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Cable Operators

Rutledge: Optimum West Is 2 Years Ahead of Charter

CEO Says Former Bresnan Ops Offer Glimpse Into What Charter Could Be 2/22/2013 6:25 AM Eastern

On the heels of its agreement to purchase Cablevision Systems’ Optimum West properties for $1.6 billion, Charter Communications CEO Tom Rutledge said the former Bresnan Communications systems offer a window into what the Stamford, Conn.-based MSO could be.

On a conference call with analysts to discuss fourth-quarter results, Rutledge noted that the former Bresnan systems are structured similarly to Charter, have comparable channel lineups and product offerings and its secondary market footprint – in Colorado, Wyoming, Utah and Montana – addresses the same demographics as the larger company.    

“The Bresnan properties are two years ahead of Charter in terms of implementation,” Rutledge said on the call. “The asset is growing at a faster rate than almost any other cable system in the United States. So we’re getting an asset that is accretive to free cash flow and well positioned to grow.”

Charter also offered a deeper dive into Optimum West’s financials on the call, showing year-over-year, third-quarter revenue growth of 9.3% to $128 million, 23.2% cash flow growth to $46 million and a 7.2% increase in primary service units (a combination of video, voice and data subscribers) to 758,000 from 707,000 in the third quarter of 2011.

“I think Bresnan is indicative of what Charter can do,” Rutledge said on the call.

For the fourth quarter, Charter's revenue and cash flow growth were in-line with analysts’ expectations at 4.3% and 2% respectively. Video losses of 36,000 in the quarter were an 18% improvement over last year and the MSO added 54,000 high speed data customers and 34,000 telephony subscribers, behind consensus estimates of 78,000 and 47,000 additions, respectively.

September