Charter Communications : 1Q21 Financial Addendum

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA

(dollars in millions, except per share data)

		Three Months Ended March 31,
		2021			2020		% Change
REVENUES:
Internet	$	5,086	$	4,407	15.4 %
Video		4,344			4,422	(1.8)%
Voice		399			457	(12.6)%
Residential revenue		9,829			9,286	5.8 %
Small and medium business		1,012			996	1.6 %
Enterprise		638			622	2.5 %
Commercial revenue		1,650			1,618	2.0 %
Advertising sales		344			365	(5.8)%
Mobile		492			258	90.7 %
Other		207			211	(2.0)%
Total Revenue		12,522			11,738	6.7 %
COSTS AND EXPENSES:
Programming		2,988			2,892	3.3 %
Regulatory, connectivity and produced content		600			551	8.9 %
Costs to service customers		1,804			1,848	(2.4)%
Marketing		751			766	(2.0)%
Mobile		572			374	52.8 %
Other expense		862			911	(5.5)%
Total operating costs and expenses (exclusive of items shown separately below)		7,577			7,342	3.2 %
Adjusted EBITDA		4,945			4,396	12.5 %
Adjusted EBITDA margin		39.5 %			37.4 %
Depreciation and amortization		2,441			2,497
Stock compensation expense		134			90
Other operating expenses, net		302			7
Income from operations		2,068			1,802
OTHER INCOME (EXPENSES):
Interest expense, net		(983)			(980)
Other income (expenses), net		52			(326)
		(931)			(1,306)
Income before income taxes		1,137			496
Income tax expense		(216)			(29)
Consolidated net income		921			467
Less: Net income attributable to noncontrolling interests		(114)			(71)
Net income attributable to Charter shareholders	$	807	$	396
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
Basic	$	4.22	$	1.91
Diluted	$	4.11		$	1.86
Weighted average common shares outstanding, basic	191,404,527		207,831,305
Weighted average common shares outstanding, diluted
205,872,536	212,810,613

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.

Addendum to Charter Communications, Inc. First Quarter 2021 Earnings Release

Page 1 of 7

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in millions)

		March 31,			December 31,
		2021			2020
ASSETS		(unaudited)
CURRENT ASSETS:
Cash and cash equivalents	$	772	$	1,001
Accounts receivable, net		2,395			2,539
Prepaid expenses and other current assets		496			369
Total current assets		3,663			3,909
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net		34,184			34,357
Customer relationships, net		5,185			5,615
Franchises		67,322			67,322
Goodwill		29,554			29,554
Total investment in cable properties, net		136,245			136,848
OTHER NONCURRENT ASSETS		3,531			3,449
Total assets	$	143,439	$	144,206
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	8,911	$	8,867
Current portion of long-term debt		1,005			1,008
Total current liabilities		9,916			9,875
LONG-TERM DEBT		83,882			81,744
DEFERRED INCOME TAXES		18,227			18,108
OTHER LONG-TERM LIABILITIES		4,233			4,198
SHAREHOLDERS' EQUITY:
Controlling interest		20,997			23,805
Noncontrolling interests		6,184			6,476
Total shareholders' equity		27,181			30,281
Total liabilities and shareholders' equity	$	143,439	$	144,206

Addendum to Charter Communications, Inc. First Quarter 2021 Earnings Release

Page 2 of 7

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in millions)

	Three Months Ended March 31,
		2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	921	$	467
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization		2,441			2,497
Stock compensation expense		134			90
Noncash interest income, net		(7)			(12)
Deferred income taxes		156			(14)
Other, net		(5)			315
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable		144			99
Prepaid expenses and other assets		(182)			(67)
Accounts payable, accrued liabilities and other		149			(155)
Net cash flows from operating activities		3,751			3,220
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(1,821)			(1,461)
Change in accrued expenses related to capital expenditures		(75)			(388)
Real estate investments through variable interest entities		(50)			(38)
Other, net		(10)			37
Net cash flows from investing activities		(1,956)			(1,850)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt		5,289			4,339
Repayments of long-term debt		(3,164)			(3,589)
Payments for debt issuance costs		(22)			(41)
Issuance of equity		-			23
Purchase of treasury stock		(3,652)			(2,352)
Proceeds from exercise of stock options		9			93
Purchase of noncontrolling interest		(507)			(393)
Distributions to noncontrolling interest		(39)			(39)
Borrowings for real estate investments through variable interest entities		50			-
Other, net		12			(24)
Net cash flows from financing activities		(2,024)			(1,983)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(229)			(613)
CASH AND CASH EQUIVALENTS, beginning of period		1,001			3,549
CASH AND CASH EQUIVALENTS, end of period	$	772		$	2,936
CASH PAID FOR INTEREST
$	1,017		$	1,050
CASH PAID FOR TAXES
$	20	$	19

Addendum to Charter Communications, Inc. First Quarter 2021 Earnings Release

Page 3 of 7

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED SUMMARY OF OPERATING STATISTICS (in thousands, except per customer and penetration data)

				Approximate as of
			March 31,			March 31,		March 31,
			2021 (a)			2020 (a)		2019 (a)
Footprint (b)
Estimated Passings		53,592			52,418				51,384
Customer Relationships (c)
Residential		29,361			27,745				26,591
SMB		2,071			1,976				1,863
Total Customer Relationships		31,432			29,721				28,454
Residential		282			468				321
SMB		20			18				30
Total Customer Relationships Quarterly Net Additions		302			486				351
Total Customer Relationship Penetration of Estimated Passings (d)		58.7 %			56.7 %				55.4 %
Monthly Residential Revenue per Residential Customer (e)	$	112.18	$	112.73			$	112.47
Monthly SMB Revenue per SMB Customer (f)	$	163.79	$	168.83			$	170.64
Residential Customer Relationships Penetration
Single Play Penetration (g)		45.2 %			43.6 %				42.1 %
Double Play Penetration (g)		32.6 %			31.2 %				27.9 %
Triple Play Penetration (g)		22.2 %			25.2 %				30.0 %
% Residential Non-Video Customer Relationships		47.3 %			44.0 %				40.0 %
Internet
Residential		27,357			25,471				24,023
SMB		1,877			1,775				1,664
Total Internet Customers		29,234			27,246				25,687
Residential		334			563				398
SMB		21			19				30
Total Internet Quarterly Net Additions		355			582				428
Video
Residential		15,483			15,550				15,952
SMB		579			524				509
Total Video Customers		16,062			16,074				16,461
Residential		(156)			(70)				(152)
SMB		18			-		7
Total Video Quarterly Net Additions		(138)			(70)				(145)
Voice
Residential		9,113			9,360				10,015
SMB		1,238			1,162				1,072
Total Voice Customers		10,351			10,522				11,087
Residential		(102)			(83)				(120)
SMB		14			18				21
Total Voice Quarterly Net Additions		(88)			(65)				(99)
Mobile Lines
Residential			2,605			1,359				310
SMB		70			13				-
Total Mobile Lines		2,675			1,372				310
Residential		285			281				176
SMB		15			9				-
Total Mobile Lines Quarterly Net Additions		300			290				176
Enterprise (h)
Enterprise Primary Service Units ("PSUs")		276			269				253
Enterprise Quarterly Net Additions		2			2				5

Addendum to Charter Communications, Inc. First Quarter 2021 Earnings Release

Page 4 of 7

1. We calculate the aging of customer accounts based on the monthly billing cycle for each account. On that basis, at March 31, 2021, March 31, 2020 and March 31, 2019, customers included approximately 125,100, 140,800 and 171,100 customers, respectively, whose accounts were over 60 days past due, approximately 26,500, 12,500 and 19,500 customers, respectively, whose accounts were over 90 days past due and approximately 20,000, 8,200 and 20,800 customers, respectively, whose accounts were over 120 days past due. Included in the March 31, 2021 aging statistics are approximately 26,900 residential voice customers that would have been disconnected under our normal collection policies, but were not due to certain state mandates in place.
2. 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.
3. Customer relationships include the number of customers that receive one or more levels of service, encompassing Internet, video 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.
4. Penetration represents residential and SMB customers as a percentage of estimated passings. Penetration excludes mobile-only customers.
5. 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 revenue and customers.
6. 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 revenue and customers.
7. 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.
8. Enterprise PSUs represents the aggregate number of fiber service offerings counting each separate service offering at each customer location as an individual PSU.

Addendum to Charter Communications, Inc. First Quarter 2021 Earnings Release

Page 5 of 7