Mediacom Communications Reports Combined Results for Fourth Quarter and Full Year 2017

MEDIACOM PARK, N.Y.--(BUSINESS WIRE)--MEDIACOM COMMUNICATIONS CORPORATION today released combined unaudited financial and operating highlights for the three months and full year ended December 31, 2017.

Mediacom Combined Results for Fourth Quarter 2017*

• Revenues were $471.8 million, reflecting a 2.5% increase from the prior year period
  • Excluding advertising, revenues increased 3.5% from the prior year period, which benefitted from advertising revenues associated with the national election in 2016
• OIBDA was $184.1 million, reflecting a 0.5% increase from the prior year period
  • Excluding advertising, OIBDA increased 3.1% from the prior year period
• Capital expenditures were $82.7 million, compared to $88.2 million in the prior year period
• Free cash flow was $75.6 million, compared to $65.4 million in the prior year period
• Ending primary service units (“PSUs”) of 2,594,000, a 5.3% increase from December 31, 2016
• Ending customer relationships of 1,363,000, a 0.8% increase from December 31, 2016
• Total leverage ratio of 3.54x, compared to 3.79x at December 31, 2016
• Interest coverage ratio of 7.14x, compared to 6.20x at December 31, 2016

Mediacom Combined Results for Full Year 2017*

• Revenues were $1,877.6 million, reflecting a 3.7% increase from the prior year
  • Excluding advertising, revenues increased 4.6% from the prior year, which benefitted from advertising revenues associated with the national election in 2016
• OIBDA was $712.0 million, reflecting a 2.6% increase from the prior year
  • Excluding advertising, OIBDA increased 4.6% from the prior year
• Capital expenditures were $341.8 million, compared to $335.2 million in the prior year
• Free cash flow was $264.4 million, compared to $237.0 million in the prior year
• Total leverage ratio of 3.66x, compared to 4.00x at December 31, 2016
• Interest coverage ratio of 6.73x, compared to 5.70x at December 31, 2016
• Ending total debt of $2,605 million, a $170 million reduction from December 31, 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 February 22, 2018.

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 1*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
	Three Months Ended December 31,
	2017			2016			YoY% Change
Video	$	193,702		$	198,994		(2.7	%)
High-speed data		170,940			156,698		9.1	%
Phone		28,041			26,666		5.2	%
Business services		64,477			59,419		8.5	%
Advertising		14,623			18,683		(21.7	%)
Total revenues	$	471,783		$	460,460		2.5	%
Service costs		(199,786	)		(188,466	)	6.0	%
SG&A expenses		(78,925	)		(79,832	)	(1.1	%)
Management fees		(9,000	)		(9,000	)	—
OIBDA ^(a)	$	184,072		$	183,162		0.5	%
Cash interest expense ^(a)		(25,783	)		(29,566	)	(12.8	%)
Capital expenditures		(82,715	)		(88,204	)	(6.2	%)
Free cash flow ^(a)	$	75,574		$	65,392		15.6	%
OIBDA margin ^(b)		39.0	%		39.8	%
	December 31, 2017			December 31, 2016			YoY% Change
Video customers		821,000			828,000		(0.8	%)
High-speed data (“HSD”) customers		1,209,000			1,156,000		4.6	%
Phone customers		564,000			479,000		17.7	%
Primary service units (“PSUs”)		2,594,000			2,463,000		5.3	%
Video customer declines		(2,000	)		(6,000	)
HSD customer increases		15,000			11,000
Phone customer increases		22,000			12,000
Quarterly PSU increases		35,000			17,000
Customer relationships ^(c)		1,363,000			1,352,000		0.8	%
Average total monthly revenue per:
PSU ^(d)	$	61.04		$	62.53		(2.4	%)
Customer relationship ^(e)	$	115.42		$	113.90		1.3	%
	December 31, 2017			December 31, 2016
Bank credit facility	$	2,105,000		$	2,025,000
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)	$	2,605,000		$	2,775,000
Total leverage ratio ^(g)	3.54x			3.79x
Interest coverage ratio ^(h)	7.14x			6.20x

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 2*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
	Year Ended December 31,
	2017			2016			YoY% Change
Video	$	794,017		$	802,204		(1.0	%)
High-speed data		670,734			603,375		11.2	%
Phone		111,439			109,228		2.0	%
Business services		249,714			230,636		8.3	%
Advertising		51,647			64,812		(20.3	%)
Total revenues	$	1,877,551		$	1,810,255		3.7	%
Service costs		(806,978	)		(761,839	)	5.9	%
SG&A expenses		(322,074	)		(319,442	)	0.8	%
Management fees		(36,500	)		(35,000	)	4.3	%
OIBDA ^(a)	$	711,999		$	693,974		2.6	%
Cash interest expense ^(a)		(105,857	)		(121,760	)	(13.1	%)
Capital expenditures		(341,765	)		(335,173	)	2.0	%
Free cash flow ^(a)	$	264,377		$	237,041		11.5	%
OIBDA margin ^(b)		37.9	%		38.3	%
	December 31, 2017			December 31, 2016			YoY% Change
Video customers		821,000			828,000		(0.8	%)
HSD customers		1,209,000			1,156,000		4.6	%
Phone customers		564,000			479,000		17.7	%
Primary service units (“PSUs”)		2,594,000			2,463,000		5.3	%
Video customer declines		(14,000	)		(27,000	)
HSD customer increases		47,000			71,000
Phone customer increases		84,000			46,000
Annual PSU increases ^(i)		117,000			90,000
Customer relationships ^(c)		1,363,000			1,352,000		0.8	%
Average total monthly revenue per:
PSU ^(d)(i)	$	61.71		$	62.39		(1.1	%)
Customer relationship ^(e)(i)	$	114.88		$	113.04		1.6	%
	December 31, 2017			December 31, 2016
Bank credit facility	$	2,105,000		$	2,025,000
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)	$	2,605,000		$	2,775,000
Total leverage ratio ^(g)	3.66x			4.00x
Interest coverage ratio ^(h)	6.73x			5.70x

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 3*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
	Three Months Ended December 31, 2017
	Mediacom Broadband			Mediacom LLC			Eliminations		Mediacom Combined
Video	$	107,097		$	86,605		―		$	193,702
High-speed data		93,222			77,718		―			170,940
Phone		14,986			13,055		―			28,041
Business services		39,357			25,120		―			64,477
Advertising		11,974			2,649		―			14,623
Total revenues	$	266,636		$	205,147		―		$	471,783
Service costs		(109,113	)		(90,673	)	―			(199,786	)
SG&A expenses		(48,235	)		(30,690	)	―			(78,925	)
Management fees		(5,350	)		(3,650	)	―			(9,000	)
OIBDA ^(a)	$	103,938		$	80,134		―		$	184,072
Investment income from affiliate	―				4,500		(4,500	)	―
Adjusted OIBDA ^(a)	$	103,938		$	84,634		(4,500	)	$	184,072
Cash interest expense ^(a)		(16,168	)		(9,615	)	―			(25,783	)
Capital expenditures		(40,223	)		(42,492	)	―			(82,715	)
Dividend to preferred members		(4,500	)	―			4,500		―
Free cash flow ^(a)	$	43,047		$	32,527		―		$	75,574
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Video customers		455,000			366,000					821,000
HSD customers		668,000			541,000					1,209,000
Phone customers		312,000			252,000					564,000
Primary service units (“PSUs”)		1,435,000			1,159,000					2,594,000
Video customer declines	―				(2,000	)				(2,000	)
HSD customer increases		9,000			6,000					15,000
Phone customer increases		12,000			10,000					22,000
Quarterly PSU increases		21,000			14,000					35,000
Customer relationships ^(c)		755,000			608,000					1,363,000
Average total monthly revenue per:
PSU ^(d)	$	62.39		$	59.36				$	61.04
Customer relationship ^(e)	$	117.80		$	112.47				$	115.42
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Bank credit facility	$	1,077,000		$	1,028,000				$	2,105,000
5½% senior notes due 2021		200,000		―						200,000
6⅜% senior notes due 2023		300,000		―						300,000
Total debt ^(f)	$	1,577,000		$	1,028,000				$	2,605,000
Total leverage ratio ^(g)	3.79x			3.04x					3.54x
Interest coverage ratio ^(h)	6.43x			8.80x					7.14x

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 4*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
	Three Months Ended December 31, 2016
	Mediacom Broadband			Mediacom LLC			Eliminations		Mediacom Combined
Video	$	111,620		$	87,374		―		$	198,994
High-speed data		85,952			70,746		―			156,698
Phone		14,157			12,509		―			26,666
Business services		36,431			22,988		―			59,419
Advertising		14,794			3,889		―			18,683
Total revenues	$	262,954		$	197,506		―		$	460,460
Service costs		(103,391	)		(85,075	)	―			(188,466	)
SG&A expenses		(47,968	)		(31,864	)	―			(79,832	)
Management fees		(5,350	)		(3,650	)	―			(9,000	)
OIBDA ^(a)	$	106,245		$	76,917		―		$	183,162
Investment income from affiliate	―				4,500		(4,500	)	―
Adjusted OIBDA ^(a)	$	106,245		$	81,417		(4,500	)	$	183,162
Cash interest expense ^(a)		(17,652	)		(11,914	)	―			(29,566	)
Capital expenditures		(48,216	)		(39,988	)	―			(88,204	)
Dividend to preferred members		(4,500	)	―			4,500		―
Free cash flow ^(a)	$	35,877		$	29,515		―		$	65,392
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Video customers		463,000			365,000					828,000
HSD customers		643,000			513,000					1,156,000
Phone customers		264,000			215,000					479,000
Primary service units (“PSUs”)		1,370,000			1,093,000					2,463,000
Video customer declines		(3,000	)		(3,000	)				(6,000	)
HSD customer increases		7,000			4,000					11,000
Phone customer increases		7,000			5,000					12,000
Quarterly PSU increases		11,000			6,000					17,000
Customer relationships ^(c)		754,000			598,000					1,352,000
Average total monthly revenue per:
PSU ^(d)	$	64.24		$	60.40				$	62.53
Customer relationship ^(e)	$	117.02		$	110.00				$	113.90
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Bank credit facility	$	1,128,000		$	897,000				$	2,025,000
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)	$	1,628,000		$	1,147,000				$	2,775,000
Total leverage ratio ^(g)	3.83x			3.52x					3.79x
Interest coverage ratio ^(h)	6.02x			6.83x					6.20x

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 5*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
	Year Ended December 31, 2017
	Mediacom Broadband			Mediacom LLC			Eliminations		Mediacom Combined
Video	$	439,716		$	354,301		―		$	794,017
High-speed data		366,012			304,722		―			670,734
Phone		59,350			52,089		―			111,439
Business services		152,481			97,233		―			249,714
Advertising		41,527			10,120		―			51,647
Total revenues	$	1,059,086		$	818,465		―		$	1,877,551
Service costs		(439,990	)		(366,988	)	―			(806,978	)
SG&A expenses		(194,629	)		(127,445	)	―			(322,074	)
Management fees		(21,665	)		(14,835	)	―			(36,500	)
OIBDA ^(a)	$	402,802		$	309,197		―		$	711,999
Investment income from affiliate	―				18,000		(18,000	)	―
Adjusted OIBDA ^(a)	$	402,802		$	327,197		(18,000	)	$	711,999
Cash interest expense ^(a)		(66,250	)		(39,607	)	―			(105,857	)
Capital expenditures		(181,477	)		(160,288	)	―			(341,765	)
Dividend to preferred members		(18,000	)	―			18,000		―
Free cash flow ^(a)	$	137,075		$	127,302		―		$	264,377
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Video customers		455,000			366,000					821,000
HSD customers		668,000			541,000					1,209,000
Phone customers		312,000			252,000					564,000
Primary service units (“PSUs”)		1,435,000			1,159,000					2,594,000
Video customer declines		(8,000	)		(6,000	)				(14,000	)
HSD customer increases		25,000			22,000					47,000
Phone customer increases		48,000			36,000					84,000
Annual PSU increases ^(i)		65,000			52,000					117,000
Customer relationships ^(c)		755,000			608,000					1,363,000
Average total monthly revenue per:
PSU ^(d)(i)	$	62.93		$	60.20				$	61.71
Customer relationship ^(e)(i)	$	116.97		$	112.27				$	114.88
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Bank credit facility	$	1,077,000		$	1,028,000				$	2,105,000
5½% senior notes due 2021		200,000		―						200,000
6⅜% senior notes due 2023		300,000		―						300,000
Total debt ^(f)	$	1,577,000		$	1,028,000				$	2,605,000
Total leverage ratio ^(g)	3.92x			3.14x					3.66x
Interest coverage ratio ^(h)	6.08x			8.26x					6.73x

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 6*
Mediacom Communications Corporation
Selected Combined Financial and Operating Data
(Dollars in thousands, except per unit data)
(Unaudited)
	Year Ended December 31, 2016
	Mediacom Broadband			Mediacom LLC			Eliminations		Mediacom Combined
Video	$	450,658		$	351,546		―		$	802,204
High-speed data		331,778			271,597		―			603,375
Phone		57,999			51,229		―			109,228
Business services		141,054			89,582		―			230,636
Advertising		51,750			13,062		―			64,812
Total revenues	$	1,033,239		$	777,016		―		$	1,810,255
Service costs		(419,406	)		(342,433	)	―			(761,839	)
SG&A expenses		(193,669	)		(125,773	)	―			(319,442	)
Management fees		(20,800	)		(14,200	)	―			(35,000	)
OIBDA ^(a)	$	399,364		$	294,610		―		$	693,974
Investment income from affiliate	―				18,000		(18,000	)	―
Adjusted OIBDA ^(a)	$	399,364		$	312,610		(18,000	)	$	693,974
Cash interest expense ^(a)		(73,108	)		(48,652	)	―			(121,760	)
Capital expenditures		(179,696	)		(155,477	)	―			(335,173	)
Dividend to preferred members		(18,000	)	―			18,000		―
Free cash flow ^(a)	$	128,560		$	108,481		―		$	237,041
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Video customers		463,000			365,000					828,000
HSD customers		643,000			513,000					1,156,000
Phone customers		264,000			215,000					479,000
Primary service units (“PSUs”)		1,370,000			1,093,000					2,463,000
Video customer declines		(17,000	)		(10,000	)				(27,000	)
HSD customer increases		38,000			33,000					71,000
Phone customer increases		25,000			21,000					46,000
Annual PSU increases		46,000			44,000					90,000
Customer relationships ^(c)		754,000			598,000					1,352,000
Average total monthly revenue per:
PSU ^(d)	$	63.92		$	60.46				$	62.39
Customer relationship ^(e)	$	115.89		$	109.47				$	113.04
	Mediacom Broadband			Mediacom LLC					Mediacom Combined
Bank credit facility	$	1,128,000		$	897,000				$	2,025,000
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)	$	1,628,000		$	1,147,000				$	2,775,000
Total leverage ratio ^(g)	4.08x			3.67x					4.00x
Interest coverage ratio ^(h)	5.46x			6.43x					5.70x

* See Table 7 for information about our use of non-GAAP measures and definitions of OIBDA and free cash flow, and Table 8 for footnotes.

TABLE 7
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 8
Footnotes
(a)	See Table 7 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.
(i)	Annual customer changes and average total monthly revenue metrics for the twelve months ended December 31, 2017 have been adjusted to reflect Mediacom LLC’s January 2017 acquisition of 7,000 video customers, 6,000 HSD customers and 1,000 phone customers, aggregating 14,000 PSUs and 9,000 customer relationships as if it had occurred on December 31, 2016.

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.