InvestorsJanuary 28, 2022
Charter Announces Fourth Quarter and Full Year 2021 Results
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Key highlights:
- Fourth quarter total residential and small and medium business ("SMB") customer relationships increased by 120,000. As of
December 31, 2021 , Charter served a total of 32.1 million residential and SMB customers, with 939,000 net new customer relationships added in 2021. - Fourth quarter total residential and SMB Internet customers increased by 190,000. As of
December 31, 2021 , Charter served a total of 30.1 million residential and SMB Internet customers, with 1.2 million total Internet customers added in 2021. - Fourth quarter total residential and SMB mobile lines increased by 380,000. As of
December 31, 2021 , Charter served a total of 3.6 million mobile lines, with 1.2 million mobile lines added in 2021. - Fourth quarter revenue of
$13.2 billion grew by 4.7% year-over-year, driven by residential revenue growth of 5.1%, mobile revenue growth of 47.5% and commercial revenue growth of 4.8%, partly offset by a decline in advertising sales revenue of 28.2%, driven by lower political revenue. - Fourth quarter Adjusted EBITDA1 of
$5.4 billion grew by 7.7% year-over-year. - For the year ended
December 31, 2021 , revenue of$51.7 billion grew by 7.5% year-over-year. Full year 2021 Adjusted EBITDA totaled$20.6 billion , 11.4% higher than in 2020. - Net income attributable to Charter shareholders totaled
$1.6 billion in the fourth quarter. For the year endedDecember 31, 2021 , net income attributable to Charter shareholders totaled$4.7 billion . - Fourth quarter capital expenditures totaled
$2.1 billion and included$127 million of mobile-related capital expenditures. For the year endedDecember 31, 2021 , capital expenditures totaled$7.6 billion and included$482 million of mobile-related capital expenditures. - Full year 2021 free cash flow1 totaled
$8.7 billion , compared to$7.1 billion in 2020. - During the fourth quarter, Charter purchased 7.6 million shares of Charter Class A common stock and
Charter Communications Holdings, LLC ("Charter Holdings ") common units for approximately$5.3 billion . For the year endedDecember 31, 2021 , Charter purchased 25.3 million shares of Charter Class A common stock andCharter Holdings common units for approximately$17.3 billion .
"We continued to execute well in 2021, with solid customer growth and strong financial growth. We added over 1.2 million Internet customers and we grew full year revenue and EBITDA by 7.5% and 11.4%, respectively," said
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 |
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Footprint (b) |
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Estimated Passings |
54,521 |
53,416 |
52,270 |
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Customer Relationships (c) |
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Residential |
29,926 |
29,079 |
27,277 |
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SMB |
2,143 |
2,051 |
1,958 |
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Total Customer Relationships |
32,069 |
31,130 |
29,235 |
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Residential |
103 |
167 |
240 |
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SMB |
17 |
30 |
28 |
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Total Customer Relationships Quarterly Net Additions |
120 |
197 |
268 |
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Total Customer Relationship Penetration of Estimated Passings (d) |
58.8 % |
58.3 % |
55.9 % |
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Monthly Residential Revenue per Residential Customer (e) |
$ 114.14 |
$ 111.85 |
$ 113.79 |
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Monthly SMB Revenue per SMB Customer (f) |
$ 164.59 |
$ 163.02 |
$ 169.06 |
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Residential Customer Relationships Penetration |
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Single Play Penetration (g) |
46.7 % |
44.5 % |
43.0 % |
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Double Play Penetration (g) |
33.0 % |
32.7 % |
30.7 % |
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Triple Play Penetration (g) |
20.4 % |
22.9 % |
26.2 % |
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% Residential Non-Video Customer Relationships |
49.2 % |
46.2 % |
42.7 % |
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Internet |
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Residential |
28,137 |
27,023 |
24,908 |
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SMB |
1,952 |
1,856 |
1,756 |
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Total Internet Customers |
30,089 |
28,879 |
26,664 |
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Residential |
172 |
216 |
313 |
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SMB |
18 |
30 |
26 |
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Total Internet Quarterly Net Additions |
190 |
246 |
339 |
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Video |
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Residential |
15,216 |
15,639 |
15,620 |
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SMB |
617 |
561 |
524 |
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Total Video Customers |
15,833 |
16,200 |
16,144 |
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Residential |
(71) |
(66) |
(105) |
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SMB |
13 |
31 |
4 |
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Total Video Quarterly Net Additions |
(58) |
(35) |
(101) |
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Voice |
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Residential |
8,621 |
9,215 |
9,443 |
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SMB |
1,282 |
1,224 |
1,144 |
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Total Voice Customers |
9,903 |
10,439 |
10,587 |
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Residential |
(163) |
(120) |
(152) |
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SMB |
9 |
17 |
24 |
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Total Voice Quarterly Net Additions |
(154) |
(103) |
(128) |
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Mobile Lines (h) |
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Residential |
3,448 |
2,320 |
1,078 |
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SMB |
116 |
55 |
4 |
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Total Mobile Lines |
3,564 |
2,375 |
1,082 |
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Residential |
363 |
300 |
285 |
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SMB |
17 |
15 |
3 |
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Total Mobile Lines Quarterly Net Additions |
380 |
315 |
288 |
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Enterprise (i) |
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Enterprise Primary Service Units ("PSUs") |
272 |
259 |
252 |
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Enterprise Quarterly Net Additions |
3 |
2 |
3 |
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 2021, Charter's residential customer relationships grew by 103,000, compared to growth of 167,000 in the fourth quarter of 2020 and 240,000 in the fourth quarter of 2019. As of
Charter added 172,000 residential Internet customers during the fourth quarter of 2021, compared to 216,000 during the fourth quarter of 2020 and 313,000 during the fourth quarter of 2019. Currently, 200 Mbps is the minimum speed offered to new Spectrum Internet® customers in 85% of Charter's footprint. As of
Residential video customers decreased by 71,000 in the fourth quarter of 2021, compared to declines of 66,000 in the fourth quarter of 2020 and 105,000 in the fourth quarter of 2019. As of
During the fourth quarter of 2021, residential wireline voice customers declined by 163,000, compared to declines of 120,000 in the fourth quarter of 2020 and 152,000 in the fourth quarter of 2019. As of
Fourth quarter 2021 residential revenue per residential customer (excluding mobile) totaled
SMB customer relationships grew by 17,000 in the fourth quarter of 2021, while fourth quarter 2020 and 2019 SMB customer relationships grew by 30,000 and 28,000, respectively. During the fourth quarter of 2021, enterprise PSUs grew by 3,000, compared to growth of 2,000 in the fourth quarter of 2020 and 3,000 in the fourth quarter of 2019.
During the fourth quarter of 2021, Charter added 380,000 mobile lines, compared to growth of 315,000 during the fourth quarter of 2020 and 288,000 during the fourth quarter of 2019. 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
Fourth Quarter Financial Results
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA (dollars in millions, except per share data)
|
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Three Months Ended |
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2021 |
2020 |
% Change |
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REVENUES: |
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Internet |
|
|
11.6 % |
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Video |
4,406 |
4,418 |
(0.3) % |
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Voice |
396 |
449 |
(11.9) % |
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Residential revenue |
10,226 |
9,729 |
5.1 % |
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Small and medium business |
1,054 |
997 |
5.8 % |
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Enterprise |
643 |
623 |
3.2 % |
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Commercial revenue |
1,697 |
1,620 |
4.8 % |
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Advertising sales |
448 |
625 |
(28.2) % |
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Mobile |
632 |
428 |
47.5 % |
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Other |
209 |
222 |
(6.2) % |
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Total Revenue |
13,212 |
12,624 |
4.7 % |
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COSTS AND EXPENSES: |
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Total operating costs and expenses |
7,833 |
7,630 |
2.7 % |
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Adjusted EBITDA |
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|
7.7 % |
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Adjusted EBITDA margin |
40.7 % |
39.6 % |
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Capital Expenditures |
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|
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% Total Revenue |
15.7 % |
16.3 % |
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Net income attributable to Charter shareholders |
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Earnings per common share attributable to Charter shareholders: |
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Basic |
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Diluted |
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Net cash flows from operating activities |
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Free cash flow |
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Revenues
Fourth quarter revenue increased by 4.7% year-over-year to
Residential revenue totaled
Internet revenue grew by 11.6% year-over-year to
Video revenue totaled
Voice revenue totaled
Commercial revenue increased by 4.8% year-over-year to
Fourth quarter advertising sales revenue of
Fourth quarter mobile revenue totaled
Operating Costs and Expenses
Fourth quarter total operating costs and expenses increased by
Fourth quarter programming costs decreased by
Regulatory, connectivity and produced content expenses increased by
Costs to service customers decreased by
Marketing expenses increased by
Fourth quarter mobile costs totaled
Other expenses decreased by
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 2021, net cash flows from operating activities totaled
Free cash flow in the fourth quarter of 2021 totaled
Liquidity & Financing
As of
In
In
Share Repurchases
During the three months ended
Full Year Financial Results
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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA |
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(dollars in millions, except per share data) |
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Year Ended |
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2021 |
2020 |
% Change |
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REVENUES: |
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Internet |
|
|
13.9 % |
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Video |
17,630 |
17,432 |
1.1 % |
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Voice |
1,598 |
1,806 |
(11.5) % |
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Residential revenue |
40,322 |
37,759 |
6.8 % |
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Small and medium business |
4,170 |
3,964 |
5.2 % |
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Enterprise |
2,573 |
2,468 |
4.3 % |
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Commercial revenue |
6,743 |
6,432 |
4.9 % |
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Advertising sales |
1,594 |
1,699 |
(6.2) % |
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Mobile |
2,178 |
1,364 |
59.6 % |
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Other |
845 |
843 |
0.2 % |
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Total Revenue |
51,682 |
48,097 |
7.5 % |
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COSTS AND EXPENSES: |
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Total operating costs and expenses |
31,052 |
29,579 |
5.0 % |
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Adjusted EBITDA |
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11.4 % |
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Adjusted EBITDA margin |
39.9 % |
38.5 % |
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Capital Expenditures |
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% Total Revenue |
14.8 % |
15.4 % |
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Net income attributable to Charter shareholders |
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Earnings per common share attributable to Charter shareholders: |
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Basic |
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Diluted |
|
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Net cash flows from operating activities |
|
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Free cash flow |
|
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Revenues
For the year ended
Operating Costs and Expenses
Operating costs and expenses totaled
Adjusted EBITDA
Adjusted EBITDA totaled
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
Capital 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
For the year ended
Free cash flow for the year ended
Share Repurchases
For the year ended
Webcast
Charter will host a webcast on
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 Annual Report on Form 10-K for the year ended
Use of Adjusted EBITDA and Free Cash Flow Information
The company uses certain measures that are not defined by
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
About Charter
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.
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
- 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.
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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA |
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(dollars in millions, except per share data) |
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Three Months Ended |
Year Ended |
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2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
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REVENUES: |
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Internet |
|
|
11.6 % |
|
|
13.9 % |
|||||
Video |
4,406 |
4,418 |
(0.3) % |
17,630 |
17,432 |
1.1 % |
|||||
Voice |
396 |
449 |
(11.9) % |
1,598 |
1,806 |
(11.5) % |
|||||
Residential revenue |
10,226 |
9,729 |
5.1 % |
40,322 |
37,759 |
6.8 % |
|||||
Small and medium business |
1,054 |
997 |
5.8 % |
4,170 |
3,964 |
5.2 % |
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Enterprise |
643 |
623 |
3.2 % |
2,573 |
2,468 |
4.3 % |
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Commercial revenue |
1,697 |
1,620 |
4.8 % |
6,743 |
6,432 |
4.9 % |
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Advertising sales |