Altice USA 10Q 2024 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			For the quarterly period ended			March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number

Registrant; State of Incorporation; Address and Telephone Number

IRS Employer Identification No.

001-38126

38-3980194

Altice USA, Inc.

Delaware

1 Court Square West

Long Island City,

New York

11101

(516)

803-2300

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)

Large Accelerated Filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes

☐

☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share	ATUS	NYSE


Number of shares of common stock outstanding as of April 26, 2024			459,961,698

ALTICE USA, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION		2

Item 1. Financial Statements

ALTICE USA, INC. AND SUBSIDIARIES
Consolidated Financial Statements
	Consolidated Balance Sheets - March 31, 2024 (Unaudited) and December 31, 2023	2
	Consolidated Statements of Operations - Three months ended March 31, 2024 and 2023 (Unaudited)	3
	Consolidated Statements of Comprehensive Income (Loss) - Three months ended March 31, 2024 and 2023 (Unaudited)	4
	Consolidated Statements of Stockholders' Deficiency - Three months ended March 31, 2024 and 2023 (Unaudited)	5
	Consolidated Statements of Cash Flows - Three months ended March 31, 2024 and 2023 (Unaudited)	6
	Combined Notes to Consolidated Financial Statements (Unaudited)	12
Supplemental Financial Statements Furnished:
CSC HOLDINGS, LLC AND SUBSIDIARIES
Consolidated Financial Statements
	Consolidated Balance Sheets - March 31, 2024 (Unaudited) and December 31, 2023	7
	Consolidated Statements of Operations - Three months ended March 31, 2024 and 2023 (Unaudited)	8
	Consolidated Statements of Comprehensive Income (Loss) - Three months ended March 31, 2024 and 2023 (Unaudited)	9
	Consolidated Statements of Member's Deficiency - Three months ended March 31, 2024 and 2023 (Unaudited)	10
	Consolidated Statements of Cash Flows - Three months ended March 31, 2024 and 2023 (Unaudited)	11
	Combined Notes to Consolidated Financial Statements (Unaudited)	12
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		25
Item 3. Quantitative and Qualitative Disclosures About Market Risk		42
Item 4. Controls and Procedures		42

PART II. OTHER INFORMATION		43
Item 1. Legal Proceedings		43


Item 5. Other Information		43
Item 6. Exhibits		43
SIGNATURES		44

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements


ALTICE USA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
	March 31, 2024 (Unaudited)		December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	284,450	$	302,058
Restricted cash	284		280
Accounts receivable, trade (less allowance for doubtful accounts of $24,430 and $21,915, respectively)	314,691		357,597

Prepaid expenses and other current assets ($407 and $407 due from affiliates, respectively)	258,284		174,859
Derivative contracts	51,212		—





Total current assets	908,921		834,794
Property, plant and equipment, net of accumulated depreciation of $8,343,299 and $8,162,442, respectively	8,197,655		8,117,757

Right-of-use operating lease assets	244,712		255,545


Other assets	159,094		195,114
Amortizable intangibles, net of accumulated amortization of $5,958,636 and $5,874,612, respectively	1,175,517		1,259,335
Indefinite-lived cable television franchises	13,216,355		13,216,355
Goodwill	8,044,716		8,044,716
Total assets	$	31,946,970	$	31,923,616
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable	$	963,226	$	936,950
Interest payable	304,389		274,507
Accrued employee related costs	135,478		182,146

Deferred revenue	87,295		85,018
Debt	344,117		359,407
Other current liabilities ($87,129 and $71,523 due to affiliates, respectively)	408,871		470,096
Total current liabilities	2,243,376		2,308,124
Other liabilities	229,796		221,249
Deferred tax liability	4,936,625		4,848,460

Right-of-use operating lease liability	254,576		264,647
Long-term debt, net of current maturities	24,717,702		24,715,554
Total liabilities	32,382,075		32,358,034
Commitments and contingencies (Note 15)

Stockholders' Deficiency:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, no shares issued and outstanding	—		—
Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 276,705,185 shares issued and 275,737,556 outstanding as of March 31, 2024 and 271,772,978 shares issued and outstanding as of December 31, 2023	2,767		2,718
Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 issued, 184,224,142 shares outstanding as of March 31, 2024 and 184,224,428 shares outstanding as of December 31, 2023	1,842		1,842
Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding	—		—
Paid-in capital	195,713		187,186
Accumulated deficit	(622,268)		(601,075)
	(421,946)		(409,329)
Treasury stock, at cost (967,629 Class A common shares at March 31, 2024)	(10)		—
Accumulated other comprehensive loss	(9,208)		(12,851)
Total Altice USA stockholders' deficiency	(431,164)		(422,180)
Noncontrolling interests	(3,941)		(12,238)
Total stockholders' deficiency	(435,105)		(434,418)
Total liabilities and stockholders' deficiency	$	31,946,970	$	31,923,616

See accompanying notes to consolidated financial statements.

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Revenue (including revenue from affiliates of $210 and $78, respectively) (See Note 14)	$	2,250,935	$	2,293,978
Operating expenses:
Programming and other direct costs (including charges from affiliates of $3,355 and $2,642, respectively) (See Note 14)	743,887		771,719
Other operating expenses (including charges from affiliates of $12,289 and $4,676, respectively) (See Note 14)	674,250		651,245
Restructuring, impairments and other operating items (See Note 7)	51,253		29,672
Depreciation and amortization (including impairments)	388,391		416,212
	1,857,781		1,868,848
Operating income	393,154		425,130
Other income (expense):
Interest expense, net	(437,141)		(389,278)
Gain on investments and sale of affiliate interests, net	292		192,010
Loss on derivative contracts, net	—		(166,489)
Gain (loss) on interest rate swap contracts, net	42,303		(14,429)
Gain (loss) on extinguishment of debt and write-off of deferred financing costs	(7,035)		4,393
Other income (loss), net	(1,545)		10,205
	(403,126)		(363,588)
Income (loss) before income taxes	(9,972)		61,542
Income tax expense	(2,924)		(30,372)
Net income (loss)	(12,896)		31,170
Net income attributable to noncontrolling interests	(8,297)		(5,305)
Net income (loss) attributable to Altice USA, Inc. stockholders	$	(21,193)	$	25,865
Income (loss) per share:
Basic income (loss) per share	$	(0.05)	$	0.06
Basic weighted average common shares (in thousands)	457,369		454,686

Diluted income (loss) per share	$	(0.05)	$	0.06
Diluted weighted average common shares (in thousands)	457,369		455,594
Cash dividends declared per common share	$	—	$	—

See accompanying notes to consolidated financial statements.

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Net income (loss)	$	(12,896)	$	31,170
Other comprehensive income (loss):
Defined benefit pension plans	5,825		1,454
Applicable income taxes	(1,570)		(393)
Defined benefit pension plans, net of income taxes	4,255		1,061



Foreign currency translation adjustment	(612)		(190)
Other comprehensive income	3,643		871
Comprehensive income (loss)	(9,253)		32,041
Comprehensive income attributable to noncontrolling interests	(8,297)		(5,305)
Comprehensive income (loss) attributable to Altice USA, Inc. stockholders	$	(17,550)	$	26,736

See accompanying notes to consolidated financial statements.


ALTICE USA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (In thousands) (Unaudited)
	Class A Common Stock		Class B Common Stock		Paid-in Capital		Accumulated Deficit		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Altice USA Stockholders' Deficiency		Non-controlling Interests		Total Deficiency
Balance at January 1, 2024	$	2,718	$	1,842	$	187,186	$	(601,075)	$	—	$	(12,851)	$	(422,180)	$	(12,238)	$	(434,418)
Net loss attributable to Altice USA stockholders	—		—		—		(21,193)		—		—		(21,193)		—		(21,193)
Net income attributable to noncontrolling interests	—		—		—		—		—		—		—		8,297		8,297

Pension liability adjustments, net of income taxes	—		—		—		—		—		4,255		4,255		—		4,255
Foreign currency translation adjustment	—		—		—		—		—		(612)		(612)		—		(612)
Share-based compensation expense (equity classified)	—		—		6,484		—		—		—		6,484		—		6,484








Other, net	49		—		2,043		—		(10)		—		2,082		—		2,082
Balance at March 31, 2024	2,767		1,842		195,713		(622,268)		(10)		(9,208)		(431,164)		(3,941)		(435,105)




Balance at January 1, 2023	$	2,719	$	1,843	$	182,701	$	(654,273)	$	—	$	(8,201)	$	(475,211)	$	(28,701)	$	(503,912)
Net income attributable to Altice USA to stockholders	—		—		—		25,865		—		—		25,865		—		25,865
Net income attributable to noncontrolling interests	—		—		—		—		—		—		—		5,305		5,305

Pension liability adjustments, net of income taxes	—		—		—		—		—		1,061		1,061		—		1,061
Foreign currency translation adjustment	—		—		—		—		—		(188)		(188)		(2)		(190)
Share-based compensation benefit (equity classified)	—		—		(8,718)		—		—		—		(8,718)		—		(8,718)
Change in noncontrolling interest	—		—		(14,166)		—		—		—		(14,166)		(8,027)		(22,193)
Other, net	(15)		—		(67)		—		—		—		(82)		—		(82)
Balance at March 31, 2023	2,704		1,843		159,750		(628,408)		—		(7,328)		(471,439)		(31,425)		(502,864)

See accompanying notes to consolidated financial statements.

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net income (loss)	$	(12,896)	$	31,170
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization (including impairments)	388,391		416,212


Loss (gain) on investments and sale of affiliate interests, net	(292)		(192,010)
Loss on derivative contracts, net	—		166,489
Loss (gain) on extinguishment of debt and write-off of deferred financing costs	7,035		(4,393)
Amortization of deferred financing costs and discounts (premiums) on indebtedness	6,893		10,719

Share-based compensation	13,757		(2,623)
Deferred income taxes	86,595		(57,248)
Decrease in right-of-use assets	11,488		11,324
Provision for doubtful accounts	21,998		20,259
Other	1,510		316
Change in operating assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade	20,908		26,364
Prepaid expenses and other assets	(85,655)		(45,931)
Amounts due from and due to affiliates	15,606		10,084
Accounts payable and accrued liabilities	(64,859)		(20,577)
Deferred revenue	3,056		13,833
Interest rate swap contracts	(13,874)		32,858
Net cash provided by operating activities	399,661		416,846
Cash flows from investing activities:
Capital expenditures	(336,095)		(582,897)






Other, net	318		(198)
Net cash used in investing activities	(335,777)		(583,095)
Cash flows from financing activities:
Proceeds from long-term debt	2,950,000		350,000
Repayment of debt	(2,967,306)		(268,936)

Proceeds from derivative contracts in connection with the settlement of collateralized debt	—		38,902




Principal payments on finance lease obligations	(35,396)		(37,861)







Payment related to acquisition of a noncontrolling interest	(7,261)		—
Additions to deferred financing costs	(17,138)		—
Other, net	(3,775)		(700)
Net cash provided by (used in) financing activities	(80,876)		81,405
Net decrease in cash and cash equivalents	(16,992)		(84,844)
Effect of exchange rate changes on cash and cash equivalents	(612)		(190)
Net decrease in cash and cash equivalents	(17,604)		(85,034)
Cash, cash equivalents and restricted cash at beginning of year	302,338		305,751
Cash, cash equivalents and restricted cash at end of period	$	284,734	$	220,717

See accompanying notes to consolidated financial statements.


CSC HOLDINGS, LLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
	March 31, 2024 (Unaudited)		December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	284,444	$	302,051
Restricted cash	284		280
Accounts receivable, trade (less allowance for doubtful accounts of $24,430 and $21,915, respectively)	314,691		357,597

Prepaid expenses and other current assets ($407 and $407 due from affiliates, respectively)	258,284		174,859
Derivative contracts	51,212		—





Total current assets	908,915		834,787
Property, plant and equipment, net of accumulated depreciation of $8,343,299 and $8,162,442, respectively	8,197,655		8,117,757

Right-of-use operating lease assets	244,712		255,545


Other assets	159,094		195,114
Amortizable intangibles, net of accumulated amortization of $5,958,636 and $5,874,612, respectively	1,175,517		1,259,335
Indefinite-lived cable television franchises	13,216,355		13,216,355
Goodwill	8,044,716		8,044,716
Total assets	$	31,946,964	$	31,923,609


LIABILITIES AND MEMBER'S DEFICIENCY
Current Liabilities:
Accounts payable	$	963,226	$	936,950
Interest payable	304,389		274,507
Accrued employee related costs	135,478		182,146

Deferred revenue	87,295		85,018
Debt	344,117		359,407
Other current liabilities ($87,129 and $71,523 due to affiliates, respectively)	408,871		470,097
Total current liabilities	2,243,376		2,308,125

Other liabilities	229,796		221,249
Deferred tax liability	4,940,125		4,851,959

Right-of-use operating lease liability	254,576		264,647
Long-term debt, net of current maturities	24,717,702		24,715,554
Total liabilities	32,385,575		32,361,534
Commitments and contingencies (Note 15)


Member's deficiency (100 membership units issued and outstanding)	(425,462)		(412,836)
Accumulated other comprehensive loss	(9,208)		(12,851)
Total member's deficiency	(434,670)		(425,687)
Noncontrolling interests	(3,941)		(12,238)
Total deficiency	(438,611)		(437,925)
Total liabilities and member's deficiency	$	31,946,964	$	31,923,609

See accompanying notes to consolidated financial statements.

CSC HOLDINGS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Revenue (including revenue from affiliates of $210 and $78, respectively) (See Note 14)	$	2,250,935	$	2,293,978
Operating expenses:
Programming and other direct costs (including charges from affiliates of $3,355 and $2,642, respectively) (See Note 14)	743,887		771,719
Other operating expenses (including charges from affiliates of $12,289 and $4,676, respectively) (See Note 14)	674,250		651,245
Restructuring, impairments and other operating items (See Note 7)	51,253		29,672
Depreciation and amortization (including impairments)	388,391		416,212
	1,857,781		1,868,848
Operating income	393,154		425,130
Other income (expense):
Interest expense, net	(437,141)		(389,278)
Gain on investments and sale of affiliate interests, net	292		192,010
Loss on derivative contracts, net	—		(166,489)
Gain (loss) on interest rate swap contracts, net	42,303		(14,429)
Gain (loss) on extinguishment of debt and write-off of deferred financing costs	(7,035)		4,393
Other income (loss), net	(1,545)		10,205
	(403,126)		(363,588)
Income (loss) before income taxes	(9,972)		61,542
Income tax expense	(2,924)		(30,372)
Net income (loss)	(12,896)		31,170
Net income attributable to noncontrolling interests	(8,297)		(5,305)
Net income (loss) attributable to CSC Holdings, LLC sole member	$	(21,193)	$	25,865

See accompanying notes to consolidated financial statements.

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Net income (loss)	$	(12,896)	$	31,170
Other comprehensive income (loss):
Defined benefit pension plans	5,825		1,454
Applicable income taxes	(1,570)		(393)
Defined benefit pension plans, net of income taxes	4,255		1,061



Foreign currency translation adjustment	(612)		(190)
Other comprehensive income	3,643		871
Comprehensive income (loss)	(9,253)		32,041
Comprehensive income attributable to noncontrolling interests	(8,297)		(5,305)
Comprehensive income (loss) attributable to CSC Holdings, LLC's sole member	$	(17,550)	$	26,736

See accompanying notes to consolidated financial statements.

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF MEMBER'S DEFICIENCY

(In thousands)

(Unaudited)


	Member's Deficiency		Accumulated Other Comprehensive Income (Loss)		Total Member's Deficiency		Noncontrolling Interests		Total Deficiency

Balance at January 1, 2024	$	(412,836)	$	(12,851)	$	(425,687)	$	(12,238)	$	(437,925)
Net loss attributable to CSC Holdings' sole member	(21,193)		—		(21,193)		—		(21,193)
Net income attributable to noncontrolling interests	—		—		—		8,297		8,297

Pension liability adjustments, net of income taxes	—		4,255		4,255		—		4,255
Foreign currency translation adjustment	—		(612)		(612)		—		(612)
Share-based compensation expense (equity classified)	6,484		—		6,484		—		6,484


Cash distributions to parent	(3,775)		—		(3,775)		—		(3,775)
Non-cash contributions from parent	5,858		—		5,858		—		5,858




Balance at March 31, 2024	(425,462)		(9,208)		(434,670)		(3,941)		(438,611)




Balance at January 1, 2023	$	(475,650)	$	(8,201)	$	(483,851)	$	(28,701)	$	(512,552)
Net income attributable to CSC Holdings' sole member	25,865		—		25,865		—		25,865
Net income attributable to noncontrolling interests	—		—		—		5,305		5,305

Pension liability adjustments, net of income taxes	—		1,061		1,061		—		1,061
Foreign currency translation adjustment, net of income taxes	—		(188)		(188)		(2)		(190)
Share-based compensation benefit (equity classified)	(8,718)		—		(8,718)		—		(8,718)




Change in noncontrolling interest	(14,166)		—		(14,166)		(8,027)		(22,193)
Other, net	(82)		—		(82)		—		(82)
Balance at March 31, 2023	(472,751)		(7,328)		(480,079)		(31,425)		(511,504)

See accompanying notes to consolidated financial statements.

CSC HOLDINGS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities:
Net income (loss)	$	(12,896)	$	31,170
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization (including impairments)	388,391		416,212



Loss (gain) on investments and sale of affiliate interests, net	(292)		(192,010)
Loss on derivative contracts, net	—		166,489
Loss (gain) on extinguishment of debt and write-off of deferred financing costs	7,035		(4,393)
Amortization of deferred financing costs and discounts (premiums) on indebtedness	6,893		10,719

Share-based compensation	13,757		(2,623)
Deferred income taxes	86,595		(57,248)
Decrease in right-of-use assets	11,488		11,324
Provision for doubtful accounts	21,998		20,259
Other	1,510		316
Change in operating assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade	20,908		26,364
Prepaid expenses and other assets	(85,655)		(45,931)
Amounts due from and due to affiliates	15,606		10,084
Accounts payable and accrued liabilities	(64,858)		(20,577)
Deferred revenue	3,056		13,833
Interest rate swap contracts	(13,874)		32,858
Net cash provided by operating activities	399,662		416,846
Cash flows from investing activities:
Capital expenditures	(336,095)		(582,897)


Other, net	318		(198)
Net cash used in investing activities	(335,777)		(583,095)
Cash flows from financing activities:
Proceeds from long-term debt	2,950,000		350,000
Repayment of debt	(2,967,306)		(268,936)

Proceeds from derivative contracts in connection with the settlement of collateralized debt	—		38,902





Principal payments on finance lease obligations	(35,396)		(37,861)

Payment to acquire noncontrolling interest	(7,261)		—
Additions to deferred financing costs	(17,138)		—
Other, net	(3,775)		(700)

Net cash provided by (used in) financing activities	(80,876)		81,405
Net decrease in cash and cash equivalents	(16,991)		(84,844)
Effect of exchange rate changes on cash and cash equivalents	(612)		(190)
Net decrease in cash and cash equivalents	(17,603)		(85,034)
Cash, cash equivalents and restricted cash at beginning of year	302,331		305,744
Cash, cash equivalents and restricted cash at end of period	$	284,728	$	220,710

See accompanying notes to consolidated financial statements.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share and per share amounts)

(Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND RELATED MATTERS

The Company and Related Matters

Altice USA, Inc. ("Altice USA") was incorporated in Delaware on September 14, 2015. Altice USA is majority-owned by Patrick Drahi through Next Alt S.à r.l. ("Next Alt"). Patrick Drahi also controls Altice Group Lux S.à r.l, ("Altice Europe") and its subsidiaries and other entities.

Altice USA, through CSC Holdings, LLC (a wholly-owned subsidiary of Cablevision) and its consolidated subsidiaries ("CSC Holdings," and collectively with Altice USA, the "Company", "we", "us" and "our"), principally delivers broadband, video, and telephony services to residential and business customers, as well as proprietary content and advertising services in the United States. We market our residential services under the Optimum brand and provide enterprise services under the Lightpath and Optimum Business brands. In addition, we offer a full service mobile offering to consumers across our footprint. As these businesses are managed on a consolidated basis, we classify our operations in one segment.

The accompanying consolidated financial statements ("consolidated financial statements") of Altice USA include the accounts of Altice USA and its majority-owned subsidiaries and the accompanying consolidated financial statements of CSC Holdings include the accounts of CSC Holdings and its majority-owned subsidiaries. The consolidated balance sheets and statements of operations of Altice USA are essentially identical to the consolidated balance sheets and statements of operations of CSC Holdings, with the following exceptions: Altice USA has additional cash and CSC Holdings has a higher deferred tax liability on their respective consolidated balance sheets. Additionally, CSC Holdings and its subsidiaries have certain intercompany receivables from and payables to Altice USA.

The combined notes to the consolidated financial statements relate to the Company, which, except as noted, are essentially identical for Altice USA and CSC Holdings. All significant intercompany transactions and balances between Altice USA and CSC Holdings and their respective consolidated subsidiaries are eliminated in both sets of consolidated financial statements. Intercompany transactions between Altice USA and CSC Holdings are not eliminated in the CSC Holdings consolidated financial statements, but are eliminated in the Altice USA consolidated financial statements.

The financial statements of CSC Holdings are included herein as supplemental information as CSC Holdings is not an SEC registrant.

NOTE 2. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all the information and notes required for complete annual financial statements.

The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The financial statements presented in this report are unaudited; however, in the opinion of management, such financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented.

The results of operations for the interim periods are not necessarily indicative of the results that might be expected for future interim periods or for the full year ending December 31, 2024.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. See Note 11 for a discussion of fair value estimates.

Reclassifications

Certain reclassifications have been made to the 2023 amounts to conform to the 2024 presentation.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

NOTE 3. ACCOUNTING STANDARDS

Recently Issued But Not Yet Adopted Accounting Pronouncements

ASU No. 2023-07 Segment Reporting—Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures, to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities. ASU No. 2023-07 is meant to enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and provide new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for annual periods beginning after December 15, 2023 (year ending December 31, 2024 for the Company). Early adoption is permitted. We are currently evaluating the impact of adopting ASU 2023-07.

ASU No. 2023-09 Income Taxes—Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes—Improvements to Income Tax Disclosures, which require greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 (year ending December 31, 2025 for the Company). Early adoption is permitted. We are currently evaluating the impact of adopting ASU No. 2023-09.

NOTE 4. REVENUE

The following table presents the composition of revenue:


	Three Months Ended March 31,
	2024		2023
Residential:
Broadband	$	916,994	$	957,045
Video	755,594		770,601
Telephony	70,965		77,681
Mobile (a)	24,893		15,526
Residential revenue (a)	1,768,446		1,820,853
Business services and wholesale (a)	364,861		363,641
News and advertising	105,725		98,737
Other (a)	11,903		10,747
Total revenue	$	2,250,935	$	2,293,978

(a)Beginning in the second quarter of 2023, mobile service revenue previously included in mobile revenue is now separately reported in residential revenue and business services revenue. In addition, mobile equipment revenue previously included in mobile revenue is now included in other revenue. Prior period amounts have been revised to conform with this presentation.

We are assessed non-income related taxes by governmental authorities, including franchising authorities (generally under multi-year agreements), and collect such taxes from our customers. In instances where the tax is being assessed directly on us, amounts paid to the governmental authorities are recorded as programming and other direct costs and amounts received from the customers are recorded as revenue. For the three months ended March 31, 2024 and 2023, the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $54,694 and $56,455, respectively.

Customer Contract Costs

Deferred enterprise sales commission costs are included in other current and noncurrent assets in the consolidated balance sheets and totaled $18,283 and $18,109 as of March 31, 2024 and December 31, 2023, respectively.

A significant portion of our revenue is derived from residential and small and medium-sized business ("SMB") customer contracts which are month-to-month. As such, the amount of revenue related to unsatisfied performance

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

obligations is not necessarily indicative of the future revenue to be recognized from our existing customer base. Contracts with enterprise customers generally range from three years to five years, and services may only be terminated in accordance with the contractual terms.

Concentration of Credit Risk

We did not have a single customer that represented 10% or more of our consolidated revenues for the three months ended March 31, 2024 and 2023 or 10% or more of our consolidated net trade receivables at March 31, 2024 and December 31, 2023, respectively.

NOTE 5. NET INCOME (LOSS) PER SHARE

Basic net income (loss) per common share attributable to Altice USA stockholders is computed by dividing net income attributable to Altice USA stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share attributable to Altice USA stockholders reflects the dilutive effects of stock options, restricted stock, restricted stock units, and deferred cash-denominated awards. For awards that are performance based, the dilutive effect is reflected upon the achievement of the performance criteria. Diluted net loss per common share attributable to Altice USA stockholders excludes the effects of common stock equivalents as they are anti-dilutive.

The following table presents a reconciliation of weighted average shares used in the calculations of the basic and diluted net income per share attributable to Altice USA stockholders:

Three Months Ended March 31, 2023

(in thousands)

Basic weighted average shares outstanding

454,686

Effect of dilution:

Restricted stock

245

Deferred cash-denominated awards (Note 13)

663

Diluted weighted average shares outstanding

455,594

Weighted average shares excluded from diluted weighted average shares outstanding:

Anti-dilutive shares

50,539

Share-based compensation awards whose performance metrics have not been achieved

6,921

Net income per membership unit for CSC Holdings is not presented since CSC Holdings is a limited liability company and a wholly-owned subsidiary of Altice USA.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

NOTE 6. SUPPLEMENTAL CASH FLOW INFORMATION

Our non-cash investing and financing activities and other supplemental data were as follows:


	Three Months Ended March 31,
	2024		2023
Non-Cash Investing and Financing Activities:
Altice USA and CSC Holdings:

Property and equipment accrued but unpaid	$	320,389	$	407,013
Notes payable for the purchase of equipment and other assets	36,278		70,440

Right-of-use assets acquired in exchange for finance lease obligations	8,290		35,175

Other	1,798		—




Supplemental Data:
Altice USA and CSC Holdings:
Cash interest paid, net of capitalized interest	401,987		389,162
Income taxes paid, net	11,151		12,661

NOTE 7. RESTRUCTURING, IMPAIRMENTS AND OTHER OPERATING ITEMS

Our restructuring, impairments and other operating items are comprised of the following:


	Three Months Ended March 31,
	2024		2023
Contract termination costs (a)	$	37,136	$	—
Contractual payments for terminated employees	5,993		28,019
Facility realignment costs	5,304		382
Impairment of right-of-use operating lease assets	1,027		5

Other	1,793		1,266
	$	51,253	$	29,672

(a) Represents the cost to early terminate a contract with a vendor.

NOTE 8. GOODWILL AND INTANGIBLE ASSETS

Our amortizable intangible assets primarily consist of customer relationships acquired pursuant to business combinations and represent the value of the business relationship with those customers.

The following table summarizes information relating to our acquired amortizable intangible assets:


	As of March 31, 2024						As of December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Estimated Useful Lives
Customer relationships	$	6,073,152	$	(4,907,471)	$	1,165,681	$	6,073,152	$	(4,824,140)	$	1,249,012	3 to 18 years
Trade names	1,010,300		(1,010,300)		—		1,010,300		(1,010,300)		—		4 to 7 years
Other amortizable intangibles	50,701		(40,865)		9,836		50,495		(40,172)		10,323		1 to 15 years
	$	7,134,153	$	(5,958,636)	$	1,175,517	$	7,133,947	$	(5,874,612)	$	1,259,335

Amortization expense for the three months ended March 31, 2024 and 2023 aggregated $84,024 and $105,695, respectively.

Goodwill and the value of indefinite-lived cable franchises acquired in business combinations are not amortized. Rather, such assets are tested for impairment annually, as of October 1, or whenever events or changes in circumstances indicate that it is more likely than not that the assets may be impaired. The carrying amount of

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

indefinite-lived cable franchise rights was $13,216,355 and goodwill was $8,044,716 as of March 31, 2024 and December 31, 2023.

NOTE 9. DEBT

The following table provides details of our outstanding debt:


		Interest Rate at March 31, 2024		March 31, 2024				December 31, 2023
Date Issued	Maturity Date			Principal Amount		Carrying Amount (a)		Principal Amount		Carrying Amount (a)
CSC Holdings Senior Notes:
May 23, 2014 (g)				$	—	$	—	$	750,000	$	742,746
October 18, 2018	April 1, 2028	7.500	%	4,118		4,115		4,118		4,114
November 27, 2018	April 1, 2028	7.500	%	1,045,882		1,044,982		1,045,882		1,044,933
July 10 and October 7, 2019	January 15, 2030	5.750	%	2,250,000		2,274,997		2,250,000		2,275,915
June 16 and August 17, 2020	December 1, 2030	4.625	%	2,325,000		2,358,046		2,325,000		2,359,078
May 13, 2021	November 15, 2031	5.000	%	500,000		498,563		500,000		498,525
				6,125,000		6,180,703		6,875,000		6,925,311
CSC Holdings Senior Guaranteed Notes:
September 23, 2016	April 15, 2027	5.500	%	1,310,000		1,307,868		1,310,000		1,307,709
January 29, 2018	February 1, 2028	5.375	%	1,000,000		996,162		1,000,000		995,940
January 24, 2019	February 1, 2029	6.500	%	1,750,000		1,748,177		1,750,000		1,748,098
June 16, 2020	December 1, 2030	4.125	%	1,100,000		1,096,607		1,100,000		1,096,499
August 17, 2020	February 15, 2031	3.375	%	1,000,000		997,631		1,000,000		997,556
May 13, 2021	November 15, 2031	4.500	%	1,500,000		1,495,715		1,500,000		1,495,598
April 25, 2023	May 15, 2028	11.250	%	1,000,000		994,334		1,000,000		994,072
January 25, 2024	January 31, 2029	11.750	%	2,050,000		2,031,568		—		—
				10,710,000		10,668,062		8,660,000		8,635,472
CSC Holdings Restricted Group Credit Facility:
Revolving Credit Facility (b)	July 13, 2027	7.678	%	1,600,000		1,596,861		825,000		821,632
Term Loan B (f)				—		—		1,520,483		1,518,530
Incremental Term Loan B-3 (f)				—		—		521,744		520,988

Incremental Term Loan B-5 (c)	April 15, 2027	7.940	%	2,880,000		2,869,447		2,887,500		2,876,131
Incremental Term Loan B-6 (d)	January 15, 2028	9.825	%	1,981,923		1,945,521		1,986,928		1,948,503
				6,461,923		6,411,829		7,741,655		7,685,784
Lightpath Senior Notes:
September 29, 2020	September 15, 2028	5.625	%	415,000		409,407		415,000		409,136
Lightpath Senior Secured Notes:
September 29, 2020	September 15, 2027	3.875	%	450,000		444,759		450,000		444,410
Lightpath Term Loan (e)	November 30, 2027	8.690	%	580,500		571,011		582,000		571,898
Lightpath Revolving Credit Facility				—		—		—		—
				1,445,500		1,425,177		1,447,000		1,425,444

Finance lease obligations				201,250		201,250		228,356		228,356
Notes payable and supply chain financing				174,798		174,798		174,594		174,594
				25,118,471		25,061,819		25,126,605		25,074,961
Less: current portion of credit facility debt				(56,019)		(56,019)		(61,177)		(61,177)


Less: current portion of finance lease obligations				(113,300)		(113,300)		(123,636)		(123,636)
Less: current portion of notes payable and supply chain financing				(174,798)		(174,798)		(174,594)		(174,594)
				(344,117)		(344,117)		(359,407)		(359,407)
Long-term debt				$	24,774,354	$	24,717,702	$	24,767,198	$	24,715,554

(a)The carrying amount is net of the unamortized deferred financing costs and/or discounts/premiums.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

(b)At March 31, 2024, $137,512 of the revolving credit facility was restricted for certain letters of credit issued on our behalf and $737,488 of the $2,475,000 facility was undrawn and available, subject to covenant limitations. The revolving credit facility bears interest at a rate of Secured Overnight Financing Rate ("SOFR") (plus a Term SOFR credit adjustment spread of 0.10%) plus 2.25% per annum.

(c)Incremental Term Loan B-5 requires quarterly installments of $7,500 and bears interest at a rate equal to Synthetic USD London Interbank Offered Rate ("LIBOR") plus 2.50% per annum.

(d)Incremental Term Loan B-6 requires quarterly installments of $5,005 and bears interest at a rate equal to SOFR plus 4.50% per annum.

(e)Pursuant to the loan agreement, interest will be calculated for any (i) SOFR loan, at a rate per annum equal to the Term SOFR (plus spread adjustments of 0.11448%, 0.26161% and 0.42826% for interest periods of one, three and six months, respectively) or (ii) the alternate base rate loan, at the alternative base rate as applicable, plus the applicable margin in each case, where the applicable margin is 2.25% per annum with respect to any alternate base rate loan and 3.25% per annum with respect to any SOFR loan.

(f)The Term Loan B and Incremental Term Loan B-3 were repaid with proceeds from the issuance of senior guaranteed notes in January 2024. See discussion below.

(g)The 5.250% senior notes were redeemed in February 2024 with proceeds from drawings under the CSC Holdings Revolving Credit Facility. See discussion below.

For financing purposes, we have two debt silos: CSC Holdings and Lightpath. The CSC Holdings silo is structured as a restricted group (the "CSC Holdings Restricted Group") and an unrestricted group, which includes certain designated subsidiaries and investments. The CSC Holdings Restricted Group is comprised of CSC Holdings and substantially all of its wholly-owned operating subsidiaries excluding Cablevision Lightpath which became an unrestricted subsidiary in September 2020. These CSC Holdings Restricted Group subsidiaries are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by CSC Holdings. The Lightpath silo includes all of its operating subsidiaries which are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by Lightpath.

CSC Holdings Revolving Credit Facility

During the three months ended March 31, 2024, CSC Holdings borrowed $900,000 under its revolving credit facility and repaid $125,000 of amounts outstanding under the revolving credit facility.

CSC Holdings Senior Guaranteed Notes and Senior Notes

In January 2024, CSC Holdings issued $2,050,000 in aggregate principal amount of senior guaranteed notes due 2029. These notes bear interest at a rate of 11.750% and will mature on January 31, 2029. The proceeds from the sale of these notes were used to (i) repay the outstanding principal balance of the Term Loan B, (ii) repay the outstanding principal balance of the Incremental Term Loan B-3, and (iii) pay the fees, costs and expenses associated with these transactions. In connection with these transactions, we recorded a write-off of the outstanding deferred financing costs on these loans of $2,598.

In February 2024, we redeemed the CSC Holdings 5.250% Senior Notes and 5.250% Series B Senior Notes due June 2024 with proceeds under the CSC Revolving Credit Facility. In connection with these transactions, we recorded a write-off of the outstanding deferred financing costs on these notes of $4,437.

Lightpath Credit Facility

In February 2024, Lightpath entered into an extension amendment (the "Extension Amendment") to its amended credit agreement (the "Amended Credit Agreement") that provides for, among other things, (a) an extension of the scheduled maturity date with respect to the 2027 Revolving Credit Commitments (as defined in the Extension Amendment) under the credit agreement to the date (the "New Maturity Date") that is the later of (x) November 30, 2025 and (y) the earlier of (i) June 15, 2027 and (ii) the date that is five business days after any Extension Breach Date (as defined in the Amended Credit Agreement) and (b) incremental revolving credit commitments in an aggregate principal amount of $15,000 which shall be of the same class and type as the 2027 Revolving Credit Commitments and will, for the avoidance of doubt, mature on the New Maturity Date. After giving effect to the Extension Amendment, the aggregate principal amount of revolving loan commitments available under the Amended Credit Agreement equaled $115,000.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

Under the Extension Amendment, the aggregate principal amount of 2027 Revolving Credit Commitments equaled $95,000 and the aggregate principal amount of 2025 Revolving Credit Commitments (as defined in the Extension Amendment) equaled $20,000. Interest will be calculated at a rate per annum equal to the adjusted Term SOFR rate or the alternate base rate, as applicable, plus the applicable margin, where the applicable margin is (i) with respect to any alternate base rate loan, 2.25% per annum and (ii) with respect to any Term SOFR loan, 3.25% per annum.

Debt Compliance

As of March 31, 2024, CSC Holdings and Lightpath were in compliance with applicable financial covenants under their respective credit facilities and with applicable financial covenants under each respective indenture by which the senior guaranteed notes, senior secured notes and senior notes were issued.

Supply Chain Financing Arrangement

We have a supply chain financing arrangement with a financial institution with credit availability of $175,000 that is used to finance certain of our property and equipment purchases. This arrangement extends our repayment terms beyond a vendor’s original invoice due dates (for up to one year) and as such are classified as debt on our consolidated balance sheets.

The following is a rollforward of the outstanding balances relating to our supply chain financing arrangement:


Balance as of December 31, 2023	$	174,454
Purchases financed	36,278
Repayments	(35,934)
Balance as of March 31, 2024	$	174,798

Summary of Debt Maturities

The future principal payments under our various debt obligations outstanding as of March 31, 2024, including notes payable and supply chain financing, but excluding finance lease obligations, are as follows:


2024	$	180,535
2025	92,297
2026	56,019
2027	6,741,520
2028 (a)	5,371,850
Thereafter	12,475,000

(a)Includes $1,906,850 principal amount related to the CSC Holdings' Incremental Term Loan B-6 that is due on the earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of such date, any Incremental Term Loan B-5 borrowings are still outstanding, unless the Incremental Term Loan B-5 maturity date has been extended to a date falling after January 15, 2028.

NOTE 10. DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS

Prepaid Forward Contracts

Historically, we had entered into various transactions to limit the exposure against equity price risk on shares of Comcast Corporation ("Comcast") common stock we previously owned. We monetized all of our stock holdings in Comcast through the execution of prepaid forward contracts, collateralized by an equivalent amount of the respective underlying stock.

In January 2023, we settled our outstanding collateralized indebtedness by delivering the Comcast shares we held and the related equity derivative contracts which resulted in us receiving net cash of approximately $50,500 (including dividends of $11,598) and recorded a gain on the extinguishment of debt of $4,393.

As of March 31, 2024, we did not hold and have not issued equity derivative instruments for trading or speculative purposes.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

Interest Rate Swap Contracts

The following represents the location of the assets associated with our derivative instruments within the consolidated balance sheets:


Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	Fair Value at
		March 31, 2024		December 31, 2023

Asset Derivatives:
Interest rate swap contracts	Derivative contracts	$	51,212	$	—

Interest rate swap contracts	Other assets, long-term	75,576		112,914

		$	126,788	$	112,914

The following table presents certain consolidated statement of operations data related to our derivative contracts and the underlying Comcast common stock:


	Three Months Ended March 31,
	2024		2023
Loss on derivative contracts related to change in the value of equity derivative contracts related to Comcast common stock	$	—	$	(166,489)
Change in the fair value of Comcast common stock included in gain (loss) on investments	—		192,010
Gain (loss) on interest rate swap contracts, net	42,303		(14,429)

Interest Rate Swap Contract

The following is a summary of the terms of our interest rate swap contracts:

Maturity Date

Notional Amount

Company Pays

Company Receives

CSC Holdings:

January 2025

$500,000

Fixed rate of 1.3281%

One-month SOFR

January 2025

500,000

Fixed rate of 1.4223%

One-month SOFR

January 2025

500,000

Fixed rate of 1.2567%

One-month SOFR

December 2026

750,000

Fixed rate of 2.7129%

One-month SOFR

December 2026

750,000

Fixed rate of 2.6999%

One-month SOFR

Lightpath:

December 2026

300,000

Fixed rate of 2.11%

One-month SOFR

December 2026

180,000

Fixed rate of 3.523%

One-month SOFR

NOTE 11. FAIR VALUE MEASUREMENT

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:

•Level I - Quoted prices for identical instruments in active markets.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

•Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•Level III - Instruments whose significant value drivers are unobservable.

The following table presents our financial assets and financial liabilities that are measured at fair value on a recurring basis and their classification under the fair value hierarchy:


	Fair Value Hierarchy	March 31, 2024		December 31, 2023
Assets:
Money market funds	Level I	$	39,906	$	49,541


Interest rate swap contracts	Level II	126,788		112,914
Liabilities:


Contingent consideration related to acquisition	Level III	2,303		2,037

Our money market funds which are classified as cash equivalents are classified within Level I of the fair value hierarchy because they are valued using quoted market prices.

The interest rate swap contracts on our consolidated balance sheets are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit risk considerations. Such adjustments are generally based on available market evidence. Since model inputs can generally be verified and do not involve significant management judgment, we have concluded that these instruments should be classified within Level II of the fair value hierarchy.

The fair values of the contingent consideration as of March 31, 2024 and December 31, 2023 related to an acquisition in the third quarter of 2022 and were determined using a probability assessment of the contingent payment for the respective periods.

Fair Value of Financial Instruments

The following methods and assumptions were used to estimate fair value of each class of financial instruments for which it is practicable to estimate:

Credit Facility Debt, Senior Notes, Senior Guaranteed Notes, Senior Secured Notes, Notes Payable, and Supply Chain Financing

The fair values of each of our debt instruments are based on quoted market prices for the same or similar issues or on the current rates offered to us for instruments of the same remaining maturities. The fair value of notes payable is based primarily on the present value of the remaining payments discounted at the borrowing cost. The carrying value of outstanding amounts related to supply chain financing agreements approximates the fair value due to their short-term maturity (less than one year).

The carrying values, estimated fair values, and classification under the fair value hierarchy of our financial instruments, excluding those that are carried at fair value in the accompanying consolidated balance sheets, are summarized below:


		March 31, 2024				December 31, 2023
	Fair Value Hierarchy	Carrying Amount (a)		Estimated Fair Value		Carrying Amount (a)		Estimated Fair Value

Credit facility debt	Level II	$	6,982,840	$	7,042,423	$	8,257,682	$	8,323,654

Senior guaranteed notes and senior secured notes	Level II	11,112,821		9,428,313		9,079,882		7,784,288
Senior notes	Level II	6,590,110		3,653,838		7,334,447		4,932,931
Notes payable and supply chain financing	Level II	174,798		174,798		174,594		174,594





		$	24,860,569	$	20,299,372	$	24,846,605	$	21,215,467

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

(a)Amounts are net of unamortized deferred financing costs and discounts/premiums.

The fair value estimates related to our debt instruments presented above are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

NOTE 12. INCOME TAXES

We use an estimated annual effective tax rate ("AETR") to measure the income tax expense or benefit recognized on a year-to-date basis in an interim period. In addition, certain items included in income tax expense as well as the tax impact of certain items included in pretax income must be treated as discrete items. The income tax expense or benefit associated with these discrete items is fully recognized in the interim period in which the items occur.

For the three months ended March 31, 2024, we recorded tax expense of $2,924 on a pre-tax loss of $9,972, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was primarily due to the impact of state tax expense, certain non-deductible expenses, and tax deficiencies on share-based compensation.

For the three months ended March 31, 2023, we recorded a tax expense of $30,372 on pre-tax income of $61,542, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was due to the impact of certain non-deductible expenses, state tax expense, and tax deficiencies on share-based compensation.

NOTE 13. SHARE-BASED COMPENSATION

The following table presents share-based compensation expense (benefit) and unrecognized compensation cost:


	Share-Based Compensation				Unrecognized Compensation Cost as of March 31, 2024
	Three Months Ended March 31,
	2024		2023

Awards issued pursuant to LTIP:
Stock option awards (a)	$	(1,688)	$	(5,585)	$	5,278
Performance stock units (a)	(1,730)		(7,198)		5,392
Restricted share units	9,752		3,396		80,984
Cash denominated performance awards	5,292		326		35,932
Other	2,131		6,438		4,251
	$	13,757	$	(2,623)	$	131,837

(a)The benefit for 2023 includes credits due to the modification of awards to certain former executive officers and other forfeitures.

Restricted Share Units

The following table summarizes activity related to restricted share units granted to our employees:


			Number of Units
Balance at December 31, 2023			22,493,888
Granted			16,268,960
Vested			(3,266,648)
Forfeited			(1,504,386)
Balance at March 31, 2024			33,991,814

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

Cash Denominated Performance Awards

The following table summarizes activity related to cash denominated performance award granted to our employees:


			Number of Units
Balance at December 31, 2023			48,492,500


Forfeited			(2,740,000)
Balance at March 31, 2024			45,752,500

The deferred cash denominated performance awards cliff vest in three years. The payout of these awards can range from 0% to 200% of the target value based on the Company’s achievement of certain revenue and Adjusted EBITDA targets during a three year performance period. These awards will be settled in shares of the Company's Class A common stock, or cash, at the Company's option.

Lightpath Plan Awards

As of March 31, 2024, 494,286 Class A-1 management incentive units and 250,829 Class A-2 management incentive units ("Award Units") granted to certain employees of Lightpath were outstanding. Vested units will be redeemed upon a partial exit, a change in control or the completion of an initial public offering, as defined in the Holdings LLC agreement. The grant date fair value of the Award Units outstanding aggregated $29,438 and will be expensed in the period in which a partial exit or a liquidity event is consummated.

NOTE 14. AFFILIATE AND RELATED PARTY TRANSACTIONS

Affiliate and Related Party Transactions

Altice USA is controlled by Patrick Drahi through Next Alt who also controls Altice Europe and other entities.

As the transactions discussed below were conducted between entities under common control by Mr. Drahi, amounts charged for certain services may not have represented amounts that might have been received or incurred if the transactions were based upon arm's length negotiations.

The following table summarizes the revenue and expenses related to services provided to or received from affiliates and related parties:


	Three Months Ended March 31,
	2024		2023
Revenue	$	210	$	78
Operating expenses:
Programming and other direct costs	(3,355)		(2,642)
Other operating expenses, net	(12,289)		(4,676)

Operating expenses, net	(15,644)		(7,318)







Net charges	$	(15,434)	$	(7,240)
Capital expenditures	$	50,093	$	28,134

Revenue

We recognize revenue primarily from the sale of advertising to a subsidiary of Altice Europe.

Programming and other direct costs

Programming and other direct costs include costs incurred for advertising services provided by a subsidiary of Altice Europe.

Other operating expenses, net

Other operating expenses primarily include charges for services provided by certain subsidiaries of Altice Europe and other related parties, including costs for customer care services.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

Capital Expenditures

Capital expenditures primarily include costs for equipment purchased and software development services provided by subsidiaries of Altice Europe.

Aggregate amounts that were due from and due to affiliates and related parties are summarized below:



	March 31, 2024		December 31, 2023


Due from:
Altice Europe	$	137	$	137
Other affiliates and related parties	270		270
	$	407	$	407
Due to:
Altice Europe	$	87,129	$	71,523

	$	87,129	$	71,523

Amounts due from affiliates presented in the table above represent amounts due for services provided to the respective related party. Amounts due to affiliates presented in the table above and included in other current liabilities in the accompanying balance sheets relate to the purchase of equipment, customer care services, and advertising services, as well as reimbursement for payments made on our behalf.

CSC Holdings

During the three months ended March 31, 2024 and 2023, CSC Holdings made cash equity distribution payments to its parent of $3,775 and $83, respectively and non-cash contributions of $5,858 and $1, respectively.

NOTE 15. COMMITMENTS AND CONTINGENCIES

Legal Matters

On December 7, 2023, Warner Records Inc., Sony Music Publishing (US) LLC and a number of other purported copyright holders (collectively, the “Warner Plaintiffs”) filed a complaint in the U.S. District Court for the Eastern District of Texas (the “Warner Matter”), alleging that certain of our Internet subscribers directly infringed over 10,700 of the Warner Plaintiffs’ copyrighted works. The Warner Plaintiffs seek to hold us liable for claims of contributory infringement of copyright and vicarious copyright infringement. The Warner Plaintiffs also claim that our alleged secondary infringement was willful and seek substantial statutory damages.

The Warner Matter follows a similar complaint filed in December 2022 by BMG Rights Management (US) LLC, UMG Recordings, Inc., Capitol Records, LLC, Concord Music Group, Inc., and Concord Bicycle Assets, LLC (collectively, the “BMG Plaintiffs”) in the U.S. District Court for the Eastern District of Texas (the “BMG Matter”) alleging that certain of our Internet subscribers directly infringed over 8,000 of the BMG Plaintiffs’ copyrighted works. The BMG Plaintiffs seek to hold us liable for claims of contributory infringement of copyright and vicarious copyright infringement. The BMG Plaintiffs claim that our alleged secondary infringement was willful and seek substantial statutory damages. Trial in this matter is scheduled for September 2024.

We intend to and are vigorously defending against the claims in the Warner Matter and the BMG Matter. In addition to contesting the claims of liability, we have an affirmative defense under the Digital Millennium Copyright Act that, if successful, would preclude or limit monetary damages against us in connection with some or all of the Warner Plaintiffs’ and BMG Plaintiffs’ asserted claims. There can be no assurance as to the outcome of these litigations. We may incur significant costs in defending these actions, and if we need to take measures to reduce our exposure to these risks or are required to pay damages in relation to such claims or choose to settle such claims, our business, reputation, financial condition and results of operations could be materially adversely affected.

We also receive notices from third parties, and in some cases we are named as a defendant in lawsuits, claiming infringement of various patents or copyrights relating to various aspects of our businesses. In certain of these cases other industry participants are also defendants, and in certain of these cases we expect that some or all potential liability would be the responsibility of our vendors pursuant to applicable contractual indemnification provisions. In the event that we are found to infringe on any patent or other intellectual property rights, we may be subject to

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and per share amounts)

(Unaudited)

substantial damages or an injunction that could require us or our vendors to modify certain products and services we offer to our subscribers, as well as enter into royalty or license agreements with respect to the patents at issue. We are also party to various other lawsuits, disputes and investigations arising in the ordinary course of our business, some of which may involve claims for substantial damages, fines or penalties. Although the outcome of these matters cannot be predicted and the impact of the final resolution of these matters on our results of operations in a particular subsequent reporting period is not known, management does not believe that the resolution of these matters, individually, will have a material adverse effect on our operations or financial position or our ability to meet our financial obligations as they become due, but they could be material to our consolidated results of operations or cash flows for any one period.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Form 10-Q contains statements that constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Act of 1934, as amended. In this Form 10-Q there are statements concerning our future operating results and future financial performance. Words such as "expects", "anticipates", "believes", "estimates", "may", "will", "should", "could", "potential", "continue", "intends", "plans" and similar words and terms used in the discussion of future operating results, future financial performance and future events identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors.

We operate in a highly competitive, consumer and technology driven and rapidly changing business that is affected by government regulation and economic, strategic, technological, political and social conditions. Various factors could adversely affect our operations, business or financial results in the future and cause our actual results to differ materially from those contained in the forward-looking statements. In addition, important factors that could cause our actual results to differ materially from those in our forward-looking statements include:

•competition for broadband, video and telephony customers from existing competitors (such as broadband communications companies, direct broadcast satellite providers, wireless data and telephony providers, and Internet-based providers) and new fiber-based competitors entering our footprint;

•changes in consumer preferences, laws and regulations or technology that may cause us to change our operational strategies;

•increased difficulty negotiating programming agreements on favorable terms, if at all, resulting in increased costs to us and/or the loss of popular programming;

•increasing programming costs and delivery expenses related to our products and services;

•our ability to achieve anticipated customer and revenue growth, to successfully introduce new products and services and to implement our growth strategy;

•our ability to complete our capital investment plans on time and on budget, including our plan to build a parallel fiber-to-the-home ("FTTH") network;

•our ability to develop mobile voice and data services and our ability to attract customers to these services;

•the effects of economic conditions or other factors which may negatively affect our customers’ demand for our current and future products and services;

•the effects of industry conditions;

•demand for digital and linear advertising products and services;

•our substantial indebtedness and debt service obligations;

•adverse changes in the credit market;

•changes as a result of any tax reforms that may affect our business;

•financial community and rating agency perceptions of our business, operations, financial condition and the industries in which we operate;

•the restrictions contained in our financing agreements;

•our ability to generate sufficient cash flow to meet our debt service obligations;

•fluctuations in interest rates which may cause our interest expense to vary from quarter to quarter;

•technical failures, equipment defects, physical or electronic break-ins to our services, computer viruses and similar problems;

•cybersecurity incidents as a result of hacking, phishing, denial of service attacks, dissemination of computer viruses, ransomware and other malicious software, misappropriation of data, and other malicious attempts;

•disruptions to our networks, infrastructure and facilities as a result of natural disasters, power outages, accidents, maintenance failures, telecommunications failures, degradation of plant assets, terrorist attacks and similar events;

•labor shortages and supply chain disruptions;

•our ability to obtain necessary hardware, software, communications equipment and services and other items from our vendors at reasonable costs;

•our ability to effectively integrate acquisitions and to maximize expected operating efficiencies from our acquisitions, if any;

•significant unanticipated increases in the use of bandwidth-intensive Internet-based services;

•the outcome of litigation, government investigations and other proceedings; and

•other risks and uncertainties inherent in our cable and broadband communications businesses and our other businesses, including those listed under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 14, 2024 (the "Annual Report").

These factors are not necessarily all of the important factors that could cause our actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could cause our actual results to differ materially from those expressed in any of our forward-looking statements.

Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made only as of the date of this Quarterly Report. Except to the extent required by law, we do not undertake, and specifically decline any obligation, to update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

You should read this Quarterly Report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. We qualify all forward-looking statements by these cautionary statements.

Certain numerical figures included in this Quarterly Report have been subject to rounding adjustments. Accordingly, such numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

All dollar amounts, except per customer and per share data, included in the following discussion, are presented in thousands.

Overview

Our Business

We principally provide broadband communications and video services in the United States and market our services primarily under the Optimum brand. We deliver broadband, video, telephony, and mobile services to approximately 4.7 million residential and business customers across our footprint. Our footprint extends across 21 states (primarily in the New York metropolitan area and various markets in the south-central United States) through a fiber-rich hybrid-fiber coaxial ("HFC") broadband network and a fiber-to-the-home ("FTTH") network with approximately 9.7 million total passings as of March 31, 2024. Additionally, we offer news programming and advertising services.

Key Factors Impacting Operating Results and Financial Condition

Our future performance is dependent, to a large extent, on the impact of direct competition, general economic conditions (including capital and credit market conditions), our ability to manage our businesses effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers. For more information, see "Risk Factors" and "Business-Competition" included in our Annual Report on Form 10-K for the year ended December 31, 2023 and the cautionary statement regarding forward-looking statements included in this Quarterly Report.

We derive revenue principally through monthly charges to residential customers of our broadband, video, telephony and mobile services. We also derive revenue from digital video recorder, video-on-demand ("VOD"), pay-per-view, installation and home shopping commissions. Our residential broadband, video, telephony and mobile services accounted for approximately 41%, 34%, 3%, and 1%, respectively, of our consolidated revenue for the three months ended March 31, 2024. We also derive revenue from the sale of a wide and growing variety of products and services to both large enterprise and small and medium-sized business ("SMB") customers, including broadband, telephony, networking, video, and mobile services. For the three months ended March 31, 2024, 16% of our consolidated

revenue was derived from these business services. In addition, we derive revenue from the sale of advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), digital advertising, data analytics and affiliation fees for news programming, which accounted for approximately 5% of our consolidated revenue for the three months ended March 31, 2024. Our other revenue for the three months ended March 31, 2024, which includes mobile equipment revenue, accounted for less than 1% of our consolidated revenue.

Revenue is impacted by rate increases, changes in promotional offerings, changes in the number of customers that subscribe to our services, including additional services sold to our existing customers, programming package changes by our video customers, speed tier changes by our broadband customers, acquisitions/dispositions, and construction of cable systems that result in the addition of new customers. Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.

We operate in a highly competitive consumer-driven industry and we compete against a variety of broadband, video, mobile, fixed wireless broadband and fixed-line telephony providers and delivery systems, including broadband communications companies, wireless data and telephony providers, fiber-based service providers, satellite delivered video signals, Internet-delivered video content and broadcast television signals available to residential and business customers in our service areas. Our competitors include AT&T, Inc., DirecTV, DISH Network Corporation, Frontier Communications Parent, Inc., Lumen Technologies, Inc., T-Mobile US, Inc., and Verizon Communications Inc. Consumers' selection of an alternate source of service, whether due to economic constraints, technological advances, or preference, negatively impacts the demand for our services. For more information on our competitive landscape, see "Risk Factors" and "Business-Competition" included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Our programming costs, which are the most significant component of our operating expenses, are impacted by increases in contractual rates, changes in the number of customers receiving certain programming services, and new channel launches. We expect contractual rates to increase in the future. See "Results of Operations" below for more information regarding the key factors impacting our revenues and operating expenses.

Historically, we have made substantial investments in our network and the development of new and innovative products and other service offerings for our customers as a way of differentiating ourselves from our competitors and we expect to do so in the future. Our ongoing FTTH network build has enabled us to deliver multi-gig broadband speeds to FTTH customers in order to meet the growing data needs of residential and business customers. In addition, we launched a full service mobile offering to consumers across our footprint. We may incur greater than anticipated capital expenditures in connection with these initiatives, fail to realize anticipated benefits, experience delays and business disruptions or encounter other challenges to executing them as planned. See "Liquidity and Capital Resources- Capital Expenditures" for additional information regarding our capital expenditures.

Non-GAAP Financial Measures

We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, gain (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 and sale of affiliate interests, interest expense, net, depreciation and amortization, share-based compensation, restructuring, impairments and other operating items (such as significant legal settlements and contractual payments for terminated employees). See reconciliation of net income (loss) to Adjusted EBITDA below.

Adjusted EBITDA eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our business and from intangible assets recognized from acquisitions, as well as certain non-cash and other operating items that affect the period-to-period comparability of our operating performance. In addition, Adjusted EBITDA is unaffected by our capital and tax structures and by our investment activities.

We believe Adjusted EBITDA is an appropriate measure for evaluating our operating performance. 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 performance and evaluate management’s effectiveness with specific reference to these indicators. We believe Adjusted EBITDA provides management and investors a useful measure for period-to-period comparisons of our core business and operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to our 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 U.S. generally accepted accounting principles ("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 Operating Free Cash Flow (defined as Adjusted EBITDA less cash capital expenditures) and Free Cash Flow (defined as net cash flows from operating activities less cash capital expenditures) as indicators of our financial performance. We believe these measures are two of several benchmarks used by investors, analysts and peers for comparison of performance in our industry, although they may not be directly comparable to similar measures reported by other companies.

Results of Operations (unaudited)


	Three Months Ended March 31,				Favorable (Unfavorable)
	2024		2023
Revenue:
Broadband	$	916,994	$	957,045	$	(40,051)
Video	755,594		770,601		(15,007)
Telephony	70,965		77,681		(6,716)
Mobile (a)	24,893		15,526		9,367
Residential revenue (a)	1,768,446		1,820,853		(52,407)



Business services and wholesale (a)	364,861		363,641		1,220
News and advertising	105,725		98,737		6,988

Other (a)	11,903		10,747		1,156
Total revenue	2,250,935		2,293,978		(43,043)
Operating expenses:
Programming and other direct costs	743,887		771,719		27,832
Other operating expenses	674,250		651,245		(23,005)
Restructuring, impairments and other operating items	51,253		29,672		(21,581)
Depreciation and amortization (including impairments)	388,391		416,212		27,821
Operating income	393,154		425,130		(31,976)
Other income (expense):
Interest expense, net	(437,141)		(389,278)		(47,863)
Gain on investments and sale of affiliate interests, net	292		192,010		(191,718)
Loss on derivative contracts, net	—		(166,489)		166,489
Gain (loss) on interest rate swap contracts, net	42,303		(14,429)		56,732
Gain (loss) on extinguishment of debt and write-off of deferred financing costs	(7,035)		4,393		(11,428)
Other income (loss), net	(1,545)		10,205		(11,750)
Income (loss) before income taxes	(9,972)		61,542		(71,514)
Income tax expense	(2,924)		(30,372)		27,448
Net income (loss)	(12,896)		31,170		(44,066)
Net income attributable to noncontrolling interests	(8,297)		(5,305)		(2,992)
Net income (loss) attributable to Altice USA, Inc. stockholders	$	(21,193)	$	25,865	$	(47,058)

The following is a reconciliation of net income to Adjusted EBITDA and Operating Free Cash Flow (unaudited):


	Three Months Ended March 31,
	2024		2023
Net income (loss)	$	(12,896)	$	31,170
Income tax expense	2,924		30,372
Other loss (income), net	1,545		(10,205)
Loss (gain) on interest rate swap contracts, net	(42,303)		14,429
Loss on derivative contracts, net	—		166,489
Gain on investments and sale of affiliates interests, net	(292)		(192,010)
Loss (gain) on extinguishment of debt and write-off of deferred financing costs	7,035		(4,393)
Interest expense, net	437,141		389,278
Depreciation and amortization	388,391		416,212
Restructuring, impairments and other operating items	51,253		29,672
Share-based compensation	13,757		(2,623)
Adjusted EBITDA	846,555		868,391
Capital expenditures (cash)	336,095		582,897
Operating Free Cash Flow	$	510,460	$	285,494

The following is a reconciliation of net cash flow from operating activities to Free Cash Flow (Deficit) (unaudited):


	Three Months Ended March 31,
	2024		2023

Net cash flows from operating activities	$	399,661	$	416,846
Less: Capital expenditures (cash)	336,095		582,897
Free Cash Flow (Deficit)	$	63,566	$	(166,051)

The following table sets forth certain customer metrics (unaudited):


	March 31, 2024			December 31, 2023			March 31, 2023

	(in thousands)
Total passings (a)	9,679.3			9,628.7			9,512.2
Total customer relationships (b)	4,706.5			4,743.5			4,853.3
Residential	4,326.8			4,363.1			4,472.4
SMB	379.7			380.3			380.9
Residential customers:
Broadband	4,139.7			4,169.0			4,263.7
Video	2,094.7			2,172.4			2,380.5
Telephony	1,452.1			1,515.3			1,703.5
Penetration of total passings (c)	48.6		%	49.3		%	51.0		%
Average revenue per user ("ARPU") (d)	$	135.67		$	136.01		$	135.32
Total mobile lines	351.6			322.2			247.9

FTTH total passings (e)	2,780.0			2,735.2			2,373.0
FTTH customer relationships (f)	394.6			341.4			209.9
FTTH Residential	385.2			333.8			207.2
FTTH SMB	9.4			7.6			2.7
Penetration of FTTH total passings (g)	14.2		%	12.5		%	8.8		%

(a)Represents the estimated number of single residence homes, apartments and condominium units passed by our HFC and FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our HFC and FTTH network. Broadband services were not available to approximately 30 thousand passings and telephony services were not available to approximately 500 thousand passings.

(b)Represents number of households/businesses that receive at least one of our fixed-line services. Customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our HFC and FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per-view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual rooms at that hotel. Total customer relationships exclude mobile-only customer relationships.

(c)Represents the number of total customer relationships divided by total passings.

(d)Calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video, telephony and mobile services to residential customers by the average number of total residential customers for the same period (excluding mobile-only customer relationships). ARPU amounts for prior periods have been adjusted to include mobile service revenue.

(e)Represents the estimated number of single residence homes, apartments and condominium units passed by the FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our FTTH network.

(f)Represents number of households/businesses that receive at least one of our fixed-line services on our FTTH network. FTTH customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual rooms at that hotel.

(g)Represents the number of total FTTH customer relationships divided by FTTH total passings.

Comparison of Results for the Three Months Ended March 31, 2024 compared to the Three Months Ended March 31, 2023

Broadband Revenue

Broadband revenue for the three months ended March 31, 2024 and 2023 was $916,994 and $957,045, respectively. Broadband revenue is derived principally through monthly charges to residential subscribers of our broadband services. Broadband revenue decreased $40,051 (4%) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 and was due primarily to a decrease in broadband customers and lower average recurring broadband revenue per broadband customer.

Video Revenue

Video revenue for the three months ended March 31, 2024 and 2023 was $755,594 and $770,601, respectively. Video revenue is derived principally through monthly charges to residential customers of our video services. Video revenue decreased $15,007 (2%) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was due primarily to a decline in video customers, partially offset by higher average recurring video revenue per video customer, primarily driven by certain rate increases.

Telephony Revenue

Telephony revenue for the three months ended March 31, 2024 and 2023 was $70,965 and $77,681, respectively. Telephony revenue is derived principally through monthly charges to residential customers of our telephony services. Telephony revenue decreased $6,716 (9%) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decrease was due to a decline in telephony customers, partially offset by higher average recurring revenue per telephony customer.

Mobile Service Revenue

Mobile service revenue for the three months ended March 31, 2024 and 2023 was $24,893 and $15,526, respectively. The increase of $9,367 (60%) was due primarily to an increase in mobile customers, as well as a decline in customers receiving free service as compared to the prior year.

Business Services and Wholesale Revenue

Business services and wholesale revenue for the three months ended March 31, 2024 and 2023 was $364,861 and $363,641, respectively. Business services and wholesale revenue is derived primarily from the sale of fiber-based telecommunications services to the business market, and the sale of broadband, video, telephony, and mobile services to SMB customers.

Business services and wholesale revenue increased $1,220 for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was due to higher revenue from our Lightpath business primarily due to increases in Ethernet and indefeasible right of use contract fee revenue. This increase was partially offset by a decrease in wholesale revenue.

News and Advertising Revenue

News and advertising revenue for the three months ended March 31, 2024 and 2023 was $105,725 and $98,737, respectively. News and advertising revenue is primarily derived from the sale of (i) advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), (ii) digital advertising, (iii) data analytics, and (iv) affiliation fees for news programming.

News and advertising revenue increased $6,988 (7%) for the three months ended March 31, 2024, compared to the three months ended March 31, 2023 primarily due to an increase in linear and digital advertising revenue from political advertising.

Other Revenue

Other revenue for the three months ended March 31, 2024 and 2023 was $11,903 and $10,747, respectively. Other revenue includes revenue from sales of mobile equipment and other miscellaneous revenue streams.

Programming and Other Direct Costs

Programming and other direct costs for the three months ended March 31, 2024 and 2023 amounted to $743,887 and $771,719, respectively. Programming and other direct costs include cable programming costs, which are costs paid to programmers (net of amortization of any incentives received from programmers for carriage) for cable content

(including costs of VOD and pay-per-view) and are generally paid on a per-customer basis. These costs are impacted by increases in contractual rates, changes in the number of customers receiving certain programming services, and new channel launches. These costs also include interconnection, call completion, circuit and transport fees paid to other telecommunication companies for the transport and termination of voice and data services, which typically vary based on rate changes and the level of usage by our customers. These costs also include franchise fees which are payable to the state governments and local municipalities where we operate and are primarily based on a percentage of certain categories of revenue derived from the provision of video service over our cable systems, which vary by state and municipality. These costs change in relation to changes in such categories of revenues or rate changes. Additionally, these costs include the cost of media for advertising spots sold, the cost of mobile devices sold to our customers and direct costs of providing mobile services.

The decrease in programming and other direct costs of $27,832 (4%) for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily attributable to the following:



Decrease in programming costs primarily due to lower video customers, partially offset by net contractual rate increases	$	(44,665)
Increase in costs of media advertising spots for resale, primarily for linear and digital spots	6,327
Increase in software license fees related to customer premise equipment	4,863

Other net increases	5,643
	$	(27,832)

Programming costs

Programming costs aggregated $595,702 and $640,367, respectively, for the three months ended March 31, 2024 and 2023, respectively. Our programming costs in 2024 will continue to be impacted by changes in the number of video customers, and by changes in programming rates (which we expect to increase).

Other Operating Expenses

Other operating expenses for the three months ended March 31, 2024 and 2023 amounted to $674,250 and $651,245, respectively. Other operating expenses include staff costs and employee benefits including salaries of company employees and related taxes, benefits and other employee related expenses, as well as third-party labor costs. Other operating expenses also include network management and field service costs, which represent costs associated with the maintenance of our broadband network, including costs of certain customer connections and other costs associated with providing and maintaining services to our customers.

Customer installation and network repair and maintenance costs may fluctuate as a result of changes in the level of capitalizable activities, maintenance activities and the utilization of contractors as compared to employees. Costs associated with the initial deployment of new customer premise equipment necessary to provide services are capitalized. The costs of redeployment of customer premise equipment is expensed as incurred.

Other operating expenses also include costs related to our call center operations that handle customer inquiries and billing and collection activities, and sales and marketing costs, which include advertising production and placement costs associated with acquiring and retaining customers. These costs vary period to period and certain of these costs, such as sales and marketing, may increase with intense competition. Additionally, other operating expenses include various other administrative costs.

The increase in other operating expenses of $23,005 (4%) for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was attributable to the following:



Increase in share-based compensation costs	$	16,380
Increase in repairs and maintenance costs	6,911
Increase in consulting costs	9,250
Net decrease in labor costs and benefits primarily from an increase in capitalizable activity	(11,840)
Other net increases	2,304


	$	23,005

Restructuring, Impairments and Other Operating Items

Restructuring, impairments and other operating items for the three months ended March 31, 2024 amounted to $51,253, as compared to $29,672 for the three months ended March 31, 2023, and comprised the following:


	Three Months Ended March 31,
	2024		2023
Contract termination costs (a)	$	37,136	$	—
Contractual payments for terminated employees	5,993		28,019
Facility realignment costs	5,304		382
Impairment of right-of-use operating lease assets	1,027		5

Other	1,793		1,266
	$	51,253	$	29,672

(a) Represents the cost to early terminate a contract with a vendor.

Depreciation and Amortization

Depreciation and amortization for the three months ended March 31, 2024 amounted to $388,391, as compared to $416,212 for the three months ended March 31, 2023.

The decrease in depreciation and amortization of $27,821 for the three ended March 31, 2024 as compared to the three months ended March 31, 2023 was due to lower amortization expense resulting from certain assets becoming fully amortized, partially offset by higher depreciation expense resulting from an increase in asset additions.

Adjusted EBITDA

Adjusted EBITDA amounted to $846,555 for the three months ended March 31, 2024 as compared to $868,391 for the three months ended March 31, 2023.

Adjusted EBITDA is a non-GAAP measure that is defined as net income (loss) excluding income taxes, non-operating income or expenses, gain (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 and sale of affiliate interests, interest expense, net, depreciation and amortization, share-based compensation, restructuring, impairments and other operating items (such as significant legal settlements and contractual payments for terminated employees). See reconciliation of net income (loss) to Adjusted EBITDA above.

The decrease in Adjusted EBITDA of $21,836 (3%) for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was due to the decrease in revenue, partially offset by the decrease in operating expenses in the 2024 period (excluding depreciation and amortization, restructuring, impairments and other operating items and share-based compensation), as discussed above.

Operating Free Cash Flow

Operating free cash flow was $510,460 for the three months ended March 31, 2024 as compared to $285,494 for the three months ended March 31, 2023. The increase in operating free cash flow of $224,966 (79%) for the three months ended March 31, 2024 as compared to the same period in 2023 was due to a decrease in capital expenditures, partially offset by a decrease in Adjusted EBITDA.

Free Cash Flow (Deficit)

Free cash flow (deficit) was $63,566 for the three months ended March 31, 2024 as compared to $(166,051) for the three months ended March 31, 2023. The increase in free cash flow of $229,617 in the three month period was due to a decrease in capital expenditures, partially offset by a decrease in net cash provided by operating activities.

Interest Expense, net

Interest expense, net was $437,141 for the three months ended March 31, 2024, as compared to $389,278 for the same period in the prior year. The increase of $47,863 for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was attributable to the following:



Increase primarily due to an increase in interest rates	$	47,995
Lower capitalized interest related to FTTH network construction	3,605
Lower interest income	88
Other net decreases, primarily lower amortization of deferred financing costs and original issue discounts	(3,825)
	$	47,863

Gain on Investments and sale of affiliate interests, net

Gain on investments and sale of affiliate interests, net was $292 for the three months ended March 31, 2024 compared to $192,010 for the three months ended March 31, 2023. The gain in the 2023 period consisted primarily of the increase in the fair value of the Comcast common stock owned by the Company through January 24, 2023. The effects of this gain was partially offset by the loss on the related equity derivative contracts, net described below.

Loss on Derivative Contracts, net

Loss on derivative contracts, net amounted to $(166,489) for the three months ended March 31, 2023. The loss included realized and unrealized gains or losses due to the change in fair value of equity derivative contracts relating to the Comcast common stock owned by the Company through January 24, 2023. The effects of this loss was partially offset by the gain on investment securities pledged as collateral, which are included in gain on investments discussed above.

Gain (Loss) on Interest Rate Swap Contracts, net

Gain (loss) on interest rate swap contracts, net was $42,303 for the three months ended March 31, 2024 compared to $(14,429) for the three months ended March 31, 2023. These amounts represent the change in the fair value of our interest rate swap contracts. These swap contracts are not designated as hedges for accounting purposes.

Gain (Loss) on Extinguishment of Debt and Write-off of Deferred Financing Costs

Gain (loss) on extinguishment of debt and write-off of deferred financing costs amounted to $(7,035) and $4,393 for the three months ended March 31, 2024 and 2023, respectively.

The following table provides a summary of the gain (loss) on extinguishment of debt and the write-off of deferred financing costs recorded by us:


	Three months ended March 31,
	2024		2023
Settlement of collateralized debt	$	—	$	4,393
Repayment of CSC Holdings Term Loan B and Incremental Term Loan B-3	(2,598)		—
Redemption of 5.250% Senior Notes and 5.250% Series B Senior Notes due June 2024	(4,437)		$	—
	$	(7,035)	$	4,393

Other Income (Loss), net

Other income (loss), net amounted to $(1,545) for the three months ended March 31, 2024 compared to $10,205 for the three months ended March 31, 2023. These amounts include the non-service benefit or cost components of the Company's pension plans and dividends received on Comcast common stock owned by the Company through January 24, 2023 for the 2023 period.

Income Tax Expense

For the three months ended March 31, 2024, Altice USA recorded tax expense of $2,924 on a pre-tax loss of $9,972, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was primarily due to the impact of state tax expense, certain non-deductible expenses, and tax deficiencies on share-based compensation.

For the three months ended March 31, 2023, Altice USA recorded a tax expense of $30,372 on pre-tax income of $61,542 resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was due to the impact of certain non-deductible expenses, state tax expense, and tax deficiencies on share-based compensation.

CSC HOLDINGS, LLC

The following is a reconciliation of CSC Holdings' net income to Adjusted EBITDA and Operating Free Cash Flow:


	CSC Holdings
	Three Months Ended March 31,
	2024		2023
Net income (loss)	$	(12,896)	$	31,170
Income tax expense	2,924		30,372
Other loss (income), net	1,545		(10,205)
Loss (gain) on interest rate swap contracts, net	(42,303)		14,429
Loss on derivative contracts, net	—		166,489
Gain on investments and sale of affiliate interests, net	(292)		(192,010)
Loss (gain) on extinguishment of debt and write-off of deferred financing costs	7,035		(4,393)
Interest expense, net	437,141		389,278
Depreciation and amortization	388,391		416,212
Restructuring, impairments and other operating items	51,253		29,672
Share-based compensation	13,757		(2,623)
Adjusted EBITDA	846,555		868,391
Capital expenditures (cash)	336,095		582,897
Operating Free Cash Flow	$	510,460	$	285,494

Refer to Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" above.

The following is a reconciliation of CSC Holdings' net cash flow from operating activities to Free Cash Flow (Deficit):



	Three Months Ended March 31,
	2024		2023

Net cash flows from operating activities	$	399,662	$	416,846
Less: Capital expenditures (cash)	336,095		582,897
Free Cash Flow (Deficit)	$	63,567	$	(166,051)

LIQUIDITY AND CAPITAL RESOURCES

Altice USA has no operations independent of its subsidiaries. Funding for our subsidiaries has generally been provided by cash flow from their respective operations, cash on hand and borrowings under the CSC Holdings revolving credit facility and the proceeds from the issuance of securities and borrowings under syndicated term loans in the capital markets. Our decision as to the use of cash generated from operating activities, cash on hand, borrowings under the revolving credit facility or accessing the capital markets has been based upon an ongoing review of the funding needs of the business, the optimal allocation of cash resources, the timing of cash flow generation and the cost of borrowing under the revolving credit facility, debt securities and syndicated term loans. We calculate net leverage ratios for our CSC Holdings Restricted Group and Lightpath debt silos as net debt to L2QA EBITDA (Adjusted EBITDA for the two most recent consecutive fiscal quarters multiplied by 2.0).

We expect to utilize free cash flow and availability under the CSC Holdings Restricted Group and Lightpath revolving credit facilities, as well as future refinancing transactions, to further extend the maturities of, or reduce the principal on, our debt obligations. The timing and terms of any refinancing transactions will be subject to, among other factors, market conditions. Additionally, we may, from time to time, depending on market conditions and other factors, use cash on hand and the proceeds from other borrowings to repay the outstanding debt through open market purchases, privately negotiated purchases, tender offers, exchange offers or redemptions, or engage in similar transactions.

We believe existing cash balances, operating cash flows and availability under the CSC Holdings Restricted Group and Lightpath revolving credit facilities will provide adequate funds to support our current operating plan, make planned capital expenditures and fulfill our debt service requirements for the next twelve months. However, our ability to fund our operations, make planned capital expenditures, make scheduled payments on our indebtedness and repay our indebtedness depends on our future operating performance and cash flows and our ability to access the

capital markets, which, in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control. Competition, market disruptions or a deterioration in economic conditions could lead to lower demand for our products, as well as lower levels of advertising, and increased incidence of customers' inability to pay for the services we provide. These events would adversely impact our results of operations, cash flows and financial position. Although we currently believe amounts available under the CSC Holdings Restricted Group and Lightpath revolving credit facilities will be available when, and if, needed, we can provide no assurance that access to such funds will not be impacted by adverse conditions in the financial markets or other conditions. The obligations of the financial institutions under the revolving credit facilities are several and not joint and, as a result, a funding default by one or more institutions does not need to be made up by the others.

In the longer term, we may not be able to generate sufficient cash from operations to fund anticipated capital expenditures, meet all existing future contractual payment obligations and repay our debt at maturity. As a result, we could be dependent upon our continued access to the capital and credit markets to issue additional debt or equity or refinance existing debt obligations. We intend to raise significant amounts of funding over the next several years to fund capital expenditures, repay existing obligations and meet other obligations, and the failure to do so successfully could adversely affect our business. If we are unable to do so, we will need to take other actions including deferring capital expenditures, selling assets, seeking strategic investments from third parties or reducing discretionary uses of cash.

Debt Outstanding

The following tables summarize the carrying value of our outstanding debt, net of unamortized deferred financing costs, discounts and premiums (excluding accrued interest) as of March 31, 2024, as well as interest expense for the three months ended March 31, 2024:


	CSC Holdings Restricted Group		Lightpath		Altice USA/CSC Holdings
Debt outstanding:
Credit facility debt	$	6,411,829	$	571,011	$	6,982,840
Senior guaranteed notes	10,668,062		—		10,668,062
Senior secured notes	—		444,759		444,759
Senior notes	6,180,703		409,407		6,590,110
Subtotal	23,260,594		1,425,177		24,685,771
Finance lease obligations	201,250		—		201,250
Notes payable and supply chain financing	174,798		—		174,798
Total debt	$	23,636,642	$	1,425,177	$	25,061,819
Interest expense:
Credit facility debt, senior notes, finance leases, notes payable and supply chain financing	$	414,546	$	24,679	$	439,225

Payment Obligations Related to Debt

As of March 31, 2024, total amounts payable by us in connection with our outstanding obligations, including related interest, as well as notes payable and supply chain financing, but excluding finance lease obligations are as follows:


	CSC Holdings Restricted Group		Lightpath		Altice USA/ CSC Holdings
2024	$	1,356,158	$	63,185	$	1,419,343
2025	1,718,062		97,332		1,815,394
2026	1,674,596		92,549		1,767,145
2027	7,156,402		1,110,487		8,266,889
2028 (a)	5,889,813		438,344		6,328,157
Thereafter	13,514,063		—		13,514,063
Total	$	31,309,094	$	1,801,897	$	33,110,991

For financing purposes, we have two debt silos: CSC Holdings and Lightpath. The CSC Holdings silo is structured as a restricted group (the "CSC Holdings Restricted Group") and an unrestricted group, which includes certain designated subsidiaries and investments. The CSC Holdings Restricted Group is comprised of CSC Holdings and substantially all of its wholly-owned operating subsidiaries excluding Lightpath which became an unrestricted subsidiary in September 2020. These CSC Holdings Restricted Group subsidiaries are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by CSC Holdings. The Lightpath silo includes all of its operating subsidiaries which are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by Lightpath.

CSC Holdings Restricted Group

Sources of cash for the CSC Holdings Restricted Group include primarily cash flow from the operations of the businesses in the CSC Holdings Restricted Group, borrowings under its credit facility and issuance of securities in the capital markets, contributions from its parent, and, from time to time, distributions or loans from its subsidiaries. The CSC Holdings Restricted Group's principal uses of cash include: capital spending, in particular, the capital requirements associated with the upgrade of its digital broadband, video and telephony services, including costs to build our FTTH network; debt service; other corporate expenses and changes in working capital; and investments that it may fund from time to time.

CSC Holdings Credit Facility

In October 2015, a wholly-owned subsidiary of Altice USA, which merged with and into CSC Holdings on June 21, 2016, entered into a senior secured credit facility, which provides U.S. dollar term loans (the "CSC Term Loan B"), and U.S. dollar revolving loan commitments in an aggregate principal amount of $2,475,000 ($1,600,000 outstanding at March 31, 2024) (the "CSC Revolving Credit Facility" and, together with the CSC Term Loan B, the "CSC Credit Facilities"), which are governed by a credit facilities agreement entered into by, inter alios, CSC Holdings, certain lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent and security agent (as amended, restated, supplemented or otherwise modified from time to time, the "CSC Credit Facilities Agreement"). The CSC Term Loan B was repaid during the three months ended March 31, 2024 with proceeds from the issuance of senior guaranteed notes in January 2024.

In October 2018, CSC Holdings entered into a $1,275,000 incremental term loan facility (the “Incremental Term Loan B-3”) which was repaid during the three months ended March 31, 2024 with proceeds from the issuance of senior guaranteed notes in January 2024. In October 2019, CSC Holdings entered into a $3,000,000 ($2,880,000 outstanding at March 31, 2024) incremental term loan facility ("Incremental Term Loan B-5") and in December 2022, CSC Holdings entered into a $2,001,942 ($1,981,923 outstanding at March 31, 2024) incremental term loan facility (the "Incremental Term Loan B-6") under its CSC Credit Facilities Agreement.

During the three months ended March 31, 2024, CSC Holdings borrowed $900,000 under the CSC Revolving Credit Facility and repaid $125,000 of amounts outstanding under the CSC Revolving Credit Facility.

At March 31, 2024, $137,512 of the CSC Revolving Credit Facility was restricted for certain letters of credit issued on our behalf and $737,488 was undrawn and available, subject to covenant limitations.

As of March 31, 2024, CSC Holdings was in compliance with applicable financial covenants under its credit facility.

See Note 9 to our consolidated financial statements for further information regarding the CSC Credit Facilities Agreement.

CSC Holdings Senior Guaranteed Notes and Senior Notes

In February 2024, we redeemed the CSC Holdings 5.250% Senior Notes and 5.250% Series B Senior Notes due June 2024 with proceeds under the CSC Revolving Credit Facility.

As of March 31, 2024, CSC Holdings was in compliance with applicable financial covenants under each respective indenture by which the senior guaranteed notes and senior notes were issued.

Lightpath

Sources of cash for Lightpath include existing cash balances, operating cash flows from its operating subsidiaries and availability under the revolving credit facility.

Lightpath Credit Facility

Lightpath is party to a credit agreement which provides a term loan in an aggregate principal amount of $600,000 ($580,500 outstanding at March 31, 2024) and revolving loan commitments in an aggregate principal amount of $115,000. As of March 31, 2024, there were no borrowings outstanding under the Lightpath revolving credit facility.

As of March 31, 2024, Lightpath was in compliance with applicable financial covenants under its credit agreement and with applicable financial covenants under each respective indenture by which its senior secured notes and senior notes were issued.

See Note 9 to our consolidated financial statements for further information on the above debt obligations.

Fair Value of Debt

At March 31, 2024, the fair value of our fixed rate debt, comprised of our senior guaranteed and senior secured notes, senior notes, and supply chain financing of $13,256,949 was lower than its carrying value of $17,877,729 by $4,620,780. The fair value of these financial instruments is estimated based on reference to quoted market prices for these or comparable securities. Our floating rate borrowings, comprised of our term loans and revolving credit facilities bear interest in reference to current SOFR-based market rates and thus their principal values approximate

fair value. The effect of a hypothetical 100 basis point decrease in interest rates prevailing at March 31, 2024 would increase the estimated fair value of our fixed rate debt by $548,728 to $13,805,677. This estimate is based on the assumption of an immediate and parallel shift in interest rates across all maturities.

Interest Rate Risk

To manage interest rate risk, we have from time to time entered into interest rate swap contracts to adjust the proportion of total debt that is subject to variable and fixed interest rates. Such contracts effectively fix the borrowing rates on floating rate debt to provide an economic hedge against the risk of rising rates and/or effectively convert fixed rate borrowings to variable rates to permit us to realize lower interest expense in a declining interest rate environment. We monitor the financial institutions that are counterparties to our interest rate swap contracts and we only enter into interest rate swap contracts with financial institutions that are rated investment grade. All such contracts are carried at their fair market values on our consolidated balance sheets, with changes in fair value reflected in the consolidated statements of operations. See Note 10 to our consolidated financial statements for a summary of interest rate swap contracts outstanding at March 31, 2024. Our outstanding interest rate swap contracts are not designated as hedges for accounting purposes. Accordingly, the changes in the fair value of these interest rate swap contracts are recorded through the statements of operations. For the three months ended March 31, 2024, we recorded a gain on interest rate swap contracts of $42,303, and had a fair value at March 31, 2024 of $51,212 recorded as derivative contracts, short term and $75,576 recorded as other assets, long-term on the consolidated balance sheet.

As of March 31, 2024, we did not hold and have not issued derivative instruments for trading or speculative purposes.

Capital Expenditures

The following table presents the Company's capital expenditures:


	Three Months Ended March 31,
	2024		2023
Customer premise equipment	$	103,312	$	86,061
Network infrastructure	113,418		346,856
Support and other	60,300		76,973
Business Services	59,065		73,007
Capital expenditures (cash basis)	336,095		582,897
Right-of-use assets acquired in exchange for finance lease obligations	8,290		35,175
Notes payable issued to vendor for the purchase of equipment and other assets	36,278		70,440
Change in accrued and unpaid purchases and other	3,389		(88,306)
Capital expenditures (accrual basis)	$	384,052	$	600,206

Customer premise equipment includes expenditures for drop cable, fiber gateways, modems, routers, and other equipment installed at customer locations. Network infrastructure includes (i) scalable infrastructure, such as headend and related equipment, (ii) line extensions, such as fiber and coaxial cable, amplifiers, electronic equipment, and design and engineering costs to expand the network, and (iii) upgrade and rebuild, including costs to modify or replace existing segments of the network. Support and other capital expenditures include costs associated with the replacement or enhancement of non-network assets, such as software systems, vehicles, facilities, and office equipment. Business services capital expenditures include primarily equipment, support and other costs related to our fiber-based telecommunications business serving enterprise customers.

Cash Flow Discussion

Altice USA

Operating Activities

Net cash provided by operating activities amounted to $399,661 for the three months ended March 31, 2024 compared to $416,846 for the three months ended March 31, 2023.

The decrease in cash provided by operating activities of $17,185 in 2024 as compared to 2023 resulted from a decrease of $141,449 due to changes in working capital (including an increase in interest payments of $12,825 and a decrease in tax payments of $1,510), as well as the timing of payments of liabilities, and collections of accounts

receivable, among other items, partially offset by an increase in net income (loss) before depreciation and amortization and other non-cash items of $124,264.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2024 was $335,777 compared to $583,095 for the three months ended March 31, 2023. The 2024 investing activities consisted primarily of capital expenditures of $336,095. The 2023 investing activities consisted primarily of capital expenditures of $582,897.

Financing Activities

Net cash provided by (used in) financing activities amounted to $(80,876) for the three months ended March 31, 2024, compared to $81,405 for the three months ended March 31, 2023.

In 2024, the Company's financing activities consisted primarily of the repayment of debt of $2,967,306 and principal payments on finance lease obligations of $35,396 offset by proceeds from long-term debt of $2,950,000.

In 2023, the Company's financing activities consisted primarily of proceeds from long-term debt of $350,000 and net proceeds from derivative contracts in connection with the settlement of collateralized debt of $38,902, partially offset by repayment of debt of $268,936 and principal payments on finance lease obligations of $37,861.

CSC Holdings

Operating Activities

Net cash provided by operating activities amounted to $399,662 for the three months ended March 31, 2024 compared to $416,846 for the three months ended March 31, 2023.

The decrease in cash provided by operating activities of $17,184 in 2024 as compared to 2023 resulted from a decrease of $141,448 due to changes in working capital (including an increase in interest payments of $12,825 and a decrease in tax payments of $1,510), as well as the timing of payments of liabilities and collections of accounts receivable, among other items, partially offset by an increase in net income before depreciation and amortization and other non-cash items of $124,264.

Investing Activities

Financing Activities

Net cash provided by (used in) financing activities amounted to $(80,876) for the three months ended March 31, 2024, compared to $81,405 for the three months ended March 31, 2023.

In 2024, the Company's financing activities consisted primarily of the repayment of debt of $2,967,306 and principal payments on finance lease obligations of $35,396, partially offset by proceeds from long-term debt of $2,950,000.

Commitments and Contingencies

As of March 31, 2024, the Company's commitments and contingencies not reflected in the Company's balance sheet decreased to approximately $5,300,000 as compared to approximately $6,000,000 as of December 31, 2023. This decrease relates primarily to payments made in 2024 pursuant to programming commitments and a reduction in programming commitments due to a decrease in the number of video customers as of March 31, 2024 as compared to December 31, 2023.

The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses. For a complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our consolidated financial statements, please refer to our Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information relating to market risk is included in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations under the caption "Market Risk."

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of Altice USA's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined under SEC rules). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of March 31, 2024.

Changes in Internal Control

During the three months ended March 31, 2024, there were no changes in the Company's internal control over financial reporting that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Refer to Note 15 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of our legal proceedings.

Item 5. Other Information

None.

Item 6. Exhibits


EXHIBIT NO.						DESCRIPTION

4.1						Senior Guaranteed Notes Indenture, dated as of January 25, 2024, among CSC Holdings, LLC as Issuer, the Guarantors set forth therein and Deutsche Bank Trust Company Americas, as Trustee, Paying Agent, Transfer Agent and Registrar (incorporated herein by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File No. 001-38126) filed on January 25, 2024).
10.1						Extension Amendment No. 1 to Credit Agreement, dated as of February 9, 2024 by and among Cablevision Lightpath LLC, as borrower, the other loan parties party thereto, the revolving credit lenders party thereto, the L/C Issuers party thereto, the swingline lenders party thereto, the 2024 Extension Arranger and Goldman Sachs Bank USA, as the administrative agent.
31.1						Section 302 Certification of the CEO.
31.2						Section 302 Certification of the CFO.
32						Section 906 Certifications of the CEO and CFO.
101						The following financial statements from Altice USA's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 filed with the Securities and Exchange Commission on May 2, 2024 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income (Loss); (iv) the Consolidated Statements of Stockholders' Deficiency; (v) the Consolidated Statements of Cash Flows; and (vi) the Combined Notes to Consolidated Financial Statements.
104						The cover page from this Quarterly Report on Form 10-Q formatted in Inline XBRL.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ALTICE USA, INC.

Date:

May 2, 2024

/s/ Marc Sirota

By:

Marc Sirota

Chief Financial Officer

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Altice USA (ATUS) 10-Q2024 FY Quarterly report

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