Charter Reports First Quarter Financial and Operating Results.

Year-over-year double-digit pro forma revenue and adjusted EBITDA growth driven by strong RGU net additions and over 13% increase in ARPU 

ST. LOUIS -- Charter Communications, Inc. (NASDAQ: CHTR) (along with its subsidiaries, the "Company" or "Charter") today reported its first quarter 2008 financial and operating results.

* First quarter revenue of $1.564 billion grew 10.5% year-over-year on a pro forma(1) basis and 9.8% on an actual basis, primarily driven by increases in telephone and high-speed Internet (HSI) revenues.

* First quarter adjusted EBITDA2 of $545 million increased 10.5% year-over-year on a pro forma basis and 9.9% on an actual basis.

* Total ARPU3 for the quarter increased 13.4% year-over-year to $100.14, driven by increased sales of The Charter Bundle(TM), advanced services growth and rate adjustments.

* Revenue generating units (RGUs) increased 7% year-over-year, with 302,300 net additions during the first quarter of 2008, primarily driven by continued strong HSI and telephone growth.

* First quarter 2008 marked the highest video RGU net additions and video ARPU growth since 2003.

"Our pro forma double digit revenue and adjusted EBITDA growth for the first quarter was driven by strong RGU additions and ARPU growth," said Neil Smit, President and Chief Executive Officer. "Our continued strong performance into 2008 reflects our focus and execution as we pursue the right strategies for Charter, including driving bundled penetration and targeting our operating and capital investments toward the projects with the highest expected returns."

Key Operating Results

All of the following customer growth and ARPU statistics are presented on a pro forma basis. Charter added a net 302,300 RGUs during the first quarter of 2008. As of March 31, 2008, Charter served approximately 5,598,800 customers and the Company's 12,084,400 RGUs were comprised of 5,208,000 basic video, 3,023,200 digital video, 2,768,200 HSI, and 1,085,000 telephone customers.

* Telephone customers increased by approximately 125,700 during the first quarter of 2008 and nearly doubled year-over-year. Telephone penetration is approximately 11% of telephone homes passed.

* Video RGUs increased 90,900 during the first quarter and video ARPU grew 6.2% - the highest video RGU net additions and video ARPU growth since 2003. Digital video customers increased by approximately 102,800 and basic video customers decreased by 11,900.

* HSI customers increased by approximately 85,700 in the first quarter of 2008. HSI ARPU increased year-over-year to $40.08.

* First quarter 2008 total ARPU increased 13.4% to $100.14 from the same period in 2007, driven primarily by an increase in bundled customers, advanced services growth, and upgrading customers to higher service tiers.

First Quarter Results - Pro Forma

First quarter revenues were $1.564 billion, a pro forma increase of $148 million, or 10.5%. The increase resulted primarily from increases in telephone and HSI revenues.

Telephone revenues nearly doubled to $121 million compared to pro forma revenue of $63 million in the year-ago quarter. HSI revenues increased $35 million, up 11.9% year-over-year on a pro forma basis, due primarily to an increased number of customers. Video revenues increased $27 million, up 3.2% year-over-year on a pro forma basis, primarily as a result of digital and advanced services revenue growth and rate adjustments. Commercial revenues increased $12 million, or 14.8%, on a pro forma basis, as Charter continues to market The Charter Business Bundle[R]. Advertising sales revenue increased $6 million, reflecting a pro forma increase of 9.7% compared to the first quarter of 2007.

Operating expenses, which include programming, service and advertising sales costs, increased 8.8% year-over-year on a pro forma basis, reflecting annual programming rate increases, increased labor and maintenance costs to support improved service levels, and growth of the Company's telephone business and other advanced services. Selling, general, and administrative expenses increased by 13.8% on a pro forma basis compared to the year-ago quarter, reflecting expenditures to further improve the customer experience, increases in bad debt expense, and higher marketing expenditures targeted at revenue growth and retaining customers.

Adjusted EBITDA totaled $545 million for the first quarter of 2008, a pro forma increase of 10.5% compared to the year-ago quarter.

Net cash flows from operating activities for the first quarter of 2008 were $204 million, compared to a pro forma $263 million for the first quarter of 2007.

First Quarter Results - Actual

First quarter revenues increased 9.8% and operating costs and expenses increased 9.7% compared to year-ago results.

Adjusted EBITDA for the first quarter of 2008 grew 9.9% versus the actual results in the year-ago period.

Income from operations was $205 million in the first quarter of 2008, compared to $156 million in the first quarter of 2007.

Net loss for the first quarter of 2008 was $358 million, or $.97 per common share. For the first quarter of 2007, Charter reported a net loss of $381 million and net loss per common share of $1.04. The decrease in reported net loss was primarily related to higher adjusted EBITDA resulting from higher RGUs and increased ARPU.

Net cash flows from operating activities for the first quarter of 2008 were $204 million, compared to $266 million for the first quarter of 2007.

Expenditures for property, plant, and equipment for the first quarter of 2008 were $334 million, compared to first quarter 2007 expenditures of $298 million. The increase in capital expenditures primarily reflects year-over-year increases in scalable infrastructure related to network upgrades to support higher HSI speeds and other advanced services.

As of March 31, 2008, Charter had $20.575 billion in long-term debt and $467 million of cash on hand. Availability under the Company's revolving credit facility was approximately $1.4 billion at March 31, 2008, none of which was limited by covenant restrictions. Charter expects that cash on hand, cash flows from operating activities, and amounts available under its credit facilities will be adequate to meet its projected cash needs through 2009 and will not be sufficient to fund projected cash needs in 2010 (primarily as a result of the CCH II, LLC $2.2 billion of senior notes maturing in September 2010) and thereafter.

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, and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net 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 defined as income from operations before depreciation and amortization, 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 and pro forma adjusted EBITDA are liquidity measures used by Company management and its board of directors to measure the Company's ability to fund operations and its financing obligations. For this reason, it is a significant component of Charter's annual incentive compensation program. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing for the Company. Company management evaluates these costs through other financial measures.

Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.

The Company believes that adjusted EBITDA, pro forma adjusted EBITDA, and free cash flow provide information useful to investors in assessing Charter's 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 $34 million and $32 million for each of the three months ended March 31, 2008 and 2007, respectively, which expense amounts are excluded for the purposes of calculating compliance with leverage covenants.

In addition to the actual results for the three months ended March 31, 2008 and 2007, we have provided pro forma results in this release for the three months ended March 31, 2007. We believe these pro forma results facilitate meaningful analysis of the results of operations. Pro forma results in this release reflect certain sales and acquisition of cable systems in 2007 as if they had occurred on January 1, 2007. Pro forma income statements for the three months ended March 31, 2007 and pro forma customer statistics as of March 31, 2007 are provided in the addendum of this news release.

Additional Information Available on Website

A slide presentation to accompany the first quarter conference call will be available on the Investor & News Center of our website at www.charter.com in the "Presentations/Webcasts" section. Pro forma data, including disclosure concerning the pro forma data and the basis upon which it was calculated, for each quarter of 2007 can also be found on the Investor & News Center in the "Pro Forma Information" section.

Conference Call

The Company will host a conference call on Monday, May 12, 2008, 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. Access the webcast by clicking on "About Charter" at the top of the home page. 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 beginning two hours after its completion. Accompanying slides will also be available on the site.

Those participating via telephone should dial 888/233-1576 no later than 10 minutes prior to the call. International participants should dial 706/643-3458. The passcode for the call is 43490012.

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 May 19, 2008. The passcode for the replay is 43490012.

About Charter Communications[R]

Charter Communications, Inc. is a leading broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable[R] video entertainment programming, Charter High-Speed[R] Internet access, and Charter Telephone[R]. Charter Business[TM] 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[R] brand. More information about Charter can be found at www.charter.com.

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.

2 Adjusted EBITDA is defined in the "Use of Non-GAAP Financial Metrics" section and is reconciled to net cash flows from operating activities in the addendum of this news release.

3 Average revenue per basic customer.

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, and Section 21E of the Securities Exchange Act of 1934, as amended, 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:

* the availability, in general, of funds to meet interest payment obligations under our debt and to fund our operations and necessary capital expenditures, either through cash flows from operating activities, further borrowings or other sources and, in particular, our ability to fund debt obligations (by dividend, investment or otherwise) to the applicable obligor of such debt;

* 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;

* our ability to pay or refinance debt prior to or when it becomes due and/or refinance that debt through new issuances, exchange offers or otherwise, including restructuring our balance sheet and leverage position;

* the impact of competition from other distributors, including incumbent telephone companies, direct broadcast satellite operators, wireless broadband providers, and digital subscriber line ("DSL") providers;

* difficulties in growing, further introducing, and operating our telephone services, while adequately meeting customer expectations for the reliability of voice services;

* our ability to adequately meet demand for installations and customer service;

* our ability to sustain and grow revenues and cash flows from operating activities by offering video, high-speed Internet, telephone and other services, and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition;

* our ability to obtain programming at reasonable prices or to adequately raise prices to offset the effects of higher programming costs;

* general business conditions, economic uncertainty or slowdown, including the recent significant slowdown in the new housing sector and overall economy; and

* the effects of governmental regulation on our business.

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.

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