10-QPeriod: Q3 FY2021

CHARTER COMMUNICATIONS, INC. /MO/ Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 29, 2021For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) reported solid financial results for the nine months ended September 30, 2021, showcasing robust revenue growth and improved profitability. Total revenues increased by 8.4% year-over-year, driven by strong performance in Internet and Mobile services, and a recovery in Commercial and Advertising segments. The company demonstrated significant operational leverage, with Adjusted EBITDA growing by 12.8% and Income from Operations increasing by 27.4%, indicating effective cost management and revenue realization. Financially, Charter maintained a strong operational cash flow, generating $12.0 billion in net cash from operating activities for the first nine months. The company continued to invest in its network infrastructure, with capital expenditures of $5.6 billion, supporting long-term growth initiatives. Despite a substantial debt load of approximately $87.9 billion, Charter managed its liquidity effectively, with $466 million in cash and cash equivalents and available credit facilities. The company also actively returned capital to shareholders through share repurchases and continued to manage its debt portfolio through refinancing activities.

Financial Highlights

47 data points
Beta

Revenue

$13.15B

Net Income

$1.22B

9.3% Net Margin

EPS (Diluted)

$6.50

Total Assets

$142.50B

Cash & Equivalents

$466.00M

Free Cash Flow

$2.40B

Financial Statements
Beta
Revenue$13.15B
Operating Expenses$10.22B
Operating Income$2.93B
Net Income$1.22B
EPS (Basic)$6.69
EPS (Diluted)$6.50
Shares Outstanding (Basic)181.93M
Shares Outstanding (Diluted)187.17M

Key Highlights

  • 1Revenue increased by 9.2% to $13.1 billion for the third quarter and 8.4% to $38.5 billion for the nine months ended September 30, 2021, driven by growth in Internet, Mobile, and Commercial services.
  • 2Adjusted EBITDA grew by 13.9% to $5.3 billion for the third quarter and 12.8% to $15.3 billion for the nine months, indicating strong operational performance and cost control.
  • 3Net income attributable to Charter shareholders surged by 49.5% to $1.2 billion for the third quarter and 54.1% to $3.0 billion for the nine months, demonstrating improved profitability.
  • 4The company generated robust operating cash flow of $12.0 billion for the nine months ended September 30, 2021.
  • 5Capital expenditures were $5.6 billion for the nine months ended September 30, 2021, reflecting ongoing investment in network infrastructure and growth initiatives.
  • 6Total debt remains substantial at $87.9 billion as of September 30, 2021, though the company's leverage ratio was 4.3x Adjusted EBITDA, within its target range.
  • 7The company repurchased $10.8 billion of treasury stock and $1.5 billion of noncontrolling interests for the nine months ended September 30, 2021, indicating a commitment to shareholder returns.

Frequently Asked Questions

Charter Communications demonstrated strong financial performance for the nine months ended September 30, 2021. Revenue growth was robust, driven primarily by increases in Internet, Mobile, and Commercial services. Profitability significantly improved, with net income attributable to Charter shareholders rising substantially compared to the prior year. The company also generated substantial operating cash flow, though it continued to invest heavily in capital expenditures for network expansion and upgrades. Debt levels remain high, but the company's leverage ratio is within its stated target range.

Charter's Mobile segment is a significant growth driver, with revenues increasing by 45.4% for the third quarter and 65.2% for the nine months ended September 30, 2021. However, this growth comes with associated costs, including device-related cash flows and capital expenditures for network build-out. While contributing positively to revenue, the mobile segment is currently reducing Adjusted EBITDA and free cash flow due to these growth-related investments and operational costs.

Charter manages its substantial debt through a combination of strategies. This includes generating strong free cash flow, utilizing availability under its credit facilities, and accessing capital markets for refinancing. The company aims to maintain its leverage ratio within a target range of 4 to 4.5 times Adjusted EBITDA. Recent activities indicate a focus on extending debt maturities and managing interest expenses through note issuances and repayments.

Internet services continue to be a strong performer, with revenues growing significantly due to both price adjustments and an increase in the number of residential and SMB customers. Conversely, Video revenues have shown modest growth, impacted by a decrease in residential video customers, although this is partly offset by rate and pricing adjustments. Voice services continue to decline, reflecting a broader industry trend.