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InvestorsJuly 28, 2023

Charter Announces Second Quarter 2023 Results

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STAMFORD, Conn., July 28, 2023 /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, 2023.

  • Second quarter total residential and small and medium business ("SMB") Internet customers increased by 77,000. As of June 30, 2023, Charter served a total of 30.6 million residential and SMB Internet customers.
  • Second quarter total residential and SMB mobile lines increased by 648,000. As of June 30, 2023, Charter served a total of 6.6 million mobile lines.
  • As of June 30, 2023, Charter had a total of 32.2 million residential and SMB customer relationships, which excludes mobile-only relationships.
  • Second quarter revenue of $13.7 billion grew by 0.5% year-over-year, driven by residential Internet revenue growth of 3.1%, residential mobile service revenue growth of 29.8% and other revenue growth of 28.5%, primarily driven by higher mobile device sales.
  • Net income attributable to Charter shareholders totaled $1.2 billion in the second quarter.
  • Second quarter Adjusted EBITDA1 of $5.5 billion grew by 0.2% year-over-year.
  • Second quarter capital expenditures totaled $2.8 billion and included $1.1 billion of line extensions.
  • Second quarter net cash flows from operating activities totaled $3.3 billion, compared to $3.7 billion in the prior year. The year-over-year decline was primarily due to higher cash taxes.
  • Second quarter free cash flow1 of $668 million decreased from $1.7 billion in the prior year, primarily due to higher capital expenditures, mostly driven by Charter's network expansion and evolution initiatives, and higher cash taxes.
  • During the second quarter, Charter purchased 1.1 million shares of Charter Class A common stock and Charter Communications Holdings, LLC ("Charter Holdings") common units for approximately $378 million.

"We are growing our business by providing differentiated and valuable products, and high-quality service to our customers," said Chris Winfrey, President and CEO of Charter. "We are also executing well on our evolution and expansion initiatives, and these strategic investments will lead to further customer and financial growth, creating long-term value for Charter shareholders."

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

   
   

June 30, 2023 (c)

 

June 30, 2022 (c)

 

Y/Y Change

Footprint (d)

           

Estimated Passings

 

56,209

 

55,008

 

2.2 %

             

Customer Relationships (e)

           

Residential

 

30,009

 

29,942

 

0.2 %

SMB

 

2,219

 

2,182

 

1.7 %

  Total Customer Relationships

 

32,228

 

32,124

 

0.3 %

             

Residential

 

13

 

(93)

 

106

SMB

 

4

 

19

 

(15)

  Total Customer Relationships Quarterly Net Additions

 

17

 

(74)

 

91

             

  Total Customer Relationship Penetration of Estimated Passings (f)

 

57.3 %

 

58.4 %

 

(1.1) ppts

             

Monthly Residential Revenue per Residential Customer (g)

 

$               120.25

 

$               120.61

 

(0.3) %

Monthly SMB Revenue per SMB Customer (h)

 

$               164.56

 

$               167.47

 

(1.7) %

             

Residential Customer Relationships Penetration

           

One Product Penetration (i)

 

46.0 %

 

45.4 %

 

0.6 ppts

Two Product Penetration (i)

 

33.0 %

 

32.6 %

 

0.4 ppts

Three or More Product Penetration (i)

 

20.9 %

 

22.0 %

 

(1.1) ppts

             

% Residential Non-Video Customer Relationships

 

53.1 %

 

50.4 %

 

2.7 ppts

             

Internet

           

Residential

 

28,549

 

28,259

 

1.0 %

SMB

 

2,037

 

1,994

 

2.1 %

  Total Internet Customers

 

30,586

 

30,253

 

1.1 %

             

Residential

 

70

 

(42)

 

112

SMB

 

7

 

21

 

(14)

  Total Internet Quarterly Net Additions

 

77

 

(21)

 

98

             

Video

           

Residential

 

14,071

 

14,853

 

(5.3) %

SMB

 

635

 

642

 

(1.0) %

  Total Video Customers

 

14,706

 

15,495

 

(5.1) %

             

Residential

 

(189)

 

(240)

 

51

SMB

 

(11)

 

14

 

(25)

  Total Video Quarterly Net Additions

 

(200)

 

(226)

 

26

             

Voice

           

Residential

 

7,248

 

8,200

 

(11.6) %

SMB

 

1,294

 

1,287

 

0.6 %

  Total Voice Customers

 

8,542

 

9,487

 

(10.0) %

             

Residential

 

(225)

 

(265)

 

40

SMB

 

4

 

(1)

 

5

Total Voice Quarterly Net Additions

 

(221)

 

(266)

 

45

             

Mobile Lines (j)

           

Residential

 

6,410

 

4,134

 

55.1 %

SMB

 

216

 

147

 

46.5 %

  Total Mobile Lines

 

6,626

 

4,281

 

54.8 %

             

Residential

 

628

 

329

 

299

SMB

 

20

 

15

 

5

  Total Mobile Lines Quarterly Net Additions

 

648

 

344

 

304

             

Enterprise (k)

           

Enterprise Primary Service Units ("PSUs")

 

294

 

277

 

6.2 %

Enterprise Quarterly Net Additions

 

6

 

3

 

3

 

In thousands, except per customer and penetration data. See footnotes to unaudited summary of operating statistics on page 7 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, 2023, Charter had 30.0 million residential customer relationships.

Second quarter residential Internet customers increased by 70,000, compared to an increase of 17,000 during the second quarter of 2022 when excluding last year's 59,000 customer disconnects related to the discontinuation of the Emergency Broadband Benefit program and additional requirements of the Affordable Connectivity Program.

Spectrum Internet® delivers the fastest Internet and WiFi download speeds in the nation.1 Charter offers Spectrum Internet products with speeds up to 1 Gbps across its entire footprint and is on plan to evolve its network to offer symmetrical and multi-gigabit speeds across its entire footprint at a lower cost and more quickly than its competitors. 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, became available to SMB customers in March, and is available to all Spectrum Internet customers. At the end of the second quarter, over 45% of Charter's total Internet customers had Advanced WiFi. In the first quarter of 2023, Charter completed the deployment of Mobile Speed Boost to all Advanced WiFi routers. In October 2022, Charter introduced Spectrum One, which brings together Spectrum Internet, Advanced WiFi and Unlimited Spectrum MobileTM. Spectrum One products work better together, provide the fastest connectivity, offer more reliable and secure online connections and save customers significant money.

Residential video customers decreased by 189,000 in the second quarter of 2023, compared to a decline of 240,000 in the second quarter of 2022. As of June 30, 2023, Charter had 14.1 million residential video customers. Charter plans to begin deploying Xumo-branded streaming devices in late 2023.

During the second quarter of 2023, residential wireline voice customers declined by 225,000, compared to a decline of 265,000 in the second quarter of 2022. As of June 30, 2023, Charter had 7.2 million residential wireline voice customers.

During the second quarter of 2023, Charter added 628,000 residential mobile lines, compared to growth of 329,000 during the second quarter of 2022. Spectrum Mobile is available to all new and existing Spectrum Internet customers and offers the fastest overall speeds,2 with plans that include 5G access, do not require contracts and include taxes and fees in the price. Spectrum One and Spectrum Mobile are central to Charter's converged network strategy to provide consumers a differentiated connectivity experience with highly competitive, simple data plans and pricing.

Second quarter 2023 monthly residential revenue per residential customer totaled $120.25, and decreased by 0.3% compared to the prior year period, given a higher mix of non-video customer relationships and a higher mix of lower priced video packages within Charter's video customer base, partly offset by promotional rate step-ups, rate adjustments and the accelerated growth of Spectrum Mobile.

SMB customer relationships grew by 4,000 in the second quarter of 2023, while second quarter 2022 SMB customer relationships grew by 19,000. Enterprise PSUs grew by 6,000 in the second quarter of 2023 versus 3,000 added in the second quarter of 2022.

Charter continues to work with federal, state and local governments to bring Spectrum Internet to unserved and underserved communities. During the second quarter of 2023, Charter activated 68,000 subsidized rural passings.

1.

Based on Ookla's Speedtest Global Index median fixed download speeds for Q2 2023.

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.

 

Second Quarter Financial Results

(in millions)

 
 

Three Months Ended June 30,

 

2023

 

2022

 

% Change

Revenues:

         

Internet

$      5,733

 

$      5,562

 

3.1 %

Video

4,188

 

4,484

 

(6.6) %

Voice

365

 

398

 

(8.3) %

Mobile service

539

 

415

 

29.8 %

Residential revenue

10,825

 

10,859

 

(0.3) %

Small and medium business

1,094

 

1,092

 

0.2 %

Enterprise

690

 

669

 

3.2 %

Commercial revenue

1,784

 

1,761

 

1.4 %

Advertising sales

384

 

460

 

(16.5) %

Other

666

 

518

 

28.5 %

Total Revenues

$    13,659

 

$    13,598

 

0.5 %

           

Net income attributable to Charter shareholders

$      1,223

 

$      1,471

 

(16.8) %

Net income attributable to Charter shareholders margin

9.0 %

 

10.8 %

   
           

Adjusted EBITDA (a)

$      5,522

 

$      5,509

 

0.2 %

Adjusted EBITDA margin

40.4 %

 

40.5 %

   
           

Capital Expenditures

$      2,834

 

$      2,193

 

29.2 %

           

Net cash flows from operating activities

$      3,311

 

$      3,734

 

(11.3) %

Free cash flow (a)

$         668

 

$      1,659

 

(59.7) %

 

See page 1 of the addendum of this news release for a GAAP reconciliation of Adjusted EBITDA and free cash flow and page 7 of the addendum of this news release for footnotes.  The footnotes contain important disclosures regarding the definitions used for these financial results.  All percentages are calculated using whole numbers. Minor differences may exist due to rounding.

 

Revenues

Second quarter revenue increased by 0.5% year-over-year to $13.7 billion, driven by growth in residential Internet, mobile service and other revenues, primarily driven by higher mobile device sales, partly offset by lower residential video and advertising sales revenues.

Residential revenue totaled $10.8 billion in the second quarter, a decrease of 0.3% year-over-year.

Internet revenue grew by 3.1% year-over-year to $5.7 billion, driven by growth in Internet customers during the last year, promotional rate step-ups and rate adjustments, partly offset by lower bundled revenue allocation.

Video revenue totaled $4.2 billion in the second quarter, a decrease of 6.6% compared to the prior year period, driven by a higher mix of lower priced video packages within Charter's video customer base and a decline in video customers during the last year, partly offset by promotional rate step-ups and video rate adjustments that pass through programmer rate increases.

 Voice revenue totaled $365 million in the second quarter, a decrease of 8.3% compared to the second quarter of 2022, driven by a decline in wireline voice customers over the last twelve months.

Second quarter mobile service revenue totaled $539 million, an increase of 29.8% year-over-year, driven by mobile line growth and higher bundled revenue allocation.

Commercial revenue increased by 1.4% year-over-year to $1.8 billion, driven by SMB and enterprise revenue growth of 0.2% and 3.2% year-over-year, respectively. Second quarter 2023 SMB revenue growth was driven by customer relationship growth, partly offset by lower monthly SMB revenue per SMB customer primarily due a higher mix of lower priced video packages and a lower number of voice lines per SMB customer relationship. Enterprise revenue excluding wholesale increased by 7.2% year-over-year, mostly reflecting PSU growth.

Second quarter advertising sales revenue of $384 million decreased by 16.5% compared to the year-ago quarter, primarily driven by lower political revenue. Excluding political revenue in both periods, advertising sales revenue decreased by 3.5% year-over-year, due to a more challenged advertising market, partly offset by higher advanced advertising revenue.

Other revenue totaled $666 million in the second quarter, an increase of 28.5% compared to the second quarter of 2022, driven by higher mobile device sales.

Operating Costs and Expenses

Second quarter programming costs decreased by $232 million, or 7.8% as compared to the second quarter of 2022, reflecting fewer video customers and a higher mix of lower cost packages within Charter's video customer base, partly offset by contractual programming rate increases and renewals.

Other costs of revenue increased by $182 million, or 15.4% year-over-year, primarily driven by higher mobile device sales and other mobile direct costs and higher regional sports network costs given more games played in the second quarter of 2023 compared to second quarter 2022, partly offset by lower advertising sales expense.

Costs to service customers increased by $72 million, or 3.6% year-over-year. The year-over-year increase in costs to service customers was primarily driven by adjustments to job structure, pay and benefits to build a more skilled and longer tenured workforce resulting in lower frontline employee attrition compared to 2022, and additional activity to support the accelerated growth of Spectrum Mobile, partly offset by productivity improvements and lower bad debt.

Sales and marketing expenses increased by $31 million, or 3.6% year-over-year, primarily due to higher staffing across sales channels and the accelerated growth of Spectrum Mobile.

Other expenses decreased by $5 million, or 0.4% as compared to the second quarter of 2022, primarily due to favorability in insurance expense, mostly offset by higher labor costs.

Net Income Attributable to Charter Shareholders

Net income attributable to Charter shareholders totaled $1.2 billion in the second quarter of 2023, compared to $1.5 billion in the second quarter of 2022. The year-over-year decrease in net income attributable to Charter shareholders was primarily driven by higher interest expense and other non-operating costs and expenses, partly offset by higher Adjusted EBITDA. 

 Net income per basic common share attributable to Charter shareholders totaled $8.15 in the second quarter of 2023 compared to $8.96 during the same period last year. The decrease was primarily the result of the factors described above, partly offset by the benefit of an 8.5% decrease in basic weighted average common shares outstanding versus the prior year period.

Adjusted EBITDA

Second quarter Adjusted EBITDA of $5.5 billion grew by 0.2% year-over-year, reflecting growth in revenue and operating expenses of 0.5% and 0.6%, respectively.

Capital Expenditures

Capital expenditures totaled $2.8 billion in the second quarter of 2023, compared to $2.2 billion during the second quarter of 2022. The increase was primarily driven by higher spend on line extensions, which totaled $1.1 billion in the second quarter of 2023, compared to $693 million in the prior year quarter, driven by Charter's subsidized rural construction initiative and continued network expansion across residential and commercial greenfield and market fill-in opportunities. Second quarter capital expenditures excluding line extensions totaled $1.8 billion, compared to $1.5 billion in the second quarter of 2022, primarily driven by higher spend on upgrade/rebuild (primarily network evolution) and support capital.

Charter currently expects full year 2023 capital expenditures, excluding line extensions, to be between $6.5 billion and $6.8 billion. Charter expects 2023 line extensions capital expenditures to be approximately $4 billion. The actual amount of capital expenditures in 2023 will depend on a number of factors including, but not limited to, the pace of Charter's network evolution and expansion initiatives, supply chain timing and growth rates in Charter's residential and commercial businesses.

Cash Flow and Free Cash Flow

During the second quarter of 2023, net cash flows from operating activities totaled $3.3 billion, compared to $3.7 billion in the prior year quarter. The year-over-year decrease in net cash flows from operating activities was primarily due to higher cash taxes.

Free cash flow in the second quarter of 2023 totaled $668 million, compared to $1.7 billion during the same period last year. The year-over-year decrease in free cash flow was primarily driven by a decrease in net cash flows from operating activities and an increase in capital expenditures.

Liquidity & Financing

As of June 30, 2023, total principal amount of debt was $97.8 billion and Charter's credit facilities provided approximately $3.2 billion of additional liquidity in excess of Charter's $478 million cash position.

Share Repurchases

During the three months ended June 30, 2023, Charter purchased 1.1 million shares of Charter Class A common stock and Charter Holdings common units for approximately $378 million.

Webcast

Charter will host a webcast on Friday, July 28, 2023 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 six months ended June 30, 2023, 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 $335 million and $709 million for the three and six months ended June 30, 2023, respectively, and $348 million and $690 million for the three and six months ended June 30, 2022, respectively.

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;
  • 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 including in connection with our network evolution and rural construction initiatives;
  • 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,

 

2023

 

2022

 

2023

 

2022

Net income attributable to Charter shareholders

$             1,223

 

$             1,471

 

$             2,244

 

$             2,674

Plus:  Net income attributable to noncontrolling interest

190

 

237

 

352

 

423

Interest expense, net

1,298

 

1,109

 

2,563

 

2,169

Income tax expense

444

 

489

 

818

 

834

Depreciation and amortization

2,172

 

2,240

 

4,378

 

4,534

Stock compensation expense

168

 

104

 

376

 

251

Other, net

27

 

(141)

 

141

 

(163)

Adjusted EBITDA (a)

$             5,522

 

$             5,509

 

$           10,872

 

$           10,722

               

Net cash flows from operating activities

$             3,311

 

$             3,734

 

$             6,634

 

$             7,381

Less:  Purchases of property, plant and equipment

(2,834)

 

(2,193)

 

(5,298)

 

(4,050)

Change in accrued expenses related to capital expenditures

191

 

118

 

(4)

 

128

Free cash flow (a)

$                668

 

$             1,659

 

$             1,332

 

$             3,459

 

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,

 

2023

 

2022

 

% Change

 

2023

 

2022

 

% Change

REVENUES:

                     

Internet

$             5,733

 

$             5,562

 

3.1 %

 

$           11,451

 

$           11,014

 

4.0 %

Video

4,188

 

4,484

 

(6.6) %

 

8,442

 

8,830

 

(4.4) %

Voice

365

 

398

 

(8.3) %

 

738

 

789

 

(6.4) %

Mobile service

539

 

415

 

29.8 %

 

1,036

 

802

 

29.1 %

Residential revenue

10,825

 

10,859

 

(0.3) %

 

21,667

 

21,435

 

1.1 %

Small and medium business

1,094

 

1,092

 

0.2 %

 

2,185

 

2,162

 

1.1 %

Enterprise

690

 

669

 

3.2 %

 

1,372

 

1,330

 

3.1 %

Commercial revenue

1,784

 

1,761

 

1.4 %

 

3,557

 

3,492

 

1.9 %

Advertising sales

384

 

460

 

(16.5) %

 

739

 

843

 

(12.3) %

Other

666

 

518

 

28.5 %

 

1,349

 

1,028

 

31.2 %

Total Revenues

13,659

 

13,598

 

0.5 %

 

27,312

 

26,798

 

1.9 %

                       

COSTS AND EXPENSES:

                     

Programming

2,740

 

2,972

 

(7.8) %

 

5,539

 

5,949

 

(6.9) %

Other costs of revenue

1,367

 

1,185

 

15.4 %

 

2,695

 

2,293

 

17.5 %

Costs to service customers

2,069

 

1,997

 

3.6 %

 

4,164

 

3,956

 

5.3 %

Sales and marketing

895

 

864

 

3.6 %

 

1,841

 

1,744

 

5.6 %

Other expense (b)

1,066

 

1,071

 

(0.4) %

 

2,201

 

2,134

 

3.1 %

Total operating costs and expenses (b)

8,137

 

8,089

 

0.6 %

 

16,440

 

16,076

 

2.3 %

                       

Adjusted EBITDA (a)

$             5,522

 

$             5,509

 

0.2 %

 

$           10,872

 

$           10,722

 

1.4 %

 

All percentages are calculated using whole numbers. Minor differences may exist due to rounding. 

See footnotes on page 7.

 

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,

 

2023

 

2022

 

2023

 

2022

REVENUES

$          13,659

 

$          13,598

 

$          27,312

 

$          26,798

               

COSTS AND EXPENSES:

             

Operating costs and expenses (exclusive of items shown separately below)

8,305

 

8,193

 

16,816

 

16,327

Depreciation and amortization

2,172

 

2,240

 

4,378

 

4,534

Other operating income, net

(58)

 

(62)

 

(48)

 

(61)

 

10,419

 

10,371

 

21,146

 

20,800

Income from operations

3,240

 

3,227

 

6,166

 

5,998

               

OTHER INCOME (EXPENSES):

             

Interest expense, net

(1,298)

 

(1,109)

 

(2,563)

 

(2,169)

Other income (expense), net

(85)

 

79

 

(189)

 

102

 

(1,383)

 

(1,030)

 

(2,752)

 

(2,067)

Income before income taxes

1,857

 

2,197

 

3,414

 

3,931

Income tax expense

(444)

 

(489)

 

(818)

 

(834)

Consolidated net income

1,413

 

1,708

 

2,596

 

3,097

Less: Net income attributable to noncontrolling interests

(190)

 

(237)

 

(352)

 

(423)

Net income attributable to Charter shareholders

$            1,223

 

$            1,471

 

$            2,244

 

$            2,674

               

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:

             

Basic

$              8.15

 

$              8.96

 

$            14.89

 

$            15.98

Diluted

$              8.05

 

$              8.80

 

$            14.69

 

$            15.66

Weighted average common shares outstanding, basic

150,091,880

 

164,049,619

 

150,761,406

 

167,350,535

Weighted average common shares outstanding, diluted

151,975,698

 

167,090,925

 

152,727,540

 

170,741,462

 

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions)

 

 

June 30,

 

December 31,

 

2023

 

2022

ASSETS

(unaudited)

   

CURRENT ASSETS:

     

Cash and cash equivalents

$                    478

 

$                    645

Accounts receivable, net

2,864

 

2,921

Prepaid expenses and other current assets

587

 

451

Total current assets

3,929

 

4,017

       

INVESTMENT IN CABLE PROPERTIES:

     

Property, plant and equipment, net

37,546

 

36,039

Customer relationships, net

2,222

 

2,772

Franchises

67,396

 

67,363

Goodwill

29,672

 

29,563

Total investment in cable properties, net

136,836

 

135,737

       

OTHER NONCURRENT ASSETS

4,850

 

4,769

       

Total assets

$              145,615

 

$              144,523

       

LIABILITIES AND SHAREHOLDERS' EQUITY

     

CURRENT LIABILITIES:

     

Accounts payable and accrued liabilities

$                 9,976

 

$               10,555

Current portion of long-term debt

1,999

 

1,510

Total current liabilities

11,975

 

12,065

       

LONG-TERM DEBT

95,971

 

96,093

DEFERRED INCOME TAXES

18,982

 

19,058

OTHER LONG-TERM LIABILITIES

4,660

 

4,758

       

SHAREHOLDERS' EQUITY:

     

Controlling interest

10,460

 

9,119

Noncontrolling interests

3,567

 

3,430

Total shareholders' equity

14,027

 

12,549

       

Total liabilities and shareholders' equity

$              145,615

 

$              144,523

 

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions) 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2023

 

2022

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

             

Consolidated net income

$            1,413

 

$            1,708

 

$            2,596

 

$            3,097

Adjustments to reconcile consolidated net income to net cash flows from operating activities:

             

Depreciation and amortization

2,172

 

2,240

 

4,378

 

4,534

Stock compensation expense

168

 

104

 

376

 

251

Noncash interest, net

7

 

(4)

 

4

 

(7)

Deferred income taxes

(40)

 

77