UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA (dollars in millions, except per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2020
2019
% Change
2020
2019
% Change
REVENUES:
Internet
$
4,722
$
4,195
12.5 %
$
13,659
$
12,322
10.8 %
Video
4,221
4,359
(3.2)%
13,014
13,134
(0.9)%
Voice
449
477
(5.8)%
1,357
1,470
(7.7)%
Residential revenue
9,392
9,031
4.0 %
28,030
26,926
4.1 %
Small and medium business
988
974
1.5 %
2,967
2,882
2.9 %
Enterprise
617
644
(4.3)%
1,845
1,939
(4.9)%
Commercial revenue
1,605
1,618
(0.8)%
4,812
4,821
(0.2)%
Advertising sales
460
394
16.8 %
1,074
1,134
(5.3)%
Mobile
368
192
91.8 %
936
490
91.3 %
Other
214
215
(0.7)%
621
632
(1.8)%
Total Revenue
12,039
11,450
5.1 %
35,473
34,003
4.3 %
COSTS AND EXPENSES:
Programming
2,727
2,790
(2.3)%
8,492
8,482
0.1 %
Regulatory, connectivity and produced content
612
612
(0.1)%
1,651
1,770
(6.7)%
Costs to service customers
1,902
1,894
0.4 %
5,598
5,483
2.1 %
Marketing
788
793
(0.7)%
2,273
2,296
(1.0)%
Mobile
456
337
35.2 %
1,243
874
42.2 %
Other expense
915
938
(2.5)%
2,692
2,772
(2.9)%
Total operating costs and expenses (exclusive
7,400
7,364
0.5 %
21,949
21,677
1.3 %
of items shown separately below)
Adjusted EBITDA
4,639
4,086
13.6 %
13,524
12,326
9.7 %
Adjusted EBITDA margin
38.5 %
35.7 %
38.1 %
36.2 %
Depreciation and amortization
2,370
2,415
7,295
7,465
Stock compensation expense
83
71
263
238
Other operating expenses, net
14
14
23
71
Income from operations
2,172
1,586
5,943
4,552
OTHER INCOME (EXPENSES):
Interest expense, net
(946)
(963)
(2,883)
(2,833)
Loss on extinguishment of debt
(58)
-
(121)
-
Gain (loss) on financial instruments, net
69
(34)
(185)
(116)
Other pension benefits (costs), net
(115)
9
(94)
27
Other expense, net
(13)
(5)
(13)
(131)
(1,063)
(993)
(3,296)
(3,053)
Income before income taxes
1,109
593
2,647
1,499
Income tax expense
(177)
(126)
(372)
(329)
Consolidated net income
932
467
2,275
1,170
Less: Net income attributable to noncontrolling
(118)
(80)
(299)
(216)
interests
Net income attributable to Charter shareholders
$
814
$
387
$
1,976
$
954
EARNINGS PER COMMON SHARE
ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
Basic
$
4.01
$
1.77
$
9.62
$
4.30
Diluted
$
3.90
$
1.74
$
9.35
$
4.23
Weighted average common shares outstanding,
202,826,502
218,499,213
205,468,736
221,818,079
basic
Weighted average common shares outstanding,
208,722,129
222,355,867
211,399,781
225,337,984
diluted
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. Third Quarter 2020 Earnings Release
Page 1 of 7
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in millions)
September 30,
December 31,
2020
2019
ASSETS
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents
$
1,283
$
3,483
Accounts receivable, net
2,068
2,227
Prepaid expenses and other current assets
709
761
Total current assets
4,060
6,471
RESTRICTED CASH
3
66
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net
34,196
34,591
Customer relationships, net
6,050
7,453
Franchises
67,322
67,322
Goodwill
29,554
29,554
Total investment in cable properties, net
137,122
138,920
OTHER NONCURRENT ASSETS
3,008
2,731
Total assets
$
144,193
$
148,188
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities
$
8,541
$
8,885
Current portion of long-term debt
1,715
3,500
Total current liabilities
10,256
12,385
LONG-TERM DEBT
77,947
75,578
DEFERRED INCOME TAXES
17,929
17,711
OTHER LONG-TERM LIABILITIES
4,349
3,703
SHAREHOLDERS' EQUITY:
Controlling interest
26,906
31,445
Noncontrolling interests
6,806
7,366
Total shareholders' equity
33,712
38,811
Total liabilities and shareholders' equity
$
144,193
$
148,188
Addendum to Charter Communications, Inc. Third Quarter 2020 Earnings Release
Page 2 of 7
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income
$
932
$
467
$
2,275
$
1,170
Adjustments to reconcile consolidated net income to net cash flows from
operating activities:
Depreciation and amortization
2,370
2,415
7,295
7,465
Stock compensation expense
83
71
263
238
Noncash interest income, net
(10)
(17)
(31)
(89)
Other pension (benefits) costs, net
115
(9)
94
(27)
Loss on extinguishment of debt
58
-
121
-
(Gain) loss on financial instruments, net
(69)
34
185
116
Deferred income taxes
151
96
252
233
Other, net
(4)
(3)
(21)
148
Changes in operating assets and liabilities, net of effects from acquisitions
and dispositions:
Accounts receivable
(74)
(227)
159
(564)
Prepaid expenses and other assets
(76)
(49)
(240)
(225)
Accounts payable, accrued liabilities and other
188
165
61
(75)
Net cash flows from operating activities
3,664
2,943
10,413
8,390
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(2,014)
(1,651)
(5,352)
(4,913)
Change in accrued expenses related to capital expenditures
104
(21)
(70)
(449)
Real estate investments through variable interest entities
(41)
(61)
(122)
(125)
Other, net
(35)
2
(43)
10
Net cash flows from investing activities
(1,986)
(1,731)
(5,587)
(5,477)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt
3,030
2,443
10,352
13,157
Repayments of long-term debt
(1,819)
(763)
(9,711)
(10,886)
Payments for debt issuance costs
(29)
(16)
(91)
(48)
Issuance of equity
-
-
23
-
Purchase of treasury stock
(3,361)
(2,767)
(6,868)
(4,568)
Proceeds from exercise of stock options
50
25
171
106
Purchase of noncontrolling interest
(366)
(339)
(884)
(593)
Distributions to noncontrolling interest
(37)
(38)
(114)
(116)
Borrowings for real estate investments through variable interest entities, net
39
-
63
-
Other, net
(1)
(6)
(30)
(133)
Net cash flows from financing activities
(2,494)
(1,461)
(7,089)
(3,081)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(816)
(249)
(2,263)
(168)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period
2,102
846
3,549
765
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period
$
1,286
$
597
$
1,286
$
597
CASH PAID FOR INTEREST
$
1,038
$
1,048
$
3,023
$
3,065
CASH PAID FOR TAXES
$
34
$
12
$
84
$
55
Addendum to Charter Communications, Inc. Third Quarter 2020 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
September 30,
June 30,
December 31,
September 30,
2020 (a)
2020 (a)
2019 (a)
2019 (a)
Footprint (b)
Estimated Passings
53,022
52,714
52,154
51,940
Customer Relationships (c)
Residential
28,912
28,496
27,277
27,037
SMB
2,021
1,980
1,958
1,930
Total Customer Relationships
30,933
30,476
29,235
28,967
Residential
416
751
240
282
SMB
41
4
28
28
Total Customer Relationships Net Additions
457
755
268
310
Total Customer Relationship Penetration of Estimated Passings (d)
58.3 %
57.8 %
56.1 %
55.8 %
Monthly Residential Revenue per Residential Customer (e)
$
109.03
$
110.82
$
113.79
$
112.00
Monthly SMB Revenue per SMB Customer (f)
$
164.77
$
166.06
$
169.06
$
169.44
Residential Customer Relationships Penetration
Single Play Penetration (g)
44.2 %
44.0 %
43.0 %
42.7 %
Double Play Penetration (g)
32.3 %
31.7 %
30.7 %
29.9 %
Triple Play Penetration (g)
23.5 %
24.3 %
26.2 %
27.3 %
% Residential Non-Video Customer Relationships
45.7 %
45.1 %
42.7 %
41.8 %
Internet
Residential
26,807
26,313
24,908
24,595
SMB
1,826
1,783
1,756
1,730
Total Internet Customers
28,633
28,096
26,664
26,325
Residential
494
842
313
351
SMB
43
8
26
29
Total Internet Net Additions
537
850
339
380
Video
Residential
15,705
15,652
15,620
15,725
SMB
530
516
524
520
Total Video Customers
16,235
16,168
16,144
16,245
Residential
53
102
(105)
(77)
SMB
14
(8)
4
2
Total Video Net Additions
67
94
(101)
(75)
Voice
Residential
9,335
9,398
9,443
9,595
SMB
1,207
1,169
1,144
1,120
Total Voice Customers
10,542
10,567
10,587
10,715
Residential
(63)
38
(152)
(213)
SMB
38
7
24
23
Total Voice Net Additions
(25)
45
(128)
(190)
Mobile Lines
Residential
2,020
1,672
1,078
793
SMB
40
25
4
1
Total Mobile Lines
2,060
1,697
1,082
794
Residential
348
313
285
275
SMB
15
12
3
1
Total Mobile Lines Net Additions
363
325
288
276
Enterprise (h)
Enterprise Primary Service Unites ("PSUs")
272
270
267
264
Enterprise Net Additions
2
1
3
6
Addendum to Charter Communications, Inc. Third Quarter 2020 Earnings Release
Page 4 of 7
We calculate the aging of customer accounts based on the monthly billing cycle for each account. On that basis, at September 30, 2020, June 30, 2020, December 31, 2019 and September 30, 2019, customers included approximately 181,700, 124,500, 154,200 and 148,000 customers, respectively, whose accounts were over 60 days past due, approximately 52,300, 18,400, 13,500 and 16,400 customers, respectively, whose accounts were over 90 days past due and approximately 26,000, 10,400, 10,000 and 14,100 customers, respectively, whose accounts were over 120 days past due. Included in the September 30, 2020 aging statistics are approximately 60,200 customers that would have been disconnected under our normal collection policies, but were not due to certain state mandates in place.
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.
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.
Penetration represents residential and SMB customers as a percentage of estimated passings. Penetration excludes mobile-only customers.
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.
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.
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.
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. Third Quarter 2020 Earnings Release
Page 5 of 7
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
(dollars in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Net income attributable to Charter shareholders
$
814
$
387
$
1,976
$
954
Plus: Net income attributable to noncontrolling interest
118
80
299
216
Interest expense, net
946
963
2,883
2,833
Income tax expense
177
126
372
329
Depreciation and amortization
2,370
2,415
7,295
7,465
Stock compensation expense
83
71
263
238
Loss on extinguishment of debt
58
-
121
-
(Gain) loss on financial instruments, net
(69)
34
185
116
Other pension (benefits) costs, net
115
(9)
94
(27)
Other, net
27
19
36
202
Adjusted EBITDA (a)
4,639
4,086
13,524
12,326
Less: Mobile revenue
(368)
(192)
(936)
(490)
Plus: Mobile costs and expenses
456
337
1,243
874
Cable Adjusted EBITDA
$
4,727
$
4,231
$
13,831
$
12,710
Net cash flows from operating activities
$
3,664
$
2,943
$
10,413
$
8,390
Less: Purchases of property, plant and equipment
(2,014)
(1,651)
(5,352)
(4,913)
Change in accrued expenses related to capital expenditures
104
(21)
(70)
(449)
Free cash flow
1,754
1,271
4,991
3,028
Plus: Mobile net cash outflows from operating activities
126
156
407
563
Purchases of mobile property, plant and equipment
139
100
351
281
Cable free cash flow
$
2,019
$
1,527
$
5,749
$
3,872
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.
Addendum to Charter Communications, Inc. Third Quarter 2020 Earnings Release
Page 6 of 7
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CAPITAL EXPENDITURES (dollars in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Customer premise equipment (a)
$
520
$
470
$
1,501
$
1,527
Scalable infrastructure (b)
424
320
979
840
Line extensions (c)
439
370
1,204
1,054
Upgrade/rebuild (d)
175
165
459
451
Support capital (e)
456
326
1,209
1,041
Total capital expenditures
2,014
1,651
5,352
4,913
Less: Mobile capital expenditures
(139)
(100)
(351)
(281)
Cable capital expenditures
$
1,875
$
1,551
$
5,001
$
4,632
Capital expenditures included in total related to:
Commercial services
$
358
$
327
$
942
$
956
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).
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).
Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.
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).
Addendum to Charter Communications, Inc. Third Quarter 2020 Earnings Release
Charter Communications Inc. published this content on 29 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 October 2020 13:49:03 UTC
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