Market Overview

Mediacom Communications Reports Combined Results for Second Quarter 2018

Share:

MEDIACOM COMMUNICATIONS CORPORATION today released combined unaudited
financial and operating highlights for the three months ended June 30,
2018.

Mediacom Combined Results for Second Quarter
2018*

  • Revenues were $488.4 million, reflecting a 3.6% increase from the
    prior year period
  • OIBDA was $185.1 million, reflecting a 3.1% increase from the prior
    year period
  • Capital expenditures were $76.9 million, compared to $89.1 million in
    the prior year period
  • Free cash flow was $86.6 million, compared to $64.1 million in the
    prior year period
  • Ending primary service units ("PSUs") of 2,658,000, a 4.9% increase
    from June 30, 2017
  • Ending customer relationships of 1,368,000, a 0.3% increase from June
    30, 2017
  • Total leverage ratio of 3.35x, compared to 3.78x at June 30, 2017
  • Interest coverage ratio of 8.59x, compared to 6.82x at June 30, 2017
  • Ending total debt of $2,480.0 million, a $235.0 million reduction from
    June 30, 2017

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 August 2, 2018.

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
June 30,
  2018       2017   YoY % Change
Video $

195,427

$ 201,311 (2.9 %)
High-speed data 184,190 167,040 10.3 %
Phone 28,389 28,230 0.6 %
Business services 68,062 62,210 9.4 %
Advertising   12,356     12,671   (2.5 %)
Total revenues $ 488,424 $ 471,462 3.6 %
Service costs (212,641 ) (202,765 ) 4.9 %
SG&A expenses (81,671 ) (80,614 ) 1.3 %
Management fees   (9,000 )   (8,500 ) 5.9 %
OIBDA (a) $ 185,112 $ 179,583 3.1 %
Cash interest expense (a) (21,556 ) (26,335 ) (18.1 %)
Capital expenditures   (76,907 )   (89,125 ) (13.7 %)
Free cash flow (a) $ 86,649   $ 64,123   35.1 %
 
OIBDA margin (b) 37.9 % 38.1 %
           
 
June 30, 2018 June 30, 2017 YoY % Change
Video customers 808,000 829,000 (2.5 %)
High-speed data ("HSD") customers 1,251,000 1,185,000 5.6 %
Phone customers   599,000     520,000   15.2 %
Primary service units ("PSUs") 2,658,000 2,534,000 4.9 %
 
Video customer declines (9,000 ) (3,000 )
HSD customer increases 23,000 6,000
Phone customer increases   17,000     25,000  
Quarterly PSU increases 31,000 28,000
 
Customer relationships (c) 1,368,000 1,364,000 0.3 %
 
Average total monthly revenue per:
PSU (d) $ 61.61 $ 62.36 (1.2 %)
Customer relationship (e) $ 119.23 $ 115.05 3.6 %
           
 
June 30, 2018 June 30, 2017
Bank credit facility $ 2,280,000 $ 2,215,000
5½% senior notes due 2021 200,000 200,000
6⅜% senior notes due 2023

―     

  300,000  
Total debt (f) $ 2,480,000 $ 2,715,000
 
Total leverage ratio (g)

3.35x  

3.78x  

Interest coverage ratio (h)

8.59x  

6.82x  

_______________

* See Table 4 for information about our use of non-GAAP measures and
definitions of OIBDA and free cash flow, Table 5 regarding the
effect of recent changes to certain accounting standards on our
revenue recognition and Table 6 for footnotes.
 
 

TABLE 2*

Mediacom Communications Corporation

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

(Unaudited)

 
Three Months Ended
June 30, 2018

Mediacom
Broadband

 

Mediacom
LLC

  Eliminations  

Mediacom
Combined

Video $

107,812

$ 87,615

$ 195,427
High-speed data 100,023 84,167

184,190
Phone 15,271 13,118

28,389
Business services 41,682 26,380

68,062
Advertising   9,964     2,392  

    12,356  
Total revenues $ 274,752 $ 213,672

$ 488,424
Service costs (115,267 ) (97,374 )

(212,641 )
SG&A expenses (49,102 ) (32,569 )

(81,671 )
Management fees   (5,350 )   (3,650 )

    (9,000 )
OIBDA (a) $ 105,033 $ 80,079

$ 185,112
Investment income from affiliate     4,500   (4,500 )

 
Adjusted OIBDA (a) $ 105,033 $ 84,579 (4,500 ) $ 185,112
Cash interest expense (a) (12,307 ) (9,249 ) (21,556 )
Capital expenditures (40,439 ) (36,468 ) (76,907 )
Dividend to preferred members   (4,500 )   4,500    
Free cash flow (a) $ 47,787   $ 38,862     $ 86,649  
                       
 

Mediacom
Broadband

Mediacom
LLC

Mediacom
Combined

Video customers 447,000 361,000 808,000
HSD customers 690,000 561,000 1,251,000
Phone customers   332,000     267,000     599,000  
Primary service units ("PSUs") 1,469,000 1,189,000 2,658,000
 
Video customer declines (6,000 ) (3,000 ) (9,000 )
HSD customer increases 11,000 12,000 23,000
Phone customer increases   9,000     8,000     17,000  
Quarterly PSU increases 14,000 17,000 31,000
 
Customer relationships (c) 757,000 611,000 1,368,000
 
Average total monthly revenue per:
PSU (d) $ 62.64 $ 60.33 $ 61.61
Customer relationship (e) $ 121.06 $ 116.95 $ 119.23
                       
 

Mediacom
Broadband

Mediacom
LLC

Mediacom
Combined

Bank credit facility $ 1,127,500 $ 1,152,500 $ 2,280,000
5½% senior notes due 2021 200,000 200,000
6⅜% senior notes due 2023      
Total debt (f) $ 1,327,500 $ 1,152,500 $ 2,480,000
 
Total leverage ratio (g) 3.16x 3.41x 3.35x
Interest coverage ratio (h) 8.53x 9.14x 8.59x

_______________

* See Table 4 for information about our use of non-GAAP measures and
definitions of OIBDA and free cash flow, Table 5 regarding the
effect of recent changes to certain accounting standards on our
revenue recognition and Table 6 for footnotes.
 
 

TABLE 3*

Mediacom Communications Corporation

Selected Combined Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 
Three Months Ended
June 30, 2017

Mediacom
Broadband

 

Mediacom
LLC

    Eliminations  

Mediacom
Combined

Video $

111,522

$ 89,789 $ 201,311
High-speed data 91,246 75,794 167,040
Phone 15,049 13,181 28,230
Business services 37,978 24,232 62,210
Advertising   10,110     2,561       12,671  
Total revenues $ 265,905 $ 205,557 $ 471,462
Service costs (110,930 ) (91,835 ) (202,765 )
SG&A expenses (48,621 ) (31,993 ) (80,614 )
Management fees   (5,015 )   (3,485 )     (8,500 )
OIBDA (a) $ 101,339 $ 78,244 $ 179,583
Investment income from affiliate     4,500   (4,500 )  
Adjusted OIBDA (a) $ 101,339 $ 82,744 (4,500 ) $ 179,583
Cash interest expense (a) (17,074 ) (9,261 ) (26,335 )
Capital expenditures (48,726 ) (40,399 ) (89,125 )
Dividend to preferred members   (4,500 )   4,500    
Free cash flow (a) $ 31,039   $ 33,084     $ 64,123  
                         
 

Mediacom
Broadband

Mediacom
LLC

 

Mediacom
Combined

Video customers 459,000 370,000 829,000
HSD customers 655,000 530,000 1,185,000
Phone customers   288,000     232,000     520,000  
Primary service units ("PSUs") 1,402,000 1,132,000 2,534,000
 
Video customer declines (2,000 ) (1,000 ) (3,000 )
HSD customer increases 3,000 3,000 6,000
Phone customer increases   15,000     10,000     25,000  
Quarterly PSU increases 16,000 12,000 28,000
 
Customer relationships (c) 754,000 610,000 1,364,000
 
Average total monthly revenue per:
PSU (d) $ 63.58 $ 60.85 $ 62.36
Customer relationship (e) $ 117.32 $ 112.23 $ 115.05
                         
 

Mediacom
Broadband

Mediacom
LLC

Mediacom
Combined

Bank credit facility $ 1,014,000 $ 1,201,000 $ 2,215,000
5½% senior notes due 2021 200,000 200,000
6⅜% senior notes due 2023   300,000       300,000  
Total debt (f) $ 1,514,000 $ 1,201,000 $ 2,715,000
 
Total leverage ratio (g) 3.73x 3.63x 3.78x
Interest coverage ratio (h) 5.94x 8.93x 6.82x

_______________

* See Table 4 for information about our use of non-GAAP measures
and definitions of OIBDA and free cash flow, Table 5 regarding the
effect of recent changes to certain accounting standards on our
revenue recognition and Table 6 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 
Changes in Accounting Standards – Revenue
Recognition

As of January 1, 2018, we adopted Accounting Standards Update No.
2014-09 – Revenues from Contracts with Customers and related guidance
(collectively, "revenue recognition"), which was issued by the Financial
Accounting Standards Board. Adoption of this accounting standard
affected both the timing of revenue recognition (the "timing change")
and the allocation of revenues among video, HSD and phone within our
multi-product offerings, in which we offer product bundles at a discount
(the "allocation change"). We adopted this accounting standard using a
modified retrospective transition, and accordingly, the impact of such
adoption was reflected in our financial results only for the three
months ended June 30, 2018 and prior period results were not restated.
The adoption of the new standard did not have a material impact on the
results of operations of Mediacom Combined for the three months ended
June 30, 2018. Excluding the impact of the timing change, on a combined
basis, total revenues and OIBDA for the three months ended June 30,
2018, would have increased 3.6% and 2.8%, respectively. Because of the
allocation change, we recorded a decrease in our video revenues and
corresponding increases in our HSD and phone revenues. Excluding the
overall impact of the timing change and the allocation change, on a
combined basis, video revenues would have decreased 0.7%, HSD revenues
would have increased 8.0% and phone revenues would have decreased 1.1%
for the three months ended June 30, 2018.

TABLE 6 
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.

View Comments and Join the Discussion!