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» Cablevision Systems Corporation's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Please take note of the following. Today’s discussion may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation 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 five 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. Jim Dolan Thank you, Bret, and good morning. During the second quarter of 2012, we continued to improve the overall Optimum experience for our customers. As we have stated before, we are changing the way we approach our business and we believe that our initiatives are positioning the company for long-term success. We added nearly 7000 total Optimum customer relationship in the second quarter. Net basic video subscribers were essentially flat company-wide. Both of these metrics reflect a significant improvement as compared with our performance during the second quarter 2011. Optimum East experienced positive video growth as well as substantial increases in the number of Optimum Online and Optimum Voice subscribers. Optimum West felt the effects of a seasonally slow quarter which impacted all of its customer metrics. We continue to focus on all aspects of our relationships with our customers including our products, pricing, customer service, network quality and performance. Our second quarter financial performance reflects the near-term impact of the operating and capital investments that we are in the process of making.
Second quarter 2012 total revenue increased by 0.5% as compared with the second quarter of 2011. AOCF declined 7.2% versus the prior year period, primarily reflecting lower margins in our core cable business. As expected, capital expenditures increased significantly in the second quarter. This increased level of investment negatively impacted free cash flow, which was $59 million for the quarter.We continued to be committed to our return of capital initiatives. We repurchased 5.6 million shares of stock in the second quarter and last week the board declared a $0.15 per share quarterly dividend which is payable next month. Turning to operations, product service and operational improvements and enhancements are all continuing as we strive to provide our customers with more value from their Optimum relationship. Our data network augmentation project, which was completed during the first quarter, significantly improved the Optimum Online experience. Our investment also enhanced our ability to monitor our network’s performance. As a result, we were not surprised when our product performance improvements were validated by the FCC’s latest Measurement Broadband America report, which was released on July 19. According to the report, customers of our core Optimum Online and Optimum Online Boost Plus services received more than 100% of advertised speeds on average across a 24 hour day. In addition, the report highlighted that Optimum Online customers received 128% of advertised speeds during peak weekday hours and Optimum Online Boost Plus customers received 113% of advertised speeds during peak hours. Another area in which we provide our customers with great value is through our continued investment in WiFi. Our WiFi network has more access points than any other WiFi network in the country and this product is becoming increasingly attractive to our customers who are seeking to contact to content outside of their homes. During the second quarter, we expanded our network by adding nearly 5,000 additional hotspots in our Optimum East territories. In addition to adding coverage, we continued to invest to enhance the speed, capacity and connectivity of the network. Read the rest of this transcript for free on seekingalpha.com