[July 27, 2017] |
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Altice USA Reports Second Quarter 2017 Results1
Altice USA, Inc. (NYSE:ATUS):
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Altice USA continues to grow at an accelerated pace with further
customer service improvements, investment in an advanced fiber
network, product innovation and margin expansion
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Optimum is rated #1 in Customer Satisfaction and Customer Loyalty2;
"Generation Gigaspeed" FTTH rollout progressing to deliver even higher
quality of service and faster speeds
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Suddenlink was rated the fastest Internet Service Provider in the U.S.
for 20173; 1 Gig markets now 62% of Suddenlink footprint
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Three Months Ended June 30,
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Six Months Ended June 30,
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($k)
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2017
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2016
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2017
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2016
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Actual
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Actual
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Actual
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Actual
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Revenue
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$
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2,328,341
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$
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823,501
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$
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4,634,017
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$
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1,451,090
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Adjusted EBITDA1
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994,036
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359,204
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1,935,771
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621,933
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Net loss
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(474,790
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)
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(282,129
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)
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(550,978
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)
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(422,877
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)
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Capital Expenditures (accrued)
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228,071
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90,121
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391,015
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164,036
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-
Revenue growth for Altice USA of +3.2% YoY in Q2 2017 (vs. +2.2% YoY
in Q2 2016), excluding Newsday; reported revenue growth +0.6% YoY in
Q2 2017 (vs. +2.0% YoY in Q2 2016)
-
Adjusted EBITDA for Altice USA grew +21.9% YoY in Q2 2017; Adjusted
EBITDA margin increased 6.6 percentage points YoY to 42.7%
-
Adjusted EBITDA less capex (Operating Free Cash Flow4) for
Altice USA grew +41.3% YoY in Q2 2017 (YTD 2017 OpFCF margin of 33.3%
vs. 25.6% in FY 2016) showing very strong cash flow conversion
-
Optimum saw continued growth in unique residential B2C customer
relationships with +2k net additions in Q2, in line with the level of
last year excluding a certain event5; Suddenlink unique
residential B2C customer relationship net losses of -14k in Q2,
reflecting normal seasonality
-
Sixth straight quarter of customer service improvements
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Successful $2.2bn IPO of Altice USA
Dexter Goei, Altice USA Chairman and Chief Executive Officer, said: "We
continue to advance our strategy of offering a more robust and
differentiated product portfolio to meet our customers' needs, while
investing in innovation, superior service and a reliable network. We are
very pleased with our performance so far and look forward to continuing
to build the Company for the long-term. The second quarter was also
marked by the successful execution of Altice USA's initial public
offering, which provides the Company with greater flexibility and
strategic optionality operating in a competitive industry."
Q2 2017 Highlights
Altice USA IPO
On June 27, 2017, Altice N.V. (Euronext: ATC, ATCB, "Altice") and Altice
USA, Inc. (NYSE: ATUS, "Altice USA"), announced the closing of Altice
USA's initial public offering of 71,724,139 shares of its Class A common
stock at a price to the public of $30.00 per share, including the
underwriters full exercise of their option to purchase 7,781,110 shares
to cover overallotments. Altice USA's Class A common stock began trading
on June 22, 2017, on the New York Stock Exchange under the symbol "ATUS".
Network Investments to Enhance Broadband
Speeds and Reliability
Altice USA continues to make progress on its FTTH network plans and
remains on track with its previously stated targets to upgrade 100% of
Optimum footprint and part of Suddenlink footprint over the next five
years. The Company continues to believe the FTTH network will be more
resilient with reduced maintenance requirements, fewer service outages
and lower power usage, which is expected to drive further cost
efficiencies in the business. This network should position Altice USA to
satisfy anticipated demand for increasing speeds and support evolving
technologies, such as the expected transition of mobile networks to 5G,
and enable the Company to capture associated revenue growth
opportunities.
In the Optimum footprint, the Company continues to upgrade speeds, now
offering up to 450Mbps in some areas, and has seen an increasing number
of customers upgrading their speed tiers with 90% of residential
broadband gross additions taking download speed tiers of 100Mbps or
higher at the end of Q2 2017 (37% of the residential customer base now
take speeds of 100Mbps or higher).
In the Suddenlink market, the Company continues to roll out 1 Gigabit
service, currently with 62% of the market having access to these faster
speeds. Suddenlink was rated the fastest Internet Service Provider in
the U.S. for 20176 with 64% of residential broadband gross
additions taking speeds of 100Mbps or higher (44% of the residential
customer base now take speeds of 100Mbps or higher).
On a blended basis, 79% of Altice USA's residential broadband gross
additions were taking download speeds of 100Mbps or higher with 39% of
the total residential customer base taking 100Mbps or higher speeds as
of the end of Q2 2017 (vs. 30% and 12% respectively at the end of Q2
2016). These upgrades have almost doubled YoY the average broadband
speed taken by Altice USA's customer base to 93Mbps at the end of Q2
2017 (from 52Mbps at the end of Q2 2016).
Customer Service Improvements
The Company's network upgrades continue to be reflected in further
improvements in customer service metrics, including a 20% YoY reduction
in the number of technical service visits in H1 2017 vs. H1 2016 and a
reduction in the number of technical service related calls of 19% YoY
over the same period. This is the sixth straight quarter of customer
service improvements since Altice took control of Suddenlink and the
fourth straight quarter since taking control of Optimum. In fact,
Optimum is rated #1 in Customer Satisfaction and Customer Loyalty7.
Altice USA also continues to improve customer service and achieve sales
and marketing efficiencies through digitalization. The percentage of B2C
gross adds achieved through online sales channels has increased to 18%
for Optimum and 28% for Suddenlink as of the end of Q2 2017 (vs. 2% and
14% respectively in Q4 2015 before Altice took control of Optimum and
Suddenlink).
Product and Service Innovations
Altice USA is bringing new innovations and service offerings to market.
In the second quarter, the Company successfully launched for small and
medium-sized businesses its hosted voice product developed on the
backbone of Altice's Advanced Business Communications Platform, which
was developed by Altice Labs. For residential customers, Altice USA
expanded its customer service offerings, introducing a full suite of
whole-home premium service products, including in-home installation of
devices, remote technical support for mobile devices and computers, and
device protection to provide customers with advanced levels of support
and added value beyond the company's traditional 24/7 service for its
TV, phone and internet products. In the second quarter, the Company also
introduced its new home communications hub to customers as part of beta
testing, and looks forward to introducing it more broadly in the coming
months.
Commercial Rebranding
On May 23, 2017, Altice announced the transformation from a holding
company with a collection of different assets and brands around the
world, to a unified global group with one single brand - Altice. The
Altice name, brand and new logo will replace the current commercial
brands at each of Altice's operating companies, including Optimum and
Suddenlink, and it is expected that the commercial brands will have
completed the transition process by the end of the second quarter of
2018. The business brands will transition to Altice Business.
Content and Programming Partnerships
On May 25, 2017, Altice USA reached a multi-year partnership with Viacom
that includes advanced advertising and content distribution agreements.
This partnership combines Altice USA's unique audience data,
multi-screen advertising platforms, measurement and analytics
capabilities with Viacom's advanced advertising offerings to deliver
local and national advertising across multiple screens, including TV,
mobile, tablet and desktop. The content distribution arrangement
includes an early carriage renewal of Viacom's premier networks in the
Optimum system and the return of a number of Viacom networks in
Suddenlink systems, as well as additional rights for the distribution of
multi-platform, digital and next-generation Viacom content including
select virtual reality and 4K for Altice USA's current and future
customer offerings. This partnership reinforces Altice USA's commitment
to significantly enhance the video experience for all of its customers.
On May 17, 2017, Altice USA participated in a $19 million round of
financing of Cheddar along with other strategic investors including
Raine Ventures, Amazon, NYSE and Broad Video Ventures. Cheddar is the
place for brands to reach young people interested in business, finance,
technology and innovation with live video programming, covering news
through the lens of the companies and executives driving changes in
these areas.
Financial and Operational Review - Pro Forma
For quarter ended June 30, 2017 compared to quarter ended June 30,
2016
-
Revenue growth for Altice USA of +3.2% YoY in Q2 2017 to $2,328m (vs.
+2.2% YoY in Q2 2016), excluding Newsday; reported revenue growth
+0.6% YoY in Q2 2017 (vs. +2.0% YoY in Q2 2016)
-
Optimum revenue growth was +2.9% YoY in Q2 2017, excluding
Newsday; a decline of -0.7% YoY on a reported basis
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Suddenlink revenue growth +3.8% YoY.
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Adjusted EBITDA for Altice USA grew +21.9% YoY in Q2 2017 to $994m
(vs. +13.4% YoY in Q2 2016); Adjusted EBITDA margin increased +6.6
percentage points YoY to 42.7% (vs. 36.1% in Q2 2016):
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Optimum Adjusted EBITDA growth of +28.6% YoY; Adjusted EBITDA
margin increased +8.1 percentage points YoY to 40.8% (vs. 32.6% in
Q2 2016);
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Suddenlink Adjusted EBITDA growth +9.5% YoY; Adjusted EBITDA
margin increased +2.5 percentage points YoY to 47.5% (vs. 45.0% in
Q2 2016).
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Capex for Altice USA was $228m in Q2 2017 representing 9.8% of
revenue. Capex is expected to increase through H2 2017 and into 2018
towards the historical total annual capex before Altice took over
Optimum and Suddenlink as the build phase of the FTTH rollout has now
begun.
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Operating Free Cash Flow for Altice USA grew +41.3% YoY in Q2 2017 to
$766m (vs. +47.9% YoY in Q2 2016):
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Optimum OpFCF growth of +56.9% YoY;
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Suddenlink OpFCF growth +16.3% YoY.
-
Altice USA saw total unique residential B2C customer relationship net
losses of -11k in Q2 2017, driven by normal seasonality at Suddenlink,
with continued growth in B2C ARPU per unique customer:
-
Increased demand for higher speed broadband tiers at Optimum
continues to drive growth in B2C ARPU per unique customer (+1.6%
YoY). Optimum saw continued growth in unique residential B2C
customer relationships with +2k net additions in Q2, including
broadband RGU additions of +10k and -12k video RGU losses (all of
which are broadly in line with the RGU growth in Q2 2016 of +16k
unique customer additions, +23k broadband RGU additions and -2k
video RGU losses when adjusted for the impact of a strike at a
competitor);
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Suddenlink's increased sales of higher broadband speed tiers drove
growth in ARPU per unique customer (+2.8% YoY). Suddenlink unique
residential B2C customer relationship net losses of -14k in Q2
reflect normal seasonality (vs. -10k losses in Q2 2016) including
broadband RGU losses of -8k and video RGU losses of -25k (vs. -2k
broadband RGU losses and -25k video RGU losses in Q2 2016);
-
Altice USA's programming costs increased +2.6% YoY in Q2 2017 due
primarily to an increase in contractual programming rates, partially
offset by the decrease in video customers. We continue to expect
programming rates to increase by high single digits in 2017:
-
Optimum's programming costs increased +2.8% YoY in Q2 2017 to
$482m;
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Suddenlink's programming costs increased +1.8% YoY in Q2 2017 to
$150m.
-
Altice USA's advertising revenue grew +2.4% YoY in Q2, an increase
compared to Q2 2016 (+1.6%) due primarily to increases in digital
advertising revenue.
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Net debt for Altice USA at the end of the second quarter was $21,336m,
including the impact of total dividends in Q2 2017 of $840m (a total
of $340m from Suddenlink, $500m from Optimum) and $193m accrued
interest on the (now extinguished) shareholder loan paid prior to the
IPO. Net debt was $21,370m pro forma for the partial repayment of the
Cablevision 10.875% 2025 Senior Notes (funded by net primary equity
proceeds from the IPO).
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Altice USA's blended weighted average cost of debt was 6.4% (6.9% for
Optimum, 5.4% for Suddenlink) and the blended weighted average life
was 6.1 years at the end of June 2017. This represents consolidated
L2QA net leverage for Altice USA of 5.5x both pre- and post-IPO
proceeds (5.7x on LTM basis). Net leverage for Optimum was 5.6x and
5.3x for Suddenlink at the end of June 2017 on L2QA basis (5.3x and
5.0x pre-dividend payments in Q2 2017 respectively).
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Altice USA Consolidated Operating Results
(Dollars in thousands, except per share data)
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Three Months Ended June 30,
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Six Months Ended June 30,
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2017
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2016
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2016
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2017
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2016
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2016
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Actual
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Pro Forma1
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Actual
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Actual
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Pro Forma1
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Actual
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Revenue:
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Residential:
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Pay TV
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$
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1,059,857
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$
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1,062,240
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$
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368,555
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$
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2,131,218
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|
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$
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2,116,297
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|
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$
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648,291
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Broadband
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|
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629,416
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|
|
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565,793
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|
|
|
243,773
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|
|
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1,241,185
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|
|
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1,113,474
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|
|
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440,464
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Telephony
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|
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208,451
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|
|
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220,081
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|
|
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59,216
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|
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419,324
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|
|
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441,093
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|
|
|
98,951
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Business services and wholesale
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323,940
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|
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305,844
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|
|
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111,193
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|
|
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643,531
|
|
|
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606,699
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|
|
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195,597
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Advertising
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|
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92,748
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|
|
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90,538
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|
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29,288
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|
|
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172,716
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|
|
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169,902
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|
|
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50,175
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Other
|
|
|
13,929
|
|
|
|
70,719
|
|
|
|
11,476
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|
|
|
26,043
|
|
|
|
141,229
|
|
|
|
17,612
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Total revenue
|
|
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2,328,341
|
|
|
|
2,315,215
|
|
|
|
823,501
|
|
|
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4,634,017
|
|
|
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4,588,694
|
|
|
|
1,451,090
|
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Operating expenses:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Programming and other direct costs
|
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|
758,694
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|
|
|
760,148
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|
|
|
249,823
|
|
|
|
1,517,046
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|
|
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1,527,973
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|
|
|
439,418
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Other operating expenses
|
|
|
593,690
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|
|
|
749,945
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|
|
|
214,474
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|
|
|
1,207,127
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|
|
|
1,526,708
|
|
|
|
389,739
|
|
Restructuring and other expense
|
|
|
12,388
|
|
|
|
106,069
|
|
|
|
99,701
|
|
|
|
89,317
|
|
|
|
114,675
|
|
|
|
107,270
|
|
Depreciation and amortization
|
|
|
706,787
|
|
|
|
611,699
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|
|
|
214,100
|
|
|
|
1,315,511
|
|
|
|
1,247,760
|
|
|
|
415,000
|
|
Operating income
|
|
|
256,782
|
|
|
|
87,354
|
|
|
|
45,403
|
|
|
|
505,016
|
|
|
|
171,578
|
|
|
|
99,663
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest expense, net
|
|
|
(420,192
|
)
|
|
|
(442,393
|
)
|
|
|
(287,827
|
)
|
|
|
(853,254
|
)
|
|
|
(878,994
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)
|
|
|
(557,241
|
)
|
Gain on investments, net
|
|
|
57,130
|
|
|
|
88,259
|
|
|
|
58,634
|
|
|
|
188,788
|
|
|
|
188,624
|
|
|
|
58,634
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|
Loss on equity derivative contracts, net
|
|
|
(66,463
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)
|
|
|
(15,616
|
)
|
|
|
(27,345
|
)
|
|
|
(137,507
|
)
|
|
|
(63,628
|
)
|
|
|
(27,345
|
)
|
Gain on interest rate swap contracts
|
|
|
9,146
|
|
|
|
40,241
|
|
|
|
40,241
|
|
|
|
11,488
|
|
|
|
40,241
|
|
|
|
40,241
|
|
Loss on extinguishment of debt and write-off of deferred
financing costs
|
|
|
(561,382
|
)
|
|
|
(19,948
|
)
|
|
|
(19,948
|
)
|
|
|
(561,382
|
)
|
|
|
(19,948
|
)
|
|
|
(19,948
|
)
|
Other income (expense), net
|
|
|
1,121
|
|
|
|
2,827
|
|
|
|
6
|
|
|
|
897
|
|
|
|
4,872
|
|
|
|
17
|
|
Loss before income taxes
|
|
|
(723,858
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)
|
|
|
(259,276
|
)
|
|
|
(190,836
|
)
|
|
|
(845,954
|
)
|
|
|
(557,255
|
)
|
|
|
(405,979
|
)
|
Income tax benefit (expense)
|
|
|
249,068
|
|
|
|
92,916
|
|
|
|
(91,293
|
)
|
|
|
294,976
|
|
|
|
200,755
|
|
|
|
(16,898
|
)
|
Net loss
|
|
|
(474,790
|
)
|
|
|
(166,360
|
)
|
|
|
(282,129
|
)
|
|
|
(550,978
|
)
|
|
|
(356,500
|
)
|
|
|
(422,877
|
)
|
Net loss (income) attributable to noncontrolling interests
|
|
|
(365
|
)
|
|
|
364
|
|
|
|
364
|
|
|
|
(602
|
)
|
|
|
364
|
|
|
|
364
|
|
Net loss attributable to Altice USA stockholders
|
|
|
$
|
(475,155
|
)
|
|
|
$
|
(165,996
|
)
|
|
|
$
|
(281,765
|
)
|
|
|
$
|
(551,580
|
)
|
|
|
$
|
(356,136
|
)
|
|
|
$
|
(422,513
|
)
|
Basic and diluted net loss per share
|
|
|
$
|
(0.72
|
)
|
|
|
$
|
(0.26
|
)
|
|
|
$
|
(0.43
|
)
|
|
|
$
|
(0.84
|
)
|
|
|
$
|
(0.55
|
)
|
|
|
$
|
(0.65
|
)
|
Basic and diluted weighted average common shares
|
|
|
659,145
|
|
|
|
649,525
|
|
|
|
649,525
|
|
|
|
654,362
|
|
|
|
649,525
|
|
|
|
649,525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Reconciliation of net loss to Adjusted EBITDA and Adjusted EBITDA
less Capital Expenditures:
We define Adjusted EBITDA, which is a non-GAAP financial measure, as net
income (loss) excluding income taxes, income (loss) from discontinued
operations, other non-operating income or expenses, loss on
extinguishment of debt and write-off of deferred financing costs, loss
on interest rate swap contracts, gain (loss) on equity derivative
contracts, gain (loss) on investments, interest expense (including cash
interest expense), interest income, depreciation and amortization
(including impairments), share-based compensation expense or benefit,
restructuring expense or credits 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 Adjusted EBITDA less Capital Expenditures (including
accrued, but unpaid capital), or Operating Free Cash Flow, as an
indicator of the Company's financial performance. We believe this
measure is one of several benchmarks used by investors, analysts and
peers for comparison of performance in the Company's industry, although
it may not be directly comparable to similar measures reported by other
companies.
|
|
|
|
|
|
|
Altice USA
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
|
Actual
|
|
|
Pro Forma1
|
|
|
Actual
|
|
|
Actual
|
|
|
Pro Forma1
|
|
|
Actual
|
Net loss
|
|
|
$
|
(474,790
|
)
|
|
|
$
|
(166,360
|
)
|
|
|
$
|
(282,129
|
)
|
|
|
$
|
(550,978
|
)
|
|
|
$
|
(356,500
|
)
|
|
|
$
|
(422,877
|
)
|
Income tax expense (benefit)
|
|
|
(249,068
|
)
|
|
|
(92,916
|
)
|
|
|
91,293
|
|
|
|
(294,976
|
)
|
|
|
(200,755
|
)
|
|
|
16,898
|
|
Other expense (income), net
|
|
|
(1,121
|
)
|
|
|
(2,827
|
)
|
|
|
(6
|
)
|
|
|
(897
|
)
|
|
|
(4,872
|
)
|
|
|
(17
|
)
|
Gain on interest rate swap contracts
|
|
|
(9,146
|
)
|
|
|
(40,241
|
)
|
|
|
(40,241
|
)
|
|
|
(11,488
|
)
|
|
|
(40,241
|
)
|
|
|
(40,241
|
)
|
Loss on equity derivative contracts, net
|
|
|
66,463
|
|
|
|
15,616
|
|
|
|
27,345
|
|
|
|
137,507
|
|
|
|
63,628
|
|
|
|
27,345
|
|
Gain on investments, net
|
|
|
(57,130
|
)
|
|
|
(88,259
|
)
|
|
|
(58,634
|
)
|
|
|
(188,788
|
)
|
|
|
(188,624
|
)
|
|
|
(58,634
|
)
|
Loss on extinguishment of debt and write-off of deferred
financing costs
|
|
|
561,382
|
|
|
|
19,948
|
|
|
|
19,948
|
|
|
|
561,382
|
|
|
|
19,948
|
|
|
|
19,948
|
|
Interest expense, net
|
|
|
420,192
|
|
|
|
442,393
|
|
|
|
287,827
|
|
|
|
853,254
|
|
|
|
878,994
|
|
|
|
557,241
|
|
Depreciation and amortization
|
|
|
706,787
|
|
|
|
611,699
|
|
|
|
214,100
|
|
|
|
1,315,511
|
|
|
|
1,247,760
|
|
|
|
415,000
|
|
Restructuring and other expenses
|
|
|
12,388
|
|
|
|
106,069
|
|
|
|
99,701
|
|
|
|
89,317
|
|
|
|
114,675
|
|
|
|
107,270
|
|
Share-based compensation
|
|
|
18,079
|
|
|
|
10,534
|
|
|
|
-
|
|
|
|
25,927
|
|
|
|
25,231
|
|
|
|
-
|
|
Adjusted EBITDA
|
|
|
$
|
994,036
|
|
|
|
$
|
815,656
|
|
|
|
$
|
359,204
|
|
|
|
$
|
1,935,771
|
|
|
|
$
|
1,559,244
|
|
|
|
$
|
621,933
|
|
Capital Expenditures (accrued)
|
|
|
|
228,071
|
|
|
|
|
273,624
|
|
|
|
|
90,121
|
|
|
|
|
391,015
|
|
|
|
|
500,123
|
|
|
|
|
164,036
|
|
Adjusted EBITDA less Capex (accrued)
|
|
|
$
|
765,965
|
|
|
|
$
|
542,032
|
|
|
|
$
|
269,083
|
|
|
|
$
|
1,544,756
|
|
|
|
$
|
1,059,121
|
|
|
|
$
|
457,897
|
|
Capital Expenditures (cash)
|
|
|
|
202,235
|
|
|
|
|
244,845
|
|
|
|
|
63,366
|
|
|
|
|
459,662
|
|
|
|
|
459,701
|
|
|
|
|
129,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following is the contribution from Newsday Media Group:
|
|
|
|
|
|
|
Altice USA ($m)
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2016
|
|
|
2016
|
Pro Forma Revenue
|
|
|
2,315.2
|
|
|
4,588.7
|
Less Newsday
|
|
|
58.4
|
|
|
110.4
|
Pro Forma Excluding Newsday
|
|
|
2,256.8
|
|
|
4,478.3
|
|
|
|
|
|
|
|
The following table sets forth certain customer metrics by segment
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017
|
|
|
March 31, 2017
|
|
|
June 30, 2016
|
|
|
|
Cablevision
|
|
|
Cequel
|
|
|
Total Altice USA
|
|
|
Cablevision
|
|
|
Cequel
|
|
|
Total Altice USA
|
|
|
Cablevision
|
|
|
Cequel
|
|
|
Total Altice USA
|
|
|
|
(in thousands, except per customer amounts)
|
Homes passed (a)
|
|
|
5,140
|
|
|
|
3,430
|
|
|
|
8,570
|
|
|
|
5,128
|
|
|
|
3,419
|
|
|
|
8,547
|
|
|
|
5,094
|
|
|
|
3,374
|
|
|
|
8,468
|
|
Total customers relationships (b)
|
|
|
3,151
|
|
|
|
1,753
|
|
|
|
4,904
|
|
|
|
3,148
|
|
|
|
1,765
|
|
|
|
4,913
|
|
|
|
3,143
|
|
|
|
1,726
|
|
|
|
4,869
|
|
Residential
|
|
|
2,889
|
|
|
|
1,648
|
|
|
|
4,537
|
|
|
|
2,887
|
|
|
|
1,661
|
|
|
|
4,548
|
|
|
|
2,882
|
|
|
|
1,628
|
|
|
|
4,510
|
|
SMB
|
|
|
262
|
|
|
|
106
|
|
|
|
367
|
|
|
|
261
|
|
|
|
103
|
|
|
|
365
|
|
|
|
261
|
|
|
|
98
|
|
|
|
359
|
|
Residential customers (c):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pay TV
|
|
|
2,401
|
|
|
|
1,062
|
|
|
|
3,463
|
|
|
|
2,413
|
|
|
|
1,087
|
|
|
|
3,500
|
|
|
|
2,470
|
|
|
|
1,126
|
|
|
|
3,596
|
|
Broadband
|
|
|
2,646
|
|
|
|
1,358
|
|
|
|
4,004
|
|
|
|
2,636
|
|
|
|
1,366
|
|
|
|
4,003
|
|
|
|
2,604
|
|
|
|
1,306
|
|
|
|
3,909
|
|
Telephony
|
|
|
1,954
|
|
|
|
590
|
|
|
|
2,544
|
|
|
|
1,955
|
|
|
|
596
|
|
|
|
2,551
|
|
|
|
1,994
|
|
|
|
596
|
|
|
|
2,590
|
|
Residential triple product customer penetration
(d):
|
|
|
64.3
|
%
|
|
|
25.3
|
%
|
|
|
50.1
|
%
|
|
|
64.4
|
%
|
|
|
25.4
|
%
|
|
|
50.2
|
%
|
|
|
66.1
|
%
|
|
|
25.8
|
%
|
|
|
51.6
|
%
|
Penetration of homes passed (e):
|
|
|
61.3
|
%
|
|
|
51.1
|
%
|
|
|
57.2
|
%
|
|
|
61.4
|
%
|
|
|
51.6
|
%
|
|
|
57.5
|
%
|
|
|
61.7
|
%
|
|
|
51.2
|
%
|
|
|
57.5
|
%
|
ARPU(f)
|
|
|
$
|
156.00
|
|
|
|
$
|
110.01
|
|
|
|
$
|
139.25
|
|
|
|
$
|
155.83
|
|
|
|
$
|
110.00
|
|
|
|
$
|
139.11
|
|
|
|
$
|
153.52
|
|
|
|
$
|
107.03
|
|
|
|
$
|
136.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Represents the estimated number of single residence homes,
apartments and condominium units passed by the cable distribution
network in areas serviceable without further extending the
transmission lines. In addition, it includes commercial
establishments that have connected to our cable distribution
network. For Cequel, broadband services were not available to
approximately 100 homes passed and telephony services were not
available to approximately 500 homes passed.
|
(b)
|
|
Represents number of households/businesses that receive at least one
of the Company's services.
|
(c)
|
|
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. In calculating the number of customers, we count
all customers other than inactive/disconnected customers. 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.
|
(d)
|
|
Represents the number of customers that subscribe to three of our
services divided by total residential customer relationships.
|
(e)
|
|
Represents the number of total customer relationships divided by
homes passed.
|
(f)
|
|
Calculated by dividing the average monthly revenue for the
respective quarter (fourth quarter for annual periods) derived from
the sale of broadband, pay television and telephony services to
residential customers for the respective quarter by the average
number of total residential customers for the same period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Debt as of June 30,
2017, breakdown by credit silo
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suddenlink (Cequel) - In $m
|
|
|
|
|
|
Actual
|
|
|
Coupon / Margin
|
|
|
Maturity
|
Sn. Sec. Notes
|
|
|
|
|
|
1,100
|
|
|
5.375%
|
|
|
2023
|
2026 SSN
|
|
|
|
|
|
1,500
|
|
|
5.500%
|
|
|
2026
|
New Term Loan - $1265m - 2025
|
|
|
|
|
|
1,265
|
|
|
L+2.250%
|
|
|
2025
|
Other Debt & Leases
|
|
|
|
|
|
2
|
|
|
|
|
|
|
Suddenlink Sec.Debt
|
|
|
|
|
|
3,867
|
|
|
|
|
|
|
Senior Notes due 2020
|
|
|
|
|
|
1,050
|
|
|
6.375%
|
|
|
2020
|
Senior Notes due 2021
|
|
|
|
|
|
1,250
|
|
|
5.125%
|
|
|
2021
|
Senior Notes/Holdco Exchange Notes
|
|
|
|
|
|
620
|
|
|
7.750%
|
|
|
2025
|
Suddenlink Gross Debt
|
|
|
|
|
|
6,787
|
|
|
|
|
|
|
Total Cash
|
|
|
|
|
|
(112)
|
|
|
|
|
|
|
Suddenlink Net Debt
|
|
|
|
|
|
6,675
|
|
|
|
|
|
|
Undrawn RCF8
|
|
|
|
|
|
350
|
|
|
|
|
|
|
WACD (%)
|
|
|
|
|
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cablevision (Optimum) - in $m
|
|
|
Actual
|
|
|
PF9
|
|
|
Coupon / Margin
|
|
|
Maturity
|
Guaranteed Notes (GN) - LLC
|
|
|
1,310
|
|
|
1,310
|
|
|
5.500%
|
|
|
2027
|
6.625% Guaranteed Notes Acq.- LLC
|
|
|
1,000
|
|
|
1,000
|
|
|
6.625%
|
|
|
2025
|
10.125% Senior Notes Acq. - LLC
|
|
|
1,800
|
|
|
1,800
|
|
|
10.125%
|
|
|
2023
|
10.875% Senior Notes Acq. - LLC
|
|
|
2,000
|
|
|
1,684
|
|
|
10.875%
|
|
|
2025
|
7.875% Senior Debentures - LLC
|
|
|
300
|
|
|
300
|
|
|
7.875%
|
|
|
2018
|
7.625% Senior Debentures - LLC
|
|
|
500
|
|
|
500
|
|
|
7.625%
|
|
|
2018
|
8.625% Senior Notes - LLC
|
|
|
526
|
|
|
526
|
|
|
8.625%
|
|
|
2019
|
6.750% Senior Notes - LLC
|
|
|
1,000
|
|
|
1,000
|
|
|
6.750%
|
|
|
2021
|
5.250% Senior Notes - LLC
|
|
|
750
|
|
|
750
|
|
|
5.250%
|
|
|
2024
|
New Term Loan $3,000m - 2025
|
|
|
3,000
|
|
|
3,000
|
|
|
L+2.250%
|
|
|
2025
|
Drawn RCF
|
|
|
650
|
|
|
650
|
|
|
L+3.250%
|
|
|
2021
|
Other Debt & Leases10
|
|
|
39
|
|
|
39
|
|
|
|
|
|
|
Cablevision New Debt /Total Debt LLC
|
|
|
12,875
|
|
|
12,559
|
|
|
|
|
|
|
8.625% Senior Notes - Corp
|
|
|
400
|
|
|
400
|
|
|
8.625%
|
|
|
2017
|
7.750% Senior Notes - Corp
|
|
|
750
|
|
|
750
|
|
|
7.750%
|
|
|
2018
|
8.000% Senior Notes - Corp
|
|
|
500
|
|
|
500
|
|
|
8.000%
|
|
|
2020
|
5.875% Senior Notes - Corp
|
|
|
649
|
|
|
649
|
|
|
5.875%
|
|
|
2022
|
Cablevision New Debt /Total Debt Corp
|
|
|
15,174
|
|
|
14,858
|
|
|
|
|
|
|
Total Cash
|
|
|
(507)
|
|
|
(156)
|
|
|
|
|
|
|
Cablevision Net Debt
|
|
|
14,667
|
|
|
14,701
|
|
|
|
|
|
|
Undrawn RCF11
|
|
|
1,650
|
|
|
1,650
|
|
|
|
|
|
|
WACD (%)
|
|
|
|
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Altice USA Pro Forma Net Leverage
Reconciliation as of June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In $m
|
|
|
|
|
|
|
|
|
|
|
|
|
Altice USA
|
|
|
Suddenlink
|
|
|
Optimum
|
|
|
Altice US Inc
|
|
|
Pro Forma9
|
Gross Debt Consolidated
|
|
|
6,787
|
|
|
14,858
|
|
|
-
|
|
|
21,645
|
Cash
|
|
|
(112)
|
|
|
(156)
|
|
|
(7)
|
|
|
(275)
|
Net Debt Consolidated
|
|
|
6,675
|
|
|
14,701
|
|
|
(7)
|
|
|
21,370
|
LTM EBITDA GAAP
|
|
|
1,244
|
|
|
2,515
|
|
|
|
|
|
3,759
|
L2QA EBITDA GAAP
|
|
|
1,270
|
|
|
2,631
|
|
|
|
|
|
3,902
|
Net Leverage (LTM)
|
|
|
5.4x
|
|
|
5.8x
|
|
|
|
|
|
5.7x
|
Net Leverage (L2QA)
|
|
|
5.3x
|
|
|
5.6x
|
|
|
|
|
|
5.5x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In $m
|
|
Altice USA Reconciliation to Financial Reported Debt
|
|
|
Actual
|
|
|
Pro Forma9
|
Total Debenture and Loans from Financial Institutions
|
|
|
21,424
|
|
|
21,108
|
Unamortized Financing Costs
|
|
|
321
|
|
|
321
|
Fair Value Adjustments
|
|
|
175
|
|
|
175
|
Total Adjusted Value of Debenture and Loans from Financial
Institutions
|
|
|
21,920
|
|
|
21,604
|
Other Debt & Capital Leases
|
|
|
41
|
|
|
41
|
Gross Debt Consolidated
|
|
|
21,961
|
|
|
21,645
|
|
|
|
|
|
|
|
About Altice USA
Altice USA (NYSE:ATUS), the U.S. business of Altice N.V. (Euronext: ATC,
ATCB), is one of the largest broadband communications and video services
providers in the United States, delivering broadband, pay television,
telephony services, Wi-Fi hotspot access, proprietary content and
advertising services to approximately 4.9 million residential and
business customers across 21 states through its Optimum and Suddenlink
brands.
|
|
|
1
|
|
Financial data for 2016 period is pro forma defined as results of
Altice USA as if the Cablevision (Optimum) acquisition had occurred
on 1/1/16, unless noted otherwise. All financials shown under U.S.
generally accepted accounting principles ("GAAP") reporting
standard. See "Reconciliation of net loss to Adjusted EBITDA and
Adjusted EBITDA less Capital Expenditures" on page 7 of this
release. See also separate Altice N.V. Q2 2017 earnings release
today for reconciliation to reported figures under IFRS reporting
standard.
|
2
|
|
Optimum ranks #1 among measured Cable Providers for both TV and
Internet services according to the 2017 ACSI TV and ISP studies.
|
3
|
|
According to PC Mag, Suddenlink ranks as the #1 Residential-Direct
Internet Service Provider.
|
4
|
|
Operating Free Cash Flow defined here as Adjusted EBITDA less capex
(including accruals for capital).
|
5
|
|
Adjusting for the impact from a strike at a competitor.
|
6
|
|
According to PC Mag, Suddenlink ranks as the #1 Residential-Direct
Internet Service Provider.
|
7
|
|
Optimum ranks #1 among measured Cable Providers for both TV and
Internet services according to the 2017 ACSI TV and ISP studies.
|
8
|
|
At June 30, 2017, $17m of the revolving credit facility was
restricted for certain letters of credit issued on behalf of the
Company and $333m of the facility was undrawn and available, subject
to covenant limitations.
|
9
|
|
Pro forma gives effect for the partial repayment of the Cablevision
10.875% 2025 Senior Notes (funded by net primary equity proceeds
from the IPO).
|
10
|
|
Excludes $66m of notes payable related to collateralized debt
|
11
|
|
At June 30, 2017, $91m of the revolving credit facility was
restricted for certain letters of credit issued on behalf of the
Company and $1,559m of the facility was undrawn and available,
subject to covenant limitations.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170727006564/en/
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