Stock Analysis on Net

Charter Communications Inc. (NASDAQ:CHTR)

$24.99

Analysis of Goodwill and Intangible Assets

Microsoft Excel

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Goodwill and Intangible Asset Disclosure

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

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Franchises
Goodwill
Wireless spectrum licenses
Trademarks
Indefinite-lived intangible assets
Customer relationships
Other intangible assets
Finite-lived intangible assets, gross carrying amount
Accumulated amortization
Finite-lived intangible assets, net carrying amount
Franchises, goodwill and other intangible assets

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


The analysis of the provided financial data reveals several noteworthy trends and changes in the intangible asset components over the reported periods.

Franchises
The value of franchises remains relatively stable, with a slight upward trend, increasing from 67,322 million USD in 2020 to 67,462 million USD in 2024. This indicates consistency in this asset category with minor incremental growth over the five-year span.
Goodwill
Goodwill similarly exhibits minimal variation, increasing marginally from 29,554 million USD in 2020 to 29,674 million USD in 2024. This stability suggests no significant impairments or additional goodwill recognition during the period.
Wireless Spectrum Licenses and Trademarks
Both wireless spectrum licenses and trademarks hold steady at 464 million USD and 159 million USD, respectively, throughout all years, indicating no changes or revaluations in these intangible assets.
Indefinite-lived Intangible Assets
The total value of indefinite-lived intangible assets shows little fluctuation, increasing marginally from 97,499 million USD in 2020 to 97,759 million USD in 2024. This stability implies that assets under this category, such as franchises, goodwill, trademarks, and certain licenses, have been maintained without major impairments or disposals.
Customer Relationships
This asset exhibits a gradual increase from 18,230 million USD in 2020 to 18,294 million USD in 2024, reflecting a slight enhancement in recognized value or possibly additions that support long-term customer contracts.
Other Intangible Assets
Other intangible assets demonstrate a gradual rise from 420 million USD in 2020 to 453 million USD in 2024, which may indicate ongoing investments or acquisitions related to these assets.
Finite-lived Intangible Assets (Gross Carrying Amount)
The gross carrying amount of finite-lived intangible assets shows a mild increase from 18,650 million USD in 2020 to 18,747 million USD in 2024, suggesting slight asset additions or capital expenditures in this category.
Accumulated Amortization
Accumulated amortization steadily increases in absolute value (negative balance) from -12,774 million USD in 2020 to -17,639 million USD in 2024. This rising amortization reflects ongoing periodic expense recognition for finite-lived intangible assets, indicating active amortization over time.
Finite-lived Intangible Assets (Net Carrying Amount)
There is a notable decline in the net carrying amount of finite-lived intangible assets, decreasing significantly from 5,876 million USD in 2020 to 1,108 million USD in 2024. This sharp reduction is consistent with the rising accumulated amortization and suggests that amortization expense is outpacing any additions in this asset class, leading to a diminishing net value.
Total Franchises, Goodwill, and Other Intangible Assets
The aggregate value of franchises, goodwill, and other intangible assets decreases from 103,375 million USD in 2020 to 98,867 million USD in 2024. This decline aligns with the diminishing net finite-lived intangible assets and represents an overall slight contraction in recorded intangible asset values during the period.

In summary, the intangible assets associated with indefinite-lived categories remain stable or slightly increase, which may reflect the durable nature of core assets such as franchises and goodwill. Conversely, the finite-lived intangible assets experience significant amortization-driven reduction in net carrying value, highlighting the natural amortization cycle's effect without substantial replacement or additions. The total intangible assets reflect a measured decline, likely influenced by these amortization trends and consistent asset management.


Adjustments to Financial Statements: Removal of Goodwill

Charter Communications Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Adjustment to Total Assets
Total assets (as reported)
Less: Goodwill
Total assets (adjusted)
Adjustment to Total Charter Shareholders’ Equity
Total Charter shareholders’ equity (as reported)
Less: Goodwill
Total Charter shareholders’ equity (adjusted)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


Total Assets
The reported total assets demonstrate a gradual upward trend over the five-year period, increasing from $144,206 million in 2020 to $150,020 million in 2024. This reflects overall growth in the asset base of the company. Similarly, the adjusted total assets, which exclude goodwill, follow a comparable pattern, rising steadily from $114,652 million in 2020 to $120,346 million in 2024. The adjustment for goodwill consistently reduces the asset value by approximately $29,554 million to $29,674 million each year, indicating the significant impact of goodwill on the company's balance sheet.
Shareholders’ Equity
The reported total Charter shareholders’ equity reveals notable volatility across the reported periods. It declines sharply from $23,805 million in 2020 to $9,119 million in 2022, followed by a modest recovery to $15,587 million by 2024. This fluctuation suggests potential challenges faced during the 2021-2022 period, possibly linked to operational or financial factors affecting equity. In contrast, the adjusted total Charter shareholders’ equity, which excludes goodwill, remains negative throughout all years, ranging from -$5,749 million in 2020 down to a low of -$20,444 million in 2022, then improving slightly to -$14,087 million in 2024. The persistent negative adjusted equity implies that the company’s core equity position, excluding intangible assets like goodwill, is under pressure, which may raise concerns regarding the book value strength without goodwill.
Overall Insights
Overall, the analysis reveals that while the company's total assets have shown steady growth, the equity position adjusted for goodwill presents a weakened and consistently negative state. The disparity between reported and adjusted equity highlights the importance of goodwill in the company's valuation and suggests a reliance on intangible asset values. The trend in the adjusted equity position calls for careful monitoring of the company’s fundamental financial health independent of goodwill assets.

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


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Charter Communications Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Total Asset Turnover
Reported total asset turnover
Adjusted total asset turnover
Financial Leverage
Reported financial leverage
Adjusted financial leverage
Return on Equity (ROE)
Reported ROE
Adjusted ROE
Return on Assets (ROA)
Reported ROA
Adjusted ROA

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


The data reveal several notable trends in the company's financial performance from 2020 to 2024. The reported total asset turnover shows a moderate but steady improvement, increasing from 0.33 in 2020 to 0.37 in 2022 and then maintaining that level through 2024. This indicates a consistent efficiency in using assets to generate revenue over the period. The adjusted total asset turnover, which accounts for goodwill, starts at a higher level of 0.42 in 2020, rises to 0.47 in 2022, and then stabilizes near 0.46, suggesting that adjustments for goodwill reflect a slightly better asset utilization than reported figures alone.

Reported financial leverage exhibits significant variation, initially increasing sharply from 6.06 in 2020 to a peak of 15.85 in 2022. It then decreases to 9.62 by 2024. This pattern points to a period of aggressive leveraging followed by a reduction in reliance on debt or liabilities relative to equity, potentially indicating deleveraging efforts or changes in capital structure management. There are no available figures for adjusted financial leverage, so analysis in this area is limited to reported data.

Return on equity (ROE) shows a dramatic rise from 13.53% in 2020 to a peak of 55.43% in 2022, followed by a decline to 32.61% in 2024. Despite the decrease in the latter years, ROE remains substantially higher than in 2020. This trend suggests that the company experienced a period of high profitability relative to shareholder equity, potentially driven by the increased financial leverage and improved asset turnover, with some moderation in recent years.

Reported return on assets (ROA) shows a slight upward trend from 2.23% in 2020 to around 3.5% in 2022, followed by a small decline and then a rebound to 3.39% in 2024. Adjusted ROA values, which exclude goodwill effects, are consistently higher, starting at 2.81% in 2020 and reaching 4.22% in 2024. The adjusted ROA trend follows a similar pattern to reported ROA but indicates a generally stronger underlying asset profitability when goodwill is excluded.

In summary, the company’s efficiency in asset utilization has shown gradual improvement with slight stabilization after 2022. Financial leverage increased significantly through 2022 before decreasing, which corresponded with a peak and subsequent decline in ROE. Profitability measured by ROA is modest but exhibits an improving trend, especially when adjusted for goodwill. The absence of adjusted data for financial leverage and ROE limits a more comprehensive adjusted analysis, but the available metrics suggest that the company's financial performance improved considerably up to 2022 with some stabilization or normalization in the following years.


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


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Revenues
Total assets
Activity Ratio
Total asset turnover1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Revenues
Adjusted total assets
Activity Ratio
Adjusted total asset turnover2

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= ÷ =

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= ÷ =


The data reveals a gradual increase in both reported and adjusted total assets over the five-year period. Reported total assets rose from $144,206 million in 2020 to $150,020 million in 2024, reflecting a steady growth trend. Similarly, adjusted total assets, which exclude goodwill, increased from $114,652 million to $120,346 million during the same timeframe.

In terms of efficiency, the reported total asset turnover ratio demonstrated an upward movement from 0.33 in 2020 to 0.37 in 2022 and then stabilized, maintaining a ratio of 0.37 through 2024. This suggests slight improvement in the effectiveness of asset utilization but suggests a plateau in turnover efficiency in later years.

The adjusted total asset turnover ratio indicates a generally higher turnover compared to reported figures. It increased from 0.42 in 2020 to a peak of 0.47 in 2022 and slightly declined thereafter to 0.46 by 2024. The trend suggests that when goodwill is excluded, the company’s assets are being utilized more efficiently, albeit with a minor decline in turnover efficiency in the latter years.

Overall, the company exhibits stable growth in asset base alongside consistent asset utilization efficiency, with adjusted metrics providing a perspective of relatively improved turnover compared to reported values inclusive of goodwill.


Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Total assets
Total Charter shareholders’ equity
Solvency Ratio
Financial leverage1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets
Adjusted total Charter shareholders’ equity
Solvency Ratio
Adjusted financial leverage2

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 Financial leverage = Total assets ÷ Total Charter shareholders’ equity
= ÷ =

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Charter shareholders’ equity
= ÷ =


Total Assets
The reported total assets exhibited a generally stable upward trend over the five-year period, increasing from $144.2 billion in 2020 to $150.0 billion in 2024. This reflects a gradual expansion in asset base, suggesting ongoing investments or asset acquisition strategies. The adjusted total assets, which exclude certain intangibles such as goodwill, mirrored this pattern, rising from $114.7 billion to $120.3 billion across the same period, maintaining roughly an 80% proportion relative to the reported figures.
Shareholders’ Equity
The reported Charter shareholders' equity showed significant volatility and decline during the period from 2020 through 2022, decreasing sharply from $23.8 billion to $9.1 billion. Thereafter, it recovered somewhat, increasing to $15.6 billion by 2024. This fluctuation may indicate substantial losses, write-downs, or restructuring activities affecting equity. In contrast, the adjusted total shareholders' equity remained negative throughout the period, starting at -$5.7 billion and deteriorating further to -$20.4 billion by 2022 before gradually improving to -$14.1 billion by 2024. The persistent negative adjusted equity suggests that, excluding goodwill and possibly other intangible assets, the net asset position of the company would be in deficit, indicating a potential overvaluation of intangible assets or accumulated impairments.
Financial Leverage
Reported financial leverage, calculated as the ratio of total assets to shareholders' equity, displayed significant fluctuations, rising sharply from 6.06 in 2020 to a peak of 15.85 in 2022. This peak corresponds with the lowest reported equity levels, resulting in a higher leverage ratio indicating greater reliance on debt or liabilities relative to equity. Subsequently, leverage decreased to 9.62 by 2024, aligned with the partial recovery in shareholders' equity. Adjusted financial leverage figures were not reported, limiting further analysis in this area.
Overall Insights
The data indicate that although total asset levels remained relatively stable and exhibited slight growth, shareholders’ equity experienced considerable stress especially in the middle years of the period, with a notable divergence between reported and adjusted equity. This suggests that intangible assets such as goodwill significantly influence reported equity figures. The volatility in financial leverage reflects this equity fluctuation and signals a period of increased financial risk and capital restructuring. The improvement in equity and reduction in leverage towards 2024 may imply recent stabilizing measures or improved operational performance.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Charter shareholders
Total Charter shareholders’ equity
Profitability Ratio
ROE1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Charter shareholders
Adjusted total Charter shareholders’ equity
Profitability Ratio
Adjusted ROE2

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROE = 100 × Net income attributable to Charter shareholders ÷ Total Charter shareholders’ equity
= 100 × ÷ =

2 Adjusted ROE = 100 × Net income attributable to Charter shareholders ÷ Adjusted total Charter shareholders’ equity
= 100 × ÷ =


Total Charter shareholders' equity (reported)
The reported total shareholders' equity demonstrates a notable declining trend from 2020 to 2022, decreasing from $23,805 million to $9,119 million. Following this decline, equity rebounded, rising to $11,086 million in 2023 and further to $15,587 million in 2024. This pattern suggests an initial period of contraction or losses followed by partial recovery in the equity base.
Total Charter shareholders' equity (adjusted for goodwill)
The adjusted total shareholders' equity, which accounts for goodwill, reveals negative values throughout the analyzed period. Starting at -$5,749 million in 2020, it worsened considerably to -$20,444 million by 2022, before showing some improvement in 2023 and 2024, reaching -$14,087 million. Although still negative, the reduction in the magnitude of negative equity after 2022 points to an easing of the goodwill burden or revaluation.
Reported Return on Equity (ROE)
The reported ROE shows a marked upward trend from 13.53% in 2020 to a peak of 55.43% in 2022, followed by a decrease to 32.61% by 2024. This volatility in ROE indicates fluctuating profitability relative to shareholders’ equity, with the peak in 2022 possibly reflecting reduced equity bases and strong net income during that year. The subsequent decline suggests a normalization or moderation of profitability.
Adjusted ROE
Data for the adjusted ROE is unavailable, preventing any analysis of profitability metrics when adjusted for goodwill.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Charter shareholders
Total assets
Profitability Ratio
ROA1
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income attributable to Charter shareholders
Adjusted total assets
Profitability Ratio
Adjusted ROA2

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

2024 Calculations

1 ROA = 100 × Net income attributable to Charter shareholders ÷ Total assets
= 100 × ÷ =

2 Adjusted ROA = 100 × Net income attributable to Charter shareholders ÷ Adjusted total assets
= 100 × ÷ =


Total Assets
The reported total assets exhibit a generally increasing trend over the five-year period, rising from 144,206 million US dollars at the end of 2020 to 150,020 million US dollars by the end of 2024. This represents a gradual expansion of approximately 4.1%. Similarly, the adjusted total assets, which exclude goodwill, also show steady growth from 114,652 million US dollars in 2020 to 120,346 million US dollars in 2024, reflecting an increase of about 5.0%. The parallel rise in both reported and adjusted total assets indicates consistent asset base growth irrespective of goodwill adjustments.
Return on Assets (ROA)
The reported Return on Assets displays variability over the period, initially increasing from 2.23% in 2020 to a peak of 3.5% in 2022, followed by a slight decline to 3.1% in 2023, and subsequently recovering to 3.39% in 2024. This suggests some fluctuations in the company's ability to generate earnings from its total assets during these years.
In contrast, the adjusted ROA, which excludes the impact of goodwill, remains consistently higher than the reported ROA throughout the period, starting at 2.81% in 2020 and rising to 4.22% in 2024. The adjusted ROA also shows a similar trend of an increase reaching 4.4% in 2022, a dip to 3.88% in 2023, and a rebound thereafter. The higher adjusted ROA suggests that goodwill has a dilutive effect on the return when included in the asset base.
Overall Insights
The data indicates that the company’s asset base has gradually expanded over the five years, and its operational efficiency, as measured by ROA, has experienced some fluctuations but generally improved. The distinction between reported and adjusted figures highlights the impact of goodwill on reported asset values and profitability metrics. The adjusted figures provide a clearer indication of underlying asset performance by excluding goodwill, often considered a non-tangible asset.