01—Abstract
Summary
Summary of the 10-Q filed August 6, 2013. Cited figures are marked; the original filing is the authoritative source.
Charter Communications, Inc. reported a net loss of $96 milliona for the three months ended June 30, 2013, a slight increase from $83 million in the same period last year.
For the six months ended June 30, 2013, the net loss narrowed to $138 millionb from $177 million in the prior year. Revenue grew by 5% year-over-year for both the quarter and the first six months, driven by increases in residential Internet and commercial customer growth, and price adjustments. However, this growth was partially offset by a decline in video customers and lower advertising sales.
Financially, the company continues to manage a significant debt load of approximately $12.9 billionc. Despite the net losses, Charter generated positive operating cash flow and free cash flow. Significant debt refinancing activities occurred during the period, including the issuance of new notes and amendments to credit facilities, which resulted in losses on extinguishment of debt but improved the company's debt maturity profile and interest rates.
The acquisition of Bresnan Broadband Holdings, LLC in July 2013 for $1.625 billiond is a significant strategic move that will expand the company's footprint. The company also saw a significant investment from Liberty Media, which now holds a 27% stake and has gained board representation, signaling a new strategic chapter for Charter.
02—Key points
Key Highlights
- Revenue increased by 5% for both the three and six months ended June 30, 2013, compared to the prior year periods, reaching $1.97 billion and $3.89 billion, respectively.
- Net loss for the quarter was $96 million, a slight increase from $83 million in Q2 2012, while the six-month net loss narrowed to $138 million from $177 million in the prior year.
- The company maintained a substantial long-term debt of $12.8 billion as of June 30, 2013, though recent debt management activities have improved its structure and reduced interest expenses.
- Operating cash flow remained strong, with $1.03 billion generated for the first six months of 2013, supporting capital expenditures and debt servicing.
- Free cash flow increased significantly year-over-year, reaching $75 million for the quarter and $193 million for the six months, indicating improved operational cash generation.
- In July 2013, Charter completed the acquisition of Bresnan Broadband Holdings, LLC for $1.625 billion, expanding its service footprint into new territories.
- Liberty Media Corporation acquired a 27% stake in Charter in May 2013, bringing significant strategic investment and board influence, including the appointment of John Malone and Gregory Maffei to the board.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2013filed August 6, 2013Financial Statements
Q2 FY2013 against Q2 FY2012
| Line item | Q2 FY2013Q2 FY2012 | Change |
|---|---|---|
| Revenue | $1.97B$1.88B | +4.7% |
| Operating Expenses | $1.74B$1.61B | +7.5% |
| Operating Income | $234.00M$269.00M | −13.0% |
| Interest Expense | $211.00M$225.00M | −6.2% |
| Net Income | -$96.00M-$83.00M | −15.7% |
| EPS (Basic) | $-0.96$-0.84 | −14.3% |
| Shares Outstanding (Basic) | 100.60M99.50M | +1.1% |
05—Questions
Frequently Asked Questions
What is Charter's overall financial performance for the quarter?
For the three months ended June 30, 2013, Charter Communications reported a net loss of $96 million, a slight increase from $83 million in the same period of 2012. Revenue grew by 5% to $1.97 billion, driven by increases in Internet and commercial services, partially offset by a decline in video customers.
How is Charter managing its significant debt load?
Charter has a substantial long-term debt of approximately $12.8 billion. The company has been actively managing its debt through refinancing activities, including issuing new notes and amending credit facilities. These actions have helped to extend debt maturities and reduce average interest rates, though they also resulted in losses on extinguishment of debt. Despite the debt, the company continues to generate positive operating cash flow.
What are the key strategic developments during this period?
Two major strategic developments occurred: First, Liberty Media Corporation acquired a 27% stake in Charter in May 2013, providing significant investment and board influence. Second, Charter completed the acquisition of Bresnan Broadband Holdings, LLC in July 2013 for $1.625 billion, expanding its market reach into new states.
What is the company's outlook on customer growth and revenue?
Charter is focusing on increasing customer penetration and revenue through efforts like promoting triple-play bundles, expanding digital and HD-DVR services, and improving customer service. While residential Internet and commercial businesses are showing growth, the company faces challenges in retaining video customers due to competition and economic conditions. Revenue growth is expected to continue, supported by these initiatives.
06—Continue