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.
![Charter Communications Logo. (PRNewsfoto/Charter Communications, Inc.) Charter Communications Logo. (PRNewsfoto/Charter Communications, Inc.)](https://mma.prnewswire.com/media/76092/charter_communications_logo.jpg)
- 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
|
|
|
|
|
|
|
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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)
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Total Customer
Relationships Quarterly Net Additions
|
|
17
|
|
(74)
|
|
91
|
|
|
|
|
|
|
|
Total Customer
Relationship Penetration of Estimated Passings (f)
|
|
57.3 %
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|
58.4 %
|
|
(1.1) ppts
|
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
|
$
120.25
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|
$
120.61
|
|
(0.3) %
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Monthly SMB Revenue
per SMB Customer (h)
|
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$
164.56
|
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$
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)
|
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20.9 %
|
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22.0 %
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(1.1) ppts
|
|
|
|
|
|
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% Residential
Non-Video Customer Relationships
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53.1 %
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50.4 %
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2.7 ppts
|
|
|
|
|
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|
Internet
|
|
|
|
|
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|
Residential
|
|
28,549
|
|
28,259
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|
1.0 %
|
SMB
|
|
2,037
|
|
1,994
|
|
2.1 %
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Total Internet
Customers
|
|
30,586
|
|
30,253
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|
1.1 %
|
|
|
|
|
|
|
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Residential
|
|
70
|
|
(42)
|
|
112
|
SMB
|
|
7
|
|
21
|
|
(14)
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Total Internet
Quarterly Net Additions
|
|
77
|
|
(21)
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|
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)
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Total Video
Quarterly Net Additions
|
|
(200)
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|
(226)
|
|
26
|
|
|
|
|
|
|
|
Voice
|
|
|
|
|
|
|
Residential
|
|
7,248
|
|
8,200
|
|
(11.6) %
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SMB
|
|
1,294
|
|
1,287
|
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0.6 %
|
Total Voice
Customers
|
|
8,542
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|
9,487
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(10.0) %
|
|
|
|
|
|
|
|
Residential
|
|
(225)
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|
(265)
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|
40
|
SMB
|
|
4
|
|
(1)
|
|
5
|
Total Voice Quarterly
Net Additions
|
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(221)
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(266)
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45
|
|
|
|
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Mobile Lines
(j)
|
|
|
|
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Residential
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6,410
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4,134
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55.1 %
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SMB
|
|
216
|
|
147
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46.5 %
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Total Mobile
Lines
|
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6,626
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|
4,281
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54.8 %
|
|
|
|
|
|
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Residential
|
|
628
|
|
329
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|
299
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SMB
|
|
20
|
|
15
|
|
5
|
Total Mobile
Lines Quarterly Net Additions
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648
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|
344
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|
304
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|
|
|
|
|
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Enterprise
(k)
|
|
|
|
|
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Enterprise Primary
Service Units ("PSUs")
|
|
294
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|
277
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6.2 %
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Enterprise Quarterly
Net Additions
|
|
6
|
|
3
|
|
3
|
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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
|
|
(63)
|
|
115
|
Other, net
|
83
|
|
(132)
|
|
187
|
|
(153)
|
Changes in operating
assets and liabilities, net of effects from acquisitions and
dispositions:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(13)
|
|
(249)
|
|
57
|
|
(200)
|
Prepaid expenses and
other assets
|
(25)
|
|
52
|
|
(361)
|
|
(133)
|
Accounts payable,
accrued liabilities and other
|
(454)
|
|
(62)
|
|
(540)
|
|
(123)
|
Net cash flows from
operating activities
|
3,311
|
|
3,734
|
|
6,634
|
|
7,381
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
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
|
Other, net
|
(207)
|
|
(220)
|
|
(287)
|
|
(160)
|
Net cash flows from
investing activities
|
(2,850)
|
|
(2,295)
|
|
(5,589)
|
|
(4,082)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
3,944
|
|
9,918
|
|
11,048
|
|
16,631
|
Repayments of
long-term debt
|
(3,995)
|
|
(8,993)
|
|
(10,735)
|
|
(11,947)
|
Payments for debt
issuance costs
|
—
|
|
(20)
|
|
(18)
|
|
(57)
|
Purchase of treasury
stock
|
(326)
|
|
(3,687)
|
|
(1,238)
|
|
(7,020)
|
Proceeds from exercise
of stock options
|
3
|
|
4
|
|
5
|
|
5
|
Purchase of
noncontrolling interest
|
(54)
|
|
(578)
|
|
(176)
|
|
(994)
|
Distributions to
noncontrolling interest
|
(80)
|
|
(5)
|
|
(83)
|
|
(7)
|
Other, net
|
(9)
|
|
(26)
|
|
(15)
|
|
(28)
|
Net cash flows from
financing activities
|
(517)
|
|
(3,387)
|
|
(1,212)
|
|
(3,417)
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH
AND CASH EQUIVALENTS
|
(56)
|
|
(1,948)
|
|
(167)
|
|
(118)
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
534
|
|
2,431
|
|
645
|
|
601
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
478
|
|
$
483
|
|
$
478
|
|
$
483
|
|
|
|
|
|
|
|
|
CASH PAID FOR
INTEREST
|
$
1,243
|
|
$
1,168
|
|
$
2,432
|
|
$
2,150
|
CASH PAID FOR
TAXES
|
$
845
|
|
$
441
|
|
$
906
|
|
$
470
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED SUMMARY OF
OPERATING STATISTICS
(in thousands,
except per customer and penetration data)
|
|
|
Approximate as
of
|
|
|
June
30,
2023
(c)
|
|
March
31,
2023
(c)
|
|
December
31,
2022 (c)
|
|
June
30,
2022
(c)
|
Footprint
(d)
|
|
|
|
|
|
|
|
|
Estimated
Passings
|
|
56,209
|
|
55,885
|
|
55,573
|
|
55,008
|
|
|
|
|
|
|
|
|
|
Customer
Relationships (e)
|
|
|
|
|
|
|
|
|
Residential
|
|
30,009
|
|
29,996
|
|
29,988
|
|
29,942
|
SMB
|
|
2,219
|
|
2,215
|
|
2,207
|
|
2,182
|
Total Customer
Relationships
|
|
32,228
|
|
32,211
|
|
32,195
|
|
32,124
|
|
|
|
|
|
|
|
|
|
Residential
|
|
13
|
|
8
|
|
42
|
|
(93)
|
SMB
|
|
4
|
|
8
|
|
12
|
|
19
|
Total Customer
Relationships Quarterly Net Additions
|
|
17
|
|
16
|
|
54
|
|
(74)
|
|
|
|
|
|
|
|
|
|
Total Customer
Relationship Penetration of Estimated Passings
(f)
|
|
57.3 %
|
|
57.6 %
|
|
57.9 %
|
|
58.4 %
|
|
|
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
|
$
120.25
|
|
$
120.56
|
|
$
119.32
|
|
$
120.61
|
Monthly SMB Revenue
per SMB Customer (h)
|
|
$
164.56
|
|
$
164.58
|
|
$
165.50
|
|
$
167.47
|
|
|
|
|
|
|
|
|
|
Residential Customer
Relationships Penetration
|
|
|
|
|
|
|
|
|
One Product
Penetration (i)
|
|
46.0 %
|
|
46.0 %
|
|
45.9 %
|
|
45.4 %
|
Two Product
Penetration (i)
|
|
33.0 %
|
|
32.8 %
|
|
32.7 %
|
|
32.6 %
|
Three or More Product
Penetration (i)
|
|
20.9 %
|
|
21.1 %
|
|
21.3 %
|
|
22.0 %
|
|
|
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
|
53.1 %
|
|
52.5 %
|
|
51.7 %
|
|
50.4 %
|
|
|
|
|
|
|
|
|
|
Internet
|
|
|
|
|
|
|
|
|
Residential
|
|
28,549
|
|
28,479
|
|
28,412
|
|
28,259
|
SMB
|
|
2,037
|
|
2,030
|
|
2,021
|
|
1,994
|
Total Internet
Customers
|
|
30,586
|
|
30,509
|
|
30,433
|
|
30,253
|
|
|
|
|
|
|
|
|
|
Residential
|
|
70
|
|
67
|
|
92
|
|
(42)
|
SMB
|
|
7
|
|
9
|
|
13
|
|
21
|
Total Internet
Quarterly Net Additions
|
|
77
|
|
76
|
|
105
|
|
(21)
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
Residential
|
|
14,071
|
|
14,260
|
|
14,497
|
|
14,853
|
SMB
|
|
635
|
|
646
|
|
650
|
|
642
|
Total Video
Customers
|
|
14,706
|
|
14,906
|
|
15,147
|
|
15,495
|
|
|
|
|
|
|
|
|
|
Residential
|
|
(189)
|
|
(237)
|
|
(145)
|
|
(240)
|
SMB
|
|
(11)
|
|
(4)
|
|
1
|
|
14
|
Total Video Quarterly
Net Additions
|
|
(200)
|
|
(241)
|
|
(144)
|
|
(226)
|
|
|
|
|
|
|
|
|
|
Voice
|
|
|
|
|
|
|
|
|
Residential
|
|
7,248
|
|
7,473
|
|
7,697
|
|
8,200
|
SMB
|
|
1,294
|
|
1,290
|
|
1,286
|
|
1,287
|
Total Voice
Customers
|
|
8,542
|
|
8,763
|
|
8,983
|
|
9,487
|
|
|
|
|
|
|
|
|
|
Residential
|
|
(225)
|
|
(224)
|
|
(232)
|
|
(265)
|
SMB
|
|
4
|
|
4
|
|
(1)
|
|
(1)
|
Total Voice Quarterly
Net Additions
|
|
(221)
|
|
(220)
|
|
(233)
|
|
(266)
|
|
|
|
|
|
|
|
|
|
Mobile Lines
(j)
|
|
|
|
|
|
|
|
|
Residential
|
|
6,410
|
|
5,782
|
|
5,116
|
|
4,134
|
SMB
|
|
216
|
|
196
|
|
176
|
|
147
|
Total Mobile
Lines
|
|
6,626
|
|
5,978
|
|
5,292
|
|
4,281
|
|
|
|
|
|
|
|
|
|
Residential
|
|
628
|
|
666
|
|
600
|
|
329
|
SMB
|
|
20
|
|
20
|
|
15
|
|
15
|
Total Mobile Lines
Quarterly Net Additions
|
|
648
|
|
686
|
|
615
|
|
344
|
|
|
|
|
|
|
|
|
|
Enterprise
(k)
|
|
|
|
|
|
|
|
|
Enterprise Primary
Service Units ("PSUs")
|
|
294
|
|
288
|
|
284
|
|
277
|
Enterprise Quarterly
Net Additions
|
|
6
|
|
4
|
|
2
|
|
3
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED
CAPITAL EXPENDITURES
(dollars in
millions)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Customer premise
equipment (l)
|
$
576
|
|
$
560
|
|
$
1,113
|
|
$
1,029
|
Scalable infrastructure
(m)
|
353
|
|
384
|
|
707
|
|
743
|
Upgrade/rebuild
(n)
|
392
|
|
189
|
|
681
|
|
348
|
Support capital
(o)
|
431
|
|
367
|
|
825
|
|
696
|
Capital expenditures,
excluding line extensions
|
1,752
|
|
1,500
|
|
3,326
|
|
2,816
|
|
|
|
|
|
|
|
|
Subsidized rural
construction line extensions
|
529
|
|
278
|
|
900
|
|
470
|
Other line
extensions
|
553
|
|
415
|
|
1,072
|
|
764
|
Total line extensions
(p)
|
1,082
|
|
693
|
|
1,972
|
|
1,234
|
Total capital
expenditures
|
$
2,834
|
|
$
2,193
|
|
$
5,298
|
|
$
4,050
|
|
|
|
|
|
|
|
|
Capital expenditures
included in total related to:
|
|
|
|
|
|
|
|
Commercial
services
|
$
409
|
|
$
376
|
|
$
776
|
|
$
741
|
Subsidized rural
construction initiative (q)
|
$
541
|
|
$
296
|
|
$
932
|
|
$
497
|
Mobile
|
$
82
|
|
$
95
|
|
$
159
|
|
$
169
|
CHARTER COMMUNICATIONS, INC. AND
SUBSIDIARIES
FOOTNOTES
(a)
|
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 our businesses as well
as other non-cash or special items, and is unaffected by our
capital structure or investment activities. Free cash flow is
defined as net cash flows from operating activities, less capital
expenditures and changes in accrued expenses related to capital
expenditures.
|
(b)
|
Other expense excludes
stock compensation expense. Total operating costs and
expenses excludes stock compensation expense, depreciation and
amortization and other operating (income) expenses, net.
|
(c)
|
We calculate the aging
of customer accounts based on the monthly billing cycle for each
account. On that basis, at June 30, 2023, March 31, 2023,
December 31, 2022 and June 30, 2022, customers included
approximately 128,600, 119,800, 144,100 and 154,500 customers,
respectively, whose accounts were over 60 days past due,
approximately 47,000, 42,100, 52,800 and 45,800 customers,
respectively, whose accounts were over 90 days past due and
approximately 229,200, 217,800, 214,100 and 97,200 customers,
respectively, whose accounts were over 120 days past due. Bad
debt expense associated with these past due accounts has been
reflected in our consolidated statements of operations. The
increase in accounts past due more than 120 days is predominately
due to pre-existing and incremental unsubsidized services,
including video services, for those customers participating in
government assistance programs. These customers are
downgraded to a fully subsidized Internet-only service.
|
(d)
|
Passings represent our
estimate of the number of units, such as single family homes,
apartment and condominium units and SMB and enterprise sites
passed by our cable distribution network in the areas where we
offer the service indicated. These estimates are based upon
the information available at this time and are updated for all
periods presented when new information becomes
available.
|
(e)
|
Customer relationships
include the number of customers that receive one or more levels of
service, encompassing Internet, video, voice and mobile 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.
|
(f)
|
Penetration represents
residential and SMB customers as a percentage of estimated
passings. Penetration excludes mobile-only
customers.
|
(g)
|
Monthly residential
revenue per residential customer is calculated as total residential
quarterly revenue divided by three divided by average residential
customer relationships during the respective quarter and excludes
mobile-only customer relationships.
|
(h)
|
Monthly SMB revenue per
SMB customer is calculated as total SMB quarterly revenue divided
by three divided by average SMB customer relationships during the
respective quarter and excludes mobile-only customer
relationships.
|
(i)
|
One product, two
product and three or more product penetration represents the number
of residential customers that subscribe to one product, two
products or three or more products, respectively, as a percentage
of residential customer relationships, excluding mobile-only
customers.
|
(j)
|
Mobile lines include
phones and tablets which require one of our standard rate plans
(e.g., "Unlimited" or "By the Gig"). Mobile lines exclude
wearables and other devices that do not require standard phone rate
plans.
|
(k)
|
Enterprise PSUs
represents the aggregate number of fiber service offerings counting
each separate service offering at each customer location as an
individual PSU.
|
(l)
|
Customer premise
equipment includes equipment and devices located at the customer's
premise used to deliver our Internet, video and voice services
(e.g., modems, routers and set-top boxes), as well as installation
costs.
|
(m)
|
Scalable infrastructure
includes costs, not related to customer premise equipment or our
network, to secure growth of new customers or provide service
enhancements (e.g., headend equipment).
|
(n)
|
Upgrade/rebuild
includes costs to modify or replace existing fiber/coaxial cable
networks, including our network evolution initiative which started
in 2022.
|
(o)
|
Support capital
includes costs associated with the replacement or enhancement of
non-network assets (e.g., back-office systems, non-network
equipment, land and buildings, vehicles, tools and test
equipment).
|
(p)
|
Line extensions include
network costs associated with entering new service areas (e.g.,
fiber/coaxial cable, amplifiers, electronic equipment, make-ready
and design engineering).
|
(q)
|
The subsidized rural
construction initiative subcategory includes projects for which we
are receiving subsidies from federal, state and local governments
(for which separate reporting was initiated in 2022), excluding
customer premise equipment and installation.
|
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SOURCE Charter Communications, Inc.