Charter Announces Second Quarter 2022 Results
Charter Communications reported a 6.2% increase in second quarter revenue to $13.6 billion, with net income rising by 44.2% to $1.5 billion. The company added 344,000 mobile lines, reaching 4.3 million total mobile lines, while residential and SMB Internet customers declined by 21,000 after accounting for disconnects related to the Emergency Broadband Benefit program. Adjusted EBITDA grew 9.7% to $5.5 billion, but free cash flow fell 19.8% to $1.7 billion. Charter also repurchased 8.3 million shares for approximately $4.3 billion.
- Second quarter revenue increased by 6.2% year-over-year to $13.6 billion.
- Net income attributable to Charter shareholders rose by 44.2% year-over-year to $1.5 billion.
- Adjusted EBITDA grew by 9.7% year-over-year to $5.5 billion.
- Mobile revenue surged by 39.8% year-over-year, driven by higher mobile line growth.
- Charter repurchased 8.3 million shares for approximately $4.3 billion.
- Total residential and SMB Internet customers decreased by 21,000, including 59,000 disconnects.
- Free cash flow decreased by 19.8% year-over-year to $1.7 billion.
- Second quarter residential video customers decreased by 240,000, compared to a decline of 63,000 in 2021.
STAMFORD, Conn., July 29, 2022 /PRNewswire/ -- Charter Communications, Inc. (along with its subsidiaries, the "Company" or "Charter") today reported financial and operating results for the three and six months ended June 30, 2022.
- Second quarter total residential and small and medium business ("SMB") mobile lines increased by 344,000. As of June 30, 2022, Charter served a total of 4.3 million mobile lines.
- Second quarter total residential and SMB Internet customers increased by 38,000 when excluding 59,000 customer disconnects related to the discontinuation of the Emergency Broadband Benefit program and additional requirements of the Affordable Connectivity Program. Including the unfavorable transition impact, second quarter total residential and SMB Internet customers decreased by 21,000. As of June 30, 2022, Charter served a total of 30.3 million residential and SMB Internet customers.
- As of June 30, 2022, Charter had a total of 32.1 million residential and SMB customer relationships, which excludes mobile-only relationships.
- Second quarter revenue of
$13.6 billion grew by6.2% year-over-year, driven by residential revenue growth of4.5% , mobile revenue growth of39.8% and commercial revenue growth of4.2% . - Net income attributable to Charter shareholders totaled
$1.5 billion in the second quarter, an increase of44.2% year-over-year. - Second quarter Adjusted EBITDA1 of
$5.5 billion grew by9.7% year-over-year. - Second quarter capital expenditures totaled
$2.2 billion and included$357 million of rural construction initiative capital expenditures and$95 million of mobile-related capital expenditures. - Second quarter net cash flows from operating activities totaled
$3.7 billion , compared to$4.0 billion in the prior year quarter. - Second quarter free cash flow1 of
$1.7 billion decreased by19.8% year-over-year, primarily due to higher cash taxes and capital expenditures associated with Charter's rural construction initiative. - During the second quarter, Charter purchased 8.3 million shares of Charter Class A common stock and Charter Communications Holdings, LLC ("Charter Holdings") common units for approximately
$4.3 billion .
"Our growth has always been driven by offering value-rich packages at prices customers can afford," said Tom Rutledge, Chairman and CEO of Charter Communications. "Looking forward, we remain well-positioned to grow our business using that same strategy. Our fixed and mobile broadband services continue to converge, and we offer a unique connectivity package while meaningfully reducing customer bills. So there is a large opportunity for us to save customers money, which in turn raises connects, reduces churn and drives overall customer relationship growth."
1. | Adjusted EBITDA and free cash flow are non-GAAP measures defined in the "Use of Adjusted EBITDA and Free Cash Flow Information" section and are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, in the addendum of this news release. |
Approximate as of | ||||||
June 30, 2022 (a) | June 30, 2021 (a) | Y/Y Change | ||||
Footprint (b) | ||||||
Estimated Passings | 55,008 | 54,000 | 1.9 % | |||
Customer Relationships (c) | ||||||
Residential | 29,942 | 29,660 | 1.0 % | |||
SMB | 2,182 | 2,104 | 3.7 % | |||
Total Customer Relationships | 32,124 | 31,764 | 1.1 % | |||
Residential | (93) | 299 | (392) | |||
SMB | 19 | 33 | (14) | |||
Total Customer Relationships Quarterly Net Additions | (74) | 332 | (406) | |||
Total Customer Relationship Penetration of Estimated Passings (d) | 58.4 % | 58.8 % | (0.4) ppts | |||
Monthly Residential Revenue per Residential Customer (e) | $ 116.00 | $ 112.85 | 2.8 % | |||
Monthly SMB Revenue per SMB Customer (f) | $ 165.66 | $ 166.28 | (0.4) % | |||
Residential Customer Relationships Penetration | ||||||
Single Play Penetration (g) | 47.8 % | 45.7 % | 2.1 ppts | |||
Double Play Penetration (g) | 33.1 % | 32.7 % | 0.4 ppts | |||
Triple Play Penetration (g) | 19.1 % | 21.6 % | (2.5) ppts | |||
% Residential Non-Video Customer Relationships | 50.4 % | 48.0 % | 2.4 ppts | |||
Internet | ||||||
Residential | 28,259 | 27,722 | 1.9 % | |||
SMB | 1,994 | 1,912 | 4.3 % | |||
Total Internet Customers | 30,253 | 29,634 | 2.1 % | |||
Residential | (42) | 365 | (407) | |||
SMB | 21 | 35 | (14) | |||
Total Internet Quarterly Net Additions | (21) | 400 | (421) | |||
Video | ||||||
Residential | 14,853 | 15,420 | (3.7) % | |||
SMB | 642 | 592 | 8.4 % | |||
Total Video Customers | 15,495 | 16,012 | (3.2) % | |||
Residential | (240) | (63) | (177) | |||
SMB | 14 | 13 | 1 | |||
Total Video Quarterly Net Additions | (226) | (50) | (176) | |||
Voice | ||||||
Residential | 8,200 | 9,014 | (9.0) % | |||
SMB | 1,287 | 1,259 | 2.2 % | |||
Total Voice Customers | 9,487 | 10,273 | (7.6) % | |||
Residential | (265) | (99) | (166) | |||
SMB | (1) | 21 | (22) | |||
Total Voice Quarterly Net Additions | (266) | (78) | (188) | |||
Mobile Lines (h) | ||||||
Residential | 4,134 | 2,855 | 44.8 % | |||
SMB | 147 | 85 | 73.2 % | |||
Total Mobile Lines | 4,281 | 2,940 | 45.6 % | |||
Residential | 329 | 250 | 79 | |||
SMB | 15 | 15 | — | |||
Total Mobile Lines Quarterly Net Additions | 344 | 265 | 79 | |||
Enterprise (i) | ||||||
Enterprise Primary Service Units ("PSUs") | 277 | 265 | 4.7 % | |||
Enterprise Quarterly Net Additions | 3 | 4 | (1) | |||
Footnotes - In thousands, except per customer and penetration data. See footnotes to unaudited summary of operating statistics on page 6 of the addendum of this news release. The footnotes contain important disclosures regarding the definitions used for these operating statistics. All percentages are calculated using whole numbers. Minor differences may exist due to rounding. | ||||||
As of June 30, 2022, Charter had 29.9 million residential customer relationships, with year-over-year growth of
Second quarter residential Internet customers increased by 17,000 when excluding 59,000 customer disconnects related to the discontinuation of the Emergency Broadband Benefit program and additional requirements of the Affordable Connectivity Program. Including the unfavorable transition impact, second quarter residential Internet customers decreased by 42,000, compared to an increase of 365,000 customers during the second quarter of 2021. Currently, 300 Mbps is the minimum speed offered to new Spectrum Internet® customers across Charter's footprint. As of June 30, 2022, over
Residential video customers decreased by 240,000 in the second quarter of 2022, compared to a decline of 63,000 in the second quarter of 2021, partly driven by downgrades following an April pass through of higher programming expense. As of June 30, 2022, Charter had 14.9 million residential video customers.
During the second quarter of 2022, residential wireline voice customers declined by 265,000, compared to a decline of 99,000 in the second quarter of 2021. As of June 30, 2022, Charter had 8.2 million residential wireline voice customers.
Second quarter 2022 residential revenue per residential customer (excluding mobile) totaled
SMB customer relationships grew by 19,000 in the second quarter of 2022, while second quarter 2021 SMB customer relationships grew by 33,000. Enterprise PSUs grew by 3,000 in the second quarter of 2022 versus 4,000 added in the second quarter of 2021.
During the second quarter of 2022, Charter added 344,000 mobile lines, compared to growth of 265,000 during the second quarter of 2021. Spectrum MobileTM is available to all new and existing Spectrum Internet customers. Spectrum Mobile customers can choose "Unlimited" or "By the Gig" data plans. In October 2021, Spectrum Mobile introduced new Unlimited pricing starting at
1. | Fastest Overall Speed claim based on Global Wireless Solutions' combined cellular and WiFi speed test results in Spectrum service area where WiFi is available. Cellular speeds vary by location. |
(in millions) | |||||
Three Months Ended June 30, | |||||
2022 | 2021 | % Change | |||
Revenues: | |||||
Internet | $ 5,562 | $ 5,221 | 6.5 % | ||
Video | 4,484 | 4,378 | 2.4 % | ||
Voice | 398 | 394 | 1.0 % | ||
Residential revenue | 10,444 | 9,993 | 4.5 % | ||
Small and medium business | 1,080 | 1,042 | 3.7 % | ||
Enterprise | 669 | 636 | 4.9 % | ||
Commercial revenue | 1,749 | 1,678 | 4.2 % | ||
Advertising sales | 460 | 411 | 12.0 % | ||
Mobile | 726 | 519 | 39.8 % | ||
Other | 219 | 201 | 8.8 % | ||
Total Revenues | $ 13,598 | $ 12,802 | 6.2 % | ||
Net income attributable to Charter shareholders | $ 1,471 | $ 1,020 | 44.2 % | ||
Net income attributable to Charter shareholders margin | 10.8 % | 8.0 % | |||
Adjusted EBITDA1 | $ 5,509 | $ 5,020 | 9.7 % | ||
Adjusted EBITDA margin | 40.5 % | 39.2 % | |||
Capital Expenditures | $ 2,193 | $ 1,881 | 16.6 % | ||
% Total Revenues | 16.1 % | 14.7 % | |||
Net cash flows from operating activities | $ 3,734 | $ 3,999 | (6.6) % | ||
Free cash flow1 | $ 1,659 | $ 2,068 | (19.8) % | ||
1. | See page 1 of the addendum for a GAAP reconciliation of Adjusted EBITDA and free cash flow. |
Revenues
Second quarter revenue increased by
Residential revenue totaled
Internet revenue grew by
Video revenue totaled
Voice revenue totaled
Commercial revenue increased by
Second quarter advertising sales revenue of
Second quarter mobile revenue totaled
Operating Costs and Expenses
Second quarter programming costs decreased by
Regulatory, connectivity and produced content expenses decreased by
Costs to service customers increased by
Marketing expenses increased by
Second quarter mobile costs totaled
Other expenses increased by
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled
Net income per basic common share attributable to Charter shareholders totaled
Adjusted EBITDA
Second quarter Adjusted EBITDA of
Capital Expenditures
Property, plant and equipment expenditures totaled
Charter currently expects full year 2022 cable capital expenditures, excluding capital expenditures associated with its rural construction initiative, to be between
Cash Flow and Free Cash Flow
During the second quarter of 2022, net cash flows from operating activities totaled
Free cash flow in the second quarter of 2022 totaled
Liquidity & Financing
As of June 30, 2022, total principal amount of debt was
In May 2022, Charter Communications Operating, LLC ("Charter Operating") entered into an amendment to its credit agreement (the "Amendment") to: (i) upsize term A loans by
After giving effect to the Amendment: (i) the aggregate principal amount of term A-5 loans outstanding is
Share Repurchases
During the three months ended June 30, 2022, Charter purchased 8.3 million shares of Charter Class A common stock and Charter Holdings common units for approximately
Charter will host a webcast on Friday, July 29, 2022 at 8:30 a.m. Eastern Time (ET) related to the contents of this release.
The webcast can be accessed live via the Company's investor relations website at ir.charter.com. Participants should go to the webcast link no later than 10 minutes prior to the start time to register. The webcast will be archived at ir.charter.com two hours after completion of the webcast.
The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2022, which will be posted on the "Results & SEC Filings" section of the Company's investor relations website at ir.charter.com, when it is filed with the Securities and Exchange Commission (the "SEC"). A slide presentation to accompany the conference call and a trending schedule containing historical customer and financial data will also be available in the "Results & SEC Filings" section.
The Company uses certain measures that are not defined by U.S. generally accepted accounting principles ("GAAP") to evaluate various aspects of its business. Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income attributable to Charter shareholders and net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by Charter, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA and free cash flow are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, in the Addendum to this release.
Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company's businesses as well as other non-cash or special items, and is unaffected by the Company's capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing. These costs are evaluated through other financial measures.
Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.
Management and Charter's board of directors use Adjusted EBITDA and free cash flow to assess Charter's performance and its ability to service its debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under the Company's credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the SEC). For the purpose of calculating compliance with leverage covenants, the Company uses Adjusted EBITDA, as presented, excluding certain expenses paid by its operating subsidiaries to other Charter entities. The Company's debt covenants refer to these expenses as management fees, which were
Charter Communications, Inc. (NASDAQ:CHTR) is a leading broadband connectivity company and cable operator serving more than 32 million customers in 41 states through its Spectrum brand. Over an advanced communications network, the Company offers a full range of state-of-the-art residential and business services including Spectrum Internet®, TV, Mobile and Voice.
For small and medium-sized companies, Spectrum Business® delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise provides highly customized, fiber-based solutions. Spectrum Reach® delivers tailored advertising and production for the modern media landscape. The Company also distributes award-winning news coverage, sports and high-quality original programming to its customers through Spectrum Networks and Spectrum Originals. More information about Charter can be found at corporate.charter.com.
This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial. Although we believe that our plans, intentions and expectations as reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under "Risk Factors" from time to time in our filings with the SEC. Many of the forward-looking statements contained in this communication may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," "aim," "on track," "target," "opportunity," "tentative," "positioning," "designed," "create," "predict," "project," "initiatives," "seek," "would," "could," "continue," "ongoing," "upside," "increases," "grow," "focused on" and "potential," among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this communication are set forth in our annual report on Form 10-K, and in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:
- our ability to sustain and grow revenues and cash flow from operations by offering Internet, video, voice, mobile, advertising and other services to residential and commercial customers, to adequately meet the customer experience demands in our service areas and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition, the need for innovation and the related capital expenditures;
- the impact of competition from other market participants, including but not limited to incumbent telephone companies, direct broadcast satellite ("DBS") operators, wireless broadband and telephone providers, digital subscriber line ("DSL") providers, fiber to the home providers and providers of video content over broadband Internet connections;
- general business conditions, unemployment levels and the level of activity in the housing sector and economic uncertainty or downturn, including the impacts of the Novel Coronavirus ("COVID-19") pandemic to sales opportunities from residential move activity, our customers, our vendors and local, state and federal governmental responses to the pandemic;
- our ability to obtain programming at reasonable prices or to raise prices to offset, in whole or in part, the effects of higher programming costs (including retransmission consents and distribution requirements);
- our ability to develop and deploy new products and technologies including consumer services and service platforms;
- any events that disrupt our networks, information systems or properties and impair our operating activities or our reputation;
- the effects of governmental regulation on our business including subsidies to consumers, subsidies and incentives for competitors, costs, disruptions and possible limitations on operating flexibility related to, and our ability to comply with, regulatory conditions applicable to us;
- the ability to hire and retain key personnel;
- our ability to procure necessary services and equipment from our vendors in a timely manner and at reasonable costs;
- the availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets; and
- our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default of our other obligations under cross-default provisions.
All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this communication.
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES (dollars in millions) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net income attributable to Charter shareholders | $ 1,471 | $ 1,020 | $ 2,674 | $ 1,827 | |||
Plus: Net income attributable to noncontrolling interest | 237 | 138 | 423 | 252 | |||
Interest expense, net | 1,109 | 1,004 | 2,169 | 1,987 | |||
Income tax expense | 489 | 281 | 834 | 497 | |||
Depreciation and amortization | 2,240 | 2,354 | 4,534 | 4,795 | |||
Stock compensation expense | 104 | 100 | 251 | 234 | |||
Other (income) expenses, net | (141) | 123 | (163) | 373 | |||
Adjusted EBITDA | $ 5,509 | $ 5,020 | $ 10,722 | $ 9,965 | |||
Net cash flows from operating activities | $ 3,734 | $ 3,999 | $ 7,381 | $ 7,750 | |||
Less: Purchases of property, plant and equipment | (2,193) | (1,881) | (4,050) | (3,702) | |||
Change in accrued expenses related to capital expenditures | 118 | (50) | 128 | (125) | |||
Free cash flow | $ 1,659 | $ 2,068 | $ 3,459 | $ 3,923 | |||
The above schedule is presented in order to reconcile Adjusted EBITDA and free cash flow, non-GAAP measures, to the most directly comparable GAAP measures in accordance with Section 401(b) of the Sarbanes-Oxley Act. | |||||||
UNAUDITED ALTERNATIVE PRESENTATION OF ADJUSTED EBITDA (dollars in millions) | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||
REVENUES: | |||||||||||
Internet | $ 5,562 | $ 5,221 | 6.5 % | $ 11,014 | $ 10,307 | 6.9 % | |||||
Video | 4,484 | 4,378 | 2.4 % | 8,830 | 8,722 | 1.2 % | |||||
Voice | 398 | 394 | 1.0 % | 789 | 793 | (0.5) % | |||||
Residential revenue | 10,444 | 9,993 | 4.5 % | 20,633 | 19,822 | 4.1 % | |||||
Small and medium business | 1,080 | 1,042 | 3.7 % | 2,139 | 2,054 | 4.1 % | |||||
Enterprise | 669 | 636 | 4.9 % | 1,330 | 1,274 | 4.3 % | |||||
Commercial revenue | 1,749 | 1,678 | 4.2 % | 3,469 | 3,328 | 4.2 % | |||||
Advertising sales | 460 | 411 | 12.0 % | 843 | 755 | 11.8 % | |||||
Mobile | 726 | 519 | 39.8 % | 1,416 | 1,011 | 40.0 % | |||||
Other | 219 | 201 | 8.8 % | 437 | 408 | 7.0 % | |||||
Total Revenues | 13,598 | 12,802 | 6.2 % | 26,798 | 25,324 | 5.8 % | |||||
COSTS AND EXPENSES: | |||||||||||
Programming | 2,972 | 2,978 | (0.2) % | 5,949 | 5,966 | (0.3) % | |||||
Regulatory, connectivity and produced content | 599 | 668 | (10.3) % | 1,155 | 1,268 | (8.9) % | |||||
Costs to service customers | 1,920 | 1,827 | 5.1 % | 3,819 | 3,631 | 5.2 % | |||||
Marketing | 806 | 741 | 8.6 % | 1,632 | 1,492 | 9.4 % | |||||
Mobile | 797 | 586 | 35.9 % | 1,557 | 1,158 | 34.4 % | |||||
Other expense (a) | 995 | 982 | 1.3 % | 1,964 | 1,844 | 6.5 % | |||||
Total operating costs and expenses (a) | 8,089 | 7,782 | 3.9 % | 16,076 | 15,359 | 4.7 % | |||||
Adjusted EBITDA | $ 5,509 | $ 5,020 | 9.7 % | $ 10,722 | $ 9,965 | 7.6 % | |||||
(a) | Other expense excludes stock compensation expense. Total operating costs and expenses excludes stock compensation expense, depreciation and amortization and other operating (income) expenses, net. |
All percentages are calculated using whole numbers. Minor differences may exist due to rounding. | |
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in millions, except per share data) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
REVENUES | $ 13,598 | $ 12,802 | $ 26,798 | $ 25,324 | |||
COSTS AND EXPENSES: | |||||||
Operating costs and expenses (exclusive of items shown separately below) | 8,193 | 7,882 | 16,327 | 15,593 | |||
Depreciation and amortization | 2,240 | 2,354 | 4,534 | 4,795 | |||
Other operating (income) expenses, net | (62) | (9) | (61) | 293 | |||
10,371 | 10,227 | 20,800 | 20,681 | ||||
Income from operations | 3,227 | 2,575 | 5,998 | 4,643 | |||
OTHER INCOME (EXPENSES): | |||||||
Interest expense, net | (1,109) | (1,004) | (2,169) | (1,987) | |||
Other income (expense), net | 79 | (132) | 102 | (80) | |||
(1,030) | (1,136) | (2,067) | (2,067) | ||||
Income before income taxes | 2,197 | 1,439 | 3,931 | 2,576 | |||
Income tax expense | (489) | (281) | (834) | (497) | |||
Consolidated net income | 1,708 | 1,158 | 3,097 | 2,079 | |||
Less: Net income attributable to noncontrolling interests | (237) | (138) | (423) | (252) | |||
Net income attributable to Charter shareholders | $ 1,471 | $ 1,020 | $ 2,674 | $ 1,827 | |||
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS: | |||||||
Basic | $ 8.96 | $ 5.48 | $ 15.98 | $ 9.69 | |||
Diluted | $ 8.80 | $ 5.29 | $ 15.66 | $ 9.37 | |||
Weighted average common shares outstanding, basic | 164,049,619 | 185,916,505 | 167,350,535 | 188,645,356 | |||
Weighted average common shares outstanding, diluted | 167,090,925 | 199,077,390 | 170,741,462 | 202,458,265 | |||
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in millions) | |||
June 30, | December 31, | ||
2022 | 2021 | ||
ASSETS | (unaudited) | ||
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 483 | $ 601 | |
Accounts receivable, net | 2,779 | 2,579 | |
Prepaid expenses and other current assets | 476 | 386 | |
Total current assets | 3,738 | 3,566 | |
INVESTMENT IN CABLE PROPERTIES: | |||
Property, plant and equipment, net | 34,472 | 34,310 | |
Customer relationships, net | 3,373 | 4,060 | |
Franchises | 67,354 | 67,346 | |
Goodwill | 29,563 | 29,562 | |
Total investment in cable properties, net | 134,762 | 135,278 | |
OTHER NONCURRENT ASSETS | 4,758 | 3,647 | |
Total assets | $ 143,258 | $ 142,491 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES: | |||
Accounts payable and accrued liabilities | $ 9,862 | $ 9,461 | |
Current portion of long-term debt | 1,533 | 2,997 | |
Total current liabilities | 11,395 | 12,458 | |
LONG-TERM DEBT | 94,468 | 88,564 | |
DEFERRED INCOME TAXES | 19,123 | 19,096 | |
OTHER LONG-TERM LIABILITIES | 4,759 | 4,217 | |
SHAREHOLDERS' EQUITY: | |||
Controlling interest | 9,879 | 14,050 | |
Noncontrolling interests | 3,634 | 4,106 | |
Total shareholders' equity | 13,513 | 18,156 | |
Total liabilities and shareholders' equity | $ 143,258 | $ 142,491 | |
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Consolidated net income | $ 1,708 | $ 1,158 | $ 3,097 | $ 2,079 | |||
Adjustments to reconcile consolidated net income to net cash flows from operating activities: | |||||||
Depreciation and amortization | 2,240 | 2,354 | 4,534 | 4,795 | |||
Stock compensation expense | 104 | 100 | 251 | 234 | |||
Noncash interest income, net | (4) | (8) | (7) | (15) | |||
Deferred income taxes | 77 | 215 | 115 | 371 | |||
Other, net | (132) | 129 | (153) | 124 | |||
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | |||||||
Accounts receivable | (249) | (188) | (200) | (44) | |||
Prepaid expenses and other assets | 52 | 69 | (133) | (113) | |||
Accounts payable, accrued liabilities and other | (62) | 170 | (123) | 319 | |||
Net cash flows from operating activities | 3,734 | 3,999 | 7,381 | 7,750 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property, plant and equipment | (2,193) | (1,881) | (4,050) | (3,702) | |||
Change in accrued expenses related to capital expenditures | 118 | (50) | 128 | (125) | |||
Other, net | (220) | (85) | (160) | (145) | |||
Net cash flows from investing activities | (2,295) | (2,016) | (4,082) | (3,972) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings of long-term debt | 9,918 | 5,669 | 16,631 | 10,958 | |||
Repayments of long-term debt | (8,993) | (2,595) | (11,947) | (5,759) | |||
Payments for debt issuance costs | (20) | (36) | (57) | (58) | |||
Purchase of treasury stock | (3,687) | (3,516) | (7,020) | (7,168) | |||
Proceeds from exercise of stock options | 4 | 17 | 5 | 26 | |||
Purchase of noncontrolling interest | (578) | (583) | (994) | (1,090) | |||
Distributions to noncontrolling interest | (5) | (32) | (7) | (71) | |||
Other, net | (26) | 32 | (28) | 94 | |||
Net cash flows from financing activities | (3,387) | (1,044) | (3,417) | (3,068) | |||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (1,948) | 939 | (118) | 710 | |||
CASH AND CASH EQUIVALENTS, beginning of period | 2,431 | 772 | 601 | 1,001 | |||
CASH AND CASH EQUIVALENTS, end of period | $ 483 | $ 1,711 | $ 483 | $ 1,711 | |||
CASH PAID FOR INTEREST | $ 1,168 | $ 979 | $ 2,150 | $ 1,996 | |||
CASH PAID FOR TAXES | $ 441 | $ 49 | $ 470 | $ 69 | |||
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED SUMMARY OF OPERATING STATISTICS (in thousands, except per customer and penetration data) | ||||||||
Approximate as of | ||||||||
June 30, 2022 (a) | March 31, 2022 (a) | December 31, 2021 (a) | June 30, 2021 (a) | |||||
Footprint (b) | ||||||||
Estimated Passings | 55,008 | 54,739 | 54,521 | 54,000 | ||||
Customer Relationships (c) | ||||||||
Residential | 29,942 | 30,035 | 29,926 | 29,660 | ||||
SMB | 2,182 | 2,163 | 2,143 | 2,104 | ||||
Total Customer Relationships | 32,124 | 32,198 | 32,069 | 31,764 | ||||
Residential | (93) | 109 | 103 | 299 | ||||
SMB | 19 | 20 | 17 | 33 | ||||
Total Customer Relationships Quarterly Net Additions | (74) | 129 | 120 | 332 | ||||
Total Customer Relationship Penetration of Estimated Passings (d) | 58.4 % | 58.8 % | 58.8 % | 58.8 % | ||||
Monthly Residential Revenue per Residential Customer (e) | $ 116.00 | $ 113.28 | $ 114.14 | $ 112.85 | ||||
Monthly SMB Revenue per SMB Customer (f) | $ 165.66 | $ 163.96 | $ 164.59 | $ 166.28 | ||||
Residential Customer Relationships Penetration | ||||||||
Single Play Penetration (g) | 47.8 % | 47.2 % | 46.7 % | 45.7 % | ||||
Double Play Penetration (g) | 33.1 % | 33.0 % | 33.0 % | 32.7 % | ||||
Triple Play Penetration (g) | 19.1 % | 19.8 % | 20.4 % | 21.6 % | ||||
% Residential Non-Video Customer Relationships | 50.4 % | 49.7 % | 49.2 % | 48.0 % | ||||
Internet | ||||||||
Residential | 28,259 | 28,301 | 28,137 | 27,722 | ||||
SMB | 1,994 | 1,973 | 1,952 | 1,912 | ||||
Total Internet Customers | 30,253 | 30,274 | 30,089 | 29,634 | ||||
Residential | (42) | 164 | 172 | 365 | ||||
SMB | 21 | 21 | 18 | 35 | ||||
Total Internet Quarterly Net Additions | (21) | 185 | 190 | 400 | ||||
Video | ||||||||
Residential | 14,853 | 15,093 | 15,216 | 15,420 | ||||
SMB | 642 | 628 | 617 | 592 | ||||
Total Video Customers | 15,495 | 15,721 | 15,833 | 16,012 | ||||
Residential | (240) | (123) | (71) | (63) | ||||
SMB | 14 | 11 | 13 | 13 | ||||
Total Video Quarterly Net Additions | (226) | (112) | (58) | (50) | ||||
Voice | ||||||||
Residential | 8,200 | 8,465 | 8,621 | 9,014 | ||||
SMB | 1,287 | 1,288 | 1,282 | 1,259 | ||||
Total Voice Customers | 9,487 | 9,753 | 9,903 | 10,273 | ||||
Residential | (265) | (156) | (163) | (99) | ||||
SMB | (1) | 6 | 9 | 21 | ||||
Total Voice Quarterly Net Additions | (266) | (150) | (154) | (78) | ||||
Mobile Lines (h) | ||||||||
Residential | 4,134 | 3,805 | 3,448 | 2,855 | ||||
SMB | 147 | 132 | 116 | 85 | ||||
Total Mobile Lines | 4,281 | 3,937 | 3,564 | 2,940 | ||||
Residential | 329 | 357 | 363 | 250 | ||||
SMB | 15 | 16 | 17 | 15 | ||||
Total Mobile Lines Quarterly Net Additions | 344 | 373 | 380 | 265 | ||||
Enterprise (i) | ||||||||
Enterprise Primary Service Units ("PSUs") | 277 | 274 | 272 | 265 | ||||
Enterprise Quarterly Net Additions | 3 | 2 | 3 | 4 | ||||
(a) | We calculate the aging of customer accounts based on the monthly billing cycle for each account. On that basis, at June 30, 2022, March 31, 2022, December 31, 2021 and June 30, 2021, customers included approximately 154,500, 132,500, 128,300 and 162,700 customers, respectively, whose accounts were over 60 days past due, approximately 45,800, 29,000, 26,800 and 23,200 customers, respectively, whose accounts were over 90 days past due and approximately 97,200, 74,500, 43,200 and 30,400 customers, respectively, whose accounts were over 120 days past due. Bad debt expense associated with these past due accounts has been reflected in our consolidated statements of operations. The increase in past due accounts is predominately due to pre-existing and incremental unsubsidized amounts of customers' bills for those customers participating in government assistance programs. These customers are downgraded to a fully subsidized Internet only service. Included in the June 30, 2021 aging statistics are approximately 73,500 residential customers that would have been disconnected under our normal collection policies, but were not due to certain state mandates in place. |
(b) | Passings represent our estimate of the number of units, such as single family homes, apartment and condominium units and SMB and enterprise sites passed by our cable distribution network in the areas where we offer the service indicated. These estimates are based upon the information available at this time and are updated for all periods presented when new information becomes available. |
(c) | Customer relationships include the number of customers that receive one or more levels of service, encompassing Internet, video and voice services, without regard to which service(s) such customers receive. Customers who reside in residential multiple dwelling units ("MDUs") and that are billed under bulk contracts are counted based on the number of billed units within each bulk MDU. Total customer relationships exclude enterprise and mobile-only customer relationships. |
(d) | Penetration represents residential and SMB customers as a percentage of estimated passings. Penetration excludes mobile-only customers. |
(e) | Monthly residential revenue per residential customer is calculated as total residential quarterly revenue divided by three divided by average residential customer relationships during the respective quarter and excludes mobile revenue and customers. |
(f) | Monthly SMB revenue per SMB customer is calculated as total SMB quarterly revenue divided by three divided by average SMB customer relationships during the respective quarter and excludes mobile revenue and customers. |
(g) | Single play, double play and triple play penetration represents the number of residential single play, double play and triple play cable customers, respectively, as a percentage of residential customer relationships, excluding mobile. |
(h) | Mobile lines include phones and tablets which require one of our standard rate plans (e.g., "Unlimited" or "By the Gig"). Mobile lines exclude wearables and other devices that do not require standard phone rate plans. |
(i) | Enterprise PSUs represents the aggregate number of fiber service offerings counting each separate service offering at each customer location as an individual PSU. |
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED CAPITAL EXPENDITURES (dollars in millions) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Customer premise equipment (a) | $ 560 | $ 494 | $ 1,029 | $ 983 | |||
Scalable infrastructure (b) | 389 | 437 | 760 | 848 | |||
Line extensions (c) | 694 | 400 | 1,236 | 799 | |||
Upgrade/rebuild (d) | 181 | 161 | 327 | 306 | |||
Support capital (e) | 369 | 389 | 698 | 766 | |||
Total capital expenditures | $ 2,193 | $ 1,881 | $ 4,050 | $ 3,702 | |||
Capital expenditures included in total related to: | |||||||
Commercial services | $ 376 | $ 397 | $ 741 | $ 730 | |||
Mobile | $ 95 | $ 124 | $ 169 | $ 236 | |||
Rural construction initiative (f) | $ 357 | $ — | $ 589 | $ — | |||
(a) | Customer premise equipment includes costs incurred at the customer residence to secure new customers and revenue generating units, including customer installation costs and customer premise equipment (e.g., digital receivers and cable modems). |
(b) | Scalable infrastructure includes costs, not related to customer premise equipment, to secure growth of new customers and revenue generating units, or provide service enhancements (e.g., headend equipment). |
(c) | Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering). |
(d) | Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments. |
(e) | Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles). |
(f) | The rural construction initiative subcategory includes expenditures associated with our Rural Construction Initiative (for which separate reporting was initiated in 2022), excluding customer premise equipment and installation. |
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SOURCE Charter Communications, Inc.
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