Charter Communications Inc. announced that fourth-quarter revenues grew by 7.2 percent and full-year revenues were up 7 percent on a pro forma basis. The results were driven in part by the conclusion of its acquisition of Time Warner Cable and Bright House Networks last May for a combined $65.5 billion, making it the third-largest pay television company in the U.S.
The Stamford company said its fourth-quarter revenues of $10.3 billion were further driven by residential revenue growth of 6 percent and commercial revenue growth of 11.8 percent. On an actual basis, fourth-quarter revenue grew 309 percent year-over-year, driven primarily by the transactions.
For the year, pro forma net income attributable to Charter shareholders totaled $1.1 billion, compared with $159 million in 2015. That year-over-year increase was primarily related to higher adjusted EBITDA, the company said. On an actual basis, net income attributable to Charter shareholders totaled $3.5 billion for the year, compared with a net loss of $271 million in 2015. The increase in net income was primarily related to a $3.3 billion tax benefit resulting from a reduction in Legacy Charter’s preexisting valuation allowance on deferred tax assets and higher income from operations as a result of the transactions.
As of Dec. 31, Charter’s network passed 49.2 million homes and businesses and served 26.2 million residential and small and medium business (SMB) customers. During the fourth quarter, total customer relationships increased 287,000, compared with 394,000 on a pro forma basis during the fourth quarter of 2015. During the fourth quarter of 2016, total residential and SMB primary service units increased by 418,000, compared to 981,000 on a pro forma basis during the fourth quarter of 2015. The year-over-year decline in customer relationship and primary service units net additions was primarily driven by elevated churn on historical products in Legacy Time Warner Cable markets.
Charter further noted that in the fourth quarter of 2016 it launched its Spectrum pricing, packaging and brand to residences in additional Legacy TWC markets, including New York City, and in all Legacy Bright House markets. As of Dec. 31, Spectrum had been introduced in approximately 50 percent of the combined Legacy TWC and Legacy Bright House footprints, with the rollout to remaining Legacy TWC markets expected to be largely complete by the end of the first quarter of this year.
