Mediacom Communications Reports Combined Results for Second Quarter 2017

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

Mediacom Combined Results for Second Quarter 2017*

• Revenues were $471.5 million, reflecting a 4.6% increase from the prior year period
• OIBDA was $179.6 million, reflecting a 4.0% increase from the prior year period
• Capital expenditures were $89.1 million, compared to $86.4 million in the prior year period
• Free cash flow was $64.1 million, compared to $55.6 million in the prior year period
• Ending primary service units (“PSUs”) of 2,534,000, a 4.5% increase from June 30, 2016
  • Includes 14,000 PSUs acquired by Mediacom LLC in January 2017
• Ending customer relationships of 1,364,000, a 2.1% increase from June 30, 2016
  • Includes 9,000 customer relationships acquired by Mediacom LLC in January 2017
• Total leverage ratio of 3.78x, compared to 4.19x at June 30, 2016
• Interest coverage ratio of 6.82x, compared to 5.61x at June 30, 2016
• Ending total debt of $2,715.0 million, a reduction of $180.0 million from June 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 August 3, 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 June 30,
		2017			2016		YoY% Change
Video	$	201,311		$	203,257		(1.0	%)
High-speed data		167,040			149,357		11.8	%
Phone		28,230			27,581		2.4	%
Business services		62,210			57,367		8.4	%
Advertising		12,671			13,259		(4.4	%)
Total revenues	$	471,462		$	450,821		4.6	%
Service costs		(202,765	)		(190,606	)	6.4	%
SG&A expenses		(80,614	)		(79,540	)	1.4	%
Management fees		(8,500	)		(8,000	)	6.3	%
OIBDA ^(a)	$	179,583		$	172,675		4.0	%
Cash interest expense ^(a)		(26,335	)		(30,760	)	(14.4	%)
Capital expenditures		(89,125	)		(86,353	)	3.2	%
Free cash flow ^(a)	$	64,123		$	55,562		15.4	%
OIBDA margin ^(b)		38.1	%		38.3	%
	June 30, 2017			June 30, 2016			YoY% Change
Video customers		829,000			842,000		(1.5	%)
High-speed data (“HSD”) customers		1,185,000			1,128,000		5.1	%
Phone customers		520,000			454,000		14.5	%
Primary service units (“PSUs”)		2,534,000			2,424,000		4.5	%
Video customer declines		(3,000	)		(11,000	)
HSD customer increases		6,000			14,000
Phone customer increases		25,000			10,000
Quarterly PSU increases		28,000			13,000
Customer relationships ^(c)		1,364,000			1,336,000		2.1	%
Average total monthly revenue per:
PSU ^(d)	$	62.36		$	62.16		0.3	%
Customer relationship ^(e)	$	115.05		$	112.61		2.2	%
	June 30, 2017			June 30, 2016
Bank credit facility	$	2,215,000		$	2,145,000
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)	$	2,715,000		$	2,895,000
Total leverage ratio ^(g)	3.78x			4.19x
Interest coverage ratio ^(h)	6.82x			5.61x

* 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 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)	5.93x			8.93x					6.82x

* 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 June 30, 2016
	Mediacom Broadband			Mediacom LLC			Eliminations		Mediacom Combined
Video	$	114,148		$	89,109		―		$	203,257
High-speed data		82,307			67,050		―			149,357
Phone		14,655			12,926		―			27,581
Business services		34,950			22,417		―			57,367
Advertising		10,308			2,951		―			13,259
Total revenues	$	256,368		$	194,453		―		$	450,821
Service costs		(105,413	)		(85,193	)	―			(190,606	)
SG&A expenses		(48,133	)		(31,407	)	―			(79,540	)
Management fees		(4,750	)		(3,250	)	―			(8,000	)
OIBDA ^(a)	$	98,072		$	74,603		―		$	172,675
Investment income from affiliate	―				4,500		(4,500	)	―
Adjusted OIBDA ^(a)	$	98,072		$	79,103		(4,500	)	$	172,675
Cash interest expense ^(a)		(18,461	)		(12,299	)	―			(30,760	)
Capital expenditures		(45,013	)		(41,340	)	―			(86,353	)
Dividend to preferred members		(4,500	)	―			4,500		―
Free cash flow ^(a)	$	30,098		$	25,464		―		$	55,562
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Video customers		472,000			370,000					842,000
HSD customers		628,000			500,000					1,128,000
Phone customers		250,000			204,000					454,000
Primary service units (“PSUs”)		1,350,000			1,074,000					2,424,000
Video customer declines		(7,000	)		(4,000	)				(11,000	)
HSD customer increases		7,000			7,000					14,000
Phone customer increases		5,000			5,000					10,000
Quarterly PSU increases		5,000			8,000					13,000
Customer relationships ^(c)		741,000			595,000					1,336,000
Average total monthly revenue per:
PSU ^(d)	$	63.42		$	60.58				$	62.16
Customer relationship ^(e)	$	115.40		$	109.12				$	112.61
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Bank credit facility	$	1,188,000		$	957,000				$	2,145,000
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)	$	1,688,000		$	1,207,000				$	2,895,000
Total leverage ratio ^(g)	4.30x			3.81x					4.19x
Interest coverage ratio ^(h)	5.31x			6.43x					5.61x

* 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.