Charter video customers down 47,000 in 3Q 2016

Thursday, November 3rd, 2016 
Charter Communications logo

As of September 30, 2016, Charter’s network reached 49.0 million homes and businesses, and served 25.9 million residential and small and medium business (“SMB”) customers

STAMFORD, Connecticut — Charter Communications, Inc. (formerly known as CCH I, LLC, along with its subsidiaries, the “Company” or “Charter”) today reported financial and operating results for the three and nine months ended September 30, 2016. On May 18, 2016, Charter completed its transactions between the Company, Time Warner Cable Inc. (“Legacy TWC”) and Charter Communications, Inc. (“Legacy Charter”), and Legacy Charter and Bright House Networks, LLC (“Legacy Bright House”) (collectively, the “Transactions”). In this release, actual results reflect the operations of Legacy Charter for the three and nine months ended September 30, 2016 and Legacy TWC and Legacy Bright House for the period from May 18, 2016 through September 30, 2016. Pro forma results give effect to the Transactions as if they had closed at the beginning of the earliest period presented and include the operations of Legacy Charter, Legacy TWC and Legacy Bright House for the full nine months ended September 30, 2016 and three and nine months ended September 30, 2015.

In late September, Charter began introducing its Spectrum brand, and pricing and packaging, in certain Legacy TWC markets, including Texas and Southern California. Spectrum is an industry-leading suite of video, Internet, and voice services that includes over 200 HD channels, minimum offered Internet speeds of at least 60 Mbps, and a fully featured voice service, delivered at a highly competitive price. As of the end of the third quarter of 2016, 93% of Legacy Charter’s residential customers received CharterSpectrum products. Charter will launch Spectrum in remaining Legacy TWC and Legacy Bright House markets in the fourth quarter of 2016 and in early 2017.

Beginning in 2017, Charter will also restart all-digital efforts in those Legacy TWC and Legacy Bright House markets that continue to broadcast bandwidth-intensive and low quality analog video signals. Alldigital allows Charter to offer more advanced products and services, and provides residential customers with two-way digital set-tops, which offer better picture quality, an interactive programming guide and video on demand on all TV outlets in the home. Charter intends to complete the all-digital conversion in Legacy TWC and Legacy Bright House markets by the end of 2018, with a minimum Internet speed offering of 100 Mbps in many markets.

During the third quarter of 2016, Charter’s residential customer relationships grew by 245,000, versus 235,000 in the prior year period.1 Residential PSUs increased by 336,000 versus a gain of 605,000 in the prior year period. The year-over-year decline in PSU net additions was primarily the result of fewer voice net additions. As of September 30, 2016, Charter had 24.6 million residential customer relationships and 48.2 million residential PSUs.

Residential video customers decreased by 47,000 in the third quarter of 2016, versus a decrease of 20,000 in the year-ago period, driven by higher video losses at Legacy TWC, partially offset by better year-over-year performance at Legacy Charter and Legacy Bright House. Over the last twelve months, Legacy Charter grew residential video customers by 51,000 or 1.2%. As of the end of the third quarter of 2016, Legacy Charter’s footprint was 100% all-digital, compared to 60% at Legacy TWC and 40% at Legacy Bright House. As of September 30, 2016, Charter had 16.9 million residential video customers.

Residential – Video – Primary Service Units

                                                           2015
                         --------------------------------------
                             1Q      2Q      3Q      4Q      FY
                         ------  ------  ------  ------  ------
Legacy TWC               10,819  10,774  10,767  10,821  10,821
Legacy Charter            4,311   4,282   4,293   4,322   4,322
Legacy Bright House       2,004   1,908   1,884   1,919   1,919
                         ------  ------  ------  ------  ------
Total                    17,134  16,964  16,944  17,062  17,062

Legacy TWC                   30    (45)     (7)      54      32
Legacy Charter             (13)    (29)      11      29     (2)
Legacy Bright House           3    (96)    (24)      35    (82)
                         ------  ------  ------  ------  ------
Net Additions/(Losses)       20   (170)    (20)     118    (52)

                                           2016
                         ----------------------
                             1Q      2Q      3Q
                         ------  ------  ------
Legacy TWC               10,842  10,769  10,708
Legacy Charter            4,332   4,325   4,344
Legacy Bright House       1,912   1,840   1,835
                         ------  ------  ------
Total                    17,086  16,934  16,887

Legacy TWC                   21    (73)    (61)
Legacy Charter               10     (7)      19
Legacy Bright House         (7)    (72)     (5)
                         ------  ------  ------
Net Additions/(Losses)       24   (152)    (47)

Links: Charter Communications