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Mediacom Communications Reports Combined Results for Fourth Quarter and Full Year 2016

MEDIACOM PARK, N.Y.--(BUSINESS WIRE)--Mediacom Communications Corporation today released combined unaudited financial and operating highlights for the three months ended December 31, 2016.

Mediacom Combined Results for Fourth Quarter 2016*

  • Revenues were $460.5 million, reflecting a 5.2% increase from the prior year period
  • OIBDA was $183.2 million, reflecting a 5.9% increase from the prior year period
  • Capital expenditures were $88.2 million, compared to $76.7 million in the prior year period
  • Free cash flow was $65.4 million, compared to $60.2 million in the prior year period
  • Ending primary service units ("PSUs") of 2,463,000, a 3.8% increase from December 31, 2015
  • Ending customer relationships of 1,352,000, a 2.7% increase from December 31, 2015
  • Total leverage ratio of 3.79x, compared to 4.33x at December 31, 2015
  • Interest coverage ratio of 6.20x, compared to 4.78x at December 31, 2015
  • Ending total debt of $2,775.0 million, a $225.0 million reduction from December 31, 2015

Mediacom Combined Results for Full Year 2016*

  • Revenues were $1,810.3 million, reflecting a 5.2% increase from the prior year
  • OIBDA was $694.0 million, reflecting a 5.4% increase from the prior year
  • Capital expenditures were $335.2 million, compared to $288.2 million in the prior year
  • Free cash flow was $237.0 million, compared to $222.4 million in the prior year
  • Total leverage ratio of 4.00x, compared to 4.56x at December 31, 2015
  • Interest coverage ratio of 5.70x, compared to 4.46x at December 31, 2015

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 quarterly, annual and other periodic reports with the Securities and Exchange Commission ("SEC") has terminated as a result of the redemption of Mediacom LLC's 7 ¼% senior notes due 2022 on February 15, 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 23, 2017.

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.

________________________

* 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,
     
      2016       2015       YoY% Change
Video    

$

198,994

      $ 196,552       1.2 %
High-speed data       156,698         139,428       12.4 %
Phone       26,666         27,611       (3.4 %)
Business services       59,419         55,127       7.8 %
Advertising       18,683         19,013       (1.7 %)
Total revenues     $ 460,460       $ 437,731       5.2 %
Service costs       (188,466 )       (181,480 )     3.8 %
SG&A expenses       (79,832 )       (75,220 )     6.1 %
Management fees       (9,000 )       (8,000 )     12.5 %
OIBDA (a)     $ 183,162       $ 173,031       5.9 %
Cash interest expense (a)       (29,566 )       (36,196 )     (18.3 %)
Capital expenditures (b)       (88,204 )       (76,679 )     15.0 %
Free cash flow (a)     $ 65,392       $ 60,156       8.7 %
                       
OIBDA margin (c)       39.8 %       39.5 %      
                       
                       
      December 31, 2016     December 31, 2015     YoY% Change
Video customers       828,000         855,000       (3.2 %)
High-speed data ("HSD") customers       1,156,000         1,085,000       6.5 %
Phone customers       479,000         433,000       10.6 %
Primary service units ("PSUs")       2,463,000         2,373,000       3.8 %
                       
Video customer declines       (6,000 )       (7,000 )      
HSD customer increases       11,000         18,000        
Phone customer increases       12,000         9,000        
Quarterly PSU increases       17,000         20,000        
                       
Customer relationships (d)       1,352,000         1,317,000       2.7 %
                       
Average total monthly revenue per:                      
PSU (e)     $ 62.53       $ 61.75       1.3 %
Customer relationship (f)     $ 113.90       $ 111.25       2.4 %
                       
                       
      December 31, 2016     December 31, 2015      
Bank credit facility     $ 2,025,000       $ 2,250,000        
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 (g)     $ 2,775,000       $ 3,000,000        
                       
Total leverage ratio (h)     3.79x       4.33x        
Interest coverage ratio (i)     6.20x       4.78x        
                       

_____________

                     

* 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,
     
      2016     2015     YoY% Change
Video    

$

802,204

      $ 799,816       0.3 %
High-speed data       603,375         535,562       12.7 %
Phone       109,228         113,241       (3.5 %)
Business services       230,636         210,406       9.6 %
Advertising       64,812         62,047       4.5 %
Total revenues     $ 1,810,255       $ 1,721,072       5.2 %
Service costs       (761,839 )       (728,863 )     4.5 %
SG&A expenses       (319,442 )       (301,860 )     5.8 %
Management fees       (35,000 )       (32,000 )     9.4 %
OIBDA (a)     $ 693,974       $ 658,349       5.4 %
Cash interest expense (a)       (121,760 )       (147,659 )     (17.5 %)
Capital expenditures (b)       (335,173 )       (288,245 )     16.3 %
Free cash flow (a)     $ 237,041       $ 222,445       6.6 %
                       
OIBDA margin (c)       38.3 %       38.3 %      
                       
                       
      December 31, 2016     December 31, 2015     YoY% Change
Video customers       828,000         855,000       (3.2 %)
HSD customers       1,156,000         1,085,000       6.5 %
Phone customers       479,000         433,000       10.6 %
Primary service units ("PSUs")       2,463,000         2,373,000       3.8 %
                       
Video customer declines       (27,000 )       (35,000 )      
HSD customer increases       71,000         72,000        
Phone customer increases       46,000         33,000        
Annual PSU increases       90,000         70,000        
                       
Customer relationships (d)       1,352,000         1,317,000       2.7 %
                       
Average total monthly revenue per:                      
PSU (e)     $ 62.39       $ 61.34       1.7 %
Customer relationship (f)     $ 113.04       $ 110.50       2.3 %
                       
                       
      December 31, 2016     December 31, 2015      
Bank credit facility     $ 2,025,000       $ 2,250,000        
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 (g)     $ 2,775,000       $ 3,000,000        
                       
Total leverage ratio (h)     4.00x       4.56x        
Interest coverage ratio (i)     5.70x       4.46x        
                       

____________

                     

* 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, 2016
      Mediacom     Mediacom           Mediacom
      Broadband     LLC     Eliminations     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 (b)       (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     Mediacom             Mediacom
      Broadband     LLC             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 (d)       754,000         598,000                 1,352,000  
                                 
Average total monthly revenue per:                                
PSU (e)     $ 64.24       $ 60.40               $ 62.53  
Customer relationship (f)     $ 117.02       $ 110.00               $ 113.90  
                                 
                                 
      Mediacom     Mediacom             Mediacom
      Broadband     LLC             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 (g)     $ 1,628,000       $ 1,147,000               $ 2,775,000  
                                 
Total leverage ratio (h)     3.83x       3.52x               3.79x  
Interest coverage ratio (i)     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 4*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

             
      Three Months Ended
December 31, 2015
      Mediacom     Mediacom           Mediacom
      Broadband     LLC     Eliminations     Combined
Video    

$

110,728

      $ 85,824             $ 196,552  
High-speed data       76,853         62,575               139,428  
Phone       14,672         12,939               27,611  
Business services       33,772         21,355               55,127  
Advertising       14,838         4,175               19,013  
Total revenues     $ 250,863       $ 186,868             $ 437,731  
Service costs       (99,013 )       (82,467 )             (181,480 )
SG&A expenses       (45,771 )       (29,449 )             (75,220 )
Management fees       (4,750 )       (3,250 )             (8,000 )
OIBDA (a)     $ 101,329       $ 71,702             $ 173,031  
Investment income from affiliate             4,500      

(4,500

)

     
Adjusted OIBDA (a)     $ 101,329       $ 76,202      

(4,500

)

    $ 173,031  
Cash interest expense (a)       (21,604 )       (14,592 )             (36,196 )
Capital expenditures (b)       (39,818 )       (36,861 )             (76,679 )
Dividend to preferred members       (4,500 )    

      4,500        
Free cash flow (a)     $ 35,407       $ 24,749             $ 60,156  
                                 
                                 
      Mediacom     Mediacom             Mediacom
      Broadband     LLC             Combined
Video customers       480,000         375,000                 855,000  
HSD customers       605,000         480,000                 1,085,000  
Phone customers       239,000         194,000                 433,000  
Primary service units ("PSUs")       1,324,000         1,049,000                 2,373,000  
                                 
Video customer declines       (2,000 )       (5,000 )               (7,000 )
HSD customer increases       12,000         6,000                 18,000  
Phone customer increases       6,000         3,000                 9,000  
Quarterly PSU increases       16,000         4,000                 20,000  
                                 
Customer relationships (d)       732,000         585,000                 1,317,000  
                                 
Average total monthly revenue per:                                
PSU (e)     $ 63.54       $ 59.49               $ 61.75  
Customer relationship (f)     $ 114.94       $ 106.66               $ 111.25  
                                 
                                 
      Mediacom     Mediacom             Mediacom
      Broadband     LLC             Combined
Bank credit facility     $ 1,329,750       $ 920,250               $ 2,250,000  
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 (g)     $ 1,829,750       $ 1,170,250               $ 3,000,000  
                                 
Total leverage ratio (h)     4.51x       3.84x               4.33x  
Interest coverage ratio (i)     4.69x       5.22x               4.78x  
                                 

________________

                               

* 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, 2016
      Mediacom     Mediacom           Mediacom
      Broadband     LLC     Eliminations     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 (b)       (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     Mediacom             Mediacom
      Broadband     LLC             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 (d)       754,000         598,000                 1,352,000  
                                 
Average total monthly revenue per:                                
PSU (e)     $ 63.92       $ 60.46               $ 62.39  
Customer relationship (f)     $ 115.89       $ 109.47               $ 113.04  
                                 
                                 
      Mediacom     Mediacom             Mediacom
      Broadband     LLC             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 (g)     $ 1,628,000       $ 1,147,000               $ 2,775,000  
                                 
Total leverage ratio (h)     4.08x       3.67x               4.00x  
Interest coverage ratio (i)     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 6*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

             
      Year Ended
December 31, 2015
      Mediacom     Mediacom           Mediacom
      Broadband     LLC     Eliminations     Combined
Video    

$

451,446

      $ 348,370             $ 799,816  
High-speed data       295,049         240,513               535,562  
Phone       60,087         53,154               113,241  
Business services       128,684         81,722               210,406  
Advertising       47,096         14,951               62,047  
Total revenues     $ 982,362       $ 738,710             $ 1,721,072  
Service costs       (401,751 )       (327,112 )             (728,863 )
SG&A expenses       (182,144 )       (119,716 )             (301,860 )
Management fees       (19,000 )       (13,000 )             (32,000 )
OIBDA (a)     $ 379,467       $ 278,882             $ 658,349  
Investment income from affiliate             18,000      

(18,000

)

     
Adjusted OIBDA (a)     $ 379,467       $ 296,882      

(18,000

)

    $ 658,349  
Cash interest expense (a)       (87,759 )       (59,900 )             (147,659 )
Capital expenditures (b)       (151,204 )       (137,041 )             (288,245 )
Dividend to preferred members       (18,000 )           18,000        
Free cash flow (a)     $ 122,504       $ 99,941             $ 222,445  
                                 
                                 
      Mediacom     Mediacom             Mediacom
      Broadband     LLC             Combined
Video customers       480,000         375,000                 855,000  
HSD customers       605,000         480,000                 1,085,000  
Phone customers       239,000         194,000                 433,000  
Primary service units ("PSUs")       1,324,000         1,049,000                 2,373,000  
                                 
Video customer declines       (20,000 )       (15,000 )               (35,000 )
HSD customer increases       41,000         31,000                 72,000  
Phone customer increases       21,000         12,000                 33,000  
Annual PSU increases       42,000         28,000                 70,000  
                                 
Customer relationships (d)       732,000         585,000                 1,317,000  
                                 
Average total monthly revenue per:                                
PSU (e)     $ 62.83       $ 59.48               $ 61.34  
Customer relationship (f)     $ 113.54       $ 106.69               $ 110.50  
                                 
                                 
      Mediacom     Mediacom             Mediacom
      Broadband     LLC             Combined
Bank credit facility     $ 1,329,750       $ 920,250               $ 2,250,000  
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 (g)     $ 1,829,750       $ 1,170,250               $ 3,000,000  
                                 
Total leverage ratio (h)     4.82x       3.94x               4.56x  
Interest coverage ratio (i)     4.32x       4.96x               4.46x  
                                 

_________________

                               

* 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)

 

Capital expenditures exclude changes in accrued property, plant and equipment. For Mediacom Broadband LLC changes in accrued property, plant and equipment represented cash uses of $3.3 million and $3.8 million for three months and full year ended December 31, 2016, respectively, and cash sources of $4.4 million and $4.9 million for the three months and full year ended December 31, 2015, respectively. For Mediacom LLC, changes in accrued property, plant and equipment represented cash uses of $0.4 million and $4.4 million for the three months and full year ended December 31, 2016, respectively, and cash sources of $3.9 million and $6.4 million for the three months and full year ended December 31, 2015, respectively.

     

(c)

 

Represents OIBDA as a percentage of total revenues.

     

(d)

 

Represents the total number of customers that take at least one service, without regard to which service(s) customers purchase.

     

(e)

 

Represents average total monthly revenues for the period divided by average PSUs for such period.

     

(f)

 

Represents average total monthly revenues for the period divided by average customer relationships for such period.

     

(g)

 

Total debt excludes the effect of deferred financing costs, net.

     

(h)

 

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.

     

(i)

 

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.

 

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