Bankrupt Charter Reports Rise in Revenue
ST. LOUIS, MO.: Charter Communications reported higher revenues and operating income on fewer subscribers for the quarter ending March 31, 2009. Charter posted 1Q09 revenues of $1.66 billion compared to $1.56 billion a year ago. Operating income was $334 million compared to $205 million. Net loss was $205 million for 1Q09 compared to $359 million for 1Q08.
Charter had 5 million basic video subscribers at the end of the quarter, compared to 5.2 million a year ago. Digital video subscriptions within that group were up, however, from 3 million a year ago to more than 3.1 million this year. Broadband subscribers totaled 2.9 million compared to nearly 2.8 million, and telephone subscriptions rose to 12.5 million from 12 million last year.
About 53 percent of Charter’s revenues were derived from video subscribers as opposed to 55 percent last year. Ad sales generated $54 million, a total of 6 percent of revenues.
Charter (NASDAQ: CHTR), the nation’s fourth largest cable TV provider, is operating as a debtor-in-possession business under Chapter 11 protection. Charter filed for bankruptcy March 27 with a pre-arranged reorganization plan by which founder and majority shareholder Paul Allen will get a 7 percent equity piece and retain a 35 percent voting share. Holders of common stock, which is currently trading for 3 cents, will be wiped out.
Charter announced this week that the U.S. Bankruptcy Court for the Southern District of New York had approved the disclosure statement of the plan, allowing the cabler to solicit votes from eligible shareholders. The voting deadline is June 15; a hearing to consider approving the plan is set for July 20.
Charter has $21.7 billion in debt. An agreement negotiated with bondholders to invest $3 billion is expected ultimately to reduce debt by $8 billion. The reduction will cut annual interest payments by around $830 million and boost cash, the company said. It expects to emerge from bankruptcy by August. -- Deborah D. McAdams