Print Page  Close Window

Press Release

Printer Friendly Version View printer-friendly version
Back
Charter Reports Third Quarter Financial and Operating Results

Click here to view the Third Quarter Financial Addendum.

Charter Adds over 200,000 Revenue Generating Units During the Quarter

ST. LOUIS--(BUSINESS WIRE)--Nov. 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 forma(1) basis and 7.3% on an actual basis, primarily driven by increases in telephone and high-speed Internet (HSI) revenues.


  • Third quarter adjusted EBITDA(2) 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 ARPU(3) for the quarter increased 11.1% year-over-year to $106.07, driven by increased sales of The Charter Bundle(TM), 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.

Key Operating Results

All of the following customer growth and ARPU statistics are presented on a pro forma basis. RGUs increased 205,400 during the third quarter of 2008, representing more than a 50 percent increase in net adds versus the year-ago quarter. As of September 30, 2008, Charter served approximately 5,544,400 customers and the Company's 12,387,100 RGUs were comprised of 5,136,100 basic video; 3,118,500 digital video; 2,858,200 HSI, and 1,274,300 telephone customers.

  • Telephone customers increased by approximately 98,800 during the third quarter of 2008 and the number of telephone customers is up nearly 60% year-over-year. Telephone penetration is now 12.4% of telephone homes passed.


  • HSI customers increased by approximately 70,900 in the third quarter of 2008, a 32% higher net gain than during the year-ago quarter. While HSI customers continued to climb, ARPU remained essentially flat with last year at $40.53.


  • Digital video customers increased by approximately 61,600 and basic video customers decreased by 25,900 during the third quarter. Video ARPU was $58.87 for the third quarter of 2008, up 6.6% year-over-year.

Third quarter 2008 total ARPU increased 11.1% to $106.07 from the same period in 2007, driven primarily by an increase in bundled customers, advanced services growth, and upgrading customers to higher service tiers.

Third Quarter Results - Pro forma

Third quarter revenues were $1.636 billion, a pro forma increase of 7.8%, or $119 million. The increase resulted primarily from increases in telephone and HSI revenues.

Telephone revenues were $144 million, a 54.8% increase over third quarter 2007 pro forma telephone revenues, driven by a larger telephone customer base. HSI revenues were $342 million, up 8.2% year-over-year on a pro forma basis, due to an increased number of customers. Video revenues were $867 million, up 3.2% year-over-year on a pro forma basis, primarily as a result of digital and advanced services revenue growth, partially offset by a decline in basic video customers. Commercial revenues rose to $100 million, a 16.3% increase on a pro forma basis, resulting from increased sales of the Charter Business Bundle(R) primarily to small and medium-size businesses.

Operating expenses, which include programming, service and advertising sales costs, were $710 million, a 5.3% increase year-over-year on a pro forma basis, reflecting annual programming rate increases, increased labor costs to support improved service levels, and growth of the Company's telephone business and other advanced services. Selling, general, and administrative expenses were $363 million, up 8.4% on a pro forma basis compared to the year-ago quarter, reflecting expenditures to further improve the customer experience and increased marketing expenditures targeted at growing and retaining customers.

Adjusted EBITDA totaled $563 million for the third quarter of 2008, a pro forma increase of 10.8% compared to the year-ago quarter. The third quarter adjusted EBITDA margin was 34.4%, up from 33.5% in the year-ago quarter on a pro forma basis.

Net cash flows from operating activities for the third quarter of 2008 were $242 million, compared to $207 million for the third quarter of 2007 on a pro forma basis. The increase in cash flows from operating activities is primarily the result of the increase in HSI and telephone revenues driven by the bundle and improved cost efficiencies.

Nine Months Results - Pro forma

For the nine months ended September 30, 2008, revenues were $4.823 billion, a pro forma increase of $400 million, or 9.0%, primarily from telephone and HSI revenue growth.

Telephone revenues increased to $399 million from pro forma revenues of $236 million a year ago, up 69.1% year-over-year. HSI revenues increased to $1.009 billion, up 10.2% year-over-year on a pro forma basis. Video revenues were $2.599 billion, an increase of 3.0% year-over-year on a pro forma basis. Commercial revenues increased to $289 million, up 16.1% on a pro forma basis.

Operating expenses for the nine months ended September 30, 2008 were $2.089 billion, an increase of 7.6% year-over-year on a pro forma basis; and selling, general, and administrative expenses were $1.035 billion, up 9.8% on a pro forma basis.

Adjusted EBITDA totaled $1.699 billion for the first nine months of 2008, a pro forma increase of 10.5% compared to the same nine-month period in 2007.

Net cash flows provided by operating activities for the first nine months of 2008 were $410 million, compared to $319 million for the first nine months of 2007 on a pro forma basis. The increase in cash flows provided by operating activities is primarily the result of increased sales of our bundled services and improved cost efficiencies, partially offset by changes in operating assets and liabilities that provided less cash in 2008 than the corresponding period in 2007.

Third Quarter Results - Actual

Third quarter revenues increased 7.3% and operating costs and expenses increased 5.7% compared to year-ago results. Adjusted EBITDA for the third quarter of 2008 rose 10.4% compared to the year-ago period.

Income from operations was $208 million in the third quarter of 2008, compared to $107 million in the third quarter of 2007. Net loss for the third quarter of 2008 was $322 million, or $0.86 per common share. For the third quarter of 2007, Charter reported a net loss of $407 million and net loss per common share of $1.10. The increase in income from operations and decrease in net loss resulted primarily from increased sales of our bundled services and improved cost efficiencies. Additionally, the Company recorded a $56 million asset impairment charge in 2007 that did not reoccur in 2008.

Expenditures for property, plant, and equipment for the third quarter of 2008 were $288 million, compared to third quarter 2007 expenditures of $311 million. The decrease in capital expenditures primarily reflects year-over-year decreases in scalable infrastructure and support capital.

Net cash flows from operating activities for the third quarter of 2008 were $242 million, compared to $209 million for the third quarter of 2007.

Nine Months Results - Actual

Revenues for the nine months ended September 30, 2008 increased 8.4% year-over-year. Operating costs and expenses rose 7.6% compared to year-ago actual results. Adjusted EBITDA for the first nine months of 2008 grew 9.9% compared to the year-ago period.

Income from operations increased to $643 million for the first nine months of 2008, compared to $463 million in the first nine months of 2007. Net loss for the first nine months of the year was $956 million, or $2.57 per common share. For the first nine months of 2007, Charter reported a net loss of $1.148 billion and net loss per common share of $3.12. The increase in income from operations and the decrease in net loss are primarily attributable to revenue growth from HSI and telephone driven by the bundle, as well as improved cost efficiencies and a decline in non-operating expenses.

Capital expenditures for property, plant, and equipment for the nine months ended September 30, 2008 were $938 million, compared to $890 million in 2007. The increase in capital expenditures primarily reflects year-over-year increases in customer premise equipment. Charter expects that capital expenditures in the year 2008 will total approximately $1.2 billion, with over 75% of that amount directed toward success-based activities.

Net cash flows provided by operating activities for the first nine months of 2008 were $410 million, compared to $327 million for the first nine months of 2007. The increase in cash flows provided by operating activities is primarily the result of revenue growth from HSI and telephone driven by the bundle, as well as improved cost efficiencies, partially offset by changes in operating assets and liabilities that provided less cash in 2008 than the corresponding period in 2007.

As of September 30, 2008, Charter had $21.031 billion in long-term debt. Cash on hand and availability under the Company's revolving credit facility totaled approximately $1.3 billion on September 30, 2008, none of which was limited by covenant restrictions.

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, 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 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 $33 million and $32 million for the three months ended September 30, 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 and nine months ended September 30, 2008 and 2007, we have provided pro forma results in this release for the three and nine months ended September 30, 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 acquisitions of cable systems in 2007 as if they had occurred as of January 1, 2007. Pro forma statements of operations for the three and nine months ended September 30, 2007; and pro forma customer statistics as of December 31, 2007 and September 30, 2007, are provided in the addendum of this news release.

Additional Information Available on Website

A slide presentation to accompany the third 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 Thursday, November 6, 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, then Investor & News Center. 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 70440618.

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 November 13, 2008. The passcode for the replay is 70440618.

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.

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 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;


  • 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 downturn, including the recent volatility and disruption in the capital and credit markets and the significant downturn in the 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.

(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.


            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,
                                 -------------------------------------
                                    2008          2007
                                   Actual        Actual     % Change
                                 ------------  ------------ ----------

REVENUES:
  Video                         $        867  $        845       2.6%
  High-speed Internet                    342           318       7.5%
  Telephone                              144            94      53.2%
  Commercial                             100            87      14.9%
  Advertising sales                       80            77       3.9%
  Other                                  103           104      (1.0%)
                                 ------------  ------------
    Total revenues                     1,636         1,525       7.3%
                                 ------------  ------------

COSTS AND EXPENSES:
  Operating (excluding
   depreciation and
   amortization) (a)                     710           679       4.6%
  Selling, general and
   administrative (excluding
   stock compensation expense)
   (b)                                   363           336       8.0%
    Operating costs and
     expenses                          1,073         1,015       5.7%
                                 ------------  ------------

    Adjusted EBITDA                      563           510      10.4%
                                 ------------  ------------

    Adjusted EBITDA margin              34.4%         33.4%
                                 ------------  ------------

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

    Income from operations               208           107
                                 ------------  ------------

OTHER INCOME (EXPENSES):
  Interest expense, net                 (478)         (459)
  Change in value of
   derivatives                            10           (14)
  Other expense, net                      (5)            -
                                 ------------  ------------
                                        (473)         (473)
                                 ------------  ------------

Loss before income taxes                (265)         (366)

Income tax expense                       (57)          (41)
                                 ------------  ------------

Net loss                        $       (322) $       (407)
                                 ============  ============

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

Weighted average common shares
 outstanding, basic and diluted  374,145,243   369,239,742
                                 ============  ============


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

REVENUES:
  Video                          $      2,599  $      2,542       2.2%
  High-speed Internet                   1,009           920       9.7%
  Telephone                               399           236      69.1%
  Commercial                              289           251      15.1%
  Advertising sales                       223           216       3.2%
  Other                                   304           284       7.0%
                                  ------------  ------------
    Total revenues                      4,823         4,449       8.4%
                                  ------------  ------------

COSTS AND EXPENSES:
  Operating (excluding
   depreciation and
   amortization) (a)                    2,089         1,957       6.7%
  Selling, general and
   administrative (excluding
   stock compensation expense)
   (b)                                  1,035           946       9.4%
    Operating costs and expenses        3,124         2,903       7.6%
                                  ------------  ------------

    Adjusted EBITDA                     1,699         1,546       9.9%
                                  ------------  ------------

    Adjusted EBITDA margin               35.2%         34.7%
                                  ------------  ------------

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

    Income from operations                643           463
                                  ------------  ------------

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

Loss before income taxes                 (782)         (979)

Income tax expense                       (174)         (169)
                                  ------------  ------------

Net loss                         $       (956) $     (1,148)
                                  ============  ============

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

Weighted average common shares
 outstanding, basic and diluted   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 STATEMENTS OF OPERATIONS AND OPERATING DATA
        (DOLLARS IN MILLIONS, EXCEPT PER SHARE AND SHARE DATA)



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

REVENUES:
  Video                         $        867  $        840       3.2%
  High-speed Internet                    342           316       8.2%
  Telephone                              144            93      54.8%
  Commercial                             100            86      16.3%
  Advertising sales                       80            77       3.9%
  Other                                  103           105      (1.9%)
                                 ------------  ------------
    Total revenues                     1,636         1,517       7.8%
                                 ------------  ------------

COSTS AND EXPENSES:
  Operating (excluding
   depreciation and
   amortization) (b)                     710           674       5.3%
  Selling, general and
   administrative (excluding
   stock compensation expense)
   (c)                                   363           335       8.4%
                                 ------------  ------------
    Operating costs and
     expenses                          1,073         1,009       6.3%
                                 ------------  ------------

    Adjusted EBITDA                      563           508      10.8%
                                 ------------  ------------

    Adjusted EBITDA margin              34.4%         33.5%
                                 ------------  ------------

  Depreciation and amortization          332           335
  Stock compensation expense               8             5
  Other operating expenses, net           15             8
                                 ------------  ------------

    Income from operations               208           160
                                 ------------  ------------

OTHER INCOME (EXPENSES):
  Interest expense, net                 (478)         (459)
  Change in value of
   derivatives                            10           (14)
  Other expense, net                      (5)            -
                                 ------------  ------------
                                        (473)         (473)
                                 ------------  ------------

Loss before income taxes                (265)         (313)

Income tax expense                       (57)          (44)
                                 ------------  ------------

Net loss                        $       (322) $       (357)
                                 ============  ============

Loss per common share, basic
 and diluted                    $      (0.86) $      (0.96)
                                 ============  ============

Weighted average common shares
 outstanding, basic and diluted  374,145,243   369,239,742
                                 ============  ============


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

REVENUES:
  Video                         $      2,599  $      2,524       3.0%
  High-speed Internet                  1,009           916      10.2%
  Telephone                              399           236      69.1%
  Commercial                             289           249      16.1%
  Advertising sales                      223           214       4.2%
  Other                                  304           284       7.0%
                                 ------------  ------------
    Total revenues                     4,823         4,423       9.0%
                                 ------------  ------------

COSTS AND EXPENSES:
  Operating (excluding
   depreciation and
   amortization) (b)                   2,089         1,942       7.6%
  Selling, general and
   administrative (excluding
   stock compensation expense)
   (c)                                 1,035           943       9.8%
                                 ------------  ------------
    Operating costs and
     expenses                          3,124         2,885       8.3%
                                 ------------  ------------

    Adjusted EBITDA                    1,699         1,538      10.5%
                                 ------------  ------------

    Adjusted EBITDA margin              35.2%         34.8%
                                 ------------  ------------

  Depreciation and amortization          981           997
  Stock compensation expense              24            15
  Other operating expenses, net           51            12
                                 ------------  ------------

    Income from operations               643           514
                                 ------------  ------------

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

Loss before income taxes                (782)         (928)

Income tax expense                      (174)         (153)
                                 ------------  ------------

Net loss                        $       (956) $     (1,081)
                                 ============  ============

Loss per common share, basic
 and diluted                    $      (2.57) $      (2.94)
                                 ============  ============

Weighted average common shares
 outstanding, basic and diluted  371,968,952   367,671,479
                                 ============  ============



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

September 30, 2007. Pro forma revenues, operating costs and expenses
 and net loss were reduced by $8 million, $6 million and $50 million,
 respectively, for the three months ended September 30, 2007. Pro
 forma revenues, operating costs and expenses and net loss were
 reduced by $26 million, $18 million and $67 million, respectively,
 for the nine months ended September 30, 2007.

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  Nine Months Ended
                                  September 30,       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     June 30,   December 31,  September
                        30,                                    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.

(a) "Customers" include all persons our corporate billing records show
 as receiving service (regardless of their payment status), except for
 complimentary accounts (such as our employees). In addition, at
 September 30, 2008, June 30, 2008, December 31, 2007, and September
 30, 2007, "customers" include approximately 42,100, 34,200, 48,200,
 and 33,800 persons whose accounts were over 60 days past due in
 payment, approximately 7,700, 5,300, 10,700, and 5,700 persons whose
 accounts were over 90 days past due in payment and approximately
 3,800, 2,600, 2,900, and 2,100 of which were over 120 days past due
 in payment, respectively.

(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 408,300,
 395,600, 376,400, and 361,300 customer relationships at September 30,
 2008, June 30, 2008, December 31, 2007, and September 30, 2007,
 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. EBU is calculated for a system by dividing
 the bulk price charged to accounts in an area by the most prevalent
 price charged to non-bulk residential customers in that market for
 the comparable tier of service. The EBU method of estimating basic
 video customers is consistent with the methodology used in
 determining costs paid to programmers and has been used consistently.
 As we increase our effective video prices 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 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 September 30, 2008, June 30, 2008, December 31, 2007, and
 September 30, 2007, approximately 2,559,700, 2,494,600, 2,392,700,
 and 2,343,700 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 September 30, 2008, June 30, 2008, December 31, 2007,
 and September 30, 2007, approximately 1,233,100, 1,133,800, 920,600,
 and 769,800 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 that have been
 adopted by eleven publicly traded cable operators, including Charter.

(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.


            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
                                                            Pro Forma
                                        Actual     Actual       (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
                                                            Pro Forma
                                        Actual     Actual       (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 Nine Months Ended
                                    September 30,      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).

CONTACT: Charter Communications, Inc.
Media:
Anita Lamont, 314-543-2215
or
Analysts:
Mary Jo Moehle, 314-543-2397

SOURCE: Charter Communications, Inc.