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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 10-Q
______________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From             to             

Commission File Number: 001-33664
a2014charterlogoa01a02a26.jpg
Charter Communications, Inc.
(Exact name of registrant as specified in its charter)
Delaware
84-1496755
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
400 Washington Blvd.
Stamford
Connecticut
06902
(Address of Principal Executive Offices)
(Zip Code)
(203) 905-7801
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock $.001 Par ValueCHTRNASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x    Accelerated filer o    Non-accelerated filer o    Smaller reporting company      Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes   No x

Number of shares of Class A common stock outstanding as of September 30, 2023: 147,920,285

Number of shares of Class B common stock outstanding as of September 30, 2023: 1




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CHARTER COMMUNICATIONS, INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS
Page No.

This quarterly report on Form 10-Q is for the three and nine months ended September 30, 2023. 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,” among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this quarterly report are set forth in this quarterly report on Form 10-Q, in our annual report on Form 10-K, and in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:

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;
the impact of competition from other market participants, including but not limited to incumbent telephone companies, direct broadcast satellite ("DBS") operators, wireless broadband and telephone providers, digital subscriber line (“DSL”) providers, fiber to the home providers and providers of video content over broadband Internet connections;
general business conditions, unemployment levels and the level of activity in the housing sector and economic uncertainty or downturn;
our ability to obtain programming at reasonable prices or to raise prices to offset, in whole or in part, the effects of higher programming costs (including retransmission consents and distribution requirements);
our ability to develop and deploy new products and technologies including consumer services and service platforms;
any events that disrupt our networks, information systems or properties and impair our operating activities or our reputation;
the effects of governmental regulation on our business including subsidies to consumers, subsidies and incentives for competitors, costs, disruptions and possible limitations on operating flexibility related to, and our ability to comply with, regulatory conditions applicable to us;
the ability to hire and retain key personnel;
our ability to procure necessary services and equipment from our vendors in a timely manner and at reasonable costs including in connection with our network evolution and rural construction initiatives;
the availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets; and
our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default of our other obligations under cross-default provisions.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this quarterly report.

ii


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in millions, except share data)

September 30,
2023
December 31,
2022
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$571 $645 
Accounts receivable, less allowance for doubtful accounts of $256 and $219, respectively
2,932 2,921 
Prepaid expenses and other current assets613 451 
Total current assets4,116 4,017 
INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net of accumulated depreciation of $36,885 and $36,164, respectively
38,617 36,039 
Customer relationships, net of accumulated amortization of $16,285 and $15,478, respectively
1,983 2,772 
Franchises67,396 67,363 
Goodwill29,672 29,563 
Total investment in cable properties, net137,668 135,737 
OTHER NONCURRENT ASSETS4,898 4,769 
Total assets$146,682 $144,523 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities$10,626 $10,555 
Current portion of long-term debt1,999 1,510 
Total current liabilities12,625 12,065 
LONG-TERM DEBT95,800 96,093 
DEFERRED INCOME TAXES18,996 19,058 
OTHER LONG-TERM LIABILITIES4,517 4,758 
SHAREHOLDERS’ EQUITY:
Class A common stock; $0.001 par value; 900 million shares authorized;
153,308,940 and 152,651,396 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 capital24,460 23,940 
Accumulated deficit(11,322)(14,821)
Treasury stock at cost; 5,388,655 and no shares, respectively
(2,040) 
Total Charter shareholders’ equity 11,098 9,119 
Noncontrolling interests3,646 3,430 
Total shareholders’ equity14,744 12,549 
Total liabilities and shareholders’ equity$146,682 $144,523 

The accompanying notes are an integral part of these consolidated financial statements.
1


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)
Unaudited

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
REVENUES$13,584 $13,550 $40,896 $40,348 
COSTS AND EXPENSES:
Operating costs and expenses (exclusive of items shown separately below)
8,299 8,247 25,115 24,574 
Depreciation and amortization2,130 2,177 6,508 6,711 
Other operating (income) expense, net29 202 (19)141 
10,458 10,626 31,604 31,426 
Income from operations3,126 2,924 9,292 8,922 
OTHER INCOME (EXPENSES):
Interest expense, net
(1,306)(1,160)(3,869)(3,329)
Other income (expenses), net(15)(37)(204)65 
(1,321)(1,197)(4,073)(3,264)
Income before income taxes1,805 1,727 5,219 5,658 
Income tax expense
(369)(360)(1,187)(1,194)
Consolidated net income1,436 1,367 4,032 4,464 
Less: Net income attributable to noncontrolling interests(181)(182)(533)(605)
Net income attributable to Charter shareholders$1,255 $1,185 $3,499 $3,859 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
Basic$8.42 $7.51 $23.30 $23.51 
Diluted$8.25 $7.38 $22.94 $23.06 
Weighted average common shares outstanding, basic
149,004,322 157,971,109 150,169,275 164,189,703 
Weighted average common shares outstanding, diluted
152,019,159 160,638,186 152,495,273 167,351,777 


The accompanying notes are an integral part of these consolidated financial statements.
2


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(dollars in millions)
Unaudited

Class A Common StockClass B Common StockAdditional Paid-in CapitalAccumulated DeficitTreasury StockTotal Charter Shareholders’ EquityNon-controlling InterestsTotal Shareholders’ Equity
BALANCE, December 31, 2022$ $ $23,940 $(14,821)$ $9,119 $3,430 $12,549 
Consolidated net income   1,021  1,021 162 1,183 
Stock compensation expense  208   208  208 
Exercise of stock options  2   2  2 
Purchases of treasury stock, including excise tax    (920)(920) (920)
Purchase of noncontrolling interest, net of tax  (40)  (40)(68)(108)
Change in noncontrolling interest ownership, net of tax  28   28 (37)(9)
Distributions to noncontrolling interest      (3)(3)
BALANCE, March 31, 2023  24,138 (13,800)(920)9,418 3,484 12,902 
Consolidated net income   1,223  1,223 190 1,413 
Stock compensation expense  168   168  168 
Exercise of stock options  3   3  3 
Purchases of treasury stock, including excise tax    (330)(330) (330)
Purchase of noncontrolling interest, net of tax  (16)  (16)(34)(50)
Change in noncontrolling interest ownership, net of tax  (6)  (6)7 1 
Distributions to noncontrolling interest      (80)(80)
BALANCE, June 30, 2023  24,287 (12,577)(1,250)10,460 3,567 14,027 
Consolidated net income   1,255  1,255 181 1,436 
Stock compensation expense  164   164  164 
Exercise of stock options  16   16  16 
Purchases of treasury stock, including excise tax    (790)(790) (790)
Purchase of noncontrolling interest, net of tax  (25)  (25)(44)(69)
Change in noncontrolling interest ownership, net of tax  18   18 (23)(5)
Distributions to noncontrolling interest      (35)(35)
BALANCE, September 30, 2023$ $ $24,460 $(11,322)$(2,040)$11,098 $3,646 $14,744 

The accompanying notes are an integral part of these consolidated financial statements.
3


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(dollars in millions)
Unaudited

Class A Common StockClass B Common StockAdditional Paid-in CapitalAccumulated DeficitTreasury StockTotal Charter Shareholders’ EquityNon-controlling InterestsTotal Shareholders’ Equity
BALANCE, December 31, 2021$ $ $26,725 $(12,675)$ $14,050 $4,106 $18,156 
Consolidated net income   1,203  1,203 186 1,389 
Stock compensation expense  147   147  147 
Exercise of stock options  1   1  1 
Purchases of treasury stock    (3,333)(3,333) (3,333)
Purchase of noncontrolling interest, net of tax  (197)  (197)(156)(353)
Change in noncontrolling interest ownership, net of tax  189   189 (250)(61)
Distributions to noncontrolling interest      (2)(2)
BALANCE, March 31, 2022  26,865 (11,472)(3,333)12,060 3,884 15,944 
Consolidated net income   1,471  1,471 237 1,708 
Stock compensation expense  104   104  104 
Exercise of stock options  4   4  4 
Purchases of treasury stock    (3,687)(3,687) (3,687)
Purchase of noncontrolling interest, net of tax  (256)  (256)(238)(494)
Preferred unit conversion and change in noncontrolling interest ownership, net of tax  183   183 (244)(61)
Distributions to noncontrolling interest      (5)(5)
BALANCE, June 30, 2022  26,900 (10,001)(7,020)9,879 3,634 13,513 
Consolidated net income   1,185  1,185 182 1,367 
Stock compensation expense  109   109  109 
Exercise of stock options        
Purchases of treasury stock    (2,225)(2,225) (2,225)
Purchase of noncontrolling interest, net of tax  (155)  (155)(179)(334)
Change in noncontrolling interest ownership, net of tax  96   96 (127)(31)
Distributions to noncontrolling interest      (49)(49)
BALANCE, September 30, 2022$ $ $26,950 $(8,816)$(9,245)$8,889 $3,461 $12,350 

The accompanying notes are an integral part of these consolidated financial statements.
4


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions)
Unaudited
Nine Months Ended September 30,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income $4,032 $4,464 
Adjustments to reconcile consolidated net income to net cash flows from operating activities:
Depreciation and amortization6,508 6,711 
Stock compensation expense540 360 
Noncash interest, net13 (12)
Deferred income taxes(46)165 
Other, net212 (113)
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable(11)(262)
Prepaid expenses and other assets(534)(96)
Accounts payable, accrued liabilities and other(136)(79)
Net cash flows from operating activities10,578 11,138 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment(8,259)(6,456)
Change in accrued expenses related to capital expenditures110 284 
Other, net(334)(174)
Net cash flows from investing activities(8,483)(6,346)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt14,591 21,528 
Repayments of long-term debt(14,385)(15,659)
Payments for debt issuance costs(18)(71)
Purchase of treasury stock(2,021)(9,245)
Proceeds from exercise of stock options21 5 
Purchase of noncontrolling interest(254)(1,379)
Distributions to noncontrolling interest(118)(56)
Other, net15 (36)
Net cash flows from financing activities(2,169)(4,913)
NET DECREASE IN CASH AND CASH EQUIVALENTS (74)(121)
CASH AND CASH EQUIVALENTS, beginning of period645 601 
CASH AND CASH EQUIVALENTS, end of period$571 $480 
CASH PAID FOR INTEREST$3,666 $3,251 
CASH PAID FOR TAXES$1,149 $882 

The accompanying notes are an integral part of these consolidated financial statements.
5


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
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 regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures typically included in the Company's Annual Report on Form 10-K have been condensed or omitted for this quarterly report. The accompanying consolidated financial statements are unaudited and are subject to review by regulatory authorities. However, in the opinion of management, such financial statements include all adjustments, which consist of only normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. Interim results are not necessarily indicative of results for a full year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Areas involving significant judgments and estimates include capitalization of labor and overhead costs, pension benefits and income taxes. Actual results could differ from those estimates. Certain prior period amounts have been reclassified to conform with the 2023 presentation.

Comprehensive income equaled net income attributable to Charter shareholders for the three and nine months ended September 30, 2023 and 2022.


6


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

2.    Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following as of September 30, 2023 and December 31, 2022:

September 30, 2023December 31, 2022
Accounts payable – trade$771 $952 
Deferred revenue542 511 
Accrued liabilities:
Programming costs1,736 1,914 
Labor1,179 1,314 
Capital expenditures1,898 1,792 
Interest1,368 1,165 
Taxes and regulatory fees647 667 
Property and casualty477 505 
Operating lease liabilities291 295 
Other1,717 1,440 
$10,626 $10,555 

3.    Total Debt
A summary of our debt as of September 30, 2023 and December 31, 2022 is as follows:

September 30, 2023December 31, 2022
Principal AmountCarrying ValueFair ValuePrincipal AmountCarrying ValueFair Value
Senior unsecured notes$27,250 $27,165 $23,083 $26,650 $26,567 $22,426 
Senior secured notes and debentures(a)
55,855 56,201 44,541 56,841 57,213 46,905 
Credit facilities(b)
14,483 14,433 14,175 13,877 13,823 13,467 
$97,588 $97,799 $81,799 $97,368 $97,603 $82,798 

(a)Includes the Company's £625 million fixed-rate British pound sterling denominated notes (the “Sterling Notes”) (remeasured at $762 million and $755 million as of September 30, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates) and the Company's £650 million aggregate principal amount of Sterling Notes (remeasured at $793 million and $786 million as of September 30, 2023 and December 31, 2022, respectively, using the exchange rate at the respective dates).
(b)The Company has availability under the Charter Operating credit facilities of approximately $3.3 billion as of September 30, 2023.

The estimated fair value of the Company’s senior unsecured and secured notes and debentures as of September 30, 2023 and December 31, 2022 is based on quoted market prices in active markets and is classified within Level 1 of the valuation hierarchy, while the estimated fair value of the Company’s credit facilities is based on quoted market prices in inactive markets and is classified within Level 2.

In February 2023, CCO Holdings, LLC ("CCO Holdings") and CCO Holdings Capital Corp. jointly issued $1.1 billion of 7.375% senior unsecured notes due March 2031 at par. The net proceeds were used for general corporate purposes, including repaying certain indebtedness, funding buybacks of Charter Class A common stock and Charter Holdings common units and to pay related fees and expenses.

In February 2023, Charter Operating entered into an amendment to its credit agreement to replace London Interbank Offering Rate ("LIBOR") as the benchmark rate applicable to the Term B loans with Secured Overnight Financing Rate ("SOFR") and in

7


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

March 2023, Charter Operating entered into another amendment to its credit agreement to incur a new Term B-3 loan with an aggregate principal amount of $750 million maturing in 2030 concurrently with the cancelation of certain of Charter Operating's existing Term B-1 and B-2 loans, among other amendments. Pricing on the new Term B-3 loan is SOFR plus 2.25%. After giving effect to the amendments, the aggregate principal amount of Term B-1 loans is $2.3 billion with pricing unchanged at SOFR plus 1.75% and the aggregate principal amount of Term B-2 loans is $3.1 billion with pricing unchanged at SOFR plus 1.75%.

As of July 1, 2023, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, ceased publishing remaining U.S. Dollar LIBOR rates. The Charter Operating senior secured floating rate notes due 2024 (the "Floating Rate Notes") used LIBOR as a benchmark for establishing the interest rate of the Floating Rate Notes. As of July 1, 2023, SOFR is being used as the benchmark replacement for calculations of the amount of interest payable on the Floating Rate Notes with respect to interest periods with interest determination dates occurring after June 30, 2023.

Losses on extinguishment of debt are recorded in other income (expenses), net in the consolidated statements of operations and for the nine months ended September 30, 2022 was $3 million as a result of the Charter Operating credit facility refinancing and Charter Operating notes redemption.

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 and nine months ended September 30, 2023 and 2022.

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Shares$Shares$Shares$Shares$
Share buybacks 1,833,928 $776 5,006,943 $2,218 5,092,677 $1,963 17,597,370 $9,065 
Income tax withholding15,261 7 14,595 7 148,075 58 304,070 180 
Exercise cost94,111 43,916 147,903 273,399 
1,943,300 $783 5,065,454 $2,225 5,388,655 $2,021 18,174,839 $9,245 

Share buybacks above include shares of Charter Class A common stock purchased from Liberty Broadband Corporation (“Liberty Broadband”) as follows.

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Number of shares purchased 1,724,540 120,149 4,952,224 
Amount of shares purchased$ $796 $42 $2,602 

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, 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 2022, Charter’s board of directors approved the retirement of the then currently held treasury stock and those shares were retired as of December 31, 2022. 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

8


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

Company’s cable systems. Noncontrolling interests on the Company’s balance sheet consist primarily of Advance/Newhouse Partnership's (“A/N”) equity interests in Charter Holdings, which is comprised of a common ownership interest.

Net income of Charter Holdings attributable to A/N’s common noncontrolling interest for financial reporting purposes is based on the weighted average effective common ownership interest of approximately 11%, and was $181 million and $532 million for the three and nine months ended September 30, 2023, respectively, and $182 million and $604 million for the three and nine months ended September 30, 2022, respectively.

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 and nine months ended September 30, 2023 and 2022.

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Number of units purchased196,409 836,655 677,584 2,557,256 
Amount of units purchased$78 $385 $254 $1,379 
Decrease in noncontrolling interest based on carrying value$(44)$(179)$(146)$(573)
Decrease in additional paid-in-capital, net of tax$(25)$(155)$(81)$(608)

Total shareholders' equity was also adjusted during the three and nine months ended September 30, 2023 and 2022 due to the changes in Charter Holdings' ownership as follows.

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Increase (decrease) in noncontrolling interest $(23)$(127)$(53)$(621)
Increase (decrease) in additional paid-in-capital, net of tax$18 $96 $40 $468 

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 $516 million and $570 million and is included in other long-term liabilities on its consolidated balance sheets as of September 30, 2023 and December 31, 2022, respectively.

The effect of financial instruments are recorded in other income (expenses), net in the consolidated statements of operations and consisted of the following.
Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Change in fair value of cross-currency derivative instruments
$6 $(322)$54 $(482)
Foreign currency remeasurement of Sterling Notes to U.S. dollars
64 129 (14)304 
Gain (loss) on financial instruments, net$70 $(193)$40 $(178)


9


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
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 September 30, Nine Months Ended September 30,
2023202220232022
Internet$5,776 $5,571 $17,227 $16,585 
Video4,004 4,379 12,446 13,209 
Voice379 391 1,117 1,180 
Mobile service581 435 1,617 1,237 
Residential revenue10,740 10,776 32,407 32,211 
Small and medium business1,085 1,095 3,270 3,257 
Enterprise698 673 2,070 2,003 
Commercial revenue1,783 1,768 5,340 5,260 
Advertising sales384 481 1,123 1,324 
Other677 525 2,026 1,553 
$13,584 $13,550 $40,896 $40,348 

As of September 30, 2023 and December 31, 2022, accounts receivable, net on the consolidated balance sheets includes approximately $651 million and $577 million of current equipment installment plan receivables, respectively, and other noncurrent assets includes approximately $547 million and $261 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 September 30, Nine Months Ended September 30,
2023202220232022
Programming$2,595 $2,871 $8,134 $8,820 
Other costs of revenue1,385 1,202 4,080 3,495 
Costs to service customers2,142 2,066 6,306 6,022 
Sales and marketing912 925 2,753 2,669 
Other expense1,265 1,183 3,842 3,568 
$8,299 $8,247 $25,115 $24,574 

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 customers include costs related to field operations, network operations and customer operations for the Company’s products, including mobile, sold to non-bulk residential and small and medium business ("SMB") customers including internal and third-party labor for the non-capitalizable portion of installations, service and repairs, maintenance, bad debt expense, billing and collection, occupancy and vehicle costs. Sales and

10


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

marketing costs represent the costs of selling and marketing our Internet, video, voice and mobile services to current and potential non-bulk residential and SMB customers, including labor cost. Other expense includes indirect costs associated with the Company’s Spectrum Enterprise, Spectrum Reach and Spectrum Networks businesses, including sales and marketing and bad debt expenses as well as costs associated with selling to and servicing bulk properties. Other expense also includes 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 September 30, Nine Months Ended September 30,
2023202220232022
Special charges, net$19 $199 $(23)$135 
Loss on disposal of assets, net10 3 4 6 
$29 $202 $(19)$141 

Special charges, net primarily includes net amounts of litigation settlements and employee termination costs.

10.     Other Income (Expenses), Net

Other income (expenses), net consist of the following for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Loss on extinguishment of debt (see Note 3)$ $ $ $(3)
Gain (loss) on financial instruments, net (see Note 6)70 (193)40 (178)
Net periodic pension benefits2 207 5 241 
Gain (loss) on equity investments, net(87)(51)(249)5 
$(15)$(37)$(204)$65 

During the three and nine months ended September 30, 2022, settlements for lump-sum distributions to pension plan participants exceeded the estimated annual interest cost of the plans. As a result, the pension liability and pension asset values were reassessed utilizing remeasurement date assumptions in accordance with the Company's mark-to-market pension accounting policy to record gains and losses in the period in which a remeasurement event occurs. Therefore, net periodic pension benefits includes a $189 million remeasurement gain recorded during the three and nine months ended September 30, 2022 which was primarily driven by changes in the discount rate offset by losses to record assets to fair value.

Loss on equity investments, net for the three and nine months ended September 30, 2023 is primarily related to our joint venture in Xumo, a next generation streaming platform jointly owned with Comcast Corporation.

11.     Stock Compensation Plans

Charter’s stock incentive plans provide for grants of nonqualified stock options, incentive stock options, stock appreciation rights, dividend equivalent rights, performance units and performance shares, share awards, phantom stock, restricted stock units and restricted stock.  Directors, officers and other employees of the Company and its subsidiaries, as well as others performing consulting services for the Company, are eligible for grants under the stock incentive plans.


11


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

Charter granted the following equity awards for the periods presented.

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Stock options9,500 50,700 4,266,700 1,455,100 
Restricted stock  10,300 6,800 
Restricted stock units10,900 175,600 1,546,800 618,700 

Stock options and restricted stock units generally cliff vest three years from the date of grant. Certain stock options and restricted stock units vest based on achievement of stock price hurdles. Stock options generally expire ten years from the grant date and restricted stock units have no voting rights. Restricted stock generally vests one year from the date of grant.

As of September 30, 2023, total unrecognized compensation remaining to be recognized in future periods totaled $472 million for stock options, $2 million for restricted stock and $524 million for restricted stock units and the weighted average period over which they are expected to be recognized is three years for stock options, seven months for restricted stock and two years for restricted stock units.

The Company recorded stock compensation expense of $164 million and $540 million for the three and nine months ended September 30, 2023, respectively, and $109 million and $360 million for the three and nine months ended September 30, 2022, respectively, which is included in operating costs and expenses.

12.    Earnings Per Share

Basic earnings per common share is computed by dividing net income attributable to Charter shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share considers the impact of potentially dilutive securities using the treasury stock and if-converted methods and is based on the weighted average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options, restricted stock, restricted stock units, equity awards with market conditions and Charter Holdings common units. Charter Holdings common units of 18 million for the three and nine months ended September 30, 2023 and 19 million and 20 million for the three and nine months ended September 30, 2022, respectively, were not included in the computation of diluted earnings per share as their effect would have been antidilutive.

12


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)


The following is the computation of diluted earnings per common share for the three and nine months ended September 30, 2023 and 2022.

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Numerator:
Net income attributable to Charter shareholders$1,255 $1,185 $3,499 $3,859 
Denominator:
Weighted average common shares outstanding, basic149,004,322 157,971,109 150,169,275 164,189,703 
Effect of dilutive securities:
Assumed exercise or issuance of shares relating to stock plans3,014,837 2,667,077 2,325,998 3,162,074 
Weighted average common shares outstanding, diluted152,019,159 160,638,186 152,495,273 167,351,777 
Basic earnings per common share attributable to Charter shareholders$8.42 $7.51 $23.30 $23.51 
Diluted earnings per common share attributable to Charter shareholders$8.25 $7.38 $22.94 $23.06 

13.    Contingencies

On April 27, 2022, Entropic Communications, LLC (“Entropic”) filed a complaint in the United States District Court for the Eastern District of Texas alleging that Charter infringed six patents relating to the deployment of certain set-top boxes, cable modems and cable modem termination systems. Entropic seeks monetary damages, including future license fees. Trial is scheduled for December 4, 2023. On February 10, 2023, Entropic filed a separate lawsuit against Charter in the United States District Court for the Eastern District of Texas. The lawsuit alleges infringement of two patents that also relate to the deployment of certain set-top boxes and cable modems. Entropic seeks monetary damages. Trial is scheduled for October 7, 2024. On February 10, 2023, Entropic filed two more lawsuits against Charter in the United States District Court for the Eastern District of Texas. The two lawsuits allege infringement of a total of twelve patents that relate to certain set-top boxes. Entropic seeks monetary damages, including future license fees. The two cases have been consolidated for pre-trial purposes. The first trial is scheduled for December 9, 2024. While the Company is vigorously defending these suits and is unable to predict the outcome of the Entropic lawsuits, the Company does not expect that the litigation will have a material effect on its operations, financial condition, or cash flows.

In addition to the Entropic litigation described above, the Company is a defendant or co-defendant in several lawsuits involving alleged infringement of various intellectual property relating to various aspects of its businesses. Other industry participants are also defendants in certain of these cases or related cases. In the event that a court ultimately determines that the Company infringes on any intellectual property, the Company may be subject to substantial damages and/or an injunction that could require the Company or its vendors to modify certain products and services the Company offers to its subscribers, as well as negotiate royalty or license agreements with respect to the intellectual property at issue. While the Company believes the lawsuits are without merit and intends to defend the actions vigorously, no assurance can be given that any adverse outcome would not be material to the Company’s operations, consolidated financial condition, results of operations, or liquidity. The Company cannot predict the outcome of any such claims nor can it reasonably estimate a range of possible loss.

The Company is party to other lawsuits, claims and regulatory inquiries that arise in the ordinary course of conducting its business. The ultimate outcome of these other legal matters pending against the Company cannot be predicted, and although such lawsuits and claims are not expected individually to have a material adverse effect on the Company’s operations, consolidated financial condition, results of operations or liquidity, such lawsuits could have, in the aggregate, a material adverse effect on the Company’s operations, consolidated financial condition, results of operations or liquidity. Whether or not the

13


CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)

Company ultimately prevails in any particular lawsuit or claim, litigation can be time consuming and costly and injure the Company’s reputation.

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Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Charter Communications, Inc. (together with its controlled subsidiaries, “Charter”) is a leading broadband connectivity company and cable operator serving more than 32 million customers in 41 states through our Spectrum brand. Over an advanced communications network, we offer 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. We also distribute award-winning news coverage and sports programming to our 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.

Overview

During the third quarter of 2023, we added 594,000 mobile lines, 63,000 Internet customers and 8,000 residential and small and medium business ("SMB") customer relationships, which excludes mobile-only customer relationships. We spent $512 million and $1.4 billion on our subsidized rural construction initiative during the three and nine months ended September 30, 2023, respectively, and activated approximately 78,000 and 190,000 subsidized rural passings, respectively. Our mobile line and Internet customer additions in the third quarter were supported by our Spectrum One offering, which brings together Spectrum Internet, Advanced WiFi and Unlimited Spectrum Mobile to offer consumers fast, reliable and secure online connections on their favorite devices at home and on-the-go in a high-value package and was further supported by growth in our legacy and new subsidized rural markets.

We continue to upgrade our network to provide higher Internet speeds and reliability and invest in our products and customer service platforms. We currently offer Spectrum Internet products with speeds up to 1 Gbps across our entire footprint and we plan to upgrade our network to provide multi-gigabit speeds. Our Advanced WiFi, a managed WiFi service that provides customers an optimized home network while providing greater control of their connected devices with enhanced security and privacy, is available to all Internet customers. We continue to invest in our ability to provide a differentiated Internet connectivity experience for our mobile and fixed Internet customers with increasing availability of out-of-home WiFi access points across our footprint. In addition, we continue to work towards the construction of our own 5G mobile data-only network in targeted areas of our footprint leveraging our Citizen Broadband Radio Service ("CBRS") Priority Access Licenses.

We also continue to evolve our video product. In September 2023, we entered into a new affiliation agreement with Disney which provides a template for a new programming affiliation approach where we partner with content providers to provide access to both linear and app-based direct-to-consumer content. In October 2023, we began deploying Xumo Stream Boxes to new video customers. The Xumo Stream Box combines a live TV experience with access to hundreds of direct-to-consumer TV apps and features unified search and discovery along with a curated content offering based on the customer's interests and subscriptions. By continually improving our product set and offering consumers the opportunity to save money by switching to our services, we believe we can continue to penetrate our expanding footprint and sell additional products to our existing customers. We are also beginning to see benefits from the targeted investments we are making in employee wages and benefits inside of our operations to build employee skill sets and tenure, as well as the continued investments in digitization of our customer service platforms and proactive maintenance, all with the goal of improving the customer experience, reducing transactions and driving customer growth and retention.


15


We realized revenue, Adjusted EBITDA and income from operations during the periods presented as follows (in millions; all percentages are calculated using whole numbers; minor differences may exist due to rounding):

Three Months Ended September 30, Nine Months Ended September 30,
20232022% Change20232022% Change
Revenues$13,584 $13,550 0.2 %$40,896 $40,348 1.4 %
Adjusted EBITDA$5,449 $5,412 0.7 %$16,321 $16,134 1.2 %
Income from operations$3,126 $2,924 6.9 %$9,292 $8,922 4.2 %

Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, interest expense, net, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. See “Use of Adjusted EBITDA and Free Cash Flow” for further information on Adjusted EBITDA and free cash flow. 

Growth in total revenue was primarily due to growth in residential Internet customers and residential mobile lines partly offset by lower residential video and advertising sales revenues. Adjusted EBITDA growth and changes in income from operations were impacted by growth in revenue and increases in operating costs and expenses, primarily other costs of revenue and costs to service customers partly offset by a decrease in programming expense.


16


The following table summarizes our customer statistics for Internet, video, voice and mobile as of September 30, 2023 and 2022 (in thousands except per customer data and footnotes).

Approximate as of
September 30,
2023 (a)
2022 (a)
Customer Relationships (b)
Residential 30,012 29,946 
SMB2,224 2,195 
Total Customer Relationships32,236 32,141 
Monthly Residential Revenue per Residential Customer (c)
$119.28 $120.00 
Monthly SMB Revenue per SMB Customer (d)
$162.94 $166.84 
Internet
Residential28,606 28,320 
SMB2,043 2,008 
Total Internet Customers30,649 30,328 
Video
Residential13,751 14,642 
SMB628 649 
Total Video Customers14,379 15,291 
Voice
Residential6,960 7,929 
SMB1,296 1,287 
Total Voice Customers8,256 9,216 
Mobile Lines (e)
Residential6,987 4,516 
SMB233 161 
Total Mobile Lines7,220 4,677 
Enterprise Primary Service Units ("PSUs") (f)
298282 

(a)We calculate the aging of customer accounts based on the monthly billing cycle for each account. On that basis, as of September 30, 2023 and 2022, customers include approximately 143,300 and 151,700 customers, respectively, whose accounts were over 60 days past due, approximately 53,400 and 55,500 customers, respectively, whose accounts were over 90 days past due and approximately 261,700 and 149,300 customers, respectively, whose accounts were over 120 days past due. Bad debt expense associated with these past due accounts has been reflected in our consolidated statements of operations. The increase in accounts past due more than 120 days is predominately due to pre-existing and incremental unsubsidized amounts of customers’ bills for those customers participating in government assistance programs, including video services. These customers are downgraded to a subsidized Internet-only service.
(b)Customer relationships include the number of customers that receive one or more levels of service, encompassing Internet, video, voice and mobile services, without regard to which service(s) such customers receive. Customers who reside in residential multiple dwelling units (“MDUs”) and that are billed under bulk contracts are counted based on the number of billed units within each bulk MDU. Total customer relationships exclude enterprise and mobile-only customer relationships.
(c)Monthly residential revenue per residential customer is calculated as total residential quarterly revenue divided by three divided by average residential customer relationships during the respective quarter and excludes mobile-only customers.
(d)Monthly SMB revenue per SMB customer is calculated as total SMB quarterly revenue divided by three divided by average SMB customer relationships during the respective quarter and excludes mobile-only customers.

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(e)Mobile lines include phones and tablets which require one of our standard rate plans (e.g., "Unlimited" or "By the Gig"). Mobile lines exclude wearables and other devices that do not require standard phone rate plans.
(f)Enterprise PSUs represent the aggregate number of fiber service offerings counting each separate service offering at each customer location as an individual PSU.

Critical Accounting Policies and Estimates

For a discussion of our critical accounting policies and the means by which we develop estimates therefore, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K. There have been no material changes from the critical accounting policies described in our Form 10-K.

Results of Operations

The following table sets forth the consolidated statements of operations for the periods presented (dollars in millions, except per share data):

Three Months Ended September 30, Nine Months Ended September 30,
2023202220232022
Revenues$13,584 $13,550 $40,896 $40,348 
Costs and Expenses:
Operating costs and expenses (exclusive of items shown separately below)
8,299 8,247 25,115 24,574 
Depreciation and amortization2,130 2,177 6,508 6,711 
Other operating (income) expense, net29 202 (19)141 
10,458 10,626 31,604 31,426 
Income from operations3,126 2,924 9,292 8,922 
Other Income (Expenses):
Interest expense, net(1,306)(1,160)(3,869)(3,329)
Other income (expenses), net(15)(37)(204)65 
(1,321)(1,197)(4,073)(3,264)
Income before income taxes1,805 1,727 5,219 5,658 
Income tax expense(369)(360)(1,187)(1,194)
Consolidated net income 1,436 1,367 4,032 4,464 
Less: Net income attributable to noncontrolling interests(181)(182)(533)(605)
Net income attributable to Charter shareholders$1,255 $1,185 $3,499 $3,859 
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
Basic$8.42 $7.51 $23.30 $23.51 
Diluted$8.25 $7.38 $22.94 $23.06 
Weighted average common shares outstanding, basic
149,004,322 157,971,109 150,169,275 164,189,703 
Weighted average common shares outstanding, diluted
152,019,159 160,638,186 152,495,273 167,351,777 

Revenues. Total revenues grew $34 million and $548 million for the three and nine months ended September 30, 2023, respectively, compared to the corresponding periods in 2022 primarily due to growth in residential Internet customers and residential mobile lines partly offset by lower residential video and advertising sales revenues as well as $68 million of total customer credits related to the temporary loss of Disney programming during the third quarter of 2023.

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Revenues by service offering were as follows (dollars in millions; all percentages are calculated using whole numbers; minor differences may exist due to rounding):

Three Months Ended September 30, Nine Months Ended September 30,
20232022% Change20232022% Change
Internet$5,776 $5,571 3.7 %$17,227 $16,585 3.9 %
Video4,004 4,379 (8.6)%12,446 13,209 (5.8)%
Voice379 391 (3.0)%1,117 1,180 (5.3)%
Mobile service581 435 33.8 %1,617 1,237 30.7 %
Residential revenue10,740 10,776 (0.3)%32,407 32,211 0.6 %
Small and medium business1,085 1,095 (0.9)%3,270 3,257 0.4 %
Enterprise698 673 3.7 %2,070 2,003 3.3 %
Commercial revenue1,783 1,768 0.8 %5,340 5,260 1.5 %
Advertising sales384 481 (20.3)%1,123 1,324 (15.2)%
Other677 525 28.8 %2,026 1,553 30.4 %
$13,584 $13,550 0.2 %$40,896 $40,348 1.4 %

The increase in Internet revenues from our residential customers is attributable to the following (dollars in millions):

Three months ended
September 30, 2023
compared to
three months ended
September 30, 2022
Increase / (Decrease)
Nine months ended
September 30, 2023
compared to
nine months ended
September 30, 2022
Increase / (Decrease)
Increase related to rate and product mix changes$146 $499 
Increase in average residential Internet customers59 143 
$205 $642 

The increase related to rate and product mix was primarily due to promotional rate step-ups and rate adjustments, partly offset by lower bundled revenue allocation. Residential Internet customers grew by 286,000 customers from September 30, 2022 to September 30, 2023.

Video revenues consist primarily of revenues from video services provided to our residential customers, as well as franchise fees, equipment service fees and video installation revenue. The decrease in video revenues is attributable to the following (dollars in millions):

Three months ended
September 30, 2023
compared to
three months ended
September 30, 2022
Increase / (Decrease)
Nine months ended
September 30, 2023
compared to
nine months ended
September 30, 2022
Increase / (Decrease)
Decrease in average residential video customers$(232)$(699)
Change related to rate and product mix changes(143)(64)
$(375)$(763)

Residential video customers decreased by 891,000 from September 30, 2022 to September 30, 2023. The change related to rate and product mix was affected by a higher mix of lower cost video packages within our video customer base and $63 million of customer credits related to the temporary loss of Disney programming in the third quarter of 2023, offset by the pass-through of programming cost increases and promotional rate step-ups.


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The decrease in voice revenues from our residential customers is attributable to the following (dollars in millions):