InvestorsAugust 2, 2000
Charter Communications, Inc. Announces Second Quarter 2000 Financial Results; Increases in Revenue, Operating Cash Flow, and Customers Continue
Share Article:
ST. LOUIS--(BUSINESS WIRE)--Aug. 2, 2000--Charter Communications, Inc. (Nasdaq:CHTR) today reported increases in revenue, operating cash flow, and customers for the three months ended June 30, 2000.
Revenue grew 9.8% to $794.8 million and operating cash flow increased 16.4% to $373.2 million for the second quarter of 2000 compared to the pro forma results for the second quarter of 1999. For those cable systems owned or managed by Charter during the second quarter of both 2000 and 1999, revenue and operating cash flow grew 12.8% and 15.6%, respectively, and customer growth was 2.3% over the year-ago period. As of June 30, 2000, Charter served 6,214,100 basic cable customers, an increase of 1.7% compared to the pro forma customer level of 6,110,100 as of June 30, 1999.
"I'm pleased to report continued outstanding financial performance and customer growth. Our results clearly indicate that we continue to outpace the industry with effective sales, marketing, customer care and operating strategies. During the second quarter, we added over 40,000 basic customers through internal growth, more than doubling our first quarter growth. And with the addition of some 150,000 Charter Digital Cable(TM) customers during the quarter, 375,000 customers are now enjoying the benefits of this exciting technology, exceeding our original estimates and those of Wall Street analysts," said Jerry Kent, President and CEO of Charter. "We also continue to see outstanding growth in the deployment of Charter Pipeline(TM), our high-speed Internet access service, and now serve 149,300 data customers, an increase of more than 20% from the previous quarter."
To ensure continued growth in the deployment of advanced services, Mr. Kent said Charter has accelerated its upgrade and rebuild program throughout the company. Under the accelerated program, 70% of Charter's cable systems will be upgraded by the end of the year, with completion by the end of 2002. "When fully upgraded, Charter will have one of the most robust broadband networks in the nation," he said. "This is necessary to support our planned rollout of interactive services, including DIVA's video-on-demand service, and our DIGEO broadband portal in partnership with DIGEO BROADBAND, INC. These services and more offer just a glimpse of our Wired World(TM) vision."
In announcing first quarter 2000 results, Mr. Kent indicated that Charter's quarterly operating cash flow growth would accelerate throughout the year. "Today's second quarter results clearly demonstrate an acceleration in operating cash flow growth. The synergies we've achieved through the successful integration of last year's acquisitions were a key driver of this growth. Second quarter operating cash flow increased 16.4% compared to 10.8% growth in the first quarter, and I look forward to accelerating the rate of operating cash flow growth for the balance of the year," he said.
Mr. Kent said the successful integration of the acquisitions, as evidenced by stellar operating cash flow growth, will allow Charter's strategic focus to concentrate on the next phases of growth: rebuilding and upgrading infrastructure, and accelerating the deployment of advanced digital, data and interactive services.
With more than 6.2 million customers, Charter Communications, a Wired World(TM) company, is among the nation's largest broadband communications companies. Charter offers an array of advanced broadband services, including cable television under the Charter Cable TV brand; advanced digital video programming services under the Charter Digital Cable(TM) brand; and high-speed Internet access via Charter Pipeline(TM). Charter's Class A common stock is traded on the Nasdaq National Market under the ticker symbol "CHTR." More information about Charter can be found on the Internet at www.chartercom.com.
Statements in this press release regarding Charter Communications' business that are not historical facts may be "forward-looking statements." Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Important factors that could cause actual results to differ materially from any such forward-looking statements are identified in the reports and documents Charter files from time to time with the U.S. Securities and Exchange Commission.
Charter Communications, Inc.
Consolidated Operating Results
(Dollars in thousands)
Three Months Ended June 30
--------------------------
Actual Pro Forma(a)
2000 1999 % Change
-------- -------- --------
(Unaudited)
Revenues:
Basic $569,197 $525,694
Premium 58,194 58,657
Pay-per-view 8,796 10,875
Digital 15,066 896
Data 13,626 4,465
Advertising sales 41,794 32,565
Other 88,107 90,895
-------- --------
Total revenues 794,780 724,047 9.8%
-------- --------
Operating Expenses:
Programming 181,635 169,239
General and administrative 134,217 123,707
Service 46,594 46,658
Marketing 17,644 17,892
Advertising sales 14,271 10,520
Other 12,183 6,600
Corporate expense charge - related party 15,007 28,904
-------- --------
Total operating expenses 421,551 403,520 4.5%
-------- --------
-------- --------
Operating cash flow $373,229 $320,527 16.4%
======== ========
(a) The pro forma results for the three months ended June 30, 1999
reflect: the eleven acquisitions of cable systems completed
during 1999, all acquisitions closed through June 30, 2000,
including the Bresnan acquisition, and the issuance of notes
by Charter Communications Holdings in January 2000.
Charter Communications, Inc.
Summary of Operating Statistics
Cable Television Actual Pro Forma(a) Actual
---------------- ---------- --------- ---------
June 30, December 31, June 30,
2000 1999 1999
---------- --------- ---------
Homes Passed 10,006,700 9,914,000 4,509,000
Basic Customers 6,214,100 6,144,600 2,734,000
Basic Penetration 62.1% 62.0% 60.6%
Premium Subscriptions 3,297,000 3,114,400 1,676,000
Premium Penetration 53.1% 50.7% 61.3%
Average Monthly Revenue
per Basic Customer (quarter) $ 42.63 $ 41.12 $ 37.56
----------------------------------------------------------------
Digital Video Actual Pro Forma(a) Actual
------------- --------- --------- -------
June 30, December 31, June 30,
2000 1999 1999
--------- --------- -------
Digital Homes Passed 6,528,100 4,675,000 330,000
Customers 375,000 155,400 10,900
Penetration 5.7% 3.3% 3.3%
Digital Converters Deployed 456,100 176,600 12,400
----------------------------------------------------------------
Data Actual Pro Forma(a) Actual
---- --------- --------- ---------
June 30, December 31, June 30,
2000 1999 1999
--------- --------- ---------
Data Homes Passed 5,201,700 4,422,000 1,450,700
Customers 149,300 84,400 13,500
Penetration 2.9% 1.9% 0.9%
----------------------------------------------------------------
Television-Based Internet Access Actual Pro Forma(a) Actual
-------------------------------- ------- ------- -------
June 30, December 31, June 30,
2000 1999 1999
------- ------- -------
Television-Based Internet
Homes Passed 429,000 429,000 245,200
Customers 7,200 7,100 4,300
Penetration 1.7% 1.7% 1.8%
----------------------------------------------------------------
Other Statistics Actual Pro Forma(a) Actual
---------------- --------- --------- ---------
June 30, December 31, June 30,
2000 1999 1999
--------- --------- ---------
For the quarter ended
Capital Expenditures
(in 000's) $ 765,614 $ 427,676 $ 150,597
As of
Book Value per Share $ 12.17 $ 13.82 N/A
----------------------------------------------------------------
(a) The pro forma statistics as of December 31, 1999 reflect all
acquisitions closed since this date, including Bresnan
Communications in February 2000.
Charter Communications, Inc.
Consolidated Statement of Operations
(Dollars in thousands, except per share data)
Periods Ended June 30, 2000
------------ ------------
Three Months Six Months
------------ ------------
(Unaudited)
Revenues:
Basic $ 569,197 $ 1,093,744
Premium 58,194 113,967
Pay-per-view 8,796 16,027
Digital 15,066 24,262
Data 13,626 23,338
Advertising sales 41,794 75,072
Other 88,107 169,974
------------ ------------
Total revenues 794,780 1,516,384
------------ ------------
Operating Expenses:
Programming 181,635 346,460
General and administrative 134,217 259,509
Service 46,594 93,685
Marketing 17,644 29,337
Other 26,454 49,322
Corporate expense charge
- related party 15,007 27,515
------------ ------------
Total operating expenses 421,551 805,828
------------ ------------
Operating cash flow 373,229 710,556
Depreciation 296,912 549,788
Amortization 306,775 599,999
Option compensation expense 10,589 26,089
Interest, net 250,453 475,932
Other, net 2,636 2,504
------------ ------------
(494,136) (943,756)
Minority Interest in Loss of Subsidiary 297,315 566,221
------------ ------------
Net Loss $ (196,821) $ (377,535)
============ ============
Basic and Diluted Loss per Share $ (0.89) $ (1.70)
============ ============
Weighted Average Common Shares
Outstanding 222,089,746 222,003,415
============ ============
Charter Communications, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
Actual Pro Forma(a)
June 30, 2000 December 31, 1999
------------- -----------------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 74,021 $ 127,508
Accounts receivable, less
allowance for doubtful
accounts 122,869 102,934
Prepaid expenses and other 38,838 35,279
------------ ------------
Total current assets 235,728 265,721
------------ ------------
Investment in Cable Properties:
Property, plant and equipment,
net of accumulated
depreciation of $681,866
and $474,885, respectively 4,233,878 3,856,634
Franchises, net of accumulated
amortization of $1,262,944
and $940,201, respectively 17,338,243 17,748,048
------------ ------------
Total investment in
cable properties 21,572,121 21,604,682
Other Assets 217,308 279,672
------------ ------------
$ 22,025,157 $ 22,150,075
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and
accrued expenses $ 1,017,330 $ 671,706
Payables to related
party 2,751 13,259
------------ ------------
Total current liabilities 1,020,081 684,965
------------ ------------
Long-Term Debt 11,605,328 11,130,886
------------ ------------
Deferred Management
Fees - Related Party 13,751 21,623
------------ ------------
Other Long-Term Liabilities 147,370 155,144
------------ ------------
Minority Interest 4,689,263 5,242,114
------------ ------------
Redeemable Securities 1,846,176 1,846,176
------------ ------------
Shareholders' Equity:
Class A common stock; $.001 par
value; 1.75 billion shares
authorized; 222,039,746 shares
issued and outstanding 195 195
Class B common stock; $.001
par value; 750 million shares
authorized; 50,000 shares
issued and outstanding -- --
Preferred stock; $.001 par
value; 250 million shares
authorized; no shares issued
and outstanding -- --
Additional paid-in capital 3,145,798 3,133,782
Accumulated deficit (443,766) (66,231)
Accumulated other comprehensive
income 961 1,421
------------ ------------
Total shareholders' equity 2,703,188 3,069,167
------------ ------------
$ 22,025,157 $ 22,150,075
============ ============
(a) The consolidated pro forma balance sheet as of December 31,
1999 reflects acquisitions closed since this date, including
the acquisition of Bresnan Communications in February 2000.
Charter Communications, Inc.
"Same Store" Results
(Dollars in thousands)
Operating Results Three Months Ended June 30
--------------------------
2000 1999 % Change
---- ---- --------
(Unaudited)
Revenues:
Basic $211,975 $193,615
Premium 24,046 24,655
Pay-per-view 4,117 5,098
Digital 7,969 474
Data 5,021 1,409
Advertising sales 17,855 13,664
Other 39,559 36,358
-------- --------
Total revenues 310,542 275,273 12.8%
-------- --------
Operating Expenses:
Programming 70,499 63,696
General and administrative 52,243 48,297
Service 16,555 17,590
Marketing 6,586 6,911
Advertising sales 5,494 3,136
Other 5,059 2,333
-------- -------
Total operating expenses 156,436 141,963 10.2%
-------- -------
System operating cash
flow $154,106 $133,310 15.6%
======== ========
Operating Data June 30, 2000 June 30, 1999
------------- -------------
(Unaudited)
Homes Passed 3,895,600 3,820,100
Basic Customers 2,268,400 2,216,800 2.3%
Basic Penetration 58.2% 58.0%
Premium Subscriptions 1,428,800 1,388,800
Digital Video Customers 212,900 10,900
Data Customers 74,800 13,500
Average Monthly Revenue
per Basic Customer $ 45.63 $ 41.39 10.2%
Note: The above "same store" information presents operating results and data for the second quarter of 2000 as compared to the second quarter of 1999 for the cable systems owned or managed by Charter Communications as of April 1, 1999.
CONTACT:
Charter Communications Inc., St. Louis
Anita Lamont, 314/543-2215 (Media)
alamont@chartercom.com
Andy Morgan, 314/543-2217
Amorgan@chartercom.com
or
Kevin Picha, 314/543-2218 (Analysts and Investors)
kpicha@chartercom.com