still uncertainty from a potential second wave of shutdowns in our markets. However, we remain very pleased with this business services performance and recovery throughout this challenging year, performing better than we expected. We continue to expect a close to our Lightpath transaction in the fourth quarter following regulatory approval. Turning to our News and Advertising business on Slide 12. We're extremely pleased to report revenue growth of 5.2% year-over-year in Q3. Even without the incremental contribution from political ad sales this quarter on a year-over-year basis, the trajectory of recovery in our news and advertising business has improved. Advertising revenue, excluding political, declined only 6.6% year-over-year in Q3 compared to a decline of 15.6% in Q2. In addition to the boost from political, we saw a recovery in local advertising from its trough in April. In October, we've seen a further increase in advertising revenue to the highest monthly level year-to-date. We continue to benefit from positive viewership trends with a 42% increase in Cheddar website traffic since pre-pandemic, an increase in users of 64% and a 35% increase in News12 TV viewership on a year-over-year basis. Sports are starting to come back as well, which is a positive for advertising spend. However, we still anticipate pressure on the national branded segment of our business and continue to assess market conditions. Year-to-date, our News and Advertising business is now flat, and we are cautiously optimistic that we can achieve flat revenue for the full year but this continues to depend a lot on many factors, including whether we can see a full comeback of sports for the remainder of this year and avoid further protracted lockdowns. And with that, I'll turn this over to Mike to discuss the financials in more detail.

Thank you, Dexter. Good afternoon, everybody. Thanks for joining us. We certainly hope everyone is doing well. I want to spend a minute highlighting our EBITDA growth trajectory on Slide 13, for starters. In Q3, we grew adjusted EBITDA 5.5% year-over-year or 6.3% year-over-year excluding mobile. In the quarter, we had an additional impact of approximately $16 million to adjusted EBITDA through the Hurricanes Isaias and Laura. Excluding mobile and excluding storms, we grew EBITDA 7.7% year-over-year. And you can see that our rate of growth has accelerated each quarter this year. We continue to benefit from a combination of strong customer growth and deliberate cost actions and remain very confident in our ability to grow EBITDA this year and deleverage. We also feel very good about our opportunity to continue to drive margin expansion in our business, which I'll turn to you now on Slide 14. On Slide 14, you can see that we posted an adjusted EBITDA margin of 46.3%, up 200 basis points year-over-year. Some of the margin improvement in this quarter is driven by the adjustment to decreased revenue and programming costs for regional sports network credits due to expected rebates from sports programmers. Excluding these RSN credits, adjusted EBITDA margin would have been 44.8%, still up 100 basis points year-over-year. Excluding mobile EBITDA losses, our 3Q EBITDA margin was 47.5% or 46.3% further adjusted for both RSN credits and storms, which is the best-ever margin result ever achieved by our cable business and compares to 44.3% a year ago or a 200 basis point improvement year-over-year. In Q3, our EBITDA less CapEx, operating free cash flow margin of 38% was up nearly 1,000 basis points year-over-year due to a combination of EBITDA margin growth and lighter CapEx due to some delays in fiber permits. Adjusted for RSN credits, we would still have seen an increase of 840 basis points year-over-year. Turning now to Slide 15. We continue to underspend on CapEx this year relative to prior periods. Our total capital intensity for the quarter was 8.3% in Q3. But without fiber and new home build growth investments, this would have been 6.5%. This quarter, we did complete our 1-gig rollout in Optimum. As I noted earlier, we remain impacted by permitting delays due to the pandemic, but are focused on reaccelerating all of our network initiatives and continue to invest in our network, anticipating that we will see permanent changes in consumption behaviors across much of our customer base. Furthermore, the combination of Hurricanes Isaias, Laura and Delta has led to some one-time capital outlays in the third and fourth quarter to repair storm-related damage, including replacing a fiber ring in Louisiana. However, we continue to expect cash CapEx for the full year to come in below $1.3 billion. For the next few years, as we build out fiber and Optimum, we continue to think that we can comfortably operate in the $1.3 billion to $1.4 billion CapEx envelope and complete our various network upgrade and edge-out initiatives. Longer term, we think there remains significant opportunity for a reduction in capital spending to below $1 billion annually, particularly once we have completed our fiber upgrade in the Optimum footprint. In summary, we continue to feel very good about the long-term potential of our network to deliver superior connectivity solutions to our customers at a reasonable cost. Turning to Slide 16. I'm very pleased to report another very strong quarter of free cash flow performance. With our results in the first three quarters, we have already delivered more free cash flow year-to-date 2020 than any prior full year. We generated $458 million in free cash flow in the third quarter, up 176% year-over-year and generated $1.46 billion in free cash flow year-to-date. Our free cash flow per share year-over-year on the last 12-month basis has increased 72% to $3.06, representing a significant yield relative to our current share price. In the quarter, our cash flows from investing activities included $150 million outlay for the acquisition of Service Electric. Our cash flows from financing activities reflect the number of transactions in the third quarter. We saw a cash outlay of $433 million in Q3 for share repurchases. In July, we redeemed a sum total of $1.7 billion, about 5 3/8% guaranteed notes due 2023 and 7 3/4% senior notes due 2025 that we refinanced in June, which we discussed in our Q2 call. And in September, we received proceeds of $865 million from bond issuances from our Lightpath financing, which is being held in escrow until the transaction completes, and which appears as restricted cash on our balance sheet this quarter. Slide 17 presents an overview of our pro forma capital structure, inclusive of the new Lightpath debt silo. Pro forma for the Lightpath transaction, the consolidated Altice USA net leverage on the last two quarters annualized EBITDA basis is 4.9x. Cablevision Lightpath LLC is now an unrestricted subsidiary of CSC Holdings LLC. In September, Lightpath raised new debt of $1.465 billion, which is held within a separate debt silo and is nonrecourse to CSC Holdings LLC. This includes $600 million in a term loan facility priced at LIBOR plus 325 basis points, which has not yet been funded; $450 million in the new 7-year senior secured notes, priced at 3 7/8%; and $415 million of new 8-year unsecured notes priced at 5 5/8%. This represents a blended average cost of debt of 4.3% at the Lightpath level and proceeds from the notes of $865 million are reflected as restricted cash on our balance sheet this quarter. Cablevision Lightpath pro forma net leverage is approximately 6.9x on the last two quarters annualized basis. Lastly, CSC Holdings LLC is reporting net leverage pro forma for debt and equity proceeds from the Lightpath transaction of 4.8x net debt-to-EBITDA on an L2QA basis. On Slide 18, we provide an update on our interest savings initiatives. 2020 will be similar in cash interest expense to 2019 due to the timing of our recent refinancing activity. However, our current run rate implies that we expect to realize over $200 million in cash interest savings relative to 2019 cash interest expense on a run-rate basis going forward. And zooming out, we are very happy to illustrate that since 2017, we have taken out approximately $600 million in cumulative annual interest savings. In Q3, we refinanced our $1.7 billion of 10 7/8% notes via an add-on offering to our 4 5/8% unsecured note we had priced in June for an effective yield of 4.16%. We also refinanced $1 billion of 6 5/8% senior guaranteed notes into a new 10.5-year note and achieved a record low coupon of 3 3/8%. This further lowered our cost of borrowing to 4.9% in Q3 from 5.4% last quarter for CSC Holdings LLC. If we were to refinance our entire CSC Holdings LLC debt stack at similar levels, leaving the Lightpath entity unchanged, our annual interest expense would come in less than $900 million. Additionally, through the refinancings, we extended our weighted average life of debt to 6.9 years this quarter at the CSC Holdings debt silo. We have no annual bond maturities greater than $1 billion before 2025, all of which could be covered by either free cash flow generation or our undrawn revolver. We will continue to proactively manage our balance sheet in the same way going forward, and remain very proud of the progress we have made and comfortable with the strength and resilience of our balance sheet. Finally, on Slide 19, we provide our updated outlook for 2020. We are maintaining guidance for revenue ex-mobile and adjusted EBITDA growth this year. We delivered 0.2% revenue growth, ex-mobile, year-to-date on an as-reported basis, but this growth would be 1.3%, excluding the RSN credits. Total adjusted EBITDA growth year-to-date is 2.6%, and we still expect faster growth in Q4 compared to the first half of the year. We continue to guide to cash CapEx of less than $1.3 billion, including some temporarily elevated CapEx to address storm damage. Our leverage target remains 4.5 to 5x on a last two quarters annualized basis at CSC Holdings LLC, which is a level at which we are very comfortable. Given the favorable financing environment, we are likely to remain towards the higher end of this range in the short term. We have raised our share buyback target to reflect the fact that we have already completed $1.8 billion in share repurchases as of the end of Q3, and now target at least $2 billion this year, up from $1.7 billion previously. This level of share buybacks is consistent with our leverage guidance of around 5x. And to conclude, I just want to echo Dexter's remarks, and that we remain incredibly proud of the Altice team for their dedication and resilience during this time, which has once again resulted in a very strong quarter. And with that, we will now take any questions.

And your first question is from Phil Cusick of JPMorgan.

So a couple of things, if I can. First, Mike, you just talked about guidance for a second. Let's go back to that. At this point, your guidance for growth in revenue and EBITDA this year leaves a lot of room. Can you say again how you think about sustainability of growth on both of those in the fourth quarter, and anything you can give us for 2021 at this point? And then second, can you dig into how we should think about taxes in 2021? Have you run through your NOLs with the Lightpath sale?

So on the guidance, you're right, we are a little open-ended, and we're guiding towards growth. And I think we mentioned that we do continue to anticipate accelerated growth in the fourth quarter, at least in terms of adjusted EBITDA relative to the first half of the year. So I don't think we're going to get any more specific than that, Phil, but that's kind of where we are. On revenue growth, we will have some headwind in the fourth quarter. I think we alluded to the fact that the RSN credit adjustment we made as of 9/30 will have an additional element in the fourth quarter. But even given the RSN credits in Q3 and anticipated in Q4, we're still guiding towards revenue growth for the year. On taxes, we entered 2020 saying that we would be a full federal cash taxpayer in the beginning of 2021. We did get a lot of benefit from the CARES Act in terms of enhanced deductibility of some of our interest expense, and we pushed that out to the beginning of 2022. Now with the Lightpath transaction, we're back where we were when we started the year, saying that we anticipate being a full federal cash taxpayer very early in 2021. The actual tax burden in that year is somewhere in the neighborhood of $400 million to $450 million, I think, as a reasonable placeholder number. We continue to pursue strategy and efficiencies in that area and are pursuing a number of channels in that regard.

Your next question is from Craig Moffett of MoffettNathanson.

A couple of questions. First, on broadband ARPU, just given how complicated the allocations within the bundle get and with the RSN discounts and that sort of thing, can you break down how we should think about broadband ARPU growth now and going forward in its components of upgrades and then unbundling the bundled discounts and that sort of thing? And then just a broader question, if I look out further, given how high margins have gotten, I think you once said you didn't think 50% margin, Dexter, were out of the question for this business. I wonder if you'd sort of revisit that, and what do you think the ceiling on margins might be as you look out now that you're actually getting reasonably close to 50% margins.

Yes, Craig. On the broadband ARPU, broadband ARPU grew by about 11.2%. Broadband revenue was about 15.5%. The 11.2% breakdown, very much like in our previous quarters when we called this out, about one-third of it is accounting; one-third of it is growth; and one-third of it is upsell. So that's pretty much what we're seeing consistently here quarter-over-quarter. So if you exclude the accounting allocation, you're looking at kind of an 8%-ish type cash-on-cash growth in broadband ARPU. In terms of how we're thinking about margins, as you know, we're running probably in certain parts of our businesses north of 50% today. Clearly, the shift here away from video and more focus on broadband, broadband upselling and higher broadband ARPU is going to help accelerate that margin growth, and what we continue to do, obviously, in terms of our capital expenditures and infrastructure, which we think are going to help us drive lower customer interactions, and also continue to drive higher gross margin products. Yes, let's first get to 50%, and then ask me the question when we get there, and I'll hopefully give you some more guidance going forward.

Your next question is from Brett Feldman of Goldman Sachs.

At this point, we've seen that some of your chief competitors, FiOS and AT&T's fiber business, obviously, had very good quarters. And clearly, that did not impact your ability to put together a solid quarter as well. So we know that. The question we keep getting is what is the competitive dynamic like in your markets between you and your fiber competitors? And are you seeing them in some way step up their efforts, and have you had to make any adjustments? And I think we're really trying to understand what's the run rate been like as we move past the third quarter and look into this quarter and into 2021.

Brett, we've had, through all disclosable metrics, just outstanding growth KPIs across the board, from customer acquisitions to broadband growth. The numbers I saw for FiOS and AT&T were good, but we haven't seen anything particular from either of them in terms of overaggressiveness on the marketing side. I think business is getting back to usual. We saw FiOS be less present in Q2, given some of their labor issues in terms of installations. I think they're catching up a little bit, but we're still, to date, about 125% higher than we were last year year-to-date in terms of broadband additions. So we're very focused on continuing to grow our customer counts and our broadband RGUs, and we've been able to nicely defend all the gains that we got at the end of Q1 and the balance of Q2. We are not seeing anything outrageously different from competition out there, despite the fact that they've got strong results.

Your next question is from Doug Mitchelson from Crédit Suisse.

Dexter, I was just hoping you could remind us of some of the facts around fiber because the 44% sell-in in the market of footprint for gross adds is pretty interesting. Now you're scaling gross adds, is the cost to connect fiber as you expected? And can you remind us what the timing is for when OpEx savings from the fiber network happens? Does it happen when you connect to customers? Does it happen when you connect lots of customers or when you roll them all over to fiber and turn off the coax network? And are you starting to see fiber build and fiber connect costs and customer reactions successful enough to the point that you think parts of Suddenlink make sense for fiber? And then for Mike, I just want to make sure I heard it right. You said $400 million to $450 million was a reasonable placeholder for cash taxes in '21, because that would be, I think, something like a 33% tax rate. I just want to make sure I heard you right.

So why don't I hit the fiber question first. We're still in the early days on the rollout. It's very encouraging to see how the selling rate has picked up quarter-over-quarter. We're still working on efficiencies for connections and installations; we're not yet where we want to be in terms of the time and cost to connect our fiber subscribers, which is normal as we train field technicians and get customers comfortable with the new technology. We'll continue to monitor this closely and put resources into training to improve efficiencies. We see a very large runway ahead in pent-up demand for this product, particularly as people work from home and upload speeds become more important. We'll continue to provide more data points quarter-to-quarter as we grow the base. I don't think we're at the desired cost-effectiveness yet. For Suddenlink, we are laying fiber very deep into our new-builds, which allows us to adopt FTTH for the last drop when appropriate. Today, we'll continue to focus on the HFC plant in Suddenlink by and large, but we will look at pockets where full FTTH makes sense, especially for edge-outs. Overall, we are encouraged by the sell-in and the demand dynamics, but it's early days.

And then, Doug, in response to your question on taxes, I was giving you a rough estimate. I may have erred a little on the high side, but we're not using a 33% rate. We continue to use a 27% effective rate inclusive of states. There's certainly room to manage that number down a little bit and we continue to pursue opportunities to do so.

Your next question is from Ben Swinburne from Morgan Stanley.

Maybe Dexter for you, two different topics. One, you mentioned the video sell-in rate has continued to trend down. I'm just wondering if you could remind us of roughly where that sits. And maybe that's a good way for us to think about where penetration settles in longer term. And then on the edge-outs, 150,000 homes a year gives you guys a nice kick or two in sub growth. I'm wondering if you think there are opportunities to go bigger than that. I know you're focusing on Suddenlink, but maybe there aren't opportunities in Optimum, which is a pretty well built-out area. But I'm just curious if there's potential to take that number even higher based on the economics and the returns you're seeing around broadband builds.

On video sell-in rates, we're in the mid- to high-30s now. Historically, at the best-in-class we were in the low 60s; as late as Q2 this year we were in the mid- to high-40s, and that's fallen off to the mid-30s to high-30s. Some of this is pandemic-related, with promos, roll-offs, and forgiveness of debt due to the New Jersey Executive Order or the Pledge initiative. There's a muddle of items where we've disconnected people and reconnected people, so the numbers aren't as clean as they would be historically. A 40% sell-in rate is probably a safe long-term number, but we'll watch quarter-to-quarter as marketing normalizes. On edge-outs, the biggest challenge has been getting crews and the build machine up and running again because of pandemic stoppages. We're focused on lining up crews toward the end of this year to be ready for the New Year and deliver 150,000-plus homes passed. Can we do more? Yes. Will we do substantially more next year with high confidence? Probably not immediately. We're thinking in a three-year trajectory: if we average 150,000 a year, maybe 450,000 over the next three years, we will try to push for more. RDOF presents some opportunities for contiguous rural builds with partial subsidies; we'll be thoughtful about return economics. There will be some opportunities, particularly where the homes are contiguous with our existing footprint and the subsidies make the economics attractive.

Got it. And those RDOF opportunities I imagine are completely unserved, right? So it's sort of your market to go after, if you get it.

That's exactly right. We expect to get some subsets that are contiguous to areas we want to build, and for small communities contiguous to our existing footprint, post-subsidy economics can make a lot of sense. We'll be selective.

And maybe just wrapping that up into one last question then. Dexter, obviously, election next week, in case you weren't aware. There's a lot of focus on the implications for cable, and you guys fortunately aren't going to be the targets in Washington, at least among the cable industry. But it could affect you. I'm just wondering how you think about the implications, if any, of things like Title II, maybe a greater political focus on affordability and access. I mean to me, the RDOF stuff seems like it works financially and politically, not to sound too cynical, but just wondering how you're thinking about all this stuff as you look out to a potential Democratic FCC.

It's difficult to over-interpret political rhetoric. Any regulatory change for our sector would take a long time to enact, as we've seen historically. Whether an administration will prioritize such action is another question. Right now there is broad focus on expanding broadband access, which generally aligns with our objectives to invest in networks. We'll be reactive and proactive as needed, but at this point we don't see any imminent regulatory action that would materially change our near-term plans.

Your next question is from John Hodulik from UBS.

Two quick ones, I think. First, any updated thoughts on the use of proceeds from the Lightpath transaction, just given the better-than-expected EBITDA growth you've seen in the second half here? And then, Dexter, you talked about M&A among smaller cable companies. Can you give us a sense of what the landscape looks like? Obviously, there's a lot of small cable companies out there, sort of is it a target-rich environment where you guys got a lot queued up? Or any sort of insight into sort of what you look for? And obviously, we know about the Atlantic Broadband situation, but are you looking for contiguous regions or underpenetrated assets or lower margins? Or any hints as to how you guys sort of look at the landscape would be great.

On use of proceeds from Lightpath: our $2 billion-plus repurchase guidance is based on non-Lightpath proceeds. The approximately $1.1 billion of net proceeds we expect to get from Lightpath, to the extent we don't see attractive M&A opportunities to deploy that capital, we'll likely use some or all of it to buy back shares. On M&A, we like contiguous, underpenetrated cable assets where we can drive operational synergies. We are looking at a handful of opportunities; smaller operators are certainly around and given the low-rate environment and scale advantages, some of the smaller operators are considering deals. Service Electric was an example where we found low-hanging fruit by adding sales resources, updating products and investing in the network. Everything we can get our hands on that makes sense will be the best use of capital from a return standpoint. Absent M&A opportunities, buying back shares at attractive yields while financing at low rates remains very compelling.

Your next question is from Peter Supino from Bernstein.

I was curious to ask about Suddenlink and in particular, whether in September you provided some really helpful color on the profitability of Suddenlink. I would love to know more about subscriber growth and/or ARPU levels and trends in the Suddenlink territories given the different customer demographics there.

We don't break out Suddenlink numbers specifically, but a disproportionate chunk of our volume growth is coming from Suddenlink, similar to peers in comparable demographics. Suddenlink benefits from a programming cost lineup that is less prominent than in the Optimum footprint, which improves margins. Broadband ARPU on the Suddenlink side is consistently about 5% to 10% higher than Optimum, driven by less competitive pressure from fiber competitors in those markets. Growth has been strong from a broadband net-add standpoint and ARPU on Suddenlink has been higher. Historically, we've rolled out 1-gig earlier in Suddenlink than Optimum, which has helped penetration. SMB growth is also stronger in Suddenlink than in Optimum. The flip side is Optimum contributes more to advertising dollars and some profitability areas, which balances consolidated results.

Your next question is from Jonathan Chaplin of New Street Research.

Just a follow up on Hodulik's questions. With the Atlantic Broadband process extra, is that over at this point? And if not, is there sort of a date at which point it will be over? And when we think about the use of proceeds from Lightpath, if there isn't another deal like Atlantic Broadband to do, would you do an accelerated share repurchase program in the fourth quarter that would consume that? Or would the $1.1 billion be sort of spread out over time in terms of share repurchases?

On Atlantic Broadband: our latest offer had an expiration date of November 18. Other than reiterating that, there's nothing more to add at this time. On the $1.1 billion, there are many ways to deploy it, whether through accelerated share repurchases, open market repurchases, or structured offerings. Given current price levels, we're likely to be opportunistic and be more active sooner rather than spread it evenly over 12 months.

It seems like investors win either way. We had to get Atlantic Broadband or $1.1 billion of share repurchases, so I think that's awesome.

Your next question is from Bentley Cross from TD Securities.

A quick question on capital intensity. I mean 8.3% in the quarter and lower than that ex new-build. You guys communicated that's going to be in the same range, $1.3 to $1.4 billion going forward. Just wondering when we get down to that dream scenario of sub-$1 billion and if you can put a time frame on that.

A lot of this depends on our FTTH rollout progress. We're not on budget this year due to permitting and construction restrictions, and edge-out activity is lower than planned. Given current visibility, we expect to do 500,000-plus more fiber homes next year and, if the machine is fully up and running with permitting moving quickly, we could do over 1 million per year thereafter. By simple math, you are probably looking at 3.5 to 4 years before we complete the entire Optimum footprint on FTTH. As we complete fiber upgrades, capital intensity should come down materially and the long-run target of below $1 billion annual CapEx becomes achievable.

We have time for one last question. Your final question is from Michael Rollins of Citi.

Curious if you could talk a bit more about the mobile strategy in terms of how you're looking at rolling into the T-Mobile network and if you're looking at building some infrastructure in your markets. And related to that, when you're building fiber-to-the-home, are you layering in a lot more strands or capability where you might be able to leverage your own fiber over time to either build or partner and offer a solution to another provider?

On the fiber builds, yes, as we roll out FTTH we are putting very high strand-count fiber in place so we can multipurpose it in the future. Regarding mobile, we have good dialogue with T-Mobile. We are currently roaming with them and are discussing a near-term re-homing from the Sprint network to the T-Mobile network. That is a near-term item depending on their readiness on OSS/BSS and other technical factors. We'll continue to develop products and services with T-Mobile and look for opportunities to grow the business. Large capital allocations to build mobile infrastructure ourselves are not our preferred approach. We prefer partnering with parties that have infrastructure or building arrangements where we can secure capacity rather than making sizeable spectrum purchases or building standalone infrastructure in a region, which is generally less economical given subscriber mobility. Thank you very much, everyone. It sounds like that's the last question. I appreciate your time. Nick, Cathy, Mike and I are available for follow-on questions whenever.

Thank you.

Thank you, everybody.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.