STAMFORD, Conn., Feb. 22, 2013 /PRNewswire/ -- Charter
Communications, Inc. (Nasdaq: CHTR) (along with its
subsidiaries, the "Company" or "Charter") today reported financial
and operating results for the three and twelve months ended
December 31, 2012.
(Logo:
http://photos.prnewswire.com/prnh/20110526/AQ10195LOGO)
Key highlights:
- Fourth quarter 2012 residential customer relationships
increased by 20,000, a four-fold increase over the fourth quarter
of 2011. Residential customer relationships grew by 108,000 in
2012, compared to a loss of 20,000 in 2011.
- Revenues grew to $1.913 billion
in the fourth quarter of 2012, up 4.3% as compared to the
prior-year period, driven by growth in Internet and commercial
customers, and higher sales of video and advertising. Total
revenues for the full year rose 3.9% on a pro
forma1 basis and 4.2% on an actual basis.
- Residential Internet revenues rose 9.0% in the fourth quarter,
compared to the year-ago quarter as Charter added 293,000 Internet
customers over the past twelve months, 28% more than in 2011.
- Commercial revenues grew 20.4% in the fourth quarter, supported
by growth across all segments, marking the seventh consecutive
quarter of growth in excess of 20%. Full year commercial revenues
increased 20.7% on a pro forma basis and 21.0% on an actual
basis.
- Adjusted EBITDA2 for the fourth quarter increased to
$698 million, up 1.7% compared to
prior year. Fourth quarter net loss totaled $40 million, compared to $67 million in the comparable prior-year
period.
- Free cash flow2 for the quarter was $33 million and net cash flows from operating
activities totaled $485 million. Free
cash flow for the year was $144
million and cash flows from operating activities were
$1.876 billion.
"Our fourth quarter results provide early evidence that our
strategic changes are working as planned," said Tom Rutledge, Charter President and CEO.
"We are providing a more competitive product and service, and as a
result, customer relationships are growing and underlying
subscription revenue is accelerating. Across both our residential
and commercial businesses, our strategies are designed to drive
higher market penetration and sustainable growth."
1
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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.
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2
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Adjusted
EBITDA and free cash flow are defined in the "Use of Non-GAAP
Financial Metrics" section and are reconciled to net loss and net
cash flows from operating activities, respectively, in the addendum
of this news release.
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Key
Operating Results
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Approximate as of
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December 31, 2012 (a)
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December 31, 2011 (a)
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Y/Y
Change
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Footprint
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Estimated Video Passings (b)
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12,112
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12,013
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1%
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Estimated Internet Passings (b)
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11,810
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11,692
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1%
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Estimated Telephone Passings (b)
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11,139
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10,891
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2%
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Penetration Statistics
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Video Penetration of Estimated Video Passings (c)
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34.3%
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35.9%
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-1.6
ppts
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Internet Penetration of Estimated Internet Passings (c)
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33.7%
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31.3%
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2.4
ppts
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Telephone Penetration of Estimated Telephone Passings
(c)
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18.1%
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17.2%
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0.9
ppts
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Residential
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Residential Customer Relationships (d)
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5,035
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4,927
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2%
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Residential Non-Video Customers
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1,046
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783
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34%
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%
Non-Video
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20.8%
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15.9%
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4.9
ppts
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Customers
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Video
(e)
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3,989
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4,144
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-4%
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Internet
(f)
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3,785
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3,492
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8%
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Telephone
(g)
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1,914
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1,791
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7%
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Residential PSUs (h)
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9,688
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9,427
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3%
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Residential PSU / Customer Relationships
(d)(h)
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1.92
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1.91
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Quarterly Net Additions/(Losses)
(i)
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Video
(e)
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(36)
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(44)
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18%
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Internet
(f)
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54
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68
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-21%
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Telephone
(g)
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34
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27
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26%
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Residential PSUs (h)
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52
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51
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2%
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Single
Play Penetration (j)
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37.6%
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37.7%
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-0.1
ppts
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Double
Play Penetration (k)
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32.5%
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33.2%
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-0.7
ppts
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Triple
Play Penetration (l)
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29.9%
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29.1%
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0.8
ppts
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Digital
Penetration (m)
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86.9%
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82.0%
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4.9
ppts
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Revenue
per Customer Relationship (n)
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$105.78
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$105.73
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-
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Commercial
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Commercial Customer Relationships (d)(o)
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325
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298
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9%
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Customers
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Video
(o)
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169
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170
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-1%
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Internet
(f)
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193
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163
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18%
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Telephone
(g)
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105
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79
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33%
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Commercial PSUs (h)
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467
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412
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13%
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Quarterly Net Additions/(Losses)
(i)
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Video
(o)
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(3)
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(3)
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-
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Internet
(f)
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7
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7
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-
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Telephone
(g)
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6
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5
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20%
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Commercial PSUs (h)
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10
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9
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11%
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Footnotes
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In
thousands, except ARPU and penetration data. See footnotes to
unaudited summary of operating statistics on page 6 of the addendum
of this news release. The footnotes contain important disclosures
regarding the definitions used for these operating
statistics.
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During 2012, we implemented several new operating strategies to
further position Charter for growth. We made significant progress
in enhancing our product set and changing the way we do business to
better serve our customers. At mid-year 2012, we implemented
new pricing and packaging of our residential offerings and revamped
our go-to-market approach, both designed to increase the
penetration of our products and to produce a higher quality,
longer-term relationship with our customers. As a result of these
new operating strategies, in the second half of 2012, we grew our
triple play penetration by 110 basis points, from 28.8% to
29.9%. This compares to an increase of 40 basis points in the
second half of 2011.
In the fourth quarter of 2012, we grew residential customer
relationships 20,000, up from a gain of 5,000 in the fourth quarter
last year. Residential PSUs increased by 52,000, in line with the
gain in the year-ago quarter. We added 4,000 commercial customer
relationships in the fourth quarter of 2012 compared to 3,000 in
the prior-year quarter.
Residential video customers decreased by 36,000 in the fourth
quarter of 2012, 18% better than the decline of 44,000 last year.
In 2011, we lost 192,000 expanded basic video customers and in
2012, we reduced that loss to 12,000. The year-over-year
improvement was driven by a combination of factors including our
enhanced video product, which now includes over 100 HD channels,
and the transition to new selling methods.
We added 54,000 residential Internet customers in the fourth
quarter of 2012 compared to 68,000 a year ago. With our new pricing
and packing, we no longer offered deeply discounted standalone
offers as compared to the fourth quarter of 2011, when we actively
marketed a $19.99 promotional offer
for Internet service, as well as a low-priced double play Internet
and phone offer.
Fourth quarter residential revenue per customer relationship
totaled $105.78, up slightly from
$105.73 in 2011, reflecting better
product sell-in offset by entry-level pricing.
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Fourth Quarter Financial
Results
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CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS AND OPERATING DATA
(dollars
in millions, except per share and share data)
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Three
Months Ended December 31,
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2012
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2011
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Actual
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Actual
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%
Change
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REVENUES:
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Video
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$
927
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$
902
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2.8%
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Internet
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482
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442
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9.0%
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Telephone
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186
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217
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(14.3)%
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Commercial
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177
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147
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20.4%
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Advertising sales
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96
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81
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18.5%
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Other
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45
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45
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—%
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Total
Revenues
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1,913
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1,834
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4.3%
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COSTS
AND EXPENSES:
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Total
operating costs and expenses (excluding depreciation and
amortization)
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1,215
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1,148
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5.8%
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Adjusted
EBITDA
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$
698
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$
686
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1.7%
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Adjusted
EBITDA margin
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36.5%
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37.4%
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Capital
Expenditures
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$
449
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$
327
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% Total
Revenues
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23.5%
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17.8%
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Net
loss
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$
(40)
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$
(67)
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Loss per
common share, basic and diluted
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$
(0.41)
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$
(0.63)
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Net cash
flows from operating activities
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$
485
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$
425
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Free cash
flow
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$
33
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$
166
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Revenue
Fourth quarter 2012 revenues were $1.913
billion, up 4.3% compared to the year-ago quarter, due to
growth in video, Internet, commercial and advertising revenues.
Video revenues totaled $927
million in the fourth quarter, an increase of 2.8% compared
to the prior-year period. Video revenue growth was driven by price
increases and higher sales of DVR and HD services, partially offset
by a decrease in residential video customers.
Internet revenues grew 9.0% compared to the year-ago quarter to
$482 million, driven by an 8.4%
increase in our Internet customer base. Telephone revenues totaled
$186 million, down 14.3% over fourth
quarter 2011 due to value-based pricing and revenue allocation in
multi-product packages, partially offset by the addition of 123,000
phone customers in the last twelve months.
With 20.4% year-over-year growth, commercial revenues rose to
$177 million, reflecting higher sales
to small and medium businesses and carrier customers.
Fourth quarter advertising sales revenues of $96 million increased 18.5% compared to the
year-ago quarter, and benefited from the November political
election and from strength in the automotive sector.
Operating Costs and Expenses
Fourth quarter total operating costs and expenses increased 5.8%
compared to the year-ago period, reflecting increases in
programming expenses and costs to service customers. Fourth quarter
programming expenses increased $26
million year-over-year, reflecting contractual programming
increases, partially offset by customer losses. Costs to service
our customers increased during the fourth quarter of 2012 primarily
from greater spending on preventive maintenance.
Adjusted EBITDA
Fourth quarter adjusted EBITDA of $698
million increased 1.7% compared to the year-ago quarter.
Adjusted EBITDA margin declined to 36.5% for the fourth quarter of
2012 compared to 37.4% in the year-ago quarter.
Net Loss
Net loss totaled $40 million in
the fourth quarter of 2012, an improvement compared to $67 million in the year-ago period. Our net loss
improvement reflects our lower interest expense and a gain realized
on the extinguishment of debt in the fourth quarter of 2012, partly
offset by higher depreciation and amortization. Net loss per common
share was $0.41 in the fourth quarter
of 2012 compared to $0.63 during the
same period last year. The decrease is a result of our lower net
loss in the fourth quarter of 2012, partially offset by a decrease
in our weighted average shares outstanding as a result of share
repurchases in 2011.
Capital Expenditures
Property, plant and equipment expenditures were $449 million in the fourth quarter of 2012,
compared to $327 million in 2011. The
increase was primarily driven by investments in customer premise
equipment ("CPE"), upgrade and rebuild, commercial growth and
support capital. The CPE expenditures included higher set-top box
placement in new and existing customer homes. During the quarter we
also completed higher levels of plant replacement in select regions
of Charter's network that have historically performed below the
rest of our systems. Support capital expenditures increased due to
fleet replacement and real estate expenditures related to our
organizational realignment.
Cash Flow
During the fourth quarter of 2012, net cash flows from operating
activities totaled $485 million,
compared to $425 million in the
fourth quarter of 2011. The increase in net cash flows from
operating activities was primarily driven by the timing of trade
working capital and an increase in adjusted EBITDA.
Free cash flow for the fourth quarter of 2012 was $33 million, compared to $166 million during the same period last year.
The decrease was primarily the result of higher capital
expenditures.
In the fourth quarter of 2012, Charter redeemed the remaining
$1.1 billion of 13.5% senior notes
due 2016 and repaid $750 million of
bank debt. Charter also issued $1.0
billion of 5.125% senior unsecured notes due 2023 in the
fourth quarter of 2012.
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Year
to Date Financial Results
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CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS AND OPERATING DATA
(dollars
in millions, except per share and share data)
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|
Year
Ended December 31,
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2012
|
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2011
|
|
|
|
2011
|
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Actual
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Pro
forma
|
|
%
Change
|
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Actual
|
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%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
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Video
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$
3,639
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$
3,652
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(0.4)%
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$
3,639
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—%
|
Internet
|
1,866
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1,713
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8.9%
|
|
1,708
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9.3%
|
Telephone
|
828
|
|
859
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(3.6)%
|
|
858
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|
(3.5)%
|
Commercial
|
658
|
|
545
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20.7%
|
|
544
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21.0%
|
Advertising sales
|
334
|
|
292
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14.4%
|
|
292
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14.4%
|
Other
|
179
|
|
163
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9.8%
|
|
163
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9.8%
|
Total
Revenues
|
7,504
|
|
7,224
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3.9%
|
|
7,204
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4.2%
|
|
|
|
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|
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COSTS
AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
Total
operating costs and expenses (excluding depreciation and
amortization)
|
4,810
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|
4,544
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5.9%
|
|
4,529
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6.2%
|
|
|
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|
|
Adjusted
EBITDA
|
$
2,694
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|
$
2,680
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0.5%
|
|
$
2,675
|
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0.7%
|
|
|
|
|
|
|
|
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|
|
Adjusted
EBITDA margin
|
35.9%
|
|
37.1%
|
|
|
|
37.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
$
1,745
|
|
$
1,311
|
|
|
|
$
1,311
|
|
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% Total
Revenues
|
23.3%
|
|
18.1%
|
|
|
|
18.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(304)
|
|
$
(370)
|
|
|
|
$
(369)
|
|
|
Loss per
common share, basic and diluted
|
$
(3.05)
|
|
$
(3.39)
|
|
|
|
$
(3.39)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
flows from operating activities
|
$
1,876
|
|
$
1,742
|
|
|
|
$
1,737
|
|
|
Free cash
flow
|
$
144
|
|
$
488
|
|
|
|
$
483
|
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|
|
|
|
|
|
|
|
|
|
|
Revenue
For the year ended December 31, 2012, revenues rose to
$7.504 billion, up 3.9% on a pro
forma basis, and 4.2% on an actual basis, compared to the prior
year. We continued to grow our Internet and commercial businesses,
and advertising was supported by a political election year and
strength in the automotive segment.
Operating Costs and Expenses
Operating costs and expenses totaled $4.810 billion in 2012, an increase of 5.9% on a
pro forma basis, and 6.2% on an actual basis compared to
2011, due to higher programming costs, increased maintenance and
marketing expenses, increased service labor costs, and higher costs
associated with growing our commercial business.
Adjusted EBITDA
Adjusted EBITDA was $2.694 billion
for the year ended December 31, 2012, an increase of 0.5%
compared to 2011 on a pro forma basis, and 0.7% on an actual
basis. Charter's adjusted EBITDA margin declined to 35.9% in 2012
compared to an adjusted EBITDA margin of 37.1% on a pro
forma and actual basis in 2011.
Net Loss
For the year ended December 31, 2012, net loss was
$304 million, compared to
$370 million on a pro forma
basis, and $369 million on an actual
basis for the same period last year. Net loss per common share was
$3.05 for the year ended
December 31, 2012, compared to $3.39 on a pro forma and actual basis
during the same period last year.
Capital Expenditures
Property, plant and equipment expenditures for the year ended
December 31, 2012, totaled $1.745
billion, compared to $1.311
billion in the same period last year. The increase related
to higher residential and commercial customer growth as well as
higher set-top box placement in existing homes, investments in
plant to improve service reliability, and expenditures for fleet
replacement and real estate related to our organizational
realignment.
In 2013, we expect capital expenditures to be approximately
$1.7 billion, excluding the impact of
acquisitions. We anticipate 2013 capital expenditures to be driven
by the deployment of additional set-top boxes in new and existing
customer homes, growth in our commercial business, and further
spend related to plant reliability, back-office support and our
organizational realignment. The actual amount of our capital
expenditures will depend on a number of factors including the
growth rates of both our residential and commercial businesses, and
the pace at which we progress to all-digital transmission.
Cash Flow
Net cash flows from operating activities were $1.876 billion, compared to $1.742 billion on a pro forma basis and
$1.737 billion on an actual basis in
2011.
Free cash flow for the year ended December 31, 2012 was
$144 million, compared to
$488 million on a pro forma
basis and $483 million on an actual
basis in the same period last year. The decrease in free cash flow
was primarily due to an increase in capital expenditures partially
offset by higher cash flow from operating activities.
Liquidity
Total principal amount of debt was approximately $12.9 billion as of December 31, 2012. At
the end of the year, we had $7
million of cash and cash equivalents, $27 million of restricted cash and cash
equivalents, and our credit facilities provided us with
approximately $960 million of
available liquidity.
Conference Call
Charter will host a conference call on Friday, February 22, 2013 at 10:00 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
83494589.
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 21,
2013. The conference ID code for the replay is 83494589.
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 year ended December 31, 2012
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 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, (gain) loss on extinguishment of debt, and
other operating (income) expenses, such as special charges and
(gain) 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 is used by management and the Company's
Board to evaluate the performance of the Company's business.
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 $49 million and $41
million for the three months ended December 31, 2012
and 2011, respectively, and $191
million and $151 million for
the year ended December 31, 2012 and 2011, respectively.
In addition to the actual results for the three and twelve
months ended December 31, 2012 and 2011, we have provided
pro forma results in this release for the twelve months
ended December 31, 2011. We believe these pro forma
results facilitate meaningful analysis of the results of
operations. Pro forma results in this release reflect
certain acquisitions of cable systems in 2011 as if they occurred
as of January 1, 2011. Pro
forma statements of operations for the twelve months ended
December 31, 2011 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," "designed," "create" 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 cash flow from
operations 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 impact of competition from other market participants,
including but not limited to incumbent telephone companies, direct
broadcast satellite operators, wireless broadband and telephone
providers, digital subscriber line ("DSL") providers, and 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 development and deployment of new products and
technologies;
- 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
(dollars
in millions, except per share and share data)
|
|
|
|
|
|
Three
Months Ended December 31,
|
|
Year
Ended December 31,
|
|
2012
|
|
2011
|
|
|
|
2012
|
|
2011
|
|
|
|
Actual
|
|
Actual
|
|
%
Change
|
|
Actual
|
|
Actual
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
927
|
|
$
902
|
|
2.8
%
|
|
$
3,639
|
|
$
3,639
|
|
—%
|
Internet
|
482
|
|
442
|
|
9.0
%
|
|
1,866
|
|
1,708
|
|
9.3
%
|
Telephone
|
186
|
|
217
|
|
(14.3)%
|
|
828
|
|
858
|
|
(3.5)%
|
Commercial
|
177
|
|
147
|
|
20.4
%
|
|
658
|
|
544
|
|
21.0
%
|
Advertising sales
|
96
|
|
81
|
|
18.5
%
|
|
334
|
|
292
|
|
14.4
%
|
Other
|
45
|
|
45
|
|
—%
|
|
179
|
|
163
|
|
9.8
%
|
Total
Revenues
|
1,913
|
|
1,834
|
|
4.3
%
|
|
7,504
|
|
7,204
|
|
4.2
%
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS
AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Programming
|
495
|
|
469
|
|
5.5
%
|
|
1,979
|
|
1,872
|
|
5.7
%
|
Franchises, regulatory and connectivity
|
92
|
|
90
|
|
2.2
%
|
|
369
|
|
359
|
|
2.8
%
|
Costs to
service customers
|
357
|
|
325
|
|
9.8
%
|
|
1,363
|
|
1,268
|
|
7.5
%
|
Marketing
|
98
|
|
96
|
|
2.1
%
|
|
422
|
|
387
|
|
9.0
%
|
Other
|
173
|
|
168
|
|
3.0
%
|
|
677
|
|
643
|
|
5.3
%
|
Total
operating costs and expenses (excluding depreciation and
amortization)
|
1,215
|
|
1,148
|
|
5.8
%
|
|
4,810
|
|
4,529
|
|
6.2
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
698
|
|
686
|
|
1.7
%
|
|
2,694
|
|
2,675
|
|
0.7
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA margin
|
36.5
%
|
|
37.4
%
|
|
|
|
35.9
%
|
|
37.1
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
466
|
|
411
|
|
|
|
1,713
|
|
1,592
|
|
|
Stock
compensation expense
|
13
|
|
10
|
|
|
|
50
|
|
35
|
|
|
Other
operating expenses, net
|
13
|
|
-
|
|
|
|
15
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from operations
|
206
|
|
265
|
|
|
|
916
|
|
1,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
(216)
|
|
(245)
|
|
|
|
(907)
|
|
(963)
|
|
|
Gain
(loss) on extinguishment of debt
|
19
|
|
(19)
|
|
|
|
(55)
|
|
(143)
|
|
|
Other
expense, net
|
-
|
|
(1)
|
|
|
|
(1)
|
|
(5)
|
|
|
|
(197)
|
|
(265)
|
|
|
|
(963)
|
|
(1,111)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
9
|
|
-
|
|
|
|
(47)
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(49)
|
|
(67)
|
|
|
|
(257)
|
|
(299)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(40)
|
|
$
(67)
|
|
|
|
$
(304)
|
|
$
(369)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER
COMMON SHARE, BASIC AND DILUTED:
|
$
(0.41)
|
|
$
(0.63)
|
|
|
|
$
(3.05)
|
|
$
(3.39)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding, basic and diluted
|
100,003,344
|
|
105,503,936
|
|
|
|
99,657,989
|
|
108,948,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain
prior year amounts have been reclassified to conform with the 2012
presentation, including the reflection of revenues earned from
customers residing in multi-dwelling residential structures from
commercial revenues to video and Internet revenues and marketing
expense to include residential and commercial labor.
|
|
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
(dollars
in millions, except per share and share data)
|
|
|
|
Year
Ended December 31,
|
|
2012
|
|
2011
|
|
|
|
Actual
|
|
Pro
Forma (a)
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
Video
|
$
3,639
|
|
$
3,652
|
|
(0.4)%
|
Internet
|
1,866
|
|
1,713
|
|
8.9
%
|
Telephone
|
828
|
|
859
|
|
(3.6)%
|
Commercial
|
658
|
|
545
|
|
20.7
%
|
Advertising sales
|
334
|
|
292
|
|
14.4
%
|
Other
|
179
|
|
163
|
|
9.8
%
|
Total
Revenues
|
7,504
|
|
7,224
|
|
3.9
%
|
|
|
|
|
|
|
COSTS
AND EXPENSES:
|
|
|
|
|
|
Programming
|
1,979
|
|
1,879
|
|
5.3
%
|
Franchises, regulatory and connectivity
|
369
|
|
361
|
|
2.2
%
|
Costs to
service customers
|
1,363
|
|
1,273
|
|
7.1
%
|
Marketing
|
422
|
|
388
|
|
8.8
%
|
Other
|
677
|
|
643
|
|
5.3
%
|
Total
operating costs and expenses excluding depreciation and
amortization)
|
4,810
|
|
4,544
|
|
5.9
%
|
|
|
|
|
|
|
Adjusted
EBITDA
|
2,694
|
|
2,680
|
|
0.5
%
|
|
|
|
|
|
|
Adjusted
EBITDA margin
|
35.9
%
|
|
37.1
%
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
1,713
|
|
1,598
|
|
|
Stock
compensation expense
|
50
|
|
35
|
|
|
Other
operating expenses, net
|
15
|
|
7
|
|
|
|
|
|
|
|
|
Income
from operations
|
916
|
|
1,040
|
|
|
|
|
|
|
|
|
OTHER
EXPENSES:
|
|
|
|
|
|
Interest
expense, net
|
(907)
|
|
(963)
|
|
|
Loss on
extinguishment of debt
|
(55)
|
|
(143)
|
|
|
Other
expense, net
|
(1)
|
|
(5)
|
|
|
|
(963)
|
|
(1,111)
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
(47)
|
|
(71)
|
|
|
|
|
|
|
|
|
Income tax
expense
|
(257)
|
|
(299)
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(304)
|
|
$
(370)
|
|
|
|
|
|
|
|
|
LOSS PER
COMMON SHARE, BASIC AND DILUTED:
|
$
(3.05)
|
|
$
(3.39)
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding, basic and diluted
|
99,657,989
|
|
108,948,554
|
|
|
|
|
|
|
|
|
(a)
|
Pro forma
results reflect certain acquisitions of cable systems in 2011 as if
they occurred as of January 1, 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.
|
|
Certain
prior year amounts have been reclassified to conform with the 2012
presentation, including the reflection of revenues earned from
customers residing in multi-dwelling residential structures from
commercial revenues to video and Internet revenues and marketing
expense to include residential and commercial labor.
|
|
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,
|
|
2012
|
|
2011
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and
cash equivalents
|
$
7
|
|
$
2
|
Restricted
cash and cash equivalents
|
27
|
|
27
|
Accounts
receivable, net
|
234
|
|
268
|
Prepaid
expenses and other current assets
|
65
|
|
60
|
Total
current assets
|
333
|
|
357
|
|
|
|
|
INVESTMENT
IN CABLE PROPERTIES:
|
|
|
|
Property,
plant and equipment, net
|
7,206
|
|
6,897
|
Franchises
|
5,287
|
|
5,288
|
Customer
relationships, net
|
1,424
|
|
1,704
|
Goodwill
|
953
|
|
954
|
Total
investment in cable properties, net
|
14,870
|
|
14,843
|
|
|
|
|
OTHER
NONCURRENT ASSETS
|
396
|
|
401
|
|
|
|
|
Total
assets
|
$
15,599
|
|
$
15,601
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts
payable and accrued liabilities
|
$
1,224
|
|
$
1,157
|
Total
current liabilities
|
1,224
|
|
1,157
|
|
|
|
|
LONG-TERM
DEBT
|
12,808
|
|
12,856
|
DEFERRED
INCOME TAXES
|
1,122
|
|
847
|
OTHER
LONG-TERM LIABILITIES
|
296
|
|
332
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
149
|
|
409
|
|
|
|
|
Total
liabilities and shareholders' equity
|
$
15,599
|
|
$
15,601
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(dollars
in millions)
|
|
|
|
|
|
|
|
Three
Months Ended December 31,
|
|
Year
Ended December 31,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
CASH FLOWS
FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
(40)
|
|
$
(67)
|
|
$
(304)
|
|
$
(369)
|
Adjustments to reconcile net loss to net cash flows
from operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
466
|
|
411
|
|
1,713
|
|
1,592
|
Noncash
interest expense
|
|
12
|
|
7
|
|
45
|
|
34
|
(Gain)
loss on extinguishment of debt
|
|
(19)
|
|
19
|
|
55
|
|
143
|
Deferred
income taxes
|
|
47
|
|
65
|
|
250
|
|
290
|
Other,
net
|
|
20
|
|
7
|
|
45
|
|
33
|
Changes in
operating assets and liabilities, net of effects from acquisitions
and dispositions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
16
|
|
(19)
|
|
34
|
|
(24)
|
Prepaid
expenses and other assets
|
|
4
|
|
5
|
|
(8)
|
|
1
|
Accounts
payable, accrued liabilities and other
|
|
(21)
|
|
(3)
|
|
46
|
|
37
|
Net cash
flows from operating activities
|
|
485
|
|
425
|
|
1,876
|
|
1,737
|
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Purchases
of property, plant and equipment
|
|
(449)
|
|
(327)
|
|
(1,745)
|
|
(1,311)
|
Change in
accrued expenses related to capital expenditures
|
|
(3)
|
|
68
|
|
13
|
|
57
|
Sales
(purchases) of cable systems, net
|
|
-
|
|
-
|
|
19
|
|
(88)
|
Other,
net
|
|
(6)
|
|
(4)
|
|
(24)
|
|
(24)
|
Net cash
flows from investing activities
|
|
(458)
|
|
(263)
|
|
(1,737)
|
|
(1,366)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Borrowings
of long-term debt
|
|
1,477
|
|
1,688
|
|
5,830
|
|
5,489
|
Repayments
of long-term debt
|
|
(2,347)
|
|
(1,427)
|
|
(5,901)
|
|
(5,072)
|
Payments
for debt issuance costs
|
|
(12)
|
|
(19)
|
|
(53)
|
|
(62)
|
Purchase
of treasury stock
|
|
(7)
|
|
(410)
|
|
(11)
|
|
(733)
|
Other,
net
|
|
1
|
|
3
|
|
1
|
|
5
|
Net cash
flows from financing activities
|
|
(888)
|
|
(165)
|
|
(134)
|
|
(373)
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
(861)
|
|
(3)
|
|
5
|
|
(2)
|
CASH AND
CASH EQUIVALENTS, beginning of period
|
|
868
|
|
5
|
|
2
|
|
4
|
CASH AND
CASH EQUIVALENTS, end of period
|
|
$
7
|
|
$
2
|
|
$
7
|
|
$
2
|
|
|
|
|
|
|
|
|
|
CASH PAID
FOR INTEREST
|
|
$
257
|
|
$
250
|
|
$
904
|
|
$
899
|
|
|
|
|
|
|
|
|
|
|
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED SUMMARY OF OPERATING
STATISTICS
(in
thousands, except ARPU and penetration data)
|
|
|
|
Approximate as of
|
|
December 31, 2012 (a)
|
|
September 30, 2012 (a)
|
|
December 31, 2011 (a)
|
Footprint
|
|
|
|
|
|
Estimated Video Passings (b)
|
12,112
|
|
12,072
|
|
12,013
|
Estimated Internet Passings (b)
|
11,810
|
|
11,759
|
|
11,692
|
Estimated Telephone Passings (b)
|
11,139
|
|
11,018
|
|
10,891
|
|
|
|
|
|
|
Penetration Statistics
|
|
|
|
|
|
Video Penetration of Estimated Video Passings (c)
|
34.3
%
|
|
34.8
%
|
|
35.9
%
|
Internet Penetration of Estimated Internet Passings (c)
|
33.7
%
|
|
33.3
%
|
|
31.3
%
|
Telephone Penetration of Estimated Telephone Passings
(c)
|
18.1
%
|
|
18.0
%
|
|
17.2
%
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
Residential Customer Relationships (d)
|
5,035
|
|
5,015
|
|
4,927
|
Residential Non-Video Customers
|
1,046
|
|
990
|
|
783
|
%
Non-Video
|
20.8
%
|
|
19.7
%
|
|
15.9
%
|
|
|
|
|
|
|
Customers
|
|
|
|
|
|
Video
(e)
|
3,989
|
|
4,025
|
|
4,144
|
Internet
(f)
|
3,785
|
|
3,731
|
|
3,492
|
Telephone
(g)
|
1,914
|
|
1,880
|
|
1,791
|
Residential PSUs (h)
|
9,688
|
|
9,636
|
|
9,427
|
Residential PSU / Customer Relationships
(d)(h)
|
1.92
|
|
1.92
|
|
1.91
|
Quarterly Net Additions/(Losses)
(i)
|
|
|
|
|
|
Video
(e)
|
(36)
|
|
(73)
|
|
(44)
|
Internet
(f)
|
54
|
|
69
|
|
68
|
Telephone
(g)
|
34
|
|
52
|
|
27
|
Residential PSUs (h)
|
52
|
|
48
|
|
51
|
|
|
|
|
|
|
Single
Play Penetration (j)
|
37.6
%
|
|
37.4
%
|
|
37.7
%
|
Double
Play Penetration (k)
|
32.5
%
|
|
33.0
%
|
|
33.2
%
|
Triple
Play Penetration (l)
|
29.9
%
|
|
29.6
%
|
|
29.1
%
|
Digital
Penetration (m)
|
86.9
%
|
|
86.2
%
|
|
82.0
%
|
|
|
|
|
|
|
Revenue
per Customer Relationship (n)
|
$
105.78
|
|
$
105.39
|
|
$
105.73
|
|
|
|
|
|
|
Commercial
|
|
|
|
|
|
Commercial
Customer Relationships (d)(o)
|
325
|
|
321
|
|
298
|
|
|
|
|
|
|
Customers
|
|
|
|
|
|
Video
(o)
|
169
|
|
172
|
|
170
|
Internet
(f)
|
193
|
|
186
|
|
163
|
Telephone
(g)
|
105
|
|
99
|
|
79
|
Commercial PSUs (h)
|
467
|
|
457
|
|
412
|
Quarterly Net Additions/(Losses)
(i)
|
|
|
|
|
|
Video
(o)
|
(3)
|
|
1
|
|
(3)
|
Internet
(f)
|
7
|
|
9
|
|
7
|
Telephone
(g)
|
6
|
|
8
|
|
5
|
Commercial PSUs (h)
|
10
|
|
18
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2012, September 30, 2012 and December 31, 2011, customers
include approximately 18,400, 16,900 and 18,600 customers,
respectively, whose accounts were over 60 days past due in payment,
approximately 2,600, 3,400 and 2,500 customers, respectively, whose
accounts were over 90 days past due in payment and approximately
1,700, 1,600 and 1,400 customers, respectively, whose accounts were
over 120 days past due in payment.
|
|
|
(b)
|
"Passings"
represent our estimate of the number of units, such as single
family homes, apartment and condominium units and commercial
establishments passed by our cable distribution network in the
areas where we offer the service indicated. These estimates
are updated for all periods presented based upon the information
available at that time.
|
|
|
(c)
|
"Penetration" represents residential and commercial
customers as a percentage of estimated passings for the service
indicated.
|
|
|
(d)
|
"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 structures, which are
calculated on an EBU basis (see footnote (o)) and non-video
commercial customer relationships.
|
|
|
(e)
|
"Video
Customers" represent those customers who subscribe to our video
services. Effective January 1, 2012, Charter revised its reporting
of customers whereby customers residing in multi-dwelling
residential structures are now included in residential video
customers rather than commercial video customers.
Further, residential video customers are no longer calculated on an
EBU (see footnote (o)) basis but are based on separate billing
relationships. The impact of these changes increased
residential video customers and reduced commercial video customers,
with an overall net decrease to total video customers. Prior
periods were reclassified to conform to the 2012
presentation.
|
|
|
(f)
|
"Internet
Customers" represent those customers who subscribe to our Internet
service.
|
|
|
(g)
|
"Telephone
Customers" represent those customers who subscribe to our telephone
service.
|
|
|
(h)
|
"Primary
Service Units" or "PSUs" represent the total of video, Internet and
phone customers.
|
|
|
(i)
|
"Quarterly
Net Additions/(Losses)" represent the net gain or loss in the
respective quarter for the service indicated.
|
|
|
(j)
|
"Single
Play Penetration" represents residential customers receiving only
one of Charter service offerings, including video, Internet or
phone, as a % of residential customer relationships.
|
|
|
(k)
|
"Double
Play Penetration" represents residential customers receiving only
two of Charter service offerings, including video, Internet and/or
phone, as a % of residential customer relationships.
|
|
|
(l)
|
"Triple
Play Penetration" represents residential customers receiving all
three Charter service offerings, including video, Internet and
phone, as a % of residential customer relationships.
|
|
|
(m)
|
"Digital
Penetration" represents the number of residential digital video
RGUs as a percentage of residential video customers.
|
|
|
(n)
|
"Revenue
per Customer Relationship" is calculated as total residential
video, Internet and phone quarterly revenue divided by three
divided by average residential customer relationships during the
respective quarter.
|
|
|
(o)
|
Included
within commercial video customers are those in commercial
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
customers, our EBU count will decline even if there is no real loss
in commercial service customers.
|
|
|
|
|
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,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
|
|
|
|
|
|
|
Net
loss
|
$
(40)
|
|
$
(67)
|
|
$
(304)
|
|
$
(369)
|
Plus: Interest expense, net
|
216
|
|
245
|
|
907
|
|
963
|
Income tax expense
|
49
|
|
67
|
|
257
|
|
299
|
Depreciation and amortization
|
466
|
|
411
|
|
1,713
|
|
1,592
|
Stock compensation expense
|
13
|
|
10
|
|
50
|
|
35
|
(Gain) loss on extinguishment of debt
|
(19)
|
|
19
|
|
55
|
|
143
|
Other, net
|
13
|
|
1
|
|
16
|
|
12
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA (b)
|
698
|
|
686
|
|
2,694
|
|
2,675
|
Less: Purchases of property, plant and
equipment
|
(449)
|
|
(327)
|
|
(1,745)
|
|
(1,311)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA less capital expenditures
|
$
249
|
|
$
359
|
|
$
949
|
|
$
1,364
|
|
|
|
|
|
|
|
|
Net cash
flows from operating activities
|
$
485
|
|
$
425
|
|
$
1,876
|
|
$
1,737
|
Less: Purchases of property, plant and
equipment
|
(449)
|
|
(327)
|
|
(1,745)
|
|
(1,311)
|
Change in accrued expenses related to
capital expenditures
|
(3)
|
|
68
|
|
13
|
|
57
|
|
|
|
|
|
|
|
|
Free cash
flow
|
$
33
|
|
$
166
|
|
$
144
|
|
$
483
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31,
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Actual
|
|
Pro
forma (a)
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
|
$
(304)
|
|
$
(370)
|
Plus: Interest expense, net
|
|
|
|
|
907
|
|
963
|
Income tax expense
|
|
|
|
|
257
|
|
299
|
Depreciation and amortization
|
|
|
|
|
1,713
|
|
1,598
|
Stock compensation expense
|
|
|
|
|
50
|
|
35
|
Loss on extinguishment of debt
|
|
|
|
|
55
|
|
143
|
Other, net
|
|
|
|
|
16
|
|
12
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA (b)
|
|
|
|
|
2,694
|
|
2,680
|
Less: Purchases of property, plant and
equipment
|
|
|
|
|
(1,745)
|
|
(1,311)
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA less capital expenditures
|
|
|
|
|
$
949
|
|
$
1,369
|
|
|
|
|
|
|
|
|
Net cash
flows from operating activities
|
|
|
|
|
$
1,876
|
|
$
1,742
|
Less: Purchases of property, plant and
equipment
|
|
|
|
|
(1,745)
|
|
(1,311)
|
Change in accrued expenses related to
capital expenditures
|
|
|
|
|
13
|
|
57
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
|
|
|
$
144
|
|
$
488
|
|
|
|
|
|
|
|
|
(a)
|
Pro forma
results reflect certain acquisitions of cable systems in 2011 as if
they occurred as of January 1, 2011.
|
|
|
(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,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Customer
premise equipment (a)
|
|
$
162
|
|
$
115
|
|
$
803
|
|
$
585
|
Scalable
infrastructure (b)
|
|
92
|
|
82
|
|
412
|
|
347
|
Line
extensions (c)
|
|
56
|
|
39
|
|
167
|
|
117
|
Upgrade/Rebuild (d)
|
|
69
|
|
34
|
|
197
|
|
130
|
Support
capital (e)
|
|
70
|
|
57
|
|
166
|
|
132
|
|
|
|
|
|
|
|
|
|
Total capital expenditures (f)
|
|
$
449
|
|
$
327
|
|
$
1,745
|
|
$
1,311
|
|
|
|
|
|
|
|
|
|
(a)
|
Customer
premise equipment includes costs incurred at the customer residence
to secure new customers and revenue generating units. 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, to secure growth of new customers and revenue generating
units, 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 $88 million and $75 million of
capital expenditures related to commercial services for the three
months ended December 31, 2012 and 2011, respectively, and
$269 million and $195 million for the year ended December 31,
2012 and 2011.
|
|
|
Certain
prior period amounts have been reclassified to conform with the
2012 presentation.
|
|
SOURCE Charter Communications, Inc.