Charter Announces Third Quarter 2020 Results

STAMFORD, Conn., Oct. 30, 2020 /PRNewswire/ -- Charter Communications, Inc. (along with its subsidiaries, the "Company" or "Charter") today reported financial and operating results for the three and nine months ended September 30, 2020.

Key highlights:

    --  Third quarter total residential and small and medium business ("SMB")
        customer relationships increased by 457,000, compared to 310,000 during
        the third quarter of 2019. Over the last 12 months, total customer
        relationships grew by 6.8%.
    --  Third quarter total residential and SMB Internet customers increased by
        537,000, compared to 380,000 during the third quarter of 2019. Over the
        last 12 months, total Internet customers grew by 2.3 million, or 8.8%,
        to 28.6 million.
    --  Charter added 363,000 mobile lines in the third quarter, compared to
        276,000 during the third quarter of 2019. As of September 30, 2020,
        Charter served a total of 2.1 million mobile lines.
    --  Third quarter revenue of $12.0 billion grew by 5.1% year-over-year,
        driven by residential revenue growth of 4.0%, mobile revenue growth of
        91.8% and advertising revenue growth of 16.8%.
    --  Third quarter Adjusted EBITDA(1) of $4.6 billion grew by 13.6%
        year-over-year, while third quarter cable Adjusted EBITDA(1) of $4.7
        billion grew by 11.7% year-over-year.
    --  Net income attributable to Charter shareholders totaled $814 million in
        the third quarter, compared to $387 million during the same period last
        year.
    --  Third quarter capital expenditures totaled $2.0 billion and included
        $139 million of mobile-related capital expenditures.
    --  Consolidated free cash flow(1) in the third quarter of 2020 totaled $1.8
        billion, compared to $1.3 billion in 2019. Cable free cash flow(1)
        totaled $2.0 billion in the third quarter of 2020, versus $1.5 billion
        in 2019.
    --  During the third quarter, Charter purchased approximately 6.1 million
        shares of Charter Class A common stock and Charter Communications
        Holdings, LLC ("Charter Holdings") common units for approximately $3.6
        billion.

"Our long-term strategy of growing customer relationships by delivering high-quality products and service remains on track," said Tom Rutledge, Chairman and CEO of Charter Communications, Inc. "We've added two million customer relationships in the past year and remain focused on executing a proven operating and investment strategy that works for customers, employees and the communities we serve, creating shareholder value for the long term."



            
              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



                                                                   September 30,                               September 30,        Y/Y Change
                                                          2020 (a)                                    2019 (a)



                     Footprint (b)

    ---

        Estimated Passings                                                53,022                                             51,940                               2.1
                                                                                                                                                                  %




                     Customer Relationships (c)

    ---


       Residential                                                       28,912                                             27,037                               6.9
                                                                                                                                                                  %



       SMB                                                                2,021                                              1,930                               4.7
                                                                                                                                                                  %



        Total Customer                                                    30,933                                             28,967                               6.8
         Relationships                                                                                                                                            %






       Residential                                                          416                                                282                              47.9
                                                                                                                                                                  %



       SMB                                                                   41                                                 28                              46.0
                                                                                                                                                                  %



        Total Customer
         Relationships Net                                                                                                                                        %
         Additions                                                           457                                                310                              47.7





        Total Customer Relationship
         Penetration of Estimated                                              %                                                 %
         Passings (d)                                                       58.3                                               55.8                          2.5 ppts




        Monthly Residential Revenue
         per Residential Customer                                                                                                                                          %
         (e)                                                                     $
      109.03                                                    $
     112.00                 (2.7)


        Monthly SMB Revenue per SMB                                              $
      164.77                                                    $
     169.44                 (2.8)
         Customer (f)                                                                                                                                                      %




                     Residential Customer
                      Relationships Penetration

    ---

        Single Play Penetration (g)                                         44.2                                               42.7
                                                                               %                                                 %                         1.5 ppts


        Double Play Penetration (g)                                         32.3                                               29.9
                                                                               %                                                 %                         2.4 ppts


        Triple Play Penetration (g)                                         23.5                                               27.3
                                                                               %                                                 %                       (3.8) ppts




        % Residential Non-Video                                             45.7                                               41.8
         Customer Relationships                                                %                                                 %                         3.9 ppts




                     Internet

    ---


       Residential                                                       26,807                                             24,595                               9.0
                                                                                                                                                                  %



       SMB                                                                1,826                                              1,730                               5.5
                                                                                                                                                                  %



        Total Internet Customers                                          28,633                                             26,325                               8.8
                                                                                                                                                                  %






       Residential                                                          494                                                351                              40.3
                                                                                                                                                                  %



       SMB                                                                   43                                                 29                              47.5
                                                                                                                                                                  %



        Total Internet Net                                                   537                                                380                              41.3
         Additions                                                                                                                                                %





                     Video

    ---


       Residential                                                       15,705                                             15,725                             (0.1)
                                                                                                                                                                  %



       SMB                                                                  530                                                520                               1.9
                                                                                                                                                                  %



        Total Video Customers                                             16,235                                             16,245                             (0.1)
                                                                                                                                                                  %






       Residential                                                           53                                               (77)                            169.4
                                                                                                                                                                  %



       SMB                                                                   14                                                  2                             410.1
                                                                                                                                                                  %



        Total Video Net Additions                                             67                                               (75)                            189.3
                                                                                                                                                                  %





                     Voice

    ---


       Residential                                                        9,335                                              9,595                             (2.7)
                                                                                                                                                                  %



       SMB                                                                1,207                                              1,120                               7.8
                                                                                                                                                                  %



        Total Voice Customers                                             10,542                                             10,715                             (1.6)
                                                                                                                                                                  %






       Residential                                                         (63)                                             (213)                             70.1
                                                                                                                                                                  %



       SMB                                                                   38                                                 23                              68.7
                                                                                                                                                                  %



        Total Voice Net Additions                                           (25)                                             (190)                             86.8
                                                                                                                                                                  %





                     Mobile Lines

    ---


       Residential                                                        2,020                                                793                             154.6
                                                                                                                                                                  %



       SMB                                                                   40                                                  1                             
         NM



        Total Mobile Lines                                                 2,060                                                794                             159.5
                                                                                                                                                                  %






       Residential                                                          348                                                275                              26.5
                                                                                                                                                                  %



       SMB                                                                   15                                                  1                             
         NM



        Total Mobile Lines Net                                               363                                                276                              31.5
         Additions                                                                                                                                                %





                     Enterprise (h)

    ---

        Enterprise Primary Service                                           272                                                264                               3.1
         Unites ("PSUs")                                                                                                                                          %


        Enterprise Net Additions                                               2                                                  6                            (68.9)
                                                                                                                                                                  %



                                           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 third quarter of 2020, Charter's residential customer relationships grew by 416,000, while third quarter 2019 residential customer relationships grew by 282,000. As of September 30, 2020, Charter had 28.9 million residential customer relationships, with year-over-year growth of 1.9 million, or 6.9%.

Charter added 494,000 residential Internet customers in the third quarter of 2020, versus third quarter 2019 residential Internet customer net additions of 351,000. As of September 30, 2020, Charter had 26.8 million residential Internet customers, with over 85% subscribing to tiers that provided 100 Mbps or more of speed, and over 50% subscribing to tiers that provided 200 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 53,000 in the third quarter of 2020, while third quarter 2019 residential video customers decreased by 77,000. As of September 30, 2020, Charter had 15.7 million residential video customers.

During the third quarter of 2020, residential wireline voice customers declined by 63,000, while third quarter 2019 residential wireline voice customers declined by 213,000. As of September 30, 2020, Charter had 9.3 million residential wireline voice customers.

Third quarter 2020 residential revenue per residential customer (excluding mobile) totaled $109.03, and declined by 2.7% compared to the prior year period, driven by $218 million of estimated credits to be provided to Charter's video customers upon finalization of expected rebates from sports programming networks which result from fewer games broadcast during COVID-19. Excluding the planned credit to video customers, residential revenue per residential customer (excluding mobile) totaled $111.56, and declined 0.4% year-over-year given a higher percentage of non-video customers and a higher mix of lower priced video packages within Charter's video customer base, lower pay-per-view and video on demand revenue and lower installation revenue partly offset by promotional rate step-ups and rate adjustments.

SMB customer relationships grew by 41,000 during the third quarter of 2020, compared to growth of 28,000 during the third quarter of 2019. As of September 30, 2020, Charter had 2.0 million SMB customer relationships, with year-over-year growth of 4.7%. Enterprise PSUs grew by 2,000 during the third quarter of 2020 compared to growth of 6,000 during the third quarter of 2019. As of September 30, 2020, Charter had 272,000 enterprise PSUs, with growth of 3.1% year-over-year.

During the third quarter of 2020, Charter added 363,000 mobile lines, and as of September 30, 2020, Charter served a total of 2.1 million mobile lines. Spectrum Mobile(TM) 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", or "By the Gig." All plans include 4G and 5G access, with no added taxes, fees or contracts.

Third 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 September 30,



                                                                        2020                                2019                            % Change

                                                                                                                                               ---


     
                REVENUES:



     Internet                                                                 $
              4,722                                                     $
       4,195       12.5

                                                                                                                                                                       %



     Video                                                            4,221                                               4,359                                (3.2)

                                                                                                                                                                  %



     Voice                                                              449                                                 477                                (5.8)

                                                                                                                                                                  %




     Residential revenue                                              9,392                                               9,031                                  4.0

                                                                                                                                                                  %



     Small and medium business                                          988                                                 974                                  1.5

                                                                                                                                                                  %



     Enterprise                                                         617                                                 644                                (4.3)

                                                                                                                                                                  %




     Commercial revenue                                               1,605                                               1,618                                (0.8)

                                                                                                                                                                  %



     Advertising sales                                                  460                                                 394                                 16.8

                                                                                                                                                                  %



     Mobile                                                             368                                                 192                                 91.8

                                                                                                                                                                  %



     Other                                                              214                                                 215                                (0.7)

                                                                                                                                                                  %




     Total Revenue                                                   12,039                                              11,450                                  5.1

                                                                                                                                                                  %






     
                COSTS AND EXPENSES:



     Cable operating costs and expenses                               6,944                                               7,027                                (1.2)

                                                                                                                                                                  %



     Mobile operating costs and expenses                                456                                                 337                                 35.2

                                                                                                                                                                  %




     Total operating costs and expenses                               7,400                                               7,364                                  0.5

                                                                                                                                                                  %






     Adjusted EBITDA                                                          $
              4,639                                                     $
       4,086       13.6

                                                                                                                                                                       %






     Adjusted EBITDA margin                                            38.5                                                35.7

                                                                           %                                                  %





     Cable Adjusted EBITDA                                                    $
              4,727                                                     $
       4,231       11.7

                                                                                                                                                                       %



     Cable Adjusted EBITDA margin                                      40.5                                                37.6

                                                                           %                                                  %





     Capital Expenditures                                                     $
              2,014                                                     $
       1,651



     % Total Revenue                                                   16.7                                                14.4
                                                                           %                                                  %





     Cable Capital Expenditures                                               $
              1,875                                                     $
       1,551



     % Total Cable Revenue                                             16.1                                                13.8
                                                                           %                                                  %




      Net income attributable to Charter shareholders                            $
              814                                                       $
       387


      Earnings per common share attributable to Charter shareholders:



     Basic                                                                     $
              4.01                                                      $
       1.77



     Diluted                                                                   $
              3.90                                                      $
       1.74





     Net cash flows from operating activities                                 $
              3,664                                                     $
       2,943



     Free cash flow                                                           $
              1,754                                                     $
       1,271



     Cable free cash flow                                                     $
              2,019                                                     $
       1,527

Revenues

Third quarter revenue increased by 5.1% year-over-year to $12.0 billion, driven by growth in Internet, mobile and advertising.

Residential revenue totaled $9.4 billion in the third quarter, an increase of 4.0% year-over-year, despite $218 million of estimated credits to be provided to Charter's video customers upon finalization of expected rebates from sports programming networks which result from fewer games broadcast during COVID-19.

Internet revenue grew by 12.5% compared to the year-ago quarter, to $4.7 billion, driven by growth in Internet customers during the last year, promotional rate step-ups and rate adjustments.

Video revenue totaled $4.2 billion in the third quarter, a decrease of 3.2% compared to the prior year period, driven by the estimated customer credits related to sports programming, a higher mix of lower priced video packages within Charter's video customer base, a decline in video customers during the last year, lower pay-per-view and video on demand revenue and lower installation revenue partly offset by rate adjustments and promotional rate step-ups.

Voice revenue totaled $449 million in the third quarter, a decrease of 5.8% compared to the third quarter of 2019, driven by a decline in wireline voice customers over the last 12 months and value-based pricing.

Commercial revenue declined to $1.6 billion, a decrease of 0.8% over the prior year period, driven by Charter's sale of Navisite in the third quarter of 2019, lower cell tower backhaul and other wholesale revenue - both in Enterprise, and an $11 million impact from COVID-19 related seasonal plans in SMB. SMB revenue growth absent the COVID-19 seasonal plan impact was 2.6% year-over-year, reflecting customer relationship growth. Enterprise retail revenue excluding Navisite in 2019 and wholesale revenue, was 5.8%, reflecting PSU growth.

Third quarter advertising sales revenue of $460 million increased by 16.8% compared to the year-ago quarter, driven by higher political revenue and the timing of the return of multiple sports events and leagues, partly offset by lower local and national sales which are recovering from previous lows during the COVID-19 pandemic. Excluding political revenue in both periods, advertising sales revenue declined by 11.2% year-over-year.

Third quarter mobile revenue totaled $368 million, an increase of 91.8% year-over-year.

Other revenue totaled $214 million in the third quarter, a decrease of 0.7% year-over-year, driven by lower processing fees, partly offset by higher video customer premise equipment ("CPE") sold to customers.

Operating Costs and Expenses

Third quarter total operating costs and expenses increased by $36 million, or 0.5% year-over-year. Excluding mobile costs in both periods, operating costs and expenses decreased by 1.2% compared to the year-ago quarter.

Third quarter programming costs decreased by $63 million, or 2.3% as compared to the third quarter of 2019, reflecting $163 million of estimated sports network rebates which result from fewer games broadcast during COVID-19, a higher mix of lower cost video packages within Charter's video customer base and fewer video customers, partly offset by contractual programming increases and renewals.

Regulatory, connectivity and produced content expenses were essentially unchanged year-over-year, as lower regulatory and franchise fees were offset by higher video CPE sold to customers and higher sports rights costs. The impact of an expected reduction in sports rights content costs were immaterial in the quarter as this benefit will be amortized over the life of the contract, consistent with the deferral of second quarter expense for canceled games. Together with the expected rebates shown in programming expense, Charter intends to provide a credit on its video customers' invoices for all of the rebates provided by sports programming networks when details are finalized with the networks.

Costs to service customers increased by $8 million, or 0.4% year-over-year, despite year-over-year residential and SMB customer growth of 6.8%. The year-over-year increase in costs to service customers was primarily driven by previously announced accelerated wage benefits for hourly field operations and call center employees, higher COVID-19 related benefits and the timing of medical costs, partly offset by lower bad debt and productivity improvements.

Marketing expenses decreased by $5 million, or 0.7% year-over-year.

Other expenses decreased by $23 million, or 2.5% as compared to the third quarter of 2019 primarily driven by lower enterprise costs from the sale of Navisite, lower employee travel expense and insurance costs, partly offset by higher information technology and advertising sales expense.

Third quarter mobile costs totaled $456 million, an increase of 35.2% year-over-year, and were comprised of device costs, customer acquisition costs, and service and operating costs.

Adjusted EBITDA

Third quarter Adjusted EBITDA of $4.6 billion grew by 13.6% year-over-year, reflecting growth in revenue and operating expenses of 5.1% and 0.5%, respectively. Third quarter cable Adjusted EBITDA grew by 11.7% year-over-year reflecting growth in cable revenue of 3.7% and a decline in cable operating expenses of 1.2%.

Net Income Attributable to Charter Shareholders

Net income attributable to Charter shareholders totaled $814 million in the third quarter of 2020, compared to $387 million in the third quarter of 2019. The year-over-year increase in net income attributable to Charter shareholders was primarily driven by higher Adjusted EBITDA, partly offset by a pension remeasurement loss.

Net income per basic common share attributable to Charter shareholders totaled $4.01 in the third quarter of 2020 compared to $1.77 during the same period last year. The increase was primarily the result of the factors described above in addition to a 7.2% decrease in weighted average common shares outstanding versus the prior year period.

Capital Expenditures

Property, plant and equipment expenditures totaled $2.0 billion in the third quarter of 2020, compared to $1.7 billion during the third quarter of 2019, primarily driven by increases in support capital, scalable infrastructure, line extensions and Internet CPE. The year-over-year increase in support capital was primarily due to facility improvements, the timing of back office systems investments and mobile store build-outs. The increase in scalable infrastructure spending was primarily due to core network enhancements and node splits given 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. Third quarter capital expenditures included $139 million of mobile costs, most of which are included in support capital.

Charter currently expects 2020 cable capital expenditures to be consistent and possibly lower as a percentage of cable revenue versus 2019, despite the significant acceleration in customer growth and network utilization during COVID-19.

Cash Flow and Free Cash Flow

During the third quarter of 2020, net cash flows from operating activities totaled $3.7 billion, compared to $2.9 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 in the third quarter of 2020 totaled $1.8 billion, compared to $1.3 billion during the same period last year. Cable free cash flow in the third quarter of 2020 totaled $2.0 billion, compared to $1.5 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 September 30, 2020, total principal amount of debt was $79.1 billion and Charter's credit facilities provided approximately $4.7 billion of additional liquidity in excess of Charter's $1.3 billion cash position.

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 were 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.

In October 2020, CCO Holdings and CCO Holdings Capital Corp. jointly issued an additional $1.5 billion of its 4.500% senior unsecured notes due 2032 at a price of 103.750%. The net proceeds will be used to pay related fees and expenses and for general corporate purposes, including repaying certain indebtedness, including repayment of all of CCO Holdings' 5.375% senior notes due May 1, 2025, as well as funding potential buybacks of Charter Class A common stock and Charter Holdings common units.

Share Repurchases

During the three months ended September 30, 2020, Charter purchased approximately 6.1 million shares of Charter Class A common stock and Charter Holdings common units for approximately $3.6 billion.

Conference Call

Charter will host a conference call on Friday, October 30, 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 8066249.

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 November 13, 2020. The conference ID code for the replay is 8066249.

Additional Information Available on Website

The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2020, which will be posted on the "Results & SEC Filings" 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 "Results & SEC Filings" section.

Use of Adjusted EBITDA and Free Cash Flow Information

The company uses certain measures that are not defined by U.S. generally accepted accounting principles ("GAAP") to evaluate various aspects of its business. Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income attributable to Charter shareholders and net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by Charter, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA and free cash flow are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, in the Addendum to this release.

Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, 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, net, such as special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company's businesses as well as other non-cash or special items, and is unaffected by the Company's capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing. These costs are evaluated through other financial measures.

Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.

Management and Charter's board of directors use Adjusted EBITDA and free cash flow to assess Charter's performance and its ability to service its debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under the Company's credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the 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 $927 million for the three and nine months ended September 30, 2020, respectively, and $317 million and $916 million for the three and nine months ended September 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 September 30,                                                  Nine Months Ended September 30,

                                                                                                                                                       ---

                                                    2020               2019                              % Change                              2020                                  2019           % Change

                                                                                                                                                                                                     ---


     
                REVENUES:



     Internet                                           $
       4,722                                                $
              4,195                                    12.5                                  $
     13,659             $
     12,322   10.8
                                                                                                                                                                         %
                                                                                                                                                                                                                                              %



     Video                                        4,221                             4,359                                                    (3.2)                                 13,014                       13,134      (0.9)

                                                                                                                                                %                                                                            %



     Voice                                          449                               477                                                    (5.8)                                  1,357                        1,470      (7.7)

                                                                                                                                                %                                                                            %




     Residential revenue                          9,392                             9,031                                                      4.0                                  28,030                       26,926        4.1
                                                                                                                                                %
                                                                                                                                                                                                                             %


      Small and medium business                      988                               974                                                      1.5                                   2,967                        2,882        2.9
                                                                                                                                                %
                                                                                                                                                                                                                             %



     Enterprise                                     617                               644                                                    (4.3)                                  1,845                        1,939      (4.9)

                                                                                                                                                %                                                                            %




     Commercial revenue                           1,605                             1,618                                                    (0.8)                                  4,812                        4,821      (0.2)

                                                                                                                                                %                                                                            %



     Advertising sales                              460                               394                                                     16.8                                   1,074                        1,134      (5.3)
                                                                                                                                                %
                                                                                                                                                                                                                             %



     Mobile                                         368                               192                                                     91.8                                     936                          490       91.3
                                                                                                                                                %
                                                                                                                                                                                                                             %



     Other                                          214                               215                                                    (0.7)                                    621                          632      (1.8)

                                                                                                                                                %                                                                            %




     Total Revenue                               12,039                            11,450                                                      5.1                                  35,473                       34,003        4.3
                                                                                                                                                %
                                                                                                                                                                                                                             %




     
                COSTS AND EXPENSES:



     Programming                                  2,727                             2,790                                                    (2.3)                                  8,492                        8,482        0.1

                                                                                                                                                %                                                                            %


      Regulatory, connectivity and                   612                               612                                                    (0.1)                                  1,651                        1,770      (6.7)
       produced content
                                                                                                                                                %                                                                            %


      Costs to service customers                   1,902                             1,894                                                      0.4                                   5,598                        5,483        2.1
                                                                                                                                                %
                                                                                                                                                                                                                             %



     Marketing                                      788                               793                                                    (0.7)                                  2,273                        2,296      (1.0)

                                                                                                                                                %                                                                            %



     Mobile                                         456                               337                                                     35.2                                   1,243                          874       42.2
                                                                                                                                                %
                                                                                                                                                                                                                             %



     Other expense                                  915                               938                                                    (2.5)                                  2,692                        2,772      (2.9)

                                                                                                                                                %                                                                            %



      Total operating costs and                    7,400                             7,364                                                      0.5                                  21,949                       21,677        1.3
       expenses (exclusive of items                                                                                                             %
       shown separately below)                                                                                                                                                                                               %




     Adjusted EBITDA                              4,639                             4,086                                                     13.6                                  13,524                       12,326        9.7
                                                                                                                                                %
                                                                                                                                                                                                                             %



      Adjusted EBITDA margin                        38.5                              35.7                                                                              38.1                             36.2
                                              
            %                       
            %                                                                       
            %                      
            %



      Depreciation and amortization                2,370                             2,415                                                                             7,295                            7,465


      Stock compensation expense                      83                                71                                                                               263                              238


      Other operating expenses, net                   14                                14                                                                                23                               71



      Income from operations                       2,172                             1,586                                                                             5,943                            4,552




     
                OTHER INCOME (EXPENSES):


      Interest expense, net                        (946)                            (963)                                                                          (2,883)                         (2,833)


      Loss on extinguishment of debt                (58)                                                                                                             (121)


      Gain (loss) on financial
       instruments, net                               69                              (34)                                                                            (185)                           (116)


      Other pension benefits
       (costs), net                                (115)                                9                                                                              (94)                              27



     Other expense, net                            (13)                              (5)                                                                             (13)                           (131)



                                                 (1,063)                            (993)                                                                          (3,296)                         (3,053)



      Income before income taxes                   1,109                               593                                                                             2,647                            1,499



     Income tax expense                           (177)                            (126)                                                                            (372)                           (329)



      Consolidated net income                        932                               467                                                                             2,275                            1,170


      Less: Net income attributable
       to noncontrolling interests                 (118)                             (80)                                                                            (299)                           (216)



      Net income attributable to
       Charter shareholders                                $
       814                                                  $
              387                                                        $
             1,976              $
      954





      EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER
       SHAREHOLDERS:



     Basic                                               $
       4.01                                                 $
              1.77                                                         $
             9.62             $
      4.30




     Diluted                                             $
       3.90                                                 $
              1.74                                                         $
             9.35             $
      4.23



      Weighted average common shares
       outstanding, basic                    202,826,502                       218,499,213                                                                       205,468,736                      221,818,079



      Weighted average common shares
       outstanding, diluted                  208,722,129                       222,355,867                                                                       211,399,781                      225,337,984



               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.


                                                         
              
                CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES


                                                             
              
                CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                     
              
                (dollars in millions)




                                                                                                                       September 30,                      December 31,


                                                                                                                                2020               2019

                                                                                                                                                   ---

                                
              
         ASSETS                                                           (unaudited)



     CURRENT ASSETS:



     Cash and cash equivalents                                                                                                        $
       1,283                   $
       3,483



     Accounts receivable, net                                                                                                 2,068                2,227



     Prepaid expenses and other current assets                                                                                  709                  761




     Total current assets                                                                                                     4,060                6,471






     RESTRICTED CASH                                                                                                              3                   66






     INVESTMENT IN CABLE PROPERTIES:



     Property, plant and equipment, net                                                                                      34,196               34,591



     Customer relationships, net                                                                                              6,050                7,453



     Franchises                                                                                                              67,322               67,322



     Goodwill                                                                                                                29,554               29,554




     Total investment in cable properties, net                                                                              137,122              138,920






     OTHER NONCURRENT ASSETS                                                                                                  3,008                2,731






     Total assets                                                                                                                   $
       144,193                 $
       148,188





                                    
              
         LIABILITIES AND SHAREHOLDERS' EQUITY



     CURRENT LIABILITIES:



     Accounts payable and accrued liabilities                                                                                         $
       8,541                   $
       8,885



     Current portion of long-term debt                                                                                        1,715                3,500




     Total current liabilities                                                                                               10,256               12,385






     LONG-TERM DEBT                                                                                                          77,947               75,578




     DEFERRED INCOME TAXES                                                                                                   17,929               17,711




     OTHER LONG-TERM LIABILITIES                                                                                              4,349                3,703






     SHAREHOLDERS' EQUITY:



     Controlling interest                                                                                                    26,906               31,445



     Noncontrolling interests                                                                                                 6,806                7,366




     Total shareholders' equity                                                                                              33,712               38,811






     Total liabilities and shareholders' equity                                                                                     $
       144,193                 $
       148,188


                                                               
              
                CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES


                                                              
              
                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                           
              
                (dollars in millions)




                                                                 Three Months Ended                                     Nine Months Ended
                                                     September 30,                                    September 30,

                                                                                                           ---

                                                2020                          2019                    2020                           2019

                                                                                                                                   ---

      CASH FLOWS FROM OPERATING ACTIVITIES:


      Consolidated net income                           $
              932                                       $
              467             $
            2,275  $
        1,170


      Adjustments to reconcile consolidated net
       income to net cash flows from operating
       activities:


      Depreciation and
       amortization                            2,370                                   2,415                                       7,295             7,465


      Stock compensation expense                  83                                      71                                         263               238


      Noncash interest income, net              (10)                                   (17)                                       (31)             (89)


      Other pension (benefits)
       costs, net                                115                                     (9)                                         94              (27)


      Loss on extinguishment of
       debt                                       58                                                                                121


      (Gain) loss on financial
       instruments, net                         (69)                                     34                                         185               116


      Deferred income taxes                      151                                      96                                         252               233



     Other, net                                 (4)                                    (3)                                       (21)              148


      Changes in operating assets and
       liabilities, net of effects from
       acquisitions and dispositions:


      Accounts receivable                       (74)                                  (227)                                        159             (564)


      Prepaid expenses and other
       assets                                   (76)                                   (49)                                      (240)            (225)


      Accounts payable, accrued
       liabilities and other                     188                                     165                                          61              (75)



      Net cash flows from
       operating activities                    3,664                                   2,943                                      10,413             8,390





      CASH FLOWS FROM INVESTING ACTIVITIES:


      Purchases of property, plant
       and equipment                         (2,014)                                (1,651)                                     (5,352)           (4,913)


      Change in accrued expenses
       related to capital
       expenditures                              104                                    (21)                                       (70)            (449)


      Real estate investments
       through variable interest
       entities                                 (41)                                   (61)                                      (122)            (125)



     Other, net                                (35)                                      2                                        (43)               10



      Net cash flows from
       investing activities                  (1,986)                                (1,731)                                     (5,587)           (5,477)





      CASH FLOWS FROM FINANCING ACTIVITIES:


      Borrowings of long-term
       debt                                    3,030                                   2,443                                      10,352            13,157


      Repayments of long-term
       debt                                  (1,819)                                  (763)                                    (9,711)          (10,886)


      Payments for debt issuance
       costs                                    (29)                                   (16)                                       (91)             (48)


      Issuance of equity                           -                                                                                23


      Purchase of treasury stock             (3,361)                                (2,767)                                     (6,868)           (4,568)


      Proceeds from exercise of
       stock options                              50                                      25                                         171               106


      Purchase of noncontrolling
       interest                                (366)                                  (339)                                      (884)            (593)


      Distributions to
       noncontrolling interest                  (37)                                   (38)                                      (114)            (116)


      Borrowings for real estate
       investments through
       variable interest entities,
       net                                        39                                                                                 63



     Other, net                                 (1)                                    (6)                                       (30)            (133)



      Net cash flows from
       financing activities                  (2,494)                                (1,461)                                     (7,089)           (3,081)





      NET DECREASE IN CASH, CASH
       EQUIVALENTS AND RESTRICTED
       CASH                                    (816)                                  (249)                                    (2,263)             (168)


      CASH, CASH EQUIVALENTS AND
       RESTRICTED CASH, beginning
       of period                               2,102                                     846                                       3,549               765



      CASH, CASH EQUIVALENTS AND
       RESTRICTED CASH, end of
       period                                         $
              1,286                                       $
              597             $
            1,286    $
        597





      CASH PAID FOR INTEREST                          $
              1,038                                     $
              1,048             $
            3,023  $
        3,065



      CASH PAID FOR TAXES                                $
              34                                        $
              12                $
            84     $
        55


                                                                                           
             
                CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES


                                                                                             
             
                UNAUDITED SUMMARY OF OPERATING STATISTICS


                                                                                         
           
               (in thousands, except per customer and penetration data)




                                                                                                   
             
                Approximate as of


                                                                 September 30,                         June 30,                                     December 31,                       September 30,
                                                        2020 (a)                            2020 (a)                                      2019 (a)                            2019 (a)



                     Footprint (b)

    ---


       Estimated Passings                                              53,022                                      52,714                                                                      52,154     51,940




                     Customer Relationships (c)

    ---


       Residential                                                     28,912                                      28,496                                                                      27,277     27,037



       SMB                                                              2,021                                       1,980                                                                       1,958      1,930



        Total Customer Relationships                                    30,933                                      30,476                                                                      29,235     28,967






       Residential                                                        416                                         751                                                                         240        282



       SMB                                                                 41                                           4                                                                          28         28



        Total Customer Relationships Net
         Additions                                                         457                                         755                                                                         268        310





        Total Customer Relationship
         Penetration of Estimated Passings                                   %                                          %                                                                          %         %
         (d)                                                              58.3                                        57.8                                                                        56.1       55.8




        Monthly Residential Revenue per
         Residential Customer (e)                                              $
     109.03                                                                            $
     110.82                          $
     113.79  $
     112.00


        Monthly SMB Revenue per SMB
         Customer (f)                                                          $
     164.77                                                                            $
     166.06                          $
     169.06  $
     169.44




                     Residential Customer Relationships
                      Penetration

    ---

        Single Play Penetration (g)                                       44.2                                        44.0                                                                        43.0       42.7
                                                                             %                                          %                                                                          %         %


        Double Play Penetration (g)                                       32.3                                        31.7                                                                        30.7       29.9
                                                                             %                                          %                                                                          %         %


        Triple Play Penetration (g)                                       23.5                                        24.3                                                                        26.2       27.3
                                                                             %                                          %                                                                          %         %




        % Residential Non-Video Customer                                  45.7                                        45.1                                                                        42.7       41.8
         Relationships                                                       %                                          %                                                                          %         %





       
                Internet

    ---


       Residential                                                     26,807                                      26,313                                                                      24,908     24,595



       SMB                                                              1,826                                       1,783                                                                       1,756      1,730




       Total Internet Customers                                        28,633                                      28,096                                                                      26,664     26,325






       Residential                                                        494                                         842                                                                         313        351



       SMB                                                                 43                                           8                                                                          26         29



        Total Internet Net Additions                                       537                                         850                                                                         339        380






       
                Video

    ---


       Residential                                                     15,705                                      15,652                                                                      15,620     15,725



       SMB                                                                530                                         516                                                                         524        520




       Total Video Customers                                           16,235                                      16,168                                                                      16,144     16,245






       Residential                                                         53                                         102                                                                       (105)      (77)



       SMB                                                                 14                                         (8)                                                                          4          2



        Total Video Net Additions                                           67                                          94                                                                       (101)      (75)






       
                Voice

    ---


       Residential                                                      9,335                                       9,398                                                                       9,443      9,595



       SMB                                                              1,207                                       1,169                                                                       1,144      1,120




       Total Voice Customers                                           10,542                                      10,567                                                                      10,587     10,715






       Residential                                                       (63)                                         38                                                                       (152)     (213)



       SMB                                                                 38                                           7                                                                          24         23



        Total Voice Net Additions                                         (25)                                         45                                                                       (128)     (190)





                     Mobile Lines

    ---


       Residential                                                      2,020                                       1,672                                                                       1,078        793



       SMB                                                                 40                                          25                                                                           4          1




       Total Mobile Lines                                               2,060                                       1,697                                                                       1,082        794






       Residential                                                        348                                         313                                                                         285        275



       SMB                                                                 15                                          12                                                                           3          1



        Total Mobile Lines Net Additions                                   363                                         325                                                                         288        276





                     Enterprise (h)

    ---

        Enterprise Primary Service Unites
         ("PSUs")                                                          272                                         270                                                                         267        264



       Enterprise Net Additions                                             2                                           1                                                                           3          6



               (a)               We calculate the aging of customer
                                  accounts based on the monthly
                                  billing cycle for each account.  On
                                  that basis, at September 30, 2020,
                                  June 30, 2020, December 31, 2019 and
                                  September 30, 2019, customers
                                  included approximately 181,700,
                                  124,500, 154,200 and 148,000
                                  customers, respectively, whose
                                  accounts were over 60 days past due,
                                  approximately 52,300, 18,400, 13,500
                                  and 16,400 customers, respectively,
                                  whose accounts were over 90 days
                                  past due and approximately 26,000,
                                  10,400, 10,000 and 14,100 customers,
                                  respectively, whose accounts were
                                  over 120 days past due.  Included in
                                  the September 30, 2020 aging
                                  statistics are approximately 60,200
                                  customers that would have been
                                  disconnected under our normal
                                  collection policies, but were not
                                  due to certain state mandates in
                                  place.




               (b)               Passings represent our estimate of
                                  the number of units, such as single
                                  family homes, apartment and
                                  condominium units and SMB and
                                  enterprise sites passed by our cable
                                  distribution network in the areas
                                  where we offer the service
                                  indicated.  These estimates are
                                  based upon the information available
                                  at this time and are updated for all
                                  periods presented when new
                                  information becomes available.




               (c)               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.




               (d)               Penetration represents residential
                                  and SMB customers as a percentage of
                                  estimated passings.  Penetration
                                  excludes mobile-only customers.




               (e)               Monthly residential revenue per
                                  residential customer is calculated
                                  as total residential quarterly
                                  revenue divided by three divided by
                                  average residential customer
                                  relationships during the respective
                                  quarter and excludes mobile revenue
                                  and customers.




               (f)               Monthly SMB revenue per SMB customer
                                  is calculated as total SMB quarterly
                                  revenue divided by three divided by
                                  average SMB customer relationships
                                  during the respective quarter and
                                  excludes mobile revenue and
                                  customers.




               (g)               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.




               (h)               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                                       Nine Months Ended
                                                            September 30,                                        September 30,

                                                                                                                      ---

                                                       2020                          2019                    2020                                   2019

                                                                                                                                                  ---

      Net income attributable to Charter
       shareholders                                            $
              814                                       $
              387                      $
       1,976     $
        954


      Plus:  Net income attributable to
       noncontrolling interest                          118                                      80                                         299                   216



     Interest expense, net                             946                                     963                                       2,883                 2,833



     Income tax expense                                177                                     126                                         372                   329


      Depreciation and amortization                   2,370                                   2,415                                       7,295                 7,465



     Stock compensation expense                         83                                      71                                         263                   238


      Loss on extinguishment of debt                     58                                                                                121


      (Gain) loss on financial instruments,
       net                                             (69)                                     34                                         185                   116


      Other pension (benefits) costs, net               115                                     (9)                                         94                  (27)



     Other, net                                         27                                      19                                          36                   202




     Adjusted EBITDA (a)                             4,639                                   4,086                                      13,524                12,326



     Less:  Mobile revenue                           (368)                                  (192)                                      (936)                (490)


      Plus:  Mobile costs and expenses                  456                                     337                                       1,243                   874




     Cable Adjusted EBITDA                                  $
              4,727                                     $
              4,231                     $
       13,831  $
        12,710





      Net cash flows from operating
       activities                                            $
              3,664                                     $
              2,943                     $
       10,413   $
        8,390


      Less:  Purchases of property, plant
       and equipment                                (2,014)                                (1,651)                                     (5,352)               (4,913)


      Change in accrued expenses related to
       capital expenditures                             104                                    (21)                                       (70)                (449)




     Free cash flow                                  1,754                                   1,271                                       4,991                 3,028


      Plus:  Mobile net cash outflows from
       operating activities                             126                                     156                                         407                   563


                Purchases of mobile property, plant
                 and equipment                          139                                     100                                         351                   281




     Cable free cash flow                                   $
              2,019                                     $
              1,527                      $
       5,749   $
        3,872



               (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                                     Nine Months Ended
                                                September 30,                                    September 30,

                                                                                                      ---

                                           2020                          2019                    2020                           2019

                                                                                                                              ---

     Customer premise
      equipment (a)                                $
              520                                       $
              470             $
         1,501  $
       1,527


     Scalable infrastructure
      (b)                                   424                                     320                                         979            840


     Line extensions (c)                    439                                     370                                       1,204          1,054


     Upgrade/rebuild (d)                    175                                     165                                         459            451


     Support capital (e)                    456                                     326                                       1,209          1,041



        Total capital
         expenditures                     2,014                                   1,651                                       5,352          4,913


     Less:  Mobile capital
      expenditures                        (139)                                  (100)                                      (351)         (281)



     Cable capital
      expenditures                               $
              1,875                                     $
              1,551             $
         5,001  $
       4,632





     Capital expenditures included in total
      related to:


     Commercial services                           $
              358                                       $
              327               $
         942    $
       956



               (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.