10-KPeriod: FY2021

CHARTER COMMUNICATIONS, INC. /MO/ Annual Report, Year Ended Dec 31, 2021

Filed January 28, 2022For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) is a leading broadband connectivity company and cable operator serving over 32 million customers across 41 states under the Spectrum brand. The company offers a comprehensive suite of services including high-speed internet, video, mobile, and voice, catering to both residential and business customers. Charter's core strategy focuses on leveraging its advanced network to deliver high-quality products at competitive prices, emphasizing outstanding customer service and simplified pricing. The company is investing in network upgrades, including the expansion of its 5G mobile network and rural broadband initiatives, aiming to drive customer growth and enhance long-term value. Despite a competitive landscape and rising programming costs, Charter demonstrated revenue growth and improved profitability in 2021, largely driven by its internet and mobile services. Financially, Charter reported significant revenue growth in 2021, fueled by strong performance in its Internet and Mobile segments, alongside steady contributions from its commercial services. While video and voice services saw declines, the overall revenue increase was robust. The company's Adjusted EBITDA also saw substantial growth, reflecting operational efficiencies and revenue expansion. However, Charter carries a significant debt load, which, while managed within its target leverage ratio, remains a key factor for investors to monitor. The company's strategic focus on expanding its broadband footprint, enhancing its mobile offering through its MVNO partnership and planned 5G network, and investing in its network infrastructure are key drivers for future growth.

Financial Highlights

48 data points
Beta

Revenue

$51.68B

Net Income

$4.65B

9.0% Net Margin

EPS (Diluted)

$24.47

Total Assets

$142.49B

Cash & Equivalents

$601.00M

Free Cash Flow

$8.60B

Financial Statements
Beta
Revenue$51.68B
Operating Expenses$41.16B
Operating Income$10.53B
Net Income$4.65B
EPS (Basic)$25.34
EPS (Diluted)$24.47
Shares Outstanding (Basic)183.67M
Shares Outstanding (Diluted)193.04M

Key Highlights

  • 1Charter Communications reported total revenues of $51.7 billion for 2021, a 7.5% increase year-over-year, driven by growth in residential Internet, mobile, and commercial customers, along with price adjustments.
  • 2Adjusted EBITDA grew by 11.4% to $20.6 billion in 2021, indicating improved operational performance and profitability.
  • 3The company experienced significant growth in its Mobile segment, with revenues increasing by 59.6% to $2.2 billion in 2021, demonstrating the increasing adoption of its MVNO offering.
  • 4Internet services remain a core growth driver, with revenues up 13.9% to $21.1 billion in 2021, supported by customer growth and rate increases.
  • 5Despite a continued decline in video and voice subscribers, Charter is strategically focused on retaining customers and driving value through bundled offerings and enhanced product features.
  • 6Charter continues to invest heavily in its network infrastructure, including rural broadband expansion and the development of its own 5G mobile data-only network, signaling a commitment to future growth and service expansion.
  • 7The company maintains a substantial debt load of approximately $91.2 billion, with a leverage ratio of 4.4x Adjusted EBITDA, which is within its target range but requires ongoing monitoring.

Frequently Asked Questions

Charter's primary revenue streams are subscription-based services, with Internet, Video, Voice, and Mobile being the core offerings. In 2021, Internet revenue grew by 13.9% to $21.1 billion, and Mobile revenue surged by 59.6% to $2.2 billion, highlighting these as key growth areas. Video revenue saw a modest increase of 1.1% to $17.6 billion, while Voice revenue declined by 11.5%. Commercial services also showed growth, with SMB revenue up 5.2% and Enterprise revenue up 4.3%.

Charter offers Spectrum Mobile as an MVNO leveraging Verizon's network, combined with its own Spectrum WiFi. The company is investing in building its own 5G mobile data-only network in targeted geographies using CBRS Priority Access Licenses. This strategy aims to improve customer experience, reduce costs, and drive higher sales of its core broadband products, increasing customer lifetime value and overall profitability.

Charter's video programming costs are rising due to factors like media consolidation, increased retransmission consent fees, and the demand for sports content. The company has struggled to fully pass these costs onto customers without impacting subscriber numbers. Charter is reviewing its pricing and packaging strategies to mitigate margin erosion and is exploring ways to offer more value-based packages. The decline in video subscribers indicates ongoing pressure in this segment.

Charter is actively pursuing rural broadband expansion, aiming to extend its network and offer high-speed broadband (up to 1 Gbps) to over one million estimated passings in unserved areas. This initiative involves significant investment, partially offset by government funding, including support from the Rural Digital Opportunity Fund (RDOF). The goal is to capture long-term infrastructure returns and bring essential digital services to new communities.