10-QPeriod: Q2 FY2012

CHARTER COMMUNICATIONS, INC. /MO/ Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 7, 2012For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) reported its second quarter 2012 results, indicating revenue growth driven by its Internet, telephone, and commercial businesses, partially offset by a decline in video revenue. While total revenues increased by 5% year-over-year for the quarter, the company continued to experience a net loss, albeit reduced compared to the prior year's quarter. Adjusted EBITDA showed a slight increase, demonstrating operational resilience amidst increasing programming and operating costs. Capital expenditures increased significantly, reflecting investments in network upgrades and customer premise equipment to support digitization and enhanced services. The company maintains substantial long-term debt, with ongoing efforts to manage its maturity profile and leverage. Liquidity appears adequate, supported by free cash flow and available credit facilities, though significant debt obligations remain a key financial consideration for investors.

Financial Highlights

44 data points
Beta

Revenue

$1.88B

Net Income

-$83.00M

-4.4% Net Margin

EPS (Diluted)

$-0.84

Total Assets

$15.55B

Cash & Equivalents

$5.00M

Free Cash Flow

$1.00M

Financial Statements
Beta
Revenue$1.88B
SG&A Expenses$373.00M
Operating Expenses$1.61B
Operating Income$269.00M
Interest Expense$225.00M
Net Income-$83.00M
EPS (Basic)$-0.84
Shares Outstanding (Basic)99.50M

Key Highlights

  • 1Total revenues increased by 5% to $1.88 billion for the three months ended June 30, 2012, compared to $1.79 billion in the prior year period, driven by growth in Internet, telephone, and commercial services.
  • 2Net loss for the quarter was $83 million ($0.84 per share), an improvement from a net loss of $107 million ($0.98 per share) in the same period last year.
  • 3Adjusted EBITDA grew to $693 million for the quarter, up from $673 million in the prior year, reflecting revenue growth offset by increased programming costs.
  • 4Capital expenditures increased significantly to $468 million for the quarter, up from $324 million in the prior year, primarily for customer premise equipment and scalable infrastructure.
  • 5Total long-term debt remained substantial at $12.79 billion as of June 30, 2012.
  • 6Free cash flow for the quarter was $26 million, a decrease from $155 million in the prior year, largely due to higher capital expenditures.

Frequently Asked Questions

Charter's revenue growth is primarily driven by increases in its Internet and telephone services, as well as its commercial business segments. Advertising sales also contributed positively.

The net loss is primarily attributable to significant interest expenses on its substantial debt, coupled with depreciation and amortization expenses related to its capital-intensive business. Increased programming costs also contribute to the loss.

The significant increase in capital expenditures is for investments in customer premise equipment (like set-top boxes and modems), scalable infrastructure (like headend equipment), and network upgrades. These investments are aimed at supporting increased digitization, higher bandwidth demands, and improved customer experience to drive future growth and compete effectively.

Charter has a substantial long-term debt of approximately $12.8 billion. The company aims to manage this through a combination of generating positive free cash flow, utilizing its available credit facilities, and potentially refinancing existing debt to extend maturities or reduce principal. They are also evaluating strategic opportunities, including reducing leverage, investing in growth, and potential acquisitions.