STAMFORD, Conn., Oct. 27,
2023 /PRNewswire/ -- Charter Communications, Inc.
(along with its subsidiaries, the "Company" or "Charter") today
reported financial and operating results for the three and nine
months ended September 30, 2023.
- Third quarter total residential and small and medium business
("SMB") Internet customers increased by 63,000. As of September 30, 2023, Charter served a total of
30.6 million residential and SMB Internet customers.
- Third quarter total residential and SMB mobile lines increased
by 594,000. As of September 30, 2023,
Charter served a total of 7.2 million mobile lines.
- As of September 30, 2023, Charter
had a total of 32.2 million residential and SMB customer
relationships, which excludes mobile-only relationships.
- Third quarter revenue of $13.6
billion grew by 0.2% year-over-year, driven by residential
Internet revenue growth of 3.7%, residential mobile service revenue
growth of 33.8% and other revenue growth of 28.8%, primarily driven
by higher mobile device sales.
- Net income attributable to Charter shareholders totaled
$1.3 billion in the third
quarter.
- Third quarter Adjusted EBITDA1 of $5.4 billion grew by 0.7% year-over-year.
- Third quarter capital expenditures totaled $3.0 billion and included $1.1 billion of line extensions.
- Third quarter net cash flows from operating activities totaled
$3.9 billion, compared to
$3.8 billion in the prior year.
- Third quarter free cash flow1 of $1.1 billion decreased from $1.5 billion in the prior year, primarily due to
higher capital expenditures, mostly driven by Charter's network
evolution and expansion initiatives.
- During the third quarter, Charter purchased 2.0 million shares
of Charter Class A common stock and Charter Communications
Holdings, LLC ("Charter Holdings") common units for $854 million.
"We continue to make significant progress against the multi-year
strategic initiatives we outlined last year," said Chris Winfrey, President and CEO of Charter.
"These initiatives drive continuing improvements in the quality of
our products, and when combined with our customer-friendly pricing
and packaging and high-quality service, will drive significant,
long-term growth in shareholder value."
1.
|
Adjusted EBITDA and
free cash flow are non-GAAP measures defined in the "Use of
Adjusted EBITDA and Free Cash Flow Information" section and are
reconciled to net income attributable to Charter shareholders and
net cash flows from operating activities, respectively, in the
addendum of this news release.
|
Key Operating
Results
|
|
|
|
Approximate as
of
|
|
|
|
|
September 30,
2023 (c)
|
|
September 30,
2022 (c)
|
|
Y/Y
Change
|
Footprint
(d)
|
|
|
|
|
|
|
Estimated
Passings
|
|
56,582
|
|
55,288
|
|
2.3 %
|
|
|
|
|
|
|
|
Customer
Relationships (e)
|
|
|
|
|
|
|
Residential
|
|
30,012
|
|
29,946
|
|
0.2 %
|
SMB
|
|
2,224
|
|
2,195
|
|
1.3 %
|
Total Customer
Relationships
|
|
32,236
|
|
32,141
|
|
0.3 %
|
|
|
|
|
|
|
|
Residential
|
|
3
|
|
4
|
|
(1)
|
SMB
|
|
5
|
|
13
|
|
(8)
|
Total Customer
Relationships Quarterly Net Additions
|
|
8
|
|
17
|
|
(9)
|
|
|
|
|
|
|
|
Total Customer
Relationship Penetration of Estimated Passings (f)
|
|
57.0 %
|
|
58.1 %
|
|
(1.1) ppts
|
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
|
$
119.28
|
|
$
120.00
|
|
(0.6) %
|
Monthly SMB Revenue
per SMB Customer (h)
|
|
$
162.94
|
|
$
166.84
|
|
(2.3) %
|
|
|
|
|
|
|
|
Residential Customer
Relationships Penetration
|
|
|
|
|
|
|
One Product
Penetration (i)
|
|
46.5 %
|
|
45.9 %
|
|
0.6 ppts
|
Two Product
Penetration (i)
|
|
33.0 %
|
|
32.6 %
|
|
0.4 ppts
|
Three or More Product
Penetration (i)
|
|
20.5 %
|
|
21.5 %
|
|
(1.0) ppts
|
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
|
54.2 %
|
|
51.1 %
|
|
3.1 ppts
|
|
|
|
|
|
|
|
Internet
|
|
|
|
|
|
|
Residential
|
|
28,606
|
|
28,320
|
|
1.0 %
|
SMB
|
|
2,043
|
|
2,008
|
|
1.8 %
|
Total Internet
Customers
|
|
30,649
|
|
30,328
|
|
1.1 %
|
|
|
|
|
|
|
|
Residential
|
|
57
|
|
61
|
|
(4)
|
SMB
|
|
6
|
|
14
|
|
(8)
|
Total Internet
Quarterly Net Additions
|
|
63
|
|
75
|
|
(12)
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
Residential
|
|
13,751
|
|
14,642
|
|
(6.1) %
|
SMB
|
|
628
|
|
649
|
|
(3.2) %
|
Total Video
Customers
|
|
14,379
|
|
15,291
|
|
(6.0) %
|
|
|
|
|
|
|
|
Residential
|
|
(320)
|
|
(211)
|
|
(109)
|
SMB
|
|
(7)
|
|
7
|
|
(14)
|
Total Video
Quarterly Net Additions
|
|
(327)
|
|
(204)
|
|
(123)
|
|
|
|
|
|
|
|
Voice
|
|
|
|
|
|
|
Residential
|
|
6,960
|
|
7,929
|
|
(12.2) %
|
SMB
|
|
1,296
|
|
1,287
|
|
0.7 %
|
Total Voice
Customers
|
|
8,256
|
|
9,216
|
|
(10.4) %
|
|
|
|
|
|
|
|
Residential
|
|
(288)
|
|
(271)
|
|
(17)
|
SMB
|
|
2
|
|
—
|
|
2
|
Total Voice
Quarterly Net Additions
|
|
(286)
|
|
(271)
|
|
(15)
|
|
|
|
|
|
|
|
Mobile Lines
(j)
|
|
|
|
|
|
|
Residential
|
|
6,987
|
|
4,516
|
|
54.7 %
|
SMB
|
|
233
|
|
161
|
|
44.6 %
|
Total Mobile
Lines
|
|
7,220
|
|
4,677
|
|
54.4 %
|
|
|
|
|
|
|
|
Residential
|
|
577
|
|
382
|
|
195
|
SMB
|
|
17
|
|
14
|
|
3
|
Total Mobile
Lines Quarterly Net Additions
|
|
594
|
|
396
|
|
198
|
|
|
|
|
|
|
|
Enterprise
(k)
|
|
|
|
|
|
|
Enterprise Primary
Service Units ("PSUs")
|
|
298
|
|
282
|
|
5.9 %
|
Enterprise Quarterly
Net Additions
|
|
4
|
|
5
|
|
(1)
|
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 September 30, 2023, Charter had 30.0 million
residential customer relationships.
Third quarter residential Internet customers increased
by 57,000, including some impact from the temporary loss of
Disney programming in early September, compared to an increase of
61,000 during the third quarter of 2022.
Spectrum Internet® delivers the fastest
Internet1 and WiFi download speeds in Charter's
footprint. 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. In the first
quarter of 2023, Charter completed the deployment of Mobile Speed
Boost to all Advanced WiFi routers.
Residential video customers decreased by 320,000 in the
third quarter of 2023, compared to a decline of 211,000 in the
third quarter of 2022, partly driven by video disconnects related
to the temporary loss of Disney programming in early September. As
of September 30, 2023, Charter had 13.8 million
residential video customers. In October, Charter began deploying
Xumo Stream Boxes to video customers. The Xumo Stream Box combines
a live TV experience with access to hundreds of direct-to-consumer
TV applications, and features simplified search and discovery along
with a curated content offering based on the customer's
interests and subscriptions.
During the third quarter of 2023, residential wireline voice
customers declined by 288,000, compared to a decline of 271,000 in
the third quarter of 2022. As of September 30, 2023, Charter
had 7.0 million residential wireline voice customers.
During the third quarter of 2023, Charter added 577,000
residential mobile lines, compared to growth of 382,000 during the
third quarter of 2022. Spectrum MobileTM 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. Charter's converged offer, 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.
Third quarter 2023 monthly residential revenue per
residential customer totaled $119.28,
and decreased by 0.6% compared to the prior year period, given a
higher mix of non-video customer relationships, a higher mix of
lower priced video packages within Charter's video customer base
and $63 million of residential
customer credits related to the temporary loss of Disney
programming in September 2023, partly
offset by promotional rate step-ups, rate adjustments and the
accelerated growth of Spectrum Mobile.
SMB customer relationships grew by 5,000 in the third quarter of
2023, while third quarter 2022 SMB customer relationships grew by
13,000. Enterprise PSUs grew by 4,000 in the third quarter of 2023
versus 5,000 added in the third quarter of 2022.
Charter continues to work with federal, state and local
governments to bring Spectrum Internet to unserved and
underserved communities. During the third quarter of 2023, Charter
activated 78,000 subsidized rural passings. Within Charter's
subsidized rural footprint, total residential and SMB customer
relationships increased by 31,000 in the third quarter of 2023.
1.
|
Based on Ookla's
Speedtest Global Index median fixed download speeds for Q3 2023,
which indicates that Spectrum Internet continues to deliver
faster speeds than its competitors.
|
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.
|
Third Quarter Financial
Results
|
(in
millions)
|
|
|
Three Months Ended
September 30,
|
|
2023
|
|
2022
|
|
%
Change
|
Revenues:
|
|
|
|
|
|
Internet
|
$ 5,776
|
|
$ 5,571
|
|
3.7 %
|
Video
|
4,004
|
|
4,379
|
|
(8.6) %
|
Voice
|
379
|
|
391
|
|
(3.0) %
|
Mobile
service
|
581
|
|
435
|
|
33.8 %
|
Residential
revenue
|
10,740
|
|
10,776
|
|
(0.3) %
|
Small and medium
business
|
1,085
|
|
1,095
|
|
(0.9) %
|
Enterprise
|
698
|
|
673
|
|
3.7 %
|
Commercial
revenue
|
1,783
|
|
1,768
|
|
0.8 %
|
Advertising
sales
|
384
|
|
481
|
|
(20.3) %
|
Other
|
677
|
|
525
|
|
28.8 %
|
Total
Revenues
|
$
13,584
|
|
$
13,550
|
|
0.2 %
|
|
|
|
|
|
|
Net income attributable
to Charter shareholders
|
$ 1,255
|
|
$ 1,185
|
|
5.8 %
|
Net income attributable
to Charter shareholders margin
|
9.2 %
|
|
8.8 %
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(a)
|
$ 5,449
|
|
$ 5,412
|
|
0.7 %
|
Adjusted EBITDA
margin
|
40.1 %
|
|
39.9 %
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
$ 2,961
|
|
$ 2,406
|
|
23.1 %
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$ 3,944
|
|
$ 3,757
|
|
5.0 %
|
Free cash flow
(a)
|
$ 1,097
|
|
$ 1,507
|
|
(27.2) %
|
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
Third quarter revenue increased by 0.2% year-over-year to
$13.6 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.
Year-over-year revenue growth was negatively impacted by
$68 million of total customer credits
related to the temporary loss of Disney programming in September 2023.
Residential revenue totaled $10.7
billion in the third quarter, a decrease of 0.3%
year-over-year. Year-over-year revenue growth was negatively
impacted by $63 million of
residential customer credits related to the temporary loss of
Disney programming in September
2023.
Internet revenue grew by 3.7% year-over-year to $5.8 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 $4.0 billion
in the third quarter, a decrease of 8.6% compared to the prior year
period, driven by a higher mix of lower priced video packages
within Charter's video customer base, a decline in video customers
during the last year and the aforementioned $63 million of residential customer credits
recorded in September 2023, partly
offset by promotional rate step-ups and video rate adjustments that
pass through programmer rate increases.
Voice revenue totaled $379
million in the third quarter, a decrease of 3.0% compared to
the third quarter of 2022, driven by a decline in wireline voice
customers over the last twelve months, partly offset by voice rate
adjustments.
Third quarter mobile service revenue totaled $581 million, an increase of 33.8%
year-over-year, driven by mobile line growth and higher bundled
revenue allocation.
Commercial revenue increased by 0.8% year-over-year to
$1.8 billion, driven by enterprise
revenue growth of 3.7% year-over-year, partly offset by a SMB
revenue decrease of 0.9%. The year-over-year decrease in third
quarter 2023 SMB revenue was driven by lower monthly SMB revenue
per SMB customer primarily due to a higher mix of lower priced
video packages and a lower number of voice lines per SMB customer
relationship, partly offset by customer relationship growth.
Enterprise revenue excluding wholesale increased by 5.5%
year-over-year, mostly reflecting PSU growth.
Third quarter advertising sales revenue of $384 million decreased by 20.3% compared to the
year-ago quarter, primarily driven by lower political revenue.
Excluding political revenue in both periods, advertising sales
revenue decreased by 1.8% year-over-year, due to a more challenged
advertising market, partly offset by higher advanced advertising
revenue.
Other revenue totaled $677 million
in the third quarter, an increase of 28.8% compared to the third
quarter of 2022, driven by higher mobile device sales.
Operating Costs and Expenses
Third quarter programming costs decreased by $276 million, or 9.6% as compared to the third
quarter of 2022, reflecting fewer video customers, a higher mix of
lower cost packages within Charter's video customer base and a
$61 million benefit related to the
temporary loss of Disney programming in September 2023, partly offset by contractual
programming rate increases and renewals.
Other costs of revenue increased by $183
million, or 15.2% year-over-year, primarily driven by higher
mobile device sales and other mobile direct costs, partly offset by
lower regulatory and franchise fees and lower advertising sales
expense.
Costs to service customers increased by $76 million, or 3.7% year-over-year. The
year-over-year increase in costs to service customers was primarily
driven by previous 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 decreased by $13 million, or 1.4% year-over-year, primarily
due to lower labor costs.
Other expenses increased by $27
million, or 2.5% as compared to the third quarter of
2022.
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled
$1.3 billion in the third quarter of
2023, compared to $1.2 billion in the
third quarter of 2022. The year-over-year increase in net income
attributable to Charter shareholders was primarily driven by higher
Adjusted EBITDA and lower other operating expenses, net, partly
offset by higher interest expense, net.
Net income per basic common share attributable to Charter
shareholders totaled $8.42 in the
third quarter of 2023 compared to $7.51 during the same period last year. The
increase was primarily the result of the factors described above in
addition to a 5.7% decrease in basic weighted average common shares
outstanding versus the prior year period.
Adjusted EBITDA
Third quarter Adjusted EBITDA of $5.4 billion grew by 0.7% year-over-year,
reflecting growth in revenue of 0.2%, and operating expenses which
were virtually unchanged versus the prior year period.
Capital Expenditures
Capital expenditures totaled $3.0
billion in the third quarter of 2023, compared to
$2.4 billion during the third quarter
of 2022. Line extensions capital expenditures totaled $1.1 billion in the third quarter of 2023,
compared to $826 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. Third
quarter capital expenditures excluding line extensions totaled
$1.9 billion, compared to
$1.6 billion in the third quarter of
2022, driven by higher spend on upgrade/rebuild (primarily network
evolution) and CPE (primarily Xumo Stream Boxes).
Charter now expects full year 2023 capital expenditures,
excluding line extensions, to total approximately $7.2 billion, an increase from Charter's
previously expected range of between $6.5
billion to $6.8 billion. The
increase reflects an acceleration of network evolution spend and
higher Xumo-related CPE spend. Charter continues to expect 2023
line extensions capital expenditures to total 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 third quarter of 2023, net cash flows from operating
activities totaled $3.9 billion,
compared to $3.8 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 in
the current year period and the payment of litigation settlements
in the prior year period.
Free cash flow in the third quarter of 2023 totaled $1.1 billion, compared to $1.5 billion during the same period last year.
The year-over-year decrease in free cash flow was primarily driven
by an increase in capital expenditures, partly offset by the
increase in net cash flows from operating activities.
Liquidity & Financing
As of September 30, 2023, total principal amount of debt
was $97.6 billion and Charter's
credit facilities provided approximately $3.3 billion of additional liquidity in excess of
Charter's $571 million cash
position.
Share Repurchases
During the three months ended September 30, 2023, Charter
purchased 2.0 million shares of Charter Class A common stock and
Charter Holdings common units for $854
million.
Webcast
Charter will host a webcast on Friday, October 27, 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
nine months ended September 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 $345
million and $1.1 billion for
the three and nine months ended September 30, 2023,
respectively, and $342 million and
$1.0 billion for the three and nine
months ended September 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net income attributable
to Charter shareholders
|
$
1,255
|
|
$
1,185
|
|
$
3,499
|
|
$
3,859
|
Plus: Net income
attributable to noncontrolling interest
|
181
|
|
182
|
|
533
|
|
605
|
Interest expense,
net
|
1,306
|
|
1,160
|
|
3,869
|
|
3,329
|
Income tax
expense
|
369
|
|
360
|
|
1,187
|
|
1,194
|
Depreciation and
amortization
|
2,130
|
|
2,177
|
|
6,508
|
|
6,711
|
Stock compensation
expense
|
164
|
|
109
|
|
540
|
|
360
|
Other, net
|
44
|
|
239
|
|
185
|
|
76
|
Adjusted EBITDA
(a)
|
$
5,449
|
|
$
5,412
|
|
$
16,321
|
|
$
16,134
|
|
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$
3,944
|
|
$
3,757
|
|
$
10,578
|
|
$
11,138
|
Less: Purchases
of property, plant and equipment
|
(2,961)
|
|
(2,406)
|
|
(8,259)
|
|
(6,456)
|
Change in accrued
expenses related to capital expenditures
|
114
|
|
156
|
|
110
|
|
284
|
Free cash flow
(a)
|
$
1,097
|
|
$
1,507
|
|
$
2,429
|
|
$
4,966
|
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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
%
Change
|
|
2023
|
|
2022
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Internet
|
$
5,776
|
|
$
5,571
|
|
3.7 %
|
|
$
17,227
|
|
$
16,585
|
|
3.9 %
|
Video
|
4,004
|
|
4,379
|
|
(8.6) %
|
|
12,446
|
|
13,209
|
|
(5.8) %
|
Voice
|
379
|
|
391
|
|
(3.0) %
|
|
1,117
|
|
1,180
|
|
(5.3) %
|
Mobile
service
|
581
|
|
435
|
|
33.8 %
|
|
1,617
|
|
1,237
|
|
30.7 %
|
Residential
revenue
|
10,740
|
|
10,776
|
|
(0.3) %
|
|
32,407
|
|
32,211
|
|
0.6 %
|
Small and medium
business
|
1,085
|
|
1,095
|
|
(0.9) %
|
|
3,270
|
|
3,257
|
|
0.4 %
|
Enterprise
|
698
|
|
673
|
|
3.7 %
|
|
2,070
|
|
2,003
|
|
3.3 %
|
Commercial
revenue
|
1,783
|
|
1,768
|
|
0.8 %
|
|
5,340
|
|
5,260
|
|
1.5 %
|
Advertising
sales
|
384
|
|
481
|
|
(20.3) %
|
|
1,123
|
|
1,324
|
|
(15.2) %
|
Other
|
677
|
|
525
|
|
28.8 %
|
|
2,026
|
|
1,553
|
|
30.4 %
|
Total
Revenues
|
13,584
|
|
13,550
|
|
0.2 %
|
|
40,896
|
|
40,348
|
|
1.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Programming
|
2,595
|
|
2,871
|
|
(9.6) %
|
|
8,134
|
|
8,820
|
|
(7.8) %
|
Other costs of
revenue
|
1,385
|
|
1,202
|
|
15.2 %
|
|
4,080
|
|
3,495
|
|
16.7 %
|
Costs to service
customers
|
2,142
|
|
2,066
|
|
3.7 %
|
|
6,306
|
|
6,022
|
|
4.7 %
|
Sales and
marketing
|
912
|
|
925
|
|
(1.4) %
|
|
2,753
|
|
2,669
|
|
3.1 %
|
Other expense
(b)
|
1,101
|
|
1,074
|
|
2.5 %
|
|
3,302
|
|
3,208
|
|
2.9 %
|
Total operating
costs and expenses (b)
|
8,135
|
|
8,138
|
|
— %
|
|
24,575
|
|
24,214
|
|
1.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(a)
|
$
5,449
|
|
$
5,412
|
|
0.7 %
|
|
$
16,321
|
|
$
16,134
|
|
1.2 %
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
REVENUES
|
$
13,584
|
|
$
13,550
|
|
$
40,896
|
|
$
40,348
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
Operating costs and
expenses (exclusive of items shown separately below)
|
8,299
|
|
8,247
|
|
25,115
|
|
24,574
|
Depreciation and
amortization
|
2,130
|
|
2,177
|
|
6,508
|
|
6,711
|
Other operating
(income) expense, net
|
29
|
|
202
|
|
(19)
|
|
141
|
|
10,458
|
|
10,626
|
|
31,604
|
|
31,426
|
Income from
operations
|
3,126
|
|
2,924
|
|
9,292
|
|
8,922
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES):
|
|
|
|
|
|
|
|
Interest expense,
net
|
(1,306)
|
|
(1,160)
|
|
(3,869)
|
|
(3,329)
|
Other income
(expense), net
|
(15)
|
|
(37)
|
|
(204)
|
|
65
|
|
(1,321)
|
|
(1,197)
|
|
(4,073)
|
|
(3,264)
|
Income before income
taxes
|
1,805
|
|
1,727
|
|
5,219
|
|
5,658
|
Income tax
expense
|
(369)
|
|
(360)
|
|
(1,187)
|
|
(1,194)
|
Consolidated net
income
|
1,436
|
|
1,367
|
|
4,032
|
|
4,464
|
Less: Net income
attributable to noncontrolling interests
|
(181)
|
|
(182)
|
|
(533)
|
|
(605)
|
Net income attributable
to Charter shareholders
|
$
1,255
|
|
$
1,185
|
|
$
3,499
|
|
$
3,859
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
|
|
|
|
|
|
|
|
Basic
|
$
8.42
|
|
$
7.51
|
|
$
23.30
|
|
$
23.51
|
Diluted
|
$
8.25
|
|
$
7.38
|
|
$
22.94
|
|
$
23.06
|
Weighted average
common shares outstanding, basic
|
149,004,322
|
|
157,971,109
|
|
150,169,275
|
|
164,189,703
|
Weighted average
common shares outstanding, diluted
|
152,019,159
|
|
160,638,186
|
|
152,495,273
|
|
167,351,777
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(dollars in
millions)
|
|
|
September
30,
|
|
December
31,
|
|
2023
|
|
2022
|
ASSETS
|
(unaudited)
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
571
|
|
$
645
|
Accounts receivable,
net
|
2,932
|
|
2,921
|
Prepaid expenses and
other current assets
|
613
|
|
451
|
Total current
assets
|
4,116
|
|
4,017
|
|
|
|
|
INVESTMENT IN CABLE
PROPERTIES:
|
|
|
|
Property, plant and
equipment, net
|
38,617
|
|
36,039
|
Customer
relationships, net
|
1,983
|
|
2,772
|
Franchises
|
67,396
|
|
67,363
|
Goodwill
|
29,672
|
|
29,563
|
Total investment in
cable properties, net
|
137,668
|
|
135,737
|
|
|
|
|
OTHER NONCURRENT
ASSETS
|
4,898
|
|
4,769
|
|
|
|
|
Total
assets
|
$
146,682
|
|
$
144,523
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
10,626
|
|
$
10,555
|
Current portion of
long-term debt
|
1,999
|
|
1,510
|
Total current
liabilities
|
12,625
|
|
12,065
|
|
|
|
|
LONG-TERM
DEBT
|
95,800
|
|
96,093
|
DEFERRED INCOME
TAXES
|
18,996
|
|
19,058
|
OTHER LONG-TERM
LIABILITIES
|
4,517
|
|
4,758
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
Controlling
interest
|
11,098
|
|
9,119
|
Noncontrolling
interests
|
3,646
|
|
3,430
|
Total shareholders'
equity
|
14,744
|
|
12,549
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
146,682
|
|
$
144,523
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(dollars in
millions)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Consolidated net
income
|
$
1,436
|
|
$
1,367
|
|
$
4,032
|
|
$
4,464
|
Adjustments to
reconcile consolidated net income to net cash flows from operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,130
|
|
2,177
|
|
6,508
|
|
6,711
|
Stock
compensation expense
|
164
|
|
109
|
|
540
|
|
360
|
Noncash
interest, net
|
9
|
|
(5)
|
|
13
|
|
(12)
|
Deferred income
taxes
|
17
|
|
50
|
|
(46)
|
|
165
|
Other,
net
|
25
|
|
40
|
|
212
|
|
(113)
|
Changes in operating
assets and liabilities, net of effects from acquisitions and
dispositions:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(68)
|
|
(62)
|
|
(11)
|
|
(262)
|
Prepaid expenses
and other assets
|
(173)
|
|
37
|
|
(534)
|
|
(96)
|
Accounts
payable, accrued liabilities and other
|
404
|
|
44
|
|
(136)
|
|
(79)
|
Net cash flows from
operating activities
|
3,944
|
|
3,757
|
|
10,578
|
|
11,138
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
(2,961)
|
|
(2,406)
|
|
(8,259)
|
|
(6,456)
|
Change in accrued
expenses related to capital expenditures
|
114
|
|
156
|
|
110
|
|
284
|
Other, net
|
(47)
|
|
(14)
|
|
(334)
|
|
(174)
|
Net cash flows from
investing activities
|
(2,894)
|
|
(2,264)
|
|
(8,483)
|
|
(6,346)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
3,543
|
|
4,897
|
|
14,591
|
|
21,528
|
Repayments of
long-term debt
|
(3,650)
|
|
(3,712)
|
|
(14,385)
|
|
(15,659)
|
Payments for debt
issuance costs
|
—
|
|
(14)
|
|
(18)
|
|
(71)
|
Purchase of treasury
stock
|
(783)
|
|
(2,225)
|
|
(2,021)
|
|
(9,245)
|
Proceeds from exercise
of stock options
|
16
|
|
—
|
|
21
|
|
5
|
Purchase of
noncontrolling interest
|
(78)
|
|
(385)
|
|
(254)
|
|
(1,379)
|
Distributions to
noncontrolling interest
|
(35)
|
|
(49)
|
|
(118)
|
|
(56)
|
Other, net
|
30
|
|
(8)
|
|
15
|
|
(36)
|
Net cash flows from
financing activities
|
(957)
|
|
(1,496)
|
|
(2,169)
|
|
(4,913)
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
93
|
|
(3)
|
|
(74)
|
|
(121)
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
478
|
|
483
|
|
645
|
|
601
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
571
|
|
$
480
|
|
$
571
|
|
$
480
|
|
|
|
|
|
|
|
|
CASH PAID FOR
INTEREST
|
$
1,234
|
|
$
1,101
|
|
$
3,666
|
|
$
3,251
|
CASH PAID FOR
TAXES
|
$
243
|
|
$
412
|
|
$
1,149
|
|
$
882
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED SUMMARY OF
OPERATING STATISTICS
(in thousands,
except per customer and penetration data)
|
|
|
|
Approximate as
of
|
|
|
September 30,
2023 (c)
|
|
June 30,
2023 (c)
|
|
December 31,
2022 (c)
|
|
September 30,
2022 (c)
|
Footprint
(d)
|
|
|
|
|
|
|
|
|
Estimated
Passings
|
|
56,582
|
|
56,209
|
|
55,573
|
|
55,288
|
|
|
|
|
|
|
|
|
|
Customer
Relationships (e)
|
|
|
|
|
|
|
|
|
Residential
|
|
30,012
|
|
30,009
|
|
29,988
|
|
29,946
|
SMB
|
|
2,224
|
|
2,219
|
|
2,207
|
|
2,195
|
Total Customer
Relationships
|
|
32,236
|
|
32,228
|
|
32,195
|
|
32,141
|
|
|
|
|
|
|
|
|
|
Residential
|
|
3
|
|
13
|
|
42
|
|
4
|
SMB
|
|
5
|
|
4
|
|
12
|
|
13
|
Total Customer
Relationships Quarterly Net Additions
|
|
8
|
|
17
|
|
54
|
|
17
|
|
|
|
|
|
|
|
|
|
Total Customer
Relationship Penetration of Estimated Passings
(f)
|
|
57.0 %
|
|
57.3 %
|
|
57.9 %
|
|
58.1 %
|
|
|
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
|
$
119.28
|
|
$
120.25
|
|
$
119.32
|
|
$
120.00
|
Monthly SMB Revenue
per SMB Customer (h)
|
|
$
162.94
|
|
$
164.56
|
|
$
165.50
|
|
$
166.84
|
|
|
|
|
|
|
|
|
|
Residential Customer
Relationships Penetration
|
|
|
|
|
|
|
|
|
One Product
Penetration (i)
|
|
46.5 %
|
|
46.0 %
|
|
45.9 %
|
|
45.9 %
|
Two Product
Penetration (i)
|
|
33.0 %
|
|
33.0 %
|
|
32.7 %
|
|
32.6 %
|
Three or More Product
Penetration (i)
|
|
20.5 %
|
|
20.9 %
|
|
21.3 %
|
|
21.5 %
|
|
|
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
|
54.2 %
|
|
53.1 %
|
|
51.7 %
|
|
51.1 %
|
|
|
|
|
|
|
|
|
|
Internet
|
|
|
|
|
|
|
|
|
Residential
|
|
28,606
|
|
28,549
|
|
28,412
|
|
28,320
|
SMB
|
|
2,043
|
|
2,037
|
|
2,021
|
|
2,008
|
Total Internet
Customers
|
|
30,649
|
|
30,586
|
|
30,433
|
|
30,328
|
|
|
|
|
|
|
|
|
|
Residential
|
|
57
|
|
70
|
|
92
|
|
61
|
SMB
|
|
6
|
|
7
|
|
13
|
|
14
|
Total Internet
Quarterly Net Additions
|
|
63
|
|
77
|
|
105
|
|
75
|
|
|
|
|
|
|
|
|
|
Video
|
|
|
|
|
|
|
|
|
Residential
|
|
13,751
|
|
14,071
|
|
14,497
|
|
14,642
|
SMB
|
|
628
|
|
635
|
|
650
|
|
649
|
Total Video
Customers
|
|
14,379
|
|
14,706
|
|
15,147
|
|
15,291
|
|
|
|
|
|
|
|
|
|
Residential
|
|
(320)
|
|
(189)
|
|
(145)
|
|
(211)
|
SMB
|
|
(7)
|
|
(11)
|
|
1
|
|
7
|
Total Video
Quarterly Net Additions
|
|
(327)
|
|
(200)
|
|
(144)
|
|
(204)
|
|
|
|
|
|
|
|
|
|
Voice
|
|
|
|
|
|
|
|
|
Residential
|
|
6,960
|
|
7,248
|
|
7,697
|
|
7,929
|
SMB
|
|
1,296
|
|
1,294
|
|
1,286
|
|
1,287
|
Total Voice
Customers
|
|
8,256
|
|
8,542
|
|
8,983
|
|
9,216
|
|
|
|
|
|
|
|
|
|
Residential
|
|
(288)
|
|
(225)
|
|
(232)
|
|
(271)
|
SMB
|
|
2
|
|
4
|
|
(1)
|
|
—
|
Total Voice
Quarterly Net Additions
|
|
(286)
|
|
(221)
|
|
(233)
|
|
(271)
|
|
|
|
|
|
|
|
|
|
Mobile Lines
(j)
|
|
|
|
|
|
|
|
|
Residential
|
|
6,987
|
|
6,410
|
|
5,116
|
|
4,516
|
SMB
|
|
233
|
|
216
|
|
176
|
|
161
|
Total Mobile
Lines
|
|
7,220
|
|
6,626
|
|
5,292
|
|
4,677
|
|
|
|
|
|
|
|
|
|
Residential
|
|
577
|
|
628
|
|
600
|
|
382
|
SMB
|
|
17
|
|
20
|
|
15
|
|
14
|
Total Mobile
Lines Quarterly Net Additions
|
|
594
|
|
648
|
|
615
|
|
396
|
|
|
|
|
|
|
|
|
|
Enterprise
(k)
|
|
|
|
|
|
|
|
|
Enterprise Primary
Service Units ("PSUs")
|
|
298
|
|
294
|
|
284
|
|
282
|
Enterprise Quarterly
Net Additions
|
|
4
|
|
6
|
|
2
|
|
5
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CAPITAL
EXPENDITURES
(dollars in
millions)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Customer premise
equipment (l)
|
$
659
|
|
$
577
|
|
$
1,772
|
|
$
1,606
|
Scalable infrastructure
(m)
|
308
|
|
413
|
|
1,015
|
|
1,156
|
Upgrade/rebuild
(n)
|
509
|
|
218
|
|
1,190
|
|
566
|
Support capital
(o)
|
420
|
|
372
|
|
1,245
|
|
1,068
|
Capital expenditures,
excluding line extensions
|
1,896
|
|
1,580
|
|
5,222
|
|
4,396
|
|
|
|
|
|
|
|
|
Subsidized rural
construction line extensions
|
498
|
|
427
|
|
1,398
|
|
897
|
Other line
extensions
|
567
|
|
399
|
|
1,639
|
|
1,163
|
Total line extensions
(p)
|
1,065
|
|
826
|
|
3,037
|
|
2,060
|
Total capital
expenditures
|
$
2,961
|
|
$
2,406
|
|
$
8,259
|
|
$
6,456
|
|
|
|
|
|
|
|
|
Capital expenditures
included in total related to:
|
|
|
|
|
|
|
|
Commercial
services
|
$
403
|
|
$
369
|
|
$
1,179
|
|
$
1,110
|
Subsidized rural
construction initiative (q)
|
$
512
|
|
$
440
|
|
$
1,444
|
|
$
937
|
Mobile
|
$
76
|
|
$
96
|
|
$
235
|
|
$
265
|
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 September 30, 2023, June 30, 2023,
December 31, 2022 and September 30, 2022, customers included
approximately 143,300, 128,600, 144,100 and 151,700 customers,
respectively, whose accounts were over 60 days past due,
approximately 53,400, 47,000, 52,800 and 55,500 customers,
respectively, whose accounts were over 90 days past due and
approximately 261,700, 229,200, 214,100 and 149,300 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 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.