InvestorsJanuary 31, 2020
Charter Announces Fourth Quarter 2019 Results
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STAMFORD, Conn., Jan. 31, 2020 /PRNewswire/ --
Key highlights:
- Fourth quarter total residential and SMB customer relationships increased by 268,000, compared to 248,000 during the fourth quarter of 2018. Fourth quarter total residential and SMB Internet customers increased by 339,000, compared to 329,000 during the fourth quarter of 2018.
- During the year ended
December 31, 2019 , total residential and SMB customer relationships grew by 1.1 million, or 4.0% to 29.2 million, and total residential and SMB Internet customers grew by 1.4 million, or 5.6% to 26.7 million. - Charter added 288,000 Spectrum MobileTM lines in the fourth quarter and as of
December 31, 2019 , Charter served a total of 1.1 million mobile lines, with 948,000 mobile lines added in 2019. - Fourth quarter revenue of
$11.8 billion grew by 4.7% year-over-year, driven by residential revenue growth of 5.7%, mobile revenue growth of$147 million and SMB revenue growth of 6.3%. - Fourth quarter Adjusted EBITDA1 of
$4.5 billion grew by 8.8% year-over-year, while fourth quarter cable Adjusted EBITDA1 of$4.7 billion grew by 8.9% year-over-year. - For the year ended
December 31, 2019 , revenue of$45.8 billion increased by 4.9% year-over-year. Full year 2019 Adjusted EBITDA totaled$16.9 billion , 5.0% higher than in 2018, while cable Adjusted EBITDA of$17.4 billion grew by 6.6% year-over-year. - Net income attributable to Charter shareholders totaled
$714 million in the fourth quarter, compared to$296 million during the same period last year. For the year endedDecember 31, 2019 , net income attributable to Charter shareholders totaled$1.7 billion , compared to$1.2 billion in 2018. - Fourth quarter capital expenditures totaled
$2.3 billion and included$151 million of mobile-related capital expenditures. For the year endedDecember 31, 2019 , capital expenditures totaled$7.2 billion , down from$9.1 billion in 2018, and included$432 million of mobile-related capital expenditures. - For the year 2019, consolidated free cash flow1 totaled
$4.6 billion , compared to$2.2 billion in 2018. Cable free cash flow1 totaled$5.8 billion for the full year 2019, versus$2.8 billion in 2018. - During the fourth quarter, Charter purchased approximately 5.6 million shares of Charter Class A common stock and
Charter Communications Holdings, LLC ("Charter Holdings ") common units for approximately$2.6 billion . For the year endedDecember 31, 2019 , Charter purchased 19.0 million shares of Charter Class A common stock andCharter Holdings common units for approximately$7.6 billion .
"Our operating strategy continues to deliver strong results and in 2019, we created over 1.1 million new customer relationships, substantially more than in 2018. And we added over 1.4 million new Internet customers, also more than in 2018," said
1. Adjusted EBITDA, cable Adjusted EBITDA, free cash flow and cable 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 |
||||||||
December 31, |
December 31, |
Y/Y Change |
||||||
Footprint (b) |
||||||||
Estimated Passings |
52,154 |
51,185 |
1.9 |
% |
||||
Penetration Statistics (c) |
||||||||
Total Customer Relationship Penetration of Estimated Passings |
56.1 |
% |
54.9 |
% |
1.2 |
ppts |
||
Customer Relationships (d) |
||||||||
Residential |
27,277 |
26,270 |
3.8 |
% |
||||
Small and Medium Business |
1,958 |
1,833 |
6.8 |
% |
||||
Total Customer Relationships |
29,235 |
28,103 |
4.0 |
% |
||||
Quarterly Net Additions (Losses) |
||||||||
Residential |
240 |
207 |
16.2 |
% |
||||
Small and Medium Business |
28 |
41 |
(33.3) |
% |
||||
Total Customer Relationships |
268 |
248 |
8.1 |
% |
||||
Residential |
||||||||
Primary Service Units ("PSUs") |
||||||||
Video |
15,620 |
16,104 |
(3.0) |
% |
||||
Internet |
24,908 |
23,625 |
5.4 |
% |
||||
Voice |
9,443 |
10,135 |
(6.8) |
% |
||||
Quarterly Net Additions (Losses) |
||||||||
Video |
(105) |
(36) |
(184.9) |
% |
||||
Internet |
313 |
289 |
8.1 |
% |
||||
Voice |
(152) |
(83) |
(83.9) |
% |
||||
Single Play (e) |
11,741 |
10,928 |
7.4 |
% |
||||
Double Play (e) |
8,377 |
7,097 |
18.0 |
% |
||||
Triple Play (e) |
7,159 |
8,245 |
(13.2) |
% |
||||
Single Play Penetration (f) |
43.0 |
% |
41.6 |
% |
1.4 |
ppts |
||
Double Play Penetration (f) |
30.7 |
% |
27.0 |
% |
3.7 |
ppts |
||
Triple Play Penetration (f) |
26.2 |
% |
31.4 |
% |
(5.2) |
ppts |
||
% Residential Non-Video Customer Relationships |
42.7 |
% |
38.7 |
% |
4.0 |
ppts |
||
Monthly Residential Revenue per Residential Customer (g) |
$113.79 |
$111.78 |
1.8 |
% |
||||
Small and Medium Business |
||||||||
PSUs |
||||||||
Video |
524 |
502 |
4.4 |
% |
||||
Internet |
1,756 |
1,634 |
7.5 |
% |
||||
Voice |
1,144 |
1,051 |
8.8 |
% |
||||
Quarterly Net Additions (Losses) |
||||||||
Video |
4 |
14 |
(71.7) |
% |
||||
Internet |
26 |
40 |
(32.2) |
% |
||||
Voice |
24 |
27 |
(14.2) |
% |
||||
Monthly Small and Medium Business Revenue per Customer (h) |
$169.06 |
$170.62 |
(0.9) |
% |
||||
Mobile Lines |
||||||||
Residential and Small and Medium Business Mobile Lines |
1,082 |
134 |
713.3 |
% |
||||
Net Additions (Losses) |
288 |
113 |
156.0 |
% |
||||
Enterprise PSUs (i) |
||||||||
Enterprise PSUs |
267 |
248 |
7.6 |
% |
||||
Net Additions (Losses) |
3 |
5 |
(40.5) |
% |
Footnotes |
In thousands, except per customer and penetration data. See footnotes to unaudited summary of operating statistics on page 5 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. |
During the fourth quarter of 2019, Charter's residential customer relationships grew by 240,000, while fourth quarter 2018 residential customer relationships grew by 207,000. As of December 31, 2019, Charter had 27.3 million residential customer relationships, with year-over-year growth of 1.0 million, or 3.8%.
Charter added 313,000 residential Internet customers in the fourth quarter of 2019, versus fourth quarter 2018 residential Internet customer net additions of 289,000. As of December 31, 2019, Charter had 24.9 million residential Internet customers, with 85% subscribing to tiers that provided 100 Mbps or more of speed. Over the course of 2019, Charter doubled minimum Internet speeds in a number of markets at no additional cost to new and existing Spectrum Internet® customers. Currently, 200 Mbps is the slowest speed offered to new Internet customers in approximately 60% of Charter's footprint, with 100 Mbps the slowest speed offered in the remaining 40% of its footprint.
Residential video customers decreased by 105,000 in the fourth quarter of 2019, while fourth quarter 2018 residential video customers decreased by 36,000. As of December 31, 2019, Charter had 15.6 million residential video customers.
During the fourth quarter of 2019, residential wireline voice customers declined by 152,000, while fourth quarter 2018 voice customers declined by 83,000. As of December 31, 2019, Charter had 9.4 million residential wireline voice customers.
Fourth quarter 2019 residential revenue per residential customer (excluding mobile) totaled
During the fourth quarter of 2019, Charter added 288,000 mobile lines, and as of December 31, 2019, Charter served a total of 1.1 million mobile lines. Spectrum Mobile is available to all new and existing Spectrum Internet customers and runs on America's most awarded LTE network combined with Spectrum WiFi. Spectrum Mobile customers can choose one of two simple ways to pay for data, "Unlimited" for
SMB customer relationships grew by 28,000 during the fourth quarter of 2019, compared to growth of 41,000 during the fourth quarter of 2018. As of December 31, 2019, Charter had 2.0 million SMB customer relationships, with year-over-year growth of 6.8%. Enterprise PSUs grew by 3,000 during the fourth quarter of 2019 compared to growth of 5,000 during the fourth quarter of 2018. As of December 31, 2019, Charter had 267,000 enterprise PSUs, with growth of 7.6% year-over-year.
Fourth Quarter Financial Results
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES |
||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA |
||||||||||
(dollars in millions, except per share data) |
||||||||||
Three Months Ended December 31, |
||||||||||
2019 |
2018 |
% Change |
||||||||
REVENUES: |
||||||||||
Video |
$ |
4,473 |
$ |
4,361 |
2.6 |
% |
||||
Internet |
4,345 |
3,895 |
11.5 |
% |
||||||
Voice |
450 |
515 |
(12.5) |
% |
||||||
Residential revenue |
9,268 |
8,771 |
5.7 |
% |
||||||
Small and medium business |
986 |
928 |
6.3 |
% |
||||||
Enterprise |
617 |
647 |
(4.5) |
% |
||||||
Commercial revenue |
1,603 |
1,575 |
1.8 |
% |
||||||
Advertising sales |
434 |
562 |
(22.7) |
% |
||||||
Mobile |
236 |
89 |
163.7 |
% |
||||||
Other |
220 |
234 |
(6.6) |
% |
||||||
Total Revenue |
11,761 |
11,231 |
4.7 |
% |
||||||
COSTS AND EXPENSES: |
||||||||||
Cable operating costs and expenses |
6,860 |
6,856 |
— |
% |
||||||
Mobile operating costs and expenses |
372 |
211 |
75.9 |
% |
||||||
Total operating costs and expenses |
7,232 |
7,067 |
2.3 |
% |
||||||
Adjusted EBITDA |
$ |
4,529 |
$ |
4,164 |
8.8 |
% |
||||
Adjusted EBITDA margin |
38.5 |
% |
37.1 |
% |
||||||
Cable Adjusted EBITDA |
$ |
4,665 |
$ |
4,286 |
8.9 |
% |
||||
Cable Adjusted EBITDA margin |
40.5 |
% |
38.5 |
% |
||||||
Capital Expenditures |
$ |
2,282 |
$ |
2,433 |
||||||
% Total Revenue |
19.4 |
% |
21.7 |
% |
||||||
Cable Capital Expenditures |
$ |
2,131 |
$ |
2,327 |
||||||
% Total Cable Revenue |
18.5 |
% |
20.9 |
% |
||||||
Net income attributable to Charter shareholders |
$ |
714 |
$ |
296 |
||||||
Earnings per common share attributable to Charter shareholders: |
||||||||||
Basic |
$ |
3.36 |
$ |
1.31 |
||||||
Diluted |
$ |
3.28 |
$ |
1.29 |
||||||
Net cash flows from operating activities |
$ |
3,358 |
$ |
3,168 |
||||||
Free cash flow |
$ |
1,580 |
$ |
885 |
||||||
Cable free cash flow |
$ |
1,897 |
$ |
1,189 |
Revenues
Fourth quarter revenue increased by 4.7% year-over-year to
Video revenue totaled
Internet revenue grew by 11.5%, compared to the year-ago quarter, to
Voice revenue totaled
Commercial revenue increased to
Fourth quarter advertising sales revenue of
Fourth quarter mobile revenue totaled
Other revenue totaled
Operating Costs and Expenses
Fourth quarter total operating costs and expenses increased by
Fourth quarter programming costs increased by
Regulatory, connectivity and produced content expenses increased by
Costs to service customers decreased by
Marketing expenses increased by
Other expenses decreased by
Fourth quarter mobile costs totaled
Adjusted EBITDA
Fourth quarter Adjusted EBITDA of
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled
Net income per basic common share attributable to Charter shareholders totaled
Capital Expenditures
Property, plant and equipment expenditures totaled
Cash Flow and Free Cash Flow
During the fourth quarter of 2019, net cash flows from operating activities totaled
Consolidated free cash flow for the fourth quarter of 2019 totaled
Liquidity & Financing
As of December 31, 2019, total principal amount of debt was
In
In
In
Share Repurchases
During the three months ended December 31, 2019, Charter purchased approximately 5.6 million shares of Charter Class A common stock and
Year to Date Financial Results
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES |
||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA |
||||||||||
(dollars in millions, except per share data) |
||||||||||
Year Ended December 31, |
||||||||||
2019 |
2018 |
% Change |
||||||||
REVENUES: |
||||||||||
Video |
$ |
17,607 |
$ |
17,348 |
1.5 |
% |
||||
Internet |
16,667 |
15,181 |
9.8 |
% |
||||||
Voice |
1,920 |
2,114 |
(9.1) |
% |
||||||
Residential revenue |
36,194 |
34,643 |
4.5 |
% |
||||||
Small and medium business |
3,868 |
3,665 |
5.6 |
% |
||||||
Enterprise |
2,556 |
2,528 |
1.1 |
% |
||||||
Commercial revenue |
6,424 |
6,193 |
3.7 |
% |
||||||
Advertising sales |
1,568 |
1,785 |
(12.1) |
% |
||||||
Mobile |
726 |
106 |
NM |
|||||||
Other |
852 |
907 |
(6.2) |
% |
||||||
Total Revenue |
45,764 |
43,634 |
4.9 |
% |
||||||
COSTS AND EXPENSES: |
||||||||||
Cable operating costs and expenses |
27,663 |
27,229 |
1.6 |
% |
||||||
Mobile operating costs and expenses |
1,246 |
346 |
NM |
|||||||
Total operating costs and expenses |
28,909 |
27,575 |
4.8 |
% |
||||||
Adjusted EBITDA |
$ |
16,855 |
$ |
16,059 |
5.0 |
% |
||||
Adjusted EBITDA margin |
36.8 |
% |
36.8 |
% |
||||||
Cable Adjusted EBITDA |
$ |
17,375 |
$ |
16,299 |
6.6 |
% |
||||
Cable Adjusted EBITDA margin |
38.6 |
% |
37.4 |
% |
||||||
Capital Expenditures |
$ |
7,195 |
$ |
9,125 |
||||||
% Total Revenue |
15.7 |
% |
20.9 |
% |
||||||
Cable Capital Expenditures |
$ |
6,763 |
$ |
8,883 |
||||||
% Total Cable Revenue |
15.0 |
% |
20.4 |
% |
||||||