10-QPeriod: Q1 FY2012

CHARTER COMMUNICATIONS, INC. /MO/ Quarterly Report for Q1 Ended Mar 31, 2012

Filed May 8, 2012For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) reported its first quarter 2012 financial results, reflecting continued revenue growth driven by its Internet and commercial businesses, partially offset by a decline in video revenues. The company experienced a net loss of $94 million for the quarter, an improvement from the prior year's loss of $110 million. While total revenues increased by 3% year-over-year, income from operations decreased due to higher programming costs, increased depreciation and amortization expenses, and investments in customer experience. The company's financial position remains heavily leveraged, with total debt of $12.8 billion. However, Charter demonstrated effective management of its debt through various refinancing activities and maintained adequate liquidity through free cash flow generation and access to its revolving credit facility. The company continues to invest in its product offerings, including accelerating the rollout of HD channels and improving digital and DVR services, to remain competitive in a challenging market.

Financial Highlights

44 data points
Beta

Revenue

$1.83B

Net Income

-$94.00M

-5.1% Net Margin

EPS (Diluted)

$-0.95

Total Assets

$15.52B

Cash & Equivalents

$4.00M

Free Cash Flow

$114.00M

Financial Statements
Beta
Revenue$1.83B
SG&A Expenses$372.00M
Operating Expenses$1.60B
Operating Income$230.00M
Interest Expense$237.00M
Net Income-$94.00M
EPS (Basic)$-0.95
Shares Outstanding (Basic)99.43M

Key Highlights

  • 1Total revenue increased by 3% to $1.83 billion in Q1 2012, driven by growth in Internet and commercial services.
  • 2Net loss narrowed to $94 million ($0.95 per share) from $110 million ($0.97 per share) in the prior year's quarter.
  • 3Income from operations decreased by 15% to $230 million, impacted by higher programming costs and operating expenses.
  • 4Adjusted EBITDA was $652 million, a slight decrease from $663 million in Q1 2011, attributed to increased programming and customer experience investments.
  • 5Free cash flow increased to $102 million from $72 million in the prior year's quarter, driven by improvements in operating assets and liabilities.
  • 6Long-term debt remains significant at $12.8 billion, though the company actively managed its debt structure through refinancing activities.
  • 7Capital expenditures were $340 million, with expectations to reach $1.4-$1.5 billion for the full year 2012, reflecting investments in product enhancement and customer growth.

Frequently Asked Questions

Charter reported a net loss of $94 million for the first quarter of 2012, an improvement from the $110 million net loss in the same period of 2011. Total revenues grew by 3% to $1.83 billion, primarily driven by increases in Internet and commercial services, though this growth was partially offset by a decline in video revenues. Income from operations decreased due to higher operating expenses, particularly programming costs and investments in customer experience.

Charter's long-term debt stands at $12.8 billion. The company is actively managing this through refinancing activities, such as the new term loan D facility and amendments to its revolving credit facility in April 2012. These actions aim to extend maturities and optimize its debt structure. Charter also relies on free cash flow and its credit facilities to meet its financial obligations and future capital needs.

Revenue growth is primarily driven by the increasing subscriber numbers and revenue from Internet and commercial services, along with price adjustments and incremental revenues from advanced video services like DVR and HD. However, video revenues are declining due to a decrease in basic video customers, competition, and shifts in viewing habits towards internet-based video consumption.

Charter is focused on improving its video product by accelerating the rollout of HD channels and increasing the penetration of digital and HD-DVR services. The company is also working to simplify offers, improve packaging, and enhance the customer experience. Despite these efforts, Charter acknowledges potential continued challenges from economic conditions and competition, which may impact customer growth and require further investment.