Charter Communications still looking for options to extend maturities

By Jennifer Lanning Drey

Portland, Ore., May 6 - Charter Communications, Inc. continues to take an opportunistic approach toward further extending its debt maturities after pushing out more than $5 billion of debt maturities in recent months, Eloise Schmitz, chief financial officer of Charter, said Thursday during its first-quarter earnings conference call.

Pro forma for the recent transactions, only about 16% of Charter's debt is now due through 2013.

"We maintain a disciplined investment approach and have been opportunistic in extending maturities on our debt facilities," Mike Lovett, chief executive officer of Charter, said during the call.

Specifically, Charter recently extended $3 billion of term loans and issued $1.6 billion of new eight- and 10-year senior notes that were used to refinance bonds with maturities in 2013 and 2014.

The company also recently established a new $1.3 billion credit facility.

Looking at future possibilities for extending maturities, Schmitz said the company's options are broader after the recent transactions and could include further extensions under its bank agreement or the company may look to extend maturities with first-lien bonds, free cash flow or unsecured bonds.

The total principal amount of Charter's debt was $12.8 billion at March 31, and the leverage ratio was 4.8 times, Schmitz said.

The company had $950 million of liquidity at the end of the quarter.

Charter generated $205 million of free cash flow during the first quarter, primarily as a result of reduced cash interest due to restructuring as well as adjusted EBITDA growth, Schmitz said.

EBITDA, revenue improvements

For the first quarter, Charter posted adjusted EBTIDA of $637 million, representing a 3.4% increase from adjusted EBTIDA in the same period of 2009.

First-quarter revenues of $1.7 billion were up 4.5%, reflecting strength in bundle, high-speed internet and commercial services along with growth in advertising sales, Lovett said.

Advertising revenues were up 9% over the prior-year quarter, driven by higher demand across all segments, he noted.

"We reported solid results for the quarter and will continue our balanced and disciplined approach to the business, focusing on generating free cash flow while investing for long-term growth," Schmitz said.

The company's strategic priorities continue to be simplifying and enhancing the customer experience, optimizing its infrastructure and operating model and enhancing financial flexibility, Lovett said.

Charter is a St. Louis-based broadband communications company and cable operator.

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