Cablevision Systems Corporation (CVC)

CVC 
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Cablevision Systems Corporation (CVC)

Q4 2011 Earnings Call

February 28, 2012 10:00 am ET

Executives

Patricia Armstrong - Senior Vice President, Investor Relations

James L. Dolan - President & Chief Executive Officer

Gregg Seibert - Executive Vice President and Chief Financial Officer

Analysts

Craig Moffett – Sanford Bernstein

Marci Ryvicker – Wells Fargo Securities, LLC.

Phil Cusick – JPMorgan

Jessica Reif Cohen – Bank of America

Jason Bazinet – Citigroup

Mike McCormack – Nomura Securities

James M. Ratcliffe – Barclays Capital

Thomas Eagan – Collins Stewart

Presentation

Operator

Good morning. My name is Kristy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cablevision's Fourth Quarter and Year End 2011 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

I would now like to turn the call over to Pat Armstrong, Senior Vice President of Investor Relations. Pat, please go ahead.

Patricia Armstrong

Thank you. Good morning and welcome to Cablevision's fourth quarter 2011 earnings conference call. Joining me this morning are Jim Dolan, President and CEO of Cablevision and Gregg Seibert, Executive Vice President and Chief Financial Officer.

Following a discussion of the Company's fourth quarter 2011 results, we will open the call for questions. If you don't have a copy of today's earnings release, it is available on our website at cablevision.com. Please take note of the following. Today's discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigations Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that could cause actual results to differ.

Please refer to the Company's filings with the Securities and Exchange Commission for a discussion of risks and uncertainties. The Company disclaims any obligation to update the forward-looking statements that may be discussed during this call.

Let me point out that on Page 6 of today's earnings release, we provide consolidated operations data and a reconciliation of adjusted operating cash flow, or AOCF, to operating income.

I would now like to introduce Jim Dolan, President and CEO of Cablevision.

James L. Dolan

Thank you, Pat and good morning. 2011 marked the substantial completion of a multi-year multistep process to enhance shareholder value. As most of you may recall, in August of 2008 we announced that our Board of Directors had authorized management to explore several options to enhance the value of Cablevision for its shareholders.

The spin-off of AMC last year marked another significant milestone in this process, which also included the spin-off of MSG, as well as the initiation of a quarterly dividend and a share repurchase program. Since that time we have also refinanced extended the maturities of much of our debt portfolio and completed the acquisition of the Bresnan Properties, an acquisition that we continue to believe will be accretive to shareholder value.

We remained focused on striking the right balance between returning capital to our shareholders and investing capital in the business as this balance is a critical component of our future success.

It is worth noting that since 2008, despite substantially reducing the size and cash flows of the Company by spinning off AMC and MSG, Cablevision has not only maintained its quarterly dividend, but we have increased it twice to its current level of $0.15 per share and last week, our Board of Directors approved another $0.15 per share dividend payable at the end of March.

In 2011, Cablevision also remained committed to its share repurchase program, buying back more than 20 million shares of Class A stock during the year.

Now turning to our operating results; despite a tough economy and competitive pressures, we continue to grow our high speed data and voice customers and our overall average revenue per subscriber. While we lost video subscribers in the quarter, we are taking steps to maintain or increase our video sub-base in the future.

For the fourth quarter of 2011 Cablevision's consolidated revenue grew at 7.3% and AOCF increased 21%. The Company's results reflect a number of unusual items which Gregg will talk more about shortly. Excluding these items revenue was up 1% and AOCF grew 0.8% for the quarter.

During our last call we talked about the emergence of some underlying trends with regard to certain subscriber metrics, including healthy increases in high speed data and voice customers as well as reduced video subscriber losses. This continued with our fourth quarter results. We also saw a positive momentum with our Bresnan properties which we are now calling Optimum West.

For the fourth quarter these properties reported subscriber increases across basic video, high speed data and voice services. Cablevision generated approximately $583 million in free cash flow in 2011 and an 8.7% improvement over 2010.

Over the course of the year we also continued to rollout new products and service offerings to enhance our customer's experience such as our in-home mobile apps and ultimate triple play offer. At the same time we remained focused on enhancing our existing products. As you know we were disappointed in the results of an SEC test conducted last spring on broadband speeds.

Since then we have invested the necessary time and resources to make significant improvements. As a result according to a recent test conducted by the same broadband testing firm our broadband speeds now exceed our advertised speeds throughout all periods of the day. Maintaining an industry leading level of service is critical for Cablevision.

Read the rest of this transcript for free on seekingalpha.com