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Mediacom Communications Reports Combined Results for Third Quarter 2017

MEDIACOM PARK, N.Y.--(BUSINESS WIRE)--MEDIACOM COMMUNICATIONS CORPORATION today released combined unaudited financial and operating highlights for the three months ended September 30, 2017.

Mediacom Combined Results for Third Quarter 2017*

  • Revenues were $471.6 million, reflecting a 3.8% increase from the prior year period
  • OIBDA was $173.0 million, reflecting a 2.3% increase from the prior year period
  • Capital expenditures were $90.0 million, compared to $82.1 million in the prior year period
  • Free cash flow was $56.5 million, compared to $57.0 million in the prior year period
  • Ending primary service units (“PSUs”) of 2,559,000, a 4.6% increase from September 30, 2016
    • Includes 14,000 PSUs acquired by Mediacom LLC in January 2017
  • Ending customer relationships of 1,362,000, a 1.4% increase from September 30, 2016
    • Includes 9,000 customer relationships acquired by Mediacom LLC in January 2017
  • Total leverage ratio of 3.81x, compared to 4.18x at September 30, 2016
  • Interest coverage ratio of 6.51x, compared to 5.63x at September 30, 2016
  • Ending total debt of $2,640.0 million, a reduction of $190.0 million from September 30, 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 November 1, 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.

                               

TABLE 1*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

                               
        Three Months Ended
September 30,
       
        2017     2016     YoY% Change
Video      

$

199,077

      $ 200,560       (0.7 %)
High-speed data         169,000         152,226       11.0 %
Phone         28,275         27,573       2.5 %
Business services         63,073         58,111       8.5 %
Advertising         12,160         15,717       (22.6 %)
Total revenues       $ 471,585       $ 454,187       3.8 %
Service costs         (204,698 )       (193,341 )     5.9 %
SG&A expenses         (84,348 )       (82,762 )     1.9 %
Management fees         (9,500 )       (9,000 )     5.6 %
OIBDA (a)       $ 173,039       $ 169,084       2.3 %
Cash interest expense (a)         (26,600 )       (30,019 )     (11.4 %)
Capital expenditures         (89,985 )       (82,053 )     9.7 %
Free cash flow (a)       $ 56,454       $ 57,012       (1.0 )%
                               
OIBDA margin (b)         36.7 %       37.2 %        
                               
                               
        September 30, 2017     September 30, 2016     YoY% Change
Video customers         823,000         834,000       (1.3 %)
High-speed data (“HSD”) customers         1,194,000         1,145,000       4.3 %
Phone customers         542,000         467,000       16.1 %
Primary service units (“PSUs”)         2,559,000         2,446,000       4.6 %
                               
Video customer declines         (6,000 )       (8,000 )        
HSD customer increases         9,000         17,000          
Phone customer increases         22,000         13,000          
Quarterly PSU increases         25,000         22,000          
                               
Customer relationships (c)         1,362,000         1,343,000       1.4 %
                               
Average total monthly revenue per:                              
PSU (d)       $ 61.73       $ 62.17       (0.7 )%
Customer relationship (e)       $ 115.33       $ 113.02       2.0 %
                               
                               
        September 30, 2017     September 30, 2016      
Bank credit facility       $ 2,140,000       $ 2,080,000          
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)       $ 2,640,000       $ 2,830,000          
                               
Total leverage ratio (g)      

3.81

x

   

4.18

x

       
Interest coverage ratio (h)      

6.51

x

   

5.63

x

       
                               
*   See Table 4 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 5 for footnotes.
     
                                       

TABLE 2*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

                                       
        Three Months Ended
September 30, 2017
       

Mediacom
Broadband

   

Mediacom
LLC

    Eliminations    

Mediacom
Combined

Video      

$

109,793

      $ 89,284           $ 199,077  
High-speed data         92,012         76,988             169,000  
Phone         15,050         13,225             28,275  
Business services         38,476         24,597             63,073  
Advertising         9,706         2,454             12,160  
Total revenues       $ 265,037       $ 206,548           $ 471,585  
Service costs         (110,885 )       (93,813 )           (204,698 )
SG&A expenses         (50,256 )       (34,092 )           (84,348 )
Management fees         (5,650 )       (3,850 )           (9,500 )
OIBDA (a)       $ 98,246       $ 74,793           $ 173,039  
Investment income from affiliate               4,500       (4,500)      
Adjusted OIBDA (a)       $ 98,246       $ 79,293       (4,500)     $ 173,039  
Cash interest expense (a)         (16,271 )       (10,329 )           (26,600 )
Capital expenditures         (46,491 )       (43,494 )           (89,985 )
Dividend to preferred members         (4,500 )           4,500      
Free cash flow (a)       $ 30,984       $ 25,470           $ 56,454  
                                       
                                       
       

Mediacom
Broadband

   

Mediacom
LLC

         

Mediacom
Combined

Video customers         455,000         368,000               823,000  
HSD customers         659,000         535,000               1,194,000  
Phone customers         300,000         242,000               542,000  
Primary service units (“PSUs”)         1,414,000         1,145,000               2,559,000  
                                       
Video customer declines         (4,000 )       (2,000 )             (6,000 )
HSD customer increases         4,000         5,000               9,000  
Phone customer increases         12,000         10,000               22,000  
Quarterly PSU increases         12,000         13,000               25,000  
                                       
Customer relationships (c)         754,000         608,000               1,362,000  
                                       
Average total monthly revenue per:                                      
PSU (d)       $ 62.75       $ 60.47             $ 61.73  
Customer relationship (e)       $ 117.17       $ 113.05             $ 115.33  
                                       
                                       
       

Mediacom
Broadband

   

Mediacom
LLC

         

Mediacom
Combined

Bank credit facility       $ 972,000       $ 1,168,000             $ 2,140,000  
5½% senior notes due 2021         200,000                     200,000  
6⅜% senior notes due 2023         300,000                     300,000  
Total debt (f)       $ 1,472,000       $ 1,168,000             $ 2,640,000  
                                       
Total leverage ratio (g)      

3.75

x

   

3.68

x

         

3.81

x

Interest coverage ratio (h)      

6.04

x

   

7.68

x

         

6.51

x

                                 
*   See Table 4 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 5 for footnotes.
     
                                       

TABLE 3*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

                                       
        Three Months Ended
September 30, 2016
       

Mediacom
Broadband

   

Mediacom
LLC

    Eliminations    

Mediacom
Combined

Video      

$

112,188

      $ 88,372           $ 200,560  
High-speed data         83,482         68,744             152,226  
Phone         14,625         12,948             27,573  
Business services         35,639         22,472             58,111  
Advertising         12,765         2,952             15,717  
Total revenues       $ 258,699       $ 195,488           $ 454,187  
Service costs         (106,127 )       (87,214 )           (193,341 )
SG&A expenses         (50,600 )       (32,162 )           (82,762 )
Management fees         (5,350 )       (3,650 )           (9,000 )
OIBDA (a)       $ 96,622       $ 72,462           $ 169,084  
Investment income from affiliate               4,500       (4,500)      
Adjusted OIBDA (a)       $ 96,622       $ 76,962       (4,500)     $ 169,084  
Cash interest expense (a)         (17,916 )       (12,103 )           (30,019 )
Capital expenditures         (44,122 )       (37,931 )           (82,053 )
Dividend to preferred members         (4,500 )           4,500      
Free cash flow (a)       $ 30,084       $ 26,928           $ 57,012  
                                       
                                       
       

Mediacom
Broadband

   

Mediacom
LLC

         

Mediacom
Combined

Video customers         466,000         368,000               834,000  
HSD customers         636,000         509,000               1,145,000  
Phone customers         257,000         210,000               467,000  
Primary service units (“PSUs”)         1,359,000         1,087,000               2,446,000  
                                       
Video customer declines         (6,000 )       (2,000 )             (8,000 )
HSD customer increases         8,000         9,000               17,000  
Phone customer increases         7,000         6,000               13,000  
Quarterly PSU increases         9,000         13,000               22,000  
                                       
Customer relationships (c)         744,000         599,000               1,343,000  
                                       
Average total monthly revenue per:                                      
PSU (d)       $ 63.66       $ 60.31             $ 62.17  
Customer relationship (e)       $ 116.14       $ 109.15             $ 113.02  
                                       
                                       
       

Mediacom
Broadband

   

Mediacom
LLC

         

Mediacom
Combined

Bank credit facility       $ 1,155,000       $ 925,000             $ 2,080,000  
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)       $ 1,655,000       $ 1,175,000             $ 2,830,000  
                                       
Total leverage ratio (g)      

4.28

x

   

3.82

x

         

4.18

x

Interest coverage ratio (h)      

5.39

x

   

6.36

x

         

5.63

x

                                       
*   See Table 4 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 5 for footnotes.
     

TABLE 4
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 5

Footnotes

 

(a)

  See Table 4 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.
     

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