ST. LOUIS, Feb. 27, 2012 /PRNewswire/ -- Charter
Communications, Inc. (along with its subsidiaries, the "Company" or
"Charter") today reported financial and operating results for the
three months and year ended December 31,
2011.
(Logo:
http://photos.prnewswire.com/prnh/20110526/AQ10195LOGO)
Key highlights:
- Total customer relationships grew 8,700 in the fourth quarter,
compared to a loss of 35,700 in the year-ago quarter. Residential
Internet customers grew 67,700, more than double the growth in the
year-ago period. Non-video residential customer relationships
increased by approximately 48,300 for the quarter, 1.8 times higher
than the prior-year.
- Compared with the prior year, revenues for the fourth quarter
grew 2.6% on a pro forma(1) basis and 2.8% on an actual
basis. Revenues for the full year increased 2.7% on a pro
forma basis and 2.1% on an actual basis.
- Commercial revenues continued to accelerate, growing 21.7% on a
pro forma and actual basis for the quarter. Total year
commercial revenues increased 19.2% on a pro forma basis and
18.0% on an actual basis, driven by continued growth in small and
medium businesses along with a healthy increase in sales to carrier
customers.
- Adjusted EBITDA(2) was $686
million and net loss totaled $67
million in the fourth quarter 2011.
- Free cash flow(2) for the quarter was $166 million and cash flows from operating
activities were $425 million. Free
cash flow for the year was $483
million and cash flows from operating activities were
$1.7 billion. During 2011, Charter
returned more than $725 million of
capital to shareholders by repurchasing 12.7% of outstanding
shares.
"This will be an important year for Charter and our customers,
and I'm excited to be a part of it," said Charter's newly appointed
President and Chief Executive Officer, Tom
Rutledge. "Charter executed well on its strategic priorities
in 2011, as demonstrated by enhanced product offerings, an improved
customer relationship trend, and solid financial performance. As we
move into 2012, our team is committed to a high standard of
customer service delivery and operational excellence in all aspects
of our business and to making the right investments for the future.
Focusing on these fundamentals provides a real opportunity to grow
our business."
(1) Pro forma results are described below in the "Use of
Non-GAAP Financial Metrics" section and are provided in the
addendum of this news release.
(2) Adjusted EBITDA and free cash flow are defined in the "Use
of Non-GAAP Financial Metrics" section and are reconciled to
consolidated net loss and net cash flows from operating activities,
respectively, in the addendum of this news release.
Key Operating Results
|
|
Approximate
as of
|
|
|
|
|
|
Actual
|
|
Pro
Forma
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
2011
(a)
|
|
2010
(a)
|
|
Y/Y
Change
|
|
Footprint
|
|
|
|
|
|
|
|
Estimated Homes Passed Video
(b)
|
11,960,100
|
|
11,842,900
|
|
1%
|
|
|
% Switched Digital
Video
|
86%
|
|
63%
|
|
23 ppts
|
|
|
Estimated Homes Passed Internet
(b)
|
11,633,800
|
|
11,478,600
|
|
1%
|
|
|
% DOCSIS 3.0
|
93%
|
|
57%
|
|
36 ppts
|
|
|
Estimated Homes Passed Phone
(b)
|
10,871,000
|
|
10,637,700
|
|
2%
|
|
Customers
|
|
|
|
|
|
|
|
Residential Customer
Relationships (c)
|
4,875,100
|
|
4,899,800
|
|
-1%
|
|
|
Commercial Customer
Relationships (c)
|
362,400
|
|
350,100
|
|
4%
|
|
|
Total Customer Relationships
(c)(e)
|
5,237,500
|
|
5,249,900
|
|
0%
|
|
|
Residential Non-Video
Customers
|
784,800
|
|
594,000
|
|
32%
|
|
|
% Non-Video
|
16.1%
|
|
12.1%
|
|
4.0 ppts
|
|
Services and Revenue Generating
Units (f)
|
|
|
|
|
|
|
|
Video (d)
|
4,090,300
|
|
4,305,800
|
|
-5%
|
|
|
Internet (g)
|
3,491,800
|
|
3,263,200
|
|
7%
|
|
|
Phone (h)
|
1,791,300
|
|
1,721,800
|
|
4%
|
|
|
Residential PSUs (i)
|
9,373,400
|
|
9,290,800
|
|
1%
|
|
|
Residential PSU / Customer
Relationships (c)(i)
|
1.92
|
|
1.90
|
|
|
|
|
Video (d)(e)
|
234,500
|
|
241,900
|
|
-3%
|
|
|
Internet (g)(j)
|
162,800
|
|
138,500
|
|
18%
|
|
|
Phone (h)
|
78,900
|
|
59,900
|
|
32%
|
|
|
Commercial PSUs (i)
|
476,200
|
|
440,300
|
|
8%
|
|
|
Digital Video RGUs
(k)
|
3,410,400
|
|
3,371,300
|
|
1%
|
|
|
Total RGUs
|
13,260,000
|
|
13,102,400
|
|
1%
|
|
Quarterly Net Additions/(Losses)
(l)
|
|
|
|
|
|
|
|
Video (d)
|
(45,500)
|
|
(62,200)
|
|
27%
|
|
|
Internet (g)
|
67,700
|
|
32,700
|
|
107%
|
|
|
Phone (h)
|
27,500
|
|
31,400
|
|
-12%
|
|
|
Residential PSUs
(i)
|
49,700
|
|
1,900
|
|
|
|
|
Video (d)(e)
|
(600)
|
|
(4,800)
|
|
-88%
|
|
|
Internet (g)
|
6,800
|
|
5,300
|
|
28%
|
|
|
Phone (h)
|
5,100
|
|
5,100
|
|
0%
|
|
|
Commercial PSUs
(i)
|
11,300
|
|
5,600
|
|
102%
|
|
|
Digital Video RGUs
(k)
|
9,500
|
|
20,000
|
|
-53%
|
|
|
Total RGUs
|
70,500
|
|
27,500
|
|
156%
|
|
Quarterly Residential
ARPU
|
|
|
|
|
|
|
|
Video (m)
|
$
72.40
|
|
$
70.34
|
|
3%
|
|
|
Internet (m)
|
$
42.61
|
|
$
41.70
|
|
2%
|
|
|
Phone (m)
|
$
40.76
|
|
$
41.26
|
|
-1%
|
|
|
Revenue per Customer
Relationship (n)
|
$
106.28
|
|
$
104.09
|
|
2%
|
|
Total Revenue per Video Customer
(o)
|
$
140.69
|
|
$
130.08
|
|
8%
|
|
Residential Penetration
Statistics
|
|
|
|
|
|
|
|
Video Penetration of Homes
Passed Video (p)
|
34.2%
|
|
36.4%
|
|
-2.2 ppts
|
|
|
Internet Penetration of Homes
Passed Internet (p)
|
30.0%
|
|
28.4%
|
|
1.6 ppts
|
|
|
Phone Penetration of Homes
Passed Phone (p)
|
16.5%
|
|
16.2%
|
|
0.3 ppts
|
|
|
Bundled Penetration
(q)
|
62.3%
|
|
60.8%
|
|
1.5 ppts
|
|
|
Triple Play Penetration
(r)
|
29.1%
|
|
28.2%
|
|
0.9 ppts
|
|
|
Digital Penetration
(s)
|
78.9%
|
|
74.1%
|
|
4.8 ppts
|
|
|
Advanced Digital Penetration (of
Digital) (t)
|
56.5%
|
|
52.3%
|
|
4.2 ppts
|
|
|
Set-Top-Box per Digital
RGU(u)
|
1.53
|
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
|
|
See footnotes to unaudited
summary of operating statistics on page 6 of the addendum of this
release. The footnotes contain important disclosures regarding the
definitions used for these operating statistics.
|
|
|
Residential primary service units ("PSUs") increased by 49,700
in the fourth quarter of 2011 as gains in Internet and phone PSUs
more than offset declines in video. We added 48,300 non-video
customer relationships in the quarter and continue to see
additional opportunities to drive higher penetration, particularly
in non-video households. As we continue to emphasize our bundled
services, which increase revenue per household and strengthen
retention, the percentage of our residential customers subscribing
to more than one product grew to 62.3% at December 31, 2011.
In the fourth quarter, residential video customers decreased by
45,500, a 27% improvement compared to a decrease of 62,200 in the
fourth quarter of 2010. Single play basic customers decreased by
approximately 41,300, nearly all of the video decline. We made
significant steps to improve our video product this past year by
adding new video content, such as NFL Network, more HD channels,
and additional on-line functionality and content. But we continued
to be impacted by competition and the economy which more than
offset improved retention levels. Video is an important part of our
business; and we are focused on reducing customer losses as we
expand our product offerings and improve customer experience. At
the end of December, 56.5% of our digital customers subscribed to
HD and/or DVR services, up from 55.1% in the third quarter of 2011.
Video ARPU was $72.40 for the fourth
quarter of 2011, up 2.9% year-over-year driven by higher advanced
services penetration and select price adjustments.
Our Internet product continues to receive top speed and
performance rankings, and we delivered strong Internet results as
we again captured share and grew our Internet customer base. We
added more than twice as many residential Internet customers
year-over-year, gaining 67,700 customers in 2011 compared to 32,700
last year. Approximately 95% of our Internet customers have a
broadband plan of 15Mbps or higher with approximately 25% relying
on our home networking service. Internet ARPU of $42.61 increased 2.2% compared to the year-ago
quarter primarily due to the growth in home networking and speed
tiers, as well as price adjustments.
We added 27,500 phone customers during the 2011 fourth quarter,
compared to a gain of 31,400 a year ago, and up from 10,900
additions in the third quarter of 2011. We remain focused on
aggressively marketing and driving penetration of our phone
product, particularly with existing customers, which benefits
retention. Phone ARPU of $40.76
decreased approximately 1.2% year-over-year due to increased
value-based packages and bundling.
For the twelve months ended December 31,
2011, we saw an improved trend in total customer
relationships with a loss of 12,400 compared to 116,500 in 2010,
reflecting the progress we've made in our strategic
initiatives.
Fourth Quarter Financial Results
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
|
|
(DOLLARS IN
MILLIONS, EXCEPT PER SHARE AND SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Pro Forma
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
Actual
|
|
|
Pro Forma
|
|
|
% Change
|
|
|
Actual
|
|
|
Actual
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
|
892
|
|
$
|
915
|
|
|
-2.5%
|
|
$
|
892
|
|
$
|
913
|
|
|
-2.3%
|
|
|
Internet
|
|
442
|
|
|
407
|
|
|
8.6%
|
|
|
442
|
|
|
405
|
|
|
9.1%
|
|
|
Telephone
|
|
217
|
|
|
211
|
|
|
2.8%
|
|
|
217
|
|
|
211
|
|
|
2.8%
|
|
|
Commercial
|
|
157
|
|
|
129
|
|
|
21.7%
|
|
|
157
|
|
|
129
|
|
|
21.7%
|
|
|
Advertising
sales
|
|
81
|
|
|
85
|
|
|
-4.7%
|
|
|
81
|
|
|
85
|
|
|
-4.7%
|
|
|
Other
|
|
45
|
|
|
41
|
|
|
9.8%
|
|
|
45
|
|
|
41
|
|
|
9.8%
|
|
|
Total
revenues
|
|
1,834
|
|
|
1,788
|
|
|
2.6%
|
|
|
1,834
|
|
|
1,784
|
|
|
2.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (excluding
depreciation and amortization) (a)
|
|
794
|
|
|
749
|
|
|
6.0%
|
|
|
794
|
|
|
747
|
|
|
6.3%
|
|
|
Selling, general and
administrative (excluding stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation expense)
(b)
|
|
354
|
|
|
354
|
|
|
0.0%
|
|
|
354
|
|
|
353
|
|
|
0.3%
|
|
|
Operating
costs and expenses
|
|
1,148
|
|
|
1,103
|
|
|
4.1%
|
|
|
1,148
|
|
|
1,100
|
|
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
686
|
|
|
685
|
|
|
0.1%
|
|
|
686
|
|
|
684
|
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin
|
|
37.4%
|
|
|
38.3%
|
|
|
|
|
|
37.4%
|
|
|
38.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
$
|
327
|
|
$
|
261
|
|
|
|
|
$
|
327
|
|
$
|
261
|
|
|
|
|
|
% Total Revenues
|
|
17.8%
|
|
|
14.6%
|
|
|
|
|
|
17.8%
|
|
|
14.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(67)
|
|
$
|
(70)
|
|
|
|
|
$
|
(67)
|
|
$
|
(85)
|
|
|
|
|
|
Loss per common share, basic and
diluted
|
$
|
(0.63)
|
|
$
|
(0.62)
|
|
|
|
|
$
|
(0.63)
|
|
$
|
(0.75)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating
activities
|
$
|
425
|
|
$
|
490
|
|
|
|
|
$
|
425
|
|
$
|
489
|
|
|
|
|
|
Free cash flow
|
$
|
166
|
|
$
|
244
|
|
|
|
|
$
|
166
|
|
$
|
243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Operating expenses
include programming, service, and advertising sales
expenses.
|
|
(b) Selling, general and
administrative expenses include general and administrative and
marketing expenses.
|
|
|
|
Adjusted EBITDA and free cash
flow are defined in the "Use of Non-GAAP Financial Metrics" section
and are reconciled to consolidated net loss and net cash flows from
operating activities, respectively, in the addendum of this
news release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Fourth quarter 2011 revenues rose to $1.834 billion, up 2.6% on a pro forma
basis and 2.8% on an actual basis compared to the year-ago quarter
as we continued to grow our commercial, Internet and phone
businesses and increase sales of bundled services.
Fourth quarter 2011 video revenues totaled $892 million, a decrease of 2.5% on a pro
forma basis and 2.3% on an actual basis compared to the
prior-year period. Video revenues declined as a result of our video
customer losses, partially offset by growth in revenues from DVR
and high-definition television services. Fourth quarter 2011
Internet revenues were $442 million,
up 8.6% on a pro forma basis and 9.1% on an actual basis
year-over-year driven by the addition of 228,600 Internet customers
and an increase in home networking revenue. Telephone revenues
totaled $217 million, up 2.8% on a
pro forma and an actual basis over fourth quarter 2010 as we
added 69,500 phone customers.
Commercial revenues grew to $157
million, a 21.7% year-over-year increase on a pro
forma and actual basis, supported by improved sales
productivity, increased line extensions for carrier and small and
medium business customers, and strategic investments in DOCSIS 3.0,
which also enables us to deliver higher speeds and improved
reliability to our commercial customers.
Advertising sales revenues were $81
million for the fourth quarter of 2011, a 4.7% decrease on a
pro forma and actual basis compared to the fourth quarter of
2010 which benefited from election-related political advertising
offset by a change to account for revenues received from selling
advertising for third parties on a gross basis rather than a net
basis.
Operating Costs and Expenses
Operating costs and expenses totaled $1.148 billion in the fourth quarter of 2011, an
increase of 4.1% compared to the year-ago period on a pro
forma basis and 4.4% on an actual basis, primarily related to
increases in programming expenses and other operating expenses.
Fourth quarter programming expenses increased $31 million on a pro forma basis and
$32 million on an actual basis year
over year reflecting contractual programming increases and a
one-time accrual adjustment benefit in 2010 which did not recur in
2011, partially offset by customer losses in 2011. Other operating
expenses increased in the fourth quarter of 2011 primarily related
to an increase in costs associated with higher reconnects and a
decrease in labor productivity related to the upfront investment in
our customer experience transformation. We expect these costs to
ultimately benefit us and contribute to our growth in the future.
The increase in other operating expenses was also impacted by the
changes noted above in accounting for advertising expenses.
Adjusted EBITDA
Adjusted EBITDA was $686 million
for the fourth quarter of 2011, essentially unchanged compared to
the year-ago quarter on a pro forma basis. Adjusted EBITDA
grew 0.3% on an actual basis. Adjusted EBITDA margin declined to
37.4% for the fourth quarter of 2011 compared to adjusted EBITDA
margin of 38.3% on a pro forma and actual basis in the
year-ago quarter. Margin was impacted by increased customer
acquisition activity, as we incurred the costs associated with
driving growth, some at lower acquisition price points, and also
the programming expense drivers mentioned above. In addition,
adjusted EBITDA margin in the 2010 fourth quarter reflected a
political advertising benefit.
Net Loss
Net loss was $67 million in the
fourth quarter of 2011, compared to $70
million on a pro forma basis and $85 million on an actual basis in the year-ago
period. Net loss per common share was $0.63 in the fourth quarter of 2011 compared to
$0.62 on a pro forma and
$0.75 on an actual basis during the
same period last year.
Capital Expenditures
Property, plant and equipment expenditures for the fourth
quarter of 2011 were $327 million
compared to fourth quarter 2010 expenditures of $261 million on a pro forma and actual
basis. The increase was primarily due to investments in support
capital to enhance our sales and product capabilities, as well as
investments in Internet infrastructure and commercial line
extensions.
Cash Flow
Net cash flows from operating activities totaled $425 million, compared to $490 million on a pro forma basis and
$489 million on an actual basis in
the fourth quarter of 2010. The decrease in net cash flows from
operating activities was driven by a $76
million increase in cash paid for interest primarily related
to payment timing and higher interest rates as part of
refinancings, offset by changes in working capital, excluding
changes in accrued interest and liabilities related to capital
expenditures, that provided $12
million more cash in 2011 than 2010.
Free cash flow for the fourth quarter of 2011 was $166 million, compared to $244 million on a pro forma basis and
$243 million on an actual basis in
the same period last year. The decrease was driven by lower net
cash flows from operating activities and higher capital
expenditures.
Charter continued to be opportunistic in the market in the
fourth quarter of 2011, further balancing our maturity profile and
taking advantage of lower interest rates to refinance some of our
higher cost debt. We entered into a $750
million senior secured Term Loan A due 2017, of which
$250 million was drawn at closing,
and issued $750 million of 7.375%
senior unsecured notes due 2020. The proceeds, along with
availability under our revolving credit facility, were used to
tender for $407 million of Charter
Operating's 8% senior second lien notes due 2012 ("2012 Notes"),
$234 million of Charter Operating's
10.875% senior second lien notes due 2014 ("2014 Notes") and
$286 million of CCH II, LLC's 13.5%
senior notes due 2016 ("2016 Notes").
In January and February 2012,
Charter executed certain additional financing transactions. The
company issued $750 million of 6.625%
senior unsecured notes due 2022. The net proceeds of the notes,
along with a $500 million delayed
draw on the Term Loan A, were used to tender for $300 million of the 2012 Notes, $294 million of the 2014 Notes and $334 million of the 2016 Notes, as well as
to repay amounts outstanding under our revolving credit
facility.
In addition, during the fourth quarter, we repurchased 7.6
million shares of Class A common stock for $402 million. In December
2011, Charter's board of directors approved the retirement
of 14.8 million shares of treasury stock.
Year to Date Financial Results
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
|
|
(DOLLARS IN
MILLIONS, EXCEPT PER SHARE AND SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Pro Forma
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
Pro Forma
|
|
|
% Change
|
|
|
Actual
|
|
|
Actual
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
|
3,615
|
|
$
|
3,672
|
|
|
-1.6%
|
|
$
|
3,602
|
|
$
|
3,689
|
|
|
-2.4%
|
|
|
Internet
|
|
1,711
|
|
|
1,603
|
|
|
6.7%
|
|
|
1,706
|
|
|
1,606
|
|
|
6.2%
|
|
|
Telephone
|
|
859
|
|
|
824
|
|
|
4.2%
|
|
|
858
|
|
|
823
|
|
|
4.3%
|
|
|
Commercial
|
|
584
|
|
|
490
|
|
|
19.2%
|
|
|
583
|
|
|
494
|
|
|
18.0%
|
|
|
Advertising
sales
|
|
292
|
|
|
290
|
|
|
0.7%
|
|
|
292
|
|
|
291
|
|
|
0.3%
|
|
|
Other
|
|
163
|
|
|
155
|
|
|
5.2%
|
|
|
163
|
|
|
156
|
|
|
4.5%
|
|
|
Total
revenues
|
|
7,224
|
|
|
7,034
|
|
|
2.7%
|
|
|
7,204
|
|
|
7,059
|
|
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (excluding
depreciation and amortization) (a)
|
|
3,149
|
|
|
3,050
|
|
|
3.2%
|
|
|
3,138
|
|
|
3,064
|
|
|
2.4%
|
|
|
Selling, general and
administrative (excluding stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation expense) (b)
|
|
1,395
|
|
|
1,389
|
|
|
0.4%
|
|
|
1,391
|
|
|
1,396
|
|
|
-0.4%
|
|
|
Operating
costs and expenses
|
|
4,544
|
|
|
4,439
|
|
|
2.4%
|
|
|
4,529
|
|
|
4,460
|
|
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
2,680
|
|
|
2,595
|
|
|
3.3%
|
|
|
2,675
|
|
|
2,599
|
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin
|
|
37.1%
|
|
|
36.9%
|
|
|
|
|
|
37.1%
|
|
|
36.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
$
|
1,311
|
|
$
|
1,203
|
|
|
|
|
$
|
1,311
|
|
$
|
1,209
|
|
|
|
|
|
% Total Revenues
|
|
18.1%
|
|
|
17.1%
|
|
|
|
|
|
18.2%
|
|
|
17.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(370)
|
|
$
|
(230)
|
|
|
|
|
$
|
(369)
|
|
$
|
(237)
|
|
|
|
|
|
Loss per common share, basic and
diluted
|
$
|
(3.39)
|
|
$
|
(2.03)
|
|
|
|
|
$
|
(3.39)
|
|
$
|
(2.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating
activities
|
$
|
1,742
|
|
$
|
1,907
|
|
|
|
|
$
|
1,737
|
|
$
|
1,911
|
|
|
|
|
|
Free cash flow
|
$
|
488
|
|
$
|
712
|
|
|
|
|
$
|
483
|
|
$
|
710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Operating expenses
include programming, service, and advertising sales
expenses.
|
|
(b) Selling, general and
administrative expenses include general and administrative and
marketing expenses.
|
|
|
|
Adjusted EBITDA and free cash
flow are defined in the "Use of Non-GAAP Financial Metrics" section
and are reconciled to consolidated net loss and net cash flows from
operating activities, respectively, in the addendum of this
news release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31,
2011 pro forma revenues rose to $7.224 billion, up 2.7% compared to the prior
year as we continued to grow our commercial, Internet and phone
businesses and increase sales of bundled services. On an actual
basis revenues grew 2.1% to $7.204
billion. Pro forma operating costs and expenses
totaled $4.544 billion in 2011, an
increase of 2.4% compared to 2010. On an actual basis, operating
costs and expenses totaled $4.529
billion, an increase of 1.5% compared to the year-ago
period.
Adjusted EBITDA on a pro forma basis was $2.680 billion for the year ended December 31, 2011, an increase of 3.3% compared
to 2010. Adjusted EBITDA grew 2.9% on an actual basis to
$2.675 billion. Adjusted EBITDA
margin improved to 37.1% on a pro forma and actual basis in
2011 compared to adjusted EBITDA margin of 36.9% on a pro
forma basis and 36.8% on an actual basis in 2010.
For the year ended December 31,
2011, net loss was $370
million on a pro forma basis and $369 million on an actual basis, compared to
$230 million on a pro forma
basis and $237 million on an actual
basis for the same period last year. Net loss per common share on a
pro forma and actual basis was $3.39 for the year ended December 31, 2011, compared to $2.03 on a pro forma and $2.09 on an actual basis during the same period
last year.
Property, plant and equipment expenditures for the year ended
December 31, 2011 on a pro
forma and actual basis were $1.311
billion, compared to $1.203
billion on a pro forma basis and $1.209 billion on an actual basis in the same
period last year. During 2012, we currently expect capital
expenditures to be between $1.4 billion and
$1.5 billion. The higher anticipated expenditures in 2012
relate to accelerated plans for commercial and residential customer
growth, investments in our video product to provide for additional
HD channels, and further investments in the customer experience,
both in systems and the network. The actual amount of our capital
expenditures depends on completion of an ambitious activity plan
and will be subject to the growth rates of both our residential and
commercial businesses.
Net cash flows from operating activities were $1.742 billion on a pro forma basis,
compared to $1.907 billion on a
pro forma basis in 2010. Net cash flows from operating
activities were $1.737 billion on an
actual basis, compared to $1.911
billion on an actual basis in 2010.
Free cash flow for the year ended December 31, 2011 was $488
million on a pro forma basis and $483 million on an actual basis, compared to
$712 million on a pro forma
basis and $710 million on an actual
basis in the same period last year. The decrease in free cash flow
is primarily due to an increase in cash paid for interest,
increases in capital expenditures, and other changes in operating
assets and liabilities. Excluding the change in accrued interest,
changes in operating assets and liabilities provided $42 million less cash during 2011 driven by
one-time benefits in the first half of 2010 post emergence from
bankruptcy along with timing of payments in 2011. These decreases
in free cash flow in 2011 were partially offset by revenues
increasing at a faster rate than cash expenses.
Total principal amount of debt was approximately $12.8 billion as of December 31, 2011. At the end of the year, we had
$29 million of cash and cash
equivalents (including restricted cash and cash equivalents of
$27 million) and availability under
our credit facilities of approximately $1.3
billion, including approximately $500
million of the unused portion of Term Loan A as of
December 31, which was drawn in
February 2012.
In 2011, we returned more than $725
million of capital to shareholders by repurchasing 12.7% of
our stock outstanding as of the beginning of the year.
Conference Call
Charter will host a conference call on Monday, February 27, 2012 at 9:00 a.m. Eastern Time (ET) related to the
contents of this release.
The conference call will be webcast live via the Company's
website at charter.com. The webcast can be accessed by selecting
"Investor & News Center" from the lower menu on the home page.
The call will be archived in the "Investor & News Center" in
the "Financial Information" section on the left beginning two hours
after completion of the call. Participants should go to the webcast
link no later than 10 minutes prior to the start time to
register.
Those participating via telephone should dial 866-919-0894 no
later than 10 minutes prior to the call. International participants
should dial 706-679-9379. The conference ID code for the call is
37565542.
A replay of the call will be available at 855-859-2056 or
404-537-3406 beginning two hours after the completion of the call
through the end of business on March 12,
2012. The conference ID code for the replay is 37565542.
Additional Information Available on Website
The information in this press release should be read in
conjunction with the financial statements and footnotes contained
in the Company's Form 10-K for the full year ended December 31, 2011 available on the "Investor
& News Center" of our website at charter.com in the "Financial
Information" section. A slide presentation to accompany the
conference call and a trending schedule containing historical
customer and financial data can also be found in the "Financial
Information" section.
Use of Non-GAAP Financial Metrics
The Company uses certain measures that are not defined by
Generally Accepted Accounting Principles ("GAAP") to evaluate
various aspects of its business. Adjusted EBITDA, adjusted EBITDA
less capital expenditures and free cash flow are non-GAAP financial
measures and should be considered in addition to, not as a
substitute for, net loss or cash flows from operating activities
reported in accordance with GAAP. These terms, as defined by
Charter, may not be comparable to similarly titled measures used by
other companies. Adjusted EBITDA is reconciled to net loss and free
cash flow is reconciled to net cash flows from operating activities
in the addendum of this news release.
Adjusted EBITDA is defined as net loss plus net interest
expense, income taxes, depreciation and amortization, stock
compensation expense, loss on extinguishment of debt, and other
expenses, such as special charges, reorganization items and loss on
sale or retirement of assets. As such, it eliminates the
significant non-cash depreciation and amortization expense that
results from the capital-intensive nature of the Company's
businesses as well as other non-cash or special items, and is
unaffected by the Company's capital structure or investment
activities. Adjusted EBITDA less capital expenditures is defined as
Adjusted EBITDA minus purchases of property, plant and equipment.
Adjusted EBITDA and adjusted EBITDA less capital expenditures are
used by management and the Company's Board to evaluate the
performance of the Company's business. For this reason, they are
significant components of Charter's annual incentive compensation
program. However, these measures are limited in that they do not
reflect the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues and the cash cost of
financing. Management evaluates these costs through other financial
measures.
Free cash flow is defined as net cash flows from operating
activities, less purchases of property, plant and equipment and
changes in accrued expenses related to capital expenditures.
The Company believes that adjusted EBITDA and free cash flow
provide information useful to investors in assessing Charter's
performance and its ability to service its debt, fund operations
and make additional investments with internally generated funds. In
addition, adjusted EBITDA generally correlates to the leverage
ratio calculation under the Company's credit facilities or
outstanding notes to determine compliance with the covenants
contained in the credit facilities and notes (all such documents
have been previously filed with the United States Securities and
Exchange Commission). For the purpose of calculating compliance
with leverage covenants, we use adjusted EBITDA, as presented,
excluding certain expenses paid by our operating subsidiaries to
other Charter entities. Our debt covenants refer to these expenses
as management fees which fees were in the amount of $41 million and $39
million for the three months ended December 31, 2011 and 2010, respectively, and
$151 million and $144 million for the twelve months ended
December 31, 2011 and 2010,
respectively.
In addition to the actual results for the three and twelve
months ended December 31, 2011 and
2010, we have provided pro forma results in this release for
the twelve months ended December 31,
2011 and for the three and twelve months ended December 31, 2010. We believe these pro
forma results facilitate meaningful analysis of the results of
operations. Pro forma results in this release reflect
certain acquisitions and sales of cable systems in 2010 and 2011 as
if they occurred as of January 1,
2010. Pro forma statements of operations for the
twelve months ended December 31, 2011
and for the three and twelve months ended December 31, 2010; and pro forma customer
statistics as of December 31, 2010;
are provided in the addendum of this news release.
About Charter
Charter (NASDAQ: CHTR) is a leading broadband communications
company and the fourth-largest cable operator in the United States. Charter provides a full
range of advanced broadband services, including advanced Charter
TV® video entertainment programming, Charter Internet® access, and
Charter Phone®. Charter Business® similarly provides scalable,
tailored, and cost-effective broadband communications solutions to
business organizations, such as business-to-business Internet
access, data networking, business telephone, video and music
entertainment services, and wireless backhaul. Charter's
advertising sales and production services are sold under the
Charter Media® brand. More information about Charter can be found
at charter.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), regarding, among
other things, our plans, strategies and prospects, both business
and financial. Although we believe that our plans, intentions and
expectations reflected in or suggested by these forward-looking
statements are reasonable, we cannot assure you that we will
achieve or realize these plans, intentions or expectations.
Forward-looking statements are inherently subject to risks,
uncertainties and assumptions including, without limitation, the
factors described under "Risk Factors" from time to time in our
filings with the Securities and Exchange Commission ("SEC"). Many
of the forward-looking statements contained in this release may be
identified by the use of forward-looking words such as "believe,"
"expect," "anticipate," "should," "planned," "will," "may,"
"intend," "estimated," "aim," "on track," "target," "opportunity,"
"tentative," "positioning" and "potential," among others. Important
factors that could cause actual results to differ materially from
the forward-looking statements we make in this release are set
forth in other reports or documents that we file from time to time
with the SEC, and include, but are not limited to:
- our ability to sustain and grow revenues and free cash flow by
offering video, Internet, telephone, advertising and other services
to residential and commercial customers, to adequately meet the
customer experience demands in our markets and to maintain and grow
our customer base, particularly in the face of increasingly
aggressive competition, the need for innovation and the related
capital expenditures and the difficult economic conditions in
the United States;
- the development and deployment of new products and
technologies;
- the impact of competition from other market participants,
including but not limited to incumbent telephone companies, direct
broadcast satellite operators, wireless broadband and telephone
providers, and digital subscriber line ("DSL") providers and
competition from video provided over the Internet;
- general business conditions, economic uncertainty or downturn,
high unemployment levels and the level of activity in the housing
sector;
- our ability to obtain programming at reasonable prices or to
raise prices to offset, in whole or in part, the effects of higher
programming costs (including retransmission consents);
- the effects of governmental regulation on our business;
- the availability and access, in general, of funds to meet our
debt obligations, prior to or when they become due, and to fund our
operations and necessary capital expenditures, either through (i)
cash on hand, (ii) free cash flow, or (iii) access to the capital
or credit markets; and
- our ability to comply with all covenants in our indentures and
credit facilities, any violation of which, if not cured in a timely
manner, could trigger a default of our other obligations under
cross-default provisions.
All forward-looking statements attributable to us or any person
acting on our behalf are expressly qualified in their entirety by
this cautionary statement. We are under no duty or obligation to
update any of the forward-looking statements after the date of this
release.
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
(IN
MILLIONS, EXCEPT SHARE DATA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
Actual
|
|
|
Actual
|
|
% Change
|
|
|
Actual
|
|
|
Actual
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
|
892
|
|
$
|
913
|
|
-2.3%
|
|
$
|
3,602
|
|
$
|
3,689
|
|
-2.4%
|
|
|
Internet
|
|
442
|
|
|
405
|
|
9.1%
|
|
|
1,706
|
|
|
1,606
|
|
6.2%
|
|
|
Telephone
|
|
217
|
|
|
211
|
|
2.8%
|
|
|
858
|
|
|
823
|
|
4.3%
|
|
|
Commercial
|
|
157
|
|
|
129
|
|
21.7%
|
|
|
583
|
|
|
494
|
|
18.0%
|
|
|
Advertising
sales
|
|
81
|
|
|
85
|
|
-4.7%
|
|
|
292
|
|
|
291
|
|
0.3%
|
|
|
Other
|
|
45
|
|
|
41
|
|
9.8%
|
|
|
163
|
|
|
156
|
|
4.5%
|
|
|
Total
revenues
|
|
1,834
|
|
|
1,784
|
|
2.8%
|
|
|
7,204
|
|
|
7,059
|
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (excluding
depreciation and amortization) (a)
|
794
|
|
|
747
|
|
6.3%
|
|
|
3,138
|
|
|
3,064
|
|
2.4%
|
|
|
Selling, general and
administrative (excluding stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation expense) (b)
|
|
354
|
|
|
353
|
|
0.3%
|
|
|
1,391
|
|
|
1,396
|
|
-0.4%
|
|
|
Operating
costs and expenses
|
|
1,148
|
|
|
1,100
|
|
4.4%
|
|
|
4,529
|
|
|
4,460
|
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
686
|
|
|
684
|
|
0.3%
|
|
|
2,675
|
|
|
2,599
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin
|
|
37.4%
|
|
|
38.3%
|
|
|
|
|
37.1%
|
|
|
36.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
411
|
|
|
390
|
|
|
|
|
1,592
|
|
|
1,524
|
|
|
|
|
Stock compensation
expense
|
|
10
|
|
|
9
|
|
|
|
|
35
|
|
|
26
|
|
|
|
|
Other operating expenses,
net
|
|
-
|
|
|
6
|
|
|
|
|
7
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
265
|
|
|
279
|
|
|
|
|
1,041
|
|
|
1,024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(245)
|
|
|
(232)
|
|
|
|
|
(963)
|
|
|
(877)
|
|
|
|
|
Loss on extinguishment of
debt
|
|
(19)
|
|
|
(47)
|
|
|
|
|
(143)
|
|
|
(85)
|
|
|
|
|
Other expense,
net
|
|
(1)
|
|
|
(1)
|
|
|
|
|
(5)
|
|
|
(4)
|
|
|
|
|
|
|
(265)
|
|
|
(280)
|
|
|
|
|
(1,111)
|
|
|
(966)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
|
-
|
|
|
(1)
|
|
|
|
|
(70)
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
(67)
|
|
|
(84)
|
|
|
|
|
(299)
|
|
|
(295)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(67)
|
|
$
|
(85)
|
|
|
|
$
|
(369)
|
|
$
|
(237)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share, basic and
diluted
|
$
|
(0.63)
|
|
$
|
(0.75)
|
|
|
|
$
|
(3.39)
|
|
$
|
(2.09)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding, basic and diluted
|
105,503,936
|
|
|
113,308,253
|
|
|
|
|
108,948,554
|
|
|
113,138,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Operating expenses
include programming, service, and advertising sales
expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Selling, general and
administrative expenses include general and administrative and
marketing expenses.
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is a non-GAAP
term. See page 7 of this addendum for the reconciliation of
adjusted EBITDA to net loss as defined by GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
(IN
MILLIONS, EXCEPT SHARE DATA)
|
|
|
|
Three Months
Ended December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
Actual
|
|
|
Pro Forma (a)
|
% Change
|
|
|
Pro Forma (a)
|
|
Pro Forma (a)
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
|
892
|
|
$
|
915
|
|
-2.5%
|
|
$
|
3,615
|
|
$
|
3,672
|
|
-1.6%
|
|
|
Internet
|
|
442
|
|
|
407
|
|
8.6%
|
|
|
1,711
|
|
|
1,603
|
|
6.7%
|
|
|
Telephone
|
|
217
|
|
|
211
|
|
2.8%
|
|
|
859
|
|
|
824
|
|
4.2%
|
|
|
Commercial
|
|
157
|
|
|
129
|
|
21.7%
|
|
|
584
|
|
|
490
|
|
19.2%
|
|
|
Advertising
sales
|
|
81
|
|
|
85
|
|
-4.7%
|
|
|
292
|
|
|
290
|
|
0.7%
|
|
|
Other
|
|
45
|
|
|
41
|
|
9.8%
|
|
|
163
|
|
|
155
|
|
5.2%
|
|
|
Total
revenues
|
|
1,834
|
|
|
1,788
|
|
2.6%
|
|
|
7,224
|
|
|
7,034
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (excluding
depreciation and amortization) (b)
|
794
|
|
|
749
|
|
6.0%
|
|
|
3,149
|
|
|
3,050
|
|
3.2%
|
|
|
Selling, general and
administrative (excluding stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation expense) (c)
|
|
354
|
|
|
354
|
|
0.0%
|
|
|
1,395
|
|
|
1,389
|
|
0.4%
|
|
|
Operating
costs and expenses
|
|
1,148
|
|
|
1,103
|
|
4.1%
|
|
|
4,544
|
|
|
4,439
|
|
2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
686
|
|
|
685
|
|
0.1%
|
|
|
2,680
|
|
|
2,595
|
|
3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin
|
|
37.4%
|
|
|
38.3%
|
|
|
|
|
37.1%
|
|
|
36.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
411
|
|
|
392
|
|
|
|
|
1,598
|
|
|
1,532
|
|
|
|
|
Stock compensation
expense
|
|
10
|
|
|
9
|
|
|
|
|
35
|
|
|
26
|
|
|
|
|
Other operating expenses,
net
|
|
-
|
|
|
3
|
|
|
|
|
7
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
265
|
|
|
281
|
|
|
|
|
1,040
|
|
|
1,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(245)
|
|
|
(232)
|
|
|
|
|
(963)
|
|
|
(877)
|
|
|
|
|
Loss on extinguishment of
debt
|
|
(19)
|
|
|
(47)
|
|
|
|
|
(143)
|
|
|
(85)
|
|
|
|
|
Other expense,
net
|
|
(1)
|
|
|
(1)
|
|
|
|
|
(5)
|
|
|
(4)
|
|
|
|
|
|
|
(265)
|
|
|
(280)
|
|
|
|
|
(1,111)
|
|
|
(966)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
|
-
|
|
|
1
|
|
|
|
|
(71)
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
(67)
|
|
|
(71)
|
|
|
|
|
(299)
|
|
|
(279)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(67)
|
|
$
|
(70)
|
|
|
|
$
|
(370)
|
|
$
|
(230)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share, basic and
diluted
|
$
|
(0.63)
|
|
$
|
(0.62)
|
|
|
|
$
|
(3.39)
|
|
$
|
(2.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding, basic and diluted
|
105,503,936
|
|
|
113,308,253
|
|
|
|
|
108,948,554
|
|
|
113,138,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Pro forma results
reflect certain sales and acquisitions of cable systems in 2010 and
2011 as if they occurred as of January 1, 2010.
|
|
|
|
|
(b) Operating expenses
include programming, service, and advertising sales
expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Selling, general and
administrative expenses include general and administrative and
marketing expenses.
|
|
|
|
|
|
|
|
|
|
December 31,
2011. Pro forma revenues, operating
costs and expenses and net loss increased by $20 million, $15
million and $1 million, respectively, for the year ended December
31, 2011.
|
|
|
|
December 31,
2010. Pro forma revenues and operating
costs and expenses increased by $4 million and $3 million,
respectively, and net loss decreased by $15 million for the three
months ended December 31, 2010. Pro forma revenues, operating
costs and expenses and net loss were reduced by $25 million,
$21 million and $7 million, respectively, for the year ended
December 31, 2010.
|
|
|
|
Adjusted EBITDA is a non-GAAP
term. See page 7 of this addendum for the reconciliation of
adjusted EBITDA to net loss as defined by GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2
|
|
$
|
4
|
|
Restricted cash and cash
equivalents
|
|
27
|
|
|
28
|
|
Accounts receivable, net
of allowance for doubtful accounts
|
|
272
|
|
|
247
|
|
Prepaid expenses and
other current assets
|
|
69
|
|
|
77
|
|
Total current assets
|
|
370
|
|
|
356
|
|
|
|
|
|
|
|
|
INVESTMENT IN CABLE
PROPERTIES:
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
6,897
|
|
|
6,819
|
|
Franchises
|
|
5,288
|
|
|
5,257
|
|
Customer relationships,
net
|
|
1,704
|
|
|
2,000
|
|
Goodwill
|
|
954
|
|
|
951
|
|
Total investment in cable properties
|
|
14,843
|
|
|
15,027
|
|
|
|
|
|
|
|
|
OTHER NONCURRENT
ASSETS
|
|
392
|
|
|
354
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
15,605
|
|
$
|
15,737
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
1,153
|
|
$
|
1,049
|
|
Total current liabilities
|
|
1,153
|
|
|
1,049
|
|
|
|
|
|
|
|
|
LONG-TERM DEBT
|
|
12,856
|
|
|
12,306
|
|
|
|
|
|
|
|
|
DEFERRED INCOME TAXES
|
|
847
|
|
|
568
|
|
|
|
|
|
|
|
|
OTHER LONG-TERM
LIABILITIES
|
|
340
|
|
|
336
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
409
|
|
|
1,478
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
$
|
15,605
|
|
$
|
15,737
|
|
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN
MILLIONS)
|
|
|
|
Three Months
Ended December 31,
|
Year Ended
December 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(67)
|
|
$
|
(85)
|
|
$
|
(369)
|
|
$
|
(237)
|
|
Adjustments to reconcile
net loss to net cash flows
from operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
411
|
|
|
390
|
|
|
1,592
|
|
|
1,524
|
|
Noncash
interest expense
|
|
7
|
|
|
20
|
|
|
34
|
|
|
74
|
|
Loss on
extinguishment of debt
|
|
19
|
|
|
46
|
|
|
143
|
|
|
81
|
|
Deferred
income taxes
|
|
65
|
|
|
83
|
|
|
290
|
|
|
287
|
|
Other, net
|
|
7
|
|
|
14
|
|
|
33
|
|
|
34
|
|
Changes in operating
assets and liabilities, net of
effects
from
|
|
|
|
|
|
|
|
|
|
|
|
dispositions
and acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(20)
|
|
|
(7)
|
|
|
(25)
|
|
|
-
|
|
Prepaid
expenses and other assets
|
|
5
|
|
|
7
|
|
|
1
|
|
|
22
|
|
Accounts
payable, accrued expenses and other
|
|
(2)
|
|
|
21
|
|
|
38
|
|
|
126
|
|
Net cash flows from operating activities
|
|
425
|
|
|
489
|
|
|
1,737
|
|
|
1,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(327)
|
|
|
(261)
|
|
|
(1,311)
|
|
|
(1,209)
|
|
Change in accrued
expenses related to capital expenditures
|
|
68
|
|
|
15
|
|
|
57
|
|
|
8
|
|
Purchase of cable
systems
|
|
-
|
|
|
-
|
|
|
(89)
|
|
|
-
|
|
Other, net
|
|
(4)
|
|
|
38
|
|
|
(24)
|
|
|
31
|
|
Net cash flows from investing activities
|
|
(263)
|
|
|
(208)
|
|
|
(1,367)
|
|
|
(1,170)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings of long-term
debt
|
|
1,688
|
|
|
358
|
|
|
5,489
|
|
|
3,115
|
|
Repayments of long-term
debt
|
|
(1,427)
|
|
|
(1,282)
|
|
|
(5,072)
|
|
|
(4,352)
|
|
Repayment of preferred
stock
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(138)
|
|
Payments for debt
issuance costs
|
|
(19)
|
|
|
-
|
|
|
(62)
|
|
|
(76)
|
|
Purchase of treasury
stock
|
|
(410)
|
|
|
(6)
|
|
|
(733)
|
|
|
(6)
|
|
Other, net
|
|
3
|
|
|
(1)
|
|
|
5
|
|
|
(6)
|
|
Net cash flows from financing activities
|
|
(165)
|
|
|
(931)
|
|
|
(373)
|
|
|
(1,463)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH AND CASH
EQUIVALENTS
|
|
(3)
|
|
|
(650)
|
|
|
(3)
|
|
|
(722)
|
|
CASH AND CASH EQUIVALENTS,
beginning of period *
|
|
32
|
|
|
682
|
|
|
32
|
|
|
754
|
|
CASH AND CASH EQUIVALENTS, end
of period *
|
$
|
29
|
|
$
|
32
|
|
$
|
29
|
|
$
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH PAID FOR
INTEREST
|
$
|
250
|
|
$
|
174
|
|
$
|
899
|
|
$
|
735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Cash and cash
equivalents includes restricted cash and cash
equivalents.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED
SUMMARY OF OPERATING STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Approximate
as of
|
|
|
|
|
|
Actual
|
|
Pro
Forma
|
|
|
|
December
31,
|
September
30,
|
December
31,
|
|
|
|
2011
(a)
|
|
2011
(a)
|
|
2010
(a)
|
|
|
|
|
|
|
|
|
|
Footprint
|
|
|
|
|
|
|
|
Estimated Homes Passed Video
(b)
|
11,960,100
|
|
11,927,600
|
|
11,842,900
|
|
|
% Switched Digital
Video
|
86%
|
|
80%
|
|
63%
|
|
|
|
|
|
|
|
|
|
|
Estimated Homes Passed Internet
(b)
|
11,633,800
|
|
11,601,900
|
|
11,478,600
|
|
|
% DOCSIS 3.0
|
93%
|
|
85%
|
|
57%
|
|
|
|
|
|
|
|
|
|
|
Estimated Homes Passed Phone
(b)
|
10,871,000
|
|
10,839,600
|
|
10,637,700
|
|
|
|
|
|
|
|
|
|
Customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential Customer
Relationships (c)
|
4,875,100
|
|
4,872,300
|
|
4,899,800
|
|
|
Commercial Customer
Relationships (c)
|
362,400
|
|
356,500
|
|
350,100
|
|
|
Total Customer Relationships
(c)(e)
|
5,237,500
|
|
5,228,800
|
|
5,249,900
|
|
|
|
|
|
|
|
|
|
|
Residential Non-Video
Customers
|
784,800
|
|
736,500
|
|
594,000
|
|
|
% Non-Video
|
16.1%
|
|
15.1%
|
|
12.1%
|
|
|
|
|
|
|
|
|
|
Services and Revenue Generating
Units (f)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video (d)
|
4,090,300
|
|
4,135,800
|
|
4,305,800
|
|
|
Internet (g)
|
3,491,800
|
|
3,424,100
|
|
3,263,200
|
|
|
Phone (h)
|
1,791,300
|
|
1,763,800
|
|
1,721,800
|
|
|
Residential PSUs
(i)
|
9,373,400
|
|
9,323,700
|
|
9,290,800
|
|
|
Residential PSU / Customer
Relationships (c)(i)
|
1.92
|
|
1.91
|
|
1.90
|
|
|
|
|
|
|
|
|
|
|
Video (d)(e)
|
234,500
|
|
235,100
|
|
241,900
|
|
|
Internet (g)(j)
|
162,800
|
|
156,000
|
|
138,500
|
|
|
Phone (h)
|
78,900
|
|
73,800
|
|
59,900
|
|
|
Commercial PSUs
(i)
|
476,200
|
|
464,900
|
|
440,300
|
|
|
|
|
|
|
|
|
|
|
Digital Video RGUs
(k)
|
3,410,400
|
|
3,400,900
|
|
3,371,300
|
|
|
|
|
|
|
|
|
|
|
Total RGUs
|
13,260,000
|
|
13,189,500
|
|
13,102,400
|
|
|
|
|
|
|
|
|
|
Net Additions/(Losses)
(l)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video (d)
|
(45,500)
|
|
(64,800)
|
|
(62,200)
|
|
|
Internet (g)
|
67,700
|
|
53,200
|
|
32,700
|
|
|
Phone (h)
|
27,500
|
|
10,900
|
|
31,400
|
|
|
Residential PSUs
(i)
|
49,700
|
|
(700)
|
|
1,900
|
|
|
|
|
|
|
|
|
|
|
Video (d)(e)
|
(600)
|
|
(4,300)
|
|
(4,800)
|
|
|
Internet (g)(j)
|
6,800
|
|
6,900
|
|
5,300
|
|
|
Phone (h)
|
5,100
|
|
5,300
|
|
5,100
|
|
|
Commercial PSUs
(i)
|
11,300
|
|
7,900
|
|
5,600
|
|
|
|
|
|
|
|
|
|
|
Digital Video RGUs
(k)
|
9,500
|
|
4,800
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
Total RGUs
|
70,500
|
|
12,000
|
|
27,500
|
|
|
|
|
|
|
|
|
|
Residential ARPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video (m)
|
$
72.40
|
|
$
72.21
|
|
$
70.34
|
|
|
Internet (m)
|
$
42.61
|
|
$
42.67
|
|
$
41.70
|
|
|
Phone (m)
|
$
40.76
|
|
$
40.96
|
|
$
41.26
|
|
|
Revenue per Customer
Relationship (n)
|
$
106.28
|
|
$
106.38
|
|
$
104.09
|
|
|
|
|
|
|
|
|
|
Total Revenue per Video Customer
(o)
|
$
140.69
|
|
$
137.41
|
|
$
130.08
|
|
|
|
|
|
|
|
|
|
Residential Penetration
Statistics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Video Penetration of Homes
Passed Video (p)
|
34.2%
|
|
34.7%
|
|
36.4%
|
|
|
Internet Penetration of Homes
Passed Internet (p)
|
30.0%
|
|
29.5%
|
|
28.4%
|
|
|
Phone Penetration of Homes
Passed Phone (p)
|
16.5%
|
|
16.3%
|
|
16.2%
|
|
|
|
|
|
|
|
|
|
|
Bundled Penetration
(q)
|
62.3%
|
|
61.8%
|
|
60.8%
|
|
|
Triple Play Penetration
(r)
|
29.1%
|
|
28.8%
|
|
28.2%
|
|
|
|
|
|
|
|
|
|
|
Digital Penetration
(s)
|
78.9%
|
|
77.8%
|
|
74.1%
|
|
|
Advanced Digital Penetration (of
Digital) (t)
|
56.5%
|
|
55.1%
|
|
52.3%
|
|
|
Set-Top-Box per Digital RGU
(u)
|
1.53
|
|
1.52
|
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma operating statistics
reflect certain sales and acquisitions of cable systems in 2010 and
2011 as if such transactions had occurred as of the last day of the
respective period for all periods presented. The pro forma
statements of operations do not include adjustments for financing
transactions completed by Charter during the periods presented or
certain other dispositions or acquisitions of assets because those
transactions did not significantly impact Charter's revenue and
operating costs and expenses.
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2010, actual
residential video customers, Internet customers, and phone
customers were 4,278,400, 3,246,100, and 1,717,000, respectively;
actual commercial video customers, Internet customers, and phone
customers were 242,000, 138,500, and 59,900, respectively; and
actual digital RGUs were 3,363,200.
|
|
|
|
|
|
|
|
|
|
|
See footnotes to unaudited
summary of operating statistics on page 6 of this
addendum.
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
We calculate the aging of
customer accounts based on the monthly billing cycle for each
account. On that basis, at December 31, 2011, September 30,
2011 and December 31, 2010, customers include approximately 18,600,
15,500 and 15,700 customers, respectively, whose accounts were over
60 days past due in payment, approximately 2,500, 1,900 and 1,800
customers, respectively, whose accounts were over 90 days past due
in payment and approximately 1,400, 1,000 and 1,000 customers,
respectively, whose accounts were over 120 days past due in
payment.
|
|
|
|
|
(b)
|
"Homes Passed" represent our
estimate of the number of living units, such as single family
homes, apartment units and condominium units passed by our cable
distribution network in the areas where we offer the service
indicated. "Homes passed" exclude commercial units passed by
our cable distribution network. These estimates are updated
for all periods presented when estimates change.
|
|
|
|
|
(c)
|
"Customer Relationships" include
the number of customers that receive one or more levels of service,
encompassing video, Internet and phone services, without regard to
which service(s) such customers receive. This statistic is
computed in accordance with the guidelines of the National Cable
& Telecommunications Association (NCTA). Commercial
customer relationships includes video customers in commercial and
multi-dwelling structures, which are calculated on an EBU basis
(see footnote (e)) and non-video commercial customer
relationships.
|
|
|
|
|
(d)
|
"Video Customers" represent
those customers who subscribe to our video services.
|
|
|
|
|
(e)
|
Included within commercial video
customers are those in commercial and multi-dwelling structures,
which are calculated on an equivalent bulk unit ("EBU") basis.
We calculate EBUs by dividing the bulk price charged to
accounts in an area by the published rate charged to non-bulk
residential customers in that market for the comparable tier of
service. This EBU method of estimating video customers is
consistent with the methodology used in determining costs paid to
programmers and is consistent with the methodology used by other
multiple system operators (MSOs). As we increase our
published video rates to residential customers without a
corresponding increase in the prices charged to commercial service
or multi-dwelling customers, our EBU count will decline even if
there is no real loss in commercial service or multi-dwelling
customers.
|
|
|
|
|
(f)
|
"Revenue Generating Units" or
"RGUs" represent the total of all basic video, digital video,
Internet and phone customers, not counting additional outlets
within one household. For example, a customer who receives
two types of service (such as basic video and digital video) would
be treated as two RGUs, and if that customer added Internet
service, the customer would be treated as three RGUs. This
statistic is computed in accordance with the guidelines of the
NCTA.
|
|
|
|
|
(g)
|
"Internet Customers" represent
those customers who subscribe to our Internet service.
|
|
|
|
|
(h)
|
"Phone Customers" represent
those customers who subscribe to our phone service.
|
|
|
|
|
(i)
|
"Primary Service Units" or
"PSUs" represent the total of video, Internet and phone
customers.
|
|
|
|
|
(j)
|
Prior year commercial Internet
customers were adjusted to reflect current year
presentation.
|
|
|
|
|
(k)
|
"Digital Video RGUs" include all
video customers that rent one or more digital set-top boxes or
cable cards.
|
|
|
|
|
(l)
|
"Net Additions/(Losses)"
represent the pro forma net gain or loss in the respective quarter
for the service indicated.
|
|
|
|
|
(m)
|
"Average Monthly Revenue per
Customer" or "ARPU" represents quarterly pro forma revenue for the
service indicated divided by three divided by the number of pro
forma customers for the service indicated during the respective
quarter.
|
|
|
|
|
(n)
|
"Revenue per Customer
Relationship" is calculated as total video, Internet and phone
quarterly pro forma revenue divided by three divided by average
residential customer relationships during the respective
quarter.
|
|
|
|
|
(o)
|
"Total Revenue per Video
Customer" is calculated as total quarterly pro forma revenue
divided by three divided by average pro forma video customers
during the respective quarter.
|
|
|
|
|
(p)
|
"Penetration" represents
residential customers as a percentage of homes passed for the
service indicated.
|
|
|
|
|
(q)
|
"Bundled Penetration" represents
the percentage of residential customers receiving a combination of
at least two different types of service, including Charter's video
service, Internet service or phone. "Bundled Penetration"
does not include residential customers who only subscribe to video
service.
|
|
|
|
|
(r)
|
"Triple Play Penetration"
represents residential customers receiving all three Charter
service offerings, including video, Internet and phone, as a % of
residential customer relationships.
|
|
|
|
|
(s)
|
"Digital Penetration" represents
the number of digital video RGUs as a percentage of video
customers, including EBUs.
|
|
|
|
|
(t)
|
"Advanced Digital Penetration"
represents customers who subscribe to our high-definition and/or
digital video recorder services as a % of digital video
RGUs.
|
|
|
|
|
(u)
|
"Set-Top-Box per Digital RGU" is
calculated as the number of set-top boxes deployed divided by
digital video RGUs at the end of the respective period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED
RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
(DOLLARS IN
MILLIONS)
|
|
|
|
Three Months
Ended December 31,
|
Year Ended
December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
(67)
|
|
$
(85)
|
|
$
(369)
|
|
$
(237)
|
|
Plus:
|
Interest expense, net
|
245
|
|
232
|
|
963
|
|
877
|
|
|
Income tax expense
|
67
|
|
84
|
|
299
|
|
295
|
|
|
Depreciation and
amortization
|
411
|
|
390
|
|
1,592
|
|
1,524
|
|
|
Stock compensation
expense
|
10
|
|
9
|
|
35
|
|
26
|
|
|
Loss on extinguishment of
debt
|
19
|
|
47
|
|
143
|
|
85
|
|
|
Other, net
|
1
|
|
7
|
|
12
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (b)
|
686
|
|
684
|
|
2,675
|
|
2,599
|
|
Less:
|
Purchases of property, plant and
equipment
|
(327)
|
|
(261)
|
|
(1,311)
|
|
(1,209)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA less capital
expenditures
|
$
359
|
|
$
423
|
|
$
1,364
|
|
$
1,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating
activities
|
$
425
|
|
$
489
|
|
$
1,737
|
|
$
1,911
|
|
Less:
|
Purchases of property, plant and
equipment
|
(327)
|
|
(261)
|
|
(1,311)
|
|
(1,209)
|
|
|
Change in accrued expenses
related to capital expenditures
|
68
|
|
15
|
|
57
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
$
166
|
|
$
243
|
|
$
483
|
|
$
710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
Year Ended
December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
Actual
|
|
Pro Forma
(a)
|
|
Pro Forma
(a)
|
|
Pro Forma
(a)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
(67)
|
|
$
(70)
|
|
$
(370)
|
|
$
(230)
|
|
Plus:
|
Interest expense, net
|
245
|
|
232
|
|
963
|
|
877
|
|
|
Income tax expense
|
67
|
|
71
|
|
299
|
|
279
|
|
|
Depreciation and
amortization
|
411
|
|
392
|
|
1,598
|
|
1,532
|
|
|
Stock compensation
expense
|
10
|
|
9
|
|
35
|
|
26
|
|
|
Loss on extinguishment of
debt
|
19
|
|
47
|
|
143
|
|
85
|
|
|
Other, net
|
1
|
|
4
|
|
12
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (b)
|
686
|
|
685
|
|
2,680
|
|
2,595
|
|
Less:
|
Purchases of property, plant and
equipment
|
(327)
|
|
(261)
|
|
(1,311)
|
|
(1,203)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA less capital
expenditures
|
$
359
|
|
$
424
|
|
$
1,369
|
|
$
1,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from operating
activities
|
$
425
|
|
$
490
|
|
$
1,742
|
|
$
1,907
|
|
Less:
|
Purchases of property, plant and
equipment
|
(327)
|
|
(261)
|
|
(1,311)
|
|
(1,203)
|
|
|
Change in accrued expenses
related to capital expenditures
|
68
|
|
15
|
|
57
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
$
166
|
|
$
244
|
|
$
488
|
|
$
712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Pro forma results
reflect certain sales and acquisitions of cable systems in 2010 and
2011 as if they occurred as of January 1, 2010.
|
|
|
|
(b) See page 1 and 2 of this
addendum for detail of the components included within adjusted
EBITDA.
|
|
|
|
|
The above schedules are
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
CAPITAL
EXPENDITURES
(DOLLARS IN
MILLIONS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
2011
|
|
|
2010
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer premise equipment
(a)
|
$
|
105
|
|
$
|
106
|
|
$
|
538
|
|
$
|
543
|
|
Scalable infrastructure
(b)
|
|
81
|
|
|
52
|
|
|
346
|
|
|
311
|
|
Line extensions (c)
|
|
39
|
|
|
29
|
|
|
117
|
|
|
90
|
|
Upgrade/Rebuild (d)
|
|
8
|
|
|
1
|
|
|
27
|
|
|
21
|
|
Support capital (e)
|
|
94
|
|
|
73
|
|
|
283
|
|
|
244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital
expenditures (f)
|
$
|
327
|
|
$
|
261
|
|
$
|
1,311
|
|
$
|
1,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Customer premise
equipment includes costs incurred at the customer residence to
secure new customers, revenue units and additional bandwidth
revenues. It also includes customer installation costs and
customer premise equipment (e.g., set-top boxes and cable
modems).
|
|
|
|
(b) Scalable infrastructure
includes costs, not related to customer premise equipment or our
network, to secure growth of new customers, revenue units and
additional bandwidth revenues or provide service enhancements
(e.g., headend equipment).
|
|
|
|
(c) Line extensions include
network costs associated with entering new service areas (e.g.,
fiber/coaxial cable, amplifiers, electronic equipment, make-ready
and design engineering).
|
|
|
|
(d) Upgrade/rebuild
includes costs to modify or replace existing fiber/coaxial cable
networks, including betterments.
|
|
|
|
(e) Support capital
includes costs associated with the replacement or enhancement of
non-network assets due to technological and physical obsolescence
(e.g., non-network equipment, land, buildings and
vehicles).
|
|
|
|
(f) Total capital expenditures
includes $75 million and $52 million of capital expenditures
related to commercial services for the three months ended December
31, 2011 and 2010, respectively, and $195 million and $138 million
for the year ended December 31, 2011 and 2010,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Charter Communications, Inc.