Research Update: Cox Enterprises Inc. 'BBB' Ratings Affirmed; Triggers Tightened; Outlook Stable

Cox Enterprises Inc. faces heightened competition in its cable segment, known as Cox Communications Inc. (CCI), which accounts for the majority (about 80%) of earnings. We expect that competitive pressures will result in CCI segment EBITDA contraction in the mid-single-digits per year over the next two years. We have tightened our debt-to-EBITDA downgrade threshold for the current rating by 0.25x to 3.0x. This would have otherwise been 0.5x but the auto segment provides a diversity benefit that reduces volatility in profitability and earnings. We affirmed all ratings, including the 'BBB' issuer credit rating. The stable outlook reflects our view that the company will continue to operate with a conservative financial policy such that debt to EBITDA remains around 2.0x through

...- Cox Enterprises Inc. faces heightened competition in its cable segment, known as Cox Communications Inc. (CCI), which accounts for the majority (about 80%) of earnings. - We expect that competitive pressures will result in CCI segment EBITDA contraction in the mid-single-digits per year over the next two years. - We have tightened our debt-to-EBITDA downgrade threshold for the current rating by 0.25x to 3.0x. This would have otherwise been 0.5x but the auto segment provides a diversity benefit that reduces volatility in profitability and earnings. - We affirmed all ratings, including the '###' issuer credit rating. - The stable outlook reflects our view that the company will continue to operate with a conservative financial policy such that debt to EBITDA remains around 2.0x through 2025, which is comfortably below our downgrade trigger....

Research Update