STAMFORD, Conn., April 30, 2019 /PRNewswire/ -- Charter
Communications, Inc. (along with its subsidiaries, the "Company" or
"Charter") today reported financial and operating results for the
three months ended March 31, 2019.
Key highlights:
- First quarter total residential and SMB customer relationships
increased 351,000, compared to 264,000 during the first quarter of
2018. As of March 31, 2019, Charter
had 28.5 million total customer relationships and 53.5 million
total PSUs.
- During the first quarter, Charter generated residential and SMB
Internet net additions of 428,000, video net losses of 145,000 and
wireline voice net losses of 99,000.
- Charter added 176,000 mobile lines in the first quarter,
compared to 113,000 mobile line net additions in the fourth quarter
of 2018. As of March 31, 2019,
Charter served a total of 310,000 mobile lines.
- First quarter revenues of $11.2
billion grew 5.1%, as compared to the prior year period,
driven by residential revenue growth of 4.2%, commercial revenue
growth of 4.3% and mobile revenue of $140
million.
- First quarter Adjusted EBITDA1 of $4.1 billion grew 4.2% year-over-year, while
first quarter cable Adjusted EBITDA1 of $4.2 billion grew 7.0% year-over-year.
- Net income attributable to Charter shareholders totaled
$253 million in the first quarter,
compared to $168 million during the
same period last year. The year-over-year increase in net income
attributable to Charter shareholders in the first quarter was
primarily driven by higher Adjusted EBITDA.
- First quarter capital expenditures totaled $1.7 billion compared to $2.2 billion during the first quarter of 2018.
First quarter capital expenditures included $88 million of mobile-related capital
expenditures.
- Consolidated free cash flow for the first quarter of 2019
totaled $645 million, compared to
negative free cash flow of $49
million during the same period last year. Cable free cash
flow for the first quarter totaled $936
million, compared to negative cable free cash flow of
$24 million during the same period
last year.
- During the first quarter, Charter purchased approximately 2.9
million shares of Charter Class A common stock and Charter
Communications Holdings, LLC ("Charter Holdings") common units for
approximately $963 million.
"With the most customer-impacting elements of our integration
behind us, we are now focused on growing our business. We are doing
that by driving high quality subscriptions, reducing transactions
and churn, and maintaining and creating product superiority with a
value proposition that our competitors don't provide," said
Tom Rutledge, Chairman and CEO of
Charter Communications. "In the first quarter, we accelerated our
customer relationship growth and grew our cable free cash flow by
nearly $1 billion year-over-year. We
are pleased with our progress and our operating model is designed
to drive continuous improvement, and long-term growth, in a way
that works for customers, our employees, the communities we serve,
and our shareholders."
1.
|
Adjusted EBITDA,
cable Adjusted EBITDA, free cash flow and cable free cash flow are
non-GAAP measures defined in the "Use of Adjusted EBITDA and Free
Cash Flow Information" section and are reconciled to net income
attributable to Charter shareholders and net cash flows from
operating activities, respectively, in the addendum of this news
release.
|
Key Operating Results
|
Approximate as
of
|
|
|
|
March 31, 2019
(a)
|
|
March 31, 2018
(a)
|
|
Y/Y
Change
|
Footprint
(b)
|
|
|
|
|
|
Estimated Video
Passings
|
51,023
|
|
|
50,165
|
|
|
1.7
|
%
|
Estimated Internet
Passings
|
50,857
|
|
|
49,947
|
|
|
1.8
|
%
|
Estimated Voice
Passings
|
50,292
|
|
|
49,265
|
|
|
2.1
|
%
|
|
|
|
|
|
|
Penetration
Statistics (c)
|
|
|
|
|
|
Video Penetration of
Estimated Video Passings
|
32.3
|
%
|
|
33.4
|
%
|
|
(1.1)
|
ppts
|
Internet Penetration
of Estimated Internet Passings
|
50.5
|
%
|
|
48.8
|
%
|
|
1.7
|
ppts
|
Voice Penetration of
Estimated Voice Passings
|
22.0
|
%
|
|
23.0
|
%
|
|
(1.0)
|
ppts
|
|
|
|
|
|
|
Customer
Relationships (d)
|
|
|
|
|
|
Residential
|
26,591
|
|
|
25,730
|
|
|
3.3
|
%
|
Small and Medium
Business
|
1,863
|
|
|
1,695
|
|
|
9.9
|
%
|
Total Customer
Relationships
|
28,454
|
|
|
27,425
|
|
|
3.8
|
%
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
Primary Service
Units ("PSUs")
|
|
|
|
|
|
Video
|
15,952
|
|
|
16,279
|
|
|
(2.0)
|
%
|
Internet
|
24,023
|
|
|
22,852
|
|
|
5.1
|
%
|
Voice
|
10,015
|
|
|
10,370
|
|
|
(3.4)
|
%
|
|
49,990
|
|
|
49,501
|
|
|
1.0
|
%
|
|
|
|
|
|
|
Quarterly Net
Additions/(Losses)
|
|
|
|
|
|
Video
|
(152)
|
|
|
(121)
|
|
|
(24.0)
|
%
|
Internet
|
398
|
|
|
334
|
|
|
18.8
|
%
|
Voice
|
(120)
|
|
|
(54)
|
|
|
(124.9)
|
%
|
|
126
|
|
|
159
|
|
|
(20.8)
|
%
|
|
|
|
|
|
|
|
Single Play
(e)
|
11,189
|
|
|
10,577
|
|
|
5.8
|
%
|
Double Play
(e)
|
7,412
|
|
|
6,537
|
|
|
13.4
|
%
|
Triple Play
(e)
|
7,990
|
|
|
8,616
|
|
|
(7.3)
|
%
|
|
|
|
|
|
|
Single Play
Penetration (f)
|
42.1
|
%
|
|
41.1
|
%
|
|
1.0
|
ppts
|
Double Play
Penetration (f)
|
27.9
|
%
|
|
25.4
|
%
|
|
2.5
|
ppts
|
Triple Play
Penetration (f)
|
30.0
|
%
|
|
33.5
|
%
|
|
(3.5)
|
ppts
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
40.0
|
%
|
|
36.7
|
%
|
|
3.3
|
ppts
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
$112.47
|
|
|
$111.41
|
|
|
1.0
|
%
|
|
|
|
|
|
|
Small and Medium
Business
|
|
|
|
|
|
PSUs
|
|
|
|
|
|
Video
|
509
|
|
|
460
|
|
|
10.8
|
%
|
Internet
|
1,664
|
|
|
1,503
|
|
|
10.7
|
%
|
Voice
|
1,072
|
|
|
957
|
|
|
12.0
|
%
|
|
3,245
|
|
|
2,920
|
|
|
11.2
|
%
|
|
|
|
|
|
|
Quarterly Net
Additions/(Losses)
|
|
|
|
|
|
Video
|
7
|
|
|
10
|
|
|
(23.6)
|
%
|
Internet
|
30
|
|
|
33
|
|
|
(8.1)
|
%
|
Voice
|
21
|
|
|
27
|
|
|
(24.9)
|
%
|
|
58
|
|
|
70
|
|
|
(16.8)
|
%
|
|
|
|
|
|
|
Monthly Small and
Medium Business Revenue per Customer (h)
|
$170.64
|
|
|
$178.84
|
|
|
(4.6)
|
%
|
|
|
|
|
|
|
Enterprise PSUs
(i)
|
|
|
|
|
|
Enterprise
PSUs
|
253
|
|
|
228
|
|
|
10.7
|
%
|
|
Footnotes
|
In thousands, except
per customer and penetration data. See footnotes to unaudited
summary of operating statistics on page 5 of the addendum of this
news release. The footnotes contain important disclosures regarding
the definitions used for these operating statistics.
|
|
All percentages are
calculated using whole numbers. Minor differences may exist due to
rounding. NM - Not meaningful
|
During the first quarter of 2019, Charter's residential customer
relationships grew by 321,000, while first quarter 2018 residential
customer relationships grew by 231,000. As of March 31, 2019,
Charter had 26.6 million residential customer relationships and
50.0 million residential PSUs.
Charter added 398,000 residential Internet customers in the
first quarter of 2019, versus first quarter 2018 Internet customer
net additions of 334,000. As of March 31, 2019, Charter had
24.0 million residential Internet customers, with over 80% of those
residential Internet customers subscribing to tiers that provided
100 Mbps or more of speed. Currently, 100 Mbps is the slowest speed
offered to new Internet customers in 99% of Charter's footprint.
Additionally, Charter has doubled minimum Internet speeds to 200
Mbps in a number of markets at no additional cost to new and
existing Spectrum Internet customers.
Residential video customers decreased by 152,000 in the first
quarter of 2019, while first quarter 2018 video customers decreased
by 121,000. As of March 31, 2019, Charter had 16.0 million
residential video customers.
During the first quarter of 2019, residential wireline voice
customers declined by 120,000, while first quarter 2018 voice
customers declined by 54,000. As of March 31, 2019, Charter
had 10.0 million residential wireline voice customers.
First quarter 2019 residential revenue per residential customer
(excluding mobile) totaled $112.47,
and grew by 1.0% compared to the prior year period, as promotional
rate step-ups and rate adjustments, were partly offset by continued
single play Internet sell-in.
In September of 2018, Charter completed the full market launch
of its Spectrum Mobile™ service
to new and existing Spectrum Internet customers across its
footprint. Spectrum Mobile runs on America's largest, most
reliable LTE network and is combined with Spectrum WiFi.
Spectrum Mobile customers can choose one of two simple ways
to pay for data, "Unlimited" for $45
a month (per line), or "By the Gig" at $14/GB, in both cases now including applicable
fees and taxes. During the first quarter of 2019, Charter added
176,000 mobile lines, and as of March 31, 2019, Charter served
a total of 310,000 mobile lines.
SMB customer relationships grew by 30,000 during the first
quarter of 2019, compared to growth of 33,000 during the first
quarter of 2018, and by 9.9% year-over-year. SMB PSUs increased
58,000, compared to 70,000 during the first quarter of 2018. As of
March 31, 2019, Charter had 1.9 million SMB customer
relationships and 3.2 million SMB PSUs. Enterprise PSUs grew by
5,000 during the first quarter of 2019 compared to growth of 8,000
during the first quarter of 2018. As of March 31, 2019,
Charter had 253,000 enterprise PSUs.
First Quarter Financial Results
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
(dollars in
millions, except per share data)
|
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
Video
|
$
|
4,384
|
|
|
$
|
4,292
|
|
|
2.1
|
%
|
Internet
|
4,024
|
|
|
3,707
|
|
|
8.6
|
%
|
Voice
|
504
|
|
|
556
|
|
|
(9.4)
|
%
|
Residential
revenue
|
8,912
|
|
|
8,555
|
|
|
4.2
|
%
|
Small and medium
business
|
945
|
|
|
900
|
|
|
5.0
|
%
|
Enterprise
|
643
|
|
|
622
|
|
|
3.4
|
%
|
Commercial
revenue
|
1,588
|
|
|
1,522
|
|
|
4.3
|
%
|
Advertising
sales
|
345
|
|
|
356
|
|
|
(3.1)
|
%
|
Mobile
|
140
|
|
|
—
|
|
|
NM
|
|
Other
|
221
|
|
|
224
|
|
|
(1.3)
|
%
|
Total
Revenue
|
11,206
|
|
|
10,657
|
|
|
5.1
|
%
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
Cable operating costs
and expenses
|
6,891
|
|
|
6,756
|
|
|
2.0
|
%
|
Mobile operating costs
and expenses
|
260
|
|
|
8
|
|
|
NM
|
|
Total operating costs
and expenses
|
7,151
|
|
|
6,764
|
|
|
5.7
|
%
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
4,055
|
|
|
$
|
3,893
|
|
|
4.2
|
%
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
36.2
|
%
|
|
36.5
|
%
|
|
|
|
|
|
|
|
|
Cable Adjusted
EBITDA
|
$
|
4,175
|
|
|
$
|
3,901
|
|
|
7.0
|
%
|
Cable Adjusted EBITDA
margin
|
37.7
|
%
|
|
36.6
|
%
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
$
|
1,665
|
|
|
$
|
2,183
|
|
|
|
% Total
Revenues
|
14.9
|
%
|
|
20.5
|
%
|
|
|
|
|
|
|
|
|
Net income
attributable to Charter shareholders
|
$
|
253
|
|
|
$
|
168
|
|
|
|
Earnings per common
share attributable to Charter shareholders:
|
|
|
|
|
|
Basic
|
$
|
1.13
|
|
|
$
|
0.71
|
|
|
|
Diluted
|
$
|
1.11
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$
|
2,686
|
|
|
$
|
2,699
|
|
|
|
Free cash
flow
|
$
|
645
|
|
|
$
|
(49)
|
|
|
|
Cable free cash
flow
|
$
|
936
|
|
|
$
|
(24)
|
|
|
|
Revenue
First quarter revenues rose 5.1% year-over-year to $11.2 billion, driven by growth in Internet,
mobile, video and commercial revenues. Excluding advertising
revenue, which benefited from political spend in the first quarter
of 2018 and mobile revenue, revenue grew 4.1% year-over-year.
Video revenues totaled $4.4
billion in the first quarter, an increase of 2.1% compared
to the prior year period. Video revenue growth was driven by annual
rate adjustments and promotional rolloff partly offset by a decline
in video customers during the last year.
Internet revenues grew 8.6%, compared to the year-ago quarter,
to $4.0 billion, driven by growth in
Internet customers during the last year, promotional rolloff and
rate adjustments.
Voice revenues totaled $504
million in the first quarter, a decrease of 9.4% compared to
the first quarter of 2018, driven by value-based pricing and a
decline in wireline voice customers over the last twelve
months.
Commercial revenues rose to $1.6
billion, an increase of 4.3% over the prior year
period, driven by SMB revenue growth of 5.0% and enterprise revenue
growth of 3.4%. First quarter 2019 commercial revenue growth was
lower than first quarter 2019 commercial customer relationship
growth, given the migration of Legacy TWC and Legacy Bright House
commercial customers to more attractively priced Spectrum
pricing and packaging for both SMB and enterprise services.
First quarter advertising sales revenues of $345 million declined 3.1% compared to the
year-ago quarter, driven by lower political revenue. First quarter
mobile revenue totaled $140
million.
Operating Costs and Expenses
First quarter total operating costs and expenses increased by
$387 million, or 5.7% year-over-year,
and 2.0% when excluding first quarter mobile costs.
First quarter programming expense increased by $113 million, or 4.1% as compared to the first
quarter of 2018, reflecting contractual programming increases and
renewals, partly offset by lower video customers.
Regulatory, connectivity and produced content expenses increased
by $28 million, or 5.0%
year-over-year, primarily driven by higher regulatory and franchise
pass-through fees and costs of video customer premise equipment
("CPE") sold to customers.
Costs to service customers decreased by $32 million, or 1.7% year-over-year, despite
year-over-year residential and SMB customer growth of 3.8%. The
year-over-year decrease in costs to service customers was primarily
the result of a decline in bad debt and lower transactions per
customer.
Marketing expenses decreased by $16
million, or 2.0% year-over-year.
Other expenses increased by $42
million, or 4.8% as compared to the first quarter of 2018
primarily driven by insurance and software costs.
In the first quarter of 2019, mobile costs totaled $260 million and were comprised of device costs,
service and operating costs and launch costs.
Adjusted EBITDA
First quarter Adjusted EBITDA of $4.1
billion grew by 4.2% year-over-year, reflecting revenue
growth and operating expense growth of 5.1% and 5.7%, respectively.
First quarter cable Adjusted EBITDA grew by 7.0% year-over-year
reflecting cable revenue growth and cable operating expense growth
of 3.8% and 2.0%, respectively.
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled
$253 million in the first quarter of
2019, compared to $168 million in the
first quarter of 2018. The year-over-year increase in net income
attributable to Charter shareholders was primarily driven by higher
Adjusted EBITDA, lower depreciation and amortization costs and
lower merger and restructuring costs, partly offset by higher
income tax expense, a non-cash impairment charge to an equity
method investment and higher interest expense.
Net income per basic common share attributable to Charter
shareholders totaled $1.13 in the
first quarter of 2019 compared to $0.71 during the same period last year. The
increase was primarily the result of the factors described above in
addition to a 5.5% decrease in weighted average common shares
outstanding versus the prior year period.
Capital Expenditures
Property, plant and equipment expenditures totaled $1.7 billion in the first quarter of 2019,
compared to $2.2 billion during the
first quarter of 2018, primarily driven by a decline in CPE and
scalable infrastructure spending. The decrease in CPE spending was
primarily driven by lower set-top box purchases given the
completion of Charter's all-digital initiative in the fourth
quarter of 2018 and a year-over-year decline in the pace of
migration of Legacy TWC and Legacy Bright House customers to
Spectrum pricing and packaging. The decrease in scalable
infrastructure spending was primarily driven by the completion of
the rollout of DOCSIS 3.1 technology. The increase in support
capital was due to higher capital spending related to Spectrum
Mobile, partly offset by a lower rate of insourcing and
integration spend. First quarter capital expenditures included
$88 million of mobile costs, of which
$72 million were included in support
capital.
We currently expect capital expenditures, excluding capital
expenditures related to mobile, to be approximately $7 billion in 2019, versus $8.9 billion in 2018. Our expectation for lower
capital expenditures in 2019 versus 2018, is primarily driven by
our expectation for lower customer premise equipment spend with the
completion of our all-digital conversion, lower scalable
infrastructure spend with the completion of the rollout of DOCSIS
3.1 technology across our footprint and lower support capital spend
with the substantial completion of the integration of Legacy TWC
and Legacy Bright House.
Cash Flow and Free Cash Flow
During the first quarter of 2019, net cash flows from operating
activities totaled $2.7 billion,
consistent with net cash flows from operating activities in the
prior year quarter, with higher Adjusted EBITDA, lower cash paid
for interest and lower merger and restructuring charges offset by
higher year-over-year usage of trade working capital.
Consolidated free cash flow for the first quarter of 2019
totaled $645 million, compared to
negative free cash flow of $49
million during the same period last year. Cable free cash
flow for the first quarter of 2019 totaled $936 million, compared to negative cable free
cash flow of $24 million during the
same period last year. The year-over-year increases in consolidated
free cash flow and cable free cash flow were driven by a decline in
capital expenditures versus the prior year quarter, partly offset
by a decline in accrued capital expenditures.
Liquidity & Financing
As of March 31, 2019, total principal amount of debt was
$73.4 billion. Charter's credit
facilities provided approximately $4.6
billion of additional liquidity in excess of Charter's
$1.5 billion cash position.
In January 2019, Charter
Communications Operating, LLC ("CCO") and Charter Communications
Operating Capital Corp. issued $1.25
billion of 5.050% senior secured notes due 2029 and
$750 million of 5.750% senior secured
notes due 2048 (collectively, the "Notes"). Charter used the net
proceeds from the sale of the Notes for general corporate purposes,
including funding buybacks of Class A common stock of Charter
and/or common units of Charter Holdings and for repaying certain
indebtedness, including repaying at maturity Time Warner Cable,
LLC's 8.750% senior notes due 2019.
In January 2019, Charter Operating
entered into an amendment to its Credit Agreement raising
$1.7 billion of new term loan A-3 and
increasing revolving loan capacity to $4.75
billion from $4.0 billion. In
addition, the majority of term loan A-2 holders converted to term
loan A-3 and essentially all revolver commitments were extended to
2024. The net proceeds were used for general corporate purposes,
including funding buybacks of Charter Class A common stock and/or
common units of Charter Holdings and for repaying certain
indebtedness, including repaying at maturity Time Warner Cable,
LLC's 8.250% senior notes due 2019.
Share Repurchases
During the three months ended March 31, 2019, Charter
purchased approximately 2.9 million shares of Charter Class A
common stock and Charter Holdings common units for approximately
$963 million.
Conference Call
Charter will host a conference call on Tuesday, April 30,
2019 at 8:30 a.m. Eastern Time (ET)
related to the contents of this release.
The conference call will be webcast live via the Company's
investor relations website at ir.charter.com. The call will be
archived under the "Financial Information" section two hours after
completion of the call. Participants should go to the webcast link
no later than 10 minutes prior to the start time to register.
Those participating via telephone should dial 866-919-0894 no
later than 10 minutes prior to the call. International participants
should dial 706-679-9379. The conference ID code for the call is
2391249.
A replay of the call will be available at 855-859-2056 or
404-537-3406 beginning two hours after the completion of the call
through the end of business on May 15,
2019. The conference ID code for the replay is 2391249.
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 months
ended March 31, 2019, which will be posted on the "Financial
Information" section of our investor relations website at
ir.charter.com, when it is filed with the Securities and Exchange
Commission (the "SEC"). A slide presentation to accompany the
conference call and a trending schedule containing historical
customer and financial data will also be available in the
"Financial Information" section.
Use of Adjusted EBITDA and Free Cash Flow
Information
The company uses certain measures that are not defined by U.S.
generally accepted accounting principles ("GAAP") to evaluate
various aspects of its business. Adjusted EBITDA and free cash flow
are non-GAAP financial measures and should be considered in
addition to, not as a substitute for, consolidated net income 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 consolidated
net income and net cash flows from operating activities,
respectively, in the Addendum to this release.
Adjusted EBITDA is defined as net income attributable to Charter
shareholders plus net income attributable to noncontrolling
interest, net interest expense, income taxes, depreciation and
amortization, stock compensation expense, loss on extinguishment of
debt, (gain) loss on financial instruments, other (income) expense,
net and other operating (income) expenses, such as special charges
and (gain) loss on sale or retirement of assets. As such, it
eliminates the significant non-cash depreciation and amortization
expense that results from the capital-intensive nature of the
Company's businesses as well as other non-cash or special items,
and is unaffected by the Company's capital structure or investment
activities. However, this measure is limited in that it does not
reflect the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues and the cash cost of
financing. These costs are evaluated through other financial
measures.
Free cash flow is defined as net cash flows from operating
activities, less capital expenditures and changes in accrued
expenses related to capital expenditures.
Management and Charter's board of directors use Adjusted EBITDA
and free cash flow to assess Charter's performance and its ability
to service its debt, fund operations and make additional
investments with internally generated funds. In addition, Adjusted
EBITDA generally correlates to the leverage ratio calculation under
the Company's credit facilities or outstanding notes to determine
compliance with the covenants contained in the facilities and notes
(all such documents have been previously filed with the the SEC).
For the purpose of calculating compliance with leverage covenants,
the Company uses Adjusted EBITDA, as presented, excluding certain
expenses paid by its operating subsidiaries to other Charter
entities. The Company's debt covenants refer to these expenses as
management fees, which were $300
million and $273 million for
the three months ended March 31, 2019 and 2018,
respectively.
Cable Adjusted EBITDA is defined as Adjusted EBITDA less mobile
revenues plus mobile operating costs and expenses. Cable free cash
flow is defined as free cash flow plus mobile net cash outflows
from operating activities and mobile capital expenditures.
Management and Charter's board of directors use cable Adjusted
EBITDA and cable free cash flow to provide management and investors
a more meaningful year-over-year perspective on the financial and
operational performance and trends of our core cable business
without the impact of the revenue, costs and capital expenditures
in the initial funding period to grow a new product line as well as
the negative working capital impacts from the timing of
device-related cash flows when we provide the handset or tablet to
customers pursuant to equipment installment plans.
About Charter
Charter Communications, Inc. (NASDAQ:CHTR) is a leading
broadband communications company and the second largest cable
operator in the United States.
Charter provides a full range of advanced residential broadband
services, including Spectrum TV® programming, Spectrum
Internet®, Spectrum Voice®, and Spectrum
Mobile™. Under the Spectrum Business® brand, Charter
provides scalable, and cost-effective broadband communications
solutions to small and medium-sized business organizations,
including Internet access, business telephone, and TV services.
Through the Spectrum Enterprise brand, Charter is a national
provider of scalable, fiber-based technology solutions serving many
of America's largest businesses and communications service
providers. Charter's advertising sales and production services are
sold under the Spectrum Reach® brand. Charter's news and
sports networks are operated under the Spectrum Networks brand.
More information about Charter can be found at
newsroom.charter.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This communication includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, regarding, among other things, our plans,
strategies and prospects, both business and financial.
Although we believe that our plans, intentions and expectations as
reflected in or suggested by these forward-looking statements are
reasonable, we cannot assure you that we will achieve or realize
these plans, intentions or expectations. Forward-looking
statements are inherently subject to risks, uncertainties and
assumptions including, without limitation, the factors described
under "Risk Factors" from time to time in our filings with the
SEC. Many of the forward-looking statements contained in this
communication may be identified by the use of forward-looking words
such as "believe," "expect," "anticipate," "should," "planned,"
"will," "may," "intend," "estimated," "aim," "on track," "target,"
"opportunity," "tentative," "positioning," "designed," "create,"
"predict," "project," "initiatives," "seek," "would," "could,"
"continue," "ongoing," "upside," "increases" and "potential," among
others. Important factors that could cause actual results to
differ materially from the forward-looking statements we make in
this communication are set forth in our annual report on Form 10-K,
and in other reports or documents that we file from time to time
with the SEC, and include, but are not limited to:
- our ability to sustain and grow revenues and cash flow from
operations by offering video, Internet, voice, mobile, advertising
and other services to residential and commercial customers, to
adequately meet the customer experience demands in our service
areas and to maintain and grow our customer base, particularly in
the face of increasingly aggressive competition, the need for
innovation and the related capital expenditures;
- the impact of competition from other market participants,
including but not limited to incumbent telephone companies, direct
broadcast satellite ("DBS") operators, wireless broadband and
telephone providers, digital subscriber line ("DSL") providers,
fiber to the home providers, video provided over the Internet by
(i) market participants that have not historically competed in the
multichannel video business, (ii) traditional multichannel video
distributors, and (iii) content providers that have historically
licensed cable networks to multichannel video distributors, and
providers of advertising over the Internet;
- our ability to efficiently and effectively integrate acquired
operations;
- the effects of governmental regulation on our business
including costs, disruptions and possible limitations on operating
flexibility related to, and our ability to comply with, regulatory
conditions applicable to us as a result of the Time Warner Cable
Inc. and Bright House Networks, LLC Transactions;
- general business conditions, economic uncertainty or downturn,
unemployment levels and the level of activity in the housing
sector;
- our ability to obtain programming at reasonable prices or to
raise prices to offset, in whole or in part, the effects of higher
programming costs (including retransmission consents);
- our ability to develop and deploy new products and technologies
including mobile products and any other consumer services and
service platforms;
- any events that disrupt our networks, information systems or
properties and impair our operating activities or our
reputation;
- the ability to retain and hire key personnel;
- the availability and access, in general, of funds to meet our
debt obligations prior to or when they become due and to fund our
operations and necessary capital expenditures, either through (i)
cash on hand, (ii) free cash flow, or (iii) access to the capital
or credit markets; and
- our ability to comply with all covenants in our indentures and
credit facilities, any violation of which, if not cured in a timely
manner, could trigger a default of our other obligations under
cross-default provisions.
All forward-looking statements attributable to us or any person
acting on our behalf are expressly qualified in their entirety by
this cautionary statement. We are under no duty or obligation
to update any of the forward-looking statements after the date of
this communication.
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
(dollars in
millions, except per share data)
|
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
Video
|
$
|
4,384
|
|
|
$
|
4,292
|
|
|
2.1
|
%
|
Internet
|
4,024
|
|
|
3,707
|
|
|
8.6
|
%
|
Voice
|
504
|
|
|
556
|
|
|
(9.4)
|
%
|
Residential
revenue
|
8,912
|
|
|
8,555
|
|
|
4.2
|
%
|
Small and medium
business
|
945
|
|
|
900
|
|
|
5.0
|
%
|
Enterprise
|
643
|
|
|
622
|
|
|
3.4
|
%
|
Commercial
revenue
|
1,588
|
|
|
1,522
|
|
|
4.3
|
%
|
Advertising
sales
|
345
|
|
|
356
|
|
|
(3.1)
|
%
|
Mobile
|
140
|
|
|
—
|
|
|
NM
|
|
Other
|
221
|
|
|
224
|
|
|
(1.3)
|
%
|
Total
Revenue
|
11,206
|
|
|
10,657
|
|
|
5.1
|
%
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
Programming
|
2,865
|
|
|
2,752
|
|
|
4.1
|
%
|
Regulatory,
connectivity and produced content
|
561
|
|
|
533
|
|
|
5.0
|
%
|
Costs to service
customers
|
1,822
|
|
|
1,854
|
|
|
(1.7)
|
%
|
Marketing
|
735
|
|
|
751
|
|
|
(2.0)
|
%
|
Mobile
|
260
|
|
|
8
|
|
|
NM
|
|
Other
expense
|
908
|
|
|
866
|
|
|
4.8
|
%
|
Total operating costs
and expenses (exclusive of items shown separately below)
|
7,151
|
|
|
6,764
|
|
|
5.7
|
%
|
Adjusted
EBITDA
|
4,055
|
|
|
3,893
|
|
|
4.2
|
%
|
Adjusted EBITDA
margin
|
36.2
|
%
|
|
36.5
|
%
|
|
|
Depreciation and
amortization
|
2,550
|
|
|
2,710
|
|
|
|
Stock compensation
expense
|
85
|
|
|
72
|
|
|
|
Other operating
(income) expenses, net
|
(5)
|
|
|
69
|
|
|
|
Income from
operations
|
1,425
|
|
|
1,042
|
|
|
|
OTHER INCOME
(EXPENSES):
|
|
|
|
|
|
Interest expense,
net
|
(925)
|
|
|
(851)
|
|
|
|
Gain on financial
instruments, net
|
37
|
|
|
63
|
|
|
|
Other pension
benefits, net
|
9
|
|
|
20
|
|
|
|
Other expense,
net
|
(110)
|
|
|
(23)
|
|
|
|
|
(989)
|
|
|
(791)
|
|
|
|
Income before income
taxes
|
436
|
|
|
251
|
|
|
|
Income tax
expense
|
(119)
|
|
|
(28)
|
|
|
|
Consolidated net
income
|
317
|
|
|
223
|
|
|
|
Less: Net income
attributable to noncontrolling interests
|
(64)
|
|
|
(55)
|
|
|
|
Net income
attributable to Charter shareholders
|
$
|
253
|
|
|
$
|
168
|
|
|
|
EARNINGS PER COMMON
SHARE
|
|
|
|
|
|
ATTRIBUTABLE TO
CHARTER SHAREHOLDERS:
|
|
|
|
|
|
Basic
|
$
|
1.13
|
|
|
$
|
0.71
|
|
|
|
Diluted
|
$
|
1.11
|
|
|
$
|
0.70
|
|
|
|
Weighted average
common shares outstanding, basic
|
224,630,122
|
|
|
237,762,295
|
|
|
|
Weighted average
common shares outstanding, diluted
|
227,595,365
|
|
|
241,420,722
|
|
|
|
|
Adjusted EBITDA is a
non-GAAP term. See page 6 of this addendum for the
reconciliation of Adjusted EBITDA to net income attributable to
Charter shareholders as defined by GAAP.
|
|
All percentages are
calculated using whole numbers. Minor differences may exist due to
rounding.
|
|
NM - Not
meaningful
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(dollars in
millions)
|
|
|
March
31,
|
|
December
31,
|
|
2019
|
|
2018
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,451
|
|
|
$
|
551
|
|
Accounts receivable,
net
|
1,578
|
|
|
1,733
|
|
Prepaid expenses and
other current assets
|
722
|
|
|
446
|
|
Total current
assets
|
3,751
|
|
|
2,730
|
|
|
|
|
|
RESTRICTED
CASH
|
175
|
|
|
214
|
|
|
|
|
|
INVESTMENT IN CABLE
PROPERTIES:
|
|
|
|
Property, plant and
equipment, net
|
34,859
|
|
|
35,126
|
|
Customer
relationships, net
|
8,997
|
|
|
9,565
|
|
Franchises
|
67,319
|
|
|
67,319
|
|
Goodwill
|
29,554
|
|
|
29,554
|
|
Total investment in
cable properties, net
|
140,729
|
|
|
141,564
|
|
|
|
|
|
OPERATING LEASE
RIGHT-OF-USE ASSETS
|
1,101
|
|
|
—
|
|
OTHER NONCURRENT
ASSETS
|
1,501
|
|
|
1,622
|
|
|
|
|
|
Total
assets
|
$
|
147,257
|
|
|
$
|
146,130
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
8,213
|
|
|
$
|
8,805
|
|
Operating lease
liabilities
|
205
|
|
|
—
|
|
Current portion of
long-term debt
|
3,532
|
|
|
3,290
|
|
Total current
liabilities
|
11,950
|
|
|
12,095
|
|
|
|
|
|
LONG-TERM
DEBT
|
70,567
|
|
|
69,537
|
|
DEFERRED INCOME
TAXES
|
17,473
|
|
|
17,389
|
|
LONG-TERM OPERATING
LEASE LIABILITIES
|
981
|
|
|
—
|
|
OTHER LONG-TERM
LIABILITIES
|
2,643
|
|
|
2,837
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
Controlling
interest
|
35,734
|
|
|
36,285
|
|
Noncontrolling
interests
|
7,909
|
|
|
7,987
|
|
Total shareholders'
equity
|
43,643
|
|
|
44,272
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
147,257
|
|
|
$
|
146,130
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(dollars in
millions)
|
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
Consolidated net
income
|
$
|
317
|
|
|
$
|
223
|
|
Adjustments to
reconcile consolidated net income to net cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
2,550
|
|
|
2,710
|
|
Stock compensation
expense
|
85
|
|
|
72
|
|
Accelerated vesting
of equity awards
|
—
|
|
|
5
|
|
Noncash interest
income, net
|
(55)
|
|
|
(89)
|
|
Other pension
benefits, net
|
(9)
|
|
|
(20)
|
|
Gain on financial
instruments, net
|
(37)
|
|
|
(63)
|
|
Deferred income
taxes
|
81
|
|
|
28
|
|
Other, net
|
98
|
|
|
38
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
155
|
|
|
226
|
|
Prepaid expenses and
other assets
|
(300)
|
|
|
(131)
|
|
Accounts payable,
accrued liabilities and other
|
(199)
|
|
|
(300)
|
|
Net cash flows from
operating activities
|
2,686
|
|
|
2,699
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
Purchases of
property, plant and equipment
|
(1,665)
|
|
|
(2,183)
|
|
Change in accrued
expenses related to capital expenditures
|
(376)
|
|
|
(565)
|
|
Real estate
investments through variable interest entities
|
(39)
|
|
|
—
|
|
Other, net
|
—
|
|
|
10
|
|
Net cash flows from
investing activities
|
(2,080)
|
|
|
(2,738)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
Borrowings of
long-term debt
|
6,884
|
|
|
2,929
|
|
Repayments of
long-term debt
|
(5,572)
|
|
|
(2,185)
|
|
Payments for debt
issuance costs
|
(25)
|
|
|
—
|
|
Purchase of treasury
stock
|
(940)
|
|
|
(617)
|
|
Proceeds from
exercise of stock options
|
44
|
|
|
36
|
|
Purchase of
noncontrolling interest
|
(93)
|
|
|
(127)
|
|
Distributions to
noncontrolling interest
|
(39)
|
|
|
(39)
|
|
Other, net
|
(4)
|
|
|
(3)
|
|
Net cash flows from
financing activities
|
255
|
|
|
(6)
|
|
|
|
|
|
NET INCREASE
(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
861
|
|
|
(45)
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, beginning of period
|
765
|
|
|
621
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH, end of period
|
$
|
1,626
|
|
|
$
|
576
|
|
|
|
|
|
CASH PAID FOR
INTEREST
|
$
|
966
|
|
|
$
|
1,007
|
|
CASH PAID FOR
TAXES
|
$
|
4
|
|
|
$
|
1
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED SUMMARY
OF OPERATING STATISTICS
|
(in thousands,
except per customer and penetration data)
|
|
|
Approximate as
of
|
|
March 31,
2019 (a)
|
|
December 31,
2018 (a)
|
|
March 31,
2018 (a)
|
Footprint
(b)
|
|
|
|
|
|
Estimated Video
Passings
|
51,023
|
|
|
50,824
|
|
|
50,165
|
|
Estimated Internet
Passings
|
50,857
|
|
|
50,652
|
|
|
49,947
|
|
Estimated Voice
Passings
|
50,292
|
|
|
50,086
|
|
|
49,265
|
|
|
|
|
|
|
|
Penetration
Statistics (c)
|
|
|
|
|
|
Video Penetration of
Estimated Video Passings
|
32.3
|
%
|
|
32.7
|
%
|
|
33.4
|
%
|
Internet Penetration
of Estimated Internet Passings
|
50.5
|
%
|
|
49.9
|
%
|
|
48.8
|
%
|
Voice Penetration of
Estimated Voice Passings
|
22.0
|
%
|
|
22.3
|
%
|
|
23.0
|
%
|
|
|
|
|
|
|
Customer
Relationships (d)
|
|
|
|
|
|
Residential
|
26,591
|
|
|
26,270
|
|
|
25,730
|
|
Small and Medium
Business
|
1,863
|
|
|
1,833
|
|
|
1,695
|
|
Total Customer
Relationships
|
28,454
|
|
|
28,103
|
|
|
27,425
|
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
Primary Service
Units ("PSUs")
|
|
|
|
|
|
Video
|
15,952
|
|
|
16,104
|
|
|
16,279
|
|
Internet
|
24,023
|
|
|
23,625
|
|
|
22,852
|
|
Voice
|
10,015
|
|
|
10,135
|
|
|
10,370
|
|
|
49,990
|
|
|
49,864
|
|
|
49,501
|
|
|
|
|
|
|
|
Quarterly Net
Additions/(Losses)
|
|
|
|
|
|
Video
|
(152)
|
|
|
(36)
|
|
|
(121)
|
|
Internet
|
398
|
|
|
289
|
|
|
334
|
|
Voice
|
(120)
|
|
|
(83)
|
|
|
(54)
|
|
|
126
|
|
|
170
|
|
|
159
|
|
|
|
|
|
|
|
Single Play
(e)
|
11,189
|
|
|
10,928
|
|
|
10,577
|
|
Double Play
(e)
|
7,412
|
|
|
7,097
|
|
|
6,537
|
|
Triple Play
(e)
|
7,990
|
|
|
8,245
|
|
|
8,616
|
|
|
|
|
|
|
|
Single Play
Penetration (f)
|
42.1
|
%
|
|
41.6
|
%
|
|
41.1
|
%
|
Double Play
Penetration (f)
|
27.9
|
%
|
|
27.0
|
%
|
|
25.4
|
%
|
Triple Play
Penetration (f)
|
30.0
|
%
|
|
31.4
|
%
|
|
33.5
|
%
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
40.0
|
%
|
|
38.7
|
%
|
|
36.7
|
%
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
$
|
112.47
|
|
|
$
|
111.78
|
|
|
$
|
111.41
|
|
|
|
|
|
|
|
Small and Medium
Business
|
|
|
|
|
|
PSUs
|
|
|
|
|
|
Video
|
509
|
|
|
502
|
|
|
460
|
|
Internet
|
1,664
|
|
|
1,634
|
|
|
1,503
|
|
Voice
|
1,072
|
|
|
1,051
|
|
|
957
|
|
|
3,245
|
|
|
3,187
|
|
|
2,920
|
|
|
|
|
|
|
|
Quarterly Net
Additions/(Losses)
|
|
|
|
|
|
Video
|
7
|
|
|
14
|
|
|
10
|
|
Internet
|
30
|
|
|
40
|
|
|
33
|
|
Voice
|
21
|
|
|
27
|
|
|
27
|
|
|
58
|
|
|
81
|
|
|
70
|
|
|
|
|
|
|
|
Monthly Small and
Medium Business Revenue per Customer (h)
|
$
|
170.64
|
|
|
$
|
170.62
|
|
|
$
|
178.84
|
|
|
|
|
|
|
|
Enterprise PSUs
(i)
|
|
|
|
|
|
Enterprise
PSUs
|
253
|
|
|
248
|
|
|
228
|
|
|
|
(a)
|
Customer statistics
do not include mobile. We calculate the aging of customer
accounts based on the monthly billing cycle for each account.
On that basis, at March 31, 2019, December 31, 2018 and March 31,
2018, actual customers include approximately 171,100, 217,600 and
190,700 customers, respectively, whose accounts were over 60 days
past due, approximately 19,500, 24,000 and 17,200 customers,
respectively, whose accounts were over 90 days past due and
approximately 20,800, 19,200 and 13,400 customers, respectively,
whose accounts were over 120 days past due.
|
|
|
(b)
|
Passings represent
our estimate of the number of units, such as single family homes,
apartment and condominium units and small and medium business and
enterprise sites passed by our cable distribution network in the
areas where we offer the service indicated. These estimates
are based upon the information available at this time and are
updated for all periods presented when new information becomes
available.
|
|
|
(c)
|
Penetration
represents residential and small and medium business customers as a
percentage of estimated passings for the service
indicated.
|
|
|
(d)
|
Customer
relationships include the number of customers that receive one or
more levels of service, encompassing video, Internet and voice
services, without regard to which service(s) such customers
receive. Customers who reside in residential multiple
dwelling units ("MDUs") and that are billed under bulk contracts
are counted based on the number of billed units within each bulk
MDU. Total customer relationships exclude enterprise customer
relationships.
|
|
|
(e)
|
Single play, double
play and triple play customers represent customers that subscribe
to one, two or three of Charter service offerings,
respectively.
|
|
|
(f)
|
Single play, double
play and triple play penetration represents the number of
residential single play, double play and triple play customers,
respectively, as a percentage of residential customer
relationships.
|
|
|
(g)
|
Monthly residential
revenue per residential customer is calculated as total residential
video, Internet and voice quarterly revenue divided by three
divided by average residential customer relationships during the
respective quarter.
|
|
|
(h)
|
Monthly small and
medium business revenue per customer is calculated as total small
and medium business quarterly revenue divided by three divided by
average small and medium business customer relationships during the
respective quarter.
|
|
|
(i)
|
Enterprise PSUs
represents the aggregate number of fiber service offerings counting
each separate service offering at each customer location as an
individual PSU.
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
MEASURES
|
(dollars in
millions)
|
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
Net income
attributable to Charter shareholders
|
$
|
253
|
|
|
$
|
168
|
|
Plus: Net
income attributable to noncontrolling interest
|
64
|
|
|
55
|
|
Interest expense,
net
|
925
|
|
|
851
|
|
Income tax
expense
|
119
|
|
|
28
|
|
Depreciation and
amortization
|
2,550
|
|
|
2,710
|
|
Stock compensation
expense
|
85
|
|
|
72
|
|
Gain on financial
instruments, net
|
(37)
|
|
|
(63)
|
|
Other pension
benefits, net
|
(9)
|
|
|
(20)
|
|
Other, net
|
105
|
|
|
92
|
|
Adjusted EBITDA
(a)
|
4,055
|
|
|
3,893
|
|
Less: Mobile
revenue
|
(140)
|
|
|
—
|
|
Plus: Mobile
costs and Expenses
|
260
|
|
|
8
|
|
Cable Adjusted EBITDA
(a)
|
$
|
4,175
|
|
|
$
|
3,901
|
|
|
|
|
|
Net cash flows from
operating activities
|
$
|
2,686
|
|
|
$
|
2,699
|
|
Less: Purchases
of property, plant and equipment
|
(1,665)
|
|
|
(2,183)
|
|
Change in accrued
expenses related to capital expenditures
|
(376)
|
|
|
(565)
|
|
Free cash
flow
|
645
|
|
|
(49)
|
|
Plus: Mobile
net cash outflows from operating activities
|
203
|
|
|
8
|
|
Purchases of mobile property, plant and equipment
|
88
|
|
|
17
|
|
Cable free cash
flow
|
$
|
936
|
|
|
$
|
(24)
|
|
|
|
(a)
|
See page 1 of this
addendum for detail of the components included within Adjusted
EBITDA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The above schedule is
presented in order to reconcile Adjusted EBITDA, cable Adjusted
EBITDA, free cash flow and cable free cash flow, non-GAAP measures,
to the most directly comparable GAAP measures in accordance with
Section 401(b) of the Sarbanes-Oxley Act.
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED CAPITAL
EXPENDITURES
|
(dollars in
millions)
|
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
Customer premise
equipment (a)
|
$
|
565
|
|
|
$
|
934
|
|
Scalable
infrastructure (b)
|
297
|
|
|
486
|
|
Line extensions
(c)
|
321
|
|
|
291
|
|
Upgrade/rebuild
(d)
|
131
|
|
|
142
|
|
Support capital
(e)
|
351
|
|
|
330
|
|
Total
capital expenditures
|
$
|
1,665
|
|
|
$
|
2,183
|
|
|
|
|
|
Capital expenditures
included in total related to:
|
|
|
|
Commercial
services
|
$
|
305
|
|
|
$
|
283
|
|
All-digital
transition
|
$
|
—
|
|
|
$
|
186
|
|
Mobile
|
$
|
88
|
|
|
$
|
17
|
|
|
|
(a)
|
Customer premise
equipment includes costs incurred at the customer residence to
secure new customers and revenue generating units, including
customer installation costs and customer premise equipment (e.g.,
set-top boxes and cable modems).
|
(b)
|
Scalable
infrastructure includes costs, not related to customer premise
equipment, to secure growth of new customers and revenue generating
units, or provide service enhancements (e.g., headend
equipment).
|
(c)
|
Line extensions
include network costs associated with entering new service areas
(e.g., fiber/coaxial cable, amplifiers, electronic equipment,
make-ready and design engineering).
|
(d)
|
Upgrade/rebuild
includes costs to modify or replace existing fiber/coaxial cable
networks, including betterments.
|
(e)
|
Support capital
includes costs associated with the replacement or enhancement of
non-network assets due to technological and physical obsolescence
(e.g., non-network equipment, land, buildings and
vehicles).
|
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SOURCE Charter Communications, Inc.