10-QPeriod: Q1 FY2011

CHARTER COMMUNICATIONS, INC. /MO/ Quarterly Report for Q1 Ended Mar 31, 2011

Filed May 3, 2011For Securities:CHTR

Summary

Charter Communications, Inc. reported a net loss of $110 million for the first quarter of 2011, a significant decrease from a net income of $24 million in the same period of 2010. This shift was primarily driven by a substantial increase in interest expenses and a notable loss on the extinguishment of debt related to refinancing activities. Despite the net loss, operating income showed a modest increase to $269 million from $251 million, reflecting revenue growth, particularly in high-speed Internet and telephone services, which helped offset a decline in video customers. However, the company faces ongoing challenges from economic conditions and increasing competition, impacting customer growth and revenue expansion. The company's liquidity remains a focus, with significant debt obligations and ongoing capital expenditure requirements.

Financial Highlights

42 data points
Beta

Revenue

$1.77B

Net Income

-$110.00M

-6.2% Net Margin

EPS (Diluted)

$-0.97

Total Assets

$15.71B

Cash & Equivalents

$26.00M

Free Cash Flow

$91.00M

Financial Statements
Beta
Revenue$1.77B
SG&A Expenses$345.00M
Operating Expenses$1.50B
Operating Income$269.00M
Interest Expense$233.00M
Net Income-$110.00M
EPS (Basic)$-0.97
EPS (Diluted)$-0.97
Shares Outstanding (Basic)113.22M
Shares Outstanding (Diluted)113.22M

Key Highlights

  • 1Net Loss of $110 million for Q1 2011, a decline from $24 million net income in Q1 2010.
  • 2Revenue increased by 2% to $1.77 billion, driven by growth in high-speed Internet, telephone, and commercial services, partially offset by a decrease in video revenues.
  • 3Operating income improved to $269 million from $251 million, indicating operational resilience despite market pressures.
  • 4Total debt remained substantial at $12.6 billion, with significant maturities in the coming years.
  • 5Free cash flow decreased to $72 million from $205 million, primarily due to changes in operating assets/liabilities and increased interest payments.
  • 6Capital expenditures increased to $356 million, reflecting investments in network infrastructure and advanced services.
  • 7Acquisition of 4.5 million shares of Class A common stock for $207 million in a private transaction.

Frequently Asked Questions

The primary driver of the net loss was a significant increase in interest expense and a substantial loss on the extinguishment of debt, largely due to refinancing activities, which more than offset the improvement in operating income.

Total revenues increased by 2% to $1.77 billion. Growth was primarily fueled by increases in high-speed Internet, telephone, and commercial services, which helped to offset a decline in video revenues, particularly basic video customers.

Charter has a significant debt load totaling approximately $12.6 billion. For the remainder of 2011, $33 million matures. Key upcoming maturities include $1.1 billion in 2012, $0.5 billion in 2013, and $2.2 billion in 2014. The company plans to use free cash flow and credit facilities to manage these obligations.

The company noted that weakened economic conditions and increased competition adversely affected customer demand, contributing to a decrease in basic video customers. However, high-speed Internet and telephone customer numbers continued to grow.