Charter Communications(US:CHTR)2023-10-26 16:00Financial Performance - For the three months ended September 30, 2023, Charter Communications reported a net income of $181 million, compared to $182 million for the same period in 2022, reflecting a slight decrease of 0.5%[39]. - Total revenue for the three months ended September 30, 2023, was $13.584 billion, a 0.2% increase compared to $13.550 billion for the same period in 2022[82]. - Adjusted EBITDA for the three months ended September 30, 2023, was $5.449 billion, reflecting a 0.7% increase from $5.412 billion in the prior year[82]. - Consolidated net income for the three months ended September 30, 2023, was $1,255 million, compared to $1,021 million for the three months ended March 31, 2023[159]. - Net income attributable to Charter shareholders for the three months ended September 30, 2023, was $1,255 million, up from $1,185 million in the same period last year, reflecting a growth of 5.9%[183]. - Basic earnings per share for the three months ended September 30, 2023, were $8.42, compared to $7.51 for the same period in 2022, indicating an increase of 12.1%[183]. - Consolidated net income for the nine months ended September 30, 2023, was $4,032 million, a decrease of 9.7% from $4,464 million in 2022[185]. Revenue Streams - Charter's revenues for the nine months ended September 30, 2023, were impacted by competitive pressures from various market participants, including incumbent telephone companies and wireless broadband providers[5]. - Video revenue decreased by 8.6% to $4,004 million for the three months ended September 30, 2023, compared to $4,379 million in the same period of 2022[87]. - Mobile service revenue increased significantly by 33.8% to $581 million for the three months ended September 30, 2023, compared to $435 million in the same period of 2022[87]. - Advertising sales revenues decreased by $97 million and $201 million during the three and nine months ended September 30, 2023, respectively, primarily due to a decline in political ad revenue[60]. - Advertising sales for the three months ended September 30, 2023, were $384 million, down from $481 million in the same period in 2022, a decline of 20.2%[183]. Customer Metrics - The company experienced a decrease of 891,000 residential video customers from September 30, 2022, to September 30, 2023, attributed to a higher mix of lower-cost video packages and $63 million in customer credits due to programming issues[58]. - The company reported a decrease of 969,000 residential wireline voice customers from September 30, 2022, to September 30, 2023[59]. - SMB customers grew by 29,000 from September 30, 2022, to September 30, 2023, indicating a positive trend in customer acquisition[91]. Operating Costs and Expenses - Operating costs for the three months ended September 30, 2023, were approximately $8.299 billion, compared to $8.247 billion for the same period in 2022, indicating a slight increase[73]. - Operating costs and expenses for the three months ended September 30, 2023, were $10,458 million, compared to $10,626 million for the same period in 2022, a decrease of 1.58%[183]. - Programming costs for the three months ended September 30, 2023, were approximately $2.6 billion, representing 31% of total operating costs, down from 35% in the same period of 2022[61]. - Costs to service customers increased by $76 million for the three months ended September 30, 2023, primarily due to adjustments in job structure and benefits[93]. Capital Expenditures and Investments - Capital expenditures for 2023 are projected to be approximately $7.2 billion, excluding line extensions, with an additional $4 billion expected for line extensions[105]. - Capital expenditures for the three months ended September 30, 2023, were $3.0 billion, up from $2.4 billion in the same period of 2022, driven by increased spending on network evolution and customer premise equipment[124]. - The subsidized rural construction initiative accounted for $512 million in capital expenditures for the three months ended September 30, 2023, compared to $440 million in the same period of 2022[126]. - The increase in capital expenditures for the nine months ended September 30, 2023, was primarily due to an increase in line extensions related to the rural construction initiative and continued network expansion[124]. - Net cash used in investing activities increased to $8.5 billion for the nine months ended September 30, 2023, compared to $6.3 billion for the same period in 2022, primarily due to higher capital expenditures[123]. Debt and Financing - The total debt as of September 30, 2023, included a new Term B-3 loan of $750 million, maturing in 2030, with pricing set at SOFR plus 2.25%[35]. - Net interest expense increased by $146 million for the three months ended September 30, 2023, primarily due to higher average interest rates and an increase in average debt outstanding of approximately $1.2 billion[64]. - The company expects to utilize free cash flow and cash on hand to fund projected cash needs, with approximately $3.3 billion available under credit facilities as of September 30, 2023[100]. - In February 2023, the company issued $1.1 billion of 7.375% senior unsecured notes due March 2031[164]. - The estimated fair value of the company's senior unsecured and secured notes and debentures as of September 30, 2023, was $97,588 million[190]. Stock and Shareholder Information - The company purchased 196,409 shares of Class A common stock for $78 million during the three months ended September 30, 2023, compared to 836,655 shares for $385 million in the same period of 2022[21]. - Charter purchased approximately 1.8 million shares of its Class A common stock for approximately $776 million during the three months ended September 30, 2023[132]. - As of September 30, 2023, Charter had remaining board authority to purchase an additional $672 million of Charter's Class A common stock and/or Charter Holdings common units[132]. - The company repurchased $790 million in treasury stock during the three months ended September 30, 2023[159]. - The total unrecognized compensation remaining to be recognized in future periods totaled $472 million for stock options as of September 30, 2023[176]. Other Notable Information - The company is currently involved in multiple patent infringement lawsuits, with trials scheduled for December 2023 and October 2024, which may impact future operations[178]. - The company reported a foreign currency remeasurement gain of $64 million related to Sterling Notes for the three months ended September 30, 2023[170]. - The company reported a loss on equity investments primarily related to its joint venture in Xumo, a next-generation streaming platform[202]. - The company experienced a decrease in accounts receivable, which improved to $(11) million from $(262) million in the previous year[185].