Cox Enterprises Inc.

We view the mix shift toward broadband and away from traditional video as positive for credit quality. We believe cable earnings and cash flow predictability has improved significantly because broadband is not nearly as competitive as video, where Cox faces direct competition from satellite TV providers as well as a plethora of online alternatives. Importantly, overall earnings have increased despite more concentration in broadband, which has lower operating costs, less competition, and lower churn than video, which we believe equates to more predictable cash flow. The stable outlook reflects good revenue visibility from CEI's cable unit, coupled with our expectation that the company will maintain a moderate financial policy such that debt to EBITDA remains in the 2x-3x range over

...We rate Cox Enterprises Inc. on a consolidated basis given our view that all rated subsidiaries are core to the group's overall strategy. We believe this view was reinforced in mid-2020 when the cable subsidiary Cox Communications Inc., which generates about 80% of run-rate EBITDA, provided upstream guarantees to parent Cox Enterprises Inc. (CEI). CEI also owns and controls Cox Automotive Inc., which came under temporary stress due to COVID-19. We believe the implementation of guarantees solidified our view that the company could use the strength of its cable business to potentially provide credit support to the rest of the group, if necessary. However, the cyclical and more economically sensitive autos segment weighs on our overall business risk assessment despite the diversity provided. We have a favorable view of the cable business, which we believe will continue to grow earnings. We believe a fundamental shift in cable industry dynamics in recent years has been accelerated by the COVID-19...

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