ATUS Altice USA Inc

Strong Fiber Growth; Increased Fiber Migrations and Fiber Penetration Best Mobile Performance in Four Years Continued Progress in Enhancing and Expanding Our Networks Unveiled Transformation Plan to Unlock Key Free Cash Flow Opportunities

Altice USA (NYSE: ATUS) today reports results for the third quarter ended September 30, 2024.

Dennis Mathew, Altice USA Chairman and Chief Executive Officer, said: "Over the last two years, we’ve made significant progress in strengthening our networks, stabilizing our operations, and setting a strong foundation for long-term growth. These efforts have resulted in positive momentum across our fiber and mobile product lines in the third quarter. Our focus remains on transforming our business for future growth with significant revenue opportunities, including expanding our advanced product portfolio, increasing penetration of our best-in-class fiber network, and driving operational efficiencies with a sustainable capital structure. Executing on these goals will drive free cash flow, increase shareholder value and support sustainable long-term growth over time.”

Third Quarter 2024 Financial Overview

• Total revenue of $2.2 billion (-3.9% year over year)
• Residential revenue of $1.7 billion (-5.6% year over year)
• Residential revenue per user (“ARPU”)(1) of $135.77 (-1.9% year over year)
• Business Services revenue of $366.4 million (-0.1% year over year)
• News and Advertising revenue of $117.7 million (+9.5% year over year)
• Net income (loss) attributable to stockholders of ($43.0) million ($(0.09)/share on a diluted basis) in Q3 2024 and $66.8 million ($0.15/share on a diluted basis) in Q3 2023
• Net cash flows from operating activities of $436.0 million in Q3 2024 and $474.5 million in Q3 2023
• Adjusted EBITDA(2) of $862.0 million (-5.8% year over year), and margin of 38.7%
• Cash capital expenditures of $359.2 million (+1.7% year over year) and Capital intensity(3) of 16.1% (13.1% excluding fiber and new builds)
  • We remained disciplined on capital spend over the course of the year and now anticipate cash capital expenditures of $1.5 billion in full year 2024, representing a $200 million dollar reduction compared to full year 2023 cash capital expenditures
• Free Cash Flow(2) of $76.9 million, including $115 million of higher cash interest in Q3 2024 year over year

Third Quarter 2024 Key Operational Highlights

• Strong Fiber Net Adds Reaching 482k Fiber Customers, a +63% Increase in Total Fiber Customers Compared to Q3 2023
  • Fiber customer growth continued in Q3 2024 with +47k fiber net additions, of which 73% were driven by migrations of existing customers
  • Fiber network penetration reached 16.6% at the end of Q3 2024, up from 10.8% at the end of Q3 2023
• Mobile Line Net Adds of +36k in Q3 2024, Representing the Highest Mobile Line Net Adds in Four Years; Reaching 420k Lines
  • Optimum Mobile line net additions of +36k in Q3 2024, compared to +24k in Q3 2023
  • 5.2% of broadband base converged with mobile(4) at the end of Q3 2024, up from 3.2% at the end of Q3 2023
• Strengthening Our Go-To-Market Strategy to Leverage Convergence Opportunities
  • Simplified product offers and base management strategy to drive convergence and provide customers more value
  • Evolved our video model with the introduction of new TV packages -- Entertainment TV, Extra TV, & Everything TV -- which drive higher margins via mutually beneficial programming agreements, offer consumers more content flexibility and are available alongside a customer's favorite streaming services via Optimum Stream
• Total Broadband Primary Service Units (PSUs) Net Losses of -50k(5)
  • Broadband net losses were -50k(5) in Q3 2024, compared to -31k in Q3 2023
  • Performance was driven by continued low levels of switching activity, competitive pressures across our footprint, and muted trends in the income-constrained segment, including elevated non-pay disconnects from prior ACP subscribers
• Continued Progress in Delivering on Multi-Year Network Strategy; Reaching Nearly 3 million Fiber Passings
  • Fiber passings additions of +52k in Q3 2024, reaching 2.9 million fiber passings, and targeting approximately 3 million fiber passings by year-end 2024
  • Total passings additions of +38k in Q3 2024, reaching 9.8 million total passings, and targeting over 175k additional passings in full year 2024
  • Capital intensity(3) of 16.1% in Q3 2024 compared to 15.2% in Q3 2023
  • Service call rate(6) improved by 11% year over year in Q3 2024
  • Service visit repeat rate(7) improved by 28% year over year in Q3 2024
  • Achieved approximately 99% node health across our entire footprint in Q3 2024 through enhanced node monitoring and proactive maintenance
  • Deploying new digital modulation technologies on our DOCSIS 3.1 HFC network to improve broadband performance with over 3 million customers expected to benefit from better speed attainability and reliability this year

Opportunities to Improve Free Cash Flow(2) Over Time

• Revenue Opportunities
  • Improve broadband subscriber trends
  • Reach 1 million+ mobile lines by year-end 2027
  • Launch additional high margin value-added services
  • Expand B2B product portfolio and scalable solutions
• Fiber Penetration
  • Maximize asset value and competitive positioning
  • Accelerate growth of fiber base with plans to achieve 1 million+ fiber subscribers by year-end 2026
  • Deliver 30%+ fiber penetration year-end 2026
• Operational Efficiency
  • Achieve gross margin of ~70% by year-end 2026
  • Improve other operating expenses(8) by 4-6% by year-end 2026
  • Return normalized Adjusted EBITDA(2) margins to ~40%
• Sustainable Capital Structure
  • Sufficient liquidity to support long-term operational roadmap
  • Deliver annual capex under $1.3bn in full year 2025
  • Maintain positive annual Free Cash Flow(2)

Balance Sheet Review as of September 30, 2024

• Net debt(9) for CSC Holdings, LLC Restricted Group was $23,180 million at the end of Q3 2024, representing net leverage of 7.2x L2QA(10)
  • The weighted average cost of debt for CSC Holdings, LLC Restricted Group was 6.9% and the weighted average life of debt was 4.4 years
• Net debt(9) for Cablevision Lightpath LLC was $1,410 million at the end of Q3 2024, representing net leverage of 5.7x L2QA(10)
  • The weighted average cost of debt for Cablevision Lightpath LLC was 5.4% and the weighted average life of debt was 3.3 years
• Consolidated net debt(9) for Altice USA was $24,564 million, representing consolidated net leverage of 7.1x L2QA(10)
  • The weighted average cost of debt for consolidated Altice USA was 6.8% and the weighted average life of debt was 4.3 years

Shares Outstanding

• As of September 30, 2024, Altice USA had 461,189,373 combined shares of Class A and Class B common stock outstanding

Customer Metrics (in thousands, except per customer amounts)

 

 

 

 

 

 

 

 

Q1-23

Q2-23

Q3-23

Q4-23

FY-23

Q1-24

Q2-24

Q3-24

Total Passings(11)

9,512.2

9,578.6

9,609.0

9,628.7

9,628.7

9,679.3

9,746.4

9,784.7

Total Passings additions

48.4

66.4

30.4

19.7

164.9

50.6

67.2

38.3

Total Customer Relationships(5)(12)(13)

 

 

 

 

 

 

 

 

Residential

4,472.4

4,429.5

4,391.5

4,363.1

4,363.1

4,326.8

4,272.3

4,217.5

SMB

380.9

381.0

381.1

380.3

380.3

379.7

379.7

378.4

Total Unique Customer Relationships

4,853.3

4,810.5

4,772.6

4,743.5

4,743.5

4,706.5

4,652.0

4,595.9

Residential net additions (losses)

(26.1)

(42.9)

(38.0)

(28.4)

(135.4)

(36.3)

(54.5)

(54.8)

Business Services net additions (losses)

(0.3)

0.1

0.1

(0.8)

(0.9)

(0.7)

0.0

(1.2)

Total customer net additions (losses)

(26.4)

(42.7)

(37.9)

(29.2)

(136.2)

(37.0)

(54.5)

(56.1)

Residential PSUs(5)

 

 

 

 

 

 

 

 

Broadband

4,263.7

4,227.0

4,196.0

4,169.0

4,169.0

4,139.7

4,088.7

4,039.5

Video

2,380.5

2,312.2

2,234.6

2,172.4

2,172.4

2,094.7

2,021.9

1,944.8

Telephony

1,703.5

1,640.8

1,572.7

1,515.3

1,515.3

1,452.1

1,391.1

1,326.0

Broadband net additions (losses)

(19.2)

(36.8)

(31.0)

(27.0)

(113.9)

(29.4)

(51.0)

(49.2)

Video net additions (losses)

(58.6)

(68.3)

(77.6)

(62.2)

(266.7)

(77.7)

(72.8)

(77.0)

Telephony net additions (losses)

(60.6)

(62.7)

(68.1)

(57.4)

(248.9)

(63.1)

(61.1)

(65.1)

Residential ARPU ($)(1)

135.32

137.44

138.42

136.01

136.80

135.67

135.95

135.77

SMB PSUs

 

 

 

 

 

 

 

 

Broadband

349.0

349.1

349.4

348.9

348.9

348.5

348.8

347.7

Video

95.3

93.7

91.9

89.6

89.6

87.3

85.4

83.3

Telephony

210.0

208.0

205.9

203.2

203.2

200.7

199.2

196.8

Broadband net additions (losses)

(0.1)

0.1

0.3

(0.5)

(0.2)

(0.4)

0.3

(1.1)

Video net additions (losses)

(2.0)

(1.6)

(1.8)

(2.3)

(7.7)

(2.3)

(1.9)

(2.1)

Telephony net additions (losses)

(2.3)

(2.0)

(2.1)

(2.6)

(9.1)

(2.6)

(1.4)

(2.4)

Total Mobile Lines(14)

 

 

 

 

 

 

 

 

Mobile ending lines

247.9

264.2

288.2

322.2

322.2

351.6

384.5

420.1

Mobile ending lines excluding free service

223.3

257.9

288.1

322.2

322.2

351.6

384.5

420.1

Mobile line net additions

7.6

16.3

24.1

34.0

82.0

29.3

33.0

35.5

Mobile line net additions ex-free service

14.6

34.6

30.3

34.1

113.5

29.3

33.0

35.5

Fiber (“FTTH”) Customer Metrics (in thousands)

 

 

 

 

 

 

 

 

Q1-23

Q2-23

Q3-23

Q4-23

FY-23

Q1-24

Q2-24

Q3-24

FTTH Total Passings(15)

2,373.0

2,659.5

2,720.2

2,735.2

2,735.2

2,780.0

2,842.0

2,893.7

FTTH Total Passing additions

214.2

286.6

60.7

14.9

576.4

44.8

62.0

51.7

FTTH Residential customer relationships

207.2

245.9

289.3

333.8

333.8

385.2

422.7

468.5

FTTH SMB customer relationships

2.7

3.9

5.7

7.6

7.6

9.4

11.4

13.1

FTTH Total Customer Relationships(16)

209.9

249.7

295.1

341.4

341.4

394.6

434.1

481.6

FTTH Residential net additions

37.2

38.6

43.4

44.5

163.8

51.4

37.5

45.7

FTTH SMB net additions

0.9

1.2

1.9

1.8

5.8

1.9

2.0

1.7

FTTH Total Customer Net Additions

38.1

39.8

45.3

46.3

169.7

53.2

39.5

47.4

Altice USA Consolidated Operating Results ($ and shares in thousands, except per share data) (unaudited)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

Broadband

$

913,417

 

$

961,751

 

$

2,745,400

 

$

2,884,661

Video

 

715,117

 

 

775,818

 

 

2,210,156

 

 

2,321,557

Telephony

 

69,877

 

 

73,640

 

 

212,545

 

 

227,390

Mobile

 

30,563

 

 

20,320

 

 

82,935

 

 

53,993

Residential revenue

 

1,728,974

 

 

1,831,529

 

 

5,251,036

 

 

5,487,601

Business services and wholesale

 

366,355

 

 

366,852

 

 

1,100,506

 

 

1,095,197

News and Advertising

 

117,682

 

 

107,484

 

 

328,687

 

 

319,686

Other

 

14,689

 

 

11,335

 

 

39,161

 

 

32,968

Total revenue

 

2,227,700

 

 

2,317,200

 

 

6,719,390

 

 

6,935,452

Operating expenses:

 

 

 

 

 

 

 

Programming and other direct costs

 

711,330

 

 

750,538

 

 

2,174,677

 

 

2,284,537

Other operating expenses

 

674,564

 

 

667,278

 

 

2,019,356

 

 

1,974,651

Restructuring, impairments and other operating items

 

10,871

 

 

4,453

 

 

15,525

 

 

39,303

Depreciation and amortization (including impairments)

 

386,342

 

 

402,366

 

 

1,170,503

 

 

1,237,283

Operating income

 

444,593

 

 

492,565

 

 

1,339,329

 

 

1,399,678

Other income (expense):

 

 

 

 

 

 

 

Interest expense, net

 

(448,168)

 

 

(420,216)

 

 

(1,328,264)

 

 

(1,216,203)

Gain on investments and sale of affiliate interests, net

 

—

 

 

—

 

 

292

 

 

192,010

Loss on derivative contracts, net

 

—

 

 

—

 

 

—

 

 

(166,489)

Gain (loss) on interest rate swap contracts, net

 

(45,657)

 

 

31,972

 

 

10,220

 

 

78,708

Gain (loss) on extinguishment of debt and write-off of deferred financing costs

 

—

 

 

—

 

 

(7,035)

 

 

4,393

Other income (loss), net

 

(1,495)

 

 

(1,470)

 

 

(4,526)

 

 

7,165

Income (loss) before income taxes

 

(50,727)

 

 

102,851

 

 

10,016

 

 

299,262

Income tax benefit (expense)

 

9,892

 

 

(27,336)

 

 

(42,045)

 

 

(106,433)

Net income (loss)

 

(40,835)

 

 

75,515

 

 

(32,029)

 

 

192,829

Net income attributable to noncontrolling interests

 

(2,135)

 

 

(8,676)

 

 

(16,773)

 

 

(21,825)

Net income (loss) attributable to Altice USA stockholders

$

(42,970)

 

$

66,839

 

$

(48,802)

 

$

171,004

Basic net income (loss) per share

$

(0.09)

 

$

0.15

 

$

(0.11)

 

$

0.38

Diluted net income (loss) per share

$

(0.09)

 

$

0.15

 

$

(0.11)

 

$

0.38

Basic weighted average common shares

 

460,626

 

 

454,730

 

 

459,335

 

 

454,702

Diluted weighted average common shares

 

460,626

 

 

455,076

 

 

459,335

 

 

455,118

Altice USA Consolidated Statements of Cash Flows ($ in thousands) (unaudited)

 

Nine Months Ended September 30,

 

2024

 

2023

Cash flows from operating activities:

 

 

 

Net income (loss)

$

(32,029)

 

$

192,829

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization (including impairments)

 

1,170,503

 

 

1,237,283

Gain on investments and sale of affiliate interests, net

 

(292)

 

 

(192,010)

Loss on derivative contracts, net

 

—

 

 

166,489

Loss (gain) on extinguishment of debt and write-off of deferred financing costs

 

7,035

 

 

(4,393)

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

 

15,470

 

 

26,334

Share-based compensation

 

50,351

 

 

29,368

Deferred income taxes

 

(7,129)

 

 

(187,295)

Decrease in right-of-use assets

 

33,729

 

 

34,633

Allowance for credit losses

 

68,433

 

 

62,148

Other

 

5,469

 

 

9,406

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

 

 

 

Accounts receivable, trade

 

(24,721)

 

 

(29,403)

Prepaid expenses and other assets

 

(127,820)

 

 

(76,862)

Amounts due from and due to affiliates

 

(45,700)

 

 

56,193

Accounts payable and accrued liabilities

 

(89,539)

 

 

(2,374)

Deferred revenue

 

8,589

 

 

9,531

Interest rate swap contracts

 

110,130

 

 

(1,692)

Net cash provided by operating activities

 

1,142,479

 

 

1,330,185

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(1,042,975)

 

 

(1,409,561)

Payments for acquisitions, net of cash acquired

 

(5,748)

 

 

—

Other, net

 

2,743

 

 

(1,677)

Net cash used in investing activities

 

(1,045,980)

 

 

(1,411,238)

Cash flows from financing activities:

 

 

 

Proceeds from long-term debt

 

3,875,000

 

 

2,350,000

Repayment of debt

 

(3,891,175)

 

 

(2,215,112)

Proceeds from derivative contracts in connection with the settlement of collateralized debt

 

—

 

 

38,902

Principal payments on finance lease obligations

 

(99,426)

 

 

(112,795)

Payment related to acquisition of a noncontrolling interest

 

(7,261)

 

 

(7,035)

Additions to deferred financing costs

 

(18,936)

 

 

—

Other, net

 

(6,345)

 

 

(8,521)

Net cash provided by (used in) financing activities

 

(148,143)

 

 

45,439

Net decrease in cash and cash equivalents

 

(51,644)

 

 

(35,614)

Effect of exchange rate changes on cash and cash equivalents

 

(403)

 

 

(1,482)

Net decrease in cash and cash equivalents

 

(52,047)

 

 

(37,096)

Cash, cash equivalents and restricted cash at beginning of year

 

302,338

 

 

305,751

Cash, cash equivalents and restricted cash at end of period

$

250,291

 

$

268,655

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, gain (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, impairments and other operating items (such as significant legal settlements and contractual payments for terminated employees). We define Adjusted EBITDA margin as Adjusted EBITDA divided by total revenue.

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 our operating performance. 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 our 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 U.S. generally accepted accounting principles (“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 Free Cash Flow (defined as net cash flows from operating activities less cash capital expenditures) as a liquidity measure. We believe this measure is useful to investors in evaluating our ability to service our debt and make continuing investments with internally generated funds, although it may not be directly comparable to similar measures reported by other companies.

Reconciliation of Net Income (Loss) to Adjusted EBITDA ($ in thousands) (unaudited)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

Net income (loss)

$

(40,835)

 

$

75,515

 

$

(32,029)

 

$

192,829

Income tax expense (benefit)

 

(9,892)

 

 

27,336

 

 

42,045

 

 

106,433

Other loss (income), net

 

1,495

 

 

1,470

 

 

4,526

 

 

(7,165)

Loss (gain) on interest rate swap contracts, net

 

45,657

 

 

(31,972)

 

 

(10,220)

 

 

(78,708)

Loss on derivative contracts, net

 

—

 

 

—

 

 

—

 

 

166,489

Gain on investments and sale of affiliate interests, net

 

—

 

 

—

 

 

(292)

 

 

(192,010)

Loss (gain) on extinguishment of debt and write-off of deferred financing costs

 

—

 

 

—

 

 

7,035

 

 

(4,393)

Interest expense, net

 

448,168

 

 

420,216

 

 

1,328,264

 

 

1,216,203

Depreciation and amortization

 

386,342

 

 

402,366

 

 

1,170,503

 

 

1,237,283

Restructuring, impairments and other operating items

 

10,871

 

 

4,453

 

 

15,525

 

 

39,303

Share-based compensation

 

20,170

 

 

16,115

 

 

50,351

 

 

29,368

Adjusted EBITDA

 

861,976

 

 

915,499

 

 

2,575,708

 

 

2,705,632

Adjusted EBITDA margin

 

38.7%

 

 

39.5%

 

 

38.3%

 

 

39.0%

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

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

Net cash flows from operating activities

$

436,024

 

$

474,498

 

$

1,142,479

 

$

1,330,185

Less: Capital expenditures (cash)

 

359,159

 

 

353,219

 

 

1,042,975

 

 

1,409,561

Free Cash Flow (Deficit)

$

76,865

 

$

121,279

 

$

99,504

 

$

(79,376)

Consolidated Net Debt as of September 30, 2024 ($ in millions)

 

 

 

 

 

CSC Holdings, LLC Restricted Group

Principal Amount

 

Coupon / Margin

 

Maturity

Drawn RCF

$1,700

 

SOFR+2.350%

 

2027

Term Loan B-5

2,865

 

L+2.500%(17)

 

2027

Term Loan B-6

1,972

 

SOFR+4.500%

 

2028(18)

Guaranteed Notes

1,310

 

5.500%

 

2027

Guaranteed Notes

1,000

 

5.375%

 

2028

Guaranteed Notes

1,000

 

11.250%

 

2028

Guaranteed Notes

2,050

 

11.750%

 

2029

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

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

23,372

 

 

 

 

CSC Holdings, LLC Restricted Group Cash

(192)

 

 

 

 

CSC Holdings, LLC Restricted Group Net Debt

$23,180

 

 

 

 

 

 

 

 

 

 

CSC Holdings, LLC Restricted Group Undrawn RCF

$617

 

 

 

 

Cablevision Lightpath LLC

Principal Amount

 

Coupon / Margin

 

Maturity

Drawn RCF(19)

$—

 

SOFR+3.360%

 

 

Term Loan

578

 

SOFR+3.360%

 

2027

Senior Secured Notes

450

 

3.875%

 

2027

Senior Notes

415

 

5.625%

 

2028

Cablevision Lightpath Gross Debt

1,443

 

 

 

 

Cablevision Lightpath Cash

(32)

 

 

 

 

Cablevision Lightpath Net Debt

$1,410

 

 

 

 

 

 

 

 

 

 

Cablevision Lightpath Undrawn RCF

$115

 

 

 

 

Net Leverage Schedules as of September 30, 2024 ($ in millions)

 

 

 

 

 

 

 

 

 

CSC Holdings Restricted Group(20)

 

Cablevision Lightpath LLC

 

CSC Holdings Consolidated(21)

 

Altice USA Consolidated

 

 

 

 

 

 

 

 

Gross Debt Consolidated(22)

$23,372

 

$1,443

 

$24,814

 

$24,814

Cash

(192)

 

(32)

 

(240)

 

(250)

Net Debt Consolidated(9)

$23,180

 

$1,410

 

$24,574

 

$24,564

LTM EBITDA

$3,231

 

$248

 

$3,478

 

$3,479

L2QA EBITDA

$3,210

 

$248

 

$3,457

 

$3,458

Net Leverage (LTM)

7.2x

 

5.7x

 

7.1x

 

7.1x

Net Leverage (L2QA)(10)

7.2x

 

5.7x

 

7.1x

 

7.1x

WACD (%)

6.9%

 

5.4%

 

6.9%

 

6.8%

Reconciliation to Financial Reported Debt

 

 

Altice USA Consolidated

Total Debenture and Loans from Financial Institutions (Carrying Amount)

$24,766

Unamortized financing costs and discounts, net of unamortized premiums

48

Gross Debt Consolidated(22)

24,814

Finance leases and other notes

286

Total Debt

25,100

Cash

(250)

Net Debt

$24,850

(1)

ARPU is calculated by dividing the average monthly revenue for the respective period derived from the sale of broadband, video, telephony and mobile services to residential customers by the average number of total residential customers for the same period and excludes mobile-only customer relationships.

(2)

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

(3)

Capital intensity refers to total cash capital expenditures as a percentage of total revenue.

(4)

Broadband base converged with mobile is expressed as the percentage of customers subscribing to both broadband and mobile services divided by the total broadband customer base. Excludes mobile only customers.

(5)

Customer metrics as of September 30, 2024 reflect adjustments to align to the Company’s bulk residential subscriber count policy, resulting in an increase of 4.7 thousand residential customer relationships, 3.8 thousand broadband customers and 5.2 thousand video customers. The impact of these adjustments to customer relationships, broadband and video customer net additions was not material for any period presented and as such prior period metrics were not restated.

(6)

Service call rate represents technical, care and support calls per customer.

(7)

Service visit repeat rate represents the number of repeat visits or truck rolls per customer within 30 days.

(8)

Other Operating Expenses exclude programming and direct costs, depreciation and amortization, share-based compensation, restructuring, impairments and other operating items.

(9)

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

(10)

L2QA leverage is calculated as quarter end net leverage divided by the last two quarters of Adjusted EBITDA annualized.

(11)

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.

(12)

Total Unique Customer Relationships represent the number of households/businesses that receive at least one of our 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 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.

(13)

Total Customer Relationship metrics do not include mobile-only customers.

(14)

Mobile ending lines include lines receiving free service. Mobile ending lines excluding free service exclude additions relating to mobile lines receiving free service from all periods presented, and includes net additions from when customers previously on free service start making payments.

(15)

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.

(16)

Represents number of households/businesses that receive at least one of our 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 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.

(17)

The Incremental Term Loan B-5 bears interest at a rate equal to Synthetic USD London Interbank Offered Rate ("LIBOR") plus 2.50% per annum through March 31, 2025. Thereafter, we will be required to pay interest at a rate equal to the alternate base rate (“ABR”), plus the applicable margin, where the ABR is the greater of (x) prime rate or (y) the federal funds effective rate plus 50 basis points and the applicable margin for any ABR loan is 1.50% per annum.

(18)

The Incremental Term Loan B-6 is due on the earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of such date, any Incremental Term Loan B-5 borrowings are still outstanding, unless the Incremental Term Loan B-5 maturity date has been extended to a date falling after January 15, 2028.

(19)

Under the extension amendment to the Lightpath credit agreement entered into in February 2024, $95 million of revolving credit commitments, if drawn, would be due on June 15, 2027 and $20 million of revolving credit commitments, if drawn, would be due on November 30, 2025.

(20)

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

(21)

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

(22)

Principal amount of debt excluding finance leases and other notes.

Certain numerical information is presented on a rounded basis. 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 4.6 million residential and business customers across 21 states through its Optimum brand. We operate Optimum Media, an advanced advertising and data business, which provides audience-based, multiscreen advertising solutions to local, regional and national businesses and advertising clients. We also offer hyper-local, national and international news through our News 12 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, our revenue streams, results of operations and liquidity, including Free Cash Flow; our strategy, objectives, prospects, trends, service and operational improvements, capital expenditure plans, broadband, fiber, video and mobile growth, product offerings and passings; our ability to achieve operational performance improvements; our ability to achieve near and longer term revenue, penetration, operational efficiency and capital structure opportunities (including mobile lines, fiber subscribers, fiber penetration, gross margin, operating expenses, EBITDA margins, annual capital expenditures, and annual Free Cash Flow); 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 without limitation the terms “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “opportunity”, “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, 2023 and subsequent Quarterly 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/20241104860652/en/

Investor Relations John Hsu: +1 917 405 2097 / john.hsu@alticeusa.com Sarah Freedman: +1 631 660 8714 / sarah.freedman@alticeusa.com

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