Demonstrating once again that Chapter 11 bankruptcy can be a very good thing, Charter Communications pulled off a huge swing from a $1.5 billion loss in the fourth quarter of 2008 to a $12.7 billion profit in Q4 ’09.
On an annual basis, Charter went from a $2.4 billion loss in 2008 to an $11 billion profit in 2009.
Burdened by an enormous debt load, Charter was compelled to attempt bankruptcy reorganization last year; it emerged from Chapter 11 in November.
One result was an $8 billion reduction in debt (or 40 percent of the total). Another appears to be that debt obligations are no longer eclipsing the growth in subscriber revenue.
The company cautioned that it adopted “fresh start” accounting after emerging from Chapter 11, and that results are not strictly comparable.
That said, reported fourth-quarter revenue was up 3.3 percent, and annual revenue up 4.3 percent. The company said revenue growth was driven by increases in telephone, high-speed Internet and commercial revenues. Average monthly revenue per basic video customer (ARPU) for the fourth quarter just completed increased 8.1 percent compared with the same period last year – to $117.43.
Charter reported that it served approximately 5.3 million subscribers, representing about 12.7 million revenue-generating units (RGUs) as of Dec. 31. Approximately 57 percent of Charter's customers subscribe to a bundle, up from 53 percent in the fourth quarter of 2008.
The breakdown of Charter’s 12.7 million RGUs was 4.8 million basic video, 3.2 million digital video, 3.1 million HSI and 1.6 million telephone customers.
Digital video customers increased by approximately 43,300, and basic video customers decreased by approximately 56,900 during the fourth quarter.
HSI customers grew by approximately 51,800 during the fourth quarter of 2009.
Fourth-quarter 2009 net gains of telephone customers were approximately 60,600. Telephone penetration is now 14.9 percent of approximately 10.7 million telephone homes passed as of Dec. 31.
Commercial revenues rose to $116 million, a 12.6 percent increase year-over-year, primarily resulting from increased sales of the Charter Business Bundle and customer relationship growth, the company reported.
Expenditures for property, plant and equipment for the fourth quarter of 2009 were $315 million, compared with fourth-quarter 2008 expenditures of $264 million. The increase in capital expenditures was driven primarily by an increase in customer premises equipment related to higher customer demand for high-definition and digital video recorder converters and an increase in support capital due to hardware, software and vehicle purchases.
Expenditures for property, plant and equipment for 2009 were $1.1 billion, compared with 2008 expenditures of $1.2 billion. The decrease in capital expenditures is primarily the result of lower spending on scalable infrastructure related to HSI and headend upgrades during 2009 compared with 2008.
The company said that during 2010, it expects capital expenditures to be approximately $1.2 billion.
"2009 was a successful year on many fronts. We enhanced our video, Internet and phone services while continuing to improve the customer experience. We also achieved strong operating results throughout the year and completed a financial restructuring that better positions us for the future," said Mike Lovett, interim president and CEO at Charter.