ST. LOUIS--(BUSINESS WIRE)--Feb. 15, 2001--
Aggressive Digital and High-Speed Data Deployment to Drive
Charter Communications, Inc. (Nasdaq:CHTR) today reported continued acceleration in the growth of revenues, operating cash flow (OCF), and basic, digital and data customers for the three months ended December 31, 2000, compared to pro forma year-ago results and compared to all other quarters in 2000.
2000 Financial Highlights
Jerry Kent, President and CEO, said "I'm pleased to report that we met, or in most cases significantly exceeded, all of the goals we set at the start of the year, as well as those expected by Wall Street analysts. In the fourth quarter, we capped the year with OCF growth that is almost twice that of any other major cable operator. We saw acceleration in core basic customer growth, which indicates the success of our digital strategy. And we ended the year with advanced service deployments that exceeded our original optimistic expectations. The fact that this was done in a year in which we integrated 13 major acquisitions is a tribute to the hard work and dedication of every employee at Charter, and the success of retaining our entrepreneurial culture."
For the fourth quarter of 2000, revenues increased 15.8% to $893.9 million, and OCF increased 28.9% to $433.2 million compared to the pro forma results for the fourth quarter of 1999. Pro forma revenues and OCF for the year 2000 increased 11.9% to $3.30 billion and 19.0% to $1.56 billion, respectively, compared to pro forma 1999 annual results. Pro forma internal customer growth was 2.5% for the year 2000. "We apparently retained our industry leadership in generating internal customer growth," Mr. Kent said. "Our aggressive approach to competition has enabled us to accelerate our internal customer growth throughout the year," he continued. At December 31, 2000, Charter served 6,350,900 basic cable customers, compared to 6,193,700 pro forma as of December 31, 1999, a pro forma net gain of 157,200 customers.
For "same-store" cable systems owned by Charter during the fourth quarter of both the years 2000 and 1999, revenues and system operating cash flow grew 18.3% and 28.9%, respectively. These systems represented 3,783,600 customers at December 31, 2000, reflecting a
2.2% internal growth rate in basic customers compared to a year ago. "I'm very proud of the financial and operating success Charter achieved during 2000," Mr. Kent said. "Our rate of cash flow growth increased each quarter throughout the year as we integrated acquired systems, grew our basic and advanced service offerings significantly, and achieved operating efficiencies," he continued. Mr. Kent said strong "same store" operating results reinforce his confidence that Charter will continue to be a premier operator by generating superior operating results for the foreseeable future.
Broadband Pipe Delivers Advanced Services to Growing Customer Base
Charter ended the year with 1,069,500 digital cable customers, nearly seven times the number it had on December 31, 1999. "We began the year 2000 with some 155,000 Charter Digital Cable(TM) customers, and a goal to increase that number by 10,000 new customers per week," Mr. Kent said. "Consumer excitement about digital was well beyond our initial expectations, driven by a very targeted marketing effort. As a result, we attained a weekly average of 17,500 new digital customers per week, with a weekly average of 40,000 installs throughout December," he continued. "We actually achieved the one million digital customer milestone before Christmas."
Mr. Kent said close to 90% of Charter's customers now have access to digital video service, and the company plans to continue its aggressive marketing efforts throughout 2001. "I'm pleased to acknowledge the initiative each of our employees took in deploying our digital service. We wouldn't have achieved this growth without the devotion of each of them," he said. "We've achieved tremendous success in a competitive marketplace, including conversion of some 14,000 satellite customers to Charter Digital Cable service through our dish win-back program," he added.
With the addition of 67,800 cable modem customers during the fourth quarter of 2000, Charter ended the year with 252,400 data customers. Mr. Kent said the weekly cable modem installation rate increased to over 5,200 per week during the fourth quarter, compared to 2,700 per week during the third quarter. "Charter's cable modem install rate ramped up throughout the year and exceeded the expectations we set at the beginning of the year 2000," Mr. Kent said. "Now that Charter Pipeline(TM), our two-way high-speed data product, is available to more than 50% of our customers, we're ready to step-up our marketing efforts in 2001."
Mr. Kent said Charter remains ahead of schedule in its $3.5 billion project to build what is recognized as one of the most robust broadband infrastructures in the industry. "Approximately 70% of our customers are served by plant upgraded to at least 550 megahertz, and more than 50% of our customers have access to two-way enacted plant. By the end of the year 2002, nearly 93% of our customers will be served by 550 megahertz plant or greater, providing full, two-way interactive capability," he added.
Charter is now offering multiple interactive services to digital customers in its Los Angeles Region. The company was the first to integrate Wink's Enhanced Broadcasting product with DIVA's video-on-demand (VOD) technology, providing Charter Digital Cable customers with access to product information, news on-demand, coupons and shopping on more than 20 digital channels. VOD technology is available to Charter digital cable customers in Los Angeles and the suburbs of Atlanta, passing more than 250,000 homes.
Charter announced a trial of IP telephony service in St. Louis, partnering with Nortel Networks and ANTEC. Slated to begin this Summer, the trial will involve up to 500 residents in the St. Louis area. Charter also has an IP telephony trial underway in Wisconsin using TelCordia, Cisco and Motorola equipment.
In 2000, cable system pro forma revenue and operating cash flow, before corporate overhead, grew 11.9% and 12.4% respectively. In 2001, Charter expects an acceleration in revenue and operating cash flow, with revenue expected to grow between 14% and 16% compared to pro forma 2000 results. Operating cash flow growth is expected to range between 12% and 14%. In the year 2000, Charter began a three-year plan to build a state of the art customer care center in each region. One-time expenses associated with the launch of each center began to affect the Company in 2000. These expenses will approach $11 million in 2001.
Basic internal customer growth is expected to again exceed 2.0% for 2001. Aggressive digital customer growth is expected to continue into 2001, and Mr. Kent said the company should end the year with approximately 2 million Charter Digital Cable customers, or a penetration rate in the excess of 30%. Marketing efforts for high-speed Internet access will increase in 2001 as more plant miles are upgraded to two-way interactivity. Charter expects to end 2001 with over 500,000 Charter Pipeline customers, nearly doubling that customer base. VOD launches are planned for ten additional markets in 2001. Mr. Kent said he expects approximately 2.2 million homes will have access to VOD technology by the end of 2001.
"With continued solid underlying 'same store' performance, the completed integration of 13 major acquisitions behind us, accelerated momentum in the deployment of our digital and high speed services, and the expected rollout of our TV portal, currently trialing in St. Louis, Charter enters 2001 hitting on all cylinders, and moving more quickly toward delivering our vision of a wired world," Mr. Kent concluded.
With nearly 6.4 million customers, Charter Communications, a Wired World company(TM), is among the nation's largest broadband communications companies. Charter offers a full range of broadband services and products, including analog cable television under the Charter Cable brand; 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.
Detailed financial information is included in the attached addendum.
Charter will conduct a conference call to discuss their operating results on Thursday, February 15, 2001, at 11:00 AM Eastern Time. The call will be available live via webcast at www.chartercom.com. The call will be available on the "Investor" portion of the website, via "About Charter." Participants should go to the call link at least 10 minutes prior to the start time to register. The call will be archived on the website.
Statements in this press release regarding Charter Communications' business that are not historical facts may be "forward-looking statements." These forward-looking statements include specific projections regarding Charter's revenues and operating cash flow for the year 2001 as well as projections regarding growth in digital cable and high-speed Internet customers. 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. All forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement.
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|Charter Communications Inc., St. Louis
|Anita Lamont, 314/543-2215
|Todd St. Onge, 314/543-2397