Charter Communications, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Charter Communications, Inc. filed its Q1 2024 10-Q, detailing financial positions as of March 31, 2024.</b>

AI Summary

CHARTER COMMUNICATIONS, INC. /MO/ (CHTR) filed a Quarterly Report (10-Q) with the SEC on April 26, 2024. Charter Communications, Inc. filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of 2024. Key financial data points such as common stock, additional paid-in capital, retained earnings, treasury stock, and noncontrolling interest are detailed for the periods ending March 31, 2024, December 31, 2023, and March 31, 2023. The company's fiscal year ends on December 31. The filing includes share information for Common Class A and Common Class B members.

Why It Matters

For investors and stakeholders tracking CHARTER COMMUNICATIONS, INC. /MO/, this filing contains several important signals. This 10-Q filing provides a snapshot of Charter's financial health and equity structure at the end of the first quarter, crucial for investors assessing performance and stability. The detailed breakdown of equity components allows for a deeper understanding of how shareholder value and retained earnings have evolved over the reported periods.

Risk Assessment

Risk Level: low — CHARTER COMMUNICATIONS, INC. /MO/ shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant new risks or events, but rather provides updated financial disclosures.

Analyst Insight

Review the detailed equity and share information to understand changes in shareholder structure and retained earnings compared to prior periods.

Key Numbers

• 144,029,995 — Shares Outstanding (Class A) (As of March 31, 2024)
• 145,225,458 — Shares Outstanding (Class B) (As of March 31, 2024)

Key Players & Entities

• CHARTER COMMUNICATIONS, INC. /MO/ (company) — Filer name
• CHTR (company) — Ticker symbol
• 2024-03-31 (date) — Period of report
• 2024-04-26 (date) — Filing date
• 2023-03-31 (date) — Comparative period
• 2023-12-31 (date) — Comparative period
• 400 ATLANTIC STREET (address) — Business and mail address
• STAMFORD (location) — City for business and mail address

FAQ

Industry Context

Charter Communications operates in the cable and other pay television services industry, providing broadband internet, video, and voice services.

Regulatory Implications

The filing is a standard 10-Q report under the Securities Exchange Act of 1934, requiring regular disclosure of financial information.

What Investors Should Do

1. Analyze the changes in Common Stock, Additional Paid-In Capital, and Retained Earnings from Q1 2023 to Q1 2024.
2. Compare the share counts for Class A and Class B common stock between the current and prior periods.
3. Note any specific disclosures related to noncontrolling interests or treasury stock.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-04-26: Filing Date — Date the 10-Q report was officially filed with the SEC.

Year-Over-Year Comparison

This filing is the first 10-Q for the fiscal year 2024, providing updated financial data compared to the previous year's Q1 report and the most recent annual report.

Filing Documents

• chtr-20240331.htm (10-Q) — 823KB
• chtr3312024exh-311.htm (EX-31.1) — 10KB
• chtr3312024exh-312.htm (EX-31.2) — 10KB
• chtr3312024exh-321.htm (EX-32.1) — 4KB
• chtr3312024exh-322.htm (EX-32.2) — 5KB
• chtr-20240331_g1.jpg (GRAPHIC) — 319KB
• 0001091667-24-000085.txt (&nbsp;) — 4671KB
• chtr-20240331.xsd (EX-101.SCH) — 33KB
• chtr-20240331_cal.xml (EX-101.CAL) — 54KB
• chtr-20240331_def.xml (EX-101.DEF) — 107KB
• chtr-20240331_lab.xml (EX-101.LAB) — 331KB
• chtr-20240331_pre.xml (EX-101.PRE) — 222KB
• chtr-20240331_htm.xml (XML) — 485KB

Financial Statements Charter Communications, Inc. and Subsidiaries

Financial Statements Charter Communications, Inc. and Subsidiaries Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 1 Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 2 Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2024 and 2023 3 Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 4

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 5 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3 Quantitative and Qualitative Disclosure About Market Risk 24 Item 4

Controls and Procedures

Controls and Procedures 24 PART II OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 25 Item 1A

Risk Factors

Risk Factors 25 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 26 Item 6 Exhibits 26

Signatures

Signatures S- 1 Exhibit Index E- 1 This quarterly report on Form 10-Q is for the three months ended March 31, 2024. The United States Securities and Exchange Commission ("SEC") allows us to "incorporate by reference" information that we file with the SEC, which means that we can disclose important information to you by referring you directly to those documents. In this quarterly report, "Charter," "we," "us" and "our" refer to Charter Communications, Inc. and its subsidiaries. i CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This quarterly report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial including, without limitation, the forward-looking statements set forth in Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this quarterly report. Although we believe that our plans, intentions and expectations as reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under "Risk Factors" in Part I, Item 1A of our most recent Form 10-K filed with the SEC. Many of the forward-looking statements contained in this quarterly report may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," "aim," "on track," "target," "opportunity," "tentative," "positioning," "designed," "create," "predict," "project," "initiatives," "seek," "would," "could," "continue," "ongoing," "upside," "increases," "grow," "focused on" and "potential,"

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in millions, except share data) March 31, 2024 December 31, 2023 (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 661 $ 709 Accounts receivable, less allowance for doubtful accounts of $ 281 and $ 268 , respectively 3,004 2,965 Prepaid expenses and other current assets 731 458 Total current assets 4,396 4,132 INVESTMENT IN CABLE PROPERTIES: Property, plant and equipment, net of accumulated depreciation of $ 38,529 and $ 37,751 , respectively 40,349 39,520 Customer relationships, net of accumulated amortization of $ 16,759 and $ 16,523 , respectively 1,509 1,745 Franchises 67,396 67,396 Goodwill 29,668 29,668 Total investment in cable properties, net 138,922 138,329 OTHER NONCURRENT ASSETS 4,726 4,732 Total assets $ 148,044 $ 147,193 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable, accrued and other current liabilities $ 10,926 $ 11,214 Current portion of long-term debt — 2,000 Total current liabilities 10,926 13,214 LONG-TERM DEBT 97,965 95,777 DEFERRED INCOME TAXES 18,966 18,954 OTHER LONG-TERM LIABILITIES 4,581 4,530 SHAREHOLDERS' EQUITY: Class A common stock; $ 0.001 par value; 900 million shares authorized; 145,587,549 and 145,225,458 shares issued, respectively — — Class B common stock; $ 0.001 par value; 1,000 shares authorized; 1 share issued and outstanding — — Preferred stock; $ 0.001 par value; 250 million shares authorized; no shares issued and outstanding — — Additional paid-in capital 23,544 23,346 Accumulated deficit ( 11,154 ) ( 12,260 ) Treasury stock at cost; 1,557,554 and no shares, respectively ( 516 ) — Total Charter shareholders' equity 11,874 11,086 Noncontrolling interests 3,732 3,632 Total shareholders' equity 15,606 14,718 Total liabilities and shareholders' equity $ 148,044 $ 147,193 The accompanying notes are an integral part of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in millions, except per share amounts and where indicated) 1. Organization and Basis of Presentation Organization Charter Communications, Inc. (together with its controlled subsidiaries, "Charter," or the "Company") is a leading broadband connectivity company and cable operator. Over an advanced communications network, the Company offers a full range of state-of-the-art residential and business services including Spectrum Internet , TV, Mobile and Voice. For small and medium-sized companies, Spectrum Business delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise provides highly customized, fiber-based solutions. Spectrum Reach delivers tailored advertising and production for the modern media landscape. The Company also distributes award-winning news coverage and sports programming to its customers through Spectrum Networks. Charter is a holding company whose principal asset is a controlling equity interest in Charter Communications Holdings, LLC ("Charter Holdings"), an indirect owner of Charter Communications Operating, LLC ("Charter Operating") under which substantially all of the operations reside. All significant intercompany accounts and transactions among consolidated entities have been eliminated. The Company's operations are managed and reported to its Chief Executive Officer ("CEO"), the Company's chief operating decision maker, on a consolidated basis. The CEO assesses performance and allocates resources based on the consolidated results of operations. Under this organizational and reporting structure, the Company has one reportable segment. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and the rules and regulati

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in millions, except per share amounts and where indicated) 2. Accounts Payable, Accrued and Other Current Liabilities Accounts payable, accrued and other current liabilities consist of the following as of March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Accounts payable – trade $ 850 $ 931 Deferred revenue 520 509 Accrued and other current liabilities: Programming costs 1,773 1,736 Labor 1,018 1,283 Capital expenditures 1,838 1,944 Interest 1,405 1,328 Taxes and regulatory fees 965 681 Other 2,557 2,802 $ 10,926 $ 11,214 3. Total Debt A summary of our debt as of March 31, 2024 and December 31, 2023 is as follows: March 31, 2024 December 31, 2023 Principal Amount Carrying Value Fair Value Principal Amount Carrying Value Fair Value Senior unsecured notes $ 27,250 $ 27,171 $ 23,528 $ 27,250 $ 27,168 $ 24,750 Senior secured notes and debentures (a) 55,909 56,228 46,822 57,925 58,250 50,742 Credit facilities (b) 14,618 14,566 14,397 12,413 12,359 12,237 $ 97,777 $ 97,965 $ 84,747 $ 97,588 $ 97,777 $ 87,729 (a) Includes the Company's 625 million fixed-rate British pound sterling denominated notes (the "Sterling Notes") (remeasured at $ 789 million and $ 797 million as of March 31, 2024 and December 31, 2023, respectively, using the exchange rate at the respective dates) and the Company's 650 million aggregate principal amount of Sterling Notes (remeasured at $ 820 million and $ 828 million as of March 31, 2024 and December 31, 2023, respectively, using the exchange rate at the respective dates). (b) The Company has availability under the Charter Operating credit facilities of approximately $ 2.9 billion as of March 31, 2024. The estimated fair value of the Company's senior unsecured and secured notes and debentures as of March 31, 2024 and December 31, 2023 is based on quoted market prices in active markets and is classified within Level 1 of the valu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in millions, except per share amounts and where indicated) 4. Common Stock The following represents the Company's purchase of Charter Class A common stock and the effect on the consolidated statements of cash flows during the three months ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 Shares $ Shares $ Share buybacks 1,409,597 $ 472 2,304,419 $ 863 Income tax withholding 121,907 44 127,815 49 Exercise cost 26,050 40,681 1,557,554 $ 516 2,472,915 $ 912 Share buybacks above include shares of Charter Class A common stock purchased from Liberty Broadband Corporation ("Liberty Broadband") as follows. Three Months Ended March 31, 2024 2023 Number of shares purchased 213,216 120,149 Amount of shares purchased $ 81 $ 42 As of March 31, 2024, Charter had remaining board authority to purchase an additional $ 263 million of Charter's Class A common stock and/or Charter Holdings common units, excluding purchases from Liberty Broadband. The Company also withholds shares of its Class A common stock in payment of income tax withholding owed by employees upon vesting of equity awards as well as exercise costs owed by employees upon exercise of stock options. In 2023, Charter's board of directors approved the retirement of the then currently held treasury stock and those shares were retired as of December 31, 2023. The Company accounts for treasury stock using the cost method and includes treasury stock as a component of total shareholders' equity. 5. Noncontrolling Interests Noncontrolling interests represents consolidated subsidiaries of which the Company owns less than 100 %. The Company is a holding company whose principal asset is a controlling equity interest in Charter Holdings, the indirect owner of the Company's cable systems. Noncontrolling interests on the Company's balance sheet consist primarily of Advance/Newhouse Partnership's ("A/N") equity interests in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in millions, except per share amounts and where indicated) The following table represents Charter Holdings' purchase of Charter Holdings common units from A/N and the effect on total shareholders' equity during the three months ended March 31, 2024 and 2023. Three Months Ended March 31, 2024 2023 Number of units purchased 262,339 324,100 Amount of units purchased $ 95 $ 122 Decrease in noncontrolling interest based on carrying value $ ( 58 ) $ ( 68 ) Decrease in additional paid-in-capital, net of tax $ ( 28 ) $ ( 40 ) Total shareholders' equity was also adjusted during the three months ended March 31, 2024 and 2023 due to the changes in Charter Holdings' ownership as follows. Three Months Ended March 31, 2024 2023 Decrease in noncontrolling interest $ ( 13 ) $ ( 37 ) Increase in additional paid-in-capital, net of tax $ 10 $ 28 6. Accounting for Derivative Instruments and Hedging Activities Cross-currency derivative instruments are used to manage foreign exchange risk on the Sterling Notes by effectively converting 1.275 billion aggregate principal amount of fixed-rate British pound sterling denominated debt, including annual interest payments and the payment of principal at maturity, to fixed-rate U.S. dollar denominated debt. The fair value of the Company's cross-currency derivatives, which are classified within Level 2 of the valuation hierarchy, was $ 460 million and $ 440 million and is included in other long-term liabilities on its consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively. The effect of financial instruments are recorded in other expenses, net in the consolidated statements of operations and consisted of the following. Three Months Ended March 31, 2024 2023 Change in fair value of cross-currency derivative instruments $ ( 20 ) $ 5 Foreign currency remeasurement of Sterling Notes to U.S. dollars 16 ( 32 ) Loss on financial i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in millions, except per share amounts and where indicated) 7. Revenues The Company's revenues by product line are as follows: Three Months Ended March 31, 2024 2023 Internet $ 5,826 $ 5,718 Video 3,908 4,254 Voice 374 373 Mobile service 685 497 Residential revenue 10,793 10,842 Small and medium business 1,088 1,091 Enterprise 708 682 Commercial revenue 1,796 1,773 Advertising sales 391 355 Other 699 683 $ 13,679 $ 13,653 As of March 31, 2024 and December 31, 2023, accounts receivable, net on the consolidated balance sheets includes approximately $ 695 million and $ 673 million of current equipment installment plan receivables, respectively, and other noncurrent assets includes approximately $ 766 million and $ 687 million of noncurrent equipment installment plan receivables, respectively. 8. Operating Costs and Expenses Operating costs and expenses, exclusive of items shown separately in the consolidated statements of operations, consist of the following for the periods presented: Three Months Ended March 31, 2024 2023 Programming $ 2,570 $ 2,799 Other costs of revenue 1,458 1,328 Costs to service customers 2,094 2,095 Sales and marketing 920 946 Other expense 1,354 1,343 $ 8,396 $ 8,511 Programming costs consist primarily of costs paid to programmers for basic, premium, video on demand and pay-per-view programming. Other costs of revenue include costs directly related to providing Internet, video, voice and mobile services including mobile device costs, payments to franchise and regulatory authorities, payments for sports, local and news content produced by the Company and direct costs associated with selling advertising. Also included in other costs of revenue are content acquisition costs for the Los Angeles Lakers' basketball games and Los Angeles Dodgers' baseball games, which are recorded as games are exhibited over the contract period. Costs to service custo

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (dollars in millions, except per share amounts and where indicated) the Company's Spectrum Enterprise, Spectrum Reach, Spectrum Networks and Spectrum Community Solutions businesses, including sales and marketing and bad debt expenses as well as corporate overhead and stock compensation expense, among others. 9. Other Operating (Income) Expense, Net Other operating (income) expense, net consist of the following for the periods presented: Three Months Ended March 31, 2024 2023 Special charges, net $ 13 $ 10 Gain on disposal of assets, net ( 51 ) — $ ( 38 ) $ 10 Special charges, net primarily includes net amounts of litigation settlements and employee termination costs. Gain on disposal of assets, net includes a $ 67 million gain on sale of towers during the three months ended March 31, 2024. 10. Other Expenses, Net Other expenses, net consist of the following for the periods presented: Three Months Ended March 31, 2024 2023 Loss on financial instruments, net (see Note 6) $ ( 4 ) $ ( 27 ) Net periodic pension benefits 1 2 Loss on equity investments, net ( 86 ) ( 79 ) $ ( 89 ) $ ( 104 ) 11. Stock Compensation Plans Chart

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