Altice USA Q1 2018 Results May 9, 2018
Disclaimer FORWARD-LOOKING STATEMENTS Certain statements in this presentation 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 presentation, 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, plans, objectives, prospects, growth, goals and targets; 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 “believe”, “could”, “estimate”, “expect”, “forecast”, “intend”, “may”, “plan”, “project” or “will” or, in each case, their negative, or other var iations 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 presentation 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 annual and quarterly reports. NON-GAAP FINANCIAL MEASURES 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, gain (loss) on interest rate swap contracts, gain (loss) on 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 per formance, and evaluate management’s effectiveness with specific reference to these indicators. We believe Adjusted EBITDA pro vides management and investors a useful measure for period-to-period comparisons of our core business and operating results by excludi ng 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 cash Capital Expenditures, or Operating Free Cash Flow (“ OpFCF ”), as an indicator of the Company’s financial performance. We believe this measure is one of several benchmarks used by inve stors, 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 compa nies. For an explanation of why Altice USA uses these measures and a reconciliation of the Non-GAAP measures to net income (loss), ple ase see the First Quarter 2018 (“Q1 - 18”) earnings release for Altice USA posted on the Altice USA website. MISCELLANEOUS Altice USA has filed a registration statement with the Securities and Exchange Commission (SEC) relating to the distribution of shares of Altice USA by Altice N.V. to its shareholders, which is described in this presentation. You should read the preliminary prospectus in that registration statement and other documents Altice USA has filed with the SEC for more complete information about Altice USA. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, you may also request a copy of the current preliminary prospectus, at no cost, by mail to Lisa Anselmo, Altice USA, Inc., 1 Court Square West, Long Island City, NY 11101 USA. To review a filed copy of the current registration statement and preliminary prospectus, click the following link on the SEC website at www.sec.gov as follows (or if such address has changed, by reviewing ATUS filings for the relevant date on the SEC website): https://www.sec.gov/Archives/edgar/data/1702780/000104746918000085/a2234168zs-1.htm Altice USA will publish an EU prospectus in connection with such distribution. Upon approval by the Netherlands Authority for the Financial Markets (AFM) and, to the extent relevant, notification for passporting in relevant Member States of the European Economic Area in accordance with article 18 of the Directive 2003/71/EC, the EU prospectus will be made available on the website of Altice N.V. and, upon request, a hard copy will be available free of charge by Altice USA. 2
Altice USA Q1 2018 Summary Review 1.2% revenue growth, 4.0% Adjusted EBITDA growth and 5.4% OpFCF 1 growth 1 Optimum Residential trends impacted by Starz dispute and multiple snowstorms; 2 Suddenlink Residential trends strengthening, particularly video subscribers 3 Solid 4.3% Business Services revenue growth with both SMB and enterprise trending well 4 Strong 5.1% growth in Advertising revenue, supported by 2017 investments in newly formed a 4 5 Continued improvement in EBITDA margin, driving strong FCF generation and deleveraging 6 Successful launch of Altice One across Optimum footprint, Suddenlink just starting 7 Separation of Altice USA from Altice NV expected to be effective June 2018 (1) Based on cash capex. Adjusted EBITDA and Adjusted EBITDA less cash capex (Operating free cash flow, ‘ OpFCF ’) are non GAAP -measures. For a reconciliation of these non-GAAP measures to net income (loss), please see the Q1-18 Altice USA earnings release posted to the Altice USA website 3
Revenue Growth Revenue growth across Residential, Business Services, and Advertising Q1-18 vs. Q1-17 Components of Q1 2018 revenue growth ($m) Altice USA: +1.2% YoY +1.2% YoY Optimum +0.6% YoY – impacted by Starz dispute, multiple storms & delay of rate event 2,330 2,302 Other 9 8 88 Advertising 83 Suddenlink +3.4% YoY – improved customer trends 333 319 Business Services Residential: +0.6% YoY Optimum -0.4% YoY Suddenlink +2.9% YoY 1,891 1,901 Residential Business Services: +4.3% YoY Q1 '17 Q1 '18 Advertising: +5.1% YoY 4
Residential Trends Continued positive ARPU trends; Q1-18 Optimum customer headwinds Q1-18 vs. Q1-17 Components of Q1 2018 customer and ARPU trends Residential customer relationships ARPU per unique customer Altice USA unique Residential customer relationships stable (‘000) ($) YoY. Net additions of +8k QoQ in Q1-18 (vs. +20k in Q1-17) -0.1% Optimum customer growth negatively impacted by 4,543 4,548 +0.5% Starz dispute and multiple storms in Q1-18 (-5k QoQ vs. +8k in Q1-17) 140 139 Suddenlink strong customer growth in Q1-18 (+14k QoQ vs. +12k in Q1-17) Altice USA ARPU $139.6 (+0.5% YoY with delay in rate event) Optimum ARPU $154.5 (-0.7% YoY) Suddenlink ARPU $113.6 (+3.4% YoY) Q1-17 Q1-18 Q1-17 Q1-18 Residential revenue growth: +0.6% YoY 5
Residential Trends Suddenlink strengthening; Optimum Starz dispute and storms impact in Q1-18 Residential pay TV net adds Key points ('000) Suddenlink trends improving driven by more focused marketing Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 and improved content lineup with Viacom addition in Q4-17; all (6) (7) ahead of Altice One launch (14) (20) (25) (19) Optimum trends impacted by Starz dispute and storms in Q1- (23) (19) 18, otherwise resilient in the face of market competition (15) (25) (12) (30) Altice One transforming the video and broadband user (33) (35) (37) experience including aggregating OTT services Residential broadband net adds Residential telephony net adds ('000) ('000) 40 10 4 3 26 25 17 6 3 5 16 4 (1) 17 2 (1) (7) 7 23 23 (7) (12) (1) 10 9 8 (7) (8) (8) (8) Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Optimum Suddenlink Optimum Suddenlink 6
Recommend
More recommend
