Jan 7 - 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
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