Charter Announces Second Quarter 2020 Results
STAMFORD, Conn., July 31, 2020 /PRNewswire/ -- Charter Communications, Inc. (along with its subsidiaries, the "Company" or "Charter") today reported financial and operating results for the three and six months ended June 30, 2020.
Key highlights:
-- Second quarter total residential and SMB customer relationships(1)
increased by 755,000, compared to 203,000 during the second quarter of
2019. Second quarter total residential and SMB Internet customers(1)
increased by 850,000, compared to 258,000 during the second quarter of
2019.
-- Charter added 325,000 Spectrum Mobile(TM) lines in the second quarter,
and as of June 30, 2020, Charter served a total of 1.7 million mobile
lines.
-- Second quarter revenue of $11.7 billion grew by 3.1% year-over-year,
driven by residential revenue growth of 4.1%, mobile revenue growth of
96.1% and SMB revenue growth of 2.0%.
-- Second quarter Adjusted EBITDA(2) of $4.5 billion grew by 7.3%
year-over-year, while second quarter cable Adjusted EBITDA(2) of $4.6
billion grew by 6.7% year-over-year.
-- Net income attributable to Charter shareholders totaled $766 million in
the second quarter, compared to $314 million during the same period last
year.
-- Second quarter capital expenditures totaled $1.9 billion and included
$125 million of mobile-related capital expenditures.
-- Consolidated free cash flow(2) for the second quarter of 2020 totaled
$1.9 billion, compared to $1.1 billion in 2019. Cable free cash flow(2)
totaled $2.1 billion for the second quarter of 2020, versus $1.4 billion
in 2019.
-- During the second quarter, Charter purchased approximately 2.3 million
shares of Charter Class A common stock and Charter Communications
Holdings, LLC ("Charter Holdings") common units for approximately $1.2
billion.
"Our ability to grow our services this year for new and existing customers, is a testament to our operating strategy, the quality of our products and our significant investment in systems and people over the last several years," said Tom Rutledge, CEO and Chairman of Charter Communications, Inc. "We continue to perform in a difficult and disruptive environment, and all of us at Charter are proud of our work in serving the communities in which we operate."
1. Results include the impact of
COVID-19 related offers and
programs launched by Charter in
the first quarter of 2020. See
page 3 for additional
information.
2. 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
June 30, 2020 (a) June 30, 2019 (a) Y/Y Change
Footprint (b)
---
Estimated Passings 52,714 51,619 2.1
%
Penetration Statistics (c)
---
Total Customer Relationship Penetration of Estimated Passings 57.8 55.5
% % 2.3 ppts
Customer Relationships (d)
---
Residential 28,496 26,755 6.5
%
Small and Medium Business 1,980 1,902 4.1
%
Total Customer Relationships 30,476 28,657 6.3
%
Quarterly Net Additions (Losses)
---
Residential 751 164 357.5
%
Small and Medium Business 4 39 (90.5)
%
Total Customer Relationships 755 203 271.5
%
Residential
Primary Service Units ("PSUs")
---
Internet 26,313 24,244 8.5
%
Video 15,652 15,802 (0.9)
%
Voice 9,398 9,808 (4.2)
%
Quarterly Net Additions (Losses)
---
Internet 842 221 280.8
%
Video 102 (150) 167.7
%
Voice 38 (207) 118.5
%
Single Play (e) 12,552 11,354 10.5
%
Double Play (e) 9,021 7,709 17.0
%
Triple Play (e) 6,923 7,692 (10.0)
%
Single Play Penetration (f) 44.0 42.4
% % 1.6 ppts
Double Play Penetration (f) 31.7 28.8
% % 2.9 ppts
Triple Play Penetration (f) 24.3 28.8
% % (4.5) ppts
% Residential Non-Video Customer Relationships 45.1 40.9
% % 4.2 ppts
Monthly Residential Revenue per Residential Customer (g) $110.82 $112.20 (1.2)
%
Small and Medium Business
PSUs
---
Internet 1,783 1,701 4.8
%
Video 516 518 (0.4)
%
Voice 1,169 1,097 6.5
%
Quarterly Net Additions (Losses)
---
Internet 8 37 (79.6)
%
Video (8) 9 (197.5)
%
Voice 7 25 (71.7)
%
Monthly Small and Medium Business Revenue per Customer (h) $166.06 $170.42 (2.6)
%
Mobile Lines
Residential and Small and Medium Business Mobile Lines 1,697 518 227.8
%
Net Additions 325 208 56.3
%
Enterprise PSUs (i)
Enterprise PSUs 270 258 4.9
%
Net Additions 1 5 (75.3)
%
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.
C
ustomers and Net Additions on COVID-19 Offers
For the quarter ended June 30, 2020
(in thousands)
Remote Keep Seasonal Plan (c) Total
Education Americans
Offer (a) Connected (b)
Residential
Customer Relationships 160 208
n/a 368
Internet PSUs 160 202
n/a 362
Video PSUs 58 (d) 148
n/a 206
Voice PSUs 46 (d) 90
n/a 136
Mobile Lines 10 (d) 8
n/a 18
Quarterly Net Additions
Customer Relationships 41 207
n/a 248
Internet PSUs 41 201
n/a 242
Video PSUs 12 (d) 147
n/a 159
Voice PSUs 12 (d) 90
n/a 102
Mobile Lines 7 (d) 8
n/a 15
Small and Medium Business
Customer Relationships
n/a 14 13 27
Internet PSUs
n/a 13 11 24
Video PSUs
n/a 6 13 19
Voice PSUs
n/a 11 8 19
Mobile Lines
n/a
Quarterly Net Additions
Customer Relationships
n/a 14 8 22
Internet PSUs
n/a 13 7 20
Video PSUs
n/a 6 11 17
Voice PSUs
n/a 11 5 16
Mobile Lines
n/a
Enterprise PSUs
Enterprise PSUs
n/a 1 9 10
(a) The Remote Education Offer ("REO")
represents residential customers
receiving free Internet service by
participating in Charter's free 60-
day Internet offer available to
households with K-12 and/or
college students or educators who
were not Spectrum Internet
customers. This offer for new
customers ended on June 30, 2020.
These residential customers are
generally eligible to purchase
additional products and services
(i.e. video, voice and mobile) at
current promotional rates. Of the
448,000 Internet customers who were
added as part of the REO through
June 30, 2020 (of which 119,000
were added in March), 160,000
remained within their 60-day free
period with 288,000 having rolled
off the promotional period as of
June 30, 2020. Nearly 90% of
cumulative connects on the REO
remained Internet customers as of
July 27, 2020.
(b) As part of our March 2020 pledge to
the FCC which we extended through
June 30, Keep Americans Connected
("KAC") represents customers who
requested to not be disconnected
from service due to COVID-19
related payment challenges and
would have been disconnected under
our normal collection policies
during the pledge period.
Approximately 600,000 residential
customers and 100,000 SMB customers
had requested protection from
disconnection, of which at the peak
of the program, 208,000 and 14,000,
respectively, would have been
disconnected under our normal
collection policies. Approximately
30% of the KAC customer bills were
current, and over 60% were making
partial or full payments. In an
effort to assist these COVID-19
impacted customers with overdue
balances, Charter waived $76
million of residential, $6 million
of SMB and $3 million of mobile
receivables, each of which were
recorded as a reduction to revenue
in the second quarter. These
customers no longer have an overdue
balance and will be subject to
Charter's standard collection
practices going forward.
(c) Represents small and medium
businesses and Enterprise
hospitality customers who have
requested a reduced level of
service and now pay a reduced price
for their service due to temporary
business closure or because these
customers have reduced their
service offering to their own
customers.
(d) Customers who are receiving free
Internet Service as part of the REO
who have subscribed to products in
addition to Spectrum Internet
(i.e., video, voice, mobile) during
the 60-day Free Internet Offer.
Billings are not deferred for these
additional services.
To assist communities impacted by the COVID-19 pandemic, in March, Charter launched its Remote Education Offer providing free Spectrum Internet(®) for 60 days to households with K-12 and/or college students as well as educators that did not already have Spectrum Internet service. This offer for new customers ended on June 30, 2020. The majority of customers that participated in the Remote Education Offer chose to be provided with Internet service at flagship speeds (i.e., 200 Mbps or 100 Mbps). Furthermore, as of June 30, 2020, nearly 50% of participants in the Remote Education Offer chose to subscribe to additional services (i.e., video, voice, mobile) from Charter, and were billed for these additional services. Charter also participated in the Federal Communication Commission's ("FCC") Keep Americans Connected Pledge through June 30, 2020, pausing disconnects and collection efforts for residential and SMB customers impacted by COVID-19. In an effort to assist these COVID-19 impacted customers with overdue balances, Charter waived $76 million of residential, $6 million of SMB and $3 million of mobile receivables which were recorded as reductions to revenue in the second quarter of 2020. As a result, these customers no longer have overdue balances. Finally, Charter provided a seasonal plan at reduced rates to SMB and Enterprise customers that have temporarily closed or because these customers have reduced their service offerings to their own customers. The following discussion includes the impact of Charter's COVID-19 related offers and programs, which were generally provided up to June 30, 2020, on customer results and data. See page 3 for the total number of customers participating in these COVID-19 related offers and programs as of June 30, 2020.
During the second quarter of 2020, Charter's residential customer relationships grew by 751,000, while second quarter 2019 residential customer relationships grew by 164,000. As of June 30, 2020, Charter had 28.5 million residential customer relationships, with year-over-year growth of 1.7 million, or 6.5%.
Charter added 842,000 residential Internet customers in the second quarter of 2020, versus second quarter 2019 residential Internet customer net additions of 221,000. As of June 30, 2020, Charter had 26.3 million residential Internet customers, with over 85% subscribing to tiers that provided 100 Mbps or more of speed. Currently, 200 Mbps is the slowest speed offered to new Spectrum Internet customers in approximately 60% of Charter's footprint, with 100 Mbps the slowest speed offered in the remaining 40% of its footprint.
Residential video customers increased by 102,000 in the second quarter of 2020, while second quarter 2019 residential video customers decreased by 150,000. As of June 30, 2020, Charter had 15.7 million residential video customers.
During the second quarter of 2020, residential wireline voice customers increased by 38,000, while second quarter 2019 voice customers declined by 207,000. As of June 30, 2020, Charter had 9.4 million residential wireline voice customers.
Second quarter 2020 residential revenue per residential customer (excluding mobile) totaled $110.82, and declined by 1.2% compared to the prior year period, given the waiver of overdue customer balances for customers offered protection following Charter's participation in the FCC's Keep Americans Connected Pledge, Charter's Remote Education Offer, a higher percentage of non-video customers and a higher mix of lower priced video packages within Charter's video customer base, partly offset by promotional rate step-ups and rate adjustments.
During the second quarter of 2020, Charter added 325,000 mobile lines, and as of June 30, 2020, Charter served a total of 1.7 million mobile lines. Spectrum Mobile is available to all new and existing Spectrum Internet customers and runs on America's most awarded LTE network 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 including applicable fees and taxes. Earlier this year, Spectrum Mobile launched 5G service. Customers with a $45/monthly unlimited data plan can use 5G phones to access 5G service at no additional cost in select cities nationwide.
SMB customer relationships grew by 4,000 during the second quarter of 2020, compared to growth of 39,000 during the second quarter of 2019. As of June 30, 2020, Charter had 2.0 million SMB customer relationships, with year-over-year growth of 4.1%. Enterprise PSUs grew by 1,000 during the second quarter of 2020 compared to growth of 5,000 during the second quarter of 2019. As of June 30, 2020, Charter had 270,000 enterprise PSUs, with growth of 4.9% year-over-year.
Second 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 June 30,
2020 2019 % Change
REVENUES:
Internet $
4,530 $
4,103 10.4
%
Video 4,371 4,391 (0.4)
%
Voice 451 489 (7.7)
%
Residential revenue 9,352 8,983 4.1
%
Small and medium business 983 963 2.0
%
Enterprise 606 652 (7.1)
%
Commercial revenue 1,589 1,615 (1.7)
%
Advertising sales 249 395 (37.0)
%
Mobile 310 158 96.1
%
Other 196 196 %
Total Revenue 11,696 11,347 3.1
%
COSTS AND EXPENSES:
Cable operating costs and expenses 6,794 6,885 (1.3)
%
Mobile operating costs and expenses 413 277 48.6
%
Total operating costs and expenses 7,207 7,162 0.6
%
Adjusted EBITDA $
4,489 $
4,185 7.3
%
Adjusted EBITDA margin 38.4 36.9
% %
Cable Adjusted EBITDA $
4,592 $
4,304 6.7
%
Cable Adjusted EBITDA margin 40.3 38.5
% %
Capital Expenditures $
1,877 $
1,597
% Total Revenue 16.1 14.1
% %
Cable Capital Expenditures $
1,752 $
1,504
% Total Cable Revenue 15.4 13.4
% %
Net income attributable to Charter shareholders $
766 $
314
Earnings per common share attributable to Charter shareholders:
Basic $
3.72 $
1.41
Diluted $
3.63 $
1.39
Net cash flows from operating activities $
3,529 $
2,761
Free cash flow $
1,866 $
1,112
Cable free cash flow $
2,099 $
1,409
Revenues
Second quarter revenue increased by 3.1% year-over-year to $11.7 billion, driven by growth in Internet, mobile and SMB. Excluding mobile, revenue grew by 1.8% year-over-year.
Residential revenue totaled $9.4 billion in the second quarter, an increase of 4.1% year-over-year, despite $76 million of customer receivables which Charter has waived to address past due balances for customers offered collection protection following Charter's participation in the FCC's Keep Americans Connected Pledge.
Internet revenue grew by 10.4% compared to the year-ago quarter, to $4.5 billion, driven by growth in Internet customers during the last year, promotional rolloff and rate adjustments, partly offset by the aforementioned waiver of overdue customer balances.
Video revenue totaled $4.4 billion in the second quarter, a decrease of 0.4% compared to the prior year period, driven by a decline in video customers during the last year, a higher mix of lower priced video packages within Charter's video customer base and the aforementioned waiver of overdue customer balances, partly offset by rate adjustments and promotional rolloff.
Voice revenue totaled $451 million in the second quarter, a decrease of 7.7% compared to the second quarter of 2019, driven by a decline in wireline voice customers over the last twelve months and value-based pricing.
Commercial revenue declined to $1.6 billion, a decrease of 1.7% over the prior year period, driven by a decline in enterprise revenue of 7.1%, partly offset by SMB revenue growth of 2.0%. SMB revenue in the second quarter was negatively impacted by $17 million of COVID-19 related seasonal plans and receivables waived to address past due balances for customers offered collection protection following Charter's participation in the FCC's Keep Americans Connected Pledge. Excluding one-time COVID-19 related impacts, SMB revenue grew by 3.8% year-over-year reflecting lower SMB unit growth during the pandemic. Second quarter enterprise revenue was negatively impacted by Charter's sale of Navisite in the third quarter of 2019 and $18 million of COVID-19 related hospitality customer credits. Excluding Navisite revenue from the second quarter of 2019 and one-time COVID-19 related impacts, commercial and enterprise revenue grew by 2.8% and 1.3% year-over-year, respectively.
Second quarter advertising sales revenue of $249 million decreased by 37.0% compared to the year-ago quarter, driven by lower local and national sales due to the COVID-19 pandemic. Excluding political revenue in both periods, advertising sales revenue declined by 40.8% year-over-year.
Second quarter mobile revenue totaled $310 million, an increase of 96.1% year-over-year.
Other revenue totaled $196 million in the second quarter, in-line with the prior year.
Operating Costs and Expenses
Second quarter total operating costs and expenses increased by $45 million, or 0.6% year-over-year. Excluding mobile costs in both periods, operating costs and expenses decreased by 1.3% compared to the year-ago quarter.
Second quarter programming costs increased by $46 million, or 1.6% as compared to the second quarter of 2019, reflecting contractual programming increases and renewals, partly offset by lower video customers and a higher mix of lower cost video packages within Charter's video customer base.
Regulatory, connectivity and produced content expenses decreased by $109 million, or 18.3% year-over-year, primarily driven by delayed sports rights costs.
Costs to service customers increased by $81 million, or 4.6% year-over-year, despite year-over-year residential and SMB customer growth of 6.3%. In addition to customer growth and record transaction volume for new sales and service, the year-over-year increase in costs to service customers was driven by previously announced accelerated wage benefits for hourly field operations and call center employees and COVID-19 related flex time, partly offset by lower medical costs and a one-time payroll tax credit. While bad debt increased 5.0% year-over-year, bad debt in the second quarter benefited from the revenue reduction for Keep Americans Connected customers and better collections from other customers as a result of Federal stimulus under the CARES Act.
Marketing expenses decreased by $49 million, or 6.3% year-over-year, primarily driven by better media placement rates and a one-time payroll tax credit.
Other expenses decreased by $60 million, or 6.6% as compared to the second quarter of 2019 primarily driven by lower advertising sales expense, enterprise costs from the sale of Navisite, employee travel expense and insurance costs.
Second quarter mobile costs totaled $413 million, an increase of 48.6% year-over-year, and were comprised of device costs, customer acquisition costs, and service and operating costs.
Adjusted EBITDA
Second quarter Adjusted EBITDA of $4.5 billion grew by 7.3% year-over-year, reflecting growth in revenue and operating expenses of 3.1% and 0.6%, respectively. Second quarter cable Adjusted EBITDA grew by 6.7% year-over-year reflecting growth in cable revenue of 1.8% and a decline in cable operating expenses of 1.3%.
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled $766 million in the second quarter of 2020, compared to $314 million in the second quarter of 2019. The year-over-year increase in net income attributable to Charter shareholders was primarily driven by higher Adjusted EBITDA, a non-cash gain on financial instruments in the current year period versus a loss in the prior year period and lower depreciation and amortization, partly offset by higher tax expense.
Net income per basic common share attributable to Charter shareholders totaled $3.72 in the second quarter of 2020 compared to $1.41 during the same period last year. The increase was primarily the result of the factors described above in addition to a 7.5% decrease in weighted average common shares outstanding versus the prior year period.
Capital Expenditures
Property, plant and equipment expenditures totaled $1.9 billion in the second quarter of 2020, compared to $1.6 billion during the second quarter of 2019, primarily driven by increases in scalable infrastructure, line extensions and Internet CPE. The year-over-year increase in scalable infrastructure spending was primarily due to core network enhancements and node splits to maintain excess network capacity with growing customers and traffic. The increase in line extensions was driven by continued network expansion, including to rural areas. The increase in Internet CPE spending was due to higher Internet customer growth. Second quarter capital expenditures included $125 million of mobile costs, most of which are included in support capital.
Charter currently expects 2020 cable capital expenditures to decline as a percentage of cable revenue versus 2019.
Cash Flow and Free Cash Flow
During the second quarter of 2020, net cash flows from operating activities totaled $3.5 billion, compared to $2.8 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 and a favorable change in working capital.
Consolidated free cash flow for the second quarter of 2020 totaled $1.9 billion, compared to $1.1 billion during the same period last year. Cable free cash flow for the second quarter of 2020 totaled $2.1 billion, compared to $1.4 billion during the same period last year. The year-over-year increases in consolidated free cash flow and cable free cash flow were driven by an increase in net cash flows from operating activities.
Liquidity & Financing
As of June 30, 2020, total principal amount of debt was $77.8 billion and Charter's credit facilities provided approximately $4.7 billion of additional liquidity in excess of Charter's $2.1 billion cash position.
In April 2020, Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. issued $1.6 billion of 2.800% senior secured notes due 2031 and $1.4 billion of 3.700% senior secured notes due 2051. The proceeds were used to pay related fees and expenses and for general corporate purposes.
In June 2020, Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. redeemed all of their 3.579% senior secured notes due July 2020.
In July 2020, CCO Holdings, LLC ("CCO Holdings") and CCO Holdings Capital Corp. issued $3.0 billion of 4.250% senior unsecured notes due 2031. The proceeds will be used to pay related fees and expenses and for general corporate purposes, including repaying certain indebtedness, including all of CCO Holdings' 5.875% senior notes due 2024, as well as funding buybacks of Charter Class A common stock and/or Charter Holdings common units.
Share Repurchases
During the three months ended June 30, 2020, Charter purchased approximately 2.3 million shares of Charter Class A common stock and Charter Holdings common units for approximately $1.2 billion.
Conference Call
Charter will host a conference call on Friday, July 31, 2020 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 5936339.
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 August 14, 2020. The conference ID code for the replay is 5936339.
Additional Information Available on Website
The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2020, 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, 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, loss on extinguishment of debt, (gain) loss on financial instruments, net, other pension (benefits) costs, net, 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 $308 million and $619 million for the three and six months ended June 30, 2020, respectively, and $299 million and $599 million for the three and six months ended June 30, 2019, 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 sell the handset or tablet to customers pursuant to equipment installment plans.
About Charter
Charter Communications, Inc. (NASDAQ:CHTR) is a leading broadband connectivity company and cable operator serving more than 30 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, sports and high-quality original programming to its customers through Spectrum Networks and Spectrum Originals. 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," "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:
-- the impact of the COVID-19 pandemic on the economy, our customers, our
vendors, local, state and federal governmental responses to the pandemic
and our businesses generally;
-- 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;
-- 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 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, including
the impacts of the COVID-19 pandemic to unemployment levels and the
level of activity in the housing sector;
-- 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 June 30,
Six Months Ended June 30,
2020 2019 % Change 2020 2019 % Change
REVENUES:
Internet $
4,530 $
4,103 10.4 $
8,937 $
8,127 10.0
% %
Video 4,371 4,391 (0.4)
%
% 8,793 8,775 0.2
Voice 451 489 (7.7) 908 993 (8.6)
% %
Residential revenue 9,352 8,983 4.1 18,638 17,895 4.2
% %
Small and medium business 983 963 2.0 1,979 1,908 3.7
% %
Enterprise 606 652 (7.1) 1,228 1,295 (5.2)
% %
Commercial revenue 1,589 1,615 (1.7)
%
% 3,207 3,203 0.1
Advertising sales 249 395 (37.0) 614 740 (17.1)
% %
Mobile 310 158 96.1 568 298 90.9
% %
Other 196 196 % 407 417 (2.3)
%
Total Revenue 11,696 11,347 3.1 23,434 22,553 3.9
% %
COSTS AND EXPENSES:
Programming 2,873 2,827 1.6 5,765 5,692 1.3
% %
Regulatory, connectivity and produced 488 597 (18.3) 1,039 1,158 (10.3)
% %
content
Costs to service customers 1,848 1,767 4.6 3,696 3,589 3.0
% %
Marketing 719 768 (6.3) 1,485 1,503 (1.2)
% %
Mobile 413 277 48.6 787 537 46.6
% %
Other expense 866 926 (6.6) 1,777 1,834 (3.1)
% %
Total operating costs and expenses 7,207 7,162 0.6 14,549 14,313 1.7
% %
(exclusive of items shown separately
below)
Adjusted EBITDA 4,489 4,185 7.3 8,885 8,240 7.8
% %
Adjusted EBITDA margin 38.4 36.9 37.9 36.5
%
%
%
%
Depreciation and amortization 2,428 2,500 4,925 5,050
Stock compensation expense 90 82 180 167
Other operating expenses, net 2 62 9 57
Income from operations 1,969 1,541 3,771 2,966
OTHER INCOME (EXPENSES):
Interest expense, net (957) (945) (1,937) (1,870)
Loss on extinguishment of debt (36) (63)
Gain (loss) on financial instruments, net 64 (119) (254) (82)
Other pension benefits, net 11 9 21 18
Other expense, net (9) (16) (126)
(927) (1,071) (2,233) (2,060)
Income before income taxes 1,042 470 1,538 906
Income tax expense (166) (84) (195) (203)
Consolidated net income 876 386 1,343 703
Less: Net income attributable to noncontrolling (110) (72) (181) (136)
interests
Net income attributable to Charter $
766 $
314 $
1,162 $
567
shareholders
EARNINGS PER COMMON SHARE
ATTRIBUTABLE TO CHARTER
SHAREHOLDERS:
Basic $
3.72 $
1.41 $
5.62 $
2.54
Diluted $
3.63 $
1.39 $
5.48 $
2.50
Weighted average common shares 205,777,438 222,392,274 206,804,371 223,505,016
outstanding, basic
Weighted average common shares 210,906,946 225,942,172 212,158,218 226,889,745
outstanding, diluted
Adjusted EBITDA is a non-GAAP term. See page 8 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.
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions)
June 30, December 31,
2020 2019
ASSETS (unaudited)
CURRENT ASSETS:
Cash and cash equivalents $
2,097 $
3,483
Accounts receivable, net 1,994 2,227
Prepaid expenses and other current assets 674 761
Total current assets 4,765 6,471
RESTRICTED CASH 5 66
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net 34,074 34,591
Customer relationships, net 6,486 7,453
Franchises 67,322 67,322
Goodwill 29,554 29,554
Total investment in cable properties, net 137,436 138,920
OTHER NONCURRENT ASSETS 2,930 2,731
Total assets $
145,136 $
148,188
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $
8,436 $
8,885
Current portion of long-term debt 706 3,500
Total current liabilities 9,142 12,385
LONG-TERM DEBT 77,663 75,578
DEFERRED INCOME TAXES 17,789 17,711
OTHER LONG-TERM LIABILITIES 4,141 3,703
SHAREHOLDERS' EQUITY:
Controlling interest 29,356 31,445
Noncontrolling interests 7,045 7,366
Total shareholders' equity 36,401 38,811
Total liabilities and shareholders' equity $
145,136 $
148,188
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income $
876 $
386 $
1,343 $
703
Adjustments to reconcile consolidated net income to net cash flows
from operating activities:
Depreciation and amortization 2,428 2,500 4,925 5,050
Stock compensation expense 90 82 180 167
Noncash interest income, net (9) (17) (21) (72)
Other pension benefits, net (11) (9) (21) (18)
Loss on extinguishment of debt 36 63
(Gain) loss on financial instruments, net (64) 119 254 82
Deferred income taxes 115 56 101 137
Other, net 3 53 (17) 151
Changes in operating assets and liabilities, net of effects from
acquisitions and dispositions:
Accounts receivable 97 (492) 233 (337)
Prepaid expenses and other assets (60) 124 (164) (176)
Accounts payable, accrued liabilities and other 28 (41) (127) (240)
Net cash flows from operating activities 3,529 2,761 6,749 5,447
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (1,877) (1,597) (3,338) (3,262)
Change in accrued expenses related to capital expenditures 214 (52) (174) (428)
Real estate investments through variable interest entities (43) (25) (81) (64)
Other, net (45) 8 (8) 8
Net cash flows from investing activities (1,751) (1,666) (3,601) (3,746)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt 2,983 3,830 7,322 10,714
Repayments of long-term debt (4,303) (4,551) (7,892) (10,123)
Payments for debt issuance costs (21) (7) (62) (32)
Issuance of equity - 23
Purchase of treasury stock (1,155) (861) (3,507) (1,801)
Proceeds from exercise of stock options 28 37 121 81
Purchase of noncontrolling interest (125) (161) (518) (254)
Distributions to noncontrolling interest (38) (39) (77) (78)
Borrowings for real estate investments through variable interest entities 24 24
Distributions to variable interest entities noncontrolling interest (4) (4)
Other, net (1) (123) (25) (127)
Net cash flows from financing activities (2,612) (1,875) (4,595) (1,620)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND (834) (780) (1,447) 81
RESTRICTED CASH
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of 2,936 1,626 3,549 765
period
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $
2,102 $
846 $
2,102 $
846
CASH PAID FOR INTEREST $
935 $
1,051 $
1,985 $
2,017
CASH PAID FOR TAXES $
31 $
39 $
50 $
43
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED SUMMARY OF OPERATING STATISTICS
(in thousands, except per customer and penetration data)
Approximate as of
June 30, 2020 March 31, 2020 December 31, June 30, 2019
(a) (a) 2019 (a) (a)
Footprint (b)
---
Estimated Passings 52,714 52,418 52,154 51,619
Penetration Statistics (c)
---
Total Customer Relationship Penetration of Estimated Passings 57.8 56.7 56.1 55.5
% % % %
Customer Relationships (d)
---
Residential 28,496 27,745 27,277 26,755
Small and Medium Business 1,980 1,976 1,958 1,902
Total Customer Relationships 30,476 29,721 29,235 28,657
Quarterly Net Additions (Losses)
---
Residential 751 468 240 164
Small and Medium Business 4 18 28 39
Total Customer Relationships 755 486 268 203
Residential
Primary Service Units ("PSUs")
---
Internet 26,313 25,471 24,908 24,244
Video 15,652 15,550 15,620 15,802
Voice 9,398 9,360 9,443 9,808
Quarterly Net Additions (Losses)
---
Internet 842 563 313 221
Video 102 (70) (105) (150)
Voice 38 (83) (152) (207)
Single Play (e) 12,552 12,099 11,741 11,354
Double Play (e) 9,021 8,655 8,377 7,709
Triple Play (e) 6,923 6,991 7,159 7,692
Single Play Penetration (f) 44.0 43.6 43.0 42.4
% % % %
Double Play Penetration (f) 31.7 31.2 30.7 28.8
% % % %
Triple Play Penetration (f) 24.3 25.2 26.2 28.8
% % % %
% Residential Non-Video Customer Relationships 45.1 44.0 42.7 40.9
% % % %
Monthly Residential Revenue per Residential Customer (g) $
110.82 $
112.73 $
113.79 $
112.20
Small and Medium Business
PSUs
---
Internet 1,783 1,775 1,756 1,701
Video 516 524 524 518
Voice 1,169 1,162 1,144 1,097
Quarterly Net Additions (Losses)
---
Internet 8 19 26 37
Video (8) 4 9
Voice 7 18 24 25
Monthly Small and Medium Business Revenue per Customer (h) $
166.06 $
168.83 $
169.06 $
170.42
Mobile Lines
Residential and Small and Medium Business Mobile Lines 1,697 1,372 1,082 518
Net Additions 325 290 288 208
Enterprise PSUs (i)
Enterprise PSUs 270 269 267 258
Net Additions 1 2 3 5
(a) We calculate the aging of customer
accounts based on the monthly
billing cycle for each account. On
that basis, at June 30, 2020, March
31, 2020, December 31, 2019 and June
30, 2019, customers included
approximately 124,500, 140,800,
154,200 and 152,900 customers,
respectively, whose accounts were
over 60 days past due, approximately
18,400, 12,500, 13,500 and 13,800
customers, respectively, whose
accounts were over 90 days past due
and approximately 10,400, 8,200,
10,000 and 15,800 customers,
respectively, whose accounts were
over 120 days past due. As detailed
on page 6, our customer counts
include those customers who
connected as part of our Remote
Education Offer and those customers
who we have not disconnected in our
normal timelines associated with our
Keep Americans Connected Pledge.
(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. Passings in prior
periods have been updated to reflect
standardization of definitions and
presentation among legacy companies.
(c) Penetration represents residential
and small and medium business
customers as a percentage of
estimated passings. Penetration
excludes mobile-only customers.
(d) Customer relationships include the
number of customers that receive one
or more levels of service,
encompassing Internet, video and
voice services, without regard to
which service(s) such customers
receive. Customers who reside in
residential multiple dwelling units
("MDUs") and that are billed under
bulk contracts are counted based on
the number of billed units within
each bulk MDU. Total customer
relationships exclude enterprise and
mobile-only customer relationships.
(e) Single play, double play and triple
play customers represent customers
that subscribe to one, two or three
of our cable service offerings,
respectively, excluding mobile.
(f) Single play, double play and triple
play penetration represents the
number of residential single play,
double play and triple play cable
customers, respectively, as a
percentage of residential customer
relationships, excluding mobile.
(g) Monthly residential revenue per
residential customer is calculated
as total residential Internet, video
and voice quarterly revenue divided
by three divided by average
residential customer relationships
during the respective quarter.
Monthly residential revenue per
residential customers excludes
mobile revenue and customers.
(h) Monthly small and medium business
revenue per small and medium
business 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.
Monthly small and medium business
revenue per small and medium
customer excludes mobile revenue and
customers.
(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 CUSTOMERS AND NET ADDITIONS ON COVID-19 OFFERS
FOR THE QUARTER ENDED JUNE 30, 2020
(in thousands)
Remote Keep Seasonal Plan (c) Total
Education Americans
Offer (a) Connected (b)
Residential
Customer Relationships 160 208
n/a 368
Internet PSUs 160 202
n/a 362
Video PSUs 58 (d) 148
n/a 206
Voice PSUs 46 (d) 90
n/a 136
Mobile Lines 10 (d) 8
n/a 18
Quarterly Net Additions
Customer Relationships 41 207
n/a 248
Internet PSUs 41 201
n/a 242
Video PSUs 12 (d) 147
n/a 159
Voice PSUs 12 (d) 90
n/a 102
Mobile Lines 7 (d) 8
n/a 15
Small and Medium Business
Customer Relationships
n/a 14 13 27
Internet PSUs
n/a 13 11 24
Video PSUs
n/a 6 13 19
Voice PSUs
n/a 11 8 19
Mobile Lines
n/a
Quarterly Net Additions
Customer Relationships
n/a 14 8 22
Internet PSUs
n/a 13 7 20
Video PSUs
n/a 6 11 17
Voice PSUs
n/a 11 5 16
Mobile Lines
n/a
Residential and Small and Medium Business
Customer Relationships 160 222 13 395
Internet PSUs 160 215 11 386
Video PSUs 58 (d) 154 13 225
Voice PSUs 46 (d) 101 8 155
Mobile Lines 10 (d) 8 18
Quarterly Net Additions
Customer Relationships 41 221 8 270
Internet PSUs 41 214 7 262
Video PSUs 12 (d) 153 11 176
Voice PSUs 12 (d) 101 5 118
Mobile Lines 7 (d) 8 15
Enterprise PSUs
Enterprise PSUs
n/a 1 9 10
(a) The Remote Education Offer ("REO")
represents residential customers
receiving free Internet service by
participating in Charter's free 60-
day Internet offer available to
households with K-12 and/or
college students or educators who
were not Spectrum Internet
customers. This offer for new
customers ended on June 30, 2020.
These residential customers are
generally eligible to purchase
additional products and services
(i.e. video, voice and mobile) at
current promotional rates. Of the
448,000 Internet customers who were
added as part of the REO through
June 30, 2020 (of which 119,000
were added in March), 160,000
remained within their 60-day free
period with 288,000 having rolled
off the promotional period as of
June 30, 2020. Nearly 90% of
cumulative connects on the REO
remained Internet customers as of
July 27, 2020.
(b) As part of our March 2020 pledge to
the FCC which we extended through
June 30, Keep Americans Connected
("KAC") represents customers who
requested to not be disconnected
from service due to COVID-19
related payment challenges and
would have been disconnected under
our normal collection policies
during the pledge period.
Approximately 600,000 residential
customers and 100,000 SMB customers
had requested protection from
disconnection, of which at the peak
of the program, 208,000 and 14,000,
respectively, would have been
disconnected under our normal
collection policies. Approximately
30% of the KAC customer bills were
current, and over 60% were making
partial or full payments. In an
effort to assist these COVID-19
impacted customers with overdue
balances, Charter waived $76
million of residential, $6 million
of SMB and $3 million of mobile
receivables, each of which were
recorded as a reduction to revenue
in the second quarter. These
customers no longer have an overdue
balance and will be subject to
Charter's standard collection
practices going forward.
(c) Represents small and medium
businesses and Enterprise
hospitality customers who have
requested a reduced level of
service and now pay a reduced price
for their service due to temporary
business closure or because these
customers have reduced their
service offering to their own
customers.
(d) Customers who are receiving free
Internet Service as part of the REO
who have subscribed to products in
addition to Spectrum Internet
(i.e., video, voice, mobile) during
the 60-day Free Internet Offer.
Billings are not deferred for these
additional services.
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
(dollars in millions)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net income attributable to Charter shareholders $
766 $
314 $
1,162 $
567
Plus: Net income attributable to noncontrolling interest 110 72 181 136
Interest expense, net 957 945 1,937 1,870
Income tax expense 166 84 195 203
Depreciation and amortization 2,428 2,500 4,925 5,050
Stock compensation expense 90 82 180 167
Loss on extinguishment of debt 36 63
(Gain) loss on financial instruments, net (64) 119 254 82
Other pension benefits, net (11) (9) (21) (18)
Other, net 11 78 9 183
Adjusted EBITDA (a) 4,489 4,185 8,885 8,240
Less: Mobile revenue (310) (158) (568) (298)
Plus: Mobile costs and expenses 413 277 787 537
Cable Adjusted EBITDA $
4,592 $
4,304 $
9,104 $
8,479
Net cash flows from operating activities $
3,529 $
2,761 $
6,749 $
5,447
Less: Purchases of property, plant and equipment (1,877) (1,597) (3,338) (3,262)
Change in accrued expenses related to capital expenditures 214 (52) (174) (428)
Free cash flow 1,866 1,112 3,237 1,757
Plus: Mobile net cash outflows from operating activities 108 204 281 407
Purchases of mobile property, plant and equipment 125 93 212 181
Cable free cash flow $
2,099 $
1,409 $
3,730 $
2,345
(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 June 30, Six Months Ended June 30,
2020 2019 2020 2019
Customer premise equipment (a) $
518 $
492 $
981 $
1,057
Scalable infrastructure (b) 385 223 555 520
Line extensions (c) 422 363 765 684
Upgrade/rebuild (d) 155 155 284 286
Support capital (e) 397 364 753 715
Total capital expenditures 1,877 1,597 3,338 3,262
Less: Mobile capital expenditures (125) (93) (212) (181)
Cable capital expenditures $
1,752 $
1,504 $
3,126 $
3,081
Capital expenditures included in total related to:
Commercial services $
323 $
324 $
584 $
629
(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.
