STAMFORD, Conn., Jan. 31, 2020 /PRNewswire/ -- Charter
Communications, Inc. (along with its subsidiaries, the "Company" or
"Charter") today reported financial and operating results for the
three and twelve months ended December 31, 2019.
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 ended December 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 ended December
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 ended December 31, 2019, Charter
purchased 19.0 million shares of Charter Class A common stock and
Charter 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 Tom Rutledge, Chairman and CEO of Charter
Communications. "As we look to 2020, we remain focused on driving
customer growth by offering superior services and value to our
customers, improving the efficiency of our operations, and
delivering sustainable free cash flow growth, by driving EBITDA
growth, while reducing capital intensity."
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,
2019 (a)
|
|
December 31,
2018 (a)
|
|
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 $113.79,
and grew by 1.8% compared to the prior year period, given
promotional rate step-ups, rate adjustments and a lower rate of
customers migrating to Spectrum pricing and packaging, partly
offset by a higher percentage of non-video customers, a higher mix
of streaming and lighter video packages within Charter's video
customer base and lower pay-per-view and video on demand
revenue.
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 $45 a month (per line), or "By the Gig" at
$14/GB, in both cases including
applicable fees and taxes.
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
$11.8 billion, driven by growth in
Internet, mobile, video and SMB revenue. Excluding mobile revenue
and advertising revenue, which benefited from political spend in
the fourth quarter of 2018, revenue grew by
4.8% year-over-year.
Video revenue totaled $4.5 billion
in the fourth quarter, an increase of 2.6% compared to the prior
year period. Video revenue growth was driven by rate adjustments
and promotional rolloff, partly offset by a decline in video
customers during the last year, a higher mix of streaming and
lighter video packages within Charter's video customer base and
lower pay-per-view and video on demand revenue.
Internet revenue grew by 11.5%, compared to the year-ago
quarter, to $4.3 billion, driven by
growth in Internet customers during the last year, promotional
rolloff and rate adjustments.
Voice revenue totaled $450 million
in the fourth quarter, a decrease of 12.5% compared to the fourth
quarter of 2018, driven by a decline in wireline voice customers
over the last twelve months and value-based pricing.
Commercial revenue increased to $1.6
billion, an increase of 1.8% over the prior year
period, driven by SMB revenue growth of 6.3%, partly offset by a
decline in enterprise revenue of 4.5%. Fourth quarter commercial
revenue was impacted by Charter's sale of Navisite, its managed
cloud services business within Spectrum Enterprise, in the
third quarter of 2019. Excluding Navisite revenue from the fourth
quarter of 2018, commercial and enterprise revenue grew by 4.3% and
1.3% over the prior year period, respectively.
Fourth quarter advertising sales revenue of $434 million declined by 22.7% compared to the
year-ago quarter, driven by lower political revenue. Excluding
political revenue in both periods, advertising sales revenue grew
by 4.6% year-over-year.
Fourth quarter mobile revenue totaled $236 million, an increase of $147 million year-over-year.
Other revenue totaled $220 million
in the fourth quarter, a decrease of 6.6% year-over-year, driven by
lower processing fees and home shopping revenue, partly offset by
video customer premise equipment ("CPE") sold to customers.
Operating Costs and Expenses
Fourth quarter total operating costs and expenses increased by
$165 million, or 2.3% year-over-year,
but were in-line with the prior year quarter when excluding fourth
quarter mobile costs.
Fourth quarter programming costs increased by $17 million, or 0.6% as compared to the fourth
quarter of 2018, reflecting contractual programming increases and
renewals, partly offset by lower video customers, a higher mix of
streaming and lighter video packages within Charter's video
customer base and lower pay-per-view expenses.
Regulatory, connectivity and produced content expenses increased
by $25 million, or 4.3%
year-over-year, primarily driven by video CPE sold to customers and
original programming costs.
Costs to service customers decreased by $41 million, or 2.3% year-over-year, despite
year-over-year residential and SMB customer growth of 4.0%. The
year-over-year decrease in costs to service customers was primarily
driven by lower service transactions per customer and lower
churn.
Marketing expenses increased by $16
million, or 2.1% year-over-year.
Other expenses decreased by $13
million, or 1.4% as compared to the fourth quarter of 2018
primarily driven by lower advertising sales costs and the sale of
Navisite.
Fourth quarter mobile costs totaled $372
million, an increase of $161
million year-over-year, and were comprised of device costs,
customer acquisition costs, and service and operating costs.
Adjusted EBITDA
Fourth quarter Adjusted EBITDA of $4.5
billion grew by 8.8% year-over-year, reflecting growth in
revenue and operating expenses of 4.7% and 2.3%, respectively.
Fourth quarter cable Adjusted EBITDA grew by 8.9% year-over-year
reflecting cable revenue growth of 3.4% and cable operating
expenses that were in-line with the prior year.
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled
$714 million in the fourth quarter of
2019, compared to $296 million in the
fourth quarter of 2018. The year-over-year increase in net income
attributable to Charter shareholders was primarily driven by higher
Adjusted EBITDA, a non-cash loss on financial instruments in the
prior year period versus a gain in the current year period and
lower other operating expenses, net.
Net income per basic common share attributable to Charter
shareholders totaled $3.36 in the
fourth quarter of 2019 compared to $1.31 during the same period last year. The
increase was primarily the result of the factors described above in
addition to a 6.3% decrease in weighted average common shares
outstanding versus the prior year period.
Capital Expenditures
Property, plant and equipment expenditures totaled $2.3 billion in the fourth quarter of 2019,
compared to $2.4 billion during the
fourth quarter of 2018, primarily driven by declines in CPE and
scalable infrastructure spending. The decrease in CPE spending was
primarily driven by a higher mix of boxless video outlets, lower
video gross additions, a decline in the pace of migration of Legacy
TWC and Legacy Bright House customers to Spectrum pricing
and packaging, increasing customer self-installations and the
completion of Charter's all-digital initiative in 2018. The
year-over-year decrease in scalable infrastructure spending was
primarily driven by the completion of the rollout of DOCSIS 3.1
technology in 2018 and the associated bandwidth benefit in 2019.
Fourth quarter capital expenditures included $151 million of mobile costs, most of which were
included in support capital.
Cash Flow and Free Cash Flow
During the fourth quarter of 2019, net cash flows from operating
activities totaled $3.4 billion,
compared to $3.2 billion in the prior
year quarter. The year-over-year increase in net cash flows from
operating activities was primarily due to higher Adjusted
EBITDA.
Consolidated free cash flow for the fourth quarter of 2019
totaled $1.6 billion, compared to
$885 million during the same period
last year. Cable free cash flow for the fourth quarter of 2019
totaled $1.9 billion, compared to
$1.2 billion during the same period
last year. The year-over-year increases in consolidated free cash
flow and cable free cash flow were driven by an increase in accrued
expenses related to capital expenditures, a decline in capital
expenditures and an increase in net cash flows from operating
activities.
Liquidity & Financing
As of December 31, 2019, total principal amount of debt was
$78.4 billion and Charter's credit
facilities provided approximately $4.7
billion of additional liquidity in excess of Charter's
$3.5 billion cash position.
In October 2019, CCO Holdings, LLC
("CCO Holdings") and CCO Holdings Capital Corp. issued $1.35 billion of 4.750% senior unsecured notes
due 2030. The net proceeds were used to finance a tender offer and
subsequent call of $500 million
aggregate principal amount of CCO Holdings' outstanding 5.250%
senior notes due 2021 and $850
million aggregate principal amount of CCO Holdings'
outstanding 5.750% senior notes due 2024. An additional
$500 million and $1.2 billion of the same 4.750% senior unsecured
notes due 2030 were issued in late October and December,
respectively. The proceeds were or will be used for general
corporate purposes, including to fund buybacks of Charter Class A
common stock and/or Charter Holdings common units and to repay
certain indebtedness.
In October 2019, Charter
Communications Operating, LLC ("Charter Operating") and Charter
Communications Operating Capital Corp. issued $1.5 billion of 4.800% senior secured notes due
2050. In December, an additional $1.3
billion of the same 4.800% senior secured notes due 2050
were issued. The proceeds were or will be used for general
corporate purposes, including to fund buybacks of Charter Class A
common stock and/or Charter Holdings common units and to repay
certain indebtedness.
In October 2019, Charter Operating
repriced $4.5 billion of revolver and
$4.0 billion of term loan A to LIBOR
plus 125 basis points (from 150 basis points) and its existing term
loan B to LIBOR plus 175 basis points (from 200 basis points). In
addition, $4.5 billion of the
revolver and $4.0 billion of term
loan A maturities were extended to 2025 (from 2023 and 2024) and
$3.8 billion of term loan B
maturities were extended to 2027 (from 2025).
Share Repurchases
During the three months ended December 31, 2019, Charter
purchased approximately 5.6 million shares of Charter Class A
common stock and Charter Holdings common units for approximately
$2.6 billion.
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
|
%
|
|
|
|
|
|
|
|
|
Net income
attributable to Charter shareholders
|
$
|
1,668
|
|
|
$
|
1,230
|
|
|
|
Earnings per common
share attributable to Charter shareholders:
|
|
|
|
|
|
Basic
|
$
|
7.60
|
|
|
$
|
5.29
|
|
|
|
Diluted
|
$
|
7.45
|
|
|
$
|
5.22
|
|
|
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$
|
11,748
|
|
|
$
|
11,767
|
|
|
|
Free cash
flow
|
$
|
4,608
|
|
|
$
|
2,172
|
|
|
|
Cable free cash
flow
|
$
|
5,769
|
|
|
$
|
2,766
|
|
|
|
Revenue
For the year ended December 31, 2019, revenues increased to
$45.8 billion, 4.9% higher than in
2018 driven by growth in Internet, mobile, video and commercial
revenue. Excluding mobile revenue and advertising revenue, which
benefited from political spend in 2018, revenue grew by 4.1%
year-over-year.
Operating Costs and Expenses
Operating costs and expenses totaled $28.9 billion in 2019, an increase of
$1.3 billion, or 4.8% compared to the
year ended December 31, 2018, primarily driven by increases in
mobile, programming, other expenses and regulatory, connectivity
and produced content expenses, and grew by 1.6% year-over-year when
excluding mobile costs.
Adjusted EBITDA
Adjusted EBITDA totaled $16.9
billion for the year ended December 31, 2019, an
increase of 5.0% compared to 2018, reflecting growth in revenue and
operating expenses of 4.9% and 4.8%, respectively. For the year
ended December 31, 2019, cable Adjusted EBITDA grew by 6.6%
year-over-year reflecting growth in cable revenue and cable
operating expenses of 3.5% and 1.6%, respectively.
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled
$1.7 billion for the year ended
December 31, 2019, compared to $1.2
billion in 2018. The year-over-year increase in net income
was primarily driven by higher Adjusted EBITDA and
lower depreciation and amortization expense, partly offset by
higher pension costs, income tax expense and interest expense.
Net income per basic common share attributable to Charter
shareholders totaled $7.60 for the
year ended December 31, 2019, compared to $5.29 during the same period last year. The
increase was primarily the result of the factors described above in
addition to a 5.5% decrease in weighted average common shares
outstanding versus the prior year period.
Capital Expenditures
Capital expenditures totaled $7.2
billion for the year ended December 31, 2019, compared
to $9.1 billion in 2018. The decrease
was primarily driven by declines in CPE and scalable infrastructure
spending. For the full year 2019, mobile capital expenditures
totaled $432 million versus
$242 million for the full year
2018.
Charter currently expects 2020 cable capital expenditures to
decline as a percentage of cable revenue versus 2019.
Cash Flow & Free Cash Flow
For the year ended December 31, 2019, net cash flows from
operating activities totaled $11.7
billion, in-line with the prior year. Net cash flows from
operating activities were positively impacted by higher Adjusted
EBITDA in 2019 versus 2018, offset by a higher unfavorable change
in working capital.
Free cash flow for the year ended December 31, 2019 was
$4.6 billion, compared to
$2.2 billion during the same period
last year primarily driven by lower capital expenditures. Cable
free cash flow for the year ended December 31, 2019 totaled
$5.8 billion, compared to
$2.8 billion in 2018.
Share Repurchases
For the year ended December 31, 2019, Charter purchased
approximately 19.0 million shares of Charter Class A common stock
and Charter Holdings common units for approximately $7.6 billion.
Conference Call
Charter will host a conference call on Friday, January 31,
2020 at 8:30 a.m. Eastern Time (ET)
related to the contents of this release.
The conference call will be webcast live via the Company's
investor relations website at ir.charter.com. The call will be
archived under the "Financial Information" section two hours after
completion of the call. Participants should go to the webcast link
no later than 10 minutes prior to the start time to register.
Those participating via telephone should dial 866-919-0894 no
later than 10 minutes prior to the call. International participants
should dial 706-679-9379. The conference ID code for the call is
9162126.
A replay of the call will be available at 855-859-2056 or
404-537-3406 beginning two hours after the completion of the call
through the end of business on February 14,
2020. The conference ID code for the replay is 9162126.
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
December 31, 2019, which will be posted on the "Financial
Information" section of our 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
"Financial Information" 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, loss on extinguishment of
debt, (gain) loss on financial instruments, net, other pension
(benefits) costs, net, other (income) expense, net and other
operating (income) expenses, 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 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 $301
million and $274 million for
the three months ended December 31, 2019 and 2018,
respectively, and were $1.2 billion
and $1.1 billion for the years ended
December 31, 2019 and 2018, respectively.
Cable Adjusted EBITDA is defined as Adjusted EBITDA less mobile
revenues plus mobile operating costs and expenses. Cable free cash
flow is defined as free cash flow plus mobile net cash outflows
from operating activities and mobile capital expenditures.
Management and Charter's board of directors use cable Adjusted
EBITDA and cable free cash flow to provide management and investors
a more meaningful year-over-year perspective on the financial and
operational performance and trends of our core cable business
without the impact of the revenue, costs and capital expenditures
in the initial funding period to grow a new product line as well as
the negative working capital impacts from the timing of
device-related cash flows when we provide the handset or tablet to
customers pursuant to equipment installment plans.
About Charter
Charter Communications, Inc. (NASDAQ: CHTR) is a leading
broadband communications company and the second largest cable
operator in the United States.
Charter provides a full range of advanced residential broadband
services, including Spectrum TV® programming, Spectrum
Internet®, Spectrum Voice®, and Spectrum
Mobile™. Under the Spectrum Business® brand, Charter
provides scalable, and cost-effective broadband communications
solutions to small and medium-sized business organizations,
including Internet access, business telephone, and TV services.
Through the Spectrum Enterprise brand, Charter is a national
provider of scalable, fiber-based technology solutions serving many
of America's largest businesses and communications service
providers. Charter's advertising sales and production services are
sold under the Spectrum Reach® brand. Charter's news and
sports networks are operated under the Spectrum Networks brand.
More information about Charter can be found at
newsroom.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," "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 video, Internet, 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;
- 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);
- our ability to develop and deploy new products and technologies
including mobile products and any other 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 costs, disruptions and possible limitations on operating
flexibility related to, and our ability to comply with, regulatory
conditions applicable to us as a result of the Time Warner Cable
Inc. and Bright House Networks, LLC Transactions;
- general business conditions, economic uncertainty or downturn,
unemployment levels and the level of activity in the housing
sector;
- the ability to retain and hire key personnel;
- 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
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
(dollars in
millions, except per share data)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
%
Change
|
|
2019
|
|
2018
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
|
4,473
|
|
|
$
|
4,361
|
|
|
2.6
|
%
|
|
$
|
17,607
|
|
|
$
|
17,348
|
|
|
1.5
|
%
|
Internet
|
4,345
|
|
|
3,895
|
|
|
11.5
|
%
|
|
16,667
|
|
|
15,181
|
|
|
9.8
|
%
|
Voice
|
450
|
|
|
515
|
|
|
(12.5)
|
%
|
|
1,920
|
|
|
2,114
|
|
|
(9.1)
|
%
|
Residential
revenue
|
9,268
|
|
|
8,771
|
|
|
5.7
|
%
|
|
36,194
|
|
|
34,643
|
|
|
4.5
|
%
|
Small and medium
business
|
986
|
|
|
928
|
|
|
6.3
|
%
|
|
3,868
|
|
|
3,665
|
|
|
5.6
|
%
|
Enterprise
|
617
|
|
|
647
|
|
|
(4.5)
|
%
|
|
2,556
|
|
|
2,528
|
|
|
1.1
|
%
|
Commercial
revenue
|
1,603
|
|
|
1,575
|
|
|
1.8
|
%
|
|
6,424
|
|
|
6,193
|
|
|
3.7
|
%
|
Advertising
sales
|
434
|
|
|
562
|
|
|
(22.7)
|
%
|
|
1,568
|
|
|
1,785
|
|
|
(12.1)
|
%
|
Mobile
|
236
|
|
|
89
|
|
|
163.7
|
%
|
|
726
|
|
|
106
|
|
|
NM
|
Other
|
220
|
|
|
234
|
|
|
(6.6)
|
%
|
|
852
|
|
|
907
|
|
|
(6.2)
|
%
|
Total
Revenue
|
11,761
|
|
|
11,231
|
|
|
4.7
|
%
|
|
45,764
|
|
|
43,634
|
|
|
4.9
|
%
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Programming
|
2,808
|
|
|
2,791
|
|
|
0.6
|
%
|
|
11,290
|
|
|
11,124
|
|
|
1.5
|
%
|
Regulatory,
connectivity and produced content
|
596
|
|
|
571
|
|
|
4.3
|
%
|
|
2,366
|
|
|
2,210
|
|
|
7.1
|
%
|
Costs to service
customers
|
1,794
|
|
|
1,835
|
|
|
(2.3)
|
%
|
|
7,277
|
|
|
7,327
|
|
|
(0.7)
|
%
|
Marketing
|
748
|
|
|
732
|
|
|
2.1
|
%
|
|
3,044
|
|
|
3,042
|
|
|
0.1
|
%
|
Mobile
|
372
|
|
|
211
|
|
|
75.9
|
%
|
|
1,246
|
|
|
346
|
|
|
NM
|
Other
expense
|
914
|
|
|
927
|
|
|
(1.4)
|
%
|
|
3,686
|
|
|
3,526
|
|
|
4.5
|
%
|
Total operating costs
and expenses (exclusive of items shown separately below)
|
7,232
|
|
|
7,067
|
|
|
2.3
|
%
|
|
28,909
|
|
|
27,575
|
|
|
4.8
|
%
|
Adjusted
EBITDA
|
4,529
|
|
|
4,164
|
|
|
8.8
|
%
|
|
16,855
|
|
|
16,059
|
|
|
5.0
|
%
|
Adjusted EBITDA
margin
|
38.5
|
%
|
|
37.1
|
%
|
|
|
|
36.8
|
%
|
|
36.8
|
%
|
|
|
Depreciation and
amortization
|
2,461
|
|
|
2,534
|
|
|
|
|
9,926
|
|
|
10,318
|
|
|
|
Stock compensation
expense
|
77
|
|
|
72
|
|
|
|
|
315
|
|
|
285
|
|
|
|
Other operating
expenses, net
|
32
|
|
|
119
|
|
|
|
|
103
|
|
|
235
|
|
|
|
Income from
operations
|
1,959
|
|
|
1,439
|
|
|
|
|
6,511
|
|
|
5,221
|
|
|
|
OTHER INCOME
(EXPENSES):
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(964)
|
|
|
(910)
|
|
|
|
|
(3,797)
|
|
|
(3,540)
|
|
|
|
Loss on
extinguishment of debt
|
(25)
|
|
|
—
|
|
|
|
|
(25)
|
|
|
—
|
|
|
|
Gain (loss) on
financial instruments, net
|
62
|
|
|
(110)
|
|
|
|
|
(54)
|
|
|
(110)
|
|
|
|
Other pension
benefits (costs), net
|
(96)
|
|
|
(55)
|
|
|
|
|
(69)
|
|
|
192
|
|
|
|
Other expense,
net
|
(4)
|
|
|
(2)
|
|
|
|
|
(135)
|
|
|
(77)
|
|
|
|
|
(1,027)
|
|
|
(1,077)
|
|
|
|
|
(4,080)
|
|
|
(3,535)
|
|
|
|
Income before income
taxes
|
932
|
|
|
362
|
|
|
|
|
2,431
|
|
|
1,686
|
|
|
|
Income tax
expense
|
(110)
|
|
|
(2)
|
|
|
|
|
(439)
|
|
|
(180)
|
|
|
|
Consolidated net
income
|
822
|
|
|
360
|
|
|
|
|
1,992
|
|
|
1,506
|
|
|
|
Less: Net income
attributable to noncontrolling interests
|
(108)
|
|
|
(64)
|
|
|
|
|
(324)
|
|
|
(276)
|
|
|
|
Net income
attributable to Charter shareholders
|
$
|
714
|
|
|
$
|
296
|
|
|
|
|
$
|
1,668
|
|
|
$
|
1,230
|
|
|
|
EARNINGS PER COMMON
SHARE
|
|
|
|
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO
CHARTER SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
3.36
|
|
|
$
|
1.31
|
|
|
|
|
$
|
7.60
|
|
|
$
|
5.29
|
|
|
|
Diluted
|
$
|
3.28
|
|
|
$
|
1.29
|
|
|
|
|
$
|
7.45
|
|
|
$
|
5.22
|
|
|
|
Weighted average
common shares outstanding, basic
|
212,648,072
|
|
|
227,005,966
|
|
|
|
|
219,506,735
|
|
|
232,356,665
|
|
|
|
Weighted average
common shares outstanding, diluted
|
217,778,099
|
|
|
230,131,933
|
|
|
|
|
223,786,380
|
|
|
235,525,226
|
|
|
|
|
Adjusted EBITDA is a
non-GAAP term. See page 6 of this addendum for the
reconciliation of Adjusted EBITDA to net income attributable to
Charter shareholders as defined by GAAP.
|
|
All percentages are
calculated using whole numbers. Minor differences may exist due to
rounding.
|
|
NM - Not
meaningful
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(dollars in
millions)
|
|
|
|
December
31,
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
3,483
|
|
|
$
|
551
|
|
Accounts receivable,
net
|
2,227
|
|
|
1,733
|
|
Prepaid expenses and
other current assets
|
761
|
|
|
446
|
|
Total current
assets
|
6,471
|
|
|
2,730
|
|
|
|
|
|
RESTRICTED
CASH
|
66
|
|
|
214
|
|
|
|
|
|
INVESTMENT IN CABLE
PROPERTIES:
|
|
|
|
Property, plant and
equipment, net
|
34,591
|
|
|
35,126
|
|
Customer
relationships, net
|
7,453
|
|
|
9,565
|
|
Franchises
|
67,322
|
|
|
67,319
|
|
Goodwill
|
29,554
|
|
|
29,554
|
|
Total investment in
cable properties, net
|
138,920
|
|
|
141,564
|
|
|
|
|
|
OPERATING LEASE
RIGHT-OF-USE ASSETS
|
1,092
|
|
|
—
|
|
OTHER NONCURRENT
ASSETS
|
1,639
|
|
|
1,622
|
|
|
|
|
|
Total
assets
|
$
|
148,188
|
|
|
$
|
146,130
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
8,671
|
|
|
$
|
8,805
|
|
Operating lease
liabilities
|
214
|
|
|
—
|
|
Current portion of
long-term debt
|
3,500
|
|
|
3,290
|
|
Total current
liabilities
|
12,385
|
|
|
12,095
|
|
|
|
|
|
LONG-TERM
DEBT
|
75,578
|
|
|
69,537
|
|
DEFERRED INCOME
TAXES
|
17,711
|
|
|
17,389
|
|
LONG-TERM OPERATING
LEASE LIABILITIES
|
979
|
|
|
—
|
|
OTHER LONG-TERM
LIABILITIES
|
2,724
|
|
|
2,837
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
Controlling
interest
|
31,445
|
|
|
36,285
|
|
Noncontrolling
interests
|
7,366
|
|
|
7,987
|
|
Total shareholders'
equity
|
38,811
|
|
|
44,272
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
148,188
|
|
|
$
|
146,130
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(dollars in
millions)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Consolidated net
income
|
$
|
822
|
|
|
$
|
360
|
|
|
$
|
1,992
|
|
|
$
|
1,506
|
|
Adjustments to
reconcile consolidated net income to net cash flows from operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,461
|
|
|
2,534
|
|
|
9,926
|
|
|
10,318
|
|
Stock compensation
expense
|
77
|
|
|
72
|
|
|
315
|
|
|
285
|
|
Accelerated vesting
of equity awards
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
Noncash interest
income, net
|
(17)
|
|
|
(65)
|
|
|
(106)
|
|
|
(307)
|
|
Other pension
(benefits) costs, net
|
96
|
|
|
55
|
|
|
69
|
|
|
(192)
|
|
Loss on
extinguishment of debt
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
(Gain) loss on
financial instruments, net
|
(62)
|
|
|
110
|
|
|
54
|
|
|
110
|
|
Deferred income
taxes
|
87
|
|
|
(27)
|
|
|
320
|
|
|
110
|
|
Other, net
|
10
|
|
|
94
|
|
|
158
|
|
|
175
|
|
Changes in operating
assets and liabilities, net of effects from acquisitions and
dispositions:
|
|
|
|
|
|
|
|
Accounts
receivable
|
59
|
|
|
3
|
|
|
(505)
|
|
|
(98)
|
|
Prepaid expenses and
other assets
|
(172)
|
|
|
(123)
|
|
|
(397)
|
|
|
(270)
|
|
Accounts payable,
accrued liabilities and other
|
(28)
|
|
|
155
|
|
|
(103)
|
|
|
125
|
|
Net cash flows from
operating activities
|
3,358
|
|
|
3,168
|
|
|
11,748
|
|
|
11,767
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
(2,282)
|
|
|
(2,433)
|
|
|
(7,195)
|
|
|
(9,125)
|
|
Change in accrued
expenses related to capital expenditures
|
504
|
|
|
150
|
|
|
55
|
|
|
(470)
|
|
Real estate
investments through variable interest entities
|
(23)
|
|
|
(6)
|
|
|
(148)
|
|
|
(21)
|
|
Other, net
|
(53)
|
|
|
(17)
|
|
|
(43)
|
|
|
(120)
|
|
Net cash flows from
investing activities
|
(1,854)
|
|
|
(2,306)
|
|
|
(7,331)
|
|
|
(9,736)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
6,528
|
|
|
2,268
|
|
|
19,685
|
|
|
13,820
|
|
Repayments of
long-term debt
|
(2,423)
|
|
|
(1,805)
|
|
|
(13,309)
|
|
|
(10,769)
|
|
Payments for debt
issuance costs
|
(55)
|
|
|
—
|
|
|
(103)
|
|
|
(29)
|
|
Purchase of treasury
stock
|
(2,305)
|
|
|
(1,185)
|
|
|
(6,873)
|
|
|
(4,399)
|
|
Proceeds from
exercise of stock options
|
12
|
|
|
13
|
|
|
118
|
|
|
69
|
|
Purchase of
noncontrolling interest
|
(292)
|
|
|
(183)
|
|
|
(885)
|
|
|
(656)
|
|
Distributions to
noncontrolling interest
|
(38)
|
|
|
(39)
|
|
|
(154)
|
|
|
(153)
|
|
Borrowings for real
estate investments through variable interest entities
|
—
|
|
|
172
|
|
|
—
|
|
|
342
|
|
Distributions to
variable interest entities noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(107)
|
|
Other, net
|
21
|
|
|
2
|
|
|
(112)
|
|
|
(5)
|
|
Net cash flows from
financing activities
|
1,448
|
|
|
(757)
|
|
|
(1,633)
|
|
|
(1,887)
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH,
CASH EQUIVALENTS AND RESTRICTED CASH
|
2,952
|
|
|
105
|
|
|
2,784
|
|
|
144
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, beginning of period
|
597
|
|
|
660
|
|
|
765
|
|
|
621
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, end of period
|
$
|
3,549
|
|
|
$
|
765
|
|
|
$
|
3,549
|
|
|
$
|
765
|
|
|
|
|
|
|
|
|
|
CASH PAID FOR
INTEREST
|
$
|
898
|
|
|
$
|
945
|
|
|
$
|
3,963
|
|
|
$
|
3,865
|
|
CASH PAID FOR
TAXES
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
71
|
|
|
$
|
45
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED SUMMARY
OF OPERATING STATISTICS
|
(in thousands,
except per customer and penetration data)
|
|
|
|
Approximate as
of
|
|
December 31,
2019 (a)
|
|
September 30,
2019 (a)
|
|
December 31,
2018 (a)
|
Footprint
(b)
|
|
|
|
|
|
Estimated
Passings
|
52,154
|
|
|
51,940
|
|
|
51,185
|
|
|
|
|
|
|
|
Penetration
Statistics (c)
|
|
|
|
|
|
Total Customer
Relationship Penetration of Estimated Passings
|
56.1
|
%
|
|
55.8
|
%
|
|
54.9
|
%
|
|
|
|
|
|
|
Customer
Relationships (d)
|
|
|
|
|
|
Residential
|
27,277
|
|
|
27,037
|
|
|
26,270
|
|
Small and Medium
Business
|
1,958
|
|
|
1,930
|
|
|
1,833
|
|
Total Customer
Relationships
|
29,235
|
|
|
28,967
|
|
|
28,103
|
|
|
|
|
|
|
|
Quarterly Net
Additions (Losses)
|
|
|
|
|
|
Residential
|
240
|
|
|
282
|
|
|
207
|
|
Small and Medium
Business
|
28
|
|
|
28
|
|
|
41
|
|
Total Customer
Relationships
|
268
|
|
|
310
|
|
|
248
|
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
Primary Service
Units ("PSUs")
|
|
|
|
|
|
Video
|
15,620
|
|
|
15,725
|
|
|
16,104
|
|
Internet
|
24,908
|
|
|
24,595
|
|
|
23,625
|
|
Voice
|
9,443
|
|
|
9,595
|
|
|
10,135
|
|
|
|
|
|
|
|
Quarterly Net
Additions (Losses)
|
|
|
|
|
|
Video
|
(105)
|
|
|
(77)
|
|
|
(36)
|
|
Internet
|
313
|
|
|
351
|
|
|
289
|
|
Voice
|
(152)
|
|
|
(213)
|
|
|
(83)
|
|
|
|
|
|
|
|
Single Play
(e)
|
11,741
|
|
|
11,557
|
|
|
10,928
|
|
Double Play
(e)
|
8,377
|
|
|
8,088
|
|
|
7,097
|
|
Triple Play
(e)
|
7,159
|
|
|
7,392
|
|
|
8,245
|
|
|
|
|
|
|
|
Single Play
Penetration (f)
|
43.0
|
%
|
|
42.7
|
%
|
|
41.6
|
%
|
Double Play
Penetration (f)
|
30.7
|
%
|
|
29.9
|
%
|
|
27.0
|
%
|
Triple Play
Penetration (f)
|
26.2
|
%
|
|
27.3
|
%
|
|
31.4
|
%
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
42.7
|
%
|
|
41.8
|
%
|
|
38.7
|
%
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
$
|
113.79
|
|
|
$
|
112.00
|
|
|
$
|
111.78
|
|
|
|
|
|
|
|
Small and Medium
Business
|
|
|
|
|
|
PSUs
|
|
|
|
|
|
Video
|
524
|
|
|
520
|
|
|
502
|
|
Internet
|
1,756
|
|
|
1,730
|
|
|
1,634
|
|
Voice
|
1,144
|
|
|
1,120
|
|
|
1,051
|
|
|
|
|
|
|
|
Quarterly Net
Additions (Losses)
|
|
|
|
|
|
Video
|
4
|
|
|
2
|
|
|
14
|
|
Internet
|
26
|
|
|
29
|
|
|
40
|
|
Voice
|
24
|
|
|
23
|
|
|
27
|
|
|
|
|
|
|
|
Monthly Small and
Medium Business Revenue per Customer (h)
|
$
|
169.06
|
|
|
$
|
169.44
|
|
|
$
|
170.62
|
|
|
|
|
|
|
|
Mobile
Lines
|
|
|
|
|
|
Residential and Small
and Medium Business Mobile Lines
|
1,082
|
|
|
794
|
|
|
134
|
|
Net Additions
(Losses)
|
288
|
|
|
276
|
|
|
113
|
|
|
|
|
|
|
|
Enterprise PSUs
(i)
|
|
|
|
|
|
Enterprise
PSUs
|
267
|
|
|
264
|
|
|
248
|
|
Net Additions
(Losses)
|
3
|
|
|
6
|
|
|
5
|
|
|
|
(a)
|
We calculate the
aging of customer accounts based on the monthly billing cycle for
each account. On that basis, at December 31, 2019, September
30, 2019 and December 31, 2018, customers included approximately
154,200, 148,000 and 217,600 customers, respectively, whose
accounts were over 60 days past due, approximately 13,500, 16,400
and 24,000 customers, respectively, whose accounts were over 90
days past due and approximately 10,000, 14,100 and 19,200
customers, respectively, whose accounts were over 120 days past
due.
|
|
|
(b)
|
Passings represent
our estimate of the number of units, such as single family homes,
apartment and condominium units and small and medium business 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. Passings in prior periods have been updated to reflect
standardization of definitions and presentation among legacy
companies.
|
|
|
(c)
|
Penetration
represents residential and small and medium business customers as a
percentage of estimated passings. Penetration excludes
mobile-only customers.
|
|
|
(d)
|
Customer
relationships include the number of customers that receive one or
more levels of service, encompassing video, Internet 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.
|
|
|
(e)
|
Single play, double
play and triple play customers represent customers that subscribe
to one, two or three of our cable service offerings, respectively,
excluding mobile.
|
|
|
(f)
|
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.
|
|
|
(g)
|
Monthly residential
revenue per residential customer is calculated as total residential
video, Internet and voice quarterly revenue divided by three
divided by average residential customer relationships during the
respective quarter. Monthly residential revenue per
residential customers excludes mobile revenue and
customers.
|
|
|
(h)
|
Monthly small and
medium business revenue per small and medium business customer is
calculated as total small and medium business quarterly revenue
divided by three divided by average small and medium business
customer relationships during the respective quarter. Monthly
small and medium business revenue per small and medium customer
excludes mobile revenue and customers.
|
|
|
(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
RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
|
(dollars in
millions)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net income
attributable to Charter shareholders
|
$
|
714
|
|
|
$
|
296
|
|
|
$
|
1,668
|
|
|
$
|
1,230
|
|
Plus: Net
income attributable to noncontrolling interest
|
108
|
|
|
64
|
|
|
324
|
|
|
276
|
|
Interest expense,
net
|
964
|
|
|
910
|
|
|
3,797
|
|
|
3,540
|
|
Income tax
expense
|
110
|
|
|
2
|
|
|
439
|
|
|
180
|
|
Depreciation and
amortization
|
2,461
|
|
|
2,534
|
|
|
9,926
|
|
|
10,318
|
|
Stock compensation
expense
|
77
|
|
|
72
|
|
|
315
|
|
|
285
|
|
Loss on extinguishment
of debt
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
(Gain) loss on
financial instruments, net
|
(62)
|
|
|
110
|
|
|
54
|
|
|
110
|
|
Other pension
(benefits) costs, net
|
96
|
|
|
55
|
|
|
69
|
|
|
(192)
|
|
Other, net
|
36
|
|
|
121
|
|
|
238
|
|
|
312
|
|
Adjusted EBITDA
(a)
|
4,529
|
|
|
4,164
|
|
|
16,855
|
|
|
16,059
|
|
Less: Mobile
revenue
|
(236)
|
|
|
(89)
|
|
|
(726)
|
|
|
(106)
|
|
Plus: Mobile
costs and expenses
|
372
|
|
|
211
|
|
|
1,246
|
|
|
346
|
|
Cable Adjusted
EBITDA
|
$
|
4,665
|
|
|
$
|
4,286
|
|
|
$
|
17,375
|
|
|
$
|
16,299
|
|
|
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$
|
3,358
|
|
|
$
|
3,168
|
|
|
$
|
11,748
|
|
|
$
|
11,767
|
|
Less: Purchases
of property, plant and equipment
|
(2,282)
|
|
|
(2,433)
|
|
|
(7,195)
|
|
|
(9,125)
|
|
Change in accrued
expenses related to capital expenditures
|
504
|
|
|
150
|
|
|
55
|
|
|
(470)
|
|
Free cash
flow
|
1,580
|
|
|
885
|
|
|
4,608
|
|
|
2,172
|
|
Plus: Mobile
net cash outflows from operating activities
|
166
|
|
|
198
|
|
|
729
|
|
|
352
|
|
Purchases of mobile property, plant and equipment
|
151
|
|
|
106
|
|
|
432
|
|
|
242
|
|
Cable free cash
flow
|
$
|
1,897
|
|
|
$
|
1,189
|
|
|
$
|
5,769
|
|
|
$
|
2,766
|
|
|
|
(a)
|
See page 1 of this
addendum for detail of the components included within Adjusted
EBITDA.
|
|
|
|
The above schedule is
presented in order to reconcile Adjusted EBITDA, cable Adjusted
EBITDA, free cash flow and cable free cash flow, non-GAAP measures,
to the most directly comparable GAAP measures in accordance with
Section 401(b) of the Sarbanes-Oxley Act.
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED CAPITAL
EXPENDITURES
|
(dollars in
millions)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Customer premise
equipment (a)
|
$
|
543
|
|
|
$
|
687
|
|
|
$
|
2,070
|
|
|
$
|
3,124
|
|
Scalable
infrastructure (b)
|
599
|
|
|
649
|
|
|
1,439
|
|
|
2,227
|
|
Line extensions
(c)
|
390
|
|
|
381
|
|
|
1,444
|
|
|
1,373
|
|
Upgrade/rebuild
(d)
|
183
|
|
|
182
|
|
|
634
|
|
|
704
|
|
Support capital
(e)
|
567
|
|
|
534
|
|
|
1,608
|
|
|
1,697
|
|
Total
capital expenditures
|
2,282
|
|
|
2,433
|
|
|
7,195
|
|
|
9,125
|
|
Less: Mobile
capital expenditures
|
(151)
|
|
|
(106)
|
|
|
(432)
|
|
|
(242)
|
|
Cable capital
expenditures
|
$
|
2,131
|
|
|
$
|
2,327
|
|
|
$
|
6,763
|
|
|
$
|
8,883
|
|
|
|
|
|
|
|
|
|
Capital expenditures
included in total related to:
|
|
|
|
|
|
|
|
Commercial
services
|
$
|
358
|
|
|
$
|
379
|
|
|
$
|
1,314
|
|
|
$
|
1,313
|
|
All-digital
transition
|
$
|
—
|
|
|
$
|
28
|
|
|
$
|
—
|
|
|
$
|
344
|
|
|
|
(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.,
set-top boxes 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).
|
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SOURCE Charter Communications, Inc.