Charter Q4 loss grows on added expenses

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NEW YORK -- Cable operator Charter Communications Inc. posted a wider fourth-quarter loss Wednesday as costs and interest expense rose faster than revenue.

But management said it has put the company back on a solid growth track as evidenced by a 64% customer addition jump in 2006 to 711,000 and by the first double-digit revenue and adjusted operating cash flow gain in four years in the fourth quarter.

"We increased momentum and generated consistent growth in revenue and adjusted (operating cash flow) throughout 2006, which we believe positions us well for 2007 and beyond," president and CEO Neil Smit said.

Charter chairman and controlling shareholder Paul Allen said: "Under the leadership of Neil and our management team, I am pleased with Charter's significant progress in improving its operations, enhancing its financial flexibility and delivering strong performance."

The company reported a fourth-quarter loss of $396 million, compared with a loss of $336 million a year ago.

Revenue rose 9.8%, or 11.7% when adjusted for recent acquisitions and sales, to $1.4 billion, while costs and expenses climbed 12.5% on an adjusted basis to $910 million. Charter said it spent more on advertising and programming, among other things.

Charter lost 43,300 basic cable customers in the quarter to end it with 5.43 million, while growing its digital cable user base by about 40,500. It also added 106,200 telephony subscribers and 59,000 high-speed Internet customers.

Full-year 2006 revenue rose 10%, while costs and expenses rose 12.7% to $3.6 billion.

Charter reported a free cash flow deficit of $253 million for the fourth quarter and a $892 million deficit for 2006. As of Dec. 31, it had $19.1 billion in long-term debt and $60 million of cash on hand.

Charter shares closed down 0.3% on Wednesday to $3.01.
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