Charter Communications(US:CHTR)2023-04-27 16:00Stock Repurchases and Shareholder Returns - Charter purchased approximately 2.3 million shares of its Class A common stock for approximately $863 million during Q1 2023, including 0.1 million shares from Liberty Broadband at an average price of $345.53 per share[192] - Charter Holdings purchased 0.3 million common units from A/N at an average price of $376.32 per unit, totaling $122 million in Q1 2023[192] - As of March 31, 2023, Charter had remaining board authority to purchase an additional $305 million of its Class A common stock and/or Charter Holdings common units[192] - Charter repurchased 1,130,701 shares in January 2023 at an average price of $369.43 per share, 840,442 shares in February at $394.80 per share, and 501,772 shares in March at $354.90 per share[209] - The company had approximately $771 million remaining under its share repurchase program as of January 31, 2023, which decreased to $305 million by March 31, 2023[209] - The company repurchased 2,304,419 shares of Charter Class A common stock for $863 million in Q1 2023, with remaining board authority to purchase an additional $305 million[55][56] Financial Performance and Metrics - Adjusted EBITDA for Q1 2023 was $5.35 billion, compared to $5.213 billion in Q1 2022, reflecting a 2.6% increase[147] - Free cash flow for Q1 2023 decreased to $664 million from $1.8 billion in Q1 2022, a 63.1% decline[147] - Net income attributable to Charter shareholders for Q1 2023 was $1.021 billion, down from $1.203 billion in Q1 2022, a 15.1% decrease[147] - Revenue for Q1 2023 increased to $13.653 billion, up from $13.2 billion in Q1 2022, representing a growth of approximately 3.4%[32] - Operating income rose to $2.926 billion in Q1 2023, compared to $2.771 billion in Q1 2022, reflecting a 5.6% increase[32] - Net income attributable to Charter shareholders was $1.021 billion in Q1 2023, down from $1.203 billion in Q1 2022, a decrease of 15.1%[43] - Basic earnings per share (EPS) decreased to $6.74 in Q1 2023 from $7.05 in Q1 2022, while diluted EPS dropped to $6.65 from $6.90[33] - Adjusted EBITDA grew by 2.6% to $5.350 billion, and income from operations increased by 5.6% to $2.926 billion for the three months ended March 31, 2023[72] - Revenue increased to $13.653 billion in 2023 from $13.200 billion in 2022, representing a growth of 3.4%[82] - Net income attributable to Charter shareholders decreased to $1.021 billion in 2023 from $1.203 billion in 2022, a decline of 15.1%[82] - Net income attributable to Charter shareholders decreased to $1,021 million in Q1 2023 from $1,203 million in Q1 2022[121] Capital Expenditures and Investments - Total capital expenditures increased from $1.857 billion in Q1 2022 to $2.464 billion in Q1 2023, with significant increases in customer premise equipment (from $469 million to $537 million) and upgrade/rebuild (from $159 million to $289 million)[198] - Subsidized rural construction line extensions more than doubled from $192 million in Q1 2022 to $371 million in Q1 2023[198] - Purchases of property, plant, and equipment in Q1 2023 totaled $2.464 billion, up from $1.857 billion in Q1 2022, a 32.7% increase[21] - Capital expenditures for Q1 2023 were $1.592 billion, down from $1.792 billion in Q1 2022, a reduction of 11.2%[40] - Charter spent $391 million on its subsidized rural construction initiative in Q1 2023, activating approximately 44,000 subsidized rural passings[71] Debt and Financing - Long-term debt stood at $95.973 billion as of March 31, 2023, slightly down from $96.093 billion at the end of 2022[19] - Long-term debt increased with the issuance of $1.1 billion in senior unsecured notes in February 2023, used for general corporate purposes and stock buybacks[41] - Charter Operating amended its credit agreement in March 2023, adding a $750 million Term B-3 loan with a maturity in 2030[42] - Charter's senior unsecured notes had a fair value of $23.638 billion as of March 31, 2023, compared to $22.426 billion as of December 31, 2022[52] - The company's credit facilities had a fair value of $14.267 billion as of March 31, 2023, classified within Level 2 of the valuation hierarchy[60] Cash Flow and Liquidity - Charter's cash and cash equivalents decreased from $645 million as of December 31, 2022 to $534 million as of March 31, 2023[195] - Net cash flows from operating activities for Q1 2023 were $3.323 billion, compared to $3.647 billion in Q1 2022, a 8.9% decrease[21] - Cash and cash equivalents at the end of Q1 2023 were $534 million, down from $645 million at the end of 2022[19] Revenue and Cost Analysis - Programming costs increased by $178 million in Q1 2023 compared to Q1 2022[148] - Other costs of revenue rose by $220 million in Q1 2023 compared to the same period in 2022[148] - Programming costs remained high at $1.882 billion in Q1 2023, slightly down from $1.914 billion in Q1 2022[40] - Labor costs decreased to $959 million in Q1 2023 from $1.314 billion in Q1 2022, a significant reduction of 27%[40] - Interest expense increased to $1.265 billion in Q1 2023, up from $1.060 billion in Q1 2022, reflecting higher debt levels[43] - Total revenues grew by $453 million (3.4%) for the three months ended March 31, 2023, compared to the same period in 2022, driven by price adjustments and increases in residential mobile, Internet, and commercial customers[74] - Internet revenue increased by 4.9% to $5.718 billion, while mobile service revenue surged by 28.3% to $497 million for the three months ended March 31, 2023[70] - Internet revenue grew to $5.718 billion in 2023 from $5.452 billion in 2022, while video revenue declined to $4.254 billion from $4.346 billion[102] - Mobile service revenue increased to $497 million in 2023 from $387 million in 2022, reflecting a growth of 28.4%[102] - Residential revenue rose to $10.842 billion in 2023 from $10.576 billion in 2022, while commercial revenue increased to $1.773 billion from $1.731 billion[102] - Other revenues increased by $173 million in Q1 2023 compared to Q1 2022, primarily due to higher mobile device sales[132] - Advertising sales revenues decreased by $28 million in Q1 2023 compared to Q1 2022, primarily due to a decrease in political and local ad revenue[131] - Programming costs decreased to $2.8 billion in Q1 2023 from $3.0 billion in Q1 2022, representing 33% and 37% of total operating costs and expenses, respectively[134] Customer Metrics and Growth - The company added 686,000 mobile lines, 76,000 Internet customers, and 16,000 residential and SMB customer relationships (excluding mobile-only customers) in Q1 2023[78] - Residential customer relationships slightly decreased to 29,996,000 in 2023 from 30,035,000 in 2022, while SMB customer relationships increased to 2,215,000 from 2,163,000[84] - Monthly residential revenue per customer increased to $120.56 in 2023 from $117.58 in 2022, while monthly SMB revenue per customer decreased to $164.58 from $165.58[84] - Total mobile lines increased significantly to 5,978,000 in 2023 from 3,937,000 in 2022, driven by growth in both residential and SMB segments[84] - Residential Internet customers grew by 178,000 from March 31, 2022 to March 31, 2023[127] - Residential video customers decreased by 833,000 from March 31, 2022 to March 31, 2023[128] - Residential mobile service revenues increased by $110 million in Q1 2023 compared to Q1 2022, driven by an increase of 1,977,000 mobile lines[139] - SMB customers grew by 52,000 from March 31, 2022 to March 31, 2023[140] - Enterprise PSUs increased by 14,000 from March 31, 2022 to March 31, 2023[141] Assets and Liabilities - Total current assets as of March 31, 2023, were $4.067 billion, up from $4.017 billion at the end of 2022[19] - Accounts receivable, net, included $632 million of current equipment installment plan receivables as of March 31, 2023, up from $577 million as of December 31, 2022[102] - The fair value of the company's cross-currency derivatives was $565 million as of March 31, 2023, slightly down from $570 million as of December 31, 2022[101] Technology and Network Investments - Charter's Advanced WiFi service, offering speeds up to 1 Gbps, is available to all Internet customers, with plans to upgrade to multi-gigabit speeds over the next three years[71] - The company continues to invest in its 5G mobile data-only network leveraging CBRS Priority Access Licenses[71] Compensation and Expenses - Stock compensation expense increased to $208 million in Q1 2023 from $147 million in Q1 2022[119]