Charter's surprisingly resilient earnings cause short-covering rally Charter's fundamentals on display Just as the 16% crash after the Q4/23 earnings release was an overreaction, I think Friday's rally was no different, just in a different direction. Short sellers were caught wrong-footed and hastily covered their bets, causing the price to overshoot on the upside. Over the next few months, the market will likely return to ignoring much of Charter's solid fundamentals and instead focus on short-term headwin ...

Charter Communications: Implied upside of 80% Some investors believe this pause could be a sign the rally is on its last legs, but others on Wall Street are unconcerned. Among the bulls is XM Investment analyst Marios Hadjikyriacos. "Stock markets are enjoying the best of all worlds, buoyed by a resilient U.S. economy and speculation that Fed rate cuts are just around the corner, helping to justify stretched valuations," he wrote. The index has been on a breathtaking run, but some S&P 500 stocks still have ...

Charter Communications, Inc. (NASDAQ:CHTR) Q2 2024 Earnings Conference Call July 26, 2024 8:30 AM ET Company Participants Stefan Anninger - Vice President of Investor Relations Chris Winfrey - President and Chief Executive Officer Jessica Fischer - Chief Financial Officer Conference Call Participants Craig Moffett - MoffettNathanson Sebastiano Petti - JP Morgan Jonathan Chaplin - New Street Benjamin Swinburne - Morgan Stanley Jessica Ehrlich - Bank of America Securities Peter Cipino - Wolfe Research Operato ...

The broadband provider topped estimates in its second quarter. Shares of Charter Communications (CHTR 17.38%) were soaring after the nation's No. 2 cable company and owner of the Spectrum brand posted better-than-expected results in its second-quarter earnings report, even as it continues to lose broadband subscribers. As a result, the stock was up 16.5% as of 10:46 a.m. ET. Charter manages a challenging market Charter said that total internet customers, which include both residential and business customers ...

Financial Performance - Free cash flow totaled $1.29 billion, significantly up from $668 million in Q2 2023, driven by higher adjusted EBITDA, favorable working capital changes, and lower cash taxes due to timing [1] - Second-quarter adjusted EBITDA was $5.7 billion, reflecting a 2.6% year-over-year growth, with an adjusted EBITDA margin of 41.4%, up 10 basis points year-over-year [6] - Net cash flows from operating activities reached $3.9 billion, compared to $3.3 billion in the prior year [7] - Revenues for the quarter were $13.68 billion, a 0.2% increase year-over-year, exceeding consensus estimates by 0.2% [9] Revenue Breakdown - Residential revenues amounted to $10.76 billion, down 0.6% year-over-year [10] - Voice revenue decreased by 4.2% year-over-year to $350 million, attributed to a decline in wireline voice customers [11] - Commercial revenues grew by 2.1% year-over-year to $1.8 billion, driven by enterprise and SMB revenue growth [12] - Advertising sales revenues increased by 3.3% year-over-year to $397 million, primarily due to higher political revenues [13] Customer Statistics - Total residential and SMB Internet customers decreased by 0.7% year-over-year to 30.36 million, with a loss of 154,000 residential Internet customers [14] - Residential voice customers declined by 14.9% year-over-year to 6.17 million [15] - SMB customer relationships increased by 3,000 in Q2 2024, compared to an increase of 4,000 in Q2 2023 [17] - Residential video customers decreased by 9.6% year-over-year to 12.71 million [29] Cost and Expenses - Total operating costs and expenses declined by 1.4% year-over-year to $8.02 billion, with programming costs down by $268 million, or 9.8% [18] - Costs to service customers decreased by $88 million, or 4.2% year-over-year, mainly due to lower labor costs and bad debt expenses [19] - Other costs of revenues increased by $171 million, or 12.6% year-over-year, primarily due to higher mobile service direct costs [32] Debt and Liquidity - As of June 30, 2024, total principal amount of debt was $96.5 billion, with credit facilities providing approximately $4.1 billion in additional liquidity [3] - The company purchased 1.5 million shares for $404 million during the reported quarter [21]

Key Takeaways Mobile service demand helped boost earnings and revenue at Charter Communications. The company posted a 36.9% year-over-year increase in mobile service revenue, and internet service revenue also increased. Shares soared 17% soon after trading commenced Friday but remain lower on the year. Charter Communications (CHTR) shares soared Friday after the cable, phone, and internet provider posted better-than-expected results on higher demand for its mobile service. Charter reported second-quarter ea ...

Core Insights - Charter Communications reported revenue of $13.69 billion for the quarter ended June 2024, reflecting a year-over-year increase of 0.2% and surpassing the Zacks Consensus Estimate of $13.62 billion by 0.49% [1][3] - The company achieved an EPS of $8.49, which is an increase from $8.05 in the same quarter last year, resulting in an EPS surprise of 12.45% against the consensus estimate of $7.55 [1][3] Revenue Performance - Total revenue from advertising sales was $397 million, which is below the average estimate of $435.97 million but shows a year-over-year increase of 3.4% [6] - Commercial total revenue reached $1.82 billion, slightly above the average estimate of $1.80 billion, marking a year-over-year increase of 2.1% [6] - Residential internet revenue was reported at $5.81 billion, exceeding the average estimate of $5.79 billion, with a year-over-year growth of 1.3% [6] - Residential mobile service revenue saw significant growth, reported at $737 million, compared to the average estimate of $717.63 million, representing a year-over-year increase of 36.7% [6] Customer Metrics - The company experienced a net loss of 149 thousand internet subscribers, which was better than the average estimate of a loss of 252.86 thousand [6] - Total voice customers decreased to 7,446 thousand, slightly below the average estimate of 7,470.44 thousand [6] - The net loss in video subscribers was 12 thousand, compared to an average estimate of a loss of 5.63 thousand [6] Stock Performance - Charter's shares have returned 7.2% over the past month, contrasting with a -1.2% change in the Zacks S&P 500 composite [5] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [5]

Charter Communications (CHTR) came out with quarterly earnings of $8.49 per share, beating the Zacks Consensus Estimate of $7.55 per share. This compares to earnings of $8.05 per share a year ago. These figures are adjusted for non-recurring items. Over the last four quarters, the company has surpassed consensus EPS estimates two times. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's comment ...

Second Quarter 2024 Results July 26, 2024 • 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; • our ability to obtain programming at ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Charter Communications, Inc. and its subsidiaries, including balance sheets, statements of operations, changes in shareholders' equity, cash flows, and accompanying notes, for the periods ended June 30, 2024 and December 31, 2023 (for balance sheet) or June 30, 2024 and 2023 (for income statement, equity, and cash flow) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (June 30, 2024 vs. December 31, 2023) | Metric | June 30, 2024 (millions) | December 31, 2023 (millions) | | :----- | :----------------------- | :--------------------------- | | Total Assets | $148,611 | $147,193 | | Total Current Liabilities | $10,726 | $13,214 | | Long-Term Debt | $96,692 | $95,777 | | Total Shareholders' Equity | $16,714 | $14,718 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2024 (millions) | 2023 (millions) | % Change | | :----- | :-------------- | :-------------- | :------- | | Revenues | $13,685 | $13,659 | 0.2% | | Income from operations | $3,263 | $3,240 | 0.7% | | Consolidated net income | $1,423 | $1,413 | 0.7% | | Net income attributable to Charter shareholders | $1,231 | $1,223 | 0.7% | | Basic EPS | $8.58 | $8.15 | 5.3% | | Diluted EPS | $8.49 | $8.05 | 5.5% | Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2024 (millions) | 2023 (millions) | % Change | | :----- | :-------------- | :-------------- | :------- | | Revenues | $27,364 | $27,312 | 0.2% | | Income from operations | $6,394 | $6,166 | 3.7% | | Consolidated net income | $2,703 | $2,596 | 4.1% | | Net income attributable to Charter shareholders | $2,337 | $2,244 | 4.2% | | Basic EPS | $16.24 | $14.89 | 9.1% | | Diluted EPS | $16.03 | $14.69 | 9.1% | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Total Shareholders' Equity (June 30, 2024 vs. December 31, 2023) | Metric | June 30, 2024 (millions) | December 31, 2023 (millions) | | :----- | :----------------------- | :--------------------------- | | Total Charter Shareholders' Equity | $12,879 | $11,086 | | Noncontrolling Interests | $3,835 | $3,632 | | Total Shareholders' Equity | $16,714 | $14,718 | - Purchases of treasury stock, including excise tax, amounted to **$516 million** for the three months ended March 31, 2024, and **$363 million** for the three months ended June 30, 2024, totaling **$879 million** for the six months ended June 30, 2024[39](index=39&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2024 (millions) | 2023 (millions) | Change (millions) | | :----------------- | :-------------- | :-------------- | :---------------- | | Operating Activities | $7,065 | $6,634 | +$431 | | Investing Activities | $(5,636) | $(5,589) | -$47 | | Financing Activities | $(1,496) | $(1,212) | -$284 | | Net Decrease in Cash, Cash Equivalents and Restricted Cash | $(67) | $(167) | +$100 | | Cash, Cash Equivalents and Restricted Cash, end of period | $642 | $478 | +$164 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the consolidated financial statements, covering the company's organization, accounting policies, debt structure, equity transactions, revenue breakdown, operating expenses, and contingencies [Note 1. Organization and Basis of Presentation](index=9&type=section&id=Note%201.%20Organization%20and%20Basis%20of%20Presentation) - Charter Communications, Inc. is a holding company with a controlling equity interest in Charter Communications Holdings, LLC, which indirectly owns Charter Communications Operating, LLC, where substantially all operations reside[44](index=44&type=chunk)[66](index=66&type=chunk)[122](index=122&type=chunk) - The financial statements are unaudited, prepared in accordance with U.S. GAAP and SEC rules, and include only normal recurring adjustments; interim results are not necessarily indicative of full-year results[45](index=45&type=chunk) - The Company operates as one reportable segment, with the CEO assessing performance and allocating resources based on consolidated results[94](index=94&type=chunk) [Note 2. Accounts Payable, Accrued and Other Current Liabilities](index=10&type=section&id=Note%202.%20Accounts%20Payable,%20Accrued%20and%20Other%20Current%20Liabilities) Accounts Payable, Accrued and Other Current Liabilities (millions) | Category | June 30, 2024 | December 31, 2023 | | :------- | :------------ | :---------------- | | Accounts payable – trade | $832 | $931 | | Deferred revenue | $480 | $509 | | Accrued programming costs | $1,668 | $1,736 | | Accrued labor | $1,192 | $1,283 | | Accrued capital expenditures | $2,071 | $1,944 | | Accrued interest | $1,370 | $1,328 | | Accrued taxes and regulatory fees | $896 | $681 | | Other accrued liabilities | $2,217 | $2,802 | | **Total** | **$10,726** | **$11,214** | [Note 3. Total Debt](index=10&type=section&id=Note%203.%20Total%20Debt) Summary of Debt (June 30, 2024 vs. December 31, 2023) | Debt Type | Principal Amount (June 30, 2024) | Carrying Value (June 30, 2024) | Fair Value (June 30, 2024) | Principal Amount (Dec 31, 2023) | Carrying Value (Dec 31, 2023) | Fair Value (Dec 31, 2023) | | :-------- | :------------------------------- | :----------------------------- | :------------------------- | :------------------------------ | :---------------------------- | :------------------------ | | Senior unsecured notes | $27,250 | $27,174 | $23,625 | $27,250 | $27,168 | $24,750 | | Senior secured notes and debentures | $56,214 | $56,506 | $46,936 | $57,925 | $58,250 | $50,742 | | Credit facilities | $13,060 | $13,012 | $12,839 | $12,413 | $12,359 | $12,237 | | **Total** | **$96,524** | **$96,692** | **$83,400** | **$97,588** | **$97,777** | **$87,729** | - In May 2024, Charter Operating issued **$3.0 billion** in new senior secured notes (**$1.5 billion** due 2029 and **$1.5 billion** due 2034) to fund a tender offer for **$2.7 billion** of 2025 notes and prepay a Term B-1 Loan, resulting in a **$9 million** gain on extinguishment of debt[98](index=98&type=chunk) - The Company has approximately **$4.1 billion** available under its Charter Operating credit facilities as of June 30, 2024[71](index=71&type=chunk) [Note 4. Equipment Installment Plan Financing Facility](index=11&type=section&id=Note%204.%20Equipment%20Installment%20Plan%20Financing%20Facility) - In June 2024, CCO EIP Financing, LLC (SPV Borrower) entered into a senior secured revolving credit facility (EIP Financing Facility) to finance equipment installment plan receivables (EIP Receivables)[73](index=73&type=chunk) - The EIP Financing Facility allows borrowing up to **$1.25 billion**, with a carrying value of **$873 million** as of June 30, 2024, bearing interest at **6.46%**[100](index=100&type=chunk) - Pledged EIP Receivables of **$1.3 billion** and restricted cash of **$40 million** are held by the SPV Borrower and reflected on the consolidated balance sheets[101](index=101&type=chunk) [Note 5. Common Stock](index=11&type=section&id=Note%205.%20Common%20Stock) Charter Class A Common Stock Purchases (Three and Six Months Ended June 30) | Metric | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Share buybacks (shares) | 1,321,827 | 2,731,424 | 954,330 | 3,258,749 | | Share buybacks (amount, millions) | $358 | $830 | $324 | $1,187 | - As of June 30, 2024, Charter had remaining board authority to purchase an additional **$406 million** of Class A common stock and/or Charter Holdings common units, excluding purchases from Liberty Broadband[104](index=104&type=chunk) [Note 6. Noncontrolling Interests](index=12&type=section&id=Note%206.%20Noncontrolling%20Interests) - Noncontrolling interests primarily represent Advance/Newhouse Partnership's (A/N) equity interests in Charter Holdings[78](index=78&type=chunk) Net Income Attributable to A/N's Noncontrolling Interest (millions) | Period | 2024 | 2023 | | :----- | :--- | :--- | | Three months ended June 30 | $192 | $189 | | Six months ended June 30 | $365 | $351 | Charter Holdings Common Units Purchased from A/N (Three and Six Months Ended June 30) | Metric | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Number of units purchased | 169,428 | 431,767 | 157,075 | 481,175 | | Amount of units purchased (millions) | $46 | $141 | $54 | $176 | [Note 7. Accounting for Derivative Instruments and Hedging Activities](index=12&type=section&id=Note%207.%20Accounting%20for%20Derivative%20Instruments%20and%20Hedging%20Activities) - Cross-currency derivative instruments are used to manage foreign exchange risk on British pound sterling denominated notes, effectively converting **£1.275 billion** to fixed-rate U.S. dollar denominated debt[80](index=80&type=chunk) Fair Value of Cross-Currency Derivatives (millions) | Date | Fair Value | | :--- | :--------- | | June 30, 2024 | $469 | | December 31, 2023 | $440 | Effect of Financial Instruments on Other Expenses, Net (millions) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Change in fair value of cross-currency derivative instruments | $(9) | $43 | $(29) | $48 | | Foreign currency remeasurement of Sterling Notes | $(5) | $(46) | $11 | $(78) | | Loss on financial instruments, net | $(14) | $(3) | $(18) | $(30) | [Note 8. Revenues](index=13&type=section&id=Note%208.%20Revenues) Revenues by Product Line (Three Months Ended June 30) | Product Line | 2024 (millions) | 2023 (millions) | | :----------- | :-------------- | :-------------- | | Internet | $5,806 | $5,733 | | Video | $3,867 | $4,188 | | Voice | $350 | $365 | | Mobile service | $737 | $539 | | Residential revenue | $10,760 | $10,825 | | Small and medium business | $1,101 | $1,094 | | Enterprise | $721 | $690 | | Commercial revenue | $1,822 | $1,784 | | Advertising sales | $397 | $384 | | Other | $706 | $666 | | **Total Revenues** | **$13,685** | **$13,659** | Revenues by Product Line (Six Months Ended June 30) | Product Line | 2024 (millions) | 2023 (millions) | | :----------- | :-------------- | :-------------- | | Internet | $11,632 | $11,451 | | Video | $7,775 | $8,442 | | Voice | $724 | $738 | | Mobile service | $1,422 | $1,036 | | Residential revenue | $21,553 | $21,667 | | Small and medium business | $2,189 | $2,185 | | Enterprise | $1,429 | $1,372 | | Commercial revenue | $3,618 | $3,557 | | Advertising sales | $788 | $739 | | Other | $1,405 | $1,349 | | **Total Revenues** | **$27,364** | **$27,312** | [Note 9. Operating Costs and Expenses](index=14&type=section&id=Note%209.%20Operating%20Costs%20and%20Expenses) Operating Costs and Expenses (Three Months Ended June 30) | Category | 2024 (millions) | 2023 (millions) | | :------- | :-------------- | :-------------- | | Programming | $2,472 | $2,740 | | Other costs of revenue | $1,538 | $1,367 | | Costs to service customers | $1,981 | $2,069 | | Sales and marketing | $912 | $895 | | Other expense | $1,270 | $1,234 | | **Total** | **$8,173** | **$8,305** | Operating Costs and Expenses (Six Months Ended June 30) | Category | 2024 (millions) | 2023 (millions) | | :------- | :-------------- | :-------------- | | Programming | $5,042 | $5,539 | | Other costs of revenue | $2,996 | $2,695 | | Costs to service customers | $4,075 | $4,164 | | Sales and marketing | $1,832 | $1,841 | | Other expense | $2,624 | $2,577 | | **Total** | **$16,569** | **$16,816** | - Programming costs decreased due to fewer video customers and a higher mix of lower-cost video packages, partly offset by contractual rate adjustments[190](index=190&type=chunk) [Note 10. Other Operating (Income) Expenses, Net](index=14&type=section&id=Note%2010.%20Other%20Operating%20(Income)%20Expenses,%20Net) Other Operating (Income) Expenses, Net (Three and Six Months Ended June 30) | Category | Three Months Ended June 30, 2024 (millions) | Three Months Ended June 30, 2023 (millions) | Six Months Ended June 30, 2024 (millions) | Six Months Ended June 30, 2023 (millions) | | :------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Special charges, net | $76 | $(52) | $89 | $(42) | | (Gain) loss on disposal of assets, net | $3 | $(6) | $(48) | $(6) | | **Total** | **$79** | **$(58)** | **$41** | **$(48)** | - Special charges, net primarily include severance costs and net amounts of litigation settlements[85](index=85&type=chunk) - (Gain) loss on disposal of assets, net includes a **$67 million** gain on sale of towers during the six months ended June 30, 2024[139](index=139&type=chunk) [Note 11. Other Expenses, Net](index=15&type=section&id=Note%2011.%20Other%20Expenses,%20Net) Other Expenses, Net (Three and Six Months Ended June 30) | Category | Three Months Ended June 30, 2024 (millions) | Three Months Ended June 30, 2023 (millions) | Six Months Ended June 30, 2024 (millions) | Six Months Ended June 30, 2023 (millions) | | :------- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Gain on extinguishment of debt | $9 | $0 | $9 | $0 | | Loss on financial instruments, net | $(14) | $(3) | $(18) | $(30) | | Net periodic pension benefits | $1 | $1 | $2 | $3 | | Loss on equity investments, net | $(81) | $(83) | $(167) | $(162) | | **Total** | **$(85)** | **$(85)** | **$(174)** | **$(189)** | [Note 12. Stock Compensation Plans](index=15&type=section&id=Note%2012.%20Stock%20Compensation%20Plans) - Charter's stock incentive plans include nonqualified stock options, restricted stock units, and restricted stock, generally vesting over three years for options/RSUs and one year for restricted stock[115](index=115&type=chunk)[116](index=116&type=chunk) Equity Awards Granted (Three and Six Months Ended June 30) | Award Type | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | 13,800 | 21,500 | 1,358,400 | 4,257,200 | | Restricted stock | 13,400 | 10,300 | 13,400 | 10,300 | | Restricted stock units | 16,700 | 21,500 | 1,099,800 | 1,535,900 | - Total unrecognized compensation remaining for future periods is **$399 million** for stock options, **$3 million** for restricted stock, and **$580 million** for restricted stock units[89](index=89&type=chunk) [Note 13. Earnings Per Share](index=15&type=section&id=Note%2013.%20Earnings%20Per%20Share) Basic and Diluted EPS (Three and Six Months Ended June 30) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to Charter shareholders (millions) | $1,231 | $1,223 | $2,337 | $2,244 | | Basic EPS | $8.58 | $8.15 | $16.24 | $14.89 | | Diluted EPS | $8.49 | $8.05 | $16.03 | $14.69 | | Weighted average common shares outstanding, basic | 143,329,828 | 150,091,880 | 143,920,073 | 150,761,406 | | Weighted average common shares outstanding, diluted | 144,914,860 | 151,975,698 | 145,742,397 | 152,727,540 | - Charter Holdings common units were excluded from diluted EPS computation as their effect would have been antidilutive (**17 million units** for 2024, **18 million** for 2023)[90](index=90&type=chunk) [Note 14. Contingencies](index=16&type=section&id=Note%2014.%20Contingencies) - The Company is involved in various lawsuits, claims, and regulatory inquiries, including alleged intellectual property infringement; adverse outcomes could lead to substantial damages or injunctions[145](index=145&type=chunk) - While individual lawsuits are not expected to have a material adverse effect, the aggregate impact could be material to operations, financial condition, results, or liquidity[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition, highlighting key operational trends, revenue drivers, expense changes, and liquidity position for the periods presented [Overview](index=17&type=section&id=Overview) - In Q2 2024, Charter lost **149,000 Internet customers** but added **557,000 mobile lines**; Internet customer growth was challenged by the end of the Affordable Connectivity Program (ACP), lower customer move rates, and increased competition[123](index=123&type=chunk) - The end of the ACP subsidy program was disruptive, leading to customer losses and expected one-time impacts on customer net gains, revenue per customer, and bad debt in Q3 and Q4 2024[123](index=123&type=chunk) - Mobile line growth benefited from the Spectrum One offering, Anytime Upgrade, and Phone Balance Buyout program, aiming to enhance connectivity, device upgrades, and ease of switching providers[148](index=148&type=chunk) Key Financial Performance (Three and Six Months Ended June 30) | Metric | Three Months Ended June 30, 2024 (millions) | Three Months Ended June 30, 2023 (millions) | % Change | Six Months Ended June 30, 2024 (millions) | Six Months Ended June 30, 2023 (millions) | % Change | | :----- | :------------------------------------------ | :------------------------------------------ | :------- | :---------------------------------------- | :---------------------------------------- | :------- | | Revenues | $13,685 | $13,659 | 0.2% | $27,364 | $27,312 | 0.2% | | Adjusted EBITDA | $5,665 | $5,522 | 2.6% | $11,162 | $10,872 | 2.7% | | Income from operations | $3,263 | $3,240 | 0.7% | $6,394 | $6,166 | 3.7% | [Critical Accounting Policies and Estimates](index=20&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no material changes to the critical accounting policies described in the Company's 2023 Annual Report on Form 10-K[130](index=130&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) - Total revenues increased by **$26 million** (**0.2%**) for the three months and **$52 million** (**0.2%**) for the six months ended June 30, 2024, driven by residential mobile service, residential Internet, enterprise, and other revenues, partly offset by lower residential video revenue[155](index=155&type=chunk) Revenue Growth by Service Offering (Three Months Ended June 30) | Service | 2024 (millions) | 2023 (millions) | % Change | | :------ | :-------------- | :-------------- | :------- | | Internet | $5,806 | $5,733 | 1.3% | | Video | $3,867 | $4,188 | (7.7)% | | Voice | $350 | $365 | (4.2)% | | Mobile service | $737 | $539 | 36.9% | | Residential revenue | $10,760 | $10,825 | (0.6)% | | Commercial revenue | $1,822 | $1,784 | 2.1% | | Advertising sales | $397 | $384 | 3.3% | | Other | $706 | $666 | 6.0% | Revenue Growth by Service Offering (Six Months Ended June 30) | Service | 2024 (millions) | 2023 (millions) | % Change | | :------ | :-------------- | :-------------- | :------- | | Internet | $11,632 | $11,451 | 1.6% | | Video | $7,775 | $8,442 | (7.9)% | | Voice | $724 | $738 | (1.9)% | | Mobile service | $1,422 | $1,036 | 37.4% | | Residential revenue | $21,553 | $21,667 | (0.5)% | | Commercial revenue | $3,618 | $3,557 | 1.7% | | Advertising sales | $788 | $739 | 6.5% | | Other | $1,405 | $1,349 | 4.2% | - Residential Internet customers decreased by **231,000** YoY, while residential mobile lines increased by **2,121,000** YoY[156](index=156&type=chunk)[159](index=159&type=chunk) - Operating costs and expenses decreased by **$132 million** for the three months and **$247 million** for the six months ended June 30, 2024, primarily due to lower programming costs and costs to service customers, partly offset by higher mobile service direct costs[216](index=216&type=chunk) - Net income attributable to Charter shareholders increased by **$8 million** for the three months and **$93 million** for the six months ended June 30, 2024, compared to the corresponding periods in 2023[167](index=167&type=chunk) [Use of Adjusted EBITDA and Free Cash Flow](index=25&type=section&id=Use%20of%20Adjusted%20EBITDA%20and%20Free%20Cash%20Flow) - Adjusted EBITDA and free cash flow are non-GAAP measures used by management and the board to assess performance, debt servicing ability, and funding operations/investments[196](index=196&type=chunk)[233](index=233&type=chunk) Adjusted EBITDA and Free Cash Flow Reconciliation (Three and Six Months Ended June 30) | Metric | Three Months Ended June 30, 2024 (millions) | Three Months Ended June 30, 2023 (millions) | Six Months Ended June 30, 2024 (millions) | Six Months Ended June 30, 2023 (millions) | | :----- | :------------------------------------------ | :------------------------------------------ | :---------------------------------------- | :---------------------------------------- | | Adjusted EBITDA | $5,665 | $5,522 | $11,162 | $10,872 | | Free cash flow | $1,296 | $668 | $1,654 | $1,332 | - Free cash flow increased by **$628 million** for the three months and **$322 million** for the six months ended June 30, 2024, primarily due to favorable changes in working capital, increased Adjusted EBITDA, and decreased cash paid for taxes[203](index=203&type=chunk)[176](index=176&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) This section details Charter's financial flexibility, including its debt structure, cash position, and capital allocation strategies, emphasizing its ability to fund operations, investments, and debt obligations [Recent Events](index=26&type=section&id=Recent%20Events) - In May 2024, Charter Operating issued **$3.0 billion** in new senior secured notes to refinance existing debt, including a tender offer for **$2.7 billion** of 2025 notes[172](index=172&type=chunk) [Overview of Our Contractual Obligations and Liquidity](index=26&type=section&id=Overview%20of%20Our%20Contractual%20Obligations%20and%20Liquidity) - As of June 30, 2024, Charter had **$96.5 billion** in debt, comprising **$13.1 billion** credit facility debt, **$56.2 billion** investment grade senior secured notes, and **$27.3 billion** high-yield senior unsecured notes[199](index=199&type=chunk) - Charter's target leverage ratio is **4 to 4.5 times** Adjusted EBITDA, with a leverage ratio of **4.3 times** as of June 30, 2024[200](index=200&type=chunk) - Charter has repurchased approximately **161.5 million shares** of Class A common stock and Charter Holdings common units for **$73.0 billion** since September 2016[200](index=200&type=chunk) [Free Cash Flow](index=27&type=section&id=Free%20Cash%20Flow) - Free cash flow was **$1.3 billion** and **$1.7 billion** for the three and six months ended June 30, 2024, respectively, up from **$668 million** and **$1.3 billion** in the corresponding 2023 periods[173](index=173&type=chunk) - The increase in free cash flow was driven by favorable changes in working capital, increased Adjusted EBITDA, and decreased cash paid for taxes[176](index=176&type=chunk) [Limitations on Distributions](index=27&type=section&id=Limitations%20on%20Distributions) - Distributions by subsidiaries to the parent company for debt payments are restricted under CCO Holdings indentures unless there is no default and the leverage ratio test is met[176](index=176&type=chunk) - As of June 30, 2024, CCO Holdings met its leverage ratio test, but there's no assurance it will always satisfy the test for future distributions[176](index=176&type=chunk) [Cash and Cash Equivalents](index=28&type=section&id=Cash%20and%20Cash%20Equivalents) Cash and Cash Equivalents (millions) | Date | Cash and Cash Equivalents | Restricted Cash | | :--- | :------------------------ | :-------------- | | June 30, 2024 | $602 | $40 | | December 31, 2023 | $709 | N/A | [Historical Operating, Investing, and Financing Activities](index=28&type=section&id=Historical%20Operating,%20Investing,%20and%20Financing%20Activities) - Net cash from operating activities increased by **$431 million** for the six months ended June 30, 2024, driven by higher Adjusted EBITDA, lower cash taxes, and favorable working capital changes[178](index=178&type=chunk) - Net cash used in investing activities remained stable at **$5.6 billion** for the six months ended June 30, 2024 and 2023, with increased capital expenditures offset by changes in accrued expenses[223](index=223&type=chunk) - Net cash used in financing activities increased by **$284 million** for the six months ended June 30, 2024, primarily due to higher net debt repayments, partly offset by reduced treasury stock and noncontrolling interest purchases[206](index=206&type=chunk) [Capital Expenditures](index=28&type=section&id=Capital%20Expenditures) Total Capital Expenditures (Three and Six Months Ended June 30) | Period | 2024 (millions) | 2023 (millions) | | :----- | :-------------- | :-------------- | | Three months ended June 30 | $2,853 | $2,834 | | Six months ended June 30 | $5,644 | $5,298 | - The increase in capital expenditures for the six months ended June 30, 2024, was primarily due to higher spending on network evolution, subsidized rural construction line extensions, and customer premise equipment (Xumo)[224](index=224&type=chunk) - Full-year 2024 capital expenditures are projected to be approximately **$12.0 billion**, including **$4.5 billion** for line extensions and **$1.6 billion** for network evolution[207](index=207&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes to the interest rate risk disclosures previously provided in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes to interest rate risk disclosures since the 2023 Annual Report on Form 10-K[209](index=209&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204%20Controls%20and%20Procedures) This section confirms that management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of June 30, 2024, and concluded they were effective in providing reasonable assurance that information is recorded, processed, summarized, and reported timely - Management, including the CEO and CFO, evaluated disclosure controls and procedures as of June 30, 2024[226](index=226&type=chunk) - Based on the evaluation, disclosure controls and procedures were deemed effective in providing reasonable assurance for timely and accurate financial reporting[226](index=226&type=chunk)[227](index=227&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2024[211](index=211&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201%20Legal%20Proceedings) This section refers to the legal proceedings discussion in the Annual Report on Form 10-K, updated by Note 14 in the current report, and specifies a $1 million threshold for environmental proceedings disclosure - Legal proceedings are discussed in Note 14 of the consolidated financial statements and the 2023 Annual Report on Form 10-K[212](index=212&type=chunk) - A **$1 million** threshold is used for disclosing environmental proceedings involving a governmental authority[212](index=212&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A%20Risk%20Factors) This section highlights potential risks, particularly those related to changes in the legal and regulatory framework, which could adversely affect the company's business by increasing costs, competition, or limiting operational flexibility - No material changes to risk factors from the 2023 Form 10-K, except as described in this section[213](index=213&type=chunk) - Changes in federal, state, and local regulation of cable systems, especially broadband Internet access, could increase costs, competition, and limit revenue potential[222](index=222&type=chunk) - Participation in government programs like ACP and RDOF carries compliance risks, and failure to meet requirements could result in penalties, enforcement actions, or loss of future funding; the end of the ACP benefit is disruptive, leading to customer and revenue losses[15](index=15&type=chunk)[214](index=214&type=chunk)[230](index=230&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details Charter's equity security purchases during the second quarter of 2024, including shares bought as part of publicly announced plans and shares withheld for employee taxes Purchases of Equity Securities by the Issuer (Q2 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Publicly Announced Plans or Programs (Shares) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (millions) | | :----- | :------------------------------- | :--------------------------- | :-------------------------------------------- | :-------------------------------------------------------------------------------------------------- | | April 1 - 30, 2024 | 495,909 | $266.00 | 493,180 | $390 | | May 1 - 31, 2024 | 427,542 | $270.16 | 425,442 | $384 | | June 1 - 30, 2024 | 408,202 | $277.70 | 403,205 | $406 | - During Q2 2024, Charter purchased approximately **1.3 million shares** of Class A common stock for **$358 million**; Charter Holdings purchased **0.2 million common units** from A/N for **$46 million**[21](index=21&type=chunk) - As of June 30, 2024, Charter had remaining board authority to purchase an additional **$406 million** of Class A common stock and/or Charter Holdings common units, excluding purchases from Liberty Broadband[21](index=21&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205%20Other%20Information) This section discloses the new employment agreement for Kevin D. Howard, Executive Vice President, Chief Accounting Officer, and Controller, detailing his compensation, benefits, and termination provisions - Kevin D. Howard, Executive Vice President, Chief Accounting Officer, and Controller, entered a new employment agreement effective July 26, 2024, with a term ending July 26, 2026[1](index=1&type=chunk)[21](index=21&type=chunk) Kevin D. Howard's Compensation under New Agreement | Compensation Component | Details | | :--------------------- | :------ | | Annual Base Salary | At least $625,000 | | Target Annual Cash Bonus | 85% of annual base salary | - Involuntary termination without cause or resignation for good reason entitles Mr. Howard to **two times** the sum of his annual base salary and target annual bonus, **24 months** of COBRA coverage costs, and up to **12 months** of outplacement services, subject to a release of claims[3](index=3&type=chunk)[4](index=4&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206%20Exhibits) This section refers to the Exhibit Index for a complete list of exhibits filed with the report - See Exhibit Index for a list of all exhibits[7](index=7&type=chunk) SIGNATURES This section confirms that the quarterly report was duly signed on behalf of Charter Communications, Inc. by Kevin D. Howard, Executive Vice President, Chief Accounting Officer, and Controller, on July 26, 2024 - The quarterly report was signed on behalf of Charter Communications, Inc. by Kevin D. Howard, Executive Vice President, Chief Accounting Officer and Controller, on July 26, 2024[9](index=9&type=chunk)[10](index=10&type=chunk) Exhibit Index This section provides a comprehensive list of all exhibits filed with the quarterly report, including corporate governance documents, indentures, stock incentive plans, employment agreements, and certifications - The Exhibit Index lists various documents, including the Amended and Restated Certificate of Incorporation, Indentures, Stock Incentive Plans, the Employment Agreement with Kevin D. Howard, and certifications from the CEO and CFO[12](index=12&type=chunk)