Cablevision Systems Corporation Reports Third Quarter 2011 Results
BETHPAGE, N.Y.--(BUSINESS WIRE)--Cablevision Systems Corporation (NYSE:CVC) today reported financial results for the third quarter ended September 30, 2011.
Third quarter consolidated net revenues grew 8.0% to $1.666 billion, consolidated adjusted operating cash flow ("AOCF")1was essentially flat at $539.3 million and consolidated operating income decreased 11.7% to $272.4 million, all compared to the prior year period. Third quarter 2011 results reflect the Bresnan properties acquired on December 14, 2010 as well as costs of approximately $16 million related to the impact of Hurricane Irene on our NY Metro service area. If both of these items were excluded, consolidated net revenues would have increased 0.4% while AOCF and operating income would have decreased 4.1% and 4.0%, respectively, all compared to the prior year period.
Operating highlights for the third quarter 2011 include:
• Year to date Consolidated Free Cash Flow from Continuing Operations1 of $440.2 million
• Combined Average Monthly Revenue per Basic Video Customer ("RPS") of $151.71 in the third quarter of 2011 (including Bresnan)
• High-Speed Data and Voice Line additions of 16,900 and 38,200, respectively, in the third quarter of 2011
• Lightpath AOCF growth of 16.9% in the third quarter of 2011, compared to the prior year period.
Cablevision President and CEO James L. Dolan commented: "For the third quarter of 2011, Cablevision achieved revenue growth driven primarily by the addition of the Bresnan properties. Our cable operations reported improved subscriber metrics that included increases in both high-speed data customers and voice lines, while the company continued to generate healthy free cash flow. As we are operating in a challenging environment, we are continuing our efforts to capitalize on the strength of our network and products and on building our business for the long-term," concluded Mr. Dolan.
1. See definition of adjusted operating cash flow ("AOCF") and Consolidated Free Cash Flow from Continuing Operations included in the discussion of non-GAAP financial measures on page 4 of this earnings release.
Telecommunications Services – Cable Television and Lightpath
Telecommunications Services includes Cable Television – Cablevision's video, high-speed data, and voice residential and commercial services offered over its cable infrastructure -- and its "Optimum Lightpath" branded commercial data and voice services. Third quarter 2011 Telecommunications and Cable Television results below reflect the Bresnan properties acquired on December 14, 2010 as well as costs of approximately $16 million related to the impact of Hurricane Irene on our NY Metro service area.
Telecommunications Services net revenues for the third quarter 2011 rose 9.0% to $1.562 billion, AOCF was essentially flat (down 0.2%) at $584.0 million and operating income decreased 10.2% to $333.5 million, all compared to the prior year period. Excluding Bresnan and the impact of Hurricane Irene, revenue growth would have increased 0.8%, while AOCF and operating income would have both decreased 3.9%, compared to the prior year period. The decrease in AOCF, compared to the prior period, was driven by cost increases, including both higher programming and sales and marketing costs, on essentially flat revenue growth.
Cable Television third quarter 2011 net revenues increased 9.1% to $1.490 billion, AOCF decreased 1.1% to $550.6 million and operating income decreased 12.0% to $322.0 million, all compared to the prior year period. The increase in revenue compared to the prior year period was due primarily to the addition of Bresnan in the results for the third quarter 2011. Excluding the items mentioned above, revenue would have increased 0.5%, while AOCF and operating income would have decreased 4.9% and 5.5%, respectively, all compared to the prior year period. The decrease in AOCF, compared to the prior period, was driven by cost increases, including both higher programming and sales and marketing costs, on essentially flat revenue growth.
For third quarter 2011, Lightpath net revenues increased 6.2% to $77.5 million, AOCF increased 16.9% to $33.4 million and operating income more than doubled to $11.5 million, each as compared to the prior year period. The improved results were driven primarily by a 17.9% increase in revenue from Ethernet services, offset in part by higher operating expenses to support the increase in Ethernet installations.
Other primarily consists of Newsday, News 12 Networks, MSG Varsity, Clearview Cinemas, Cablevision Media Sales Corporation (formerly Rainbow Advertising Sales Corporation ("RASCO")) and unallocated corporate general and administrative costs.
Third quarter 2011 net revenues decreased 5.5% to $109.0 million, AOCF deficit was essentially flat (up 0.7%) at a deficit of $44.7 million and operating loss improved 3.0% to a loss of $61.1 million all compared to the prior year period. Revenue was mainly impacted by the continued decline of advertising revenues at Newsday. The slight improvement in the AOCF deficit was due primarily to lower corporate costs as well as lower costs at Newsday, and when combined, more than offset the revenue decline discussed above.
RETURN OF CAPITAL
During the third quarter of 2011, Cablevision repurchased approximately 5.4 million shares of its Class A common stock for approximately $93.9 million.
On October 27, 2011, the Board of Directors of Cablevision declared a quarterly dividend of $0.15 per share on each outstanding share of both its Cablevision NY Group Class A Stock and its Cablevision NY Group Class B Stock. This quarterly dividend is payable on December 2, 2011 to shareholders of record at the close of business on November 11, 2011.