Skip to main content
Investors

News Release

Charter Posts Strong Revenue and Cash Flow Growth For the First Quarter of 2002

ST. LOUIS, Apr 29, 2002 (BUSINESS WIRE) --

Strategic marketing and bundling of services drives first quarter 2002 revenue and operating cash flow growth

Charter Communications, Inc. (Nasdaq: CHTR) 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 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 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 Service Drives Advanced Services Growth

Charter added 140,000 cable modem 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. "With the majority of our high-speed data customers now on Charter owned and operated systems, we're 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 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 these services, we expect our profitability and retention levels to continue to improve, " Mr. Vogel said.

"Our bundled 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."

    New Accounting Standards
Effective January 1, 2002, Charter adopted Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible 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 life criteria of the standard to no longer be amortized against earnings, but instead tested for impairment 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 technology by the end of 2002.

    About Charter Communications
Charter Communications, A Wired World Company(TM), is among the nation's largest broadband communications companies, currently serving some 7 million customers in 40 states. Charter provides a full range of advanced broadband services 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 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 of the Outstanding Corporate Growth Award from the Association for Corporate Growth, the 2001 R.E. "Ted" Turner Innovator of the Year Award from the Southern Cable Telecommunications Association, and the 2001 Fast 50 Award for Growth from the St. Louis Regional Chamber and Growth Association.

More information about Charter can be found at www.charter.com. Detailed financial information is included in the attached addendum.

Charter will conduct a conference call to discuss their operating results on Monday, 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 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
                                              ===========   ===========
CONTACT:          Charter Communications Inc., St. Louis
                  Andy Morgan, 314/543-2217 (Media)
                  amorgan@chartercom.com
                  or
                  Mary Jo Moehle, 314/543-2397 (Analysts)
                  mmoehle@chartercom.com

URL:              http://www.businesswire.com
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
Copyright (C) 2002 Business Wire.  All rights reserved.