CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
(dollars in millions)
| | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2017 | | 2016 | | 2017 | | 2016 | | Actual | | Actual | | Actual | | Actual | | | | | | | | | Consolidated net income | $ | 92 |
| | $ | 250 |
| | $ | 498 |
| | $ | 3,176 |
| Plus: Interest expense, net | 788 |
| | 724 |
| | 2,250 |
| | 1,771 |
| Income tax (benefit) expense | 26 |
| | 16 |
| | 99 |
| | (3,135 | ) | Depreciation and amortization | 2,701 |
| | 2,437 |
| | 7,846 |
| | 4,412 |
| Stock compensation expense | 64 |
| | 81 |
| | 198 |
| | 168 |
| Loss on extinguishment of debt | — |
| | — |
| | 35 |
| | 110 |
| (Gain) loss on financial instruments, net | (17 | ) | | (71 | ) | | 15 |
| | (16 | ) | Other pension (benefits) costs | 17 |
| | (13 | ) | | (9 | ) | | (533 | ) | Other, net | 148 |
| | 212 |
| | 388 |
| | 786 |
| | | | | | | | | Adjusted EBITDA (a) | 3,819 |
| | 3,636 |
| | 11,320 |
| | 6,739 |
| Less: Purchases of property, plant and equipment | (2,393 | ) | | (1,748 | ) | | (6,096 | ) | | (3,437 | ) | | | | | | | | | Adjusted EBITDA less capital expenditures | $ | 1,426 |
| | $ | 1,888 |
| | $ | 5,224 |
| | $ | 3,302 |
| | | | | | | | | Net cash flows from operating activities | $ | 2,908 |
| | $ | 2,801 |
| | $ | 8,696 |
| | $ | 4,815 |
| Less: Purchases of property, plant and equipment | (2,393 | ) | | (1,748 | ) | | (6,096 | ) | | (3,437 | ) | Change in accrued expenses related to capital expenditures | 79 |
| | (52 | ) | | 276 |
| | 86 |
| | | | | | | | | Free cash flow | $ | 594 |
| | $ | 1,001 |
| | $ | 2,876 |
| | $ | 1,464 |
| | | | | | | | | | | | Nine Months Ended September 30, | | | | | | 2017 | | 2016 | | | | | | Actual | | Pro Forma (b) | | | | | | | | | Consolidated net income | | | | | $ | 498 |
| | $ | 830 |
| Plus: Interest expense, net | | | | | 2,250 |
| | 2,155 |
| Income tax expense | | | | | 99 |
| | 288 |
| Depreciation and amortization | | | | | 7,846 |
| | 7,060 |
| Stock compensation expense | | | | | 198 |
| | 219 |
| Loss on extinguishment of debt | | | | | 35 |
| | 110 |
| (Gain) loss on financial instruments, net | | | | | 15 |
| | (16 | ) | Other pension benefits | | | | | (9 | ) | | (549 | ) | Other, net | | | | | 388 |
| | 514 |
| | | | | | | | | Adjusted EBITDA (a) | | | | | 11,320 |
| | 10,611 |
| Less: Purchases of property, plant and equipment | | | | | (6,096 | ) | | (5,657 | ) | | | | | | | | | Adjusted EBITDA less capital expenditures | | | | | $ | 5,224 |
| | $ | 4,954 |
|
| | (a) | See pages 1 and 2 of this addendum for detail of the components included within Adjusted EBITDA. |
| | (b) | Pro forma results reflect certain acquisitions of cable systems in 2016 as if they occurred as of January 1, 2015. |
The above schedule is presented in order to reconcile Adjusted EBITDA and free cash flows, both non-GAAP measures, to the most directly comparable GAAP measures in accordance with Section 401(b) of the Sarbanes-Oxley Act.
Addendum to Charter Communications, Inc. Third Quarter 2017 Earnings Release Page 7 of 8
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