Altice USA Reports First Quarter 2022 Results

NEW YORK--()--Altice USA (NYSE: ATUS) today reports results for the first quarter ended March 31, 2022.

Dexter Goei, Altice USA Chief Executive Officer, said: I am very pleased with our progress in this year of reinvestment and execution towards our key growth initiatives. The rapid expansion of our Optimum Fiber network is on schedule and continues to drive meaningful improvements across all of our customer service metrics relative to our legacy network. Significant progress has been made more broadly in enhancing our products and overall customer experience, as well as expanding our sales distribution channels. We are also off to a very good start with creating consistency in our marketing and offers under one unified Optimum brand.”

Key Financial Highlights

  • Total Revenue declined -2.3% YoY in Q1 2022 to $2.42 billion (-2.1% excluding air strand revenue(1)), including Residential revenue decline of -3.6% YoY, Business Services revenue growth of +0.1% YoY (+1.5% excluding air strand revenue(1)) and News & Advertising revenue growth of +9.1% YoY.
  • Net income attributable to stockholders was $196.6 million in Q1 2022 ($0.43/share on a diluted basis) compared to net income of $274.1 million in Q1 2021 ($0.58/share on a diluted basis).
  • Net cash flows from operating activities were $600.2 million in Q1 2022, compared to $749.6 million in Q1 2021.
  • Adjusted EBITDA(2) declined -7.7% YoY in Q1 2022 to $991.7 million with a margin of 40.9%.
  • Cash capital expenditures of $392.4 million in Q1 2022 represented 16.2% of revenue and were up 84.4% YoY mainly driven by accelerated fiber ("FTTH") rollout and new builds (9.5% of revenue excluding FTTH and new builds).
  • Operating Free Cash Flow(2) decreased -30.5% YoY to $599.4 million in Q1 2022.
  • Free Cash Flow(2) decreased -61.3% YoY to $207.8 million in Q1 2022.

Q1-22 Summary Financials

Three Months Ended March 31,

(in thousands)

2022

 

2021

Revenue

$2,421,897

 

$2,478,821

Net income attributable to Altice USA, Inc. stockholders

196,551

 

274,136

Adjusted EBITDA(2)

991,730

 

1,074,805

Capital Expenditures (cash)

392,371

 

212,791

Revenue Growth and Adjusted EBITDA Detail

 

Q1-22

 

 

 

Total Revenue YoY

 

(2.3)%

excl. air strand revenue(1)

 

(2.1)%

 

 

 

Residential Revenue YoY

 

(3.6)%

 

 

 

Business Services Revenue YoY

 

+0.1%

excl. air strand revenue(1)

 

+1.5%

 

 

 

News & Advertising Revenue YoY

 

+9.1%

 

 

 

Adjusted EBITDA YoY

 

(7.7)%

Adjusted EBITDA Margin

 

40.9%

Residential unique customer relationships, broadband subscribers and organic net additions (losses)

Subscribers (in thousands)

FY-20(3)

Q1-21

 

Q2-21(4)

 

Q3-21

 

Q4-21

 

FY-21(4)

 

Q1-22

Residential ending customer relationships

4,648.4

4,647.4

 

4,670.7

 

4,646.0

 

4,632.8

 

4,632.8

 

4,612.1

Residential customer organic net additions (losses)

80.8

(1.0)

 

(11.9)

 

(24.7)

 

(13.2)

 

(50.8)

 

(20.7)

Broadband ending subscribers

4,359.2

4,370.8

 

4,401.3

 

4,388.1

 

4,386.2

 

4,386.2

 

4,373.2

Broadband organic net additions (losses)

142.1

11.5

 

0.2

 

(13.1)

 

(1.9)

 

(3.3)

 

(13.0)

Key Operational Highlights

  • Total unique Residential customer relationships declined -1.5% YoY in Q1 2022 on an organic basis (-0.8% including the acquisition of Morris Broadband in Q2 2021). Unique Residential customer net losses in the quarter were -21k, compared to -1k Residential customer net losses in Q1 2021.
    • Residential Broadband RGUs: Quarterly Residential broadband net losses were -13k in Q1 2022, compared to +12k broadband net additions in Q1 2021.
    • Residential Video RGUs: Quarterly video net losses were -74k in Q1 2022, compared to -54k video net losses in Q1 2021.
  • Residential revenue declined -3.6% YoY in Q1 2022 to $1.91 billion:
    • Residential revenue per customer relationship in Q1 2022 declined -3.0% YoY to $137.92, mostly due to the loss of higher ARPU video customers, although was stable sequentially (+0.1% compared to Q4 2021).
  • Business Services revenue grew +0.1% YoY in Q1 2022 to $368 million, or grew +1.5% excluding air strand revenue(1). SMB / Other revenue was flat (-0.1% YoY) in Q1 2022, or grew +1.9% excluding air strand revenue(1). Lightpath revenue grew +0.6% YoY in Q1 2022. The Lightpath business increased net sales bookings by ~70% YoY in Q1 2022 which is expected to support accelerated revenue growth in the coming quarters.
  • News and Advertising revenue grew +9.1% YoY to $115 million in Q1 2022, approaching pre-pandemic levels of growth, driven by strength in the travel, entertainment, and sports betting segments.

Fiber Rollout and Network Upgrade Update

  • Fiber (FTTH) rollout update: Altice USA is executing on an accelerated fiber deployment over the next four years across its Optimum and Suddenlink footprint (under the Optimum Fiber brand), expecting to reach 6.5 million fiber passings by the end of 2025 (including 1.3 million total incremental FTTH passings in FY 2022). As of Q1 2022 the Company has 1.32 million FTTH passings, adding 146k new FTTH passings in the quarter. The company reported +11k FTTH customer net additions in Q1 2022, reaching 6.1% penetration of the FTTH network.
  • New build activity update: Altice USA has also been accelerating the pace of its network edge-outs, adding +42k total passings in Q1 2022, and a total of +237k total passings in the last twelve months (“LTM”) (+149k passings have been added LTM on an organic basis excluding the acquisition of Morris Broadband in Q2 2021). The Company continues to see strong momentum in growing customer penetration, typically reaching approximately 40% within a year of rollout in new-build areas. The Company is targeting an incremental 175k+ new passings in FY 2022.
  • HFC cable network upgrades update: Altice USA continues to upgrade its existing hybrid fiber-coaxial ("HFC") network to deliver higher speeds to customers in certain Suddenlink markets. In Q1 2022 the Company completed upgrades of 16k of these homes and is targeting 100k homes to be upgraded in FY 2022. These markets previously only offered up to 150 Mbps download speeds and are being upgraded to offer up to 400 Mbps or 1 Gbps.
  • Infrastructure subsidies update: Altice USA has applied for subsidies for rolling out FTTH to over 150k homes and was awarded its first subsidy grant in Yavapai County (Arizona) for 8k homes in Q1 2022.
  • Broadband speed taken by Altice USA’s customer base on average has nearly doubled in the past three years to 363 Mbps in Q1 2022. Approximately 46% of Altice USA’s broadband customers remain on plans with download speeds of 200 Mbps or less, representing a sizable opportunity to continue to upgrade speeds. Broadband-only customer usage averaged 630 GB per month in Q1 2022, which is 27% higher than the average usage of the entire customer base (495 GB per month).
  • 1 Gbps ("1 Gig") broadband speed sell-in to all new customers, where 1 Gig services are available, was 46% in Q1 2022 (1 Gig sell-in to new customers taking the FTTH product was higher at 59% in Q1 2022). Approximately 17% of the residential customer base currently take 1 Gig speeds, representing a significant growth opportunity for the Company.

FY 2022 Capex Guidance Reiterated

  • The Company expects to continue to accelerate investments in key growth initiatives, increasing cash capex to approximately $1.7 billion to $1.8 billion in FY 2022.

Additional Highlights and Announcements

Altice USA and T-Mobile Extend Strategic MVNO Agreement for Optimum Mobile

At the end of March 2022, Altice USA and T-Mobile announced the expansion of a multi-year MVNO agreement through which T-Mobile will continue to serve as the nationwide network for Altice USA’s Optimum Mobile service. Terms of the new agreement are mutually beneficial to both companies.

Under the agreement, Optimum Mobile customers will continue to benefit from T-Mobile’s nationwide network, including accessing America’s largest 5G network. The agreement also enables Optimum Mobile to provide more flexibility and value to customers and, when coupled with Optimum and Suddenlink broadband service, deliver a 360-degree seamless connectivity experience at home and on the go.

Optimum Mobile has approximately 198k mobile lines(5) as of March 31, 2022. Mobile net additions in Q1 2022 were +12k, supported by new mobile promotions. Mobile revenue grew +25.0% YoY to $24.0 million for the quarter. At the end of Q1 2022, Optimum Mobile reached 4.3% penetration of Altice USA's Residential customer base.

“Let's Reconnect” Rebrand Campaign

“Let’s Reconnect” is Altice USA’s company-wide commitment to reconnect with its customers, communities, and people to unify all of its products under the Optimum brand. As part of Let’s Reconnect, changes are being made to ensure that Optimum is delivering the highest quality service and experience to its customers and keeping them at the center of everything that the Company does.

This includes improvements in speed and reliability through the Company’s expanded fiber network and mobile service, 24/7 customer support online and over the phone, and the opening of more retail stores across the country.

Shares Outstanding

As of March 31, 2022, Altice USA had 454,654,818 combined Class A and Class B shares outstanding.

Balance Sheet Review

As of March 31, 2022:

  • Net debt for CSC Holdings, LLC Restricted Group was $22,874 million at the end of Q1 2022(6), representing net leverage of 5.5x Adjusted EBITDA on a LTM basis, or 5.8x Adjusted EBITDA on a Last 2-Quarter Annualized ("L2QA") basis. The weighted average cost of debt for CSC Holdings, LLC Restricted Group was 4.7% as of the end of Q1 2022 and the weighted average life was 6.0 years. The Company expects to return to a leverage target of 4.5x - 5.0x net debt / Adjusted EBITDA on a L2QA basis for its CSC Holdings, LLC debt silo over time.
  • Net debt for Cablevision Lightpath LLC was $1,382 million at the end of Q1 2022(6), representing net leverage of 6.7x LTM (6.5x L2QA). The weighted average cost of debt for Cablevision Lightpath LLC was 4.3% as of the end of Q1 2022 and the weighted average life was 5.8 years.
  • Consolidated net debt for Altice USA was $24,220 million(6), representing consolidated net leverage of 5.6x LTM (5.8x L2QA at the end of Q1 2022).

Altice USA Consolidated Operating Results

(In thousands, except per share data)

(Unaudited)

 

 

 

 

 

Three Months Ended

March 31,

 

 

2022

 

 

 

2021

 

Revenue:

 

 

 

Broadband

$

985,517

 

 

$

970,571

 

Video

 

841,887

 

 

 

905,834

 

Telephony

 

85,234

 

 

 

106,981

 

Residential revenue

 

1,912,638

 

 

 

1,983,386

 

Business services and wholesale

 

367,522

 

 

 

367,216

 

News and Advertising

 

114,675

 

 

 

105,070

 

Mobile

 

24,035

 

 

 

19,235

 

Other

 

3,027

 

 

 

3,914

 

Total revenue

 

2,421,897

 

 

 

2,478,821

 

Operating expenses:

 

 

 

Programming and other direct costs

 

828,793

 

 

 

851,864

 

Other operating expenses

 

641,906

 

 

 

580,433

 

Restructuring and other expense

 

3,378

 

 

 

3,209

 

Depreciation and amortization (including impairments)

 

435,349

 

 

 

434,857

 

Operating income

 

512,471

 

 

 

608,458

 

Other income (expense):

 

 

 

Interest expense, net

 

(303,362

)

 

 

(316,312

)

Gain (loss) on investments

 

(150,773

)

 

 

73,453

 

Gain (loss) on derivative contracts, net

 

101,074

 

 

 

(53,565

)

Gain on interest rate swap contracts

 

123,147

 

 

 

75,653

 

Other income, net

 

2,430

 

 

 

2,859

 

Income before income taxes

 

284,987

 

 

 

390,546

 

Income tax expense

 

(82,846

)

 

 

(112,007

)

Net income

 

202,141

 

 

 

278,539

 

Net income attributable to noncontrolling interests

 

(5,590

)

 

 

(4,403

)

Net income attributable to Altice USA stockholders

$

196,551

 

 

$

274,136

 

Basic net income per share

$

0.43

 

 

$

0.58

 

Diluted net income per share

$

0.43

 

 

$

0.58

 

Basic weighted average common shares

 

453,229

 

 

 

469,233

 

Diluted weighted average common shares

 

453,229

 

 

 

475,448

 

Altice USA Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

March 31,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net income

$

202,141

 

 

$

278,539

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization (including impairments)

 

435,349

 

 

 

434,857

 

Loss (gain) on investments

 

150,773

 

 

 

(73,453

)

Loss (gain) on derivative contracts, net

 

(101,074

)

 

 

53,565

 

Amortization of deferred financing costs and discounts (premiums) on indebtedness

 

20,342

 

 

 

23,039

 

Share-based compensation expense

 

40,532

 

 

 

28,281

 

Deferred income taxes

 

(16,149

)

 

 

29,165

 

Decrease in right-of-use assets

 

10,955

 

 

 

10,816

 

Provision for doubtful accounts

 

14,737

 

 

 

11,133

 

Other

 

(287

)

 

 

1,074

 

Change in assets and liabilities, net of effects of acquisitions and dispositions:

 

 

 

Accounts receivable, trade

 

9,112

 

 

 

55,293

 

Prepaid expenses and other assets

 

(19,462

)

 

 

(26,321

)

Amounts due from and due to affiliates

 

(8,992

)

 

 

4,627

 

Accounts payable and accrued liabilities

 

(13,477

)

 

 

(29,696

)

Deferred revenue

 

14,613

 

 

 

38,501

 

Liabilities related to interest rate swap contracts

 

(138,894

)

 

 

(89,798

)

Net cash provided by operating activities

 

600,219

 

 

 

749,622

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(392,371

)

 

 

(212,791

)

Other, net

 

888

 

 

 

2,143

 

Net cash used in investing activities

 

(391,483

)

 

 

(210,648

)

Cash flows from financing activities:

 

 

 

Proceeds from long-term debt

 

150,000

 

 

 

150,000

 

Repayment of long-term debt

 

(329,688

)

 

 

(225,863

)

Proceeds from collateralized indebtedness and related derivative contracts, net

 

 

 

 

185,105

 

Repayment of collateralized indebtedness and related derivative contracts, net

 

 

 

 

(185,105

)

Principal payments on finance lease obligations

 

(28,941

)

 

 

(18,330

)

Purchase of shares of Altice USA Class A common stock, pursuant to a share repurchase program

 

 

 

 

(503,645

)

Other

 

 

 

 

393

 

Net cash used in financing activities

 

(208,629

)

 

 

(597,445

)

Net increase (decrease) in cash and cash equivalents

 

107

 

 

 

(58,471

)

Effect of exchange rate changes on cash and cash equivalents

 

(170

)

 

 

620

 

Net decrease in cash and cash equivalents

 

(63

)

 

 

(57,851

)

Cash, cash equivalents and restricted cash at beginning of year

 

195,975

 

 

 

278,686

 

Cash, cash equivalents and restricted cash at end of period

$

195,912

 

 

$

220,835

 

Reconciliation of Non-GAAP Financial Measures:

We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, loss on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments, interest expense, net, depreciation and amortization (including impairments), share-based compensation expense, restructuring expense, and transaction expenses.

We believe Adjusted EBITDA is an appropriate measure for evaluating the operating performance of the Company. Adjusted EBITDA and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in our industry. Internally, we use revenue and Adjusted EBITDA measures as important indicators of our business performance and evaluate management’s effectiveness with specific reference to these indicators. We believe Adjusted EBITDA provides management and investors a useful measure for period-to-period comparisons of our core business and operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operating results. Adjusted EBITDA should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), and other measures of performance presented in accordance with GAAP. Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.

We also use Operating Free Cash Flow (defined as Adjusted EBITDA less cash capital expenditures), and Free Cash Flow (defined as net cash flows from operating activities less cash capital expenditures) as indicators of the Company’s financial performance. We believe these measures are two of several benchmarks used by investors, analysts and peers for comparison of performance in the Company’s industry, although they may not be directly comparable to similar measures reported by other companies.

Reconciliation of net income to Adjusted EBITDA and Operating Free Cash Flow (unaudited):

 

 

 

 

(in thousands)

Three Months Ended

March 31,

 

 

2022

 

 

 

2021

 

 

 

 

 

Net income

$

202,141

 

 

$

278,539

 

Income tax expense

 

82,846

 

 

 

112,007

 

Other income, net

 

(2,430

)

 

 

(2,859

)

Gain on interest rate swap contracts, net

 

(123,147

)

 

 

(75,653

)

Loss (gain) on derivative contracts, net

 

(101,074

)

 

 

53,565

 

Loss (gain) on investments

 

150,773

 

 

 

(73,453

)

Interest expense, net

 

303,362

 

 

 

316,312

 

Depreciation and amortization (including impairments)

 

435,349

 

 

 

434,857

 

Restructuring and other expense

 

3,378

 

 

 

3,209

 

Share-based compensation

 

40,532

 

 

 

28,281

 

Adjusted EBITDA

 

991,730

 

 

 

1,074,805

 

Capital Expenditures (cash)

 

392,371

 

 

 

212,791

 

Operating Free Cash Flow

$

599,359

 

 

$

862,014

 

Reconciliation of net cash flow from operating activities to Free Cash Flow (unaudited):

 

 

 

 

Net cash flows from operating activities

$

600,219

 

$

749,622

Capital Expenditures (cash)

 

392,371

 

 

212,791

Free Cash Flow

$

207,848

 

$

536,831

Customer Metrics(10) (in thousands, except per customer amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY-20(3)

 

Q1-21

Q2-21(4)

Q3-21

Q4-21

 

FY-21(4)

 

Q1-22

Total Passings(7)

 

9,034.1

 

9,067.6

9,195.1

9,212.5

9,263.3

 

9,263.3

 

9,304.9

Residential

 

4,648.4

 

4,647.4

4,670.7

4,646.0

4,632.8

 

4,632.8

 

4,612.1

SMB

 

376.1

 

375.8

380.7

381.6

381.9

 

381.9

 

382.9

Total Unique Customer Relationships(8)

 

5,024.6

 

5,023.2

5,051.4

5,027.6

5,014.7

 

5,014.7

 

4,995.0

Residential Customers:

 

 

 

 

 

 

 

 

 

 

 

Broadband

 

4,359.2

 

4,370.8

4,401.3

4,388.1

4,386.2

 

4,386.2

 

4,373.2

Video

 

2,961.0

 

2,906.6

2,870.5

2,803.0

2,732.3

 

2,732.3

 

2,658.7

Telephony

 

2,214.0

 

2,161.2

2,118.4

2,057.1

2,005.2

 

2,005.2

 

1,951.5

Residential ARPU ($)(9)

 

142.11

 

142.24

142.24

140.73

137.79

 

141.08

 

137.92

Fiber (FTTH) Customer Metrics (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FY-20

 

Q1-21

Q2-21

Q3-21

Q4-21

 

FY-21

 

Q1-22

FTTH Total Passings(11)

 

900.1

 

921.4

982.5

1,026.6

1,171.0

 

1,171.0

 

1,316.6

FTTH Total customer relationships(12)(13)

 

26.1

 

35.9

47.3

58.9

69.7

 

69.7

 

81.0

FTTH Residential

 

26.1

 

35.9

47.3

58.7

69.3

 

69.3

 

80.4

FTTH SMB

 

0.0

 

0.0

0.1

0.2

0.3

 

0.3

 

0.6

Penetration of FTTH total passings(14)

 

2.9%

 

3.9%

4.8%

5.7%

5.9%

 

5.9%

 

6.1%

Consolidated Net Debt as of March 31, 2022

CSC Holdings, LLC Restricted Group (in $m)

Principal

Amount

 

Coupon /

Margin

 

Maturity

Drawn RCF

$740

 

L+2.250%

 

2024

Term Loan

2,858

 

L+2.250%

 

2025

Term Loan B-3

1,237

 

L+2.250%

 

2026

Term Loan B-5

2,940

 

L+2.500%

 

2027

Guaranteed Notes

1,310

 

5.500%

 

2027

Guaranteed Notes

1,000

 

5.375%

 

2028

Guaranteed Notes

1,750

 

6.500%

 

2029

Guaranteed Notes

1,100

 

4.125%

 

2030

Guaranteed Notes

1,000

 

3.375%

 

2031

Guaranteed Notes

1,500

 

4.500%

 

2031

Senior Notes

649

 

5.875%

 

2022

Senior Notes

750

 

5.250%

 

2024

Senior Notes

1,046

 

7.500%

 

2028

Legacy unexchanged Cequel Notes

4

 

7.500%

 

2028

Senior Notes

2,250

 

5.750%

 

2030

Senior Notes

2,325

 

4.625%

 

2030

Senior Notes

500

 

5.000%

 

2031

CSC Holdings, LLC Restricted Group Gross Debt

22,958

 

 

 

 

CSC Holdings, LLC Restricted Group Cash

(84)

 

 

 

 

CSC Holdings, LLC Restricted Group Net Debt

$22,874

 

 

 

 

 

 

 

 

 

 

CSC Holdings, LLC Restricted Group Undrawn RCF

$1,601

 

 

 

 

Cablevision Lightpath LLC (in $m)

Principal

Amount

 

Coupon /

Margin

 

Maturity

Drawn RCF

$—

 

L+3.250%

 

2025

Term Loan

593

 

3.750%

 

2027

Senior Secured Notes

450

 

3.875%

 

2027

Senior Notes

415

 

5.625%

 

2028

Cablevision Lightpath Gross Debt

1,458

 

 

 

 

Cablevision Lightpath Cash

(76)

 

 

 

 

Cablevision Lightpath Net Debt

$1,382

 

 

 

 

 

 

 

 

 

 

Cablevision Lightpath Undrawn RCF

$100

 

 

 

 

Net Leverage Schedules as of March 31, 2022 (in $m)

 

CSC Holdings

Restricted

Group(16)

 

Cablevision

Lightpath LLC

 

CSC Holdings

Consolidated(17)

 

Altice USA

Consolidated

 

 

 

 

 

 

 

 

Gross Debt Consolidated(15)

$22,958

 

$1,458

 

$24,416

 

$24,416

Cash

(84)

 

(76)

 

(194)

 

(196)

Net Debt Consolidated

$22,874

 

$1,382

 

$24,222

 

$24,220

LTM EBITDA

$4,128

 

$206

 

$4,344

 

$4,344

L2QA EBITDA

$3,929

 

$213

 

$4,150

 

$4,150

Net Leverage (LTM)

5.5x

 

6.7x

 

5.6x

 

5.6x

Net Leverage (L2QA)

5.8x

 

6.5x

 

5.8x

 

5.8x

WACD (%)

4.7%

 

4.3%

 

4.6%

 

4.6%

Reconciliation to Financial Reported Debt

 

 

Actual

Total Debenture and Loans from Financial Institutions (Carrying Amount)

$24,355

Unamortized Financing Costs, Net of Premiums

17

Fair Value Adjustments

44

Gross Debt Consolidated(15)

24,416

Finance leases and other notes

370

Total Debt

24,786

Cash

(196)

Net Debt

$24,590

(1)

Excludes all air strand revenue from Business Services for all periods.

(2)

See “Reconciliation of Non-GAAP Financial Measures” on page 7 of this release.

(3)

Since Q3-20, figures include Service Electric Cable T.V. of New Jersey, Inc. acquired subscribers.

(4)

Since Q2-21, figures include Morris Broadband, LLC acquired subscribers.

(5)

Mobile line includes approximately 8k lines receiving free service.

(6)

Net debt, defined as the principal amount of debt less cash, and excluding finance leases and other notes and collateralized debt.

(7)

Total passings represents the estimated number of single residence homes, apartments and condominium units passed by the HFC and Fiber-to-the-Home ("FTTH") network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our HFC and FTTH network. Broadband services were not available to approximately 30 thousand total passings and telephony services were not available to approximately 500 thousand total passings. Total passings include approximately 67k total passings acquired in the Service Electric Cable T.V. of New Jersey acquisition in Q3-20 and in Q2-21 include approximately 89k total passings acquired in the Morris Broadband acquisition.

(8)

Total Unique Customer Relationships represent the number of households/businesses that receive at least one of the Company’s fixed-line services. Customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our HFC and FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per-view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk Residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel.

(9)

ARPU is calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video and telephony services to Residential customers by the average number of total Residential customers for the same period. ARPU for the September 30, 2020 period reflects a reduction of $5.51 due to credits that we anticipated to be issued to video customers as a result of credits the Company expected to receive from certain sports programming networks whereby the minimum number of events were not delivered pursuant to the contractual agreements with the networks and related franchise fees. ARPU for the December 31, 2020 period reflects a reduction of $1.26 due to credits that we anticipated to be issued to video customers as a result of credits the Company expected to receive from certain sports programming networks whereby the minimum number of events were not delivered pursuant to the contractual agreements with the networks and related franchise fees.

(10)

Customer metrics do not include Optimum Mobile customers.

(11)

Represents the estimated number of single residence homes, apartments and condominium units passed by the FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our FTTH network. The figures shown here represent those FTTH passings available for marketing to customers as reflected in Altice USA’s billing system (FTTH passings “ready for sales”), differing to previously reported FTTH coverage figures which represented those FTTH passings where the network had been constructed (FTTH passings “ready for service”) but were not yet necessarily available for sale to customers.

(12)

Represents number of households/businesses that receive at least one of the Company's fixed-line services on our FTTH network.

(13)

FTTH customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel.

(14)

Represents the number of total FTTH customer relationships divided by FTTH total passings.

(15)

Principal amount of debt excluding finance leases and other notes and collateralized debt.

(16)

CSC Holdings, LLC Restricted Group excludes the unrestricted subsidiaries, primarily Cablevision Lightpath LLC and NY Interconnect, LLC.

(17)

CSC Holdings Consolidated includes the CSC Holdings, LLC Restricted Group and the unrestricted subsidiaries.

Numerical information is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may exist due to rounding.

About Altice USA

Altice USA (NYSE: ATUS) is one of the largest broadband communications and video services providers in the United States, delivering broadband, video, mobile, proprietary content and advertising services to more than 5.0 million residential and business customers across 21 states through its Optimum and Suddenlink brands. The Company operates a4, an advanced advertising and data business, which provides audience-based, multiscreen advertising solutions to local, regional and national businesses and advertising clients. Altice USA also offers hyper-local, national, international and business news through its News 12, Cheddar and i24NEWS networks.

FORWARD-LOOKING STATEMENTS

Certain statements in this earnings release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, all statements other than statements of historical facts contained in this earnings release, including, without limitation, those regarding our intentions, beliefs or current expectations concerning, among other things: our future financial conditions and performance, results of operations and liquidity; our strategy, objectives, prospects, capital expenditure plans, fiber deployment and network expansion and upgrade plans, distribution channel expansion plans and leverage targets; our ability to achieve operational performance improvements; and future developments in the markets in which we participate or are seeking to participate. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “plan”, “project”, “should”, “target”, or “will” or, in each case, their negative, or other variations or comparable terminology. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. To the extent that statements in this earnings release are not recitations of historical fact, such statements constitute forward-looking statements, which, by definition, involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements including risks referred to in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and subsequent reports on Form 10-Q. You are cautioned to not place undue reliance on Altice USA’s forward-looking statements. Any forward-looking statement speaks only as of the date on which it was made. Altice USA specifically disclaims any obligation to publicly update or revise any forward-looking statement, as of any future date.

Contacts

Investor Relations
Nick Brown: +1 917 589 9983 / nick.brown@alticeusa.com
Sarah Freedman: +1 929 418 4090 / sarah.freedman@alticeusa.com

Communications
Lisa Anselmo: +1 516 279 9461 / lisa.anselmo@alticeusa.com
Janet Meahan: +1 516 519 2353 / janet.meahan@alticeusa.com

Contacts

Investor Relations
Nick Brown: +1 917 589 9983 / nick.brown@alticeusa.com
Sarah Freedman: +1 929 418 4090 / sarah.freedman@alticeusa.com

Communications
Lisa Anselmo: +1 516 279 9461 / lisa.anselmo@alticeusa.com
Janet Meahan: +1 516 519 2353 / janet.meahan@alticeusa.com