Mediacom Communications Reports Combined Results for First Quarter 2016

MEDIACOM PARK, N.Y.--(BUSINESS WIRE)--MEDIACOM COMMUNICATIONS CORPORATION today released combined unaudited financial and operating highlights for the three months ended March 31, 2016.

Mediacom Combined Results for First Quarter 2016*

• Revenues were $444.8 million, reflecting a 5.9% increase from the prior year period
• OIBDA was $169.1 million, reflecting a 6.7% increase from the prior year period
• Capital expenditures were $78.6 million, compared to $63.0 million in the prior year period
• Free cash flow was $59.1 million, compared to $58.1 million in the prior year period
• Ending primary service units (“PSUs”) of 2,411,000, a 2.9% increase from March 31, 2015
• Ending customer relationships of 1,333,000, a 2.8% increase from March 31, 2015
• Total leverage ratio of 4.36x, compared to 4.98x at March 31, 2015
• Interest coverage ratio of 5.38x, compared to 4.24x for the prior year period
• Ending total debt of $2,950.0 million, a $210.0 million reduction from March 31, 2015

Reference to “Mediacom Combined” reflects the combined results of Mediacom Broadband LLC and Mediacom LLC, eliminating intercompany amounts. The Mediacom Combined information is being provided for convenience and informational purposes only, and does not modify or supplement the previously released separate financial results of Mediacom Broadband LLC and Mediacom LLC. Holders of Mediacom Broadband LLC or Mediacom LLC debt should refer to the separate financial and operating results for each company, which were previously released and furnished with the Securities and Exchange Commission on Form 8-K on May 3, 2016.

About Mediacom

Mediacom Communications Corporation is the eighth largest cable operator in the U.S. serving about 1.3 million customers in smaller markets primarily in the Midwest and Southeast through its wholly-owned subsidiaries, Mediacom Broadband LLC and Mediacom LLC. 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.mediacomcc.com.

TABLE 1* Mediacom Communications Corporation Selected Combined Financial and Operating Data (Dollars in thousands, except per unit data) (Unaudited)
	Three Months Ended March 31,
	2016			2015			YoY% Change
Video	$	199,393		$	199,661		(0.1	%)
High-speed data		145,094			128,044		13.3	%
Phone		27,408			28,773		(4.7	)%
Business services		55,739			50,181		11.1	%
Advertising		17,153			13,338		28.6	%
Total revenues	$	444,787		$	419,997		5.9	%
Service costs		(189,426	)		(180,869	)	4.7	%
SG&A expenses		(77,308	)		(72,619	)	6.5	%
Management fees		(9,000	)		(8,000	)	12.5	%
OIBDA ^(a)	$	169,053		$	158,509		6.7	%
Cash interest expense ^(a)		(31,415	)		(37,420	)	(16.0	)%
Capital expenditures ^(b)		(78,563	)		(62,990	)	24.7	%
Free cash flow ^(a)	$	59,075		$	58,099		1.7	%
OIBDA margin ^(c)		38.0	%		37.7	%
	March 31, 2016			March 31, 2015			YoY% Change
Video customers		853,000			891,000		(4.3	)%
High-speed data (“HSD”) customers		1,114,000			1,041,000		7.0	%
Phone customers		444,000			411,000		8.0	%
Primary service units (“PSUs”)		2,411,000			2,343,000		2.9	%
Video customer (declines) increases		(2,000	)		1,000
HSD customer increases		29,000			28,000
Phone customer increases		11,000			11,000
Quarterly PSU increases		38,000			40,000
Customer relationships ^(d)		1,333,000			1,297,000		2.8	%
Average total monthly revenue per:
PSU ^(e)	$	61.98		$	60.27		2.8	%
Customer relationship ^(f)	$	111.90		$	108.69		3.0	%
	March 31, 2016			March 31, 2015
Bank credit facility	$	2,200,000		$	2,410,000
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)	$	2,950,000		$	3,160,000
Total leverage ratio ^(h)	4.36x			4.98x
Interest coverage ratio ^(i)	5.38x			4.24x

*	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 March 31, 2016
	Mediacom Broadband			Mediacom LLC			Eliminations		Mediacom Combined
Video	$	112,702		$	86,691		―		$	199,393
High-speed data		80,037			65,057		―			145,094
Phone		14,562			12,846		―			27,408
Business services		34,034			21,705		―			55,739
Advertising		13,883			3,270		―			17,153
Total revenues	$	255,218		$	189,569		―		$	444,787
Service costs		(104,475	)		(84,951	)	―			(189,426	)
SG&A expenses		(46,968	)		(30,340	)	―			(77,308	)
Management fees		(5,350	)		(3,650	)	―			(9,000	)
OIBDA ^(a)	$	98,425		$	70,628		―		$	169,053
Investment income from affiliate	―				4,500		(4,500	)	―
Adjusted OIBDA ^(a)	$	98,425		$	75,128		(4,500	)	$	169,053
Cash interest expense ^(a)		(19,079	)		(12,336	)	―			(31,415	)
Capital expenditures ^(b)		(42,345	)		(36,218	)	―			(78,563	)
Dividend to preferred members		(4,500	)	―			4,500		―
Free cash flow ^(a)	$	32,501		$	26,574		―		$	59,075
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Video customers		479,000			374,000					853,000
HSD customers		621,000			493,000					1,114,000
Phone customers		245,000			199,000					444,000
Primary service units (“PSUs”)		1,345,000			1,066,000					2,411,000
Video customer declines		(1,000	)		(1,000	)				(2,000	)
HSD customer increases		16,000			13,000					29,000
Phone customer increases		6,000			5,000					11,000
Quarterly PSU increases		21,000			17,000					38,000
Customer relationships ^(d)		740,000			593,000					1,333,000
Average total monthly revenue per:
PSU ^(e)	$	63.75		$	59.75				$	61.98
Customer relationship ^(f)	$	115.59		$	107.28				$	111.90
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Bank credit facility	$	1,280,000		$	920,000				$	2,200,000
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)	$	1,780,000		$	1,170,000				$	2,950,000
Total leverage ratio ^(h)	4.52x			3.89x					4.36x
Interest coverage ratio ^(i)	5.16x			6.09x					5.38x

*	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 March 31, 2015
	Mediacom Broadband			Mediacom LLC			Eliminations		Mediacom Combined
Video	$	113,370		$	86,291		―		$	199,661
High-speed data		70,601			57,443		―			128,044
Phone		15,232			13,541		―			28,773
Business services		30,598			19,583		―			50,181
Advertising		10,152			3,186		―			13,338
Total revenues	$	239,953		$	180,044		―		$	419,997
Service costs		(100,225	)		(80,644	)	―			(180,869	)
SG&A expenses		(43,775	)		(28,844	)	―			(72,619	)
Management fees		(4,750	)		(3,250	)	―			(8,000	)
OIBDA ^(a)	$	91,203		$	67,306		―		$	158,509
Investment income from affiliate	―				4,500		(4,500	)	―
Adjusted OIBDA ^(a)	$	91,203		$	71,806		(4,500	)	$	158,509
Cash interest expense ^(a)		(22,164	)		(15,256	)	―			(37,420	)
Capital expenditures ^(b)		(34,410	)		(28,580	)	―			(62,990	)
Dividend to preferred members		(4,500	)	―			4,500		―
Free cash flow ^(a)	$	30,129		$	27,970		―		$	58,099
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Video customers		502,000			389,000					891,000
HSD customers		581,000			460,000					1,041,000
Phone customers		225,000			186,000					411,000
Primary service units (“PSUs”)		1,308,000			1,035,000					2,343,000
Video customer increases (declines)		2,000			(1,000	)				1,000
HSD customer increases		17,000			11,000					28,000
Phone customer increases		7,000			4,000					11,000
Quarterly PSU increases		26,000			14,000					40,000
Customer relationships ^(d)		719,000			578,000					1,297,000
Average total monthly revenue per:
PSU ^(e)	$	61.76		$	58.38				$	60.27
Customer relationship ^(f)	$	111.94		$	104.65				$	108.69
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Bank credit facility	$	1,422,000		$	988,000				$	2,410,000
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)	$	1,922,000		$	1,238,000				$	3,160,000
Total leverage ratio ^(h)	5.27x			4.31x					4.98x
Interest coverage ratio ^(i)	4.11x			4.71x					4.24x

*	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)	Capital expenditures for the three months ended March 31, 2016 exclude changes in accrued property, plant and equipment, which represented a cash source of $1.1 million and a cash use of $0.9 million at Mediacom Broadband LLC and Mediacom LLC, respectively. Capital expenditures for the three months ended March 31, 2015 exclude changes in accrued property, plant and equipment, which represented a cash use of $0.1 million and a cash source of $0.6 million for Mediacom Broadband LLC and Mediacom LLC, 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 quarter divided by average PSUs for such quarter.
(f)	Represents average total monthly revenues for the quarter divided by average customer relationships for such quarter.
(g)	Total debt excludes the effect of deferred financing costs, net.
(h)	For Mediacom Combined and Mediacom Broadband LLC, represents total debt at quarter end divided by annualized OIBDA for the quarter. For Mediacom LLC, represents total debt at quarter end divided by annualized Adjusted OIBDA for the quarter.
(i)	For Mediacom Combined and Mediacom Broadband LLC, represents OIBDA divided by cash interest expense for the quarter. For Mediacom LLC, represents Adjusted OIBDA divided by cash interest expense for the quarter.