8-KRegulation FD

CHARTER COMMUNICATIONS, INC. /MO/ 8-K Report, Regulation FD Disclosure (Apr 6, 2006)

Filed April 6, 2006For Securities:CHTR

Summary

Charter Communications, Inc. (CHTR) filed an 8-K on April 6, 2006, providing preliminary first-quarter 2006 customer and financial updates, primarily related to a planned refinancing of its credit facility. The company reported significant net customer gains across analog video, digital video, high-speed Internet, and telephone services, a marked improvement compared to the first quarter of 2005. These gains are partly attributed to ongoing targeted marketing efforts and the acquisition of certain cable systems in Minnesota from Seren Innovations, Inc. in January 2006. Financially, Charter anticipates first-quarter 2006 revenues to be between $1.365 billion and $1.380 billion, representing a 7.5% to 8.5% increase year-over-year. However, Adjusted EBITDA is expected to be flat compared to the prior year, with operating expenses rising due to increased programming costs and investments in customer service. Capital expenditures are projected to be between $235 million and $260 million for the quarter, with a full-year outlook of $1.0 billion to $1.1 billion.

Key Highlights

  • 1Significant net customer gains reported across analog video (+29,400), digital video (+70,100), high-speed Internet (+126,000), and telephone (+69,600) in Q1 2006, a substantial improvement from Q1 2005.
  • 2Acquisition of certain Minnesota cable systems from Seren Innovations, Inc. in January 2006 contributed to customer gains across all service categories.
  • 3Expected Q1 2006 revenue projected to be between $1.365 billion and $1.380 billion, indicating a 7.5%-8.5% year-over-year increase.
  • 4Anticipated Q1 2006 Adjusted EBITDA is expected to be flat compared to the prior year, impacted by increased operating expenses.
  • 5Operating expenses rose due to higher programming costs and investments in customer service and customer growth.
  • 6Q1 2006 capital expenditures are estimated to be between $235 million and $260 million, with the full-year 2006 forecast at $1.0 billion to $1.1 billion.
  • 7The information provided is preliminary and intended to comply with Regulation FD in advance of a credit facility refinancing.

Frequently Asked Questions

This 8-K filing is primarily for Regulation FD disclosure, providing preliminary first-quarter 2006 financial and operational updates to potential investors in connection with a planned refinancing of Charter Communications' credit facility.

Charter experienced significant net customer gains across all its service lines (analog video, digital video, high-speed Internet, and telephone) in the first quarter of 2006, showing a substantial improvement compared to the net losses or smaller gains seen in the first quarter of 2005. This growth was partly due to a recent acquisition.

Charter expects Q1 2006 revenues to be between $1.365 billion and $1.380 billion, a 7.5% to 8.5% increase year-over-year. However, Adjusted EBITDA is projected to be flat compared to the same period last year, largely due to increased operating expenses.

Adjusted EBITDA is a non-GAAP financial measure defined by Charter as income from operations before certain charges like depreciation, amortization, and gains/losses on asset sales. Charter uses it as a liquidity measure to assess its ability to fund operations and financing obligations, and it's a key metric for its annual incentive compensation program. Investors use it to evaluate the company's debt service capabilities.