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Charter Communications Finance

To provide financial leadership that enables Charter to connect customers to a world of possibility while becoming America's most trusted connectivity provider

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Align the strategy

Charter Communications Finance SWOT Analysis

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To provide financial leadership that enables Charter to connect customers to a world of possibility while becoming America's most trusted connectivity provider

Strengths

  • LIQUIDITY: Strong free cash flow generation ($2.4B in Q1 2023)
  • SCALE: Second-largest broadband provider in US with 32.1M customers
  • INFRASTRUCTURE: Extensive fiber-rich network across 41 states
  • DIVERSIFICATION: Balanced revenue streams across internet, video, mobile
  • EXPERTISE: Experienced financial leadership team with industry knowledge

Weaknesses

  • COMPETITION: Losing market share to fiber and fixed wireless alternatives
  • DEBT: High leverage ratio of 4.30x at end of Q1 2023
  • LEGACY: Declining video subscriber base (lost 405K customers in Q1 2023)
  • INTEGRATION: Ongoing financial systems consolidation challenges
  • FORECASTING: Historical variance between financial projections and results

Opportunities

  • EXPANSION: Rural broadband initiatives supported by government funding
  • MOBILE: Potential growth in wireless segment (added 686K lines in Q1 2023)
  • AUTOMATION: Financial process automation to reduce operational costs
  • ANALYTICS: Advanced financial data analytics to identify growth vectors
  • PARTNERSHIPS: Strategic financial alliances in content and technology

Threats

  • REGULATION: Potential broadband price regulation and Title II constraints
  • COMPETITION: Accelerating fiber deployments by AT&T, Verizon, and others
  • INFLATION: Rising operational costs impacting margins and capital planning
  • TECHNOLOGY: Disruptive technologies like LEO satellite internet (Starlink)
  • MARKET: Rising interest rates affecting debt servicing and refinancing

Key Priorities

  • GROWTH: Focus on expanding mobile and broadband subscriber base
  • EFFICIENCY: Implement financial process automation and cost controls
  • INVESTMENT: Strategic capital allocation for network upgrades
  • INNOVATION: Develop new revenue streams beyond traditional services
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Align the plan

Charter Communications Finance OKR Plan

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To provide financial leadership that enables Charter to connect customers to a world of possibility while becoming America's most trusted connectivity provider

GROWTH ENGINE

Accelerate profitability through strategic expansion

  • MOBILE REVENUE: Increase mobile line additions by 15% YoY while maintaining 38% contribution margin by Q4 2025
  • BROADBAND: Achieve net positive broadband subscriber growth of 80K+ per quarter with 98% retention rate
  • BUNDLING: Implement new financial incentives increasing multi-product households by 8% with 12% higher ARPU
  • ACQUISITION: Identify and evaluate 3 strategic M&A targets with minimum 16% IRR potential by Q3 2025
FINANCIAL EXCELLENCE

Optimize operations for maximum capital efficiency

  • AUTOMATION: Implement AI-driven financial processes reducing finance operational costs by $8.2M annually
  • FORECASTING: Reduce variance between financial projections and actuals to under 3% for all key metrics
  • EFFICIENCY: Complete centralization of 5 financial systems reducing technology spend by 12% by EOY
  • WORKING CAPITAL: Optimize cash conversion cycle reducing average days by 7, freeing $112M in cash
CAPITAL MASTERY

Strategic investment in future-focused infrastructure

  • NETWORK: Develop data-driven capital allocation model increasing ROI on network investments by 14%
  • DEBT: Restructure $5.8B in debt obligations reducing average interest rate by 75 basis points
  • RURAL: Secure $380M in government broadband funding through optimized financial proposal strategy
  • INNOVATION: Allocate $220M for strategic technology investments with projected 22% 3-year ROIC
TRANSFORMATION

Pioneer new revenue streams beyond traditional services

  • ANALYTICS: Deploy AI financial platform identifying $145M in new revenue opportunities by Q3 2025
  • PARTNERSHIPS: Structure 3 strategic financial partnerships generating $85M in incremental revenue
  • COMMERCIAL: Develop financing solutions increasing enterprise services revenue by 11% YoY
  • DIVERSIFICATION: Launch financial analysis of 4 adjacent market opportunities with $500M+ potential
METRICS
  • FREE CASH FLOW GROWTH: 8% YoY for FY2025
  • EBITDA MARGIN: 41.5% by Q4 2025
  • NET DEBT/EBITDA RATIO: Reduce to 4.0x by end of 2025
VALUES
  • Integrity: Uphold the highest ethical standards in all financial reporting and analysis
  • Transparency: Provide clear, timely, and accurate financial information to stakeholders
  • Innovation: Continuously improve financial systems and processes to drive efficiency
  • Customer Focus: Align financial strategies with enhancing customer value and experience
  • Excellence: Deliver best-in-class financial stewardship and strategic guidance
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Align the learnings

Charter Communications Finance Retrospective

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To provide financial leadership that enables Charter to connect customers to a world of possibility while becoming America's most trusted connectivity provider

What Went Well

  • MOBILE: Added 458,000 mobile lines in Q4 2023, exceeding analyst estimates
  • EFFICIENCY: Operating expenses decreased 1.2% year-over-year in Q4 2023
  • BROADBAND: Added 63,000 residential internet customers in Q4 2023 quarter
  • CAPEX: Reduction in capital expenditures by 14.3% compared to prior year
  • LIQUIDITY: Generated $1.5 billion in consolidated free cash flow in Q4 2023

Not So Well

  • VIDEO: Lost 257,000 residential video customers in Q4 2023, accelerating
  • VOICE: Declined by 191,000 residential wireline voice customers in Q4 2023
  • CHURN: Higher customer disconnects in legacy residential service segments
  • ARPU: Residential average revenue per user growth slowed to 1.1% YoY
  • GUIDANCE: Q1 2024 revenue outlook below consensus analyst expectations

Learnings

  • COMPETITION: Market saturation requires more aggressive retention strategy
  • BUNDLING: Mobile-broadband bundles showing stronger retention than expected
  • INVESTMENT: Network upgrade ROI exceeding initial financial projections
  • SEGMENTATION: Financial analysis by customer cohort reveals optimization
  • FORECASTING: Improved modeling needed for seasonal subscriber fluctuations

Action Items

  • ANALYTICS: Implement enhanced subscriber segmentation financial modeling
  • EFFICIENCY: Accelerate operational cost reduction initiatives by Q3 2024
  • INTEGRATION: Consolidate financial systems to improve forecasting accuracy
  • RESTRUCTURING: Evaluate capital structure to optimize for current rates
  • REPORTING: Enhance investor communications on strategic growth initiatives
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Drive AI transformation

Charter Communications Finance AI Strategy SWOT Analysis

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To provide financial leadership that enables Charter to connect customers to a world of possibility while becoming America's most trusted connectivity provider

Strengths

  • ANALYTICS: Strong data infrastructure for AI-driven financial analysis
  • INVESTMENT: Dedicated funding for financial technology initiatives
  • TALENT: Growing team of data scientists within finance organization
  • AUTOMATION: Existing RPA implementation in accounts payable processes
  • GOVERNANCE: Established data quality and security protocols

Weaknesses

  • INTEGRATION: Siloed AI initiatives across finance sub-departments
  • LEGACY: Outdated financial systems limiting AI implementation
  • SKILLS: Gap in AI expertise among traditional finance staff
  • ADOPTION: Low utilization of existing AI tools by finance teams
  • STRATEGY: Lack of comprehensive AI roadmap for finance function

Opportunities

  • FORECASTING: AI-powered predictive models for revenue and cash flow
  • OPTIMIZATION: ML algorithms for capital allocation and tax planning
  • AUTOMATION: Expand AI for invoice processing and expense management
  • INSIGHTS: Natural language generation for financial reporting
  • RISK: AI-driven fraud detection and compliance monitoring

Threats

  • COMPETITION: Rivals advancing AI finance capabilities more rapidly
  • TALENT: Difficulty attracting AI specialists to finance roles
  • COMPLIANCE: Evolving regulatory constraints on AI in financial systems
  • SECURITY: Increased data vulnerabilities with AI implementation
  • TRUST: Internal resistance to AI-driven financial decision making

Key Priorities

  • INTEGRATION: Develop unified AI strategy across finance organization
  • FORECASTING: Implement AI-driven predictive financial models
  • UPSKILLING: Launch AI training program for finance personnel
  • AUTOMATION: Expand AI applications in routine financial processes