Losses Mount at Charter

Charter Communications Inc. , an MSO that's on the verge of filing a prearranged bankruptcy, posted a fourth-quarter loss of $1.25 billion ($3.96 per share), versus a loss of $468 million ($1.27 per share) a year ago. (See Charter Posts Q4.)

Charter, which attributed the wider year-on-year loss to an impairment charge of $1.52 billion, said pro forma fourth-quarter revenues rose 8.5 percent, to $6.46 billion.

Buried in more than $21 billion worth of debt, the nation's fourth-largest MSO is expected to file a prearranged bankruptcy by April 1. In February, Charter and its subsidiaries inked a deal with some of its debt holders to reduce the MSO's debt by about $8 billion. The agreement also calls on a number of those debt holders to invest more than $3 billion in the form of debt refinancing and new equity capital. The MSO's common stock will be cancelled, however. (See Charter Turns to Chapter 11.)

On Monday, Charter also revealed that one of its subsidiaries, CCH II LLC, will not make its scheduled payment of interest on March 16. Moreover, Charter expects to file for Chapter 11 before the end of a 30-day grace period allowed on that interest payment.

Despite heavier losses brought on by a sizable impairment charge and a looming bankruptcy, Charter did manage to grow in several key service segments. Like some of its larger peers, however, sub growth in most of those categories slowed significantly year-over-year. (See Comcast Sub Growth Weakens in Q4 and Time Warner Cable Subs Growth Slows in Q4 .)

On the subscriber front, Charter added a total of 45,300 revenue generating units (RGUs) in the quarter. It ended the year with 12.4 million RGUs, made up of 5 million basic video subs, 3.1 million digital video customers, 2.8 million high-speed Internet subs, and 1.34 million phone customers.

However, Charter did lose 75,100 basic video customers in the fourth quarter, while adding only 22,300 digital video subs. Video-related average revenue per unit (ARPU) jumped 5.3 percent, to $59.15.

Charter, which just launched Docsis 3.0 services in its home town of St. Louis, added 22,900 high-speed Internet subs in the quarter, slowed from 50,500 additions in the year-ago period. (See Charter Takes On U-verse .)

Growth also slowed in the cable telephone category, where Charter added 75,200 subs, versus 155,300 a year earlier.

— Jeff Baumgartner, Site Editor, Cable Digital News