Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Charter Communications Inc. (NASDAQ:CHTR)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

Charter Communications Inc., balance sheet: goodwill and intangible assets

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Franchises 67,322  67,319  67,319  67,316  6,006 
Goodwill 29,554  29,554  29,554  29,509  1,168 
Trademarks 159  159  159  159  159 
Other intangible assets —  —  — 
Indefinite-lived intangible assets 97,035  97,032  97,032  96,988  7,337 
Customer relationships 18,230  18,229  18,229  18,226  2,616 
Other intangible assets 405  409  731  615  173 
Finite-lived intangible assets, gross carrying amount 18,635  18,638  18,960  18,841  2,789 
Accumulated amortization (10,899) (8,756) (6,479) (3,746) (1,842)
Finite-lived intangible assets, net carrying amount 7,736  9,882  12,481  15,095  947 
Franchises, goodwill and other intangible assets 104,771  106,914  109,513  112,083  8,284 

Based on: 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.
Franchises, goodwill and other intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Charter Communications Inc.’s franchises, goodwill and other intangible assets decreased from 2017 to 2018 and from 2018 to 2019.

Adjustments to Financial Statements: Removal of Goodwill

Charter Communications Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 148,188  146,130  146,623  149,067  39,316 
Less: Goodwill 29,554  29,554  29,554  29,509  1,168 
Total assets (adjusted) 118,634  116,576  117,069  119,558  38,148 
Adjustment to Total Charter Shareholders’ Equity (deficit)
Total Charter shareholders’ equity (deficit) (as reported) 31,445  36,285  39,084  40,139  (46)
Less: Goodwill 29,554  29,554  29,554  29,509  1,168 
Total Charter shareholders’ equity (deficit) (adjusted) 1,891  6,731  9,530  10,630  (1,214)

Based on: 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10).


Charter Communications Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Charter Communications Inc., adjusted financial ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Total Asset Turnover
Reported total asset turnover 0.31 0.30 0.28 0.19 0.25
Adjusted total asset turnover 0.39 0.37 0.36 0.24 0.26
Financial Leverage
Reported financial leverage 4.71 4.03 3.75 3.71
Adjusted financial leverage 62.74 17.32 12.28 11.25
Return on Equity (ROE)
Reported ROE 5.30% 3.39% 25.32% 8.77%
Adjusted ROE 88.21% 18.27% 103.83% 33.13%
Return on Assets (ROA)
Reported ROA 1.13% 0.84% 6.75% 2.36% -0.69%
Adjusted ROA 1.41% 1.06% 8.45% 2.95% -0.71%

Based on: 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Charter Communications Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Charter Communications Inc.’s adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Charter Communications Inc.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Charter Communications Inc.’s adjusted ROA deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Charter Communications Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Revenues 45,764  43,634  41,581  29,003  9,754 
Total assets 148,188  146,130  146,623  149,067  39,316 
Activity Ratio
Total asset turnover1 0.31 0.30 0.28 0.19 0.25
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenues 45,764  43,634  41,581  29,003  9,754 
Adjusted total assets 118,634  116,576  117,069  119,558  38,148 
Activity Ratio
Adjusted total asset turnover2 0.39 0.37 0.36 0.24 0.26

Based on: 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10).

2019 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 45,764 ÷ 148,188 = 0.31

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 45,764 ÷ 118,634 = 0.39

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Charter Communications Inc.’s adjusted total asset turnover ratio improved from 2017 to 2018 and from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 148,188  146,130  146,623  149,067  39,316 
Total Charter shareholders’ equity (deficit) 31,445  36,285  39,084  40,139  (46)
Solvency Ratio
Financial leverage1 4.71 4.03 3.75 3.71
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 118,634  116,576  117,069  119,558  38,148 
Adjusted total Charter shareholders’ equity (deficit) 1,891  6,731  9,530  10,630  (1,214)
Solvency Ratio
Adjusted financial leverage2 62.74 17.32 12.28 11.25

Based on: 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10).

2019 Calculations

1 Financial leverage = Total assets ÷ Total Charter shareholders’ equity (deficit)
= 148,188 ÷ 31,445 = 4.71

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Charter shareholders’ equity (deficit)
= 118,634 ÷ 1,891 = 62.74

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Charter Communications Inc.’s adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Charter shareholders 1,668  1,230  9,895  3,522  (271)
Total Charter shareholders’ equity (deficit) 31,445  36,285  39,084  40,139  (46)
Profitability Ratio
ROE1 5.30% 3.39% 25.32% 8.77%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Charter shareholders 1,668  1,230  9,895  3,522  (271)
Adjusted total Charter shareholders’ equity (deficit) 1,891  6,731  9,530  10,630  (1,214)
Profitability Ratio
Adjusted ROE2 88.21% 18.27% 103.83% 33.13%

Based on: 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10).

2019 Calculations

1 ROE = 100 × Net income (loss) attributable to Charter shareholders ÷ Total Charter shareholders’ equity (deficit)
= 100 × 1,668 ÷ 31,445 = 5.30%

2 Adjusted ROE = 100 × Net income (loss) attributable to Charter shareholders ÷ Adjusted total Charter shareholders’ equity (deficit)
= 100 × 1,668 ÷ 1,891 = 88.21%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Charter Communications Inc.’s adjusted ROE deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Charter shareholders 1,668  1,230  9,895  3,522  (271)
Total assets 148,188  146,130  146,623  149,067  39,316 
Profitability Ratio
ROA1 1.13% 0.84% 6.75% 2.36% -0.69%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Charter shareholders 1,668  1,230  9,895  3,522  (271)
Adjusted total assets 118,634  116,576  117,069  119,558  38,148 
Profitability Ratio
Adjusted ROA2 1.41% 1.06% 8.45% 2.95% -0.71%

Based on: 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-16), 10-K (filing date: 2016-02-10).

2019 Calculations

1 ROA = 100 × Net income (loss) attributable to Charter shareholders ÷ Total assets
= 100 × 1,668 ÷ 148,188 = 1.13%

2 Adjusted ROA = 100 × Net income (loss) attributable to Charter shareholders ÷ Adjusted total assets
= 100 × 1,668 ÷ 118,634 = 1.41%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Charter Communications Inc.’s adjusted ROA deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.