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

Charter Communications Inc. (NASDAQ:CHTR)

Analysis of Income Taxes

Advanced level

Income Tax Expense (Benefit)

Charter Communications Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Federal income taxes 23 
State income taxes 113  47  25  29 
Current income tax expense 119  70  29  33 
Federal income taxes 358  204  (9,082) (2,549) (53)
State income taxes (38) (94) (34) (409) (12)
Deferred income tax expense (benefit) 320  110  (9,116) (2,958) (65)
Income tax expense (benefit) 439  180  (9,087) (2,925) (60)

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
Current income tax expense Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Charter Communications Inc.’s current income tax expense increased from 2017 to 2018 and from 2018 to 2019.
Deferred income tax expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Charter Communications Inc.’s deferred income tax expense (benefit) increased from 2017 to 2018 and from 2018 to 2019.
Income tax expense (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Charter Communications Inc.’s income tax expense (benefit) increased from 2017 to 2018 and from 2018 to 2019.

Effective Income Tax Rate (EITR)

Charter Communications Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Statutory federal income tax rate 21.00% 21.00% 35.00% 35.00% 35.00%
Effective tax rate 18.06% 10.68% 35.00% 35.00% 18.13%

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).

Item Description The company
Effective tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Charter Communications Inc.’s effective tax rate decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

Charter Communications Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Loss carryforwards 1,839  2,453  2,657  4,127  4,247 
Goodwill —  —  —  —  315 
Other intangibles —  —  —  —  211 
Accrued and other 664  578  287  243  227 
Gross deferred tax assets 2,503  3,031  2,944  4,370  5,000 
Valuation allowance (46) (89) (137) (200) (3,186)
Deferred tax assets 2,457  2,942  2,807  4,170  1,814 
Investment in partnership (20,159) (20,319) (20,107) (30,832) — 
Indefinite-lived intangibles —  —  —  —  (1,582)
Property, plant and equipment —  —  —  —  (1,822)
Accrued and other (9) (12) (14) (3) — 
Deferred tax liabilities (20,168) (20,331) (20,121) (30,835) (3,404)
Net deferred tax assets (liabilities) (17,711) (17,389) (17,314) (26,665) (1,590)

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
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Charter Communications Inc.’s gross deferred tax assets increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Charter Communications Inc.’s deferred tax assets increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Charter Communications Inc.’s net deferred tax assets (liabilities) decreased from 2017 to 2018 and from 2018 to 2019.

Deferred Tax Assets and Liabilities, Classification

Charter Communications Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Deferred tax liabilities 17,711  17,389  17,314  26,665  1,590 

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
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Charter Communications Inc.’s deferred tax liabilities increased from 2017 to 2018 and from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

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 Liabilities
Total liabilities (as reported) 109,377  101,858  99,092  98,701  39,362 
Less: Noncurrent deferred tax liabilities, net 17,711  17,389  17,314  26,665  1,590 
Total liabilities (adjusted) 91,666  84,469  81,778  72,036  37,772 
Adjustment to Total Charter Shareholders’ Equity (deficit)
Total Charter shareholders’ equity (deficit) (as reported) 31,445  36,285  39,084  40,139  (46)
Less: Net deferred tax assets (liabilities) (17,711) (17,389) (17,314) (26,665) (1,590)
Total Charter shareholders’ equity (deficit) (adjusted) 49,156  53,674  56,398  66,804  1,544 
Adjustment to Net Income (loss) Attributable To Charter Shareholders
Net income (loss) attributable to Charter shareholders (as reported) 1,668  1,230  9,895  3,522  (271)
Add: Deferred income tax expense (benefit) 320  110  (9,116) (2,958) (65)
Net income (loss) attributable to Charter shareholders (adjusted) 1,988  1,340  779  564  (336)

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 Deferred Taxes (Summary)

Charter Communications Inc., adjusted financial ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net Profit Margin
Reported net profit margin 3.64% 2.82% 23.80% 12.14% -2.78%
Adjusted net profit margin 4.34% 3.07% 1.87% 1.94% -3.44%
Financial Leverage
Reported financial leverage 4.71 4.03 3.75 3.71
Adjusted financial leverage 3.01 2.72 2.60 2.23 25.46
Return on Equity (ROE)
Reported ROE 5.30% 3.39% 25.32% 8.77%
Adjusted ROE 4.04% 2.50% 1.38% 0.84% -21.76%
Return on Assets (ROA)
Reported ROA 1.13% 0.84% 6.75% 2.36% -0.69%
Adjusted ROA 1.34% 0.92% 0.53% 0.38% -0.85%

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 net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Charter Communications Inc.’s adjusted net profit margin 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 adjusted net income divided by adjusted shareholders’ equity. Charter Communications Inc.’s adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Charter Communications Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

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


Adjusted Net Profit Margin

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)
Revenues 45,764  43,634  41,581  29,003  9,754 
Profitability Ratio
Net profit margin1 3.64% 2.82% 23.80% 12.14% -2.78%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Charter shareholders 1,988  1,340  779  564  (336)
Revenues 45,764  43,634  41,581  29,003  9,754 
Profitability Ratio
Adjusted net profit margin2 4.34% 3.07% 1.87% 1.94% -3.44%

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 Net profit margin = 100 × Net income (loss) attributable to Charter shareholders ÷ Revenues
= 100 × 1,668 ÷ 45,764 = 3.64%

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to Charter shareholders ÷ Revenues
= 100 × 1,988 ÷ 45,764 = 4.34%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Charter Communications Inc.’s adjusted net profit margin 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 Deferred Taxes
Selected Financial Data (US$ in millions)
Total assets 148,188  146,130  146,623  149,067  39,316 
Adjusted total Charter shareholders’ equity (deficit) 49,156  53,674  56,398  66,804  1,544 
Solvency Ratio
Adjusted financial leverage2 3.01 2.72 2.60 2.23 25.46

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 = Total assets ÷ Adjusted total Charter shareholders’ equity (deficit)
= 148,188 ÷ 49,156 = 3.01

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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Charter shareholders 1,988  1,340  779  564  (336)
Adjusted total Charter shareholders’ equity (deficit) 49,156  53,674  56,398  66,804  1,544 
Profitability Ratio
Adjusted ROE2 4.04% 2.50% 1.38% 0.84% -21.76%

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 × Adjusted net income (loss) attributable to Charter shareholders ÷ Adjusted total Charter shareholders’ equity (deficit)
= 100 × 1,988 ÷ 49,156 = 4.04%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Charter Communications Inc.’s adjusted ROE improved from 2017 to 2018 and from 2018 to 2019.

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 Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Charter shareholders 1,988  1,340  779  564  (336)
Total assets 148,188  146,130  146,623  149,067  39,316 
Profitability Ratio
Adjusted ROA2 1.34% 0.92% 0.53% 0.38% -0.85%

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 × Adjusted net income (loss) attributable to Charter shareholders ÷ Total assets
= 100 × 1,988 ÷ 148,188 = 1.34%

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