Charter Posts Strong Revenue and Cash Flow Growth For the First Quarter of 2002.Business Editors ST. LOUIS--(BUSINESS WIRE)--April 29, 2002 Strategic marketing and bundling bundling, courtship custom, thought to have originated in Holland and the British Isles. It was extended to America, particularly to New England, and most widely practiced in the years prior to the Revolution of 1776. of services drives first quarter 2002 revenue and operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. growth Charter Communications Charter Communications NASDAQ: CHTR is an American company providing cable television, high-speed Internet, and telephone services to more than 5.7 million customers in 29 states. It is the third-largest publicly traded cable operator in the U.S. , Inc. (Nasdaq: CHTR CHTR Charter CHTR Canadian High Temperature Research ) exceeded expectations for revenue and cash flow growth during the first quarter of 2002. Charter executives will discuss first quarter financial results and expectations for the remainder of the year in a conference call this morning. First Quarter Financial Highlights Revenue during the first quarter of 2002 increased 13.1% to $1.1 billion, and operating cash flow increased 10.4% to $449.2 million compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma results for the first quarter of 2001. "Our revenue and cash flow for the quarter exceeded the high end of our expectations and will provide a solid base of growth which we expect to accelerate throughout the year," Mr. Vogel said. Charter reported basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share of $.59 for the first quarter of 2002, compared to a loss per share of $1.20 for the first quarter of 2001. Demand For High-Speed Internet See broadband. Service Drives Advanced Services Growth Charter added 140,000 cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. customers during the first quarter of 2002, 40% more new customers than were added during the previous quarter. Charter ended the first quarter with 780,200 data customers of which 747,700 were cable modem customers. "Demand for our high-speed Internet service has been phenomenal," said Carl Vogel, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "With the majority of our high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data customers now on Charter owned and operated systems, we're we're Contraction of we are. we're we are focusing our efforts on marketing as well as margin improvement. We're confident there will be continued consumer demand for this product throughout the year." As of March 31, 2002, Charter Digital Cable(R) customers totaled 2,208,900, or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. one third of Charter's video customer base. Charter reported 6,804,800 basic video customers as of the end of the first quarter of 2002. "We're realizing success from our strategic approach to customer growth to ensure quality customers, focusing on products delivered from our digital platform, including Charter Digital Cable which allows for video on demand and interactive channels; and high-speed data via our Charter Pipeline(R) service. As we bundle To sell hardware and software as a combined product or to combine several software packages for sale as a single unit. Contrast with unbundle. See bundled software and bundling. these services, we expect our profitability and retention levels to continue to improve, " Mr. Vogel said. "Our bundled bun·dle n. 1. A group of objects held together, as by tying or wrapping. 2. Something wrapped or tied up for carrying; a package. 3. Biology A cluster or strand of closely bound muscle or nerve fibers. digital video, high-speed data, and interactive services enhance our customers' lives. We make entertainment more enjoyable, information more accessible and our customers' lives simpler for a reasonable price," he continued. "This makes our service essential to our customers, greatly reducing churn churn: see butter. ." New Accounting Standards Effective January January: see month. 1, 2002, Charter adopted Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ," a new accounting standard that addresses the accounting for intangible assets, including franchises. Statement No. 142 requires that franchise intangible assets that meet the indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those life criteria criteria (krītēr´ē  ),n. of the standard to no longer be amortized against earnings, but instead tested for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. at least annually. Upon adoption Charter did not have an impairment charge and eliminated the amortization of indefinite-lived franchises, which totaled $316.4 million for the quarter ended March 31, 2001. Looking Ahead Charter expects revenue for the second quarter of 2002 to range from $1.145 billion to $1.155 billion. Operating cash flow for the second quarter is expected to be between $500 million and $505 million. Charter expects to add 275,000 to 300,000 RGUs in the second quarter. RGUs are comprised of basic, digital and cable modem customers. Charter expects 2002 annual revenue of between $4.6 billion and $4.7 billion. Annual operating cash flow is expected to range between $2.035 billion and $2.07 billion. Charter expects to add a total of approximately 1,100,000 to 1,200,000 RGUs during 2002. Mr. Vogel said he expects about half of Charter's digital customers will have access to VOD See video-on-demand. VoD - video on demand technology by the end of 2002. About Charter Communications Charter Communications, A Wired World Company(TM), is among the nation's largest broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communications companies Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. , currently serving some 7 million customers in 40 states. Charter provides a full range of advanced broadband services See broadband and broadband service provider. to the home, including cable television on an advanced digital video programming platform marketed under the Charter Digital Cable(R) brand and high-speed Internet access via Charter Pipeline(R). Commercial high-speed data, video and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the solutions are provided under the Charter Business Networks(TM) brand. Advertising sales and production services are sold under Charter Media. A Fortune 500 and NASDAQ 100 Company, Charter was the 2001 recipient One who receives. The person to whom an e-mail message is sent is the recipient. (communications) recipient - One who receives; receiver. E.g. "No recipient of the e-mail message will know about the other addressees who were listed in the BCC header." of the Outstanding Corporate Growth Award from the Association for Corporate Growth, the 2001 R.E. "Ted" Turner Turner can refer to:
Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. Regional Chamber and Growth Association The Regional Chamber and Growth Association (RCGA) is the chamber of commerce and primary economic development agency for Metropolitan St. Louis, Missouri. The St. Louis RCGA has three primary roles: 1) to serve as the regional chamber of commerce for over 4,000 member . More information about Charter can be found at www.charter.com. Detailed financial information is included in the attached addendum addendum n. an addition to a completed written document. Most commonly this is a proposed change or explanation (such as a list of goods to be included) in a contract, or some point that has been subject of negotiation after the contract was originally proposed by . Charter will conduct a conference call to discuss their operating results on Monday Monday: see week. , April 29, 2002 at 11:00 AM Eastern Time. The call will be available live via webcast at www.charter.com. The call will be available on the "Investor Center" portion of the website, via "About Us." Participants should go to the call link at least 10 minutes prior to the start time to register. The call will be archived on the website. Statements in this press release regarding Charter Communications' business that are not historical facts may be "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ." Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from any such forward-looking statements are identified in the reports and documents Charter files from time to time with the U.S. Securities and Exchange Commission.
Charter Communications, Inc.
Unaudited Consolidated Statement of Operations
(Dollars in thousands)
Three Months Ended March 31,
---------------------------
Actual Pro Forma
2002 2001 (a) % change
---------- ---------- --------
Revenues:
Analog video $ 754,622 $ 713,128
Digital video 103,713 58,796
Cable modem 63,993 26,729
Advertising sales 59,541 60,465
Other 96,465 93,963
---------- ----------
Total revenues 1,078,334 953,081 13.1%
---------- ----------
Operating Expenses:
General, administrative and service 246,278 212,535
Analog video programming 261,641 234,451
Digital video 35,127 17,863
Cable modem 32,694 23,663
Advertising sales 19,193 17,429
Marketing 18,773 21,510
Corporate expenses 15,431 18,726
---------- ----------
Operating expenses 629,137 546,177 15.2%
---------- ----------
Operating cash flow (b) $ 449,197 $ 406,904 10.4%
========== ==========
(a) The pro forma results reflect all significant acquisitions and
dispositions closed during 2002 and 2001 as if the transactions had
occurred one year prior to their closing date to be consistent with
2002 reporting. Pro forma revenues exceed actual revenues for the
three months ended March 31, 2001 by $79.3 million. Pro forma
operating cash flow (OCF) exceeds actual OCF for three months ended
March 31, 2001 by $19.0 million. The unaudited pro forma financial
information has been presented for comparative purposes and does not
purport to be indicative of the consolidated results of operations had
these transactions been completed as of the assumed date or which may
be obtained in the future. See page 2 of 4 of this addendum to the
earnings release for a comparison of actual operating results.
(b) Information concerning OCF has been included as it is used by
certain investors as one measure of financial performance. OCF is not
a measure of financial performance under generally accepted accounting
principles in the United States and is not necessarily comparable to
similarly titled measures used by other companies. OCF should not be
construed as an alternative to operating income or to cash flows from
operating activities as determined in accordance with generally
accepted accounting principles in the United States.
Charter Communications, Inc.
Unaudited Consolidated Statement of Operations
(Dollars in thousands, except share data)
Three Months Ended March 31,
----------------------------
Actual Actual
2002 2001 % change
---------- ---------- --------
Revenues:
Analog video $ 754,622 $ 649,355
Digital video 103,713 55,047
Cable modem 63,993 25,166
Advertising sales 59,541 55,641
Other 96,465 88,588
---------- ----------
Total revenues 1,078,334 873,797 23.4%
---------- ----------
Operating Expenses:
General, administrative and service 246,278 191,630
Analog video programming 261,641 210,374
Digital video 35,127 20,609
Cable modem 32,694 17,646
Advertising sales 19,193 15,265
Marketing 18,773 16,623
Corporate expenses 15,431 13,721
---------- ----------
Operating expenses 629,137 485,868 29.5%
---------- ----------
Operating cash flow 449,197 387,929 15.8%
Depreciation and amortization 486,969 695,895
Option compensation expense 636 6,038
Interest, net 363,167 310,740
Other, net (30,010) 59,917
---------- ----------
820,762 1,072,590
---------- ----------
Loss before minority interest in loss
of subsidiary (371,565) (684,661)
Minority interest in loss
of subsidiary 197,398 403,962
---------- ----------
Net loss (174,167) (280,699)
Dividends of preferred stock
- redeemable 727 -
---------- ----------
Net loss applicable to common stock $ (174,894) $ (280,699)
========== ==========
Basic and diluted loss per share $ (0.59) $ (1.20)
========== ==========
Weighted average common shares
outstanding 294,394,955 233,777,675
=========== ===========
Charter Communications, Inc.
Unaudited Summary of Operating Statistics
Actual Pro Forma Pro Forma
---------- ----------- -----------
March 31, December 31, March 31,
Basic Analog Video 2002 2001 (a) 2001 (a)
---------- ---------- ----------
Basic Homes Passed 11,777,300 11,502,300 11,363,300
Basic Customers 6,804,800 6,953,700 6,914,500
Penetration of Basic Homes
Passed 57.8% 60.5% 60.8%
Average Monthly Revenue per
Basic Customer (quarter) $ 52.82 $ 53.07 $ 45.95
Actual Pro Forma Pro Forma
---------- ----------- -----------
March 31, December 31, March 31,
Digital Video 2002 2001 (a) 2001 (a)
---------- ----------- -----------
Digital Homes Passed 10,894,000 10,638,300 9,751,900
Digital Customers 2,208,900 2,144,800 1,455,900
Penetration of Digital Homes
Passed 20.3% 20.2% 14.9%
Penetration of Basic Customers 32.5% 30.8% 21.1%
Digital Converters Deployed 3,055,900 2,951,400 1,832,300
Actual Pro Forma Pro Forma
----------- ----------- -----------
March 31, December 31, March 31,
Data Services 2002 2001 (a) 2001 (a)
----------- ----------- -----------
Data Customers:
Cable Modem Customers 747,700 607,700 324,600
Dial-up Customers 32,500 37,100 41,900
----------- ----------- -----------
Total Data Customers 780,200 644,800 366,500
=========== =========== ===========
Data Homes Passed 8,180,300 7,560,600 5,972,400
Penetration of Data Homes
Passed 9.5% 8.5% 6.1%
Actual Pro Forma Pro Forma
----------- ----------- -----------
March 31, December 31, March 31,
Revenue Generating Units: 2002 2001 (a) 2001 (a)
----------- ----------- -----------
Basic Customers 6,804,800 6,953,700 6,914,500
New Services (Digital Video
and Cable Modem) 2,956,600 2,752,500 1,780,500
----------- ----------- -----------
Total Revenue
Generating Units 9,761,400 9,706,200 8,695,000
=========== =========== ===========
Actual
----------
March 31,
Other Statistics 2002
----------
For the quarter ended
Capital Expenditures (in 000's) $ 471,300
As of
Book Value per Share $ 9.09
(a) The pro forma statistics reflect all significant acquisitions
and dispositions closed during 2002 and 2001 as of the periods
indicated.
Charter Communications, Inc.
Unaudited Consolidated Balance Sheet Data
(Dollars in thousands)
Actual Actual
March 31, December 31,
2002 2001
----------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 16,749 $ 1,679
Accounts receivable, net of
allowance for doubtful accounts 224,441 290,504
Receivable from related party 6,509 4,634
Prepaid expenses and other 70,025 70,362
----------- -----------
Total current assets 317,724 367,179
----------- -----------
Investment in Cable Properties:
Property, plant and equipment, net 7,152,588 7,149,483
Franchises, net 17,137,096 17,138,774
----------- -----------
Total investment in cable properties 24,289,684 24,288,257
----------- -----------
Other assets 394,600 306,388
----------- -----------
$25,002,008 $24,961,824
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 1,193,322 $ 1,374,994
----------- -----------
Total current liabilities 1,193,322 1,374,994
----------- -----------
Long-term debt 16,982,543 16,342,873
Deferred management fees - related party 13,751 13,751
Other long-term liabilities 288,599 341,057
Minority interest 3,778,188 3,976,791
Preferred stock - redeemable 50,566 50,566
Shareholders' equity 2,695,039 2,861,792
----------- -----------
$25,002,008 $24,961,824
=========== ===========
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