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Mediacom Communications Reports Combined Results for Fourth Quarter and Full Year 2017

MEDIACOM PARK, N.Y.--()--MEDIACOM COMMUNICATIONS CORPORATION today released combined unaudited financial and operating highlights for the three months and full year ended December 31, 2017.

Mediacom Combined Results for Fourth Quarter 2017*

  • Revenues were $471.8 million, reflecting a 2.5% increase from the prior year period
    • Excluding advertising, revenues increased 3.5% from the prior year period, which benefitted from advertising revenues associated with the national election in 2016
  • OIBDA was $184.1 million, reflecting a 0.5% increase from the prior year period
    • Excluding advertising, OIBDA increased 3.1% from the prior year period
  • Capital expenditures were $82.7 million, compared to $88.2 million in the prior year period
  • Free cash flow was $75.6 million, compared to $65.4 million in the prior year period
  • Ending primary service units (“PSUs”) of 2,594,000, a 5.3% increase from December 31, 2016
  • Ending customer relationships of 1,363,000, a 0.8% increase from December 31, 2016
  • Total leverage ratio of 3.54x, compared to 3.79x at December 31, 2016
  • Interest coverage ratio of 7.14x, compared to 6.20x at December 31, 2016

Mediacom Combined Results for Full Year 2017*

  • Revenues were $1,877.6 million, reflecting a 3.7% increase from the prior year
    • Excluding advertising, revenues increased 4.6% from the prior year, which benefitted from advertising revenues associated with the national election in 2016
  • OIBDA was $712.0 million, reflecting a 2.6% increase from the prior year
    • Excluding advertising, OIBDA increased 4.6% from the prior year
  • Capital expenditures were $341.8 million, compared to $335.2 million in the prior year
  • Free cash flow was $264.4 million, compared to $237.0 million in the prior year
  • Total leverage ratio of 3.66x, compared to 4.00x at December 31, 2016
  • Interest coverage ratio of 6.73x, compared to 5.70x at December 31, 2016
  • Ending total debt of $2,605 million, a $170 million reduction from December 31, 2016

Reference to “Mediacom Combined” reflects the combined results of Mediacom Broadband LLC and Mediacom LLC, eliminating intercompany amounts. Mediacom LLC information is being voluntarily provided, as Mediacom LLC’s contractual obligation to file reports with the Securities and Exchange Commission (“SEC”) terminated in February 2017. Mediacom Combined information is being provided for convenience and informational purposes, and does not modify or supplement the previously released separate financial results of Mediacom Broadband LLC. Holders of Mediacom Broadband LLC debt should refer to its separate financial and operating results, which were previously released and furnished with the SEC on Form 8-K on February 22, 2018.

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

 
TABLE 1*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
 
   

Three Months Ended
December 31,

   
    2017   2016   YoY% Change
Video  

$

193,702

    $ 198,994     (2.7 %)
High-speed data     170,940       156,698     9.1 %
Phone     28,041       26,666     5.2 %
Business services     64,477       59,419     8.5 %
Advertising     14,623       18,683     (21.7 %)
Total revenues   $ 471,783     $ 460,460     2.5 %
Service costs     (199,786 )     (188,466 )   6.0 %
SG&A expenses     (78,925 )     (79,832 )   (1.1 %)
Management fees     (9,000 )     (9,000 )    
OIBDA (a)   $ 184,072     $ 183,162     0.5 %
Cash interest expense (a)     (25,783 )     (29,566 )   (12.8 %)
Capital expenditures     (82,715 )     (88,204 )   (6.2 %)
Free cash flow (a)   $ 75,574     $ 65,392     15.6 %
                 
OIBDA margin (b)     39.0 %     39.8 %    
                 
                 
    December 31, 2017     December 31, 2016     YoY% Change
Video customers     821,000       828,000     (0.8 %)
High-speed data (“HSD”) customers     1,209,000       1,156,000     4.6 %
Phone customers     564,000       479,000     17.7 %
Primary service units (“PSUs”)     2,594,000       2,463,000     5.3 %
                 
Video customer declines     (2,000 )     (6,000 )    
HSD customer increases     15,000       11,000      
Phone customer increases     22,000       12,000      
Quarterly PSU increases     35,000       17,000      
                 
Customer relationships (c)     1,363,000       1,352,000     0.8 %
                 
Average total monthly revenue per:                
PSU (d)   $ 61.04     $ 62.53     (2.4 %)
Customer relationship (e)   $ 115.42     $ 113.90     1.3 %
                 
                 
    December 31, 2017     December 31, 2016      
Bank credit facility   $ 2,105,000     $ 2,025,000      
5½% senior notes due 2021     200,000       200,000      
7¼% senior notes due 2022         250,000      
6⅜% senior notes due 2023     300,000       300,000      
Total debt (f)   $ 2,605,000     $ 2,775,000      
                 
Total leverage ratio (g)   3.54x     3.79x      
Interest coverage ratio (h)   7.14x     6.20x      
                 

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

 

TABLE 2*

Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
 
   

Year Ended
December 31,

   
    2017   2016   YoY% Change
Video  

$

794,017

    $ 802,204     (1.0 %)
High-speed data     670,734       603,375     11.2 %
Phone     111,439       109,228     2.0 %
Business services     249,714       230,636     8.3 %
Advertising     51,647       64,812     (20.3 %)
Total revenues   $ 1,877,551     $ 1,810,255     3.7 %
Service costs     (806,978 )     (761,839 )   5.9 %
SG&A expenses     (322,074 )     (319,442 )   0.8 %
Management fees     (36,500 )     (35,000 )   4.3 %
OIBDA (a)   $ 711,999     $ 693,974     2.6 %
Cash interest expense (a)     (105,857 )     (121,760 )   (13.1 %)
Capital expenditures     (341,765 )     (335,173 )   2.0 %
Free cash flow (a)   $ 264,377     $ 237,041     11.5 %
                 
OIBDA margin (b)     37.9 %     38.3 %    
                 
                 
    December 31, 2017     December 31, 2016     YoY% Change
Video customers     821,000       828,000     (0.8 %)
HSD customers     1,209,000       1,156,000     4.6 %
Phone customers     564,000       479,000     17.7 %
Primary service units (“PSUs”)     2,594,000       2,463,000     5.3 %
                 
Video customer declines     (14,000 )     (27,000 )    
HSD customer increases     47,000       71,000      
Phone customer increases     84,000       46,000      
Annual PSU increases (i)     117,000       90,000      
                 
Customer relationships (c)     1,363,000       1,352,000     0.8 %
                 
Average total monthly revenue per:                
PSU (d)(i)   $ 61.71     $ 62.39     (1.1 %)
Customer relationship (e)(i)   $ 114.88     $ 113.04     1.6 %
                 
                 
    December 31, 2017     December 31, 2016      
Bank credit facility   $ 2,105,000     $ 2,025,000      
5½% senior notes due 2021     200,000       200,000      
7¼% senior notes due 2022         250,000      
6⅜% senior notes due 2023     300,000       300,000      
Total debt (f)   $ 2,605,000     $ 2,775,000      
                 
Total leverage ratio (g)   3.66x     4.00x      
Interest coverage ratio (h)   6.73x     5.70x      
                 

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

 
TABLE 3*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
 
   

Three Months Ended
December 31, 2017

   

Mediacom
Broadband

 

Mediacom
LLC

 

Eliminations

 

Mediacom
Combined

Video  

$

107,097

    $ 86,605         $ 193,702  
High-speed data     93,222       77,718           170,940  
Phone     14,986       13,055           28,041  
Business services     39,357       25,120           64,477  
Advertising     11,974       2,649           14,623  
Total revenues   $ 266,636     $ 205,147         $ 471,783  
Service costs     (109,113 )     (90,673 )         (199,786 )
SG&A expenses     (48,235 )     (30,690 )         (78,925 )
Management fees     (5,350 )     (3,650 )         (9,000 )
OIBDA (a)   $ 103,938     $ 80,134         $ 184,072  
Investment income from affiliate         4,500     (4,500 )    
Adjusted OIBDA (a)   $ 103,938     $ 84,634     (4,500 )   $ 184,072  
Cash interest expense (a)     (16,168 )     (9,615 )         (25,783 )
Capital expenditures     (40,223 )     (42,492 )         (82,715 )
Dividend to preferred members     (4,500 )       4,500      
Free cash flow (a)   $ 43,047     $ 32,527         $ 75,574  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Video customers     455,000       366,000             821,000  
HSD customers     668,000       541,000             1,209,000  
Phone customers     312,000       252,000             564,000  
Primary service units (“PSUs”)     1,435,000       1,159,000             2,594,000  
                         
Video customer declines         (2,000 )           (2,000 )
HSD customer increases     9,000       6,000             15,000  
Phone customer increases     12,000       10,000             22,000  
Quarterly PSU increases     21,000       14,000             35,000  
                         
Customer relationships (c)     755,000       608,000             1,363,000  
                         
Average total monthly revenue per:                        
PSU (d)   $ 62.39     $ 59.36           $ 61.04  
Customer relationship (e)   $ 117.80     $ 112.47           $ 115.42  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Bank credit facility   $ 1,077,000     $ 1,028,000           $ 2,105,000  
5½% senior notes due 2021     200,000                 200,000  
6⅜% senior notes due 2023     300,000                 300,000  
Total debt (f)   $ 1,577,000     $ 1,028,000           $ 2,605,000  
                         
Total leverage ratio (g)   3.79x     3.04x           3.54x  
Interest coverage ratio (h)   6.43x     8.80x           7.14x  
                         

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

 
TABLE 4*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
 
   

Three Months Ended
December 31, 2016

   

Mediacom
Broadband

 

Mediacom
LLC

  Eliminations  

Mediacom
Combined

Video  

$

111,620

    $ 87,374         $ 198,994  
High-speed data     85,952       70,746           156,698  
Phone     14,157       12,509           26,666  
Business services     36,431       22,988           59,419  
Advertising     14,794       3,889           18,683  
Total revenues   $ 262,954     $ 197,506         $ 460,460  
Service costs     (103,391 )     (85,075 )         (188,466 )
SG&A expenses     (47,968 )     (31,864 )         (79,832 )
Management fees     (5,350 )     (3,650 )         (9,000 )
OIBDA (a)   $ 106,245     $ 76,917         $ 183,162  
Investment income from affiliate         4,500     (4,500 )    
Adjusted OIBDA (a)   $ 106,245     $ 81,417     (4,500 )   $ 183,162  
Cash interest expense (a)     (17,652 )     (11,914 )         (29,566 )
Capital expenditures     (48,216 )     (39,988 )         (88,204 )
Dividend to preferred members     (4,500 )       4,500      
Free cash flow (a)   $ 35,877     $ 29,515         $ 65,392  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Video customers     463,000       365,000             828,000  
HSD customers     643,000       513,000             1,156,000  
Phone customers     264,000       215,000             479,000  
Primary service units (“PSUs”)     1,370,000       1,093,000             2,463,000  
                         
Video customer declines     (3,000 )     (3,000 )           (6,000 )
HSD customer increases     7,000       4,000             11,000  
Phone customer increases     7,000       5,000             12,000  
Quarterly PSU increases     11,000       6,000             17,000  
                         
Customer relationships (c)     754,000       598,000             1,352,000  
                         
Average total monthly revenue per:                        
PSU (d)   $ 64.24     $ 60.40           $ 62.53  
Customer relationship (e)   $ 117.02     $ 110.00           $ 113.90  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Bank credit facility   $ 1,128,000     $ 897,000           $ 2,025,000  
5½% senior notes due 2021     200,000                 200,000  
7¼% senior notes due 2022         250,000             250,000  
6⅜% senior notes due 2023     300,000                 300,000  
Total debt (f)   $ 1,628,000     $ 1,147,000           $ 2,775,000  
                         
Total leverage ratio (g)   3.83x     3.52x           3.79x  
Interest coverage ratio (h)   6.02x     6.83x           6.20x  
                         

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

 
TABLE 5*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
 
   

Year Ended
December 31, 2017

   

Mediacom
Broadband

 

Mediacom
LLC

 

Eliminations

 

Mediacom
Combined

Video  

$

439,716

    $ 354,301         $ 794,017  
High-speed data     366,012       304,722           670,734  
Phone     59,350       52,089           111,439  
Business services     152,481       97,233           249,714  
Advertising     41,527       10,120           51,647  
Total revenues   $ 1,059,086     $ 818,465         $ 1,877,551  
Service costs     (439,990 )     (366,988 )         (806,978 )
SG&A expenses     (194,629 )     (127,445 )         (322,074 )
Management fees     (21,665 )     (14,835 )         (36,500 )
OIBDA (a)   $ 402,802     $ 309,197         $ 711,999  
Investment income from affiliate         18,000     (18,000 )    
Adjusted OIBDA (a)   $ 402,802     $ 327,197     (18,000 )   $ 711,999  
Cash interest expense (a)     (66,250 )     (39,607 )         (105,857 )
Capital expenditures     (181,477 )     (160,288 )         (341,765 )
Dividend to preferred members     (18,000 )       18,000      
Free cash flow (a)   $ 137,075     $ 127,302         $ 264,377  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Video customers     455,000       366,000             821,000  
HSD customers     668,000       541,000             1,209,000  
Phone customers     312,000       252,000             564,000  
Primary service units (“PSUs”)     1,435,000       1,159,000             2,594,000  
                         
Video customer declines     (8,000 )     (6,000 )           (14,000 )
HSD customer increases     25,000       22,000             47,000  
Phone customer increases     48,000       36,000             84,000  
Annual PSU increases (i)     65,000       52,000             117,000  
                         
Customer relationships (c)     755,000       608,000             1,363,000  
                         
Average total monthly revenue per:                        
PSU (d)(i)   $ 62.93     $ 60.20           $ 61.71  
Customer relationship (e)(i)   $ 116.97     $ 112.27           $ 114.88  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Bank credit facility   $ 1,077,000     $ 1,028,000           $ 2,105,000  
5½% senior notes due 2021     200,000                 200,000  
6⅜% senior notes due 2023     300,000                 300,000  
Total debt (f)   $ 1,577,000     $ 1,028,000           $ 2,605,000  
                         
Total leverage ratio (g)   3.92x     3.14x           3.66x  
Interest coverage ratio (h)   6.08x     8.26x           6.73x  
                         

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

 
TABLE 6*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
 

 

 

Year Ended
December 31, 2016

   

Mediacom
Broadband

 

Mediacom
LLC

  Eliminations  

Mediacom
Combined

Video  

$

450,658

    $ 351,546         $ 802,204  
High-speed data     331,778       271,597           603,375  
Phone     57,999       51,229           109,228  
Business services     141,054       89,582           230,636  
Advertising     51,750       13,062           64,812  
Total revenues   $ 1,033,239     $ 777,016         $ 1,810,255  
Service costs     (419,406 )     (342,433 )         (761,839 )
SG&A expenses     (193,669 )     (125,773 )         (319,442 )
Management fees     (20,800 )     (14,200 )         (35,000 )
OIBDA (a)   $ 399,364     $ 294,610         $ 693,974  
Investment income from affiliate         18,000     (18,000 )    
Adjusted OIBDA (a)   $ 399,364     $ 312,610     (18,000 )   $ 693,974  
Cash interest expense (a)     (73,108 )     (48,652 )         (121,760 )
Capital expenditures     (179,696 )     (155,477 )         (335,173 )
Dividend to preferred members     (18,000 )       18,000      
Free cash flow (a)   $ 128,560     $ 108,481         $ 237,041  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Video customers     463,000       365,000             828,000  
HSD customers     643,000       513,000             1,156,000  
Phone customers     264,000       215,000             479,000  
Primary service units (“PSUs”)     1,370,000       1,093,000             2,463,000  
                         
Video customer declines     (17,000 )     (10,000 )           (27,000 )
HSD customer increases     38,000       33,000             71,000  
Phone customer increases     25,000       21,000             46,000  
Annual PSU increases     46,000       44,000             90,000  
                         
Customer relationships (c)     754,000       598,000             1,352,000  
                         
Average total monthly revenue per:                        
PSU (d)   $ 63.92     $ 60.46           $ 62.39  
Customer relationship (e)   $ 115.89     $ 109.47           $ 113.04  
                         
                         
   

Mediacom
Broadband

 

Mediacom
LLC

       

Mediacom
Combined

Bank credit facility   $ 1,128,000     $ 897,000           $ 2,025,000  
5½% senior notes due 2021     200,000                 200,000  
7¼% senior notes due 2022         250,000             250,000  
6⅜% senior notes due 2023     300,000                 300,000  
Total debt (f)   $ 1,628,000     $ 1,147,000           $ 2,775,000  
                         
Total leverage ratio (g)   4.08x     3.67x           4.00x  
Interest coverage ratio (h)   5.46x     6.43x           5.70x  
                         

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 7
Use of Non-GAAP Financial Measures

“OIBDA,” “Adjusted OIBDA,” “cash interest expense” and “free cash flow” are not financial measures calculated in accordance with generally accepted accounting principles (“GAAP”) in the United States. We define OIBDA as operating income before depreciation and amortization and Adjusted OIBDA as OIBDA plus investment income from affiliate. OIBDA and Adjusted OIBDA may not be comparable to similarly titled measures used by other companies, which may have different depreciation and amortization policies, and are key components in our covenant calculations.

We define cash interest expense as interest expense, net, less amortization of deferred financing costs. Cash interest expense excludes the amortization of financing costs which were paid upon the financing of the relevant debt.

For Mediacom Broadband LLC, we define free cash flow as OIBDA less capital expenditures, cash interest expense and dividends to preferred members. For Mediacom LLC, we define free cash flow as Adjusted OIBDA less capital expenditures and cash interest expense. Free cash flow may not be comparable to similarly titled measures reported by other companies.

 

TABLE 8

Footnotes

 
(a)   See Table 7 for information regarding our use of non-GAAP financial measures.
(b)   Represents OIBDA as a percentage of total revenues.
(c)   Represents the total number of customers that take at least one service, without regard to which service(s) customers purchase.
(d)   Represents average total monthly revenues for the period divided by average PSUs for such period.
(e)   Represents average total monthly revenues for the period divided by average customer relationships for such period.
(f)   Total debt excludes the effect of deferred financing costs, net.
(g)   For Mediacom Combined and Mediacom Broadband LLC, represents total debt at period end divided by annualized OIBDA for the period. For Mediacom LLC, represents total debt at period end divided by annualized Adjusted OIBDA for the period.
(h)   For Mediacom Combined and Mediacom Broadband LLC, represents OIBDA divided by cash interest expense for the period. For Mediacom LLC, represents Adjusted OIBDA divided by cash interest expense for the period.
(i)   Annual customer changes and average total monthly revenue metrics for the twelve months ended December 31, 2017 have been adjusted to reflect Mediacom LLC’s January 2017 acquisition of 7,000 video customers, 6,000 HSD customers and 1,000 phone customers, aggregating 14,000 PSUs and 9,000 customer relationships as if it had occurred on December 31, 2016.
     

About Mediacom

Mediacom Communications Corporation is the 5th largest cable operator in the U.S. serving almost 1.4 million customers in smaller markets primarily in the Midwest and Southeast. Mediacom offers a wide array of information, communications and entertainment services to households and businesses, including video, high-speed data, phone, and home security and automation. Through Mediacom Business, the company provides innovative broadband solutions to commercial and public sector customers of all sizes, and sells advertising and production services under the OnMedia brand. More information about Mediacom is available at www.mediacomcable.com.

 

Contacts

Mediacom Communications Corporation
Investor Relations
Jack P. Griffin, (845) 443-2654
Vice President,
Corporate Finance
or
Media Relations
Thomas J. Larsen, (845) 443-2754
Senior Vice President,
Government and Public Relations