SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): December 31, 2009
Charter Communications,
Inc.
(Exact name of registrant as
specified in its charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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001-33664
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43-1857213
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(Commission File
Number)
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(I.R.S. Employer
Identification Number)
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12405 Powerscourt
Drive
St. Louis, Missouri
63131
(Address of principal executive
offices including zip code)
(314)
965-0555
(Registrant's telephone number,
including area code)
Not
Applicable
(Former name or former address, if
changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On March 2, 2010, Charter Communications, Inc. issued a press release announcing its results for the fourth quarter ended December 31, 2009. The following information, including the entirety of the press release appearing in Exhibit 99.1 hereto, is not filed but is furnished pursuant to item 2.02, "Results of Operations and Financial Condition."
ITEM 9.01. FINANCIAL STATEMENTS
AND EXHIBITS.
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Exhibit
Number
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Description
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|
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99.1
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Press
Release dated March 2,
2010. *
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*
furnished herewith
Cautionary
Statement Regarding Forward-Looking Statements:
This
current report includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), regarding, among other things, our plans, strategies and prospects, both
business and financial. Although we believe that our plans,
intentions and expectations reflected in or suggested by these forward-looking
statements are reasonable, we cannot assure you that we will achieve or realize
these plans, intentions or expectations. Forward-looking statements
are inherently subject to risks, uncertainties and assumptions, including,
without limitation, the factors described under "Risk Factors" from time to time
in our filings with the Securities and Exchange Commission
("SEC"). Many of the forward-looking statements contained in this
current report may be identified by the use of forward-looking words such as
"believe," "expect," "anticipate," "should," "planned," "will," "may," "intend,"
"estimated," "aim," "on track," "target," "opportunity" and "potential," among
others. Important factors that could cause actual results to differ
materially from the forward-looking statements we make in this current report
are set forth in other reports or documents that we file from time to time with
the SEC, and include, but are not limited to:
|
·
|
our
ability to sustain and grow revenues and cash flows from operating
activities by offering video, high-speed Internet, telephone and other
services to residential and commercial customers, and to maintain and grow
our customer base, particularly in the face of increasingly aggressive
competition and the difficult economic conditions in the United
States;
|
|
·
|
the
impact of competition from other distributors, including but not limited
to incumbent telephone companies, direct broadcast satellite operators,
wireless broadband providers, and digital subscriber line ("DSL")
providers and competition from video provided over the
Internet;
|
|
·
|
general
business conditions, economic uncertainty or downturn and the significant
downturn in the housing sector and overall
economy;
|
|
·
|
our
ability to obtain programming at reasonable prices or to raise prices to
offset, in whole or in part, the effects of higher programming costs
(including retransmission
consents);
|
|
·
|
our
ability to adequately deliver customer
service;
|
|
·
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the
effects of governmental regulation on our
business;
|
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·
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the
availability and access, in general, of funds to meet our debt
obligations, prior to or when they become due, and to fund our operations
and necessary capital expenditures, either through (i) cash on hand, (ii)
cash flows from operating activities, (iii) access to the capital or
credit markets including through new issuances, exchange offers or
otherwise, especially given recent volatility and disruption in the
capital and credit markets, or (iv) other sources and our ability to fund
debt obligations (by dividend, investment or otherwise) to the applicable
obligor of such debt; and
|
|
·
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our
ability to comply with all covenants in our indentures and credit
facilities, any violation of which, if not cured in a timely manner, could
trigger a default of our other obligations under cross-default
provisions.
|
All
forward-looking statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by this cautionary
statement. We are under no duty or obligation to update any of the
forward-looking statements after the date of this current
report.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, Charter
Communications, Inc. has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
CHARTER COMMUNICATIONS,
INC.
Registrant
Dated:
March 2, 2010
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By: /s/ Kevin D.
Howard
Name: Kevin
D. Howard
Title: Senior Vice
President-Finance, Controller and Chief Accounting
Officer
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EXHIBIT INDEX
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Exhibit
Number
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Description
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99.1
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Press
Release dated March 2,
2010. *
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*
furnished herewith
Exhibit
99.1
NEWS
Charter
Reports Fourth Quarter and Annual 2009
Financial
and Operating Results
St. Louis, Missouri – March 2,
2010 – Charter Communications, Inc. (along with its subsidiaries, the “Company”
or “Charter”) today reported financial and operating results for the three
months and year ended December 31, 2009.
Key
year-over-year highlights:
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·
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Revenues
for the year ended December 31, 2009 increased 4.5% on a pro forma1 basis and 4.3% on an actual basis compared
to 2008.
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·
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Adjusted
EBITDA2
for 2009 increased 7.8% on a pro forma basis and
7.5% on an actual basis compared to
2008.
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·
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Fourth
quarter revenues grew 3.5% on a pro forma basis and
3.3% on an
actual basis, driven by
increases in telephone, high-speed Internet (HSI) and commercial
revenues.
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·
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Fourth
quarter adjusted
EBITDA grew 2.4% on a pro forma basis and
2.1% on an actual basis.
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·
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Total
average monthly revenue per basic video customer (ARPU) for the fourth
quarter increased 8.1% year-over-year to $117.43, driven by increased
sales of The Charter BundleTM.
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·
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Charter
completed its financial restructuring in November 2009, reducing debt by
approximately $8 billion, or 40%.
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1 Pro forma results are
described below in the “Use of Non-GAAP Financial Metrics” section and are
provided in the addendum of this news release.
2Adjusted
EBITDA is defined in the “Use of Non-GAAP Financial Metrics” section and is
reconciled to consolidated net income (loss) in the addendum of this news
release.
1
“2009 was
a successful year on many fronts. We enhanced our video, Internet and phone
services while continuing to improve the customer experience. We also achieved
strong operating results throughout the year and completed a financial
restructuring that better positions us for the future,” said Mike Lovett,
Interim President and Chief Executive Officer.
Fresh
Start Accounting and Combined Successor and Predecessor Results
As
previously announced, Charter emerged from Chapter 11 on November 30, 2009 under
our pre-arranged Joint Plan of Reorganization (“the Plan”), which was confirmed
by the United States Bankruptcy Court for the Southern District of New
York.
Upon
emergence from bankruptcy, Charter adopted fresh start accounting. In addition
to fresh start accounting, our consolidated financial statements reflect all
effects of the transactions contemplated by the Plan. Thus, our financial
statements are not comparable in many respects to our financial statements for
periods prior to our adoption of fresh start accounting and prior to accounting
for the effects of the reorganization.
The
accompanying consolidated statements of operations and cash flows contained in
the addendum to this release present the results of operations and the sources
and uses of cash for (i) the eleven months ended November 30, 2009 of the
Company (the “Predecessor”) and (ii) the one month ended December 31, 2009 of
the Company (the “Successor”). However, for purposes of this release, we have
combined the current year results of operations for the Predecessor and the
Successor. We believe the combined results of operations for the three and
twelve months ended December 31, 2009 provide management and investors with a
more meaningful perspective of our ongoing financial and operational performance
and trends than if we did not combine the results of operations of the
Predecessor and the Successor in this manner.
Net gains
related to our emergence from Chapter 11 Bankruptcy and the related application
of fresh start accounting had a significant impact on net income for the quarter
and year ended December 31, 2009. Net income for the fourth quarter
of 2009 was $12.718 billion compared to a net loss of $1.495 billion in the year
ago quarter. Net income for 2009 was $11.366 billion compared to a net loss of
$2.451 billion in 2008.
2
Key
Operating Results
All of
the following customer and ARPU statistics are presented on a pro forma basis. Charter
served approximately 12.7 million revenue generating units (RGUs) as of December
31, 2009. Approximately 57% of Charter’s customers subscribe to a bundle, up
from 53% in the fourth quarter of 2008. Charter’s pro forma ARPU for the fourth
quarter of 2009 was $117.43, an increase of 8.1% compared to fourth quarter
2008, primarily as a result of higher bundled penetration.
Fourth
quarter 2009 customer changes (on a pro forma basis) included the
following:
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·
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Digital
video customers increased by approximately 43,300 and basic video
customers decreased by approximately 56,900 during the fourth quarter.
Video ARPU was $62.06 for the fourth quarter of 2009, up 4.7%
year-over-year.
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|
·
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HSI
customers grew by approximately 51,800 during the fourth quarter of 2009.
HSI ARPU of $41.48 increased approximately 3.0% compared to the year-ago
quarter, driven by customer upgrades to higher speeds of service and
increased penetration of home networking
service.
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·
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Fourth
quarter 2009 net gains of telephone customers were approximately 60,600.
Telephone penetration is now 14.9% of approximately 10.7 million telephone
homes passed as of December 31, 2009. Telephone ARPU of $41.73 increased
approximately 1.6% compared to the year-ago
quarter.
|
As of
December 31, 2009, Charter served approximately 5.3 million customers, and the
Company’s 12.7 million RGUs were comprised of 4.8 million basic video, 3.2
million digital video, 3.1 million HSI and 1.6 million telephone
customers.
Fourth
Quarter Results – Pro forma
Fourth
quarter revenues of $1.710 billion increased 3.5% compared to the year-ago
quarter on a pro forma
basis. Adjusted EBITDA for the fourth quarter of 2009 totaled $633 million, an
increase of 2.4% compared to the pro forma results for the
year-ago period.
3
Fourth
Quarter Results – Actual
Fourth
quarter revenues of $1.710 billion increased 3.3% on an actual basis. The
increase is the result of HSI, telephone and commercial revenue
growth.
HSI
revenues were $378 million, up 8.9% year-over-year due to an increased number of
customers and ARPU growth. Telephone revenues for the 2009 fourth quarter were
$184 million, a 17.9% increase over fourth quarter 2008, driven by a larger
telephone customer base and an increase in telephone ARPU. Commercial revenues
rose to $116 million, a 12.6% increase year-over-year, primarily resulting from
increased sales of the Charter Business Bundle® and customer relationship
growth. Video revenues were $862 million, essentially flat with the
year-ago quarter, as digital and advanced services revenue growth were offset by
a decline in basic video customers. Advertising sales revenues of $69 million
for the fourth quarter of 2009, which showed a 7.8% improvement compared to the
third quarter of 2009, declined 18.8% year-over-year, primarily as a result of
significant decreases in revenues from the political, automotive and retail
sectors.
Operating
costs and expenses totaled $1.077 billion for the fourth quarter of 2009, a 4.0%
increase compared to the year-ago period. Operating expenses for the 2009 fourth
quarter, which include programming, service and advertising sales costs, were
$731 million, a 4.0% increase year-over-year, primarily as a result of increased
programming costs. Selling, general and administrative expenses were $346
million, an increase of 3.9% compared to the year-ago quarter.
Adjusted
EBITDA for the fourth quarter of 2009 rose to $633 million, up 2.1% compared to
the fourth quarter of 2008.
Charter
reported $977 million of income from operations in the fourth quarter of 2009,
compared to a net loss from operations of $1.257 billion in the fourth quarter
of 2008. Driving the change are differences in non-cash franchise impairment
charges. In the fourth quarter of 2008 Charter recorded a $1.521 billion
non-cash franchise impairment charge. In the fourth quarter of 2009, we
finalized the franchise impairment analysis initiated in the third quarter and
recorded a $691 million reduction of the previously recorded non-cash franchise
impairment charge.
4
Expenditures
for property, plant and equipment for the fourth quarter of 2009 were $315
million, compared to fourth quarter 2008 expenditures of $264 million. The
increase in capital expenditures was driven primarily by an increase in customer
premise equipment related to higher customer demand for high definition and
digital video recorder converters and an increase in support capital due to
hardware, software and vehicle purchases.
Net cash
flows used in operating activities for the fourth quarter of 2009 were $414
million, compared to $11 million in the fourth quarter of 2008. The increase in
net cash flows used in operating activities was primarily due to cash paid
associated with implementing the Plan.
Year to Date Results – Pro
forma
Pro forma revenues for the
year ended December 31, 2009 were $6.754 billion, an increase of 4.5%, or $293
million, over pro forma
2008 results.
Pro forma adjusted EBITDA for
2009 totaled $2.493 billion, an increase of 7.8% compared to the pro forma results for the
year-ago period. The pro forma
adjusted EBITDA margin increased 110 basis points for the year to 36.9%,
up from 35.8% in the year-ago period on a pro forma basis.
Year
to Date Results – Actual
Revenues
of $6.755 billion for the year ended December 31, 2009 increased 4.3% compared
to the year-ago period. The increase resulted from telephone, HSI and commercial
revenue growth.
Telephone
revenues for 2009 were $713 million, a 28.5% increase over 2008, driven by a
larger telephone customer base and an increase in telephone ARPU. HSI revenues
were $1.476 billion, up 8.8% year-over-year. Commercial revenues rose to $446
million, a 13.8% increase year-over-year. Video revenues were $3.468 billion,
essentially flat with the same period in 2008. Advertising sales revenues
declined 19.2% year-over-year to $249 million for 2009.
Operating
costs and expenses totaled $4.262 billion for 2009, a 2.5% increase compared to
the year-ago period. Operating expenses for the year, which include
5
programming,
service and advertising sales costs, were $2.895 billion, a 3.7% increase
year-over-year. Selling, general and administrative expenses were $1.367
billion, essentially flat with the prior year.
Adjusted
EBITDA for the year ended December 31, 2009 rose to $2.493 billion, up 7.5%
compared to the prior year.
Charter
reported a $979 million of loss from operations in 2009, compared to a $614
million loss in 2008. The increase in loss from operations is primarily due to
the $2.163 billion non-cash franchise impairment charge recorded in 2009
compared to $1.521 billion in 2008, partially offset by the increase in adjusted
EBITDA and change in other operating income.
Expenditures
for property, plant and equipment for 2009 were $1.134 billion, compared to 2008
expenditures of $1.202 billion. The decrease in capital expenditures is
primarily the result of lower spending on scalable infrastructure related to HSI
and headend upgrades during 2009 compared to 2008. During 2010, we expect
capital expenditures to be approximately $1.2 billion.
Net cash
flows from operating activities for 2009 were $594 million, compared to $399
million in 2008. The increase in net cash flows from operating activities is
primarily due to a decrease in cash paid for interest and increase in adjusted
EBITDA, offset by reorganization items.
Debt
and Equity Update
Upon
completion of the Plan, Charter eliminated $8 billion of debt and reduced annual
interest expense by more than $830 million. As of December 31, 2009, Charter had
approximately $13.509 billion principal amount of debt and $754 million in cash
and cash equivalents.
The
Company has applied to NASDAQ to list its Class A common stock. The Company
believes it will be in a position to complete the listing of its shares of Class
A common stock on NASDAQ upon filling the vacancy on its board of directors and
audit committee.
6
Conference
Call
The
Company will host a conference call on Tuesday, March 2, 2010 at 9:00 a.m.
Eastern Time (ET) related to the contents of this release.
The
conference call will be webcast live via the Company’s website at www.charter.com. The
webcast can be accessed by selecting "Investor & News Center" from the lower
menu on the home page. The call will be archived in the "Investor & News
Center" in the "Financial Information" section on the left beginning two hours
after completion of the call. Participants should go to the call link no later
than 10 minutes prior to the start time to register.
Those
participating via telephone should dial 866-726-7983 no later than 10 minutes
prior to the call. International participants should dial 706-758-7055. The
conference ID code for the call is 59952615.
A replay
of the call will be available at 800-642-1687 or 706-645-9291 beginning two
hours after the completion of the call through the end of business on March 16,
2010. The conference ID code for the replay is 59952615.
Additional
Information Available on Website
A slide
presentation to accompany the conference call will be available on the “Investor
& News Center” of our website at www.charter.com in
the “Financial Information” section. A trending schedule containing historical
customer and financial data can also be found in the “Financial Information”
section.
Use
of Non-GAAP Financial Metrics
The
Company uses certain measures that are not defined by Generally Accepted
Accounting Principles (“GAAP”) to evaluate various aspects of its business.
Adjusted EBITDA, pro
forma adjusted EBITDA, adjusted EBITDA less capital expenditures and free
cash flow are non-GAAP financial measures and should be considered in addition
to, not as a substitute for, net income (loss) or cash flows from operating
activities reported in accordance with GAAP. These terms, as defined by Charter,
may not be comparable to similarly titled measures used by other companies.
Adjusted EBITDA is reconciled to
7
consolidated
net income (loss) and free cash flow is reconciled to cash flows from operating
activities in the addendum of this new release.
Adjusted
EBITDA is defined as consolidated net income (loss) plus interest expense,
income taxes, depreciation and amortization, impairment of franchises, asset
impairment charges, stock compensation expense and other operating expenses,
such as special charges and loss on sale or retirement of assets. As such, it
eliminates the significant non-cash depreciation and amortization expense that
results from the capital-intensive nature of the Company’s businesses as well as
other non-cash or non-recurring items, and is unaffected by the Company’s
capital structure or investment activities. Adjusted EBITDA less capital
expenditures is defined as Adjusted EBITDA minus purchases of property, plant
and equipment. Adjusted EBITDA, pro forma adjusted EBITDA and
adjusted EBITDA less capital expenditures are used by management and the
Company’s board of directors to evaluate the performance of the Company’s
business. For this reason, they are significant components of Charter’s annual
incentive compensation program. However, these measures are limited in that they
do not reflect the periodic costs of certain capitalized tangible and intangible
assets used in generating revenues and the cash cost of financing. Management
evaluates these costs through other financial measures.
Free cash
flow is defined as net cash flows from operating activities, less purchases of
property, plant and equipment and changes in accrued expenses related to capital
expenditures.
The
Company believes that adjusted EBITDA, pro forma adjusted EBITDA,
adjusted EBITDA less capital expenditures and free cash flow provide information
useful to investors in assessing Charter’s performance and its ability to
service its debt, fund operations and make additional investments with
internally generated funds. In addition, adjusted EBITDA generally correlates to
the leverage ratio calculation under the Company’s credit facilities or
outstanding notes to determine compliance with the covenants contained in the
facilities and notes (all such documents have been previously filed with the
United States Securities and Exchange Commission). Adjusted EBITDA and pro forma adjusted EBITDA, as
presented, include management fee expenses in the amount of $36 million and $32
million for the three months ended December 31, 2009
8
and 2008,
respectively, which expense amounts are excluded for the purposes of calculating
compliance with leverage covenants.
In
addition to the actual results for the three and twelve months ended December
31, 2009 and 2008, we have provided pro forma results in this
release for the three months ended December 31, 2008 and years ended December
31, 2009 and 2008. We believe these pro forma results facilitate
meaningful analysis of the results of operations. Pro forma results in this
release reflect certain sales and acquisitions of cable systems in 2008 and 2009
as if they occurred as of January 1, 2008. Pro forma statements of
operations for the three months ended December 31, 2008 and years ended December
31, 2009 and 2008 and pro
forma customer statistics as of September 30, 2009 and December 31, 2008
are provided in the addendum of this news release.
About Charter
Charter
Communications, Inc. (CCMM - OTC Bulletin Board) is a leading broadband
communications company and the fourth-largest cable operator in the United
States. Charter provides a full range of advanced broadband services, including
advanced Charter TVTM
video entertainment programming, Charter InternetTM
access, and Charter PhoneTM.
Charter Business® similarly provides scalable, tailored, and cost-effective
broadband communications solutions to business organizations, such as
business-to-business Internet access, data networking, video and music
entertainment services, and business telephone. Charter's advertising sales and
production services are sold under the Charter Media® brand. More information
about Charter can be found at www.charter.com.
# # #
Contact:
Media: Analysts:
Anita
Lamont Mary
Jo Moehle
314-543-2215 314-543-2397
9
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This
release includes forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
regarding, among other things, our plans, strategies and prospects, both
business and financial. Although we believe that our plans,
intentions and expectations reflected in or suggested by these forward-looking
statements are reasonable, we cannot assure you that we will achieve or realize
these plans, intentions or expectations. Forward-looking statements
are inherently subject to risks, uncertainties and assumptions, including,
without limitation, the factors described under "Risk Factors" from time to time
in our filings with the Securities and Exchange Commission
("SEC"). Many of the forward-looking statements contained in this
release may be identified by the use of forward-looking words such as "believe,"
"expect," "anticipate," "should," "planned," "will," "may," "intend,"
"estimated," "aim," "on track," "target," "opportunity" and "potential," among
others. Important factors that could cause actual results to differ
materially from the forward-looking statements we make in this release are set
forth in other reports or documents that we file from time to time with the SEC,
and include, but are not limited to:
|
·
|
our
ability to sustain and grow revenues and cash flows from operating
activities by offering video, high-speed Internet, telephone and other
services to residential and commercial customers, and to maintain and grow
our customer base, particularly in the face of increasingly aggressive
competition and the difficult economic conditions in the United
States;
|
|
·
|
the
impact of competition from other distributors, including but not limited
to incumbent telephone companies, direct broadcast satellite operators,
wireless broadband providers, and digital subscriber line ("DSL")
providers and competition from video provided over the
Internet;
|
|
·
|
general
business conditions, economic uncertainty or downturn and the significant
downturn in the housing sector and overall
economy;
|
|
·
|
our
ability to obtain programming at reasonable prices or to raise prices to
offset, in whole or in part, the effects of higher programming costs
(including retransmission
consents);
|
|
·
|
our
ability to adequately deliver customer
service;
|
|
·
|
the
effects of governmental regulation on our
business;
|
|
·
|
the
availability and access, in general, of funds to meet our debt
obligations, prior to or when they become due, and to fund our operations
and necessary capital expenditures, either through (i) cash on hand, (ii)
cash flows from operating activities, (iii) access to the capital or
credit markets including through new issuances, exchange offers or
otherwise, especially given recent volatility and disruption in the
capital and credit markets, or (iv) other sources and our ability to fund
debt obligations (by dividend, investment or otherwise) to the applicable
obligor of such debt; and
|
|
·
|
our
ability to comply with all covenants in our indentures and credit
facilities, any violation of which, if not cured in a timely manner, could
trigger a default of our other obligations under cross-default
provisions.
|
All
forward-looking statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by this cautionary
statement. We are under no duty or obligation to update any of the
forward-looking statements after the date of this release.
10
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CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
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||||||||||||||||||||
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UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
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||||||||||||||||||||
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(DOLLARS
IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)
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||||||||||||||||||||
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Actual
Three Months Ended December 31, 2009
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||||||||||||||||||||
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Successor
|
Predecessor
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Combined
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Predecessor
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|||||||||||||||||
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December
1
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October
1
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October
1
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Actual
Three
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|||||||||||||||||
|
through
|
through
|
through
|
Months
Ended
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|||||||||||||||||
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December
31, 2009
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November
30, 2009
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December
31, 2009
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December
31, 2008
|
%
Change
|
||||||||||||||||
|
REVENUES:
|
||||||||||||||||||||
|
Video
|
$ | 288 | $ | 574 | $ | 862 | $ | 864 | -0.2 | % | ||||||||||
|
High-speed
Internet
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127 | 251 | 378 | 347 | 8.9 | % | ||||||||||||||
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Telephone
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61 | 123 | 184 | 156 | 17.9 | % | ||||||||||||||
|
Commercial
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39 | 77 | 116 | 103 | 12.6 | % | ||||||||||||||
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Advertising
sales
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22 | 47 | 69 | 85 | -18.8 | % | ||||||||||||||
|
Other
|
35 | 66 | 101 | 101 | 0.0 | % | ||||||||||||||
|
Total
revenues
|
572 | 1,138 | 1,710 | 1,656 | 3.3 | % | ||||||||||||||
|
COSTS
AND EXPENSES:
|
||||||||||||||||||||
|
Operating
(excluding depreciation and amortization) (a)
|
244 | 487 | 731 | 703 | 4.0 | % | ||||||||||||||
|
Selling,
general and administrative (excluding stock
|
||||||||||||||||||||
|
compensation
expense) (b)
|
117 | 229 | 346 | 333 | 3.9 | % | ||||||||||||||
|
Operating
costs and expenses
|
361 | 716 | 1,077 | 1,036 | 4.0 | % | ||||||||||||||
|
Adjusted
EBITDA
|
211 | 422 | 633 | 620 | 2.1 | % | ||||||||||||||
|
Adjusted
EBITDA margin
|
36.9 | % | 37.1 | % | 37.0 | % | 37.4 | % | ||||||||||||
|
Depreciation
and amortization
|
122 | 217 | 339 | 329 | ||||||||||||||||
|
Impairment
of franchises
|
- | (691 | ) | (691 | ) | 1,521 | ||||||||||||||
|
Stock
compensation expense
|
1 | 3 | 4 | 9 | ||||||||||||||||
|
Other
operating expenses, net
|
4 | - | 4 | 18 | ||||||||||||||||
|
Income
(loss) from operations
|
84 | 893 | 977 | (1,257 | ) | |||||||||||||||
|
OTHER
INCOME (EXPENSES):
|
||||||||||||||||||||
|
Interest
expense, net (excluding unrecorded contractual interest
|
||||||||||||||||||||
|
expense
of $137 for the two months ended November 30, 2009)
|
(68 | ) | (135 | ) | (203 | ) | (486 | ) | ||||||||||||
|
Change
in value of derivatives
|
- | - | - | (28 | ) | |||||||||||||||
|
Gain
due to effects of Plan
|
- | 6,818 | 6,818 | - | ||||||||||||||||
|
Gain
due to fresh start accounting adjustments
|
- | 5,659 | 5,659 | - | ||||||||||||||||
|
Reorganization
items, net
|
(3 | ) | (121 | ) | (124 | ) | - | |||||||||||||
|
Other
income (expense), net
|
(3 | ) | 1 | (2 | ) | (2 | ) | |||||||||||||
| (74 | ) | 12,222 | 12,148 | (516 | ) | |||||||||||||||
|
Income
(loss) before income taxes
|
10 | 13,115 | 13,125 | (1,773 | ) | |||||||||||||||
|
|
||||||||||||||||||||
|
Income
tax benefit (expense)
|
(8 | ) | (93 | ) | (101 | ) | 277 | |||||||||||||
|
Consolidated
net income (loss)
|
2 | 13,022 | 13,024 | (1,496 | ) | |||||||||||||||
|
Less: Net
(income) loss - noncontrolling interest
|
- | (306 | ) | (306 | ) | 1 | ||||||||||||||
|
Net
income (loss) - Charter shareholders
|
$ | 2 | $ | 12,716 | $ | 12,718 | $ | (1,495 | ) | |||||||||||
|
Earnings
(loss) per common share - Charter shareholders:
|
||||||||||||||||||||
|
Basic
|
$ | 0.02 | $ | 33.55 | $ | (3.96 | ) | |||||||||||||
|
Diluted
|
$ | 0.02 | $ | 14.09 | $ | (3.96 | ) | |||||||||||||
|
Weighted
average common shares outstanding, basic
|
112,078,089 | 379,080,041 | 377,920,301 | |||||||||||||||||
|
Weighted
average common shares outstanding, diluted
|
114,346,861 | 902,362,926 | 377,920,301 | |||||||||||||||||
|
(a) Operating
expenses include programming, service, and advertising sales
expenses.
|
||||||||||||||||||||
|
(b) Selling,
general and administrative expenses include general and administrative and
marketing expenses.
|
||||||||||||||||||||
|
Adjusted
EBITDA is a non-GAAP term. See page 10 of this addendum for the
reconciliation of adjusted EBITDA to consolidated net income (loss) as
defined by GAAP.
|
||||||||||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 1 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
|
||||||||||||||||||||
|
(DOLLARS
IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)
|
||||||||||||||||||||
|
Actual
Year Ended December 31, 2009
|
||||||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
||||||||||||||||||
|
December
1
|
January
1
|
January
1
|
Predecessor
|
|||||||||||||||||
| through | through | through | Actual Year Ended | |||||||||||||||||
|
December
31, 2009
|
November
30, 2009
|
December
31, 2009
|
December
31, 2008
|
%
Change
|
||||||||||||||||
|
REVENUES:
|
||||||||||||||||||||
|
Video
|
$ | 288 | $ | 3,180 | $ | 3,468 | $ | 3,463 | 0.1 | % | ||||||||||
|
High-speed
Internet
|
127 | 1,349 | 1,476 | 1,356 | 8.8 | % | ||||||||||||||
|
Telephone
|
61 | 652 | 713 | 555 | 28.5 | % | ||||||||||||||
|
Commercial
|
39 | 407 | 446 | 392 | 13.8 | % | ||||||||||||||
|
Advertising
sales
|
22 | 227 | 249 | 308 | -19.2 | % | ||||||||||||||
|
Other
|
35 | 368 | 403 | 405 | -0.5 | % | ||||||||||||||
|
Total
revenues
|
572 | 6,183 | 6,755 | 6,479 | 4.3 | % | ||||||||||||||
|
COSTS
AND EXPENSES:
|
||||||||||||||||||||
|
Operating
(excluding depreciation and amortization) (a)
|
244 | 2,651 | 2,895 | 2,792 | 3.7 | % | ||||||||||||||
|
Selling,
general and administrative (excluding stock
|
||||||||||||||||||||
|
compensation
expense) (b)
|
117 | 1,250 | 1,367 | 1,368 | -0.1 | % | ||||||||||||||
|
Operating
costs and expenses
|
361 | 3,901 | 4,262 | 4,160 | 2.5 | % | ||||||||||||||
|
Adjusted
EBITDA
|
211 | 2,282 | 2,493 | 2,319 | 7.5 | % | ||||||||||||||
|
Adjusted
EBITDA margin
|
36.9 | % | 36.9 | % | 36.9 | % | 35.8 | % | ||||||||||||
|
Depreciation
and amortization
|
122 | 1,194 | 1,316 | 1,310 | ||||||||||||||||
|
Impairment
of franchises
|
- | 2,163 | 2,163 | 1,521 | ||||||||||||||||
|
Stock
compensation expense
|
1 | 26 | 27 | 33 | ||||||||||||||||
|
Other
operating (income) expenses, net
|
4 | (38 | ) | (34 | ) | 69 | ||||||||||||||
|
Income
(loss) from operations
|
84 | (1,063 | ) | (979 | ) | (614 | ) | |||||||||||||
|
OTHER
INCOME (EXPENSES):
|
||||||||||||||||||||
|
Interest
expense, net (excluding unrecorded contractual interest
|
||||||||||||||||||||
|
expense
of $558 for the eleven months ended November 30, 2009)
|
(68 | ) | (1,020 | ) | (1,088 | ) | (1,905 | ) | ||||||||||||
|
Change
in value of derivatives
|
- | (4 | ) | (4 | ) | (29 | ) | |||||||||||||
|
Gain
due to effects of Plan
|
- | 6,818 | 6,818 | - | ||||||||||||||||
|
Gain
due to fresh start accounting adjustments
|
- | 5,659 | 5,659 | - | ||||||||||||||||
|
Reorganization
items, net
|
(3 | ) | (644 | ) | (647 | ) | - | |||||||||||||
|
Other
income (expense), net
|
(3 | ) | 2 | (1 | ) | (2 | ) | |||||||||||||
| (74 | ) | 10,811 | 10,737 | (1,936 | ) | |||||||||||||||
|
Income
(loss) before income taxes
|
10 | 9,748 | 9,758 | (2,550 | ) | |||||||||||||||
|
|
||||||||||||||||||||
|
Income
tax benefit (expense)
|
(8 | ) | 351 | 343 | 103 | |||||||||||||||
|
Consolidated
net income (loss)
|
2 | 10,099 | 10,101 | (2,447 | ) | |||||||||||||||
|
Less: Net
(income) loss - noncontrolling interest
|
- | 1,265 | 1,265 | (4 | ) | |||||||||||||||
|
Net
income (loss) - Charter shareholders
|
$ | 2 | $ | 11,364 | $ | 11,366 | $ | (2,451 | ) | |||||||||||
|
Earnings
(loss) per common share - Charter shareholders:
|
||||||||||||||||||||
|
Basic
|
$ | 0.02 | $ | 30.00 | $ | (6.56 | ) | |||||||||||||
|
Diluted
|
$ | 0.02 | $ | 12.61 | $ | (6.56 | ) | |||||||||||||
|
Weighted
average common shares outstanding, basic
|
112,078,089 | 378,784,231 | 373,464,920 | |||||||||||||||||
|
Weighted
average common shares outstanding, diluted
|
114,346,861 | 902,067,116 | 373,464,920 | |||||||||||||||||
|
(a) Operating
expenses include programming, service, and advertising sales
expenses.
|
||||||||||||||||||||
|
(b) Selling,
general and administrative expenses include general and administrative and
marketing expenses.
|
||||||||||||||||||||
|
Adjusted
EBITDA is a non-GAAP term. See page 10 of this addendum for the
reconciliation of adjusted EBITDA to consolidated net income (loss) as
defined by GAAP.
|
||||||||||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 2 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
|
||||||||||||||||||||
|
(DOLLARS
IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)
|
||||||||||||||||||||
|
Actual
Three Months Ended December 31, 2009
|
||||||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
Predecessor
|
|||||||||||||||||
| December 1 | October 1 | October 1 | Pro Forma Three | |||||||||||||||||
|
through
|
through
|
through
|
Months
Ended
|
|||||||||||||||||
|
December
31, 2009
|
November
30, 2009
|
December
31, 2009
|
December
31, 2008
|
%
Change
|
||||||||||||||||
|
REVENUES:
|
||||||||||||||||||||
|
Video
|
$ | 288 | $ | 574 | $ | 862 | $ | 861 | 0.1 | % | ||||||||||
|
High-speed
Internet
|
127 | 251 | 378 | 346 | 9.2 | % | ||||||||||||||
|
Telephone
|
61 | 123 | 184 | 156 | 17.9 | % | ||||||||||||||
|
Commercial
|
39 | 77 | 116 | 103 | 12.6 | % | ||||||||||||||
|
Advertising
sales
|
22 | 47 | 69 | 85 | -18.8 | % | ||||||||||||||
|
Other
|
35 | 66 | 101 | 101 | 0.0 | % | ||||||||||||||
|
Total
revenues
|
572 | 1,138 | 1,710 | 1,652 | 3.5 | % | ||||||||||||||
|
COSTS
AND EXPENSES:
|
||||||||||||||||||||
|
Operating
(excluding depreciation and amortization) (a)
|
244 | 487 | 731 | 701 | 4.3 | % | ||||||||||||||
|
Selling,
general and administrative (excluding stock
|
||||||||||||||||||||
|
compensation
expense) (b)
|
117 | 229 | 346 | 333 | 3.9 | % | ||||||||||||||
|
Operating
costs and expenses
|
361 | 716 | 1,077 | 1,034 | 4.2 | % | ||||||||||||||
|
Adjusted
EBITDA
|
211 | 422 | 633 | 618 | 2.4 | % | ||||||||||||||
|
Adjusted
EBITDA margin
|
36.9 | % | 37.1 | % | 37.0 | % | 37.4 | % | ||||||||||||
|
Depreciation
and amortization
|
122 | 217 | 339 | 328 | ||||||||||||||||
|
Impairment
of franchises
|
- | (691 | ) | (691 | ) | 1,521 | ||||||||||||||
|
Stock
compensation expense
|
1 | 3 | 4 | 9 | ||||||||||||||||
|
Other
operating expenses, net
|
4 | - | 4 | 15 | ||||||||||||||||
|
Income
(loss) from operations
|
84 | 893 | 977 | (1,255 | ) | |||||||||||||||
|
OTHER
INCOME (EXPENSES):
|
||||||||||||||||||||
|
Interest
expense, net (excluding unrecorded contractual interest
|
||||||||||||||||||||
|
expense
of $137 for the two months ended November 30, 2009)
|
(68 | ) | (135 | ) | (203 | ) | (486 | ) | ||||||||||||
|
Change
in value of derivatives
|
- | - | - | (28 | ) | |||||||||||||||
|
Gain
due to effects of Plan
|
- | 6,818 | 6,818 | - | ||||||||||||||||
|
Gain
due to fresh start accounting adjustments
|
- | 5,659 | 5,659 | - | ||||||||||||||||
|
Reorganization
items, net
|
(3 | ) | (121 | ) | (124 | ) | - | |||||||||||||
|
Other
income (expense), net
|
(3 | ) | 1 | (2 | ) | (2 | ) | |||||||||||||
| (74 | ) | 12,222 | 12,148 | (516 | ) | |||||||||||||||
|
Income
(loss) before income taxes
|
10 | 13,115 | 13,125 | (1,771 | ) | |||||||||||||||
|
|
||||||||||||||||||||
|
Income
tax benefit (expense)
|
(8 | ) | (93 | ) | (101 | ) | 277 | |||||||||||||
|
Consolidated
net income (loss)
|
2 | 13,022 | 13,024 | (1,494 | ) | |||||||||||||||
|
Less: Net
(income) loss - noncontrolling interest
|
- | (306 | ) | (306 | ) | 1 | ||||||||||||||
|
Net
income (loss) - Charter shareholders
|
$ | 2 | $ | 12,716 | $ | 12,718 | $ | (1,493 | ) | |||||||||||
|
Earnings
(loss) per common share - Charter shareholders:
|
||||||||||||||||||||
|
Basic
|
$ | 0.02 | $ | 33.55 | $ | (3.95 | ) | |||||||||||||
|
Diluted
|
$ | 0.02 | $ | 14.09 | $ | (3.95 | ) | |||||||||||||
|
Weighted
average common shares outstanding, basic
|
112,078,089 | 379,080,041 | 377,920,301 | |||||||||||||||||
|
Weighted
average common shares outstanding, diluted
|
114,346,861 | 902,362,926 | 377,920,301 | |||||||||||||||||
|
(a) Pro
forma results reflect certain sales of cable systems in 2008 and 2009 as
if they occurred as of January 1, 2008. The pro forma statements of
operations do not include adjustments for financing transactions completed
by Charter during the periods presented or certain other dispositions or
acquisitions of assets because those transactions did not significantly
impact Charter's adjusted EBITDA. However, all transactions completed
in 2008 and 2009 have been reflected in the operating statistics. The
pro forma data is based on information available to Charter as of the date
of this document and certain assumptions that we believe are reasonable
under the circumstances. The financial data required allocation of certain
revenues and expenses and such information has been presented for
comparative purposes and is not intended to provide any indication of what
our actual financial position, or results of operations would have been
had the transactions described above been completed on the dates indicated
or to project our results of operations for any future
date.
|
||||||||||||||||||||
|
(b) Operating
expenses include programming, service, and advertising sales
expenses.
|
||||||||||||||||||||
|
(c) Selling,
general and administrative expenses include general and administrative and
marketing expenses.
|
||||||||||||||||||||
|
December
31, 2008. Pro forma revenues, operating costs and expenses and net
loss were reduced by $4 million, $2 million and $2 million, respectively,
for the three months ended December 31, 2008.
|
||||||||||||||||||||
|
Adjusted
EBITDA is a non-GAAP term. See page 10 of this addendum for the
reconciliation of adjusted EBITDA to consolidated net income (loss) as
defined by GAAP.
|
||||||||||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 3 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||||||||||||||
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
|
||||||||||||||||||||
|
(DOLLARS
IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)
|
||||||||||||||||||||
|
Pro
Forma Year Ended December 31, 2009
|
||||||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
||||||||||||||||||
|
December
1
|
January
1
|
January
1
|
Predecessor
|
|||||||||||||||||
| through | through | through | Pro Forma Year Ended | |||||||||||||||||
|
December
31, 2009
|
November
30, 2009
|
December
31, 2009
|
December
31, 2008
|
%
Change
|
||||||||||||||||
|
REVENUES:
|
||||||||||||||||||||
|
Video
|
$ | 288 | $ | 3,179 | $ | 3,467 | $ | 3,451 | 0.5 | % | ||||||||||
|
High-speed
Internet
|
127 | 1,349 | 1,476 | 1,354 | 9.0 | % | ||||||||||||||
|
Telephone
|
61 | 652 | 713 | 555 | 28.5 | % | ||||||||||||||
|
Commercial
|
39 | 407 | 446 | 391 | 14.1 | % | ||||||||||||||
|
Advertising
sales
|
22 | 227 | 249 | 306 | -18.6 | % | ||||||||||||||
|
Other
|
35 | 368 | 403 | 404 | -0.2 | % | ||||||||||||||
|
Total
revenues
|
572 | 6,182 | 6,754 | 6,461 | 4.5 | % | ||||||||||||||
|
COSTS
AND EXPENSES:
|
||||||||||||||||||||
|
Operating
(excluding depreciation and amortization) (a)
|
244 | 2,650 | 2,894 | 2,784 | 4.0 | % | ||||||||||||||
|
Selling,
general and administrative (excluding stock
|
||||||||||||||||||||
|
compensation
expense) (b)
|
117 | 1,250 | 1,367 | 1,364 | 0.2 | % | ||||||||||||||
|
Operating
costs and expenses
|
361 | 3,900 | 4,261 | 4,148 | 2.7 | % | ||||||||||||||
|
Adjusted
EBITDA
|
211 | 2,282 | 2,493 | 2,313 | 7.8 | % | ||||||||||||||
|
Adjusted
EBITDA margin
|
36.9 | % | 36.9 | % | 36.9 | % | 35.8 | % | ||||||||||||
|
Depreciation
and amortization
|
122 | 1,194 | 1,316 | 1,306 | ||||||||||||||||
|
Impairment
of franchises
|
- | 2,163 | 2,163 | 1,521 | ||||||||||||||||
|
Stock
compensation expense
|
1 | 26 | 27 | 33 | ||||||||||||||||
|
Other
operating (income) expenses, net
|
4 | (40 | ) | (36 | ) | 65 | ||||||||||||||
|
Income
(loss) from operations
|
84 | (1,061 | ) | (977 | ) | (612 | ) | |||||||||||||
|
OTHER
INCOME (EXPENSES):
|
||||||||||||||||||||
|
Interest
expense, net (excluding unrecorded contractual interest
|
||||||||||||||||||||
|
expense
of $558 for the eleven months ended November 30, 2009)
|
(68 | ) | (1,020 | ) | (1,088 | ) | (1,905 | ) | ||||||||||||
|
Change
in value of derivatives
|
- | (4 | ) | (4 | ) | (29 | ) | |||||||||||||
|
Gain
due to effects of Plan
|
- | 6,818 | 6,818 | - | ||||||||||||||||
|
Gain
due to fresh start accounting adjustments
|
- | 5,659 | 5,659 | - | ||||||||||||||||
|
Reorganization
items, net
|
(3 | ) | (644 | ) | (647 | ) | - | |||||||||||||
|
Other
income (expense), net
|
(3 | ) | 2 | (1 | ) | (2 | ) | |||||||||||||
| (74 | ) | 10,811 | 10,737 | (1,936 | ) | |||||||||||||||
|
Income
(loss) before income taxes
|
10 | 9,750 | 9,760 | (2,548 | ) | |||||||||||||||
|
|
||||||||||||||||||||
|
Income
tax benefit (expense)
|
(8 | ) | 351 | 343 | 103 | |||||||||||||||
|
Consolidated
net income (loss)
|
2 | 10,101 | 10,103 | (2,445 | ) | |||||||||||||||
|
Less: Net
(income) loss - noncontrolling interest
|
- | 1,265 | 1,265 | (4 | ) | |||||||||||||||
|
Net
income (loss) - Charter shareholders
|
$ | 2 | $ | 11,366 | $ | 11,368 | $ | (2,449 | ) | |||||||||||
|
Earnings
(loss) per common share - Charter shareholders:
|
||||||||||||||||||||
|
Basic
|
$ | 0.02 | $ | 30.00 | $ | (6.55 | ) | |||||||||||||
|
Diluted
|
$ | 0.02 | $ | 12.61 | $ | (6.55 | ) | |||||||||||||
|
Weighted
average common shares outstanding, basic
|
112,078,089 | 378,784,231 | 373,464,920 | |||||||||||||||||
|
Weighted
average common shares outstanding, diluted
|
114,346,861 | 902,067,116 | 373,464,920 | |||||||||||||||||
|
(a) Pro
forma results reflect certain sales of cable systems in 2008 and 2009 as
if they occurred as of January 1, 2008. The pro forma statements of
operations do not include adjustments for financing transactions completed
by Charter during the periods presented or certain other dispositions or
acquisitions of assets because those transactions did not significantly
impact Charter's adjusted EBITDA. However, all transactions completed
in 2008 and 2009 have been reflected in the operating statistics. The
pro forma data is based on information available to Charter as of the date
of this document and certain assumptions that we believe are reasonable
under the circumstances. The financial data required allocation of certain
revenues and expenses and such information has been presented for
comparative purposes and is not intended to provide any indication of what
our actual financial position, or results of operations would have been
had the transactions described above been completed on the dates indicated
or to project our results of operations for any future
date.
|
||||||||||||||||||||
|
(b) Operating
expenses include programming, service, and advertising sales
expenses.
|
||||||||||||||||||||
|
(c) Selling,
general and administrative expenses include general and administrative and
marketing expenses.
|
||||||||||||||||||||
|
December
31, 2009. Pro forma revenues and operating costs and expenses
were reduced by $1 million and $1 million, respectively, for the year
ended December 31, 2009. Pro forma net income increased by $2 million
for the year ended December 31, 2009.
|
||||||||||||||||||||
|
December
31, 2008. Pro forma revenues, operating costs and expenses and net
loss were reduced by $18 million, $12 million and $2 million,
respectively, for the year ended December 31, 2008.
|
||||||||||||||||||||
|
Adjusted
EBITDA is a non-GAAP term. See page 10 of this addendum for the
reconciliation of adjusted EBITDA to consolidated net income
(loss) as defined by GAAP.
|
||||||||||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 4
of 12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
||||||||
|
(DOLLARS
IN MILLIONS)
|
||||||||
|
Successor
|
Predecessor
|
|||||||
|
December
31,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT
ASSETS:
|
||||||||
|
Cash
and cash equivalents
|
$ | 709 | $ | 960 | ||||
|
Restricted
cash and cash equivalents
|
45 | - | ||||||
|
Accounts
receivable, net of allowance for doubtful accounts
|
248 | 222 | ||||||
|
Prepaid
expenses and other current assets
|
69 | 36 | ||||||
|
Total
current assets
|
1,071 | 1,218 | ||||||
|
INVESTMENT
IN CABLE PROPERTIES:
|
||||||||
|
Property,
plant and equipment, net
|
6,833 | 4,987 | ||||||
|
Franchises,
net
|
5,272 | 7,384 | ||||||
|
Customer
relationships, net
|
2,335 | 9 | ||||||
|
Goodwill
|
951 | 68 | ||||||
|
Total
investment in cable properties, net
|
15,391 | 12,448 | ||||||
|
OTHER
NONCURRENT ASSETS
|
196 | 216 | ||||||
|
Total
assets
|
$ | 16,658 | $ | 13,882 | ||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY (DEFICIT)
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 898 | $ | 1,310 | ||||
|
Current
portion of long-term debt
|
70 | 155 | ||||||
|
Total
current liabilities
|
968 | 1,465 | ||||||
|
LONG-TERM
DEBT
|
13,252 | 21,511 | ||||||
|
NOTE
PAYABLE - RELATED PARTY
|
- | 75 | ||||||
|
DEFERRED
MANAGEMENT FEES - RELATED PARTY
|
- | 14 | ||||||
|
OTHER
LONG-TERM LIABILITIES
|
520 | 1,082 | ||||||
|
TEMPORARY
EQUITY
|
1 | 241 | ||||||
|
SHAREHOLDERS'
EQUITY (DEFICIT):
|
||||||||
|
Charter
shareholders' equity (deficit)
|
1,915 | (10,506 | ) | |||||
|
Noncontrolling
interest
|
2 | - | ||||||
|
Total
shareholders' equity (deficit)
|
1,917 | (10,506 | ) | |||||
|
Total
liabilities and shareholders' equity (deficit)
|
$ | 16,658 | $ | 13,882 | ||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 5 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||||||||||
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||||||
|
(DOLLARS
IN MILLIONS)
|
||||||||||||||||
|
Three
Months Ended December 31, 2009
|
||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
Predecessor
|
|||||||||||||
|
December
1
|
October
1
|
October
1
|
Three
Months
|
|||||||||||||
|
through
|
through
|
through
|
Ended
|
|||||||||||||
|
December
31, 2009
|
November
30, 2009
|
December
31, 2009
|
December
31, 2008
|
|||||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
|
Net
income (loss) - Charter shareholders
|
$ | 2 | $ | 12,716 | $ | 12,718 | $ | (1,495 | ) | |||||||
|
Adjustments
to reconcile net income (loss) to net cash flows from operating
activities:
|
- | |||||||||||||||
|
Depreciation
and amortization
|
122 | 217 | 339 | 329 | ||||||||||||
|
Impairment
of franchises
|
- | (691 | ) | (691 | ) | 1,521 | ||||||||||
|
Noncash
interest expense
|
5 | 7 | 12 | 16 | ||||||||||||
|
Change
in value of derivatives
|
- | - | - | 28 | ||||||||||||
|
Gain
due to effects of Plan
|
- | (6,818 | ) | (6,818 | ) | - | ||||||||||
|
Gain
due to fresh start accounting adjustments
|
- | (5,659 | ) | (5,659 | ) | - | ||||||||||
|
Noncash
reorganization items, net
|
- | 15 | 15 | - | ||||||||||||
|
Deferred
income taxes
|
7 | 93 | 100 | (276 | ) | |||||||||||
|
Noncontrolling
interest
|
- | 306 | 306 | (1 | ) | |||||||||||
|
Other,
net
|
3 | 3 | 6 | 11 | ||||||||||||
|
Changes
in operating assets and liabilities, net of effects from
dispositions
|
- | |||||||||||||||
|
Accounts
receivable
|
26 | (63 | ) | (37 | ) | 24 | ||||||||||
|
Prepaid
expenses and other assets
|
2 | 1 | 3 | 8 | ||||||||||||
|
Accounts
payable, accrued expenses and other
|
16 | (699 | ) | (683 | ) | (176 | ) | |||||||||
|
Payment
of deferred management fees - related party
|
- | (25 | ) | (25 | ) | - | ||||||||||
|
Net
cash flows from operating activities
|
183 | (597 | ) | (414 | ) | (11 | ) | |||||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
|
Purchases
of property, plant and equipment
|
(108 | ) | (207 | ) | (315 | ) | (264 | ) | ||||||||
|
Change
in accrued expenses related to capital expenditures
|
- | 8 | 8 | 2 | ||||||||||||
|
Purchase
of CC VIII, LLC interest
|
- | (150 | ) | (150 | ) | - | ||||||||||
|
Other,
net
|
(3 | ) | (3 | ) | (6 | ) | 32 | |||||||||
|
Net
cash flows from investing activities
|
(111 | ) | (352 | ) | (463 | ) | (230 | ) | ||||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
|
Borrowings
of long-term debt
|
- | 1,614 | 1,614 | 750 | ||||||||||||
|
Repayments
of long-term debt
|
(17 | ) | (1,002 | ) | (1,019 | ) | (116 | ) | ||||||||
|
Payments
for debt issuance costs
|
- | (39 | ) | (39 | ) | - | ||||||||||
|
Other,
net
|
- | - | - | (2 | ) | |||||||||||
|
Net
cash flows from financing activities
|
(17 | ) | 573 | 556 | 632 | |||||||||||
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
55 | (376 | ) | (321 | ) | 391 | ||||||||||
|
CASH
AND CASH EQUIVALENTS, beginning of period
|
699 | 1,075 | 1,075 | 569 | ||||||||||||
|
CASH
AND CASH EQUIVALENTS, end of period
|
$ | 754 | $ | 699 | $ | 754 | $ | 960 | ||||||||
|
CASH
PAID FOR INTEREST
|
$ | 4 | $ | 411 | $ | 415 | $ | 606 | ||||||||
|
NONCASH
TRANSACTIONS:
|
||||||||||||||||
|
Liabilities
subject to compromise discharged at emergence
|
$ | - | $ | 7,829 | $ | 7,829 | $ | - | ||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 6 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||||||||||
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||||||
|
(DOLLARS
IN MILLIONS)
|
||||||||||||||||
|
Year
Ended December 31, 2009
|
||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
||||||||||||||
|
December
1
|
January
1
|
January
1
|
Predecessor
|
|||||||||||||
|
through
|
through
|
through
|
Actual
Year Ended
|
|||||||||||||
|
December
31, 2009
|
November
30, 2009
|
December
31, 2009
|
December
31, 2008
|
|||||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
|
Net
income (loss) - Charter shareholders
|
$ | 2 | $ | 11,364 | $ | 11,366 | $ | (2,451 | ) | |||||||
|
Adjustments
to reconcile net income (loss) to net cash flows from operating
activities:
|
||||||||||||||||
|
Depreciation
and amortization
|
122 | 1,194 | 1,316 | 1,310 | ||||||||||||
|
Impairment
of franchises
|
- | 2,163 | 2,163 | 1,521 | ||||||||||||
|
Noncash
interest expense
|
5 | 42 | 47 | 61 | ||||||||||||
|
Change
in value of derivatives
|
- | 4 | 4 | 29 | ||||||||||||
|
Gain
due to effects of Plan
|
- | (6,818 | ) | (6,818 | ) | - | ||||||||||
|
Gain
due to fresh start accounting adjustments
|
- | (5,659 | ) | (5,659 | ) | - | ||||||||||
|
Noncash
reorganization items, net
|
- | 170 | 170 | - | ||||||||||||
|
Deferred
income taxes
|
7 | (358 | ) | (351 | ) | (107 | ) | |||||||||
|
Noncontrolling
interest
|
- | (1,265 | ) | (1,265 | ) | 4 | ||||||||||
|
Other,
net
|
3 | 31 | 34 | 43 | ||||||||||||
|
Changes
in operating assets and liabilities, net of effects from
dispositions
|
||||||||||||||||
|
Accounts
receivable
|
26 | (52 | ) | (26 | ) | 3 | ||||||||||
|
Prepaid
expenses and other assets
|
2 | (36 | ) | (34 | ) | (1 | ) | |||||||||
|
Accounts
payable, accrued expenses and other
|
16 | (344 | ) | (328 | ) | (13 | ) | |||||||||
|
Payment
of deferred management fees - related party
|
- | (25 | ) | (25 | ) | - | ||||||||||
|
Net
cash flows from operating activities
|
183 | 411 | 594 | 399 | ||||||||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
|
Purchases
of property, plant and equipment
|
(108 | ) | (1,026 | ) | (1,134 | ) | (1,202 | ) | ||||||||
|
Change
in accrued expenses related to capital expenditures
|
- | (10 | ) | (10 | ) | (39 | ) | |||||||||
|
Purchase
of CC VIII, LLC interest
|
- | (150 | ) | (150 | ) | - | ||||||||||
|
Other,
net
|
(3 | ) | (7 | ) | (10 | ) | 31 | |||||||||
|
Net
cash flows from investing activities
|
(111 | ) | (1,193 | ) | (1,304 | ) | (1,210 | ) | ||||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
|
Proceeds
from Rights Offering
|
- | 1,614 | 1,614 | - | ||||||||||||
|
Borrowings
of long-term debt
|
- | - | - | 3,105 | ||||||||||||
|
Repayments
of long-term debt
|
(17 | ) | (1,054 | ) | (1,071 | ) | (1,354 | ) | ||||||||
|
Payments
for debt issuance costs
|
- | (39 | ) | (39 | ) | (42 | ) | |||||||||
|
Other,
net
|
- | - | - | (13 | ) | |||||||||||
|
Net
cash flows from financing activities
|
(17 | ) | 521 | 504 | 1,696 | |||||||||||
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
55 | (261 | ) | (206 | ) | 885 | ||||||||||
|
CASH
AND CASH EQUIVALENTS, beginning of period
|
699 | 960 | 960 | 75 | ||||||||||||
|
CASH
AND CASH EQUIVALENTS, end of period
|
$ | 754 | $ | 699 | $ | 754 | $ | 960 | ||||||||
|
CASH
PAID FOR INTEREST
|
$ | 4 | $ | 1,096 | $ | 1,100 | $ | 1,847 | ||||||||
|
NONCASH
TRANSACTIONS:
|
||||||||||||||||
|
Liabilities
subject to compromise discharged at emergence
|
$ | - | $ | 7,829 | $ | 7,829 | $ | - | ||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 7 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||||||
|
UNAUDITED
SUMMARY OF OPERATING STATISTICS
|
||||||||||||
|
Approximate
as of
|
||||||||||||
|
Actual
|
Pro
Forma
|
|||||||||||
|
December
31,
|
September
30,
|
December
31,
|
||||||||||
|
2009
(a)
|
2009
(a)
|
2008
(a)
|
||||||||||
|
Customer
Summary:
|
||||||||||||
|
Customer
Relationships:
|
||||||||||||
|
Residential
(non-bulk) basic video customers (b)
|
4,562,900 | 4,617,900 | 4,767,600 | |||||||||
|
Multi-dwelling
(bulk) and commercial unit customers (c)
|
261,100 | 263,000 | 256,400 | |||||||||
|
Total
basic video customers
|
4,824,000 | 4,880,900 | 5,024,000 | |||||||||
|
Non-video
customers (b)
|
493,100 | 462,800 | 408,700 | |||||||||
|
Total
customer relationships (d)
|
5,317,100 | 5,343,700 | 5,432,700 | |||||||||
|
Pro
forma average monthly revenue per basic video customer (e)
|
$ | 117.43 | $ | 115.21 | $ | 108.64 | ||||||
|
Pro
forma average monthly video revenue per basic video customer
(f)
|
$ | 62.06 | $ | 61.47 | $ | 59.28 | ||||||
|
Residential
bundled customers (g)
|
2,889,700 | 2,858,300 | 2,748,000 | |||||||||
|
Revenue
Generating Units:
|
||||||||||||
|
Basic
video customers (b) (c)
|
4,824,000 | 4,880,900 | 5,024,000 | |||||||||
|
Digital
video customers (h)
|
3,218,100 | 3,174,800 | 3,132,200 | |||||||||
|
Residential
high-speed Internet customers (i)
|
3,062,300 | 3,010,500 | 2,875,600 | |||||||||
|
Telephone
customers (j)
|
1,595,900 | 1,535,300 | 1,348,800 | |||||||||
|
Total
revenue generating units (k)
|
12,700,300 | 12,601,500 | 12,380,600 | |||||||||
|
Total
Video Services:
|
||||||||||||
|
Estimated
homes passed (l)
|
11,902,200 | 11,861,600 | 11,773,300 | |||||||||
|
Basic
video customers (b)(c)
|
4,824,000 | 4,880,900 | 5,024,000 | |||||||||
|
Estimated
penetration of basic homes passed (b) (c) (l) (m)
|
40.5 | % | 41.1 | % | 42.7 | % | ||||||
|
Pro
forma basic video customers quarterly net loss (b) (c) (n)
|
(56,900 | ) | (46,500 | ) | (71,800 | ) | ||||||
|
Digital
video customers (h)
|
3,218,100 | 3,174,800 | 3,132,200 | |||||||||
|
Digital
penetration of basic video customers (b) (c) (h) (o)
|
66.7 | % | 65.0 | % | 62.3 | % | ||||||
|
Digital
set-top terminals deployed
|
4,794,500 | 4,713,500 | 4,548,200 | |||||||||
|
Pro
forma digital video customers quarterly net gain (h) (n)
|
43,300 | 22,700 | 22,400 | |||||||||
|
High-Speed
Internet Services:
|
||||||||||||
|
Estimated
high-speed Internet homes passed (l)
|
11,360,200 | 11,308,600 | 11,174,600 | |||||||||
|
Residential
high-speed Internet customers (i)
|
3,062,300 | 3,010,500 | 2,875,600 | |||||||||
|
Estimated
penetration of high-speed Internet homes passed (i) (l)
(m)
|
27.0 | % | 26.6 | % | 25.7 | % | ||||||
|
Pro
forma average monthly high-speed Internet revenue per high-speed Internet
customer (f)
|
$ | 41.48 | $ | 41.58 | $ | 40.26 | ||||||
|
Pro
forma high-speed Internet customers quarterly net gain (i)
(n)
|
51,800 | 52,400 | 22,900 | |||||||||
|
Telephone
Services:
|
||||||||||||
|
Estimated
telephone homes passed (l)
|
10,723,400 | 10,619,100 | 10,434,400 | |||||||||
|
Telephone
customers (j)
|
1,595,900 | 1,535,300 | 1,348,800 | |||||||||
|
Estimated
penetration of telephone homes passed (i) (l) (m)
|
14.9 | % | 14.5 | % | 12.9 | % | ||||||
|
Pro
forma average monthly telephone revenue per telephone customer
(f)
|
$ | 41.73 | $ | 42.76 | $ | 41.06 | ||||||
|
Pro
forma telephone customers quarterly net gain (j) (n)
|
60,600 | 55,300 | 75,200 | |||||||||
|
Pro
forma operating statistics reflect the sales and acquisitions of cable
systems in 2008 and 2009 as if such transactions had occurred as of the
last day of the respective period for all periods presented. The pro
forma statements of operations do not include adjustments for financing
transactions completed by Charter during the periods presented or certain
other dispositions or acquisitions of assets because those transactions
did not significantly impact Charter's adjusted EBITDA. However, all
transactions completed in 2008 and 2009 have been reflected in the
operating statistics.
|
||||||||||||
|
At
September 30, 2009 actual basic video customers, digital video customers,
high-speed Internet customers and telephone customers were 4,879,100,
3,174,800, 3,010,100, and 1,535,300, respectively.
|
||||||||||||
|
At
December 31, 2008 actual basic video customers, digital video customers,
high-speed Internet customers and telephone customers were 5,036,400,
3,133,400, 2,875,200, and 1,348,800, respectively.
|
||||||||||||
|
See
footnotes to unaudited summary of operating statistics on page 9 of this
addendum.
|
||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 8
of 12
|
(a)
Our billing systems calculate the aging of customer accounts based on the
monthly billing cycle for each account. On that basis, at
December 31, 2009, September 30, 2009, and December 31, 2008, customers
include approximately 25,900, 33,300, and 36,000 persons, respectively,
whose accounts were over 60 days past due in payment, approximately 3,500,
5,700, and 5,300 persons, respectively, whose accounts were over 90 days
past due in payment and approximately 2,200, 2,500, and 2,700 persons,
respectively, whose accounts were over 120 days past due in
payment.
|
|||||||||||||
|
(b) "Basic
video customers" include all residential customers who receive video
services (including those who also purchase high-speed Internet and
telephone services) but excludes approximately 493,100, 462,800, and
408,700 customer relationships at December 31, 2009, September 30, 2009,
and December 31, 2008, respectively, who receive high-speed Internet
service only, telephone service only, or both high-speed Internet service
and telephone service and who are only counted as high-speed Internet
customers or telephone customers.
|
|||||||||||||
|
(c) Included
within "basic video customers" are those in commercial and multi-dwelling
structures, which are calculated on an equivalent bulk unit (“EBU”)
basis. In the second quarter of 2009, we began calculating EBUs
by dividing the bulk price charged to accounts in an area by the published
rate charged to non-bulk residential customers in that market for the
comparable tier of service rather than the most prevalent price charged as
was used previously. This EBU method of estimating basic video
customers is consistent with the methodology used in determining costs
paid to programmers and is consistent with the methodology used by other
multiple system operators (MSOs). EBUs presented as of December
31, 2008 decreased by 9,300 as a result of the change in
methodology. As we increase our published video rates to
residential customers without a corresponding increase in the prices
charged to commercial service or multi-dwelling customers, our EBU count
will decline even if there is no real loss in commercial service or
multi-dwelling customers.
|
|||||||||||||
|
(d) "Customer
relationships" include the number of customers that receive one or more
levels of service, encompassing video, Internet and telephone services,
without regard to which service(s) such customers receive. This
statistic is computed in accordance with the guidelines of the National
Cable & Telecommunications Association (NCTA) that have been adopted
by eleven then publicly traded cable operators, including
Charter.
|
|||||||||||||
|
(e)
"Pro forma average monthly revenue per basic video customer" is calculated
as total quarterly pro forma revenue divided by three divided by average
pro forma basic video customers during the respective
quarter.
|
|||||||||||||
|
(f)
"Pro forma average monthly revenue per customer" represents quarterly pro
forma revenue for the service indicated divided by three divided by the
number of pro forma customers for the service indicated during the
respective quarter.
|
|||||||||||||
|
(g)
"Residential bundled customers" include residential customers receiving a
combination of at least two different types of service, including
Charter's video service, high-speed Internet service or
telephone. "Residential bundled customers" do not include
residential customers who only subscribe to video
service.
|
|||||||||||||
|
(h) "Digital
video customers" include all basic video customers that have one or more
digital set-top boxes or cable cards deployed.
|
|||||||||||||
|
(i) "Residential
high-speed Internet customers" represent those residential customers who
subscribe to our high-speed Internet service. At December 31,
2009, September 30, 2009, and December 31, 2008, approximately 2,705,300,
2,673,400, and 2,577,200 of these high-speed Internet customers,
respectively, receive video and/or telephone services from us and are
included within the respective statistics above.
|
|||||||||||||
|
(j) "Telephone
customers" include all customers receiving telephone
service. As of December 31, 2009, September 30, 2009, and
December 31, 2008 approximately 1,548,100, 1,493,300, and 1,311,200 of
these telephone customers, respectively, receive video and/or high-speed
Internet services from us and are included within the respective
statistics above.
|
|||||||||||||
|
|
|||||||||||||
|
(k) "Revenue
generating units" represent the sum total of all basic video, digital
video, high-speed Internet and telephone customers, not counting
additional outlets within one household. For example, a
customer who receives two types of service (such as basic video and
digital video) would be treated as two revenue generating units, and if
that customer added on high-speed Internet service, the customer would be
treated as three revenue generating units. This
statistic is computed in accordance with the guidelines of the
NCTA.
|
|||||||||||||
|
(l) "Homes
passed" represent our estimate of the number of living units, such as
single family homes, apartment units and condominium units passed by our
cable distribution network in the areas where we offer the service
indicated. "Homes passed" exclude commercial units passed by
our cable distribution network. These estimates are updated for
all periods presented when estimates change.
|
|||||||||||||
|
(m) "Penetration"
represents customers as a percentage of homes passed for the service
indicated.
|
|||||||||||||
|
(n) "Pro
forma quarterly net gain (loss)" represents the pro forma net gain or loss
in the respective quarter for the service indicated.
|
|||||||||||||
|
(o) "Digital
penetration of basic video customers" represents the number of digital
video customers as a percentage of basic video
customers.
|
|||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 9 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||||||||||||||||
|
UNAUDITED
RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
|
||||||||||||||||||
|
(DOLLARS
IN MILLIONS)
|
||||||||||||||||||
|
Actual
Three Months Ended December 31, 2009
|
||||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
Predecessor
|
|||||||||||||||
|
December
1
|
October
1
|
October
1
|
Actual
Three
|
|||||||||||||||
|
through
|
through
|
through
|
Months
Ended
|
|||||||||||||||
|
December
31, 2009
|
November 30, 2009 | December 31, 2009 | December 31, 2008 | |||||||||||||||
|
Consolidated
net income (loss)
|
$ | 2 | $ | 13,022 | $ | 13,024 | $ | (1,496 | ) | |||||||||
|
Plus:
|
Interest
expense, net
|
68 | 135 | 203 | 486 | |||||||||||||
|
Income
tax (benefit) expense
|
8 | 93 | 101 | (277 | ) | |||||||||||||
|
Depreciation
and amortization
|
122 | 217 | 339 | 329 | ||||||||||||||
|
Impairment
of franchises
|
- | (691 | ) | (691 | ) | 1,521 | ||||||||||||
|
Stock
compensation expense
|
1 | 3 | 4 | 9 | ||||||||||||||
|
(Gain)
loss due to bankruptcy related items (b)
|
3 | (12,356 | ) | (12,353 | ) | - | ||||||||||||
|
Other,
net
|
7 | (1 | ) | 6 | 48 | |||||||||||||
|
Adjusted
EBITDA (c)
|
211 | 422 | 633 | 620 | ||||||||||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (207 | ) | (315 | ) | (264 | ) | |||||||||
|
Adjusted
EBITDA less capital expenditures
|
$ | 103 | $ | 215 | $ | 318 | $ | 356 | ||||||||||
|
Net
cash flows from operating activities
|
$ | 183 | $ | (597 | ) | $ | (414 | ) | $ | (11 | ) | |||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (207 | ) | (315 | ) | (264 | ) | |||||||||
|
Change
in accrued expenses related to capital expenditures
|
- | 8 | 8 | 2 | ||||||||||||||
|
Free
cash flow
|
$ | 75 | $ | (796 | ) | $ | (721 | ) | $ | (273 | ) | |||||||
|
Actual
Three Months Ended December 31, 2009
|
||||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
Predecessor
|
|||||||||||||||
|
December
1
|
October
1
|
October
1
|
Pro
Forma Three
|
|||||||||||||||
|
through
|
through
|
through
|
Months
Ended
|
|||||||||||||||
| December 31, 2009 | November 30, 2009 | December 31, 2009 | December 31, 2008 (a) | |||||||||||||||
|
Consolidated
net income (loss)
|
$ | 2 | $ | 13,022 | $ | 13,024 | $ | (1,494 | ) | |||||||||
|
Plus:
|
Interest
expense, net
|
68 | 135 | 203 | 486 | |||||||||||||
|
Income
tax (benefit) expense
|
8 | 93 | 101 | (277 | ) | |||||||||||||
|
Depreciation
and amortization
|
122 | 217 | 339 | 328 | ||||||||||||||
|
Impairment
of franchises
|
- | (691 | ) | (691 | ) | 1,521 | ||||||||||||
|
Stock
compensation expense
|
1 | 3 | 4 | 9 | ||||||||||||||
|
(Gain)
loss due to bankruptcy related items (b)
|
3 | (12,356 | ) | (12,353 | ) | - | ||||||||||||
|
Other,
net
|
7 | (1 | ) | 6 | 45 | |||||||||||||
|
Adjusted
EBITDA (c)
|
211 | 422 | 633 | 618 | ||||||||||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (207 | ) | (315 | ) | (264 | ) | |||||||||
|
Adjusted
EBITDA less capital expenditures
|
$ | 103 | $ | 215 | $ | 318 | $ | 354 | ||||||||||
|
Net
cash flows from operating activities
|
$ | 183 | $ | (597 | ) | $ | (414 | ) | $ | (13 | ) | |||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (207 | ) | (315 | ) | (264 | ) | |||||||||
|
Change
in accrued expenses related to capital expenditures
|
- | 8 | 8 | 2 | ||||||||||||||
|
Free
cash flow
|
$ | 75 | $ | (796 | ) | $ | (721 | ) | $ | (275 | ) | |||||||
|
(a) Pro
forma results reflect certain sales and acquisitions of cable systems in
2008 and 2009 as if they occurred as of January 1, 2008.
|
||||||||||||||||||
|
(b)
Represents the aggregate of gain due to effects of Plan, gain due to fresh
start accounting adjustments and reorganizations items, net as presented
on the statements of operations.
|
||||||||||||||||||
|
(c)
See page 1 of this addendum for detail of the components included within
adjusted EBITDA.
|
||||||||||||||||||
|
The
above schedules are presented in order to reconcile adjusted EBITDA and
free cash flows, both non-GAAP measures, to the most directly comparable
GAAP measures in accordance with Section 401(b) of the Sarbanes-Oxley
Act.
|
||||||||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 10 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
|||||||||||||||||
|
UNAUDITED
RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
|
|||||||||||||||||
|
(DOLLARS
IN MILLIONS)
|
|||||||||||||||||
|
Actual
Year Ended December 31, 2009
|
|||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
|||||||||||||||
|
December
1
|
January
1
|
January
1
|
Predecessor
|
||||||||||||||
|
through
|
through
|
through
|
Actual
Year Ended
|
||||||||||||||
| December 31, 2009 | November 30, 2009 | December 31, 2009 | December 31, 2008 | ||||||||||||||
|
Consolidated
net income (loss)
|
$ | 2 | $ | 10,099 | $ | 10,101 | $ | (2,447 | ) | ||||||||
|
Plus:
|
Interest
expense, net
|
68 | 1,020 | 1,088 | 1,905 | ||||||||||||
|
Income
tax (benefit) expense
|
8 | (351 | ) | (343 | ) | (103 | ) | ||||||||||
|
Depreciation
and amortization
|
122 | 1,194 | 1,316 | 1,310 | |||||||||||||
|
Impairment
of franchises
|
- | 2,163 | 2,163 | 1,521 | |||||||||||||
|
Stock
compensation expense
|
1 | 26 | 27 | 33 | |||||||||||||
|
(Gain)
loss due to bankruptcy related items (b)
|
3 | (11,833 | ) | (11,830 | ) | - | |||||||||||
|
Other,
net
|
7 | (36 | ) | (29 | ) | 100 | |||||||||||
|
Adjusted
EBITDA (c)
|
211 | 2,282 | 2,493 | 2,319 | |||||||||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (1,026 | ) | (1,134 | ) | (1,202 | ) | ||||||||
|
Adjusted
EBITDA less capital expenditures
|
$ | 103 | $ | 1,256 | $ | 1,359 | $ | 1,117 | |||||||||
|
Net
cash flows from operating activities
|
$ | 183 | $ | 411 | $ | 594 | $ | 399 | |||||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (1,026 | ) | (1,134 | ) | (1,202 | ) | ||||||||
|
Change
in accrued expenses related to capital expenditures
|
- | (10 | ) | (10 | ) | (39 | ) | ||||||||||
|
Free
cash flow
|
$ | 75 | $ | (625 | ) | $ | (550 | ) | $ | (842 | ) | ||||||
|
Pro
Forma Year Ended December 31, 2009 (a)
|
|||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
Predecessor
|
||||||||||||||
| December 1 | January 1 | January 1 | Pro Forma Year | ||||||||||||||
|
through
|
through
|
through
|
Ended
|
||||||||||||||
| December 31, 2009 | November 30, 2009 | December 31, 2009 | December 31, 2008 (a) | ||||||||||||||
|
Consolidated
net income (loss)
|
$ | 2 | $ | 10,101 | $ | 10,103 | $ | (2,445 | ) | ||||||||
|
Plus:
|
Interest
expense, net
|
68 | 1,020 | 1,088 | 1,905 | ||||||||||||
|
Income
tax (benefit) expense
|
8 | (351 | ) | (343 | ) | (103 | ) | ||||||||||
|
Depreciation
and amortization
|
122 | 1,194 | 1,316 | 1,306 | |||||||||||||
|
Impairment
of franchises
|
- | 2,163 | 2,163 | 1,521 | |||||||||||||
|
Stock
compensation expense
|
1 | 26 | 27 | 33 | |||||||||||||
|
(Gain)
loss due to bankruptcy related items (b)
|
3 | (11,833 | ) | (11,830 | ) | - | |||||||||||
|
Other,
net
|
7 | (38 | ) | (31 | ) | 96 | |||||||||||
|
Adjusted
EBITDA (c)
|
211 | 2,282 | 2,493 | 2,313 | |||||||||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (1,026 | ) | (1,134 | ) | (1,202 | ) | ||||||||
|
Adjusted
EBITDA less capital expenditures
|
$ | 103 | $ | 1,256 | $ | 1,359 | $ | 1,111 | |||||||||
|
Net
cash flows from operating activities
|
$ | 183 | $ | 411 | $ | 594 | $ | 393 | |||||||||
|
Less:
|
Purchases
of property, plant and equipment
|
(108 | ) | (1,026 | ) | (1,134 | ) | (1,202 | ) | ||||||||
|
Change
in accrued expenses related to capital expenditures
|
- | (10 | ) | (10 | ) | (39 | ) | ||||||||||
|
Free
cash flow
|
$ | 75 | $ | (625 | ) | $ | (550 | ) | $ | (848 | ) | ||||||
|
(a) Pro
forma results reflect certain sales and acquisitions of cable systems in
2008 and 2009 as if they occurred as of January 1, 2008.
|
|||||||||||||||||
|
(b)
Represents the aggregate of gain due to effects of Plan, gain due to fresh
start accounting adjustments and reorganizations items, net as presented
on the statements of operations.
|
|||||||||||||||||
|
(c)
See page 1 of this addendum for detail of the components included within
adjusted EBITDA.
|
|||||||||||||||||
|
The
above schedules are presented in order to reconcile adjusted EBITDA and
free cash flows, both non-GAAP measures, to the most directly comparable
GAAP measures in accordance with Section 401(b) of the Sarbanes-Oxley
Act.
|
|||||||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 11 of
12
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
|||||||||||||||||||
|
CAPITAL
EXPENDITURES
|
|||||||||||||||||||
|
(DOLLARS
IN MILLIONS)
|
|||||||||||||||||||
|
Three
Months Ended December 31, 2009
|
|||||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
Predecessor
|
||||||||||||||||
|
December
1
|
October
1
|
October
1
|
Three
Months
|
||||||||||||||||
|
through
|
through
|
through
|
Ended
|
||||||||||||||||
| December 31, 2009 | November 30, 2009 | December 31, 2009 | December 31, 2008 | ||||||||||||||||
|
Customer
premise equipment (a)
|
$ | 38 | $ | 95 | $ | 133 | $ | 115 | |||||||||||
|
Scalable
infrastructure (b)
|
30 | 45 | 75 | 66 | |||||||||||||||
|
Line
extensions (c)
|
7 | 14 | 21 | 17 | |||||||||||||||
|
Upgrade/Rebuild
(d)
|
1 | 7 | 8 | 3 | |||||||||||||||
|
Support
capital (e)
|
32 | 46 | 78 | 63 | |||||||||||||||
|
Total
capital expenditures
|
$ | 108 | $ | 207 | $ | 315 | $ | 264 | |||||||||||
|
Year
Ended December 31, 2009
|
|||||||||||||||||||
|
Successor
|
Predecessor
|
Combined
|
|||||||||||||||||
|
December
1
|
January
1
|
January
1
|
Predecessor
|
||||||||||||||||
|
through
|
through
|
through
|
Year
Ended
|
||||||||||||||||
| December 31, 2009 | November 30, 2009 | December 31, 2009 | December 31, 2008 | ||||||||||||||||
|
Customer
premise equipment (a)
|
$ | 38 | $ | 555 | $ | 593 | $ | 595 | |||||||||||
|
Scalable
infrastructure (b)
|
30 | 186 | 216 | 251 | |||||||||||||||
|
Line
extensions (c)
|
7 | 63 | 70 | 80 | |||||||||||||||
|
Upgrade/Rebuild
(d)
|
1 | 27 | 28 | 40 | |||||||||||||||
|
Support
capital (e)
|
32 | 195 | 227 | 236 | |||||||||||||||
|
Total
capital expenditures
|
$ | 108 | $ | 1,026 | $ | 1,134 | $ | 1,202 | |||||||||||
|
(a) Customer
premise equipment includes costs incurred at the customer residence to
secure new customers, revenue units and additional bandwidth
revenues. It also includes customer installation costs and customer
premise equipment (e.g., set-top boxes and cable modems,
etc.).
|
|||||||||||||||||||
|
(b)
Scalable infrastructure includes costs, not related to customer premise
equipment or our network, to secure growth of new customers, revenue units
and additional bandwidth revenues or provide service enhancements (e.g.,
headend equipment).
|
|||||||||||||||||||
|
(c)
Line extensions include network costs associated with entering new service
areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment,
make-ready and design engineering).
|
|||||||||||||||||||
|
(d) Upgrade/rebuild
includes costs to modify or replace existing fiber/coaxial cable networks,
including betterments.
|
|||||||||||||||||||
|
(e) Support
capital includes costs associated with the replacement or enhancement of
non-network assets due to technological and physical obsolescence (e.g.,
non-network equipment, land, buildings and vehicles).
|
|||||||||||||||||||
Addendum
to Charter Communications, Inc. Fourth Quarter 2009 Earnings
Release
Page 12 of
12