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.

Charter Communications Inc., economic profit calculation

US$ in millions

	12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Net operating profit after taxes (NOPAT)¹
	Cost of capital²
	Invested capital³

	Economic profit⁴

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Charter Communications Inc.’s economic profit increased from 2017 to 2018 and from 2018 to 2019.

Charter Communications Inc., NOPAT calculation

US$ in millions

	12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Net income (loss) attributable to Charter shareholders
	Deferred income tax expense (benefit)¹
	Increase (decrease) in allowance for doubtful accounts²
	Increase (decrease) in deferred revenue³
	Increase (decrease) in accruals for merger and restructuring costs⁴
	Increase (decrease) in equity equivalents⁵
	Interest expense, net
	Interest expense, operating lease liability⁶
	Adjusted interest expense, net
	Tax benefit of interest expense, net⁷
	Adjusted interest expense, net, after taxes⁸
	Net income (loss) attributable to noncontrolling interest
	Net operating profit after taxes (NOPAT)

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 accruals for merger and restructuring costs.

⁵ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Charter shareholders.

⁶ 2019 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

⁷ 2019 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= × 21.00% =

⁸ Addition of after taxes interest expense to net income (loss) attributable to Charter shareholders.

Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Charter Communications Inc.’s NOPAT increased from 2017 to 2018 and from 2018 to 2019.

Charter Communications Inc., cash operating taxes calculation

US$ in millions

	12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Income tax expense (benefit)
	Less: Deferred income tax expense (benefit)
	Add: Tax savings from interest expense, net
	Cash operating taxes

Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Charter Communications Inc.’s cash operating taxes decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Charter Communications Inc., invested capital calculation (financing approach)

US$ in millions

		Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
	Current portion of long-term debt
	Long-term debt, less current portion
	Operating lease liability¹
	Total reported debt & leases
	Total Charter shareholders’ equity (deficit)
	Net deferred tax (assets) liabilities²
	Allowance for doubtful accounts³
	Deferred revenue⁴
	Accruals for merger and restructuring costs⁵
	Equity equivalents⁶
	Accumulated other comprehensive (income) loss, net of tax⁷
	Noncontrolling interests
	Adjusted total Charter shareholders’ equity (deficit)
	Invested capital

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 accruals for merger and restructuring costs.

⁶ Addition of equity equivalents to total Charter shareholders’ equity (deficit).

⁷ Removal of accumulated other comprehensive income.

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Charter Communications Inc.’s invested capital decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.

Charter Communications Inc., cost of capital calculations


Equity²	÷	=	×		=
Long-term debt, including current portion³	÷	=	×	× (1 – 21.00%)	=
Operating lease liability⁴	÷	=	×	× (1 – 21.00%)	=
Total:

¹ US$ in millions