Charter Announces Third Quarter 2022 Results
Charter Communications reported Q3 2022 results, with revenues hitting $13.6 billion, a 3.1% increase YoY. Key drivers included 40.2% growth in mobile revenue and 22.9% growth in advertising sales. The company added 75,000 new Internet customers and 396,000 mobile lines, totaling 30.3 million residential and SMB Internet customers. Net income was $1.2 billion, while free cash flow decreased by 39.1% to $1.5 billion. Charter repurchased 5.8 million shares for $2.6 billion. Despite a decline in video and voice customers, the company remains optimistic about future growth.
- Revenue increased by 3.1% YoY to $13.6 billion.
- Mobile revenue grew by 40.2%, contributing significantly to overall revenue.
- Advertising sales revenue increased by 22.9% compared to the prior year.
- Added 75,000 new Internet customers, reaching a total of 30.3 million.
- Net income attributable to shareholders was $1.2 billion.
- Free cash flow decreased by 39.1% YoY to $1.5 billion.
- Video customers declined by 211,000, worsening from the previous year.
- Residential wireline voice customers fell by 271,000, indicating ongoing subscriber loss.
STAMFORD, Conn., Oct. 28, 2022 /PRNewswire/ -- Charter Communications, Inc. (along with its subsidiaries, the "Company" or "Charter") today reported financial and operating results for the three and nine months ended September 30, 2022.
- Third quarter total residential and small and medium business ("SMB") Internet customers increased by 75,000. As of September 30, 2022, Charter served a total of 30.3 million residential and SMB Internet customers.
- Third quarter total residential and SMB mobile lines increased by 396,000. As of September 30, 2022, Charter served a total of 4.7 million mobile lines.
- As of September 30, 2022, Charter had a total of 32.1 million residential and SMB customer relationships, which excludes mobile-only relationships.
- Third quarter revenue of
$13.6 billion grew by3.1% year-over-year, driven by mobile revenue growth of40.2% , advertising sales revenue growth of22.9% and residential revenue growth of0.7% . - Net income attributable to Charter shareholders totaled
$1.2 billion in the third quarter. - Third quarter Adjusted EBITDA1 of
$5.4 billion grew by2.4% year-over-year. - Third quarter capital expenditures totaled
$2.4 billion and included$525 million of rural construction initiative capital expenditures and$96 million of mobile-related capital expenditures. - Third quarter net cash flows from operating activities totaled
$3.8 billion , compared to$4.3 billion in the prior year quarter. The year-over-year decline was primarily due to higher cash taxes and the payment of litigation settlements, partly offset by higher Adjusted EBITDA. - Third quarter free cash flow1 of
$1.5 billion decreased by39.1% year-over-year, primarily due to capital expenditures associated with Charter's rural construction initiative and higher cash taxes. - During the third quarter, Charter purchased 5.8 million shares of Charter Class A common stock and Charter Communications Holdings, LLC ("Charter Holdings") common units for approximately
$2.6 billion .
"Charter now delivers the nation's first converged broadband, WiFi and mobile experience at prices that generate significant savings for consumers," said Tom Rutledge, Chairman and CEO of Charter. "And as I look at our existing advanced offerings, and our future product capabilities, we are well positioned to grow our business at very attractive rates for many years to come."
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. |
Key Operating Results
Approximate as of | ||||||
September 30, | September 30, | Y/Y Change | ||||
Footprint (b) | ||||||
Estimated Passings | 55,288 | 54,268 | 1.9 % | |||
Customer Relationships (c) | ||||||
Residential | 29,946 | 29,823 | 0.4 % | |||
SMB | 2,195 | 2,126 | 3.3 % | |||
Total Customer Relationships | 32,141 | 31,949 | 0.6 % | |||
Residential | 4 | 163 | (159) | |||
SMB | 13 | 22 | (9) | |||
Total Customer Relationships Quarterly Net Additions | 17 | 185 | (168) | |||
Total Customer Relationship Penetration of Estimated Passings (d) | 58.1 % | 58.9 % | (0.8) ppts | |||
Monthly Residential Revenue per Residential Customer (e) | $ 115.16 | $ 115.15 | 0.0 % | |||
Monthly SMB Revenue per SMB Customer (f) | $ 164.89 | $ 167.29 | (1.4) % | |||
Residential Customer Relationships Penetration | ||||||
Single Play Penetration (g) | 48.5 % | 46.4 % | 2.1 ppts | |||
Double Play Penetration (g) | 33.1 % | 32.8 % | 0.3 ppts | |||
Triple Play Penetration (g) | 18.4 % | 20.9 % | (2.5) ppts | |||
% Residential Non-Video Customer Relationships | 51.1 % | 48.7 % | 2.4 ppts | |||
Internet | ||||||
Residential | 28,320 | 27,965 | 1.3 % | |||
SMB | 2,008 | 1,934 | 3.8 % | |||
Total Internet Customers | 30,328 | 29,899 | 1.4 % | |||
Residential | 61 | 243 | (182) | |||
SMB | 14 | 22 | (8) | |||
Total Internet Quarterly Net Additions | 75 | 265 | (190) | |||
Video | ||||||
Residential | 14,642 | 15,287 | (4.2) % | |||
SMB | 649 | 604 | 7.5 % | |||
Total Video Customers | 15,291 | 15,891 | (3.8) % | |||
Residential | (211) | (133) | (78) | |||
SMB | 7 | 12 | (5) | |||
Total Video Quarterly Net Additions | (204) | (121) | (83) | |||
Voice | ||||||
Residential | 7,929 | 8,784 | (9.7) % | |||
SMB | 1,287 | 1,273 | 1.1 % | |||
Total Voice Customers | 9,216 | 10,057 | (8.4) % | |||
Residential | (271) | (230) | (41) | |||
SMB | — | 14 | (14) | |||
Total Voice Quarterly Net Additions | (271) | (216) | (55) | |||
Mobile Lines (h) | ||||||
Residential | 4,516 | 3,085 | 46.4 % | |||
SMB | 161 | 99 | 63.6 % | |||
Total Mobile Lines | 4,677 | 3,184 | 46.9 % | |||
Residential | 382 | 230 | 152 | |||
SMB | 14 | 14 | — | |||
Total Mobile Lines Quarterly Net Additions | 396 | 244 | 152 | |||
Enterprise (i) | ||||||
Enterprise Primary Service Units ("PSUs") | 282 | 269 | 4.9 % | |||
Enterprise Quarterly Net Additions | 5 | 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 September 30, 2022, Charter had 29.9 million residential customer relationships, with year-over-year growth of
Third quarter residential Internet customers increased by 61,000, compared to an increase of 243,000 customers during the third quarter of 2021. Spectrum Internet® and Spectrum WiFi deliver the fastest speeds in the nation.1 Charter offers Spectrum Internet products with speeds up to 1 Gbps across its entire footprint. Charter's Advanced WiFi, a managed WiFi service that provides customers an optimized home network while providing greater control of their connected devices with enhanced security and privacy, is available to nearly all Spectrum Internet customers. In October, Charter introduced Spectrum One, which brings together Spectrum Internet, Advanced WiFi and Unlimited Spectrum MobileTM, to offer consumers faster, more reliable and secure online connections on their favorite devices at home and on the go in a high-value package.
Residential video customers decreased by 211,000 in the third quarter of 2022, compared to a decline of 133,000 in the third quarter of 2021, partly driven by downgrades following an April pass through of higher programming expense. As of September 30, 2022, Charter had 14.6 million residential video customers.
During the third quarter of 2022, residential wireline voice customers declined by 271,000, compared to a decline of 230,000 in the third quarter of 2021. As of September 30, 2022, Charter had 7.9 million residential wireline voice customers.
Third quarter 2022 residential revenue per residential customer (excluding mobile) totaled
SMB customer relationships grew by 13,000 in the third quarter of 2022, while third quarter 2021 SMB customer relationships grew by 22,000. Enterprise PSUs grew by 5,000 in the third quarter of 2022 versus 4,000 added in the third quarter of 2021.
During the third quarter of 2022, Charter added 396,000 mobile lines, compared to growth of 244,000 during the third quarter of 2021. Spectrum Mobile is available to all new and existing Spectrum Internet customers. Spectrum Mobile customers can choose "Unlimited" or "By the Gig" data plans. Unlimited pricing starts at
1. | Based on analysis by Ookla® of Speedtest Intelligence® data U.S. median fixed download speeds for Q3 2022. Ookla trademarks used under license and reprinted with permission. |
2. | 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. |
Third Quarter Financial Results
(in millions) | |||||
Three Months Ended September 30, | |||||
2022 | 2021 | % Change | |||
Revenues: | |||||
Internet | $ 5,571 | $ 5,363 | 3.9 % | ||
Video | 4,379 | 4,502 | (2.7) % | ||
Voice | 391 | 409 | (4.6) % | ||
Residential revenue | 10,341 | 10,274 | 0.7 % | ||
Small and medium business | 1,082 | 1,062 | 1.9 % | ||
Enterprise | 673 | 656 | 2.6 % | ||
Commercial revenue | 1,755 | 1,718 | 2.2 % | ||
Advertising sales | 481 | 391 | 22.9 % | ||
Mobile | 750 | 535 | 40.2 % | ||
Other | 223 | 228 | (2.1) % | ||
Total Revenues | $ 13,550 | $ 13,146 | 3.1 % | ||
Net income attributable to Charter shareholders | $ 1,185 | $ 1,217 | (2.5) % | ||
Net income attributable to Charter shareholders margin | 8.8 % | 9.3 % | |||
Adjusted EBITDA1 | $ 5,412 | $ 5,286 | 2.4 % | ||
Adjusted EBITDA margin | 39.9 % | 40.2 % | |||
Capital Expenditures | $ 2,406 | $ 1,861 | 29.3 % | ||
% Total Revenues | 17.8 % | 14.2 % | |||
Net cash flows from operating activities | $ 3,757 | $ 4,263 | (11.9) % | ||
Free cash flow1 | $ 1,507 | $ 2,476 | (39.1) % | ||
1. | See page 1 of the addendum for a GAAP reconciliation of Adjusted EBITDA and free cash flow. |
Revenues
Third quarter revenue increased by
Residential revenue totaled
Internet revenue grew by
Video revenue totaled
Voice revenue totaled
Commercial revenue increased by
Third quarter advertising sales revenue of
Third quarter mobile revenue totaled
Operating Costs and Expenses
Third quarter programming costs decreased by
Regulatory, connectivity and produced content expenses decreased by
Costs to service customers increased by
Marketing expenses increased by
Third 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
Third 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 third quarter of 2022, net cash flows from operating activities totaled
Free cash flow in the third quarter of 2022 totaled
Liquidity & Financing
As of September 30, 2022, total principal amount of debt was
In August 2022, CCO Holdings, LLC and CCO Holdings Capital Corp. jointly issued
Share Repurchases
During the three months ended September 30, 2022, Charter purchased 5.8 million shares of Charter Class A common stock and Charter Holdings common units for approximately
Webcast
Charter will host a webcast on Friday, October 28, 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.
Additional Information Available on Website
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 nine months ended September 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.
Use of Adjusted EBITDA and Free Cash Flow Information
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
About Charter
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 and sports programming to its customers through Spectrum Networks. More information about Charter can be found at corporate.charter.com.
# # #
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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 | Nine Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Net income attributable to Charter shareholders | $ 1,185 | $ 1,217 | $ 3,859 | $ 3,044 | |||
Plus: Net income attributable to noncontrolling interest | 182 | 190 | 605 | 442 | |||
Interest expense, net | 1,160 | 1,016 | 3,329 | 3,003 | |||
Income tax expense | 360 | 347 | 1,194 | 844 | |||
Depreciation and amortization | 2,177 | 2,270 | 6,711 | 7,065 | |||
Stock compensation expense | 109 | 98 | 360 | 332 | |||
Other expenses, net | 239 | 148 | 76 | 521 | |||
Adjusted EBITDA | $ 5,412 | $ 5,286 | $ 16,134 | $ 15,251 | |||
Net cash flows from operating activities | $ 3,757 | $ 4,263 | $ 11,138 | $ 12,013 | |||
Less: Purchases of property, plant and equipment | (2,406) | (1,861) | (6,456) | (5,563) | |||
Change in accrued expenses related to capital expenditures | 156 | 74 | 284 | (51) | |||
Free cash flow | $ 1,507 | $ 2,476 | $ 4,966 | $ 6,399 | |||
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 September 30, | Nine Months Ended September 30, | ||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | ||||||
REVENUES: | |||||||||||
Internet | $ 5,571 | $ 5,363 | 3.9 % | $ 16,585 | $ 15,670 | 5.8 % | |||||
Video | 4,379 | 4,502 | (2.7) % | 13,209 | 13,224 | (0.1) % | |||||
Voice | 391 | 409 | (4.6) % | 1,180 | 1,202 | (1.9) % | |||||
Residential revenue | 10,341 | 10,274 | 0.7 % | 30,974 | 30,096 | 2.9 % | |||||
Small and medium business | 1,082 | 1,062 | 1.9 % | 3,221 | 3,116 | 3.4 % | |||||
Enterprise | 673 | 656 | 2.6 % | 2,003 | 1,930 | 3.8 % | |||||
Commercial revenue | 1,755 | 1,718 | 2.2 % | 5,224 | 5,046 | 3.5 % | |||||
Advertising sales | 481 | 391 | 22.9 % | 1,324 | 1,146 | 15.6 % | |||||
Mobile | 750 | 535 | 40.2 % | 2,166 | 1,546 | 40.1 % | |||||
Other | 223 | 228 | (2.1) % | 660 | 636 | 3.7 % | |||||
Total Revenues | 13,550 | 13,146 | 3.1 % | 40,348 | 38,470 | 4.9 % | |||||
COSTS AND EXPENSES: | |||||||||||
Programming | 2,871 | 2,983 | (3.8) % | 8,820 | 8,949 | (1.4) % | |||||
Regulatory, connectivity and produced content | 587 | 634 | (7.4) % | 1,742 | 1,902 | (8.4) % | |||||
Costs to service customers | 1,982 | 1,899 | 4.4 % | 5,801 | 5,530 | 4.9 % | |||||
Marketing | 861 | 788 | 9.3 % | 2,493 | 2,280 | 9.4 % | |||||
Mobile | 846 | 607 | 39.4 % | 2,403 | 1,765 | 36.1 % | |||||
Other expense (a) | 991 | 949 | 4.4 % | 2,955 | 2,793 | 5.8 % | |||||
Total operating costs and expenses (a) | 8,138 | 7,860 | 3.5 % | 24,214 | 23,219 | 4.3 % | |||||
Adjusted EBITDA | $ 5,412 | $ 5,286 | 2.4 % | $ 16,134 | $ 15,251 | 5.8 % | |||||
(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 | Nine Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
REVENUES | $ 13,550 | $ 13,146 | $ 40,348 | $ 38,470 | |||
COSTS AND EXPENSES: | |||||||
Operating costs and expenses (exclusive of items shown separately below) | 8,247 | 7,958 | 24,574 | 23,551 | |||
Depreciation and amortization | 2,177 | 2,270 | 6,711 | 7,065 | |||
Other operating (income) expenses, net | 202 | (9) | 141 | 284 | |||
10,626 | 10,219 | 31,426 | 30,900 | ||||
Income from operations | 2,924 | 2,927 | 8,922 | 7,570 | |||
OTHER INCOME (EXPENSES): | |||||||
Interest expense, net | (1,160) | (1,016) | (3,329) | (3,003) | |||
Other income (expense), net | (37) | (157) | 65 | (237) | |||
(1,197) | (1,173) | (3,264) | (3,240) | ||||
Income before income taxes | 1,727 | 1,754 | 5,658 | 4,330 | |||
Income tax expense | (360) | (347) | (1,194) | (844) | |||
Consolidated net income | 1,367 | 1,407 | 4,464 | 3,486 | |||
Less: Net income attributable to noncontrolling interests | (182) | (190) | (605) | (442) | |||
Net income attributable to Charter shareholders | $ 1,185 | $ 1,217 | $ 3,859 | $ 3,044 | |||
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER | |||||||
Basic | $ 7.51 | $ 6.69 | $ 23.51 | $ 16.33 | |||
Diluted | $ 7.38 | $ 6.50 | $ 23.06 | $ 15.78 | |||
Weighted average common shares outstanding, basic | 157,971,109 | 181,925,180 | 164,189,703 | 186,380,681 | |||
Weighted average common shares outstanding, diluted | 160,638,186 | 187,166,071 | 167,351,777 | 197,316,667 | |||
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(dollars in millions) | |||
September 30, | December 31, | ||
2022 | 2021 | ||
ASSETS | (unaudited) | ||
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 480 | $ 601 | |
Accounts receivable, net | 2,841 | 2,579 | |
Prepaid expenses and other current assets | 433 | 386 | |
Total current assets | 3,754 | 3,566 | |
INVESTMENT IN CABLE PROPERTIES: | |||
Property, plant and equipment, net | 35,005 | 34,310 | |
Customer relationships, net | 3,073 | 4,060 | |
Franchises | 67,363 | 67,346 | |
Goodwill | 29,563 | 29,562 | |
Total investment in cable properties, net | 135,004 | 135,278 | |
OTHER NONCURRENT ASSETS | 4,911 | 3,647 | |
Total assets | $ 143,669 | $ 142,491 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES: | |||
Accounts payable and accrued liabilities | $ 10,073 | $ 9,461 | |
Current portion of long-term debt | 1,522 | 2,997 | |
Total current liabilities | 11,595 | 12,458 | |
LONG-TERM DEBT | 95,510 | 88,564 | |
DEFERRED INCOME TAXES | 19,153 | 19,096 | |
OTHER LONG-TERM LIABILITIES | 5,061 | 4,217 | |
SHAREHOLDERS' EQUITY: | |||
Controlling interest | 8,889 | 14,050 | |
Noncontrolling interests | 3,461 | 4,106 | |
Total shareholders' equity | 12,350 | 18,156 | |
Total liabilities and shareholders' equity | $ 143,669 | $ 142,491 | |
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES | |||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(dollars in millions) | |||||||
Three Months Ended | Nine Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Consolidated net income | $ 1,367 | $ 1,407 | $ 4,464 | $ 3,486 | |||
Adjustments to reconcile consolidated net income to net cash flows from | |||||||
Depreciation and amortization | 2,177 | 2,270 | 6,711 | 7,065 | |||
Stock compensation expense | 109 | 98 | 360 | 332 | |||
Noncash interest income, net | (5) | (5) | (12) | (20) | |||
Deferred income taxes | 50 | 297 | 165 | 668 | |||
Other, net | 40 | 155 | (113) | 279 | |||
Changes in operating assets and liabilities, net of effects from acquisitions | |||||||
Accounts receivable | (62) | (62) | (262) | (106) | |||
Prepaid expenses and other assets | 37 | (14) | (96) | (127) | |||
Accounts payable, accrued liabilities and other | 44 | 117 | (79) | 436 | |||
Net cash flows from operating activities | 3,757 | 4,263 | 11,138 | 12,013 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property, plant and equipment | (2,406) | (1,861) | (6,456) | (5,563) | |||
Change in accrued expenses related to capital expenditures | 156 | 74 | 284 | (51) | |||
Other, net | (14) | (3) | (174) | (148) | |||
Net cash flows from investing activities | (2,264) | (1,790) | (6,346) | (5,762) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings of long-term debt | 4,897 | 4,305 | 21,528 | 15,263 | |||
Repayments of long-term debt | (3,712) | (3,892) | (15,659) | (9,651) | |||
Payments for debt issuance costs | (14) | (18) | (71) | (76) | |||
Purchase of treasury stock | (2,225) | (3,666) | (9,245) | (10,834) | |||
Proceeds from exercise of stock options | — | 17 | 5 | 43 | |||
Purchase of noncontrolling interest | (385) | (410) | (1,379) | (1,500) | |||
Distributions to noncontrolling interest | (49) | — | (56) | (71) | |||
Other, net | (8) | (54) | (36) | 40 | |||
Net cash flows from financing activities | (1,496) | (3,718) | (4,913) | (6,786) | |||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (3) | (1,245) | (121) | (535) | |||
CASH AND CASH EQUIVALENTS, beginning of period | 483 | 1,711 | 601 | 1,001 | |||
CASH AND CASH EQUIVALENTS, end of period | $ 480 | $ 466 | $ 480 | $ 466 | |||
CASH PAID FOR INTEREST | $ 1,101 | $ 1,042 | $ 3,251 | $ 3,038 | |||
CASH PAID FOR TAXES | $ 412 | $ 30 | $ 882 | $ 99 | |||
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES | ||||||||
UNAUDITED SUMMARY OF OPERATING STATISTICS | ||||||||
(in thousands, except per customer and penetration data) | ||||||||
Approximate as of | ||||||||
September 30, | June 30, | December 31, | September 30, | |||||
Footprint (b) | ||||||||
Estimated Passings | 55,288 | 55,008 | 54,521 | 54,268 | ||||
Customer Relationships (c) | ||||||||
Residential | 29,946 | 29,942 | 29,926 | 29,823 | ||||
SMB | 2,195 | 2,182 | 2,143 | 2,126 | ||||
Total Customer Relationships | 32,141 | 32,124 | 32,069 | 31,949 | ||||
Residential | 4 | (93) | 103 | 163 | ||||
SMB | 13 | 19 | 17 | 22 | ||||
Total Customer Relationships Quarterly Net Additions | 17 | (74) | 120 | 185 | ||||
Total Customer Relationship Penetration of Estimated Passings (d) | 58.1 % | 58.4 % | 58.8 % | 58.9 % | ||||
Monthly Residential Revenue per Residential Customer (e) | $ 115.16 | $ 116.00 | $ 114.14 | $ 115.15 | ||||
Monthly SMB Revenue per SMB Customer (f) | $ 164.89 | $ 165.66 | $ 164.59 | $ 167.29 | ||||
Residential Customer Relationships Penetration | ||||||||
Single Play Penetration (g) | 48.5 % | 47.8 % | 46.7 % | 46.4 % | ||||
Double Play Penetration (g) | 33.1 % | 33.1 % | 33.0 % | 32.8 % | ||||
Triple Play Penetration (g) | 18.4 % | 19.1 % | 20.4 % | 20.9 % | ||||
% Residential Non-Video Customer Relationships | 51.1 % | 50.4 % | 49.2 % | 48.7 % | ||||
Internet | ||||||||
Residential | 28,320 | 28,259 | 28,137 | 27,965 | ||||
SMB | 2,008 | 1,994 | 1,952 | 1,934 | ||||
Total Internet Customers | 30,328 | 30,253 | 30,089 | 29,899 | ||||
Residential | 61 | (42) | 172 | 243 | ||||
SMB | 14 | 21 | 18 | 22 | ||||
Total Internet Quarterly Net Additions | 75 | (21) | 190 | 265 | ||||
Video | ||||||||
Residential | 14,642 | 14,853 | 15,216 | 15,287 | ||||
SMB | 649 | 642 | 617 | 604 | ||||
Total Video Customers | 15,291 | 15,495 | 15,833 | 15,891 | ||||
Residential | (211) | (240) | (71) | (133) | ||||
SMB | 7 | 14 | 13 | 12 | ||||
Total Video Quarterly Net Additions | (204) | (226) | (58) | (121) | ||||
Voice | ||||||||
Residential | 7,929 | 8,200 | 8,621 | 8,784 | ||||
SMB | 1,287 | 1,287 | 1,282 | 1,273 | ||||
Total Voice Customers | 9,216 | 9,487 | 9,903 | 10,057 | ||||
Residential | (271) | (265) | (163) | (230) | ||||
SMB | — | (1) | 9 | 14 | ||||
Total Voice Quarterly Net Additions | (271) | (266) | (154) | (216) | ||||
Mobile Lines (h) | ||||||||
Residential | 4,516 | 4,134 | 3,448 | 3,085 | ||||
SMB | 161 | 147 | 116 | 99 | ||||
Total Mobile Lines | 4,677 | 4,281 | 3,564 | 3,184 | ||||
Residential | 382 | 329 | 363 | 230 | ||||
SMB | 14 | 15 | 17 | 14 | ||||
Total Mobile Lines Quarterly Net Additions | 396 | 344 | 380 | 244 | ||||
Enterprise (i) | ||||||||
Enterprise Primary Service Units ("PSUs") | 282 | 277 | 272 | 269 | ||||
Enterprise Quarterly Net Additions | 5 | 3 | 3 | 4 | ||||
(a) | We calculate the aging of customer accounts based on the monthly billing cycle for each account. On that basis, at September 30, 2022, June 30, 2022, December 31, 2021 and September 30, 2021, customers included approximately 151,700, 154,500, 128,300 and 119,200 customers, respectively, whose accounts were over 60 days past due, approximately 55,500, 45,800, 26,800 and 21,100 customers, respectively, whose accounts were over 90 days past due and approximately 149,300, 97,200, 43,200 and 31,800 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, including video services. These customers are downgraded to a fully subsidized Internet-only service. |
(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 | Nine Months Ended | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Customer premise equipment (a) | $ 577 | $ 513 | $ 1,606 | $ 1,496 | |||
Scalable infrastructure (b) | 418 | 375 | 1,178 | 1,223 | |||
Line extensions (c) | 826 | 392 | 2,062 | 1,191 | |||
Upgrade/rebuild (d) | 208 | 178 | 535 | 484 | |||
Support capital (e) | 377 | 403 | 1,075 | 1,169 | |||
Total capital expenditures | $ 2,406 | $ 1,861 | $ 6,456 | $ 5,563 | |||
Of which: Commercial services | $ 369 | $ 353 | $ 1,110 | $ 1,083 | |||
Capital expenditures included in total related to: | |||||||
Core cable (f) | $ 1,785 | $ 1,742 | $ 5,077 | $ 5,208 | |||
Mobile | 96 | 119 | 265 | 355 | |||
Rural construction initiative (g) | 525 | — | 1,114 | — | |||
Total capital expenditures | $ 2,406 | $ 1,861 | $ 6,456 | $ 5,563 | |||
(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) | Core cable represents total capital expenditures excluding mobile and rural construction initiative capital expenditures. |
(g) | 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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