While Charter Communications’ major investors wrangle in bankruptcy court over who has to eat how much of the debilitating $21.6 billion in debt the company accrued so many years ago, the MSO keeps turning in evidence its fundamental business is reasonably sound.

Charter more than halved its operating loss from $274 million in the second quarter of 2008 to $112 million in its Q2 2009 just completed. The company attributed its performance to higher adoption of its bundles, an 8.3 percent increase in ARPU, operating efficiencies and an accounting benefit of being in Chapter 11: It does not have to record additional interest on debt.

On the income side, second-quarter revenue was up 4.4 percent on a pro forma basis, to $1.69 billion. Operating income was $301 million, a significant increase from the $230 million reported in the second quarter last year. The increase was primarily driven, the company reported, by increases in telephone and high-speed Internet revenues.

Commercial revenues increased 15.8 percent year-over-year on a pro forma basis; commercial revenue accounted for more than one-fifth of the company’s Q2 total revenue growth, primarily driven by the Charter Business Bundle to small- and medium-size businesses. Everybody has been losing ad revenue, and Charter was no different; its income from advertising was down more than 17 percent from a year ago.

The company lost video subscribers, but it gained in the broadband and telephony categories. Digital video customers declined by approximately 5,700, and basic video customers decreased by 73,300 during the second quarter.

Internet customers grew by approximately 10,600, however, and the company had a net gain of approximately 56,900 telephone customers.

At the end of the Q2 reporting period, Charter tallied approximately 5.36 million customers and a total of 12.5 million RGUs. The latter number broke down as 4.9 million basic video, 3.1 million digital video, 2.9 million broadband and 1.48 million phone customers.

Approximately 55 percent of Charter’s customers subscribe to a bundle, up from 50 percent in the second quarter of 2008.

Expenditures for property, plant and equipment for the first six months of 2009 were $540 million, compared with the first half of 2008 expenditures of $650 million. The decrease in capital expenditures is primarily the result of higher spending on scalable infrastructure during the first half of 2008 related to HSI and headend upgrades combined with lower expenditures on support capital, the company said. Expenditures for property, plant and equipment for the second quarter of 2009 were $271 million, compared with second quarter 2008 expenditures of $316 million.

Charter CEO Neil Smit said: “Charter has developed a portfolio of solutions to both improve communications with our customers and personalize the customer experience, including Day of Service, where a dedicated Charter team assists customers with any questions on the day of an appointment, as well as a Social Media team, shorter service arrival windows and a growing loyalty program. We are also improving our product offerings with the addition of more video-on-demand and high-definition on-demand choices.

“For our business customers, we have launched Charter Business Voice Trunk T1-PRI telephone service that supports call centers, offices with large numbers of employees and companies generating a high volume of calls.”

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