Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Economic Profit
Charter Communications Inc., economic profit calculation
US$ in millions
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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 9,837 – 9.47% × 136,388 = -3,080
Between 2020 and 2024, a consistent trend of narrowing economic losses is observed. While economic profit remained negative throughout the entire period—indicating that the company failed to generate returns exceeding its cost of capital—the magnitude of this deficit decreased significantly from 2020 through 2023 before stabilizing in 2024.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a general growth trajectory, rising from 7,242 million US$ in 2020 to 9,837 million US$ in 2024. This growth was characterized by a sharp increase between 2020 and 2021, a peak in 2022 at 9,688 million US$, a slight contraction in 2023, and a recovery in the final year of the period.
- Cost of Capital
- The cost of capital showed a steady decline for the majority of the analyzed timeframe, falling from a high of 12.20% in 2020 to a low of 9.18% in 2023. This downward trend helped mitigate the economic profit deficit. A marginal increase to 9.47% was recorded in 2024.
- Invested Capital
- Invested capital remained relatively stable, with minor fluctuations. After a slight decrease to 130,911 million US$ in 2021, the capital base expanded steadily, reaching 136,388 million US$ by December 31, 2024.
- Economic Profit
- Economic profit improved from -9,000 million US$ in 2020 to -2,926 million US$ in 2023, representing a substantial reduction in value destruction. This improvement was driven by the simultaneous increase in NOPAT and the decrease in the cost of capital. However, the trend reversed slightly in 2024, with economic profit widening to -3,080 million US$, coinciding with the increase in both invested capital and the cost of capital.
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Net Operating Profit after Taxes (NOPAT)
Charter Communications Inc., NOPAT calculation
US$ in millions
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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for doubtful accounts.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income attributable to Charter shareholders.
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,413 × 5.10% = 72
6 2024 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 5,301 × 21.00% = 1,113
7 Addition of after taxes interest expense to net income attributable to Charter shareholders.
- Net Income Attributable to Charter Shareholders
- The net income attributable to Charter shareholders exhibited an overall upward trend from 2020 to 2024. Starting at 3,222 million USD in 2020, it increased significantly to 4,654 million USD in 2021, representing a marked improvement. The upward momentum continued into 2022, reaching 5,055 million USD, the highest observed within the period. However, in 2023, net income experienced a decline to 4,557 million USD, indicating a temporary setback or potential challenges faced during that year. This decline was followed by a recovery in 2024, with net income rising again to 5,083 million USD, surpassing the previous peak in 2022. The pattern reflects generally positive profitability with some short-term volatility.
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes also demonstrated consistent growth over the analyzed period. NOPAT rose from 7,242 million USD in 2020 to 9,333 million USD in 2021, showing a strong operational improvement. This growth trend continued, albeit at a slower pace, reaching 9,688 million USD in 2022. In 2023, there was a slight decrease to 9,377 million USD, which mirrors the decline seen in net income for the same year, suggesting a possible operational impact affecting profitability. However, in 2024, NOPAT recovered to 9,837 million USD, the highest level in the period, indicating strengthened operational efficiency or profitability drivers.
- Summary Insight
- The data indicate robust and generally increasing profitability over the five-year span, with both net income and NOPAT peaking in 2024. The dip in both metrics in 2023 represents a point of concern, potentially due to external or internal factors affecting performance that year. The rebound in 2024 suggests effective management responses or favorable conditions restoring profitability. The consistent gap between NOPAT and net income reflects the differing nature of these metrics, with NOPAT generally showing higher figures due to its focus on operating profitability, excluding non-operating items and tax effects.
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Cash Operating Taxes
Charter Communications Inc., cash operating taxes calculation
US$ in millions
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).
- Income Tax Expense
- The income tax expense shows a consistent upward trend over the five-year period. Starting at 626 million USD in 2020, it rises significantly to 1068 million USD in 2021. This increasing pattern continues, reaching 1613 million USD in 2022, with a slight stabilization around 1593 million USD in 2023, and again increasing to 1649 million USD in 2024. The overall growth in income tax expense indicates increasing taxable income or possible changes in tax rates or policies affecting the company.
- Cash Operating Taxes
- Cash operating taxes exhibit a marked increase over the period under review. The amount grows from 980 million USD in 2020 to 1100 million USD in 2021, displaying a moderate increase. However, a sharp rise is observed in 2022, with cash operating taxes more than doubling to 2493 million USD. This upward trajectory continues to 2776 million USD in 2023 and further to 2849 million USD in 2024. This pronounced growth suggests increased cash outflows for tax payments, potentially stemming from higher operating profits or changes in cash tax obligations.
- Comparative Observations
- Both income tax expense and cash operating taxes demonstrate a growing tax burden over the five years. Notably, cash operating taxes increase at a steeper rate compared to income tax expense, especially from 2021 onward. This divergence might imply timing differences between tax accruals and cash payments, or variations in tax planning strategies and deferred tax calculations. The steady rise in both indicators points to an expanding scale of operations or profitability, resulting in higher tax liabilities.
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Invested Capital
Charter Communications Inc., invested capital calculation (financing approach)
US$ in millions
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).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of deferred revenue.
5 Addition of equity equivalents to total Charter shareholders’ equity.
6 Removal of accumulated other comprehensive income.
- Total Reported Debt & Leases
-
The total reported debt and leases showed a steady increase from 84,097 million USD at the end of 2020 to a peak of 99,620 million USD at the end of 2023. In 2024, there was a slight decrease to 97,176 million USD. This pattern indicates an overall growth in leverage over the period, with a marginal reduction in the most recent year.
- Total Charter Shareholders’ Equity
-
The shareholders’ equity declined sharply from 23,805 million USD at the end of 2020 to 9,119 million USD by the end of 2022, representing a significant erosion of equity value during this timeframe. However, in 2023 and 2024, equity showed signs of recovery, increasing to 11,086 million USD and then to 15,587 million USD respectively. This rebound suggests some stabilization and potential rebuilding of the equity base after a period of losses or distributions.
- Invested Capital
-
The invested capital remained relatively stable over the five-year period, beginning at 133,151 million USD in 2020 and gradually increasing to 136,388 million USD by the end of 2024. The slight upward trend indicates steady investment levels or capital deployment, with no major fluctuations.
- Summary of Financial Trends
-
The data reflects a company operating with high financial leverage, as evidenced by the substantial debt levels sustained throughout the period. The significant reduction in shareholders’ equity through 2022 may indicate challenges such as net losses, asset impairments, or substantial distributions during those years. The partial recovery of equity in the latter years points to improved financial performance or capital restructuring efforts. Meanwhile, the invested capital’s stability suggests consistent capital investment without significant expansion or contraction in asset base. The combination of these trends may imply a focus on managing leverage risks while attempting to restore shareholder value.
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Cost of Capital
Charter Communications Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 49,041) | 49,041) | ÷ | 134,382) | = | 0.36 | 0.36 | × | 18.79% | = | 6.86% | ||
| Long-term debt, including current portion, and equipment installment plan financing facility3 | 83,928) | 83,928) | ÷ | 134,382) | = | 0.62 | 0.62 | × | 5.21% × (1 – 21.00%) | = | 2.57% | ||
| Operating lease liability4 | 1,413) | 1,413) | ÷ | 134,382) | = | 0.01 | 0.01 | × | 5.10% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 134,382) | 1.00 | 9.47% | ||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current portion, and equipment installment plan financing facility. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 46,357) | 46,357) | ÷ | 135,504) | = | 0.34 | 0.34 | × | 18.79% | = | 6.43% | ||
| Long-term debt, including current portion, and equipment installment plan financing facility3 | 87,729) | 87,729) | ÷ | 135,504) | = | 0.65 | 0.65 | × | 5.30% × (1 – 21.00%) | = | 2.71% | ||
| Operating lease liability4 | 1,418) | 1,418) | ÷ | 135,504) | = | 0.01 | 0.01 | × | 4.50% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 135,504) | 1.00 | 9.18% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current portion, and equipment installment plan financing facility. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 60,207) | 60,207) | ÷ | 144,383) | = | 0.42 | 0.42 | × | 18.79% | = | 7.84% | ||
| Long-term debt, including current portion, and equipment installment plan financing facility3 | 82,798) | 82,798) | ÷ | 144,383) | = | 0.57 | 0.57 | × | 5.10% × (1 – 21.00%) | = | 2.31% | ||
| Operating lease liability4 | 1,378) | 1,378) | ÷ | 144,383) | = | 0.01 | 0.01 | × | 3.70% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 144,383) | 1.00 | 10.17% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current portion, and equipment installment plan financing facility. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 101,999) | 101,999) | ÷ | 203,091) | = | 0.50 | 0.50 | × | 18.79% | = | 9.44% | ||
| Long-term debt, including current portion, and equipment installment plan financing facility3 | 99,641) | 99,641) | ÷ | 203,091) | = | 0.49 | 0.49 | × | 4.94% × (1 – 21.00%) | = | 1.91% | ||
| Operating lease liability4 | 1,451) | 1,451) | ÷ | 203,091) | = | 0.01 | 0.01 | × | 3.40% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 203,091) | 1.00 | 11.37% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current portion, and equipment installment plan financing facility. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 117,703) | 117,703) | ÷ | 213,274) | = | 0.55 | 0.55 | × | 18.79% | = | 10.37% | ||
| Long-term debt, including current portion, and equipment installment plan financing facility3 | 94,226) | 94,226) | ÷ | 213,274) | = | 0.44 | 0.44 | × | 5.18% × (1 – 21.00%) | = | 1.81% | ||
| Operating lease liability4 | 1,345) | 1,345) | ÷ | 213,274) | = | 0.01 | 0.01 | × | 3.90% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 213,274) | 1.00 | 12.20% | ||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current portion, and equipment installment plan financing facility. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Charter Communications Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | (3,080) | (2,926) | (3,673) | (5,553) | (9,000) | |
| Invested capital2 | 136,388) | 134,069) | 131,318) | 130,911) | 133,151) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -2.26% | -2.18% | -2.80% | -4.24% | -6.76% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | 22.42% | 15.78% | 7.39% | 26.68% | — | |
| Comcast Corp. | -1.38% | -3.27% | -7.74% | -2.74% | — | |
| Meta Platforms Inc. | 13.86% | 6.77% | 0.52% | 22.81% | — | |
| Netflix Inc. | -3.69% | -9.95% | -10.48% | -5.88% | — | |
| Walt Disney Co. | -15.81% | -17.33% | -15.13% | -18.12% | -20.38% | |
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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -3,080 ÷ 136,388 = -2.26%
4 Click competitor name to see calculations.
The financial performance from 2020 to 2024 indicates a period of gradual improvement in economic value generation, although the company remained unable to achieve positive economic profit throughout the analyzed timeframe. A consistent reduction in economic losses was observed between 2020 and 2023, followed by a marginal increase in loss for the 2024 period.
- Economic Profit Trends
- A significant upward trajectory in economic profit is observed from 2020 to 2023, as losses narrowed from negative 9,000 million US dollars to negative 2,926 million US dollars. This represents a substantial reduction in the gap between operating returns and the cost of capital. However, this trend reversed slightly in 2024, with economic profit declining to negative 3,080 million US dollars.
- Invested Capital Dynamics
- Invested capital remained relatively stable across the five-year period. After a slight decrease from 133,151 million US dollars in 2020 to 130,911 million US dollars in 2021, a steady growth pattern emerged, culminating in a peak of 136,388 million US dollars by December 31, 2024. This suggests a consistent allocation of resources into the capital base despite the lack of positive economic profit.
- Economic Spread Ratio Analysis
- The economic spread ratio reflects a narrowing negative spread, indicating an improvement in the efficiency of capital utilization relative to the cost of capital. The ratio improved from -6.76% in 2020 to a high of -2.18% in 2023. Similar to the economic profit trend, 2024 saw a slight deterioration in this ratio to -2.26%, suggesting a plateau in the recovery of economic value creation.
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Economic Profit Margin
Charter Communications Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | (3,080) | (2,926) | (3,673) | (5,553) | (9,000) | |
| Revenues | 55,085) | 54,607) | 54,022) | 51,682) | 48,097) | |
| Add: Increase (decrease) in deferred revenue | (53) | (2) | 50) | 19) | (23) | |
| Adjusted revenues | 55,032) | 54,605) | 54,072) | 51,701) | 48,074) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -5.60% | -5.36% | -6.79% | -10.74% | -18.72% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Alphabet Inc. | 14.56% | 9.73% | 5.28% | 17.70% | — | |
| Comcast Corp. | -2.39% | -5.65% | -13.66% | -5.40% | — | |
| Meta Platforms Inc. | 13.98% | 7.09% | 0.46% | 17.92% | — | |
| Netflix Inc. | -3.84% | -11.13% | -12.50% | -6.87% | — | |
| Walt Disney Co. | -28.77% | -33.84% | -31.15% | -46.18% | -54.80% | |
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).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -3,080 ÷ 55,032 = -5.60%
3 Click competitor name to see calculations.
An analysis of the economic profit and margin trends between 2020 and 2024 reveals a period of significant recovery followed by a phase of relative stagnation. While the company consistently operated with a negative economic profit, the intensity of the value destruction decreased substantially over the majority of the period.
- Economic Profit Trajectory
- Economic profit remained negative throughout the observed timeframe, indicating that generated returns were insufficient to cover the cost of capital. A strong upward trend was observed from 2020 to 2023, as the economic profit improved from -9,000 million USD to -2,926 million USD. This recovery phase ended in 2024, when a slight reversal occurred, with the figure declining to -3,080 million USD.
- Adjusted Revenue Growth
- Adjusted revenues demonstrated consistent growth year-over-year, rising from 48,074 million USD in 2020 to 55,032 million USD in 2024. The most rapid expansion occurred between 2020 and 2022; however, the growth rate decelerated in 2023 and 2024, showing a trend toward revenue saturation.
- Economic Profit Margin Analysis
- The economic profit margin mirrored the trend of the absolute economic profit, showing a marked improvement from -18.72% in 2020 to -5.36% in 2023. This contraction of the negative margin suggests an increase in capital efficiency or operational improvement during this window. This trend peaked in 2023 before shifting slightly downward to -5.60% in 2024, reflecting the stagnation observed in the absolute economic profit figures.
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