Reaches 2.2 Million Fiber Passings and More
Than 170K Fiber Customers
Altice USA (NYSE: ATUS) today reports results for the fourth
quarter and full year ended December 31, 2022.
Dennis Mathew, Altice USA Chief Executive Officer, said:
"In the full year 2022, we made great progress against our key
initiatives and began to see the benefits of our increased
investments, notably around our fiber network expansion,
accelerated new build activity, execution of the Suddenlink rebrand
to Optimum, improvements in customer care and growing our
distribution channels. We are pleased with our momentum as
demonstrated by the sequential improvement in our subscriber trends
in the fourth quarter. Looking ahead, we have a clear strategy
centered around growing our broadband and mobile businesses by
delivering best-in-class customer and employee experiences and we
are committed to executing with discipline, setting us on a path to
return to sustainable customer, revenue, and cash flow growth."
Key Financial Highlights
- Total Revenue declined -6.0% YoY in Q4 2022 to $2.37
billion (-4.7% excluding air strand revenue(1)), including
Residential revenue decline of -5.0% YoY, Business Services revenue
decline of -9.3% YoY (-0.4% excluding air strand revenue(1)) and
News & Advertising revenue decline of -10.8% YoY. Total revenue
declined -4.4% YoY in FY 2022 (-3.2% excluding air strand
revenue(1)).
- Net income (loss) attributable to stockholders was
($193.1) million in Q4 2022 (($0.43)/share on a diluted basis)
compared to $251.7 million in Q4 2021 ($0.56/share on a diluted
basis). Net income attributable to stockholders was $194.6 million
($0.43/share on a diluted basis) in FY 2022 compared to net income
of $990.3 million in FY 2021 ($2.14/share on a diluted basis).
- Net cash flows from operating activities were $461.2
million in Q4 2022, compared to $676.6 million in Q4 2021. Net cash
flows from operating activities were $2.37 billion in FY 2022,
compared to $2.85 billion in FY 2021.
- Adjusted EBITDA(2) declined -15.7% YoY in Q4 2022 to
$913.3 million (-12.8% excluding air strand revenue(1)) with a
margin of 38.6%. Adjusted EBITDA declined -12.7% YoY to $3.87
billion (-10.3% excluding air strand revenue(1)) in FY 2022 with a
margin of 40.1%.
- Cash capital expenditures of $543.2 million in Q4 2022
represented 22.9% of revenue and were up 40.5% YoY. Cash capital
expenditures of $1.91 billion in FY 2022 represented 19.8% of
revenue and were up 55.4% YoY mainly driven by accelerated
fiber-to-the-home (FTTH) rollout and new builds (10.4% of revenue
excluding FTTH and new builds).
- Operating Free Cash Flow(2) decreased -46.9% YoY to
$370.1 million in Q4 2022 and decreased -38.9% YoY to $1.95 billion
in FY 2022.
- Free Cash Flow(2) was ($82.0) million in Q4 2022 and
$452.6 million in FY 2022.
Q4-22 Summary Financials
Three Months Ended
December 31,
Twelve Months Ended
December 31,
(in thousands)
2022
2021
2022
2021
Revenue
$2,369,196
$2,521,138
$9,647,659
$10,090,849
Net income (loss) attributable to Altice
USA, Inc. stockholders
(193,113)
251,662
194,563
990,311
Adjusted EBITDA(2)
913,349
1,083,040
3,866,537
4,427,251
Capital Expenditures (cash)
543,226
386,648
1,914,282
1,231,715
Revenue Growth and Adjusted EBITDA
Detail
Q4-22
FY-22
Total Revenue YoY
(6.0
)%
(4.4
)%
excl. air strand revenue(1)
(4.7
)%
(3.2
)%
Residential Revenue YoY
(5.0
)%
(4.0
)%
Business Services Revenue YoY
(9.3
)%
(7.1
)%
excl. air strand revenue(1)
(0.4
)%
0.6
%
News & Advertising Revenue YoY
(10.8
)%
(5.5
)%
excl. political revenue
(25.0
)%
(10.5
)%
Adjusted EBITDA YoY
(15.7
)%
(12.7
)%
excl. air strand revenue(1)
(12.8
)%
(10.3
)%
Adjusted EBITDA Margin
38.6
%
40.1
%
Residential unique customer
relationships(3), broadband subscribers and organic net additions
(losses)(4)
Subscribers
(in thousands)
Q1-21
Q2-21(5)
Q3-21
Q4-21
FY-21(5)
Q1-22
Q2-22
Q3-22
Q4-22
FY-22
Residential ending customer
relationships
4,647.4
4,670.7
4,646.0
4,632.8
4,632.8
4,612.1
4,564.2
4,514.7
4,498.5
4,498.5
Residential customer organic net
losses
(1.0)
(11.9)
(24.7)
(13.2)
(50.8)
(20.7)
(47.9)
(49.5)
(16.2)
(134.3)
Broadband ending subscribers
4,370.8
4,401.3
4,388.1
4,386.2
4,386.2
4,373.2
4,333.6
4,290.6
4,282.9
4,282.9
Broadband organic net additions
(losses)
11.5
0.2
(13.1)
(1.9)
(3.3)
(13.0)
(39.6)
(43.0)
(7.7)
(103.3)
Key Operational
Highlights
- Fiber Broadband Primary Service Units (PSUs): Quarterly
FTTH broadband net additions were +36k in Q4 2022, more than three
times the growth compared to Q4 2021 (+11k). Fiber broadband net
adds were +102k in FY 2022 driven by both higher fiber gross
additions and increased migrations of existing customers. Total
fiber broadband customers reached 172k as of the end of FY
2022.
- Total unique Residential customer relationships declined
-2.9% YoY in Q4 2022. Quarterly unique Residential customer net
losses in the quarter were -16k, compared to -13k in Q4 2021.
Unique Residential customer net losses were -134k in FY 2022,
compared to -51k organic net losses in FY 2021.
- Residential Broadband PSUs: Quarterly Residential
broadband net losses were -8k in Q4 2022, compared to -2k broadband
net losses in Q4 2021. Residential broadband net losses were -103k
in FY 2022, compared to -3k organic net losses in FY 2021.
- Residential Video PSUs: Quarterly Residential video net
losses were -53k in Q4 2022, compared to -71k video net losses in
Q4 2021. Residential video net losses were -293k in FY 2022,
compared to -241k organic net losses in 2021.
- Residential revenue declined -5.0% YoY in Q4 2022 to
$1.82 billion. Residential revenue declined -4.0% YoY to $7.54
billion in FY 2022.
- Residential revenue per customer relationship declined
-2.2% YoY in Q4 2022 to $134.76. Residential revenue per customer
declined -2.4% YoY in FY 2022 to $137.70, mostly due to the loss of
higher ARPU video customers.
- Business Services revenue of $368.3 million was down
-9.3% YoY in Q4 2022 due to the early termination of a backhaul
contract for air strands which resulted in the recognition of
deferred revenue and termination fees over the amended term in the
prior year period. Excluding air strand revenue in the prior
period, Business Services revenue was down -0.4% YoY(1). SMB /
Other revenue was down -11.6% YoY in Q4 2022, or grew +0.2% YoY
excluding air strand revenue(1). Lightpath revenue was down -1.9%
YoY in Q4 2022. Business Services revenue was down -7.1% YoY in FY
2022, or grew +0.6% YoY excluding air strand revenue(1). SMB /
Other revenue was down -9.3% YoY in FY 2022, or grew +1.0% YoY
excluding air strand revenue(1). Lightpath revenue was down -0.3%
YoY in FY 2022.
- News and Advertising revenue was down -10.8% YoY to
$151.8 million in Q4 2022, or down -25.0% YoY excluding political
revenue. FY 2022 revenue was down -5.5% YoY to $520.3 million, or
down -10.5% excluding political revenue.
- Optimum Mobile has approximately 240k mobile lines(6) as
of December 31, 2022 (+4k mobile net additions in Q4 2022 and +54k
net adds in FY 2022), reaching 5.6% penetration of the Company's
residential broadband customer base.
Fiber Rollout, Multi-Gig Fiber Internet
and Network Expansion Update
- Fiber (FTTH) rollout update: As of Q4 2022, the Company
has 2.16 million FTTH passings, adding +251k new FTTH passings in
the fourth quarter and adding +988k in FY 2022. This represents the
highest amount of annual incremental FTTH passings to date (vs.
+271k new passings in FY 2021, and +390k new passings in FY
2020).
- Rollout of Optimum 5 Gig and 2 Gig Fiber Internet
service: In the last year the Company introduced both Optimum 5
Gbps (5 Gig) and 2 Gbps (2 Gig) Fiber Internet, with symmetrical
data speeds up to 5 Gig and 2 Gig respectively. The new 5 Gig and 2
Gig Optimum Fiber Internet tiers are now available across Long
Island and Connecticut in our fiber footprint. At the end of Q4
2022, 45% of the Company’s fiber passings had multi-gig speeds
available.
- 1 Gbps (1 Gig) broadband speed sell-in to all new customers,
where 1 Gig or higher services are available, was 40% in Q4
2022. Approximately 20% of the Residential broadband customer
base currently take 1 Gig speeds, representing a significant growth
opportunity for the Company.
- Broadband speeds taken on average have nearly doubled in the
past three years to 402 Mbps in Q4 2022. Approximately
40% of the Company’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 564 GB per month in Q4 2022, which is 22% higher
than the average usage of the entire customer base (461 GB per
month).
- New build activity update: the Company has been
accelerating the pace of its network edge-outs, adding +49k
passings in Q4 2022, and a total of +200k total passings in the
last twelve months (LTM). 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 150k+ new passings in FY
2023.
FY 2023 Capex Guidance
- The Company expects to continue to invest in key growth
initiatives, with anticipated cash capex of approximately $1.7
billion to $1.8 billion in FY 2023.
Balance Sheet Review
As of December 31, 2022:
- Net debt for CSC Holdings, LLC Restricted Group was
$22,921 million at the end of Q4 2022(7), representing net leverage
of 6.3x Adjusted EBITDA on a LTM basis, or 6.6x Adjusted EBITDA on
a Last 2 Quarters Annualized (L2QA) basis. The weighted average
cost of debt for CSC Holdings, LLC Restricted Group was 5.7% as of
the end of Q4 2022 and the weighted average life was 5.7 years. The
Company expects to return to a leverage target of 4.5x to 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 $1,353
million at the end of Q4 2022(7), representing net leverage of 6.0x
LTM (5.7x L2QA). The weighted average cost of debt for Cablevision
Lightpath LLC was 5.4% as of the end of Q4 2022 and the weighted
average life was 5.1 years.
- Consolidated net debt for Altice USA was $24,240
million(7), representing consolidated net leverage of 6.3x LTM
(6.5x L2QA at the end of Q4 2022).
Successful Pricing of New Term
Loan
On December 19, 2022, CSC Holdings entered
into the thirteenth amendment under its existing credit facilities
agreement (the "Thirteenth Amendment" or "Term Loan B-6"). The Term
Loan B-6 provides for, among other things, new refinancing term
loan commitments in an aggregate principal amount of $2.0 billion
issued with an original issue discount of 200 basis points, with an
extended maturity until the date that is the earlier of (i) January
15, 2028 and (ii) April 15, 2027 if, as of such date, any Term Loan
B-5 borrowings are still outstanding, unless the Incremental Loan
B-5 maturity date has been extended to a date falling after January
15, 2028.
Interest on the Term Loan B-6 will be
calculated at a rate per annum equal to the Term SOFR rate or the
alternate base rate, as applicable, plus the applicable margin,
where the applicable margin is (i) with respect to any alternate
base rate loan, 3.50% per annum and (ii) with respect to any Term
SOFR loan, 4.50% per annum. The proceeds from the Term Loan B-6
were used to refinance (including by way of cashless roll) a
portion of the Company's Term Loan B-1 and Term Loan B-3.
Shares Outstanding
As of December 31, 2022, the Company had
456,162,292 combined Class A and Class B shares outstanding.
Altice USA Consolidated
Operating Results
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Revenue:
Broadband
$
960,628
$
972,953
$
3,930,667
$
3,925,089
Video
781,869
850,344
3,281,306
3,526,205
Telephony
79,454
94,515
332,406
404,813
Residential revenue
1,821,951
1,917,812
7,544,379
7,856,107
Business services and wholesale
368,258
406,005
1,473,837
1,586,044
News and Advertising
151,846
170,205
520,293
550,667
Mobile
24,367
23,839
97,679
84,194
Other
2,774
3,277
11,471
13,837
Total revenue
2,369,196
2,521,138
9,647,659
10,090,849
Operating expenses:
Programming and other direct costs
775,713
836,484
3,205,638
3,382,129
Other operating expenses
725,709
619,633
2,735,469
2,379,765
Restructuring expense and other operating
items(17)
120,227
6,218
130,285
17,176
Depreciation and amortization (including
impairments)
446,430
460,010
1,773,673
1,787,152
Operating income
301,117
598,793
1,802,594
2,524,627
Other income (expense):
Interest expense, net
(377,072
)
(311,907
)
(1,331,636
)
(1,266,591
)
Gain (loss) on investments
242,268
(240,549
)
(659,792
)
(88,898
)
Gain (loss) on derivative contracts,
net
(218,041
)
194,931
425,815
85,911
Gain on interest rate swap contracts
2,828
33,135
271,788
92,735
Loss on extinguishment of debt and
write-off of deferred financing costs
(575
)
—
(575
)
(51,712
)
Other income, net
339
2,229
8,535
9,835
Income (loss) before income
taxes
(49,136
)
276,632
516,729
1,305,907
Income tax expense
(143,277
)
(15,922
)
(295,840
)
(294,975
)
Net income (loss)
(192,413
)
260,710
220,889
1,010,932
Net income attributable to noncontrolling
interests
(700
)
(9,048
)
(26,326
)
(20,621
)
Net income (loss) attributable to
Altice USA stockholders
$
(193,113
)
$
251,662
$
194,563
$
990,311
Basic net income (loss) per
share
$
(0.43
)
$
0.56
$
0.43
$
2.16
Diluted net income (loss) per
share
$
(0.43
)
$
0.56
$
0.43
$
2.14
Basic weighted average common
shares
453,276
453,228
453,244
458,311
Diluted weighted average common
shares
453,276
453,230
453,282
462,295
Altice USA Consolidated
Statements of Cash Flows
(in thousands)
(Unaudited)
December 31,
2022
2021
Cash flows from operating activities:
Net income
$
220,889
$
1,010,932
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization (including
impairments)
1,773,673
1,787,152
Loss on investments
659,792
88,898
Gain on derivative contracts, net
(425,815
)
(85,911
)
Loss on extinguishment of debt and
write-off of deferred financing costs
575
51,712
Amortization of deferred financing costs
and discounts (premiums) on indebtedness
77,356
91,226
Share-based compensation expense
159,985
98,296
Deferred income taxes
36,385
40,701
Decrease in right-of-use assets
44,342
43,820
Provision for doubtful accounts
88,159
68,809
Other
3,460
4,928
Change in assets and liabilities, net of
effects of acquisitions and dispositions:
Accounts receivable, trade
(45,279
)
(30,379
)
Prepaid expenses and other assets
50,419
28,343
Amounts due from and due to affiliates
(7,749
)
23,758
Accounts payable and accrued
liabilities
46,724
(177,326
)
Deferred revenue
(14,953
)
(40,929
)
Interest rate swap contracts
(301,062
)
(149,952
)
Net cash provided by operating
activities
2,366,901
2,854,078
Cash flows from investing activities:
Capital expenditures
(1,914,282
)
(1,231,715
)
Payment for acquisitions, net of cash
acquired
(2,060
)
(340,444
)
Other, net
(5,168
)
(1,444
)
Net cash used in investing activities
(1,921,510
)
(1,573,603
)
Cash flows from financing activities:
Proceeds from long-term debt
4,276,903
4,410,000
Repayment of debt
(4,469,727
)
(4,870,108
)
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
(134,682
)
(85,949
)
Purchase of shares of Altice USA Class A
common stock, pursuant to a share repurchase program
—
(804,928
)
Other
(8,400
)
(11,539
)
Net cash used in financing activities
(335,906
)
(1,362,524
)
Net increase (decrease) in cash and cash
equivalents
109,485
(82,049
)
Effect of exchange rate changes on cash
and cash equivalents
291
(662
)
Net increase (decrease) in cash and cash
equivalents
109,776
(82,711
)
Cash, cash equivalents and restricted cash
at beginning of year
195,975
278,686
Cash, cash equivalents and restricted cash
at end of period
$
305,751
$
195,975
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 and sale of affiliate interests, interest expense, net,
depreciation and amortization, share-based compensation,
restructuring expense and other operating items (such as
significant legal settlements, contractual payments for terminated
employees, and impairments).
Adjusted EBITDA eliminates the significant non-cash depreciation
and amortization expense that results from the capital-intensive
nature of our business and from intangible assets recognized from
acquisitions, as well as certain non-cash and other operating items
that affect the period-to-period comparability of our operating
performance. In addition, Adjusted EBITDA is unaffected by our
capital and tax structures and by our investment activities.
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.
We revised our definition of Adjusted EBITDA in the fourth
quarter of 2022 to exclude the impact of significant legal
settlements. This revision did not impact amounts reported in prior
periods.
Reconciliation of net income to
Adjusted EBITDA and Operating Free Cash Flow (unaudited):
(in thousands)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Net income (loss)
$
(192,413
)
$
260,710
$
220,889
$
1,010,932
Income tax expense
143,277
15,922
295,840
294,975
Other income, net
(339
)
(2,229
)
(8,535
)
(9,835
)
Gain on interest rate swap contracts,
net
(2,828
)
(33,135
)
(271,788
)
(92,735
)
Loss (gain) on derivative contracts,
net
218,041
(194,931
)
(425,815
)
(85,911
)
Loss (gain) on investments
(242,268
)
240,549
659,792
88,898
Loss on extinguishment of debt and
write-off of deferred financing costs
575
—
575
51,712
Interest expense, net
377,072
311,907
1,331,636
1,266,591
Depreciation and amortization (including
impairments)
446,430
460,010
1,773,673
1,787,152
Restructuring expense and other operating
items
120,227
6,218
130,285
17,176
Share-based compensation
45,575
18,019
159,985
98,296
Adjusted EBITDA
913,349
1,083,040
3,866,537
4,427,251
Capital Expenditures (cash)
543,226
386,648
1,914,282
1,231,715
Operating Free Cash Flow
$
370,123
$
696,392
$
1,952,255
$
3,195,536
Reconciliation of net cash flow from
operating activities to Free Cash Flow (unaudited):
Net cash flows from operating
activities
$
461,185
$
676,599
$
2,366,901
$
2,854,078
Capital Expenditures (cash)
543,226
386,648
1,914,282
1,231,715
Free Cash Flow
$
(82,041
)
$
289,951
$
452,619
$
1,622,363
Customer Metrics (in thousands,
except per customer amounts)
Q1-21
Q2-21(5)
Q3-21
Q4-21
FY-21(5)
Q1-22
Q2-22
Q3-22
Q4-22
FY-22
Total Passings(8)
9,067.6
9,195.1
9,212.5
9,263.3
9,263.3
9,304.9
9,363.1
9,414.9
9,463.8
9,463.8
Residential
4,647.4
4,670.7
4,646.0
4,632.8
4,632.8
4,612.1
4,564.2
4,514.7
4,498.5
4,498.5
SMB
375.8
380.7
381.6
381.9
381.9
382.9
383.1
382.5
381.2
381.2
Total Unique Customer
Relationships(3)
5,023.2
5,051.4
5,027.6
5,014.7
5,014.7
4,995.0
4,947.3
4,897.2
4,879.7
4,879.7
Residential Customers:
Broadband
4,370.8
4,401.3
4,388.1
4,386.2
4,386.2
4,373.2
4,333.6
4,290.6
4,282.9
4,282.9
Video
2,906.6
2,870.5
2,803.0
2,732.3
2,732.3
2,658.7
2,574.2
2,491.8
2,439.0
2,439.0
Telephony
2,161.2
2,118.4
2,057.1
2,005.2
2,005.2
1,951.5
1,886.9
1,818.9
1,764.1
1,764.1
Residential ARPU ($)(9)
142.24
142.24
140.73
137.79
141.08
137.92
140.13
138.12
134.76
137.70
Fiber (FTTH) Customer Metrics (in
thousands)
Q1-21
Q2-21
Q3-21
Q4-21
FY-21
Q1-22
Q2-22
Q3-22
Q4-22
FY-22
FTTH Total Passings(10)
921.4
982.5
1,026.6
1,171.0
1,171.0
1,316.6
1,587.1
1,908.2
2,158.7
2,158.7
FTTH Total customer
relationships(11)
35.9
47.3
58.9
69.7
69.7
81.0
104.4
135.3
171.7
171.7
FTTH Residential
35.9
47.3
58.7
69.3
69.3
80.4
103.7
134.2
170.0
170.0
FTTH SMB
0.0
0.1
0.2
0.3
0.3
0.6
0.7
1.2
1.7
1.7
Consolidated Net
Debt as of December 31, 2022
CSC Holdings, LLC Restricted Group (in
$m)
Principal
Amount
Coupon /
Margin
Maturity
Drawn RCF
$1,575
S+2.350%
2025(12)
Term Loan
1,536
L+2.250%
2025
Term Loan B-3
527
L+2.250%
2026
Term Loan B-5
2,918
L+2.500%
2027
Term Loan B-6
2,002
S+4.500%
2028(13)
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
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
23,092
CSC Holdings, LLC Restricted Group
Cash
(171)
CSC Holdings, LLC Restricted Group Net
Debt
$22,921
CSC Holdings, LLC Restricted Group
Undrawn RCF
$769
Cablevision Lightpath LLC (in
$m)
Principal
Amount
Coupon /
Margin
Maturity
Drawn RCF
$—
L+3.250%
2025
Term Loan
588
L+3.250%
2027
Senior Secured Notes
450
3.875%
2027
Senior Notes
415
5.625%
2028
Cablevision Lightpath Gross
Debt
1,453
Cablevision Lightpath Cash
(100)
Cablevision Lightpath Net Debt
$1,353
Cablevision Lightpath Undrawn
RCF
$100
Net Leverage
Schedules as of December 31, 2022 (in $m)
CSC Holdings
Restricted
Group(14)
Cablevision
Lightpath LLC
CSC Holdings
Consolidated(15)
Altice USA
Consolidated
Gross Debt Consolidated(16)
$23,092
$1,453
$24,545
$24,545
Cash
(171)
(100)
(305)
(305)
Net Debt Consolidated
$22,921
$1,353
$24,240
$24,240
LTM EBITDA
$3,633
$225
$3,867
$3,867
L2QA EBITDA
$3,488
$237
$3,735
$3,735
Net Leverage (LTM)
6.3x
6.0x
6.3x
6.3x
Net Leverage (L2QA)
6.6x
5.7x
6.5x
6.5x
WACD (%)
5.7%
5.4%
5.7%
5.7%
Reconciliation to Financial Reported
Debt
Actual
Total Debenture and Loans from
Financial Institutions (Carrying Amount)
$24,469
Unamortized financing costs and discounts,
net of unamortized premiums
24
Fair value adjustments
52
Gross Debt Consolidated(16)
24,545
Finance leases and other notes
372
Total Debt
24,917
Cash
(305)
Net Debt
$24,612
_______________________________
(1)
Excludes all air strand revenue and
related costs from Business Services for all periods.
(2)
See “Reconciliation of Non-GAAP Financial
Measures” on page 7 of this release.
(3)
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 hybrid-fiber-coaxial (HFC) and fiber-to-the-home (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.
(4)
Customer metrics do not include Optimum
Mobile customers.
(5)
Since Q2-21, figures include Morris
Broadband, LLC acquired subscribers.
(6)
Mobile lines include approximately 31.6k
lines receiving free service.
(7)
Net debt, defined as the principal amount
of debt less cash, and excluding finance leases and other notes and
collateralized debt.
(8)
Total passings represents the estimated
number of single residence homes, apartments and condominium units
passed by the HFC and 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 89k total passings acquired in the Morris
Broadband acquisition in Q2-21.
(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.
(10)
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.
(11)
Represents number of households/businesses
that receive at least one of the Company's fixed-line services on
our FTTH network. 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.
(12)
The CSC Holdings' revolving credit
facility is due on the earlier of (i) July 13, 2027 and (ii) April
17, 2025 if, as of such date, any Term Loan borrowings are still
outstanding, unless the Term Loan maturity date has been extended
to a date falling after July 13, 2027.
(13)
The Term Loan B-6 that is due on the
earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of
such date, any Term Loan B-5 are still outstanding, unless the Term
Loan B-5 maturity date has been extended to a date falling after
January 15, 2028.
(14)
CSC Holdings, LLC Restricted Group
excludes the unrestricted subsidiaries, primarily Cablevision
Lightpath LLC and NY Interconnect, LLC.
(15)
CSC Holdings Consolidated includes the CSC
Holdings, LLC Restricted Group and the unrestricted
subsidiaries.
(16)
Principal amount of debt excluding finance
leases and other notes and collateralized debt.
(17)
Includes a legal settlement with T-Mobile
of $112.5 million in Q4 2022 related to a legacy Sprint VOIP patent
dispute. The Company paid $65 million in December 2022 and the
balance of $47.5 million is payable on or before June 30, 2024.
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 approximately 4.9 million residential and
business customers across 21 states through its Optimum brand. 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 News 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, 2022 and previous 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230222005846/en/
Investor Relations Nick Brown: +1 917 589 9983 /
nick.brown@alticeusa.com Sarah Freedman: +1 631 660 8714 /
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
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