exhibit99

EX-99.1 2 exhibit99_1.htm EXHIBIT 99.1 exhibit99_1.htm

Exhibit 99.1

NEWS

Charter Reports Third Quarter

Financial and Operating Results

Charter adds over 200,000 revenue generating units during the quarter

St. Louis, Missouri – November 6, 2008 – Charter Communications, Inc. (NASDAQ: CHTR) (along with its subsidiaries, the “Company” or “Charter”) today reported financial and operating results for the third quarter and first nine months of 2008.

·	Third quarter revenues of $1.636 billion grew 7.8% year-over-year on a pro forma1 basis and 7.3% on an actual basis, primarily driven by increases in telephone and high-speed Internet (HSI) revenues.

·	Third quarter adjusted EBITDA2 of $563 million increased 10.8% year-over-year on a pro forma basis and 10.4% on an actual basis.

·	Third quarter adjusted EBITDA margin of 34.4% increased 90 basis points year-over-year on a pro forma basis.
·	Total ARPU3 for the quarter increased 11.1% year-over-year to $106.07, driven by increased sales of The Charter BundleTM, advanced services growth and upgrading customers to higher service tiers.

·	Revenue generating units (RGUs) increased 7.0% year-over-year, with 205,400 net additions during the third quarter of 2008.

“Our financial and operational performance in the third quarter once again demonstrates the Company’s disciplined approach toward increasing bundle penetration and focus on continuously improving our customers’ experiences,” said Neil Smit, President and Chief Executive Officer.

	·	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 repay debt prior to or when it becomes due and/or successfully access the capital or credit markets to refinance that debt through new issuances, exchange offers or otherwise, including restructuring our balance sheet and leverage position, especially given recent volatility and disruption in the capital and credit markets;
	·	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;

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)



	Three Months Ended September 30,									Nine Months Ended September 30,
	2008			2007						2008			2007
	Actual			Actual			% Change			Actual			Actual			% Change

REVENUES:
Video	$	867		$	845			2.6	%	$	2,599		$	2,542			2.2	%
High-speed Internet		342			318			7.5	%		1,009			920			9.7	%
Telephone		144			94			53.2	%		399			236			69.1	%
Commercial		100			87			14.9	%		289			251			15.1	%
Advertising sales		80			77			3.9	%		223			216			3.2	%
Other		103			104			(1.0	%)		304			284			7.0	%
Total revenues		1,636			1,525			7.3	%		4,823			4,449			8.4	%

COSTS AND EXPENSES:
Operating (excluding depreciation and amortization) (a)		710			679			4.6	%		2,089			1,957			6.7	%
Selling, general and administrative (excluding stock
compensation expense) (b)		363			336			8.0	%		1,035			946			9.4	%
Operating costs and expenses		1,073			1,015			5.7	%		3,124			2,903			7.6	%

Adjusted EBITDA		563			510			10.4	%		1,699			1,546			9.9	%

Adjusted EBITDA margin		34.4	%		33.4	%					35.2	%		34.7	%

Depreciation and amortization		332			334						981			999
Asset impairment charges		-			56						-			56
Stock compensation expense		8			5						24			15
Other operating expenses, net		15			8						51			13

Income from operations		208			107						643			463

OTHER INCOME (EXPENSES):
Interest expense, net		(478	)		(459	)					(1,417	)		(1,385	)
Change in value of derivatives		10			(14	)					(1	)		(18	)
Other expense, net		(5	)		-						(7	)		(39	)
		(473	)		(473	)					(1,425	)		(1,442	)

Loss before income taxes		(265	)		(366	)					(782	)		(979	)

Income tax expense		(57	)		(41	)					(174	)		(169	)

Net loss	$	(322	)	$	(407	)				$	(956	)	$	(1,148	)

Loss per common share, basic and diluted	$	(0.86	)	$	(1.10	)				$	(2.57	)	$	(3.12	)

Weighted average common shares outstanding, basic and diluted		374,145,243			369,239,742						371,968,952			367,671,479


(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 7 of this addendum for the reconciliation of adjusted EBITDA to net cash flows from operating activities as defined by GAAP.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)


	September 30,			December 31,
	2008			2007

ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	569		$	75
Accounts receivable, net of allowance for doubtful accounts		246			225
Prepaid expenses and other current assets		45			36
Total current assets		860			336

INVESTMENT IN CABLE PROPERTIES:
Property, plant and equipment, net		5,062			5,103
Franchises, net		8,933			8,942
Total investment in cable properties, net		13,995			14,045

OTHER NONCURRENT ASSETS		302			285
Total assets	$	15,157		$	14,666

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	1,465		$	1,332
Total current liabilities		1,465			1,332

LONG-TERM DEBT		21,031			19,908

NOTE PAYABLE - RELATED PARTY		72			65

DEFERRED MANAGEMENT FEES - RELATED PARTY		14			14

OTHER LONG-TERM LIABILITIES		1,205			1,035

MINORITY INTEREST		204			199

PREFERRED STOCK - REDEEMABLE		-			5

SHAREHOLDERS' DEFICIT		(8,834	)		(7,892	)
Total liabilities and shareholders' deficit	$	15,157		$	14,666

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(322	)	$	(407	)	$	(956	)	$	(1,148	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization		332			334			981			999
Asset impairment charges		-			56			-			56
Noncash interest expense		16			10			43			31
Change in value of derivatives		(10	)		14			1			18
Deferred income taxes		55			38			169			161
Other, net		17			10			39			49
Changes in operating assets and liabilities, net of effects from dispositions
Accounts receivable		3			(4	)		(21	)		(33	)
Prepaid expenses and other assets		(9	)		(5	)		(9	)		21
Accounts payable, accrued expenses and other		160			163			163			173
Net cash flows from operating activities		242			209			410			327

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(288	)		(311	)		(938	)		(890	)
Change in accrued expenses related to capital expenditures		-			(12	)		(41	)		(51	)
Other, net		10			(25	)		(1	)		6
Net cash flows from investing activities		(278	)		(348	)		(980	)		(935	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt		590			225			2,355			7,472
Repayments of long-term debt		(43	)		(114	)		(1,238	)		(6,841	)
Payments for debt issuance costs		(3	)		-			(42	)		(33	)
Other, net		(2	)		6			(11	)		9
Net cash flows from financing activities		542			117			1,064			607

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		506			(22	)		494			(1	)
CASH AND CASH EQUIVALENTS, beginning of period		63			81			75			60
CASH AND CASH EQUIVALENTS, end of period	$	569		$	59		$	569		$	59

CASH PAID FOR INTEREST	$	329		$	312		$	1,241		$	1,230

NONCASH TRANSACTIONS:
Cumulative adjustment to Accumulated Deficit for the adoption of FIN 48	$	-		$	-		$	-		$	56

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED SUMMARY OF OPERATING STATISTICS

	Approximate as of
	Actual						Pro Forma
	September 30,			June 30,			December 31,			September 30,
	2008 (a)			2008 (a)			2007 (a)			2007 (a)

Customer Summary:
Customer Relationships:
Residential (non-bulk) basic video customers (b)		4,860,100			4,897,100			4,958,600			5,011,200
Multi-dwelling (bulk) and commercial unit customers (c)		276,000			264,900			260,100			273,900
Total basic video customers		5,136,100			5,162,000			5,218,700			5,285,100

Non-video customers (b)		408,300			395,600			376,400			361,300
Total customer relationships (d)		5,544,400			5,557,600			5,595,100			5,646,400

Pro forma average monthly revenue per basic video customer (e)	$	106.07		$	104.35		$	98.13		$	95.45
Pro forma average monthly video revenue per basic video customer (f)	$	58.87		$	58.73		$	56.13		$	55.25

Residential bundled customers (g)		2,718,100			2,639,000			2,506,700			2,433,400

Revenue Generating Units:
Basic video customers (b) (c)		5,136,100			5,162,000			5,218,700			5,285,100
Digital video customers (h)		3,118,500			3,056,900			2,920,100			2,860,500
Residential high-speed Internet customers (i)		2,858,200			2,787,300			2,682,300			2,631,800
Telephone customers (j)		1,274,300			1,175,500			959,300			804,000
Total revenue generating units (k)		12,387,100			12,181,700			11,780,400			11,581,400

Video Cable Services:
Basic Video:
Estimated homes passed (l)		11,932,800			11,890,800			11,741,500			11,671,000
Basic video customers (b)(c)		5,136,100			5,162,000			5,218,700			5,285,100
Estimated penetration of basic homes passed (b) (c) (l) (m)		43.0	%		43.4	%		44.4	%		45.3	%
Pro forma basic video customers quarterly net loss (b) (c) (n)		(25,900	)		(44,800	)		(66,400	)		(38,700	)

Digital Video:
Digital video customers (h)		3,118,500			3,056,900			2,920,100			2,860,500
Digital penetration of basic video customers (b) (c) (h) (o)		60.7	%		59.2	%		56.0	%		54.1	%
Digital set-top terminals deployed		4,504,800			4,409,300			4,192,700			4,125,400
Pro forma digital video customers quarterly net gain (h) (n)		61,600			33,900			59,600			16,700

Non-Video Cable Services:
High-Speed Internet Services:
Estimated high-speed Internet homes passed (l)		11,245,600			11,203,400			11,051,400			10,967,600
Residential high-speed Internet customers (i)		2,858,200			2,787,300			2,682,300			2,631,800
Estimated penetration of high-speed Internet homes passed (i) (l) (m)		25.4	%		24.9	%		24.3	%		24.0	%
Pro forma average monthly high-speed Internet revenue per high-speed Internet customer (f)	$	40.53		$	40.67		$	40.54		$	40.58
Pro forma high-speed Internet customers quarterly net gain (i) (n)		70,900			19,300			50,500			53,900

Telephone Services:
Estimated telephone homes passed (l)		10,236,000			9,990,500			9,013,900			8,289,200
Telephone customers (j)		1,274,300			1,175,500			959,300			804,000
Estimated penetration of telephone homes passed (i) (l) (m)		12.4	%		11.8	%		10.6	%		9.7	%
Pro forma average monthly telephone revenue per telephone customer (f)	$	40.67		$	40.62		$	41.74		$	42.42
Pro forma telephone customers quarterly net gain (j) (n)		98,800			90,500			155,300			102,700


Pro forma operating statistics reflect the sales and acquisitions of cable systems in 2007 and 2008 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 of assets because those transactions did not significantly impact Charter's adjusted EBITDA. However, all transactions completed in 2007 and 2008 have been reflected in the operating statistics.

At December 31, 2007 actual basic video customers, digital video customers, high-speed Internet customers and telephone customers were 5,219,900, 2,920,400, 2,682,500, and 959,300, respectively.

At September 30, 2007 actual basic video customers, digital video customers, high-speed Internet customers and telephone customers were 5,347,800, 2,882,900, 2,639,200, and 802,600, respectively.

See footnotes to unaudited summary of operating statistics on page 6 of this addendum.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
(DOLLARS IN MILLIONS)



	Three Months Ended September 30,
	2008			2007			2007
	Actual			Actual			Pro Forma (a)

Net cash flows from operating activities	$	242		$	209		$	207
Less: Purchases of property, plant and equipment		(288	)		(311	)		(311	)
Less: Change in accrued expenses related to capital expenditures		-			(12	)		(12	)

Free cash flow		(46	)		(114	)		(116	)

Interest on cash pay obligations (b)		462			449			449
Purchases of property, plant and equipment		288			311			311
Change in accrued expenses related to capital expenditures		-			12			12
Other, net		13			6			6
Change in operating assets and liabilities		(154	)		(154	)		(154	)

Adjusted EBITDA (c)	$	563		$	510		$	508



	Nine Months Ended September 30,
	2008			2007			2007
	Actual			Actual			Pro Forma (a)

Net cash flows from operating activities	$	410		$	327		$	319
Less: Purchases of property, plant and equipment		(938	)		(890	)		(890	)
Less: Change in accrued expenses related to capital expenditures		(41	)		(51	)		(51	)

Free cash flow		(569	)		(614	)		(622	)

Interest on cash pay obligations (b)		1,374			1,354			1,354
Purchases of property, plant and equipment		938			890			890
Change in accrued expenses related to capital expenditures		41			51			51
Other, net		48			26			26
Change in operating assets and liabilities		(133	)		(161	)		(161	)

Adjusted EBITDA (c)	$	1,699		$	1,546		$	1,538



(a) Pro forma results reflect certain sales and acquisitions of cable systems in 2007 as if they occurred as of January 1, 2007.

(b) Interest on cash pay obligations excludes accretion of original issue discounts on certain debt securities and amortization of deferred financing costs that are reflected as interest expense in our consolidated 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.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CAPITAL EXPENDITURES
(DOLLARS IN MILLIONS)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2008		2007		2008		2007

Customer premise equipment (a)	$	157	$	139	$	480	$	428
Scalable infrastructure (b)		52		64		185		164
Line extensions (c)		19		27		63		76
Upgrade/Rebuild (d)		8		11		37		35
Support capital (e)		52		70		173		187

Total capital expenditures	$	288	$	311	$	938	$	890


(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 in accordance with SFAS No. 51 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).