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8-K - FORM 8-K - MEDIACOM BROADBAND LLCd390038d8k.htm

Exhibit 99.1

 

LOGO    For Immediate Release

Mediacom Broadband LLC and Mediacom LLC Report

Results for Second Quarter 2012

 

 

Middletown, NY – August 6, 2012 – MEDIACOM BROADBAND LLC AND MEDIACOM LLC, wholly-owned subsidiaries of Mediacom Communications Corporation, today each reported unaudited financial and operating highlights for the three months ended June 30, 2012.

Mediacom Broadband LLC*

 

   

Revenues were $223.9 million, reflecting a 1.9% increase from the prior year period

 

   

Operating income before depreciation and amortization (“OIBDA”) was $85.6 million, reflecting a 2.0% increase from the prior year period

 

   

Free cash flow of $15.1 million, compared to $14.9 million in the prior year period

 

   

Net quarterly decline of 4,000 primary service units (“PSUs”), compared to a decline of 17,000 in the prior year period

Mediacom LLC*

 

   

Revenues were $170.7 million, unchanged from the prior year period

 

   

Adjusted OIBDA was $69.5 million, reflecting a 0.2% increase from the prior year period

 

   

Free cash flow of $17.2 million, compared to $18.1 million in the prior year period

 

   

Net quarterly decline of 4,000 PSUs, compared to a decline of 17,000 in the prior year period

 

   

During the quarter, Mediacom LLC disposed of a non-strategic cable system serving approximately 4,200 PSUs for $11.0 million

About Mediacom

Mediacom Communications is the nation’s eighth largest cable television company and one of the leading cable operators focused on serving the smaller cities in the United States, with a significant concentration in the Midwestern and Southeastern regions. Mediacom Communications offers a wide array of broadband products and services, including digital television, video-on-demand, digital video recorders, high-definition television, as well as high-speed Internet access and phone service. Mediacom Communications also offers affordable broadband communications solutions that can be tailored to any size business through Mediacom Business. For more information about Mediacom Communications, please visit www.mediacomcc.com.

 

Contacts:   

Investor Relations

  

Media Relations

Calvin G. Craib

  

Thomas J. Larsen

Senior Vice President, Corporate Finance

  

Group Vice President, Legal and Public Affairs

(845) 695-2675

  

(845) 695-2754

 

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


TABLE 1*

Mediacom Broadband LLC

Selected Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 

     Three Months Ended
June 30,
       
     2012     2011     % Change  

Video

   $ 117,542      $ 123,254        (4.6 )% 

High-speed data

     56,710        52,161        8.7

Phone

     16,642        16,486        0.9

Business services

     20,323        15,737        29.1

Advertising

     12,667        12,120        4.5
  

 

 

   

 

 

   

 

 

 

Total revenues

   $ 223,884      $ 219,758        1.9

Service costs

     (90,593     (89,125     1.6

SG&A expenses

     (44,064     (43,052     2.4

Management fees

     (3,625     (3,663     (1.0 )% 
  

 

 

   

 

 

   

 

 

 

OIBDA (a)

   $ 85,602      $ 83,918        2.0

Cash interest expense (a)

     (27,294     (26,887     1.5

Capital expenditures (b)

     (38,697     (37,635     2.8

Dividend to preferred members

     (4,500     (4,500     —     
  

 

 

   

 

 

   

 

 

 

Free cash flow (a)

   $ 15,111      $ 14,896        1.4
  

 

 

   

 

 

   

 

 

 

OIBDA margin (c)

     38.2     38.2  

 

 

 

     June 30, 2012     June 30, 2011  

Video customers

     579,000        634,000   

High-speed data customers

     493,000        470,000   

Phone customers

     193,000        177,000   
  

 

 

   

 

 

 

Primary service units (“PSUs”)

     1,265,000        1,281,000   

Video customer declines

     (12,000     (20,000

High-speed data customer increases

     4,000        1,000   

Phone customer increases

     4,000        2,000   
  

 

 

   

 

 

 

Quarterly PSU declines

     (4,000     (17,000

Customer relationships (d)

     713,000        723,000   

Average total monthly revenue per:

    

Video customer (e)

   $ 127.57      $ 113.75   

PSU (f)

   $ 58.90      $ 56.81   

Customer relationship (g)

   $ 105.18      $ 100.90   

 

 

 

     June 30, 2012      June 30, 2011  

Bank credit facility

   $ 1,473,000       $ 1,534,600   

8 1/2% senior notes due 2015

     500,000         500,000   
  

 

 

    

 

 

 

Total debt

   $ 1,973,000       $ 2,034,600   
  

 

 

    

 

 

 

Total leverage ratio (h)

     5.76x         6.06x   

Interest coverage ratio (i)

     3.14x         3.12x   

 

* See Tables 3 and 5.

 

Page 2 of 6


TABLE 2*

Mediacom LLC

Selected Financial and Operating Data

(Dollars in thousands, except per unit data)

(Unaudited)

 

     Three Months Ended
June 30,
       
     2012     2011     % Change  

Video

   $ 91,171      $ 96,711        (5.7 )% 

High-speed data

     46,750        43,024        8.7

Phone

     15,133        15,297        (1.1 )% 

Business services

     13,682        11,679        17.2

Advertising

     3,958        4,044        (2.1 )% 
  

 

 

   

 

 

   

 

 

 

Total revenues

   $ 170,694      $ 170,755        —     

Service costs

     (74,496     (74,455     0.1

SG&A expenses

     (28,373     (28,652     (1.0 )% 

Management fees

     (2,875     (2,847     1.0
  

 

 

   

 

 

   

 

 

 

OIBDA (a)

   $ 64,950      $ 64,801        0.2

Investment income from affiliate

     4,500        4,500        —     
  

 

 

   

 

 

   

 

 

 

Adjusted OIBDA (a)

   $ 69,450      $ 69,301        0.2

Cash interest expense (a)

     (23,424     (23,453     (0.1 )% 

Capital expenditures (b)

     (28,798     (27,739     3.8
  

 

 

   

 

 

   

 

 

 

Free cash flow (a)

   $ 17,228      $ 18,109        (4.9 )% 
  

 

 

   

 

 

   

 

 

 

Adjusted OIBDA margin (j)

     40.7     40.6  

 

 

 

     June 30, 2012     June 30, 2011  

Video customers

     458,000        505,000   

High-speed data customers

     401,000        385,000   

Phone customers

     168,000        158,000   
  

 

 

   

 

 

 

Primary service units (“PSUs”)

     1,027,000        1,048,000   

Video customer declines (k)

     (10,000     (16,000

High-speed data customer increases (k)

     3,000        (1,000

Phone customer increases (k)

     3,000        —     
  

 

 

   

 

 

 

Quarterly PSU declines (k)

     (4,000     (17,000

Customer relationships (d)

     573,000        587,000   

Average total monthly revenue per:

    

Video customer (e)

   $ 122.89      $ 110.95   

PSU (f)

   $ 55.29      $ 53.87   

Customer relationship (g)

   $ 99.21      $ 96.55   

 

 

 

     June 30, 2012      June 30, 2011  

Bank credit facility

   $ 937,000       $ 1,250,400   

9 1/8% senior notes due 2019

     350,000         350,000   

7 1/4% senior notes due 2022

     250,000         —     
  

 

 

    

 

 

 

Total debt

   $ 1,537,000       $ 1,600,400   
  

 

 

    

 

 

 

Total leverage ratio (h)

     5.53x         5.77x   

Interest coverage ratio (i)

     2.96x         2.95x   

 

* See Tables 4 and 5.

 

Page 3 of 6


TABLE 3

Mediacom Broadband LLC

Reconciliation of Non-GAAP Measures

(Dollars in thousands)

(Unaudited)

 

     Three Months Ended
June 30,
 
     2012     2011  

Free cash flow

   $ 15,111      $ 14,896   

Capital expenditures

     38,697        37,635   

Dividend to preferred members

     4,500        4,500   

Other expense, net

     (327     (374

Changes in assets and liabilities, net

     (19,012     13,249   
  

 

 

   

 

 

 

Net cash flows provided by operating activities

   $ 38,969      $ 69,906   
  

 

 

   

 

 

 

OIBDA

   $ 85,602      $ 83,918   

Depreciation and amortization

     (37,672     (35,972
  

 

 

   

 

 

 

Operating income

   $ 47,930      $ 47,946   
  

 

 

   

 

 

 

Cash interest expense

   $ 27,294      $ 26,887   

Amortization of deferred financing costs

     1,211        1,341   
  

 

 

   

 

 

 

Interest expense, net

   $ 28,505      $ 28,228   
  

 

 

   

 

 

 

 

TABLE 4

Mediacom LLC

Reconciliation of Non-GAAP Measures

(Dollars in thousands)

(Unaudited)

 

     Three Months Ended
June 30,
 
     2012     2011  

Free cash flow

   $ 17,228      $ 18,109   

Capital expenditures

     28,798        27,739   

Other expense, net

     (434     (535

Changes in assets and liabilities, net

     17,286        (13,197
  

 

 

   

 

 

 

Net cash flows provided by operating activities

   $ 62,878      $ 32,116   
  

 

 

   

 

 

 

Adjusted OIBDA

   $ 69,450      $ 69,301   

Investment income from affiliate

     (4,500     (4,500
  

 

 

   

 

 

 

OIBDA

   $ 64,950      $ 64,801   

Depreciation and amortization

     (29,010     (29,409
  

 

 

   

 

 

 

Operating income

   $ 35,940      $ 35,392   
  

 

 

   

 

 

 

Cash interest expense

   $ 23,424      $ 23,453   

Amortization of deferred financing costs

     786        971   
  

 

 

   

 

 

 

Interest expense, net

   $ 24,210      $ 24,424   
  

 

 

   

 

 

 

 

 

Page 4 of 6


TABLE 5

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. We define cash interest expense as interest expense, net, less amortization of deferred financing costs. 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. OIBDA, Adjusted OIBDA, cash interest expense and free cash flow have inherent limitations as discussed below.

OIBDA and Adjusted OIBDA are some of the primary measures used by management to evaluate our performance and to forecast future results. We believe OIBDA and Adjusted OIBDA are useful for investors because it enables them to assess our performance in a manner similar to the methods used by management, and provides a measure that can be used to analyze value and compare the companies in the cable industry. A limitation of OIBDA and Adjusted OIBDA, however, is that they exclude depreciation and amortization, which represents the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management utilizes a separate process to budget, measure and evaluate capital expenditures. 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, as defined under our debt arrangements.

Free cash flow is used by management to evaluate our ability to repay debt, and to facilitate the growth of our business with internally generated funds. A limitation of free cash flow, however, is that it may be affected by the timing of our capital spending. We believe free cash flow is useful for investors for the same reasons and provides measures that can be used to analyze value and compare companies in the cable television industry, although our measure of free cash flow may not be directly comparable to similar measures reported by other companies.

OIBDA, Adjusted OIBDA and free cash flow should not be regarded as alternatives to operating income or net income as indicators of operating performance, or to the statement of cash flows as measures of liquidity, nor should they be considered in isolation or as substitutes for financial measures prepared in accordance with GAAP. We believe that operating income is the most directly comparable GAAP financial measure to OIBDA and Adjusted OIBDA, and that net cash flows provided by operating activities is the most directly comparable GAAP financial measure to free cash flow.

Cash interest expense excludes the amortization of financing costs which were paid upon the financing of the relevant debt. We believe cash interest expense is useful for investors because it enables them to assess our cost of debt for the current period without including the amortization of financing costs that were previously paid. We believe interest expense, net, is the most directly comparable GAAP financial measure to cash interest expense.

For reconciliations of OIBDA, Adjusted OIBDA, cash interest expense and free cash flow to their most directly comparable GAAP financial measures, see Tables 3 and 4.

Cautionary Statement Regarding Forward-Looking Statements

In this press release, we state our beliefs of future events and of our future financial performance. These forward-looking statements are not guarantees of future performance or results, and are subject to risks and uncertainties that could cause actual results to differ materially from historical results or those we anticipate as a result of various factors, many of which are beyond our control. Factors that may cause such differences to occur include, but are not limited to: lower demand for our residential and business services resulting from competitive and other factors; greater than anticipated programming and other service costs; our ability to generate sufficient cash flow to meet our debt service obligations; and other risks and uncertainties discussed in the Annual Reports on Form 10-K for the year ended December 31, 2011 for each of Mediacom Broadband LLC and Mediacom LLC. We disclaim any obligation to update any forward-looking statements contained herein, except as required by applicable federal securities laws.

 

Page 5 of 6


NOTES:

 

(a) 

See Table 5 for information about our use of Non-GAAP financial measures.

(b) 

Capital expenditures for Mediacom Broadband LLC and Mediacom LLC exclude changes in accrued property, plant and equipment, which represented cash sources of $0.2 million and $0.1 million for Mediacom Broadband LLC and Mediacom LLC, respectively, during the three months ended June 30, 2012.

(c) 

Represents OIBDA as a percentage of total revenues.

(d) 

Represents the total number of customers that receive at least one level of service, without regard to which service(s) customers purchase.

(e) 

Represents average total monthly revenues for the quarter divided by average video customers for such quarter.

(f) 

Represents average total monthly revenues for the quarter divided by average PSUs for such quarter.

(g) 

Represents average total monthly revenues for the quarter divided by average customer relationships for such quarter.

(h) 

For 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 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.

(j) 

Represents Adjusted OIBDA as a percentage of total revenues.

(k) 

Video, HSD and phone customer increases and declines for the three months ended June 30, 2012 at Mediacom LLC are not adjusted to reflect acquisitions/dispositions during the quarter.

 

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