Fitch Releases 3Q'12 U.S. Telecommunications & Cable Stats Quarterly Report
CHICAGO -- January 7, 2013
According to a new report issued today by Fitch Ratings, the U.S. Telecom and
Cable sector's liquidity and margins have remained stable throughout 2012 in
the face of competitive pressures with minimal organic growth opportunities.
Third-quarter liquidity remained strong, with 94% of committed facilities
available for borrowing and total liquidity exceeding aggregate 2012, 2013,
and 2014 maturities. Refinancing activities have extended the maturity profile
within the sector, as scheduled maturities during 2013 and 2014 declined by
over $4 billion since second-quarter 2012. LTM free cash flow (FCF) improved
in the third quarter to $36 billion, and issuers maintained balance sheet cash
and short-term investment balances of approximately $51 billion, over $10
billion more than last quarter mainly through debt issuance. Comcast Corp.
generated almost $7 billion more of cash in excess of second-quarter balances
due to proceeds received from SpectrumCo.'s sale of AWS spectrum to Verizon
Wireless and cash proceeds received from the redemption of NBCUniversal's
economic stake in A&E Television Networks LLC.
Margins have remained stable throughout 2012 in the face of persistent
competitive pressures and with minimal organic growth opportunities. Aggregate
LTM EBITDA margins declined 117 basis points (bps) year over year to 32%. DISH
Network Corp.'s LTM EBITDA margins witnessed the largest declines in the
portfolio with a 100 bps decline quarter over quarter and a 420 bps decline
year over year, primarily resulting from higher subscriber-related expenses.
Credit profiles are steady, as leverage is slightly lower from the previous
year at 2.35x from 2.42x.
Capital intensity typically ranges between 13.5%-14% for the
telecommunications industry. Fitch expects capital intensity to retreat in
2013 to the lower end of this range, which includes a continuation of higher
wireless spending due to the deployment of 4G LTE technology. Aside from the
industry, AT&T announced it would boost capital spending until 2015 to
significantly expand both wireless and wireline broadband networks.
The full report 'Telecommunications & Cable Stats Quarterly -- Third-Quarter
2012' is available on www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: U.S. Telecom and Cable Stats
Quarterly -- Third-Quarter 2012
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