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Charter Announces Fourth Quarter and Full Year 2013 Results

Companies mentioned in this article: Charter Communications, Inc.

STAMFORD, Conn., Feb. 21, 2014 /PRNewswire/ -- Charter Communications, Inc. (along with its subsidiaries, the "Company" or "Charter") today reported financial and operating results for the three and twelve months ended December 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20110526/AQ10195LOGO)

Key highlights:

    --  Pro forma(1) for the acquisition of Bresnan, total residential customer
        relationships grew by 63,000 during the quarter, versus 24,000 during
        the fourth quarter of 2012. Residential primary service units (PSUs)
        increased by 147,000 during the period, versus 57,000 in the year-ago
        quarter.
    --  For the full year 2013, Charter added 172,000 residential customers
        compared to growth of 120,000 residential customers in 2012. Charter saw
        improved growth across every residential PSU category in 2013, adding
        415,000 residential PSUs, versus a gain of 296,000 in 2012, a
        year-over-year improvement of 40.2%.
    --  Fourth quarter revenues of $2.1 billion grew 5.0% on a pro forma(1)
        basis( )as compared to the prior-year period, or 6.2% excluding
        advertising, led by growth in Internet, video, and commercial revenues.
        Total revenues for the full year rose 5.0% on a pro forma basis.
    --  Fourth quarter residential revenues grew 4.9% on a pro forma basis
        versus the fourth quarter of 2012, when residential revenues grew by
        2.3% on a pro forma basis. For the full year 2013, residential revenues
        grew by 4.7% on a pro forma basis versus 2.1% in 2012.
    --  Pro forma for the acquisition of Bresnan, commercial customer
        relationships grew by 16,000 in the fourth quarter of 2013, compared to
        a gain of 4,000 during the fourth quarter of 2012. Fourth quarter
        commercial revenues grew 19.4% on a pro forma basis versus the
        prior-year period, primarily driven by higher sales to small and medium
        businesses and to carrier customers.
    --  Fourth quarter Adjusted EBITDA(2) grew by 2.6% year-over-year on a pro
        forma basis. Excluding the impact of political advertising, fourth
        quarter Adjusted EBITDA grew by 4.8%.

"Our 2013 results show the early success of our strategies to drive accelerated customer growth. We now deliver a competitive, highly valuable suite of products and services to our customers, and we are beginning to execute at a high level, evidenced by improving trends through the year," said Tom Rutledge, President and CEO of Charter Communications. "We will continue that momentum in 2014, and plan to complete our all-digital initiative this year, allowing us to deliver a superior set of services across the vast majority of our footprint. Combined with improved service capabilities and higher customer satisfaction, these strategies are expected to result in greater market share and improving cash flow per home passed, as we position Charter for long-term growth and value creation."

(1 )All customer data and results, unless otherwise noted, are pro forma for the Bresnan transaction, as if it had occurred on January 1, 2012, and are provided in the addendum of this news release.

(2 )Adjusted EBITDA and free cash flow are defined in the "Use of Non-GAAP Financial Metrics" section and are reconciled to net income (loss) and net cash flows from operating activities, respectively, in the addendum of this news release.




    Key Operating Results


                            Approximate as of
                            -----------------

                                 Actual                 Pro Forma
                                 ------                 ---------

                          December 31, 2013 (a)   December 31, 2012 (a)    Y/Y Change
                          --------------------     --------------------    ----------

    Footprint
    ---------

        Estimated
        Video
        Passings
        (b)                               12,799                   12,741            --%

        Estimated
        Internet
        Passings
        (b)                               12,467                   12,427            --%

        Estimated
        Voice
        Passings
        (b)                               11,898                   11,752              1%


     Penetration
     Statistics
     -----------

        Video
        Penetration
        of
        Estimated
        Video
        Passings
        (c)                                 33.9%                    35.0%      -1.1ppts

        Internet
        Penetration
        of
        Estimated
        Internet
        Passings
        (c)                                 37.2%                    34.4%      2.8 ppts

        Voice
        Penetration
        of
        Estimated
        Voice
        Passings
        (c)                                 20.3%                    18.6%      1.7 ppts


    Residential
    -----------

        Residential
        Customer
        Relationships
        (d)                                5,561                    5,389              3%

        Residential
        Non-
        Video
        Customers                          1,384                    1,103             25%

       %
        Non-
        Video                               24.9%                    20.5%      4.4 ppts


    Customers
    ---------

        Video
        (e)                                4,177                    4,286            (3)%

        Internet
        (f)                                4,383                    4,059              8%

        Voice
        (g)                                2,273                    2,073             10%
                                           -----                    -----

        Residential
        PSUs
        (h)                               10,833                   10,418              4%

        Residential
        PSU
        /
        Customer
        Relationships
        (d)(h)                              1.95                     1.93


     Quarterly
     Net
     Additions/
     (Losses)
     (i)
     ----------

        Video
        (e)                                   (2)                     (36)            94%

        Internet
        (f)                                   93                       59             58%

        Voice
        (g)                                   56                       34             65%
                                             ---                      ---

        Residential
        PSUs
        (h)                                  147                       57            158%


        Single
        Play
        Penetration
        (j)                                 37.6%                    37.3%      0.3 ppts

        Double
        Play
        Penetration
        (k)                                 29.8%                    32.0%     -2.2 ppts

        Triple
        Play
        Penetration
        (l)                                 32.6%                    30.7%      1.9 ppts

        Digital
        Penetration
        (m)                                 91.8%                    86.8%      5.0 ppts


        Revenue
        per
        Customer
        Relationship
        (d)(n)                           $107.97                  $105.76              2%


    Commercial
    ----------

        Commercial
        Customer
        Relationships
        (d)(o)                               375                      341             10%


    Customers
    ---------

        Video
        (e)(o)                               165                      177            (7)%

        Internet
        (f)                                  257                      210             22%

        Voice
        (g)                                  145                      116             25%
                                             ---                      ---

     Commercial
     PSUs
     (h)                                     567                      503             13%


     Quarterly
     Net
     Additions/
     (Losses)
     (i)
     ----------

        Video
        (e)(o)                                (1)                      (3)            67%

        Internet
        (f)                                   12                        8             50%

        Voice
        (g)                                    7                        7            --%
                                             ---                      ---

     Commercial
     PSUs
     (h)                                      18                       12             50%

Footnotes

In thousands, except per customer and penetration data. See footnotes to unaudited summary of operating statistics on page 6 of the addendum of this news release. The footnotes contain important disclosures regarding the definitions used for these operating statistics.

On July 1, Charter completed its acquisition of Cablevision's Bresnan Broadband Holdings, LLC and its subsidiaries (collectively, "Bresnan"). As a result of the acquisition, Charter added cable operating systems in Montana, Wyoming, Colorado and Utah that pass approximately 670,000 homes and serve approximately 375,000 residential and business customers. All customer data referred to herein, are pro forma for the Bresnan transaction, as if it had occurred on January 1, 2012.

During the fourth quarter of 2013, Charter saw year-over-year and sequential improvement in customer relationship and PSU growth. Residential customer relationships grew by 63,000, up from 24,000 in the fourth quarter of 2012. Commercial customer relationships grew by 16,000 in the fourth quarter of 2013, compared to a gain of 4,000 in the prior-year period. Residential PSUs increased by 147,000 versus 57,000 in the year-ago quarter, while commercial PSUs increased 18,000 during the fourth quarter versus a gain of 12,000 in the year-ago quarter.

For the full year 2013, Charter added 172,000 residential customers compared to growth of 120,000 residential customers in 2012. In 2013, Charter also saw net additions improvement across every residential PSU category compared to the prior year, adding 415,000 residential PSUs, versus a gain of 296,000 in 2012, for a year-over-year improvement of 40.2%.

At the end of 2013, Charter had completed approximately 15% of its all-digital initiative, with customers in these markets generally having access to over 170 HD channels. All-digital allows Charter to offer more advanced products and services, and provides residential customers with two-way digital set-tops, which offer higher picture quality, an interactive programming guide and video on demand on all TV outlets in the home. Charter expects to complete its all-digital roll out across its footprint by year end 2014, at which time nearly all of Charter's residential customers will have access to Charter Spectrum, an industry-leading suite of video, data, and voice services that will include over 200 HD channels, in addition to minimum offered Internet speeds of 60 Mbps, and a fully featured voice service at a highly competitive price.

Residential video customers declined by 2,000 in the fourth quarter of 2013, versus a loss of 36,000 in the year-ago period. The year-over-year improvement in video net adds was driven by a more competitive video product, including more HD channels, attractive packaging of advanced services, including Charter's new TV app, our transition to new selling methods, and improved service quality.

Charter added 93,000 residential Internet customers in the fourth quarter of 2013, compared to 59,000 a year ago. The Company continues to see strong demand for its Internet service as consumers value the speed and reliability of Charter's Internet offering. As of December 31, 2013, approximately 75% of Charter's residential Internet customers subscribed to tiers that provided speeds of 30 Mbps or more.

During the fourth quarter, the Company added 56,000 residential voice customers, versus a gain of 34,000 during the fourth quarter of 2012. For the full year 2013, Charter added 200,000 voice customers versus 134,000 in 2012, an improvement of 49.3%.

Fourth quarter residential revenue per customer relationship totaled $107.97, and grew by 2.1% on a pro forma basis, from $105.76 in the fourth quarter of 2012, driven by rate adjustments, higher product sell-in and promotional rate step-ups, partially offset by the migration of legacy customers to Charter's new pricing and packaging and continued single play Internet sell-in.




    Fourth Quarter Financial Results


                            CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA

                            (dollars in millions, except per share data)


                                         Three Months Ended December 31,
                                         -------------------------------

                                   2013           2012                                  2012

                                Actual      Pro Forma              % Change          Actual   % Change
                                ------      ---------              --------          ------   --------

    REVENUES:

        Video                    $1,046           $994                          5.2%    $927             12.8%

        Internet                    590            513                         15.0%     482             22.4%

        Voice                       154            199                       (22.6)%     186           (17.2)%

        Commercial                  228            191                         19.4%     177             28.8%

        Advertising
         sales                       83            101                       (17.8)%      96           (13.5)%

        Other                        47             47                          --%      45              4.4%


            Total
             Revenues             2,148          2,045                          5.0%   1,913             12.3%
                                  -----          -----                                 -----


    COSTS AND EXPENSES:

        Total
         operating
         costs and
         expenses
         (excluding
         depreciation
         and
         amortization)            1,384          1,300                          6.5%   1,215             13.9%
                                  -----          -----                                 -----


            Adjusted
             EBITDA                $764           $745                          2.6%    $698              9.5%
                                   ====           ====                                  ====


            Adjusted
             EBITDA
             margin                35.6%          36.4%                                 36.5%


        Capital
         Expenditures              $566           $469                                  $449

        % Total
         Revenues                  26.4%          22.9%                                 23.5%


    Net income
     (loss)                         $39           $(73)                                 $(40)

    Income
     (loss) per
     common
     share,
     basic                        $0.38         $(0.73)                               $(0.41)

    Income
     (loss) per
     common
     share,
     diluted                      $0.35         $(0.73)                               $(0.41)


    Net cash
     flows from
     operating
     activities                    $595                                                 $485

    Free cash
     flow                           $84                                                  $33

Revenue

Fourth quarter 2013 revenues rose to $2.1 billion, 5.0% higher on a pro forma basis than the year-ago quarter, due to growth in Internet, video and commercial revenues. On an actual basis, fourth quarter revenues rose 12.3% year-over-year.

Video revenues totaled $1.0 billion in the fourth quarter, an increase of 5.2% on a pro forma basis compared to the prior-year period. Video revenue growth was driven by higher expanded basic and digital penetration, annual and promotional rate adjustments, higher advanced services penetration, and revenue allocation from higher bundling, partially offset by a decrease in residential limited basic video customers and premium revenue. Video revenues grew by 12.8% year-over-year, on an actual basis.

Internet revenues grew 15.0% on a pro forma basis compared to the year-ago quarter to $590 million, driven by an increase of 324,000 Internet customers during the last year and by price adjustments. On an actual basis, Internet revenues grew 22.4% year-over-year.

Voice revenues totaled $154 million, down 22.6% on a pro forma basis versus the fourth quarter of 2012, due to value-based pricing and revenue allocation from higher bundling, partially offset by the addition of 200,000 voice customers in the last twelve months. Voice revenues declined 17.2% year-over-year, on an actual basis.

Commercial revenues rose to $228 million, an increase of 19.4% on a pro forma basis over the prior-year period, and was driven by higher sales to small and medium businesses and to carrier customers. On an actual basis, commercial revenues grew 28.8% year-over-year.

Fourth quarter advertising sales revenues of $83 million declined 17.8% on a pro forma basis compared to the year-ago quarter, driven by a decline in political advertising revenue, which saw strength in the fourth quarter of 2012, given local and national elections. Advertising sales declined 13.5% year-over-year, on an actual basis.

Operating Costs and Expenses

Fourth quarter total operating costs and expenses increased 6.5% on a pro forma basis compared to the year-ago period, reflecting increases in programming costs, marketing expenses, and other expenses.

Fourth quarter programming expense increased by $38 million on a pro forma basis, or 7.3%, as compared to the fourth quarter of 2012, reflecting contractual programming increases and higher expanded basic package penetration. Marketing costs increased by $21 million on a pro forma basis, or 19.8% as compared to the fourth quarter of 2012, reflecting increased sales activity and sales channel development. Other expenses grew by $28 million on a pro forma basis, or 15.4%, as compared to the fourth quarter of 2012, reflecting higher labor costs to support commercial revenue growth and higher collection costs. On an actual basis, total operating costs and expenses grew by 13.9% year-over-year.

Adjusted EBITDA

Fourth quarter Adjusted EBITDA of $764 million grew by 2.6% year-over-year on a pro forma basis, reflecting pro forma revenue growth and operating costs and expenses growth of 5.0% and 6.5%, respectively. On an actual basis, Adjusted EBITDA grew by 9.5% compared to the year-ago quarter, primarily driven by the acquisition of Bresnan. Adjusted EBITDA margin declined to 35.6% versus the prior year period on both a pro forma and actual basis, given higher programming and growth-related expenses and lower high margin political advertising.

Net Income

Net income totaled $39 million in the fourth quarter of 2013, compared to a net loss of $73 million on a pro forma basis and $40 million on an actual basis in the year-ago period. Net income increased year-over-year on a pro forma basis primarily due to higher income from operations and a $4 million tax benefit in the fourth quarter of 2013 versus a $75 million pro forma tax expense in the fourth quarter of 2012. The tax benefit was primarily related to a partnership restructuring in the fourth quarter of 2013, as well as refinancing transactions completed in 2013. Basic net income per common share was $0.38 in the fourth quarter of 2013 compared to net loss per common share of $0.73 on a pro forma basis, and $0.41 on an actual basis during the same period last year. The increase was primarily the result of the factors described above.

Capital Expenditures

Property, plant and equipment expenditures were $566 million in the fourth quarter of 2013, compared to $469 million on a pro forma basis and $449 million on an actual basis, during the fourth quarter of 2012. The increase was primarily driven by higher spending on customer premise equipment to support customer growth and Charter's all-digital initiative, and higher spending on scalable infrastructure and support capital.

Cash Flow

During the fourth quarter of 2013, net cash flows from operating activities totaled $595 million, compared to $485 million in the fourth quarter of 2012. The increase in net cash flows from operating activities was primarily related to an increase in Adjusted EBITDA and the timing of cash interest payments.

Free cash flow for the fourth quarter of 2013 was $84 million, compared to $33 million during the same period last year. The increase was primarily due to higher cash flow from operating activities versus the prior-year period, partially offset by higher capital expenditures.




    Year to Date Financial Results


                                       CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                            UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA

                                       (dollars in millions, except per share data)


                                                          Year Ended December 31, 2013
                                                          ----------------------------

                                         2013           2012                                         2013            2012

                                   Pro Forma      Pro Forma              % Change                 Actual          Actual   % Change
                                   ---------      ---------              --------                 ------          ------   --------

    REVENUES:

        Video                          $4,167         $3,902                          6.8%         $4,030          $3,639             10.7%

        Internet                        2,253          1,986                         13.4%          2,186           1,866             17.1%

        Voice                             668            884                       (24.4)%            644             828           (22.2)%

        Commercial                        850            711                         19.5%            822             658             24.9%

        Advertising
         sales                            297            349                       (14.9)%            291             334           (12.9)%

        Other                             184            185                        (0.5)%            182             179              1.7%


            Total
             Revenues                   8,419          8,017                          5.0%          8,155           7,504              8.7%
                                        -----          -----                                        -----           -----


    COSTS AND EXPENSES:

        Total
         operating
         costs and
         expenses
         (excluding
         depreciation
         and
         amortization)                  5,471          5,153                          6.2%          5,297           4,810             10.1%
                                        -----          -----                                        -----           -----


            Adjusted
             EBITDA                    $2,948         $2,864                          2.9%         $2,858          $2,694              6.1%
                                       ======         ======                                       ======          ======


            Adjusted
             EBITDA
             margin                      35.0%          35.7%                                        35.0%           35.9%


        Capital
         Expenditures                  $1,854         $1,816                                       $1,825          $1,745

        % Total
         Revenues                        22.0%          22.7%                                        22.4%           23.3%


    Net loss                            $(194)         $(392)                                       $(169)          $(304)

    Loss per
     common
     share,
     basic and
     diluted                           $(1.90)        $(3.93)                                      $(1.65)         $(3.05)


    Net cash flows from operating
     activities                                                                            $2,158          $1,876

    Free cash flow                                                                           $409            $144

Revenue

For the year ended December 31, 2013, pro forma revenues rose to $8.4 billion, 5.0% higher on a pro forma basis than in 2012, driven by continued growth in Internet, video and commercial revenues. On an actual basis, full year 2013 revenues rose 8.7% year-over-year.

Operating Costs and Expenses

Pro forma operating costs and expenses totaled $5.5 billion in 2013, an increase of 6.2% on a pro forma basis compared to the year-ago period, reflecting increases in programming costs, costs to service customers, marketing expenses, and other expenses. On an actual basis, total operating costs and expenses grew by 10.1% year-over-year.

Adjusted EBITDA

Pro forma Adjusted EBITDA was $2.9 billion for the year ended December 31, 2013, an increase of 2.9% compared to 2012, on a pro forma basis. On an actual basis, Adjusted EBITDA grew by 6.1% compared to the year-ago period, driven by higher organic revenue growth and the acquisition of Bresnan. Charter's Adjusted EBITDA margin declined year-over-year, on both a pro forma and actual basis, to 35.0%.

Net Loss

For the year ended December 31, 2013, pro forma net loss was $194 million, compared to $392 million on a pro forma basis, in 2012. Net loss decreased year-over-year primarily due to lower income tax expense, lower interest expense, and higher income from operations. The lower tax expense in 2013 was primarily related to a $4 million tax benefit in the fourth quarter related to a partnership restructuring, as well as refinancing transactions completed in 2013. On a pro forma basis, net loss per common share was $1.90 for the year ended December 31, 2013, compared to $3.93 on a pro forma basis in 2012. The decrease was the result of the factors described above, in addition to a 2.3% increase in weighted average shares outstanding in the last twelve months, driven primarily by the exercise of 4.5 million warrants in 2013.

On an actual basis, net loss for the year ended December 31, 2013, totaled $169 million, compared to $304 million in 2012. On an actual basis, net loss per common share was $1.65 for the year ended December 31, 2013, compared to $3.05, on an actual basis in 2012.

Capital Expenditures

On an actual basis, capital expenditures for the year ended December 31, 2013, totaled $1.8 billion, consistent with Charter's previously stated estimate, and compared to $1.7 billion in 2012. The year-over-year increase related to higher residential and commercial customer growth, as well as higher set-top box placement in existing homes, and expenditures for back-office support and for real estate related to our organizational realignment, and the acquisition of Bresnan.

Pro forma property, plant and equipment expenditures for the full year 2013, totaled $1.9 billion, compared to $1.8 billion in 2012.

In 2014, capital expenditures are expected to be approximately $2.2 billion, driven by Charter's all-digital transition including the deployment of additional set-top boxes in new and existing customer homes, growth in Charter's commercial business, and further spend related to efforts to insource service operations as well as product development. The actual amount of our capital expenditures will depend on a number of factors including the growth rates of both our residential and commercial businesses, and the pace at which we progress to all-digital transmission, which we anticipate will comprise approximately $400 million of 2014 capital expenditures.

Cash Flow

In 2013, net cash flows from operating activities totaled $2.2 billion compared to $1.9 billion in 2012. The increase in net cash flows from operating activities was primarily related to an increase in Adjusted EBITDA and the timing of cash interest payments.

Free cash flow for the year ended December 31, 2013 was $409 million, compared to $144 million during the same period last year. The increase was primarily due to higher cash flow from operating activities versus the prior-year, partially offset by higher capital expenditures.

Liquidity

Total principal amount of debt was approximately $14.2 billion as of December 31, 2013. At the end of the quarter, Charter held $21 million of cash and cash equivalents, and its credit facilities provided approximately $1.1 billion of additional liquidity.

Conference Call

Charter will host a conference call on Friday, February 21, 2014 at 10:00 a.m. Eastern Time (ET) related to the contents of this release.

The conference call will be webcast live via the Company's website at charter.com. The webcast can be accessed by selecting "Investor & News Center" from the lower menu on the home page. The call will be archived in the "Investor & News Center" in the "Financial Information" section on the left beginning two hours after completion of the call. Participants should go to the webcast link no later than 10 minutes prior to the start time to register.

Those participating via telephone should dial 866-919-0894 no later than 10 minutes prior to the call. International participants should dial 706-679-9379. The conference ID code for the call is 30047929.

A replay of the call will be available at 855-859-2056 or 404-537-3406 beginning two hours after the completion of the call through the end of business on March 21, 2014. The conference ID code for the replay is 30047929.

Additional Information Available on Website

The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company's Form 10-K for the year ended December 31, 2013 available on the "Investor & News Center" of our website at charter.com in the "Financial Information" section. A slide presentation to accompany the conference call and a trending schedule containing historical customer and financial data can also be found in the "Financial Information" section.

Use of Non-GAAP Financial Metrics

The Company uses certain measures that are not defined by Generally Accepted Accounting Principles ("GAAP") to evaluate various aspects of its business. Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income (loss) or cash flows from operating activities reported in accordance with GAAP. These terms, as defined by Charter, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is reconciled to net income (loss) and free cash flow is reconciled to net cash flows from operating activities in the addendum of this news release.

Adjusted EBITDA is defined as net income (loss) plus net interest expense, income taxes, depreciation and amortization, stock compensation expense, (gain) loss on extinguishment of debt, (gain) loss on derivative instruments, net and other operating expenses, such as special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company's businesses as well as other non-cash or special items, and is unaffected by the Company's capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing. These costs are evaluated through other financial measures.

Free cash flow is defined as net cash flows from operating activities, less purchases of property, plant and equipment and changes in accrued expenses related to capital expenditures.

Management and the Company's board of directors use adjusted EBITDA and free cash flow to assess Charter's performance and its ability to service its debt, fund operations and make additional investments with internally generated funds. In addition, adjusted EBITDA generally correlates to the leverage ratio calculation under the Company's credit facilities or outstanding notes to determine compliance with the covenants contained in the credit facilities and notes (all such documents have been previously filed with the United States Securities and Exchange Commission). For the purpose of calculating compliance with leverage covenants, we use adjusted EBITDA, as presented, excluding certain expenses paid by our operating subsidiaries to other Charter entities. Our debt covenants refer to these expenses as management fees which fees were in the amount of $54 million and $49 million for the three months ended December 31, 2013 and 2012, respectively, and $201 million and $191 million for the year ended December 31, 2013 and 2012, respectively.

In addition to the actual results for the three months and year ended December 31, 2013 and 2012, we have provided pro forma results in this release for the year ended December 31, 2013 and the three months and year ended December 31, 2012. We believe these pro forma results facilitate meaningful analysis of the results of operations. Pro forma results in this release reflect certain acquisitions of cable systems in 2013 as if they occurred as of January 1, 2012. Pro forma statements of operations for the year ended December 31, 2013 and the three months and year ended December 31, 2012 are provided in the addendum of this news release.

About Charter

Charter (NASDAQ: CHTR) is a leading broadband communications company and the fourth-largest cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter TV® video entertainment programming, Charter Internet® access, and Charter Phone®. Charter Business® similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, business telephone, video and music entertainment services, and wireless backhaul. Charter's advertising sales and production services are sold under the Charter Media® brand. More information about Charter can be found at charter.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), regarding, among other things, our plans, strategies and prospects, both business and financial. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under "Risk Factors" from time to time in our filings with the Securities and Exchange Commission ("SEC"). Many of the forward-looking statements contained in this release may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," "aim," "on track," "target," "opportunity," "tentative," "positioning," "designed," "create" and "potential," among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this release are set forth in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:

    --  our ability to sustain and grow revenues and cash flow from operations
        by offering video, Internet, voice, advertising and other services to
        residential and commercial customers, to adequately meet the customer
        experience demands in our markets and to maintain and grow our customer
        base, particularly in the face of increasingly aggressive competition,
        the need for innovation and the related capital expenditures and the
        difficult economic conditions in the United States;
    --  the impact of competition from other market participants, including but
        not limited to incumbent telephone companies, direct broadcast satellite
        operators, wireless broadband and telephone providers, digital
        subscriber line ("DSL") providers, and video provided over the Internet;
    --  general business conditions, economic uncertainty or downturn, high
        unemployment levels and the level of activity in the housing sector;
    --  our ability to obtain programming at reasonable prices or to raise
        prices to offset, in whole or in part, the effects of higher programming
        costs (including retransmission consents);
    --  the development and deployment of new products and technologies,
        including in connection with our plan to make our systems all-digital in
        2014;
    --  the effects of governmental regulation on our business or potential
        business combination transaction;
    --  the availability and access, in general, of funds to meet our debt
        obligations prior to or when they become due and to fund our operations
        and necessary capital expenditures, either through (i) cash on hand,
        (ii) free cash flow, or (iii) access to the capital or credit markets;
    --  our ability to comply with all covenants in our indentures and credit
        facilities any violation of which, if not cured in a timely manner,
        could trigger a default of our other obligations under cross-default
        provisions; and
    --  the ultimate outcome of any possible transaction between Charter and
        Comcast Corporation ("Comcast") and/or Time Warner Cable Inc. ("TWC"),
        including the possibility that Charter will not pursue any transaction;
        and if a transaction were to occur, the ultimate outcome and results of
        integrating the operations, the ultimate outcome of Charter's pricing
        and packaging and operating strategy applied to the acquired systems and
        the ultimate ability to realize synergies.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this release.




                                           CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA

                                            (dollars in millions, except per share data)


                                       Three Months Ended December 31,                                  Year Ended December 31,
                                       -------------------------------                                -----------------------

                                               2013             2012                                          2013            2012

                                          Actual           Actual                % Change                Actual           Actual              % Change
                                          ------           ------                --------                ------           ------              --------

    REVENUES:

        Video                                $1,046             $927                         12.8%          $4,030          $3,639                       10.7%

        Internet                                590              482                         22.4%           2,186           1,866                       17.1%

        Voice                                   154              186                       (17.2)%             644             828                     (22.2)%

        Commercial                              228              177                         28.8%             822             658                       24.9%

        Advertising
         sales                                   83               96                       (13.5)%             291             334                     (12.9)%

        Other                                    47               45                          4.4%             182             179                        1.7%
                                                ---              ---                                           ---             ---

             Total Revenues                   2,148            1,913                         12.3%           8,155           7,504                        8.7%
                                              -----            -----                                         -----           -----


    COSTS AND EXPENSES:

        Programming                             561              491                         14.3%           2,146           1,965                        9.2%

        Franchises,
         regulatory and
         connectivity                           103               96                          7.3%             399             383                        4.2%

        Costs to
         service
         customers                              383              357                          7.3%           1,514           1,363                       11.1%

        Marketing                               127               98                         29.6%             479             422                       13.5%

        Other                                   210              173                         21.4%             759             677                       12.1%
                                                ---              ---                                           ---             ---

            Total operating
             costs and
             expenses
             (excluding
             depreciation
             and
             amortization)                    1,384            1,215                         13.9%           5,297           4,810                       10.1%
                                              -----            -----                                         -----           -----


             Adjusted EBITDA                    764              698                          9.5%           2,858           2,694                        6.1%
                                                ---              ---                                         -----           -----


            Adjusted EBITDA
             margin                            35.6%            36.5%                                         35.0%           35.9%
                                               ----             ----                                          ----            ----


        Depreciation
         and
         amortization                           500              466                                         1,854           1,713

        Stock
         compensation
         expense                                 11               13                                            48              50

        Other operating
         expenses, net                            7               13                                            31              15
                                                ---              ---                                           ---             ---


            Income from
             operations                         246              206                                           925             916
                                                ---              ---                                           ---             ---


    OTHER INCOME (EXPENSES):

        Interest
         expense, net                          (211)            (216)                                         (846)           (907)

        Gain (loss) on
         extinguishment
         of debt                                  -               19                                          (123)            (55)

        Gain on
         derivative
         instruments,
         net                                      2                -                                            11               -

        Other expense,
         net                                     (2)               -                                           (16)             (1)
                                                ---              ---                                           ---             ---

                                               (211)            (197)                                         (974)           (963)
                                               ----             ----                                          ----            ----


    Income (loss)
     before income
     taxes                                       35                9                                           (49)            (47)


    Income tax
     benefit
     (expense)                                    4              (49)                                         (120)           (257)
                                                ---              ---                                          ----            ----


    Net income
     (loss)                                     $39             $(40)                                        $(169)          $(304)
                                                ===             ====                                         =====           =====


    EARNINGS (LOSS) PER COMMON SHARE:

        Basic                                 $0.38           $(0.41)                                       $(1.65)         $(3.05)
                                              =====           ======                                        ======          ======

        Diluted                               $0.35           $(0.41)                                       $(1.65)         $(3.05)
                                              =====           ======                                        ======          ======


    Weighted
     average common
     shares
     outstanding,
     basic                              103,836,535      100,003,344                                   101,934,630      99,657,989
                                        ===========      ===========                                   ===========      ==========

    Weighted
     average common
     shares
     outstanding,
     diluted                            111,415,982      100,003,344                                   101,934,630      99,657,989
                                        ===========      ===========                                   ===========      ==========


    Adjusted EBITDA is a non-GAAP term. See page 7 of this addendum for the reconciliation of adjusted EBITDA to net loss as defined by GAAP.

                                          CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING DATA

                                          (dollars in millions, except per share data)


                                       Three Months Ended December 31,                               Year Ended December 31,
                                       -------------------------------                               -----------------------

                                              2013              2012                                         2013              2012

                                          Actual       Pro Forma (a)             %Change            Pro Forma (a)     Pro Forma (a)             %Change
                                          ------       ------------              -------            ------------      ------------              -------

    REVENUES:

        Video                               $1,046              $994                        5.2%           $4,167            $3,902                        6.8%

        Internet                               590               513                       15.0%            2,253             1,986                       13.4%

        Voice                                  154               199                     (22.6)%              668               884                     (24.4)%

        Commercial                             228               191                       19.4%              850               711                       19.5%

        Advertising
         sales                                  83               101                     (17.8)%              297               349                     (14.9)%

        Other                                   47                47                        --%              184               185                      (0.5)%
                                               ---               ---                                          ---               ---

            Total Revenues                   2,148             2,045                        5.0%            8,419             8,017                        5.0%
                                             -----             -----                                        -----             -----


    COSTS AND EXPENSES:

        Programming                            561               523                        7.3%            2,214             2,091                        5.9%

        Franchises,
         regulatory and
         connectivity                          103               105                      (1.9)%              417               419                      (0.5)%

        Costs to
         service
         customers                             383               384                      (0.3)%            1,566             1,472                        6.4%

        Marketing                              127               106                       19.8%              497               457                        8.8%

        Other                                  210               182                       15.4%              777               714                        8.8%
                                               ---               ---                                          ---               ---

            Total operating
             costs and
             expenses
             (excluding
             depreciation
             and
             amortization)                   1,384             1,300                        6.5%            5,471             5,153                        6.2%
                                             -----             -----                                        -----             -----


            Adjusted EBITDA                    764               745                        2.6%            2,948             2,864                        2.9%
                                               ---               ---                                        -----             -----


            Adjusted EBITDA
             margin                           35.6%             36.4%                                        35.0%             35.7%
                                              ----              ----                                         ----              ----


        Depreciation
         and
         amortization                          500               507                                        1,908             1,877

        Stock
         compensation
         expense                                11                13                                           48                50

        Other operating
         expenses, net                           7                13                                           31                15
                                               ---               ---                                          ---               ---


        Income from
         operations                            246               212                                          961               922
                                               ---               ---                                          ---               ---


    OTHER INCOME (EXPENSES):

        Interest
         expense, net                         (211)             (229)                                        (873)             (960)

        Gain (loss) on
         extinguishment
         of debt                                 -                19                                         (123)              (55)

        Gain on
         derivative
         instruments,
         net                                     2                 -                                           11                 -

        Other expense,
         net                                    (2)                -                                          (16)               (1)
                                               ---               ---                                          ---               ---

                                              (211)             (210)                                      (1,001)           (1,016)
                                              ----              ----                                       ------            ------


    Income (loss)
     before income
     taxes                                      35                 2                                          (40)              (94)


    Income tax
     benefit
     (expense)                                   4               (75)                                        (154)             (298)
                                               ---               ---                                         ----              ----


    Net income
     (loss)                                    $39              $(73)                                       $(194)            $(392)
                                               ===              ====                                        =====             =====


    EARNINGS (LOSS) PER COMMON SHARE:

        Basic                                $0.38            $(0.73)                                      $(1.90)           $(3.93)
                                             =====            ======                                       ======            ======

        Diluted                              $0.35            $(0.73)                                      $(1.90)           $(3.93)
                                             =====            ======                                       ======            ======


    Weighted
     average common
     shares
     outstanding,
     basic                             103,836,535       100,003,344                                  101,934,630        99,657,989
                                       ===========       ===========                                  ===========        ==========

    Weighted
     average common
     shares
     outstanding,
     diluted                           111,415,982       100,003,344                                  101,934,630        99,657,989
                                       ===========       ===========                                  ===========        ==========


    Adjusted EBITDA is a non-GAAP term. See page 7 of this addendum for the reconciliation of adjusted EBITDA to net loss as defined by GAAP.


    (a) Pro forma results reflect certain acquisitions of cable systems in 2013 as if they occurred as of January 1, 2012.


    December 31, 2013. Pro forma revenues, operating expenses and net loss increased by $264 million, $174 million and $25 million, respectively, for the year ended December 31, 2013.


    December 31, 2012. Pro forma revenues, operating expenses and net loss increased by $132 million, $85 million and $33 million, respectively, for the three months ended December
     31, 2012. Pro forma revenues, operating expenses and net loss increased by $513 million, $343 million and $88 million, respectively, for the year ended December 31, 2012

        CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                 CONSOLIDATED BALANCE SHEETS

                    (dollars in millions)


                                                 December 31,
                                                 ------------

                                                2013          2012
                                                ----          ----

                    ASSETS

    CURRENT ASSETS:

    Cash and cash equivalents                    $21            $7

    Restricted cash and cash equivalents           -            27

    Accounts receivable, net                     234           234

    Prepaid expenses and other current
     assets                                       67            62
                                                 ---           ---

    Total current assets                         322           330
                                                 ---           ---


    INVESTMENT IN CABLE PROPERTIES:

    Property, plant and equipment, net         7,981         7,206

    Franchises                                 6,009         5,287

    Customer relationships, net                1,389         1,424

    Goodwill                                   1,177           953
                                               -----           ---

    Total investment in cable properties,
     net                                      16,556        14,870
                                              ------        ------


    OTHER NONCURRENT ASSETS                      417           396
                                                 ---           ---


    Total assets                             $17,295       $15,596
                                             =======       =======


    LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:

    Accounts payable and accrued
     liabilities                              $1,467        $1,224


    Total current liabilities                  1,467         1,224
                                               -----         -----


    LONG-TERM DEBT                            14,181        12,808
                                              ------        ------

    DEFERRED INCOME TAXES                      1,431         1,321
                                               -----         -----

    OTHER LONG-TERM LIABILITIES                   65            94
                                                 ---           ---


    SHAREHOLDERS' EQUITY                         151           149
                                                 ---           ---


    Total liabilities and shareholders'
     equity                                  $17,295       $15,596
                                             =======       =======



              CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

             UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                          (dollars in millions)


                                        Three Months              Year Ended
                                           Ended            December 31,
                                       December 31,
                                      -------------          -------------

                                      2013        2012        2013        2012
                                      ----        ----        ----        ----

    CASH FLOWS FROM OPERATING
     ACTIVITIES:

    Net income
     (loss)                            $39        $(40)      $(169)      $(304)

    Adjustments to reconcile
     net income (loss) to net
     cash flows from operating
     activities:

    Depreciation
     and
     amortization                      500         466       1,854       1,713

    Stock
     compensation
     expense                            11          13          48          50

    Noncash
     interest
     expense                            10          12          43          45

    (Gain) loss
     on
     extinguishment
     of debt                             -         (19)        123          55

    Gain on
     derivative
     instruments,
     net                                (2)          -         (11)          -

    Deferred
     income
     taxes                               -          47         112         250

    Other, net                           2           7          34          (5)

    Changes in operating assets
     and liabilities, net of
     effects from acquisitions:

    Accounts
     receivable                          -          16          10          34

    Prepaid
     expenses
     and other
     assets                             13           4           -          (8)

    Accounts
     payable,
     accrued
     liabilities
     and other                          22         (21)        114          46
                                       ---         ---         ---         ---

    Net cash
     flows from
     operating
     activities                        595         485       2,158       1,876
                                       ---         ---       -----       -----


    CASH FLOWS FROM INVESTING
     ACTIVITIES:

    Purchases of
     property,
     plant and
     equipment                        (566)       (449)    (1,825)     (1,745)

    Change in
     accrued
     expenses
     related to
     capital
     expenditures                       55          (3)         76          13

    Sales
     (purchases)
     of cable
     systems,
     net                                (3)          -        (676)         19

    Other, net                          (3)         (6)        (18)        (24)
                                       ---         ---         ---         ---

    Net cash
     flows from
     investing
     activities                       (517)       (458)    (2,443)     (1,737)
                                      ----        ----      ------      ------


    CASH FLOWS FROM FINANCING
     ACTIVITIES:

    Borrowings
     of long-
     term debt                         213       1,477       6,782       5,830

    Repayments
     of long-
     term debt                        (343)    (2,347)     (6,520)     (5,901)

    Payments for
     debt
     issuance
     costs                               -         (12)        (50)        (53)

    Purchase of
     treasury
     stock                              (4)         (7)        (15)        (11)

    Proceeds
     from
     exercise of
     options and
     warrants                           37           2         104          15

    Other, net                          (1)         (1)         (2)        (14)
                                       ---         ---         ---         ---

    Net cash
     flows from
     financing
     activities                        (98)       (888)        299        (134)
                                       ---        ----         ---        ----


    NET INCREASE
     (DECREASE)
     IN CASH AND
     CASH
     EQUIVALENTS                       (20)       (861)         14           5

    CASH AND
     CASH
     EQUIVALENTS,
     beginning
     of period                          41         868           7           2
                                       ---         ---         ---         ---

    CASH AND
     CASH
     EQUIVALENTS,
     end of
     period                            $21          $7         $21          $7
                                       ===         ===         ===         ===


    CASH PAID
     FOR
     INTEREST                         $179        $257        $763        $904
                                      ====        ====        ====        ====



                                      CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                                        UNAUDITED SUMMARY OF OPERATING STATISTICS

                                 (in thousands, except per customer and penetration data)


                                       Approximate as of
                                      -----------------

                                          Actual                       Pro Forma
                                          ------                       ---------

                                       December 31,                  September 30,          December 31,
                                         2013 (a)                      2013 (a)               2012 (a)
                                          -------                       -------                -------

    Footprint
    ---------

        Estimated
         Video
         Passings
         (b)                                       12,799                         12,794                12,741

        Estimated
         Internet
         Passings
         (b)                                       12,467                         12,475                12,427

        Estimated
         Voice
         Passings
         (b)                                       11,898                         11,815                11,752


    Penetration Statistics
    ----------------------

        Video
         Penetration
         of
         Estimated
         Video
         Passings
         (c)                                         33.9%                          34.0%                 35.0%

        Internet
         Penetration
         of
         Estimated
         Internet
         Passings
         (c)                                         37.2%                          36.4%                 34.4%

        Voice
         Penetration
         of
         Estimated
         Voice
         Passings
         (c)                                         20.3%                          19.9%                 18.6%


    Residential
    -----------

        Residential
         Customer
         Relationships
         (d)                                        5,561                          5,498                 5,389

        Residential
         Non-Video
         Customers                                  1,384                          1,319                 1,103

        % Non-Video                                  24.9%                          24.0%                 20.5%


    Customers
    ---------

       Video (e)                                    4,177                          4,179                 4,286

       Internet (f)                                 4,383                          4,290                 4,059

       Voice (g)                                    2,273                          2,217                 2,073

       Residential
        PSUs (h)                                   10,833                         10,686                10,418
                                                   ======                         ======                ======

       Residential
        PSU /
        Customer
        Relationships
        (d)(h)                                       1.95                           1.94                  1.93


    Quarterly Net Additions/(Losses) (i)
    ---------------------------

       Video (e)                                       (2)                           (27)                  (36)

       Internet (f)                                    93                             86                    59

       Voice (g)                                       56                             41                    34


       Residential
        PSUs (h)                                      147                            100                    57
                                                      ===                            ===                   ===


       Single Play
        Penetration
        (j)                                          37.6%                          37.7%                 37.3%

       Double Play
        Penetration
        (k)                                          29.8%                          30.2%                 32.0%

       Triple Play
        Penetration
        (l)                                          32.6%                          32.2%                 30.7%

       Digital
        Penetration
        (m)                                          91.8%                          91.2%                 86.8%

       Revenue per
        Customer
        Relationship
        (d)(n)                                    $107.97                        $108.52               $105.76


    Commercial
    ----------

       Commercial
        Customer
        Relationships
        (d)(o)                                        375                            359                   341


    Customers
    ---------

       Video (e)(o)                                   165                            166                   177

       Internet (f)                                   257                            245                   210

       Voice (g)                                      145                            138                   116

       Commercial
        PSUs (h)                                      567                            549                   503
                                                      ===                            ===                   ===


    Quarterly Net Additions/(Losses) (i)
    ---------------------------

       Video (e)(o)                                    (1)                             2                    (3)

       Internet (f)                                    12                             12                     8

       Voice (g)                                        7                              7                     7

       Commercial
        PSUs (h)                                       18                             21                    12
                                                      ===                            ===                   ===


    Pro forma operating statistics reflect certain acquisitions of cable systems in 2013 as
     if such transactions had occurred as of the last day of the respective period for all
     periods presented.


    At December 31, 2012, actual residential video, Internet and voice customers were
     3,989,000, 3,785,000 and 1,914,000, respectively; actual commercial video, Internet
     and voice customers were 169,000, 193,000 and 105,000, respectively.


    See footnotes to unaudited summary of operating statistics on page 6 of this addendum.

    (a)      We calculate the aging of customer
             accounts based on the monthly billing
             cycle for each account.  On that
             basis, at December 31, 2013, September
             30, 2013 and December 31, 2012,
             customers include approximately
             11,300, 9,700 and 18,400 customers,
             respectively, whose accounts were over
             60 days past due in payment,
             approximately 800, 1,000 and 2,600
             customers, respectively, whose
             accounts were over 90 days past due in
             payment and approximately 900, 900 and
             1,700 customers, respectively, whose
             accounts were over 120 days past due
             in payment.


    (b)      "Passings" represent our estimate of
             the number of units, such as single
             family homes, apartment and
             condominium units and commercial
             establishments passed by our cable
             distribution network in the areas
             where we offer the service indicated.
             These estimates are updated for all
             periods presented based upon the
             information available at that time.


    (c)      "Penetration" represents residential
             and commercial customers as a
             percentage of estimated passings for
             the service indicated.


    (d)      "Customer Relationships" include the
             number of customers that receive one
             or more levels of service,
             encompassing video, Internet and voice
             services, without regard to which
             service(s) such customers receive.
             This statistic is computed in
             accordance with the guidelines of the
             National Cable & Telecommunications
             Association ("NCTA").  Commercial
             customer relationships include video
             customers in commercial structures,
             which are calculated on an EBU basis
             (see footnote (o)) and non-video
             commercial customer relationships.


    (e)      "Video Customers" represent those
             customers who subscribe to our video
             services.


    (f)      "Internet Customers" represent those
             customers who subscribe to our
             Internet services.


    (g)      "Voice Customers" represent those
             customers who subscribe to our voice
             services.


    (h)      "Primary Service Units" or "PSUs"
             represent the total of video, Internet
             and voice customers.


    (i)      "Quarterly Net Additions/(Losses)"
             represent the net gain or loss in the
             respective quarter for the service
             indicated.


    (j)      "Single Play Penetration" represents
             residential customers receiving only
             one Charter service offering,
             including video, Internet or voice, as
             a % of residential customer
             relationships.


    (k)      "Double Play Penetration" represents
             residential customers receiving only
             two Charter service offering,
             including video, Internet and/or
             voice, as a % of residential customer
             relationships.


    (l)      "Triple Play Penetration" represents
             residential customers receiving all
             three Charter service offerings,
             including video, Internet and voice,
             as a % of residential customer
             relationships.


    (m)      "Digital Penetration" represents the
             number of residential digital video
             customers as a percentage of
             residential video customers.


    (n)      "Revenue per Customer Relationship" is
             calculated as total residential video,
             Internet and voice quarterly revenue
             divided by three divided by average
             residential customer relationships
             during the respective quarter.


    (o)      Included within commercial video
             customers are those in commercial
             structures, which are calculated on an
             equivalent bulk unit ("EBU") basis.
             We calculate EBUs by dividing the bulk
             price charged to accounts in an area
             by the published rate charged to non-
             bulk residential customers in that
             market for the comparable tier of
             service. This EBU method of estimating
             basic video customers is consistent
             with the methodology used in
             determining costs paid to programmers
             and is consistent with the methodology
             used by other multiple system
             operators.  As we increase our
             published video rates to residential
             customers without a corresponding
             increase in the prices charged to
             commercial service customers, our EBU
             count will decline even if there is no
             real loss in commercial service
             customers.  For example, commercial
             video customers decreased by 10,000
             during the year ended December 31,
             2013 due to published video rate
             increases.



                   CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

    UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES (dollars in millions)


                                          Three Months
                                         Ended December
                                                 31,                  Year Ended December 31,
                                          ---------------            -----------------------

                                      2013              2012              2013              2012

                                    Actual         Actual            Actual            Actual
                                    ------         ------            ------            ------


    Net income
     (loss)                            $39              $(40)            $(169)            $(304)

    Plus:  Interest
     expense, net                      211               216               846               907

    Income tax
     (benefit)
     expense                            (4)               49               120               257

    Depreciation
     and
     amortization                      500               466             1,854             1,713

    Stock
     compensation
     expense                            11                13                48                50

    (Gain) loss on
     extinguishment
     of debt                             -               (19)              123                55

    Gain on
     derivative
     instruments,
     net                                (2)                -               (11)                -

    Other, net                           9                13                47                16
                                       ---               ---               ---               ---


    Adjusted EBITDA
     (b)                               764               698             2,858             2,694

    Less:
     Purchases of
     property,
     plant and
     equipment                        (566)             (449)           (1,825)           (1,745)
                                      ----              ----            ------            ------


    Adjusted EBITDA
     less capital
     expenditures                     $198              $249            $1,033              $949
                                      ====              ====            ======              ====


    Net cash flows
     from operating
     activities                       $595              $485            $2,158            $1,876

    Less:
     Purchases of
     property,
     plant and
     equipment                        (566)             (449)           (1,825)           (1,745)

    Change in
     accrued
     expenses
     related to
     capital
     expenditures                       55                (3)               76                13
                                       ---               ---               ---               ---


    Free cash flow                     $84               $33              $409              $144
                                       ===               ===              ====              ====


                                          Three Months
                                         Ended December
                                                 31,                 Year Ended December 31,
                                          ---------------            -----------------------

                                      2013              2012              2013              2012

                                    Actual     Pro Forma (a)     Pro Forma (a)     Pro Forma (a)
                                    ------     ------------      ------------      ------------


    Net income
     (loss)                            $39              $(73)            $(194)            $(392)

    Plus:  Interest
     expense, net                      211               229               873               960

    Income tax
     (benefit)
     expense                            (4)               75               154               298

    Depreciation
     and
     amortization                      500               507             1,908             1,877

    Stock
     compensation
     expense                            11                13                48                50

    (Gain) loss on
     extinguishment
     of debt                             -               (19)              123                55

    Gain on
     derivative
     instruments,
     net                                (2)                -               (11)                -

    Other, net                           9                13                47                16
                                       ---               ---               ---               ---


    Adjusted EBITDA
     (b)                               764               745             2,948             2,864

    Less:
     Purchases of
     property,
     plant and
     equipment                        (566)             (469)           (1,854)           (1,816)
                                      ----              ----            ------            ------


    Adjusted EBITDA
     less capital
     expenditures                     $198              $276            $1,094            $1,048
                                      ====              ====            ======            ======


    (a) Pro forma results reflect certain acquisitions of cable systems in 2013 as if they occurred as of January 1, 2012.


    (b) See page 1 and 2 of this addendum for detail of the components included within adjusted EBITDA. Political advertising
     contributed to Adjusted EBITDA $1 million and $17 million for the three months ended December 31, 2013 and 2012,
     respectively.


    The above schedules are presented in order to reconcile adjusted EBITDA and free cash flows, both non-GAAP measures, to the
     most directly comparable GAAP measures in accordance with Section 401(b) of the Sarbanes-Oxley Act.

                    CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES

                                 CAPITAL EXPENDITURES

                                (dollars in millions)


                                             Three Months
                                            Ended December
                                                    31,                Year Ended December 31,
                                             ---------------          -----------------------

                                         2013              2012            2013              2012

                                       Actual         Actual          Actual            Actual
                                       ------         ------          ------            ------


    Customer
     premise
     equipment
     (a)                                 $223              $164            $841              $795

    Scalable
     infrastructure
     (b)                                  142                86             352               387

    Line
     extensions
     (c)                                   57                61             219               192

    Upgrade/
     Rebuild
     (d)                                   46                74             183               212

    Support
     capital
     (e)                                   98                64             230               159
                                          ---               ---             ---               ---


       Total
        capital
        expenditures
        (f)                              $566              $449          $1,825            $1,745
                                         ====              ====          ======            ======


                                             Three Months
                                            Ended December
                                                    31,               Year Ended December 31,
                                             ---------------          -----------------------

                                         2013              2012            2013              2012

                                       Actual     Pro Forma (g)   Pro Forma (g)     Pro Forma (g)
                                       ------     ------------    ------------      ------------


    Customer
     premise
     equipment
     (a)                                 $223              $169            $854              $826

    Scalable
     infrastructure
     (b)                                  142                92             362               407

    Line
     extensions
     (c)                                   57                62             221               196

    Upgrade/
     Rebuild
     (d)                                   46                78             185               220

    Support
     capital
     (e)                                   98                68             232               167
                                          ---               ---             ---               ---


       Total
        capital
        expenditures                     $566              $469          $1,854            $1,816
                                         ====              ====          ======            ======

    (a)       Customer premise equipment
              includes costs incurred at the
              customer residence to secure
              new customers and revenue
              generating units, including
              customer installation costs and
              customer premise equipment
              (e.g., set-top boxes and cable
              modems).


    (b)       Scalable infrastructure includes
              costs, not related to customer
              premise equipment, to secure
              growth of new customers and
              revenue generating units, or
              provide service enhancements
              (e.g., headend equipment).


    (c)       Line extensions include network
              costs associated with entering
              new service areas (e.g., fiber/
              coaxial cable, amplifiers,
              electronic equipment, make-
              ready and design engineering).


    (d)       Upgrade/rebuild includes costs
              to modify or replace existing
              fiber/coaxial cable networks,
              including betterments.


    (e)       Support capital includes costs
              associated with the replacement
              or enhancement of non-network
              assets due to technological and
              physical obsolescence (e.g.,
              non-network equipment, land,
              buildings and vehicles).


    (f)       Total capital expenditures
              include $98 million and $88
              million for the three months
              ended December 31, 2013 and
              2012, respectively, and $319
              million and $269 million for
              the year months ended December
              31, 2013 and 2012,
              respectively, of capital
              expenditures related to
              commercial services.


    (g)       Pro forma results reflect
              certain acquisitions of cable
              systems in 2013 as if they
              occurred as of January 1, 2012.

SOURCE Charter Communications, Inc.