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
SeptemberJune 30, 20192020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
For the transition period fromto
Commission File NumberRegistrant; State of Incorporation; Address and Telephone NumberIRS Employer Identification No.
001-38126
atus-20200630_g1.jpg
38-3980194
Altice USA, Inc.
Delaware
1 Court Square West
Long Island City,New York11101
(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☒No☐
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, 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 Registrants wereRegistrant was required to submit and post such files).
Yes☒No☐
Yes☒No☐

Indicate by check mark whether eachthe 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☐
(Do not check if a 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☐No☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, par value $0.01 per shareATUSNew York Stock ExchangeNYSE
Number of shares of common stock outstanding as of November 1, 2019:July 24, 2020636,831,534578,097,380 






ALTICE USA, INC. AND SUBSIDIARIES

FORM 10-Q
TABLE OF CONTENTS

Page
PART I. FINANCIAL INFORMATION
4
Item 1. Financial Statements
ALTICE USA, INC. AND SUBSIDIARIES
FORM 10-QConsolidated Financial Statements
TABLE OF CONTENTSConsolidated Balance Sheets - June 30, 2020 (Unaudited) and December 31, 2019
4
Consolidated Statements of Operations - Three and six months ended June 30, 2020 and 2019 (Unaudited)
6
PART I. FINANCIAL INFORMATIONConsolidated Statements of Comprehensive Income - Three and six months ended June 30, 2020 and 2019 (Unaudited)
7
PageConsolidated Statements of Stockholders' Equity - Three and six months ended June 30, 2020 and 2019 (Unaudited)
8
Item 1.Consolidated Statements of Cash Flows - Six months ended June 30, 2020 and 2019 (Unaudited)
12
Combined Notes to Consolidated Financial Statements of Altice USA, Inc. and Subsidiaries(Unaudited)
22
Supplemental Financial Statements Furnished:
CSC HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Financial Statements
Consolidated Balance Sheets - SeptemberJune 30, 20192020 (Unaudited) and December 31, 20182019
414
Consolidated Statements of Operations - Three and ninesix months ended SeptemberJune 30, 20192020 and 20182019 (Unaudited)
616
Consolidated Statements of Comprehensive Income (Loss) - Three and ninesix months ended SeptemberJune 30, 20192020 and 20182019 (Unaudited)
717
Consolidated Statements of Stockholders’Member's Equity - Three and ninesix months ended SeptemberJune 30, 20192020 and 20182019 (Unaudited)
818
Consolidated Statements of Cash Flows - NineSix months ended SeptemberJune 30, 20192020 and 20182019 (Unaudited)
1320
Combined Notes to Consolidated Financial Statements (Unaudited)
1522
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
3543
Item 3. Quantitative and Qualitative Disclosures About Market Risk
5159
Item 4. Controls and Procedures
5261
PART II. OTHER INFORMATION
61
Item 1. Legal Proceedings
5461
Item 1A. Risk Factors
61
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
5462
Item 6. Exhibits
5563
SIGNATURES
SIGNATURES
5665


1





PART
Part I. FINANCIAL INFORMATION
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, wireless data and telephony providers, direct broadcast satellite ("DBS") providers and Internet-based providers) and new 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 fiber-to-the-home ("FTTH") network, and deploy Altice One, our home communications hub;
•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 thatwhich 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 thatwhich 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;

2





•the disruption or failure of our network, information systems or technologies as a result of computer hacking, computer viruses, “cyber-attacks,”"cyber-attacks," misappropriation of data, power loss, system outages, natural disasters, and other material events;
•the impact from the coronavirus ("COVID-19") pandemic;
•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 or as a result of the transactions, if any;
•significant unanticipated increases in the use of bandwidth-intensive Internet-based services;
•the outcome of litigation, government investigations and other proceedings;
•our ability to successfully operate our business following the completion of our separation from Altice Europe; and
•other risks and uncertainties inherent in our cable and other 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'sAltice USA's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") filed on March 1, 2019February 14, 2020 (the "Annual Report"). and in "Part II, Item 1A. Risk Factors" included herein.
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 AnnualQuarterly 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.

3






Item 1. Financial Statements
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, 2020 (Unaudited)December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents$1,952,142  $701,898  
Restricted cash264  262  
Accounts receivable, trade (less allowance for doubtful accounts of $32,441 and $14,683)387,739  457,118  
Prepaid expenses and other current assets209,916  215,304  
Amounts due from affiliates3,452  6,774  
Total current assets2,553,513  1,381,356  
Property, plant and equipment, net of accumulated depreciation of $5,880,504 and $5,276,9215,723,109  5,753,401  
Right-of-use operating lease assets270,592  280,340  
Investment securities pledged as collateral1,674,395  1,931,697  
Derivative contracts225,791  25,207  
Other assets106,840  92,622  
Amortizable intangibles, net of accumulated amortization of $4,054,809 and $3,670,6793,097,216  3,481,109  
Indefinite-lived cable television franchises13,020,081  13,020,081  
Goodwill8,142,309  8,142,309  
Total assets$34,813,846  $34,108,122  
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
 September 30, 2019 December 31, 2018
ASSETS(Unaudited)  
Current Assets:   
Cash and cash equivalents$175,091
 $298,781
Restricted cash261
 257
Accounts receivable, trade (less allowance for doubtful accounts of $13,694 and $13,520)442,710
 448,399
Prepaid expenses and other current assets195,163
 136,285
Amounts due from affiliates4,554
 17,557
Derivative contracts—
 1,975
Total current assets817,779
 903,254
Property, plant and equipment, net of accumulated depreciation of $5,058,198 and $4,044,6715,797,059
 5,828,881
Right-of-use operating lease assets282,746
 —
Investment securities pledged as collateral1,936,422
 1,462,626
Derivative contracts2,634
 109,344
Other assets102,322
 84,382
Amortizable intangibles, net of accumulated amortization of $3,476,043 and $2,882,7873,675,954
 4,192,824
Indefinite-lived cable television franchises13,020,081
 13,020,081
Goodwill8,138,511
 8,012,416
Total assets$33,773,508
 $33,613,808

See accompanying notes to consolidated financial statements.


4




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except share and per share amounts)

 June 30, 2020 (Unaudited)December 31, 2019
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable$832,011  $799,618  
Interest payable381,482  385,655  
Accrued employee related costs109,334  111,337  
Amounts due to affiliates5,722  7,456  
Deferred revenue117,925  124,777  
Debt1,859,290  170,682  
Other current liabilities387,212  378,954  
Total current liabilities3,692,976  1,978,479  
Other liabilities215,781  204,904  
Deferred tax liability4,833,305  4,762,595  
Liabilities under derivative contracts312,916  255,666  
Right-of-use operating lease liability259,297  269,062  
Long-term debt, net of current maturities24,326,397  24,249,603  
Total liabilities33,640,672  31,720,309  
Commitments and contingencies (Note 16)
Redeemable equity15,495  108,551  
Stockholders' Equity:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, 0 shares issued and outstanding—  —  
Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 400,531,285 shares issued and 393,596,028 shares outstanding as of June 30, 2020 and 457,207,079 shares issued and 446,749,307 shares outstanding as of December 31, 20194,005  4,572  
Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 issued, 186,194,357 shares outstanding as of June 30, 2020 and 186,245,832 shares outstanding as of December 31, 20191,862  1,862  
Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, 0 shares issued and outstanding—  —  
Paid-in capital817,796  2,039,918  
Retained earnings501,172  390,766  
1,324,835  2,437,118  
Treasury stock, at cost (6,935,257 and 10,457,772 Class A common shares at June 30, 2020 and December 31, 2019, respectively)(163,869) (163,904) 
Accumulated other comprehensive loss(12,118) (3,250) 
Total stockholders' equity1,148,848  2,269,964  
Noncontrolling interest8,831  9,298  
Total stockholders' equity1,157,679  2,279,262  
 $34,813,846  $34,108,122  
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except share and per share amounts)

 September 30, 2019 December 31, 2018
LIABILITIES AND STOCKHOLDERS' EQUITY(Unaudited)  
Current Liabilities:   
Accounts payable$878,518
 $857,502
Interest payable278,506
 386,475
Accrued employee related costs128,914
 139,806
Amounts due to affiliates6,904
 26,096
Deferred revenue108,070
 140,053
Debt161,701
 158,625
Other current liabilities316,734
 312,634
Total current liabilities1,879,347
 2,021,191
Other liabilities245,885
 271,554
Deferred tax liability4,797,941
 4,723,937
Liabilities under derivative contracts377,613
 132,908
Right-of-use operating lease liability270,564
 —
Long-term debt, net of current maturities23,895,580
 22,653,975
Total liabilities31,466,930
 29,803,565
Commitments and contingencies (Note 16)


 


Redeemable equity217,311
 130,007
Stockholders' Equity:   
Preferred stock, $.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, 450,565,544 shares issued and 450,564,558 shares outstanding as of September 30, 2019 and 496,064,027 shares issued and outstanding as of December 31, 20184,506
 4,961
Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 shares issued,186,262,928 shares outstanding as of September 30, 2019 and 212,976,259 shares outstanding as of December 31, 20181,863
 2,130
Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding—
 —
Paid-in capital1,709,685
 3,423,803
Retained earnings390,437
 251,830
 2,106,491
 3,682,724
Treasury stock, at cost (986 Class A common shares at September 30, 2019)—
 —
Accumulated other comprehensive loss(25,520) (11,783)
Total stockholders' equity2,080,971
 3,670,941
Noncontrolling interest8,296
 9,295
Total stockholders' equity2,089,267
 3,680,236
 $33,773,508
 $33,613,808

See accompanying notes to consolidated financial statements.

5




ALTICE USA, INC. AND SUBSIDIARIES
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Revenue (including revenue from affiliates of $70, $545, $1,158 and $1,397, respectively) (See Note 15)$2,438,662
 $2,417,801
 $7,286,310
 $7,111,668
Operating expenses:       
Programming and other direct costs (including charges from affiliates of $3,508, $1,671, $7,282 and $6,690 respectively) (See Note 15)820,896
 790,533
 2,452,875
 2,373,021
Other operating expenses (including charges from affiliates of $1,602, $905, $5,868, and $15,154, respectively) (See Note 15)568,233
 569,070
 1,702,124
 1,727,842
Restructuring and other expense12,381
 16,587
 39,090
 29,865
Depreciation and amortization (including impairments)565,637
 536,053
 1,695,685
 1,827,285
 1,967,147
 1,912,243
 5,889,774
 5,958,013
Operating income471,515
 505,558
 1,396,536
 1,153,655
Other income (expense):       
Interest expense(388,800) (389,594) (1,158,301) (1,157,395)
Interest income1,524
 1,427
 3,948
 9,843
Gain (loss) on investments and sale of affiliate interests, net120,253
 111,684
 478,124
 (182,031)
Gain (loss) on derivative contracts, net(77,333) (79,628) (303,986) 130,883
Loss on interest rate swap contracts(11,163) (19,554) (61,735) (64,405)
Loss on extinguishment of debt and write-off of deferred financing costs(503) —
 (159,599) (41,616)
Other income (expense), net(226) (186) 66
 (12,473)
 (356,248) (375,851) (1,201,483) (1,317,194)
Income (loss) before income taxes115,267
 129,707
 195,053
 (163,539)
Income tax expense(37,871) (95,968) (56,445) (29,675)
Net income (loss)77,396
 33,739
 138,608
 (193,214)
Net income attributable to noncontrolling interests(157) (1,186) (1) (1,039)
Net income (loss) attributable to Altice USA, Inc. stockholders$77,239
 $32,553
 $138,607
 $(194,253)
Income (loss) per share:       
Basic income (loss) per share$0.12
 $0.04
 $0.21
 $(0.26)
Basic weighted average common shares (in thousands)643,797
 732,963
 668,929
 735,685
        
Diluted income (loss) per share:$0.12
 $0.04
 $0.21
 $(0.26)
Diluted weighted average common shares (in thousands)646,006
 732,963
 669,855
 735,685
Cash dividends declared per common share$—
 $—
 $—
 $—
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue (including revenue from affiliates of $3,379, $496, $6,867, and $1,088 respectively) (See Note 15)$2,474,979  $2,451,081  $4,925,235  $4,847,648  
Operating expenses:
Programming and other direct costs (including charges from affiliates of $1,738, $2,087, $3,927 and $3,774, respectively) (See Note 15)860,875  818,994  1,725,389  1,631,979  
Other operating expenses (including charges from affiliates of $2,161, $2,020, $6,102 and $4,266, respectively) (See Note 15)542,637  569,459  1,124,946  1,133,891  
Restructuring and other expense40,966  11,465  48,260  26,709  
Depreciation and amortization (including impairments)521,794  568,620  1,069,363  1,130,048  
 1,966,272  1,968,538  3,967,958  3,922,627  
Operating income508,707  482,543  957,277  925,021  
Other income (expense):
Interest expense(351,025) (381,218) (716,236) (769,501) 
Interest income151  605  1,810  2,424  
Gain (loss) on investments and sale of affiliate interests, net197,597  103,146  (257,876) 357,871  
Gain (loss) on derivative contracts, net(152,061) (49,624) 287,800  (226,653) 
Loss on interest rate swap contracts, net(33,735) (26,900) (88,567) (50,572) 
Loss on extinguishment of debt and write-off of deferred financing costs—  (1,194) —  (159,096) 
Other income, net669  212  1,592  292  
(338,404) (354,973) (771,477) (845,235) 
Income before income taxes170,303  127,570  185,800  79,786  
Income tax expense(58,826) (41,160) (75,861) (18,574) 
Net income111,477  86,410  109,939  61,212  
Net loss (income) attributable to noncontrolling interests(213) (43) 467  156  
Net income attributable to Altice USA, Inc. stockholders$111,264  $86,367  $110,406  $61,368  

Income per share:
Basic income per share$0.19  $0.13  $0.18  $0.09  
Basic weighted average common shares (in thousands)587,587  668,031  604,500  681,703  
 
Diluted income per share$0.19  $0.13  $0.18  $0.09  
Diluted weighted average common shares (in thousands)589,466  668,648  606,597   682,014  
See accompanying notes to consolidated financial statements.

6




ALTICE USA, INC. AND SUBSIDIARIES
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net income (loss)$77,396
 $33,739
 $138,608
 $(193,214)
Other comprehensive income (loss):       
Defined benefit pension plans:       
Unrecognized actuarial gain (loss)(15,860) 9,602
 (19,508) 13,794
Applicable income taxes4,298
 (2,592) 5,287
 (3,723)
Unrecognized actuarial gain (loss) arising during period, net of income taxes(11,562) 7,010
 (14,221) 10,071
Settlement loss included in other expense, net1,091
 65
 1,629
 929
Applicable income taxes(295) (18) (441) (252)
Settlement loss included in other expense, net, net of income taxes796
 47
 1,188
 677
Foreign currency translation adjustment(385) 437
 (965) 1,351
Applicable income taxes105
 (27) 261
 (365)
Foreign currency translation adjustment, net(280) 410
 (704) 986
Other comprehensive income (loss)(11,046) 7,467
 (13,737) 11,734
Comprehensive income (loss)66,350
 41,206
 124,871
 (181,480)
Comprehensive income attributable to noncontrolling interests(157) (1,186) (1) (1,039)
Comprehensive income (loss) attributable to Altice USA, Inc. stockholders$66,193
 $40,020
 $124,870
 $(182,519)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Net income$111,477  $86,410  $109,939  $61,212  
Other comprehensive income (loss):
Defined benefit pension plans:
Unrecognized actuarial gain (loss)1,880  (8,567) (11,589) (3,648) 
Applicable income taxes(503) 2,282  3,096  989  
Unrecognized gain (loss) arising during period, net of income taxes1,377  (6,285) (8,493) (2,659) 
Settlement loss included in other expense, net271  367  773  538  
Applicable income taxes(72) (101) (207) (147) 
Settlement loss included in other expense, net, net of income taxes199  266  566  391  
Foreign currency translation adjustment(517) (336) (941) (580) 
Applicable income taxes—  93  —  157  
Foreign currency translation adjustment, net(517) (243) (941) (423) 
Other comprehensive income (loss)1,059  (6,262) (8,868) (2,691) 
Comprehensive income112,536  80,148  101,071  58,521  
Comprehensive loss (income) attributable to noncontrolling interests(213) (43) 467  156  
Comprehensive income attributable to Altice USA, Inc. stockholders$112,323  $80,105  $101,538   $58,677  

See accompanying notes to consolidated financial statements.


7




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)

 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 Retained Earnings Treasury Stock 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at January 1, 2019$4,961
 $2,130
 $3,423,803
 $251,830
 $—
 $(11,783) $3,670,941
 $9,295
 $3,680,236
Net loss attributable to stockholders—
 —
 —
 (24,999) —
 —
 (24,999) —
 (24,999)
Net loss attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (199) (199)
Distributions from noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (1,000) (1,000)
Pension liability adjustments, net of income taxes—
 —
 —
 —
 —
 3,752
 3,752
 —
 3,752
Foreign currency translation adjustment, net of income taxes—
 —
 —
 —
 —
 (181) (181) —
 (181)
Share-based compensation expense—
 —
 13,790
 —
 —
 —
 13,790
 —
 13,790
Redeemable equity vested—
 —
 1,364
 —
 —
 —
 1,364
 —
 1,364
Change in redeemable equity—
 —
 (61,696) —
 —
 —
 (61,696) —
 (61,696)
Class A shares acquired through share repurchase program and retired(294) —
 (599,707) —
 —
 —
 (600,001) —
 (600,001)
Conversion of Class B to Class A shares242
 (242) —
 —
 —
 —
 —
 —
 —
Balance at March 31, 2019$4,909
 $1,888
 $2,777,554
 $226,831
 $—
 $(8,212) $3,002,970
 $8,096
 $3,011,066
                  
See accompanying notes to consolidated financial statements.

8




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)


Class A
Common
Stock
Class B
Common
Stock		Paid-in
Capital		Retained EarningsTreasury StockAccumulated
Other
Comprehensive
Loss		Total
Stockholders'
Equity		Non-controlling
Interest		Total
Equity
Balance at January 1, 2020$4,572  $1,862  $2,039,918  $390,766  $(163,904) $(3,250) $2,269,964  $9,298  $2,279,262  
Net loss attributable to stockholders—  —  —  (858) —  —  (858) —  (858) 
Net loss attributable to noncontrolling interests—  —  —  —  —  —  —  (680) (680) 
Pension liability adjustments, net of income taxes—  —  —  —  —  (9,503) (9,503) —  (9,503) 
Foreign currency translation adjustment, net of income taxes—  —  —  —  —  (424) (424) —  (424) 
Share-based compensation expense—  —  27,370  —  —  —  27,370  —  27,370  
Redeemable equity vested—  —  29,479  —  —  —  29,479  —  29,479  
Change in redeemable equity—  —  13,260  —  —  —  13,260  —  13,260  
Class A shares acquired through share repurchase program and retired(312) —  (749,686) —  —  —  (749,998) —  (749,998) 
Issuance of common shares pursuant to employee long term incentive plan1  —  2,495  —  11  —  2,507  —  2,507  
Balance at March 31, 2020$4,261  $1,862  $1,362,836  $389,908  $(163,893) $(13,177) $1,581,797  $8,618  $1,590,415  
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
(In thousands)
(Unaudited)

 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 Retained Earnings Treasury Stock 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at March 31, 2019$4,909
 $1,888
 $2,777,554
 $226,831
 $—
 $(8,212) $3,002,970
 $8,096
 $3,011,066
Net income attributable to stockholders—
 —
 —
 86,367
 —
 —
 86,367
 —
 86,367
Net income attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 43
 43
Pension liability adjustments, net of income taxes—
 —
 —
 —
 —
 (6,019) (6,019) —
 (6,019)
Foreign currency translation adjustment, net of income taxes—
 —
 —
 —
 —
 (243) (243) —
 (243)
Share-based compensation expense (equity classified)—
 —
 16,077
 —
 —
 —
 16,077
 —
 16,077
Redeemable equity vested—
 —
 61,702
 —
 —
 —
 61,702
 —
 61,702
Change in redeemable equity—
 —
 (46,294) —
 —
 —
 (46,294) —
 (46,294)
Class A shares acquired through share repurchase program and retired(249) —
 (599,703) —
 —
 —
 (599,952) —
 (599,952)
Conversion of Class B to Class A shares16
 (16) —
 —
 —
 —
 —
 —
 —
Issuance of common shares pursuant to employee long term incentive plan—
 —
 244
 —
 —
 —
 244
 —
 244
Class A shares issued in connection with acquisition5
 —
 10,768
 —
 —
 —
 10,773
 —
 10,773
Balance at June 30, 2019$4,681
 $1,872
 $2,220,348
 $313,198
 $—
 $(14,474) $2,525,625
 $8,139
 $2,533,764


See accompanying notes to consolidated financial statements.


9
8




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
(In thousands)
(Unaudited)


Class A
Common
Stock
Class B
Common
Stock		Paid-in
Capital		Retained EarningsTreasury StockAccumulated
Other
Comprehensive
Loss		Total
Stockholders'
Equity		Non-controlling
Interest		Total
Equity
Balance at March 31, 2020$4,261  $1,862  $1,362,836  $389,908  $(163,893) $(13,177) $1,581,797  $8,618  $1,590,415  
Net income attributable to stockholders—  —  —  111,264  —  —  111,264  —  111,264  
Net loss attributable to noncontrolling interests—  —  —  —  —  —  —  213  213  
Pension liability adjustments, net of income taxes—  —  —  —  —  1,576  1,576  —  1,576  
Foreign currency translation adjustment, net of income taxes—  —  —  —  —  (517) (517) —  (517) 
Share-based compensation expense—  —  33,683  —  —  —  33,683  —  33,683  
Redeemable equity vested—  —  59,081  —  —  —  59,081  —  59,081  
Change in redeemable equity—  —  (8,764) —  —  —  (8,764) —  (8,764) 
Class A shares acquired through share repurchase program and retired(258) —  (630,979) —  —  —  (631,237) —  (631,237) 
Issuance of common shares pursuant to employee long term incentive plan2  —  1,939  —  24  —  1,965  —  1,965  
Balance at June 30, 2020$4,005  $1,862  $817,796  $501,172  $(163,869) $(12,118) $1,148,848  $8,831  $1,157,679  
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
(In thousands)
(Unaudited)

 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 Retained Earnings Treasury Stock 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at June 30, 2019$4,681
 $1,872
 $2,220,348
 $313,198
 $—
 $(14,474) $2,525,625
 $8,139
 $2,533,764
Net income attributable to stockholders—
 —
 —
 77,239
 —
 —
 77,239
 —
 77,239
Net income attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 157
 157
Pension liability adjustments, net of income taxes—
 —
 —
 —
 —
 (10,766) (10,766) —
 (10,766)
Foreign currency translation adjustment, net of income taxes—
 —
 —
 —
 —
 (280) (280) —
 (280)
Share-based compensation expense—
 —
 18,023
 —
 —
 —
 18,023
 —
 18,023
Redeemable equity vested—
 —
 9,071
 —
 —
 —
 9,071
 —
 9,071
Change in redeemable equity—
 —
 (51,450) —
 —
 —
 (51,450) —
 (51,450)
Class A shares acquired through share repurchase program and retired(184) —
 (486,736) —
 —
 —
 (486,920) —
 (486,920)
Conversion of Class B to Class A shares9
 (9) —
 —
 —
 —
 —
 —
 —
Issuance of common shares pursuant to employee long term incentive plan—
 —
 429
 —
 —
 —
 429
 —
 429
Balance at September 30, 2019$4,506
 $1,863
 $1,709,685
 $390,437
 $—
 $(25,520) $2,080,971
 $8,296
 $2,089,267

See accompanying notes to consolidated financial statements.



10
9




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
(In thousands)
(Unaudited)


Class A
Common
Stock
Class B
Common
Stock		Paid-in
Capital		Retained EarningsTreasury StockAccumulated
Other
Comprehensive
Loss		Total
Stockholders'
Equity		Non-controlling
Interest		Total
Equity
Balance at January 1, 2019$4,961  $2,130  $3,423,803  $251,830  $—  $(11,783) $3,670,941  $9,295  $3,680,236  
Net loss attributable to stockholders—  —  —  (24,999) —  —  (24,999) —  (24,999) 
Net loss attributable to noncontrolling interests—  —  —  —  —  —  —  (199) (199) 
Distributions to noncontrolling interests—  —  —  —  —  —  —   (1,000) (1,000) 
Pension liability adjustments, net of income taxes—  —  —  —  —  3,752  3,752  —  3,752  
Foreign currency translation adjustment, net of income taxes—  —  —  —  —  (181) (181) —  (181) 
Share-based compensation expense (equity classified)—  —  13,790  —  —  —  13,790  —  13,790  
Redeemable equity vested—  —  1,364  —  —  1,364  —  1,364  
Change in redeemable equity—  —  (61,696) —  —  —  (61,696) —  (61,696) 
Class A shares acquired through share repurchase program and retired(294) —  (599,707) —  —  —  (600,001) —  (600,001) 
Conversion of Class B to Class A shares242  (242) —  —  —  —  —  —  —  
Balance at March 31, 2019$4,909  $1,888  $2,777,554  $226,831  $—  $(8,212) $3,002,970  $8,096  $3,011,066  
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
(In thousands)
(Unaudited)
 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 Retained Earnings 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at January 1, 2018, as adjusted$2,470
 $4,901
 $4,665,229
 $840,636
 $(10,022) $5,503,214
 $1,539
 $5,504,753
Net loss attributable to stockholders—
 —
 —
 (128,951) —
 (128,951) —
 (128,951)
Net income attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 2
 2
Pension liability adjustments, net of income taxes—
 —
 —
 —
 3,765
 3,765
 —
 3,765
Share-based compensation expense—
 —
 21,623
 —
 —
 21,623
 —
 21,623
Change in redeemable equity—
 —
 (3,347) —
 —
 (3,347) —
 (3,347)
Other changes to equity—
 —
 (859) —
 —
 (859) —
 (859)
Adoption of ASU No. 2018-02—
 —
 —
 2,163
 (2,163) —
 —
 —
Balance at March 31, 20182,470
 4,901
 4,682,646
 713,848
 (8,420) 5,395,445
 1,541
 5,396,986
Net loss attributable to stockholders—
 —
 —
 (97,855) —
 (97,855) —
 (97,855)
Net income attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 (149) (149)
Contributions from noncontrolling interests—
 —
 —
 —
 —
 —
 5,995
 5,995
Pension liability adjustments, net of income taxes—
 —
 —
 —
 (74) (74) —
 (74)
Foreign currency translation adjustment—
 —
 —
 —
 576
 576
 —
 576
Share-based compensation expense—
 —
 12,226
 —
 —
 12,226
 —
 12,226
Redeemable equity vested—
 —
 111,521
 —
 —
 111,521
 —
 111,521
Change in redeemable equity—
 —
 (47,049) —
 —
 (47,049) —
 (47,049)
Dividend payment—
 —
 (963,711) (536,224) —
 (1,499,935) —
 (1,499,935)
Conversion of Class B to Class A shares, including $2,424 in connection with the Distribution2,458
 (2,458) —
 —
 —
 —
 —
 —
Impact of i24 Acquisition—
 —
 61,049
 (73,578) (2,520) (15,049) —
 (15,049)
Balance at June 30, 2018$4,928
 $2,443
 $3,856,682
 $6,191
 $(10,438) $3,859,806
 $7,387
 $3,867,193


See accompanying notes to consolidated financial statements.














1110




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
(In thousands)
(Unaudited)

Class A Common StockClass B Common StockPaid-in CapitalRetained EarningsTreasury StockAccumulated Other Comprehensive LossTotal Stockholders' EquityNon-controlling InterestTotal Equity
Balance at March 31, 2019$4,909  $1,888  $2,777,554  $226,831  $—  $(8,212) $3,002,970  $8,096  $3,011,066  
Net income attributable to stockholders—  —  —  86,367  —  —  86,367  —  86,367  
Net income attributable to noncontrolling interests—  —  —  —  —  —  —  43  43  
Pension liability adjustments, net of income taxes—  —  —  —  —  (6,019) (6,019) —  (6,019) 
Foreign currency translation adjustment, net of income taxes—  —  —  —  —  (243) (243) —  (243) 
Share-based compensation expense (equity classified)—  —  16,077  —  —  —  16,077  —  16,077  
Redeemable equity vested—  —  61,702  —  —  61,702  —  61,702  
Change in redeemable equity—  —  (46,294) —  —  —  (46,294) —  (46,294) 
Class A shares acquired through share repurchase program and retired(249) —  (599,703) —  —  —  (599,952) —  (599,952) 
Conversion of Class B to Class A shares16  (16) —  —  —  —  —  —  —  
Issuance of common shares pursuant to employee long term incentive plan—  —  244  —  —  —  244  —  244  
Class A shares issued in connection with acquisition5  —  10,768  —  —  —  10,773  —  10,773  
Balance at June 30, 2019$4,681  $1,872  $2,220,348  $313,198  $—  $(14,474) $2,525,625  $8,139  $2,533,764  
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Continued)
(In thousands)
(Unaudited)
 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 Retained Earnings 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at June 30, 2018$4,928
 $2,443
 $3,856,682
 $6,191
 $(10,438) $3,859,806
 $7,387
 $3,867,193
Net loss attributable to stockholders—
 —
 —
 32,553
 —
 32,553
 —
 32,553
Net income attributable to noncontrolling interests—
 —
 —
 —
 —
 —
 1,186
 1,186
Pension liability adjustments, net of income taxes—
 —
 —
 —
 7,057
 7,057
 —
 7,057
Foreign currency translation adjustment—
 —
 —
 —
 410
 410
 —
 410
Share-based compensation expense—
 —
 12,327
 —
 —
 12,327
 —
 12,327
Redeemable equity vested—
 —
 12,894
 —
 —
 12,894
 —
 12,894
Change in redeemable equity—
 —
 (22,528) —
 —
 (22,528) —
 (22,528)
Class A shares acquired through share repurchase program and retired(133) —
 (240,666) —
 —
 (240,799) —
 (240,799)
Conversion of Class B to Class A shares, including $2,424 in connection with the Distribution312
 (312) —
 —
 —
 —
 —
 —
Impact of i24 Acquisition—
 —
 —
 —
 680
 680
 —
 680
Balance at September 30, 2018$5,107
 $2,131
 $3,618,709
 $38,744
 $(2,291) $3,662,400
 $8,573
 $3,670,973



See accompanying notes to consolidated financial statements.

11


ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Six Months Ended June 30,
 20202019
Cash flows from operating activities:
Net income$109,939  $61,212  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including impairments)1,069,363  1,130,048  
Non-cash restructuring charges2,383  10,014  
Loss (gain) on investments and sale of affiliate interests, net257,876  (357,871) 
Loss (gain) on derivative contracts, net(287,800) 226,653  
Loss on extinguishment of debt and write-off of deferred financing costs—  159,096  
Amortization of deferred financing costs and discounts (premiums) on indebtedness48,217  53,876  
Settlement loss related to pension plan773  538  
Share-based compensation expense related to equity classified awards61,053  29,867  
Deferred income taxes51,105  19,604  
Decrease in right-of-use assets23,071  23,147  
Provision for doubtful accounts41,857  34,814  
Change in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade27,522  1,804  
Other receivables—  2,740  
Prepaid expenses and other assets(5,577) (72,638) 
Amounts due from and due to affiliates1,588  (3,282) 
Accounts payable10,256  18,549  
Accrued liabilities(12,796) (98,551) 
Deferred revenue(17,302) 12,022  
Liabilities related to interest rate swap contracts148,013  41,322  
Net cash provided by operating activities1,529,541  1,292,964  
Cash flows from investing activities: 
Capital expenditures(527,805) (657,253) 
Payment for acquisitions, net of cash acquired—  (172,659) 
Proceeds related to sale of equipment and costs of disposal(1,846) 898  
Decrease in other investments4,008  —  
Additions to other intangible assets(237) (867) 
Net cash used in investing activities(525,880) (829,881) 
See accompanying notes to consolidated financial statements.
12




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 2019 2018
Cash flows from operating activities:   
Net income (loss)$138,608
 $(193,214)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
Depreciation and amortization (including impairments)1,695,685
 1,827,285
Equity in net loss of affiliates—
 10,849
Loss (gain) on investments and sale of affiliate interests, net(478,124) 182,031
Loss (gain) on derivative contracts, net303,986
 (130,883)
Loss on extinguishment of debt and write-off of deferred financing costs159,599
 41,616
Amortization of deferred financing costs and discounts (premiums) on indebtedness82,398
 60,526
Settlement loss related to pension plan1,629
 929
Share-based compensation expense related to equity classified awards47,891
 46,176
Deferred income taxes55,694
 14,399
Provision for doubtful accounts61,054
 50,643
Change in assets and liabilities, net of effects of acquisitions and dispositions:   
Accounts receivable, trade(46,849) (111,446)
Other receivables3,306
 (138)
Prepaid expenses and other assets(44,942) (41,890)
Amounts due from and due to affiliates(6,189) 7,203
Accounts payable27,018
 85,497
Interest payable(107,969) (76,095)
Accrued employee related costs and other liabilities(78,796) (122,101)
Deferred revenue(30,020) 56,326
Liabilities related to interest rate swap and derivative contracts50,008
 62,549
Net cash provided by operating activities1,833,987
 1,770,262
Cash flows from investing activities:   
Capital expenditures(1,032,555) (832,824)
Payment for acquisitions, net of cash acquired(172,659) (10,753)
Sale of affiliate interest1,958
 (3,537)
Proceeds related to sale of equipment, including costs of disposal4,484
 7,802
Increase in other investments—
 (2,500)
Additions to other intangible assets(3,969) (584)
Net cash used in investing activities(1,202,741) (842,396)
    
See accompanying notes to consolidated financial statements.


13




ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)

Six Months Ended June 30,
20202019
Cash flows from financing activities:
Proceeds from credit facility debt, net of discounts200,000  1,940,000  
Repayment of credit facility debt(228,875) (602,830) 
Issuance of senior notes, including premiums1,725,000  1,754,375  
Redemption of senior notes, including premiums and fees—  (2,462,692) 
Proceeds from notes payable—  39,856  
Repayment of notes payable(48,239) (74,061) 
Principal payments on finance lease obligations(11,935) (3,273) 
Purchase of shares of Altice USA Class A common stock pursuant to a share repurchase program(1,381,235) (1,199,953) 
Additions to deferred financing costs(5,894) (12,488) 
Proceeds from stock option exercises3,650  —  
Contingent payment for acquisition(4,947) (500) 
Distributions to noncontrolling interests, net—  (1,000) 
Net cash provided by (used in) financing activities247,525  (622,566) 
Net increase (decrease) in cash and cash equivalents excluding effect of exchange rate changes1,251,186  (159,483) 
Effect of exchange rate changes on cash and cash equivalents(940) (580) 
Net increase (decrease) in cash and cash equivalents1,250,246  (160,063) 
Cash, cash equivalents and restricted cash at beginning of year702,160  299,038  
Cash, cash equivalents and restricted cash at end of period$1,952,406  $138,975  
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)
 Nine Months Ended September 30,
 2019 2018
Cash flows from financing activities:   
Proceeds from credit facility debt, net of discounts$2,040,000
 $2,217,500
Repayment of credit facility debt(1,342,625) (635,738)
Issuance of senior notes and debentures, including premiums2,754,375
 2,050,000
Redemption of senior notes, including premiums and fees(2,471,578) (2,623,756)
Proceeds from collateralized indebtedness, net—
 516,513
Repayment of collateralized indebtedness and related derivative contracts, net—
 (516,513)
Dividends to stockholders—
 (1,499,935)
Proceeds from notes payable67,187
 15,955
Repayment of notes payable(90,210) (14,089)
Principal payments on finance lease obligations(6,736) (8,581)
Purchase of shares of Class A common stock, pursuant to a share repurchase program(1,686,873) (226,803)
Additions to deferred financing costs(16,007) (21,570)
Contingent payment for acquisition(500) (30,000)
Contributions from (distributions to) noncontrolling interests(1,000) 5,995
Other—
 (859)
Net cash used in financing activities(753,967) (771,881)
Effect of exchange rate changes on cash and cash equivalents(965) 376
Net increase (decrease) in cash and cash equivalents(123,686) 156,361
Cash, cash equivalents and restricted cash at beginning of year299,038
 330,100
Cash, cash equivalents and restricted cash at end of period$175,352
 $486,461

See accompanying notes to consolidated financial statements.

13


CSC HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, 2020 (Unaudited)December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents$1,952,128  $697,741  
Restricted cash264  262  
Accounts receivable, trade (less allowance for doubtful accounts of $32,441 and $14,683)387,739  457,118  
Prepaid expenses and other current assets209,916  211,642  
Amounts due from affiliates3,322  6,774  
Total current assets2,553,369  1,373,537  
Property, plant and equipment, net of accumulated depreciation of $5,880,504 and $5,276,9215,723,109  5,753,401  
Right-of-use operating lease assets270,592  280,340  
Investment securities pledged as collateral1,674,395  1,931,697  
Derivative contracts225,791  25,207  
Other assets106,840  92,622  
Amortizable intangibles, net of accumulated amortization of $4,054,809 and $3,670,6793,097,216  3,481,109  
Indefinite-lived cable television franchises13,020,081  13,020,081  
Goodwill8,142,309  8,142,309  
Total assets$34,813,702  $34,100,303  

See accompanying notes to consolidated financial statements.

14



CSC HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except per membership unit amounts)

 June 30, 2020 (Unaudited)December 31, 2019
LIABILITIES AND MEMBER'S EQUITY
Current Liabilities:
Accounts payable$832,011  $799,618  
Interest payable381,482  385,655  
Accrued employee related costs109,334  111,337  
Amounts due to affiliates5,722  7,456  
Deferred revenue117,925  124,777  
Debt1,859,290  170,682  
Other current liabilities387,212  378,948  
Total current liabilities3,692,976  1,978,473  
Other liabilities215,779  204,904  
Deferred tax liability5,156,281  4,980,599  
Liabilities under derivative contracts312,916  255,666  
Right-of-use operating lease liability259,297  269,062  
Long-term debt, net of current maturities24,326,397  24,249,603  
Total liabilities33,963,646  31,938,307  
Commitments and contingencies (Note 16)
Redeemable equity15,495  108,551  
Member's Equity:
Retained earnings7,480  13,515  
Other member's equity (100 membership units issued and outstanding)830,368  2,033,882  
837,848  2,047,397  
Accumulated other comprehensive loss(12,118) (3,250) 
Total member's equity825,730  2,044,147  
Noncontrolling interest8,831  9,298  
Total member's equity834,561  2,053,445  
 $34,813,702  $34,100,303  

See accompanying notes to consolidated financial statements.

15


CSC HOLDINGS LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)


Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue (including revenue from affiliates of $3,379, $496, $6,867, and $1,088 respectively) (See Note 15)$2,474,979  $2,451,081  $4,925,235  $4,847,648  
Operating expenses:
Programming and other direct costs (including charges from affiliates of $1,738, $2,087, $3,927 and $3,774, respectively) (See Note 15)860,875  818,994  1,725,389  1,631,979  
Other operating expenses (including charges from affiliates of $2,161, $2,020, $6,102 and $4,266, respectively) (See Note 15)542,637  569,459  1,124,946  1,133,891  
Restructuring and other expense40,966  11,465  48,260  26,709  
Depreciation and amortization (including impairments)521,794  568,620  1,069,363  1,130,048  
 1,966,272  1,968,538  3,967,958  3,922,627  
Operating income508,707  482,543  957,277  925,021  
Other income (expense):
Interest expense(351,025) (356,818) (716,236) (720,857) 
Interest income151  605  1,810  2,424  
Gain (loss) on investments and sale of affiliate interests, net197,596  103,146  (258,223) 357,871  
Gain (loss) on derivative contracts, net(152,061) (49,624) 287,800  (226,653) 
Loss on interest rate swap contracts, net(33,735) (26,900) (88,567) (50,572) 
Loss on extinguishment of debt and write-off of deferred financing costs—  (1,194) —  (159,096) 
Other income, net669  212  1,592  292  
(338,405) (330,573) (771,824) (796,591) 
Income before income taxes170,302  151,970  185,453  128,430  
Income tax expense(56,629) (47,828) (61,658) (32,152) 
Net income113,673  104,142  123,795  96,278  
Net loss (income) attributable to noncontrolling interests(213) (43) 467  156  
Net income attributable to CSC Holdings, LLC sole member$113,460  $104,099  $124,262  $96,434  

See accompanying notes to consolidated financial statements.

16


CSC HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)


Three Months Ended June 30,Six Months Ended June 30,
202020192020 2019
Net income$113,673  $104,142  $123,795  $96,278  
Other comprehensive income (loss):
Defined benefit pension plans:
Unrecognized actuarial gain (loss)1,880  (8,567) (11,589) (3,648) 
Applicable income taxes(503) 2,282  3,096  989  
Unrecognized gain (loss) arising during period, net of income taxes1,377  (6,285) (8,493) (2,659) 
Settlement loss included in other expense, net271  367  773   538  
Applicable income taxes(72) (101) (207) (147) 
Settlement loss included in other expense, net, net of income taxes199  266  566  391  
Foreign currency translation adjustment(517) (336) (941) (580) 
Applicable income taxes—  93  —  157  
Foreign currency translation adjustment, net(517) (243) (941) (423) 
Other comprehensive income (loss)1,059  (6,262) (8,868) (2,691) 
Comprehensive income114,732  97,880  114,927  93,587  
Comprehensive loss (income) attributable to noncontrolling interests(213) (43) 467  156  
Comprehensive income attributable to CSC Holdings, LLC's sole member$114,519  $97,837  $115,394  $93,743  

See accompanying notes to consolidated financial statements.

17


CSC HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL MEMBER'S EQUITY
(In thousands)
(Unaudited)


Retained EarningsOther Member's EquityAccumulated Other Comprehensive Income (Loss)Total Member's EquityNoncontrolling InterestTotal Equity
Balance at January 1, 2020$13,515  $2,033,882  $(3,250) $2,044,147  $9,298  $2,053,445  
Net income attributable to CSC Holdings' sole member10,802  —  —  10,802  —  10,802  
Net loss attributable to noncontrolling interests—  —  —  —  (680) (680) 
Pension liability adjustments, net of income taxes—  —  (9,503) (9,503) —  (9,503) 
Foreign currency translation adjustment—  —  (424) (424) —  (424) 
Share-based compensation expense—  27,370  —  27,370  —  27,370  
Redeemable equity vested—  29,479  —  29,479  —  29,479  
Change in redeemable equity—  13,260  —  13,260  —  13,260  
Cash distributions to parent(24,317) (696,033) —  (720,350) —  (720,350) 
Non-cash distributions to parent—  (150,602) —  (150,602) —  (150,602) 
Balance at March 31, 2020—  1,257,356  (13,177) 1,244,179  8,618  1,252,797  
Net income attributable to CSC Holdings' sole member113,460  —  —  113,460  —  113,460  
Net loss attributable to noncontrolling interests—  —  —  —  213  213  
Pension liability adjustments, net of income taxes—  —  1,576  1,576  —  1,576  
Foreign currency translation adjustment—  —  (517) (517) —  (517) 
Share-based compensation expense—  33,683  —  33,683  —  33,683  
Redeemable equity vested—  59,081  —  59,081  —  59,081  
Change in redeemable equity—  (8,764) —  (8,764) —  (8,764) 
Cash distributions to parent(105,980) (546,403) —  (652,383) —  (652,383) 
Non-cash contributions from parent—  35,415  —  35,415  —  35,415  
Balance at June 30, 2020$7,480  $830,368  $(12,118) $825,730  $8,831  $834,561  

See accompanying notes to consolidated financial statements.
18


CSC HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL MEMBER'S EQUITY (continued)
(In thousands)
(Unaudited)


Retained EarningsOther Member's EquityAccumulated Other Comprehensive LossTotal Member's EquityNoncontrolling InterestsTotal Equity
Balance at January 1, 2019$549,691  $3,451,937  $(11,783) $3,989,845  $9,295  $3,999,140  
Net loss attributable to CSC Holdings' sole member(7,665) —  —  (7,665) —  (7,665) 
Net loss attributable to noncontrolling interests—  —  —  —  (199) (199) 
Distributions to noncontrolling interests—  —  —  —  (1,000) (1,000) 
Pension liability adjustments, net of income taxes—  —  3,752  3,752  —  3,752  
Foreign currency translation adjustment, net of income taxes—  —  (181) (181) —  (181) 
Share-based compensation expense—  13,790  —  13,790  —  13,790  
Redeemable equity vested—  1,364  —  1,364  —  1,364  
Change in redeemable equity—  (61,696) —  (61,696) —  (61,696) 
Cash distributions to parent(543,217) (51,245) —  (594,462) —  (594,462) 
Other—  (276) —  (276) —  (276) 
Balance at March 31, 2019(1,191) 3,353,874  (8,212) 3,344,471  8,096  3,352,567  
Net income attributable to CSC Holdings' sole member104,099  —  —  104,099  —  104,099  
Net income attributable to noncontrolling interests—  —  —  —  43  43  
Pension liability adjustments, net of income taxes—  —  (6,019) (6,019) —  (6,019) 
Foreign currency translation adjustment, net of income taxes—  —  (243) (243) —  (243) 
Share-based compensation expense—  16,077  —  16,077  —  16,077  
Redeemable equity vested—  61,702  —  61,702  —  61,702  
Change in redeemable equity—  (46,294) —  (46,294) —  (46,294) 
Cash distributions to parent(90,324) (544,704) —  (635,028) —  (635,028) 
Impact of Cheddar acquisition—  10,773  —  10,773  —  10,773  
Other—  244  —  244  —  244  
Balance at June 30, 2019$12,584  $2,851,672  $(14,474) $2,849,782  $8,139  $2,857,921  


See accompanying notes to consolidated financial statements.
19


CSC HOLDINGS LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


Six Months Ended June 30,
 20202019
Cash flows from operating activities:
Net income$123,795  $96,278  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including impairments)1,069,363  1,130,048  
Non-cash restructuring charges2,383  10,014  
Loss (gain) on investments and sale of affiliate interests, net258,223  (357,871) 
Loss (gain) on derivative contracts, net(287,800) 226,653  
Loss on extinguishment of debt and write-off of deferred financing costs—  159,096  
Amortization of deferred financing costs and discounts (premiums) on indebtedness48,217  44,751  
Settlement loss related to pension plan773  538  
Share-based compensation expense related to equity classified awards61,053  29,867  
Deferred income taxes156,077  33,183  
Decrease in right-of-use assets23,071  23,147  
Provision for doubtful accounts41,857  34,814  
Change in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade27,522  1,804  
Other receivables—  2,740  
Prepaid expenses and other assets(9,239) (72,638) 
Amounts due from and due to affiliates(114,290) (13,668) 
Accounts payable10,256  18,349  
Accrued liabilities(12,794) (98,673) 
Deferred revenue(17,302) 12,022  
Liabilities related to interest rate swap contracts148,013  41,322  
Net cash provided by operating activities1,529,178  1,321,776  
Cash flows from investing activities: 
Capital expenditures(527,805) (657,253) 
Payment for acquisitions, net of cash acquired—  (172,659) 
Proceeds related to sale of equipment and costs of disposal(1,846) 898  
Decrease in other investments3,662  —  
Additions to other intangible assets(237) (867) 
Net cash used in investing activities(526,226) (829,881) 
See accompanying notes to consolidated financial statements.
20

CSC HOLDINGS LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)

Six Months Ended June 30,
20202019
Cash flows from financing activities:
Proceeds from credit facility debt, net of discounts$200,000  $1,940,000  
Repayment of credit facility debt(228,875) (602,830) 
Issuance of senior notes, including premiums1,725,000  1,754,375  
Redemption of senior notes, including premiums and fees—  (2,462,692) 
Distributions to parent(1,372,733) (1,229,489) 
Proceeds from notes payable—  39,856  
Repayment of notes payable(48,239) (74,061) 
Principal payments on finance lease obligations(11,935) (3,273) 
Additions to deferred financing costs(5,894) (12,488) 
Contingent payment for acquisition(4,947) (500) 
Distributions to noncontrolling interests, net—  (1,000) 
Net cash provided by (used in) financing activities252,377  (652,102) 
Net increase (decrease) in cash and cash equivalents excluding effect of exchange rate changes1,255,329  (160,207) 
Effect of exchange rate changes on cash and cash equivalents(940) (580) 
Net increase (decrease) in cash and cash equivalents1,254,389  (160,787) 
Cash, cash equivalents and restricted cash at beginning of year698,003  298,784  
Cash, cash equivalents and restricted cash at end of period$1,952,392  $137,997  

See accompanying notes to consolidated financial statements.

21

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" or the "Company") was incorporated in Delaware on September 14, 2015. Through June 8, 2018, the CompanyAltice USA was majority-owned by Altice Europe N.V. ("Altice Europe"), a public company with limited liability (naamloze vennootshcap)vennootschap) under Dutch law. On June 8, 2018, Altice Europe distributed substantially all of its equity interest in the Company through a distribution in kind to holders of Altice Europe's common shares A and common shares B (the “Distribution”"Distribution"). The CompanyAltice USA is now majority-owned by Patrick Drahi through Next Alt. S.a.r.l. ("Next Alt").
The CompanyAltice USA is a holding company that does not conduct any business operations of its own. Altice Europe, through a subsidiary, acquired Cequel Corporation ("Cequel" or "Suddenlink") on December 21, 2015 and Cequel was contributed to Altice USA on June 9, 2016. Altice USA acquired Cablevision Systems Corporation ("Cablevision" or "Optimum") on June 21, 2016.
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"), principally provides broadband communications and video services in the United States andStates. It markets its residential services primarily under two brands: Optimum, in the New York metropolitan area, and Suddenlink, principally in markets in the south-central United States. It operates enterprise services under the brands Lightpath and Altice Business. It delivers broadband, video, telephony services, proprietary content and advertising services to residential and business customers. In September 2019, the Company launched Altice Mobile, a full service voice and data offering, to consumers across its footprint. As these brands are managed on a consolidated basis, the Company classifies its operations in 1 segment.
The accompanying combined consolidated financial statements ("consolidated financial statements")of Altice USA include the accounts of Altice USA and its majority-owned subsidiaries and the Companyaccompanying consolidated financial statements of CSC Holdings include the accounts of CSC Holdings and allits majority-owned subsidiaries in which the Company has a controlling interest and gives effect to the ATS Acquisition and the i24 Acquisition discussed below. All significant inter-company accountsAltice USA has no business operations independent of its CSC Holdings subsidiary, whose operating results and transactions have been eliminated in consolidation.
Acquisitionfinancial position are consolidated into Altice USA. The consolidated balance sheets and statements of Altice Technical Services US Corp
Altice Technical Services US Corp. ("ATS") was formed to provide network construction and maintenance services and commercial and residential installations, disconnections, and maintenance. During the second quarter of 2017, a substantial portion of the Company's technical workforce at Cablevision, a wholly-owned subsidiaryoperations of Altice USA either accepted employment with ATS or became employees of ATS and ATS commenced operations and began to perform services for the Company. A substantial portion of the Cequel technical workforce became employees of ATS in December 2017. Additionally, in the second quarter of 2017, the Company entered into an Independent Contractor Agreement with ATS that governed the terms of the services providedare essentially identical to the Companyconsolidated balance sheets and entered into a Transition Services Agreement forstatements of operations of CSC Holdings, with the use of the Company's resourcesfollowing exceptions: Altice USA has additional cash and deferred taxes on its consolidated balance sheet. In addition, CSC Holdings and its subsidiaries have certain intercompany receivables from and payables to provide various overhead functions to ATS, including accounting, legal and human resources and for the use of certain facilities, vehicles and technician tools during a transitional period. The Transition Services Agreement required ATS to reimburse the Company for its cost to provide such services.
In January 2018, the Company acquired 70% of the equity interests in ATS for $1.00 (the "ATS Acquisition") and the Company became the owner of 100% of the equity interests in ATS in March 2018. ATS was previously owned by Altice Europe and a member of ATS's management through a holding company. As the acquisition is a combination of businesses under common control, the Company combined theUSA. Differences between Altice USA's results of operations and related assets and liabilitiesthose of ATS for all periods since its formation. In connection with the ATS Acquisition, the Company recorded goodwill of $23,101, representing the amount previously transferred to ATS.
Acquisition of i24NEWS
In April 2018, Altice Europe transferred its ownership of i24 US and i24 Europe ("i24NEWS"), Altice Europe's 24/7 international news and current affairs channels to the Company for minimal consideration (the "i24 Acquisition"). As the acquisition was a combination of businesses under common control, the Company combined the results of operations and related assets and liabilities of i24NEWS as of April 1, 2018. Operating resultsCSC Holdings primarily include incremental interest expense for periods prior to April 1, 2018 havethe assumption of Cablevision senior notes by CSC Holdings in November 2019, loss (gain) on investments and sale of affiliate interests, net, and income tax benefit (expense).
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 or 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 been revised to reflect the i24 Acquisition as the impact was deemed immaterial.
Altice Europe Distribution
On June 8, 2018, Altice Europe distributed substantially all of its equity interesteliminated in the Company through a distribution in kind to holders of Altice Europe's common shares A and common shares B (the “Distribution”). The Distribution took place by way of a special distribution in kind by Altice Europe of its 67.2% interestCSC Holdings consolidated financial statements, but are eliminated in the Company to Altice Europe shareholders. Each shareholderUSA consolidated financial statements.
The financial statements of Altice Europe on May 23, 2018, the Distribution record date, received 0.4163 shares

CSC Holdings are included herein as supplemental information as CSC Holdings is not an SEC registrant.
15
22


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



of the Company's common stock for every share held by such shareholder in Altice Europe.
Prior to Altice Europe's announcement of the Distribution, the Board of Directors of Altice USA, acting through its independent directors, approved the payment of a $2.035 dividend to all shareholders of record on May 22, 2018. The payment of the dividend, aggregating $1,499,935, was made on June 6, 2018, and was funded with cash at CSC Holdings LLC, a wholly-owned subsidiary of Cablevision, from financings completed in January 2018, and cash generated from operations. In connection with the payment of the dividend, the Company recorded a decrease in retained earnings of $536,224, representing the cumulative earnings through the payment date, and a decrease in paid in capital of $963,711.
In connection with the Distribution, the Management Advisory and Consulting Services Agreement with Altice Europe which provided certain consulting, advisory and other services was terminated. See Note 15 for further details.
Stock Repurchase Plan
In June 2018, the Board of Directors of Altice USA also authorized a share repurchase program of $2.0 billion$2,000,000, and on July 30, 2019, the Board of Directors authorized a new incremental three-year share repurchase program of $5.0 billion$5,000,000 that took effect following the completion in August 2019 of the $2.0 billion$2,000,000 repurchase program. Under these repurchase programs, shares of Altice USA Class A common stock may be purchased from time to time in the open market and may include trading plans entered into with one or more brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Size and timing of these purchases will be determined based on market conditions and other factors.  
DuringFor the ninesix months ended SeptemberJune 30, 2019, the Company2020, Altice USA repurchased 72,668,712an aggregate of 56,956,374 shares for a total purchase price of approximately $1,686,873.$1,381,235. From inception through SeptemberJune 30, 2019, the Company2020, Altice USA repurchased an aggregate of 100,697,392157,653,766 shares for a total purchase price of approximately $2,186,874.$3,568,109. These acquired shares were retired and the cost forof these shares was recorded in paid in capital in the Company'sAltice USA's consolidated balance sheet.  As of SeptemberJune 30, 2019, the Company2020, Altice USA had approximately $4,813,126$3,431,891 of availability remaining under the incremental share repurchase program and had 636,827,486579,790,385 combined Class A and Class B shares outstanding.
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, 2018.2019.
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, 2019.2020.
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 revenue and expenses during the reporting period.  Actual results could differ from those estimates. See Note 12 for a discussion of fair value estimates.
Common Stock of Altice USA
The following table provides details of Altice USA's shares of common stock outstanding:
 Shares of Common Stock Outstanding
 Class A
Common Stock		Class B
Common Stock
Balance at December 31, 2019446,749,307  186,245,832  
Conversion of Class B common stock to Class A common stock51,475  (51,475) 
Shares issued in connection with stock option exercises209,105  —  
Retirement of Class A common shares in connection with the Company's stock
repurchase plan (see Note 1)
(56,956,374) —  
Shares issued from treasury upon vesting of redeemable equity and restricted awards3,542,515  —  
Balance at June 30, 2020393,596,028  186,194,357  
Reclassifications
Certain reclassifications have been made to the 20182019 financial statements to conform to the 20192020 presentation.

23
16


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 PRONOUNCEMENTS
Recently Issued But Not Yet Adopted Accounting Pronouncements
ASU No. 2018-14, Changes to2020-04, Facilitation of the Disclosure Requirements for Defined Benefit PlansEffects of Reference Rate Reform on Financial Reporting ("ASU 2018-14"2020-04")
In August 2018,March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-14, Changesnew accounting guidance related to the Disclosure Requirements for Defined Benefit Plans, which amends ASC 715 to clarify certain disclosure requirements related to defined benefit pension and other postretirement plans. ASU 2018-14 becomeseffects of reference rate reform on financial reporting. The guidance, effective for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., LIBOR) with a new alternative reference rate. The Company adopted the guidance as of March 31, 2020. The adoption of this guidance did not have an impact on the Company's consolidated financial statements.
ASU No. 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12")
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740). ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions for investments, intraperiod allocations and interim calculations. The new guidance also simplifies aspects of the accounting for franchise taxes, enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The amendments did not create new accounting requirements. The Company onadopted the standard as of January 1, 2021, although early adoption is permitted.2020. The Company does not expect the adoption of ASU 2018-14 tothis standard did not have a materialsignificant impact on itsthe Company's consolidated financial statements.
ASU No. 2018-15, Customer’s Accounting for Implementation Costs in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15")
In August 2018, the FASB issued ASU 2018-15 Customer’s Accounting for Implementation Costs in a Cloud Computing Arrangement That is a Service Contract, which requires upfront implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract to be amortized to hosting expense over the term of the arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-15 becomes effective forThe Company adopted the Company onstandard as of January 1, 2020, although early adoption is permitted.2020. The Company is currently in the process of evaluating the impact that the adoption of ASU 2018-15 willthis standard did not have a significant impact on itsthe Company's consolidated financial statements.
ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350) ("ASU 2017-04")
In January 2017, the FASB issued ASU No. 2017-04 Intangibles-Goodwill and Other (Topic 350). ASU 2017-04which simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 becomes effective forThe Company adopted the Company onstandard as of January 1, 2020 with early2020. The adoption permitted and will be applied prospectively.of this standard did not have an impact on the Company's consolidated financial statements.
ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13")
In June 2016, the FASB issued ASU No. 2016-13 Measurement of Credit Losses on Financial Instruments. ASU No.2016-13which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be assessed for impairment under the current expected credit loss model rather than an incurred loss model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.  ASU 2016-13 became effective for the Company on January 1, 2020 and the adoption of this standard did not have a significant impact on the Company's consolidated financial statements. The Company will continue to actively monitor the impact of the recent coronavirus (COVID-19) pandemic on expected credit losses.
Recently Issued But Not Yet Adopted Accounting Pronouncements
ASU No. 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14")
In August 2018, the FASB issued ASU 2018-14 which amends ASC 715 to clarify certain disclosure requirements related to defined benefit pension and other postretirement plans. ASU 2018-14 becomes effective for the Company on January 1, 2020. Early2021, although early adoption is permitted. The Company is currently in the process of evaluating the impact thatdoes not expect the adoption of ASU No. 2016-13 will2018-14 to have a material impact on its consolidated financial statements.
24
NOTE 4.    NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO STOCKHOLDERS
Basic net income (loss) per common share attributable to Altice USA stockholders is computed by dividing net income (loss) 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 and restricted stock. For such awards that are performance based, the diluted effect is reflected upon the achievement of the performance criteria.

17


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



The following table presents a reconciliation of weighted average shares used in the calculations of the basic and diluted income per share attributable to Altice USA stockholders:
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
 (in thousands)
Basic weighted average shares outstanding643,797
 732,963
 668,929
 735,685
Effect of dilution:       
Stock options2,201
 —
 923
 —
Restricted stock8
 —
 3
 —
Diluted weighted average shares outstanding646,006
 732,963
 669,855
 735,685

For the three and nine months ended September 30, 2019, the weighted average common stock equivalents of approximately 2,018,000 and 4,882,000 shares, respectively, have been excluded from diluted weighted average shares outstanding as they are anti-dilutive.  In addition, approximately 57,000 performance based options for the three months and nine months ended September 30, 2019, issued pursuant to the Company's employee stock plan have also been excluded from the diluted weighted average shares outstanding as the performance criteria on these awards had not yet been satisfied for the respective periods.
For the three months ended September 30, 2018, the weighted average common stock equivalents of approximately 5,841,000 shares have been excluded from diluted weighted average shares outstanding as they are anti-dilutive. In addition, approximately 73,000 performance based options for the three months ended September 30, 2018, issued pursuant to the Company's employee stock plan have also been excluded from the diluted weighted average shares outstanding as the performance criteria on these awards had not yet been satisfied for the respective period.
NOTE 5.4. REVENUE AND CONTRACT ASSETS
The following table presents the composition of revenue:
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Residential:       
Video$993,158
 $1,054,667
 $3,028,914
 $3,122,779
Broadband814,328
 729,907
 2,396,151
 2,143,730
Telephony148,231
 161,351
 452,927
 490,888
Business services and wholesale357,628
 344,193
 1,066,123
 1,014,671
News and advertising118,067
 123,913
 327,255
 323,992
Mobile3,174
 —
 3,174
 —
Other4,076
 3,770
 11,766
 15,608
Total revenue$2,438,662
 $2,417,801
 $7,286,310
 $7,111,668

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Residential:
Broadband$920,363  $806,250  $1,805,892  $1,581,823  
Video952,526  1,018,426  1,899,587  2,035,756  
Telephony117,322  150,232  242,352  304,696  
Business services and wholesale365,564  357,806  730,094  708,495  
News and advertising96,631  114,450  202,171  209,188  
Mobile19,866  —  38,222  —  
Other2,707  3,917  6,917  7,690  
Total revenue$2,474,979  $2,451,081  $4,925,235  $4,847,648  
The Company is assessed non-income related taxes by governmental authorities, including franchising authorities (generally under multi-year agreements), and collects such taxes from its customers.  In instances where the tax is being assessed directly on the Company, 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 and ninesix months ended SeptemberJune 30, 2020 and 2019, the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $63,539$65,280 and $191,695,$130,190, and $63,920 and $128,156, respectively. For the three and nine months ended September 30, 2018 the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $63,703 and $190,895, respectively.

18


ALTICE USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



Contract Assets
The following table provides information about contracts assetscustomer contract costs and contract liabilitiesdeferred revenue related to contracts with customers:
June 30, 2020December 31, 2019
Customer contract costs (a)$21,724  $30,758  
Deferred revenue (b)164,732  182,034  
 September 30, 2019 December 31, 2018
Contract assets (a)$29,810
 $26,405
Deferred revenue (b)162,398
 190,056

(a)Contract assets include primarily sales commissions for enterprise customers that are deferred and amortized over the average contract term.
(b)Deferred revenue represents payments received from customers for services that have yet to be provided and installation revenue which is deferred and recognized over the benefit period. A significant portion of the Company's deferred revenue represents payments for services for up to one month in advance from residential and small and medium-sized business ("SMB") customers which is realized within the following month as services are performed.
(a)Customer contract costs include primarily sales commissions for business services enterprise customers that are deferred and amortized over the average contract term.
(b)Deferred revenue represents payments received from customers for services that have yet to be provided and installation revenue which is deferred and recognized over the benefit period. A portion of the Company's deferred revenue represents payments for services for up to one month in advance from residential and small and medium sized business ("SMB") customers which is realized within the following month as services are performed and the remaining portion is recognized over the contract period.
A significant portion of our revenue is derived from residential and SMB customer contracts which are month-to month. As such, the amount of revenue related to unsatisfied performance 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.
25

ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)


NOTE 5. NET INCOME PER SHARE
Basic net income 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 and restricted stock. For such awards that are performance based, the diluted effect is reflected upon the achievement of the performance criteria.
The following table presents a reconciliation of weighted average shares used in the calculations of the basic and diluted income per share attributable to Altice USA stockholders for the three and six months ended June 30, 2020 and 2019:
Three Months Ended
June 30, 2020		Six Months Ended
June 30, 2020		Three Months Ended
June 30, 2019		Six Months Ended
June 30, 2019
(in thousands)
Basic weighted average shares outstanding587,587  604,500  668,031  681,703  
Effect of dilution:
Stock options1,857  2,079  566  285  
Restricted stock22  18  51  26  
Diluted weighted average shares outstanding589,466  606,597  668,648  682,014  
Weighted average shares excluded from diluted weighted average shares outstanding:
Anti-dilutive shares28,514  24,362  1,292  6,350  
Performance stock units and restricted stock whose performance metrics have not been achieved.8,943  7,758  —  —  
Net income (loss) 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.
26

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
The Company's non-cash investing and financing activities and other supplemental data were as follows:
 Nine Months Ended September 30,
 2019 2018
Non-Cash Investing and Financing Activities:   
    
Property and equipment accrued but unpaid$206,842
 $166,800
Leasehold improvements paid by landlord—
 350
Notes payable issued to vendor for the purchase of equipment and other assets35,124
 49,780
Unsettled purchases of shares of Altice USA, Inc. Class A common stock, pursuant to a share repurchase program—
 13,996
Right-of-use assets acquired in exchange for finance lease obligations29,957
 8,162
Deferred financing costs accrued but unpaid1,236
 1,006
Contingent consideration for acquisitions—
 6,733
Receivable related to the sale of an investment—
 11,954
Supplemental Data:   
Cash interest paid1,170,785
 1,174,154
Income taxes paid, net6,457
 12,148
Six Months Ended June 30,
20202019
Non-Cash Investing and Financing Activities:
Altice USA and CSC Holdings:
Property and equipment accrued but unpaid$210,204  $245,692  
Notes payable issued to vendor for the purchase of equipment and other assets11,582  16,204  
Right-of-use assets acquired in exchange for finance lease obligations78,564  6,501  
Deferred financing costs accrued but unpaid1,644  853  
CSC Holdings:
Distributions to parent115,187  —  

Supplemental Data:
Altice USA:
Cash interest paid673,222  763,819  
Income taxes paid, net28,406  6,247  
CSC Holdings:
Cash interest paid673,222  724,299  
Income taxes paid, net28,406  6,247  
NOTE 7. �� RESTRUCTURING AND OTHER EXPENSE
Restructuring
Beginning in the first quarter of 2016, the Company commenced restructuring initiatives that were intended to simplify the Company's organizational structure ("2016 Restructuring Plan").

The following table summarizes the activity for the 2016 Restructuring Plan:
Severance and Other Employee Related CostsFacility Realignment and Other CostsTotal
Accrual balance at December 31, 2019$1,676  $2,332  $4,008  
Restructuring charges—  2,059  2,059  
Payments and other(1,639) (1,813) (3,452) 
Accrual balance at June 30, 2020$37  $2,578  $2,615  

Cumulative costs to date relating to 2016 Restructuring Plan amounted to $436,984.
In May 2019, the Company commenced another restructuring initiative to further simplify the Company's organization structure ("2019 Restructuring Plan").
19
27


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



The following table summarizes the activity for the 2016 Restructuring Plan:  
 Severance and Other Employee Related Costs Facility Realignment and Other Costs Total
Accrual balance at December 31, 2018$21,454
 $13,615
 $35,069
Restructuring charges6,562
 5,652
 12,214
Payments and other(24,941) (2,783) (27,724)
Impact of the adoption of ASC 842 (a)—
 (13,849) (13,849)
Accrual balance at September 30, 2019$3,075
 $2,635
 $5,710
(a)The following table summarizes the activity for the 2019 Restructuring Plan:Certain accrued restructuring liabilities were netted against right-of-use operating assets on the Company's consolidated
Severance and Other Employee Related Costs
Accrual balance sheet as of January 1,at December 31, 2019 in connection with the Company's adoption of ASC 842 (see Note 8).$37,946 
Restructuring charges3,180 
Payments and other(18,186)
Accrual balance at June 30, 2020$22,940 
In addition,Cumulative costs to date relating to the 2019 Restructuring Plan amounted to $45,895.
Restructuring and other expense for the three and ninesix months ended SeptemberJune 30, 2019,2020 also includes $40,128 related to contractual payments for terminated employees. As of June 30, 2020, the outstanding amount due to terminated employees amounted to $29,735 and is reflected in accrued employee related costs in our consolidated balance sheet.
In addition, the Company recorded restructuring charges of $73$611 and $8,769,$2,316 for the three and six months ended June 30, 2020, and $147 and $8,696, for the three and six months ended June 30, 2019, respectively, related primarily to the impairment of right-of-use operating lease assets, included in the Company's restructuring initiatives, as their carrying amount was not recoverable and exceeded their fair value.
Cumulative costs to date relating to the 2016 Restructuring Plan amounted to $428,509.
In May 2019, the Company commenced another restructuring initiative to further simplify the Company's organization structure ("2019 Restructuring Plan").
The following table summarizes the activity for the 2019 Restructuring Plan: 
 Severance and Other Employee Related Costs
Restructuring charges$16,150
Payments and other(636)
Accrual balance at September 30, 2019$15,514

Transaction Costs
The Company recorded costs of $987 and $1,957 duringFor the three and ninesix months ended SeptemberJune 30, 2019,2020, the Company incurred transaction costs of $88 and $577, respectively, primarily related to certain transactions not related to the Company's operations. The Company incurredrecorded transaction costs of $1,920$574 and $7,682$970 for the three and ninesix months ended SeptemberJune 30, 2018 relating2019, respectively, primarily related to costs incurred in connection with the Distribution discussed in Note 1.Company's acquisition of Cheddar, Inc.
NOTE 8. LEASES
On January 1, 2019, the Company adopted FASB Accounting Standards Codification ("ASC"), Topic 842, Leases ("ASC 842"), which increases transparency and comparability by recognizing a lessee’s rights and obligations resulting from leases by recording them on the balance sheet as lease assets and lease liabilities. The new guidance requires the recognition of the right-of-use ("ROU") assets and related operating and finance lease liabilities on the balance sheet. The Company adopted the new guidance using the modified retrospective approach with a cumulative-effect adjustment recorded on January 1, 2019. As a result, the consolidated balance sheet as of December 31, 2018 was not restated and is not comparative.
The adoption of ASC 842 resulted in the recognition of ROU assets of $274,292 and lease liabilities forCompany's operating leases are comprised primarily of $299,900 onfacility leases and its finance leases are comprised primarily of vehicle and equipment leases.
Balance sheet information related to the Company's consolidated balance sheet as of January 1, 2019, with no material impact to its consolidated statements of operations. The difference between the ROU assets and the operating lease liability represents the reclassification of (i) deferred rent balances, resulting from the historical operating leases and (ii) certain accrued restructuring liabilities (See Note 7). The Company's accounting for finance leases remained substantially unchanged from its accounting for capital leases in prior periods.is presented below:

Balance Sheet locationJune 30, 2020December 31, 2019
Operating leases:
Right-of-use lease assetsRight-of-use operating lease assets$270,592  $280,340  
Right-of-use lease liability, currentOther current liabilities40,440  38,836  
Right-of-use lease liability, long-termRight-of-use operating lease liability259,297�� 269,062  
Finance leases:
Right-of-use lease assetsProperty, plant and equipment137,370  70,339  
Right-of-use lease liability, currentCurrent portion of long-term debt49,478  22,017  
Right-of-use lease liability, long-termLong-term debt86,571  47,403  
20
28


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



The Company elected the package of practical expedients permitted within the standard, which allow an entity to forgo reassessing (i) whether a contract contains a lease, (ii) classification of leases, and (iii) whether capitalized costs associated with a lease meet the definition of initial direct costs. Also, the Company elected the expedient allowing an entity to use hindsight to determine the lease term and impairment of ROU assets and the expedient related to land easements which allows the Company not to retrospectively treat land easements as leases; however, the Company must apply lease accounting prospectively to land easements if they meet the definition of a lease.
For contracts entered into on or after the effective date, at the inception of a contract the Company will assess whether the contract is, or contains, a lease. The Company's assessment is based on: (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtained the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019, are accounted for under ASC 840 and were not reassessed for classification.
For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments. For finance leases, the lease liability is initially measured in the same manner and date as for operating leases, and is subsequently measured at amortized cost using the effective interest method. The Company generally uses its incremental borrowing rate as the discount rate for leases, unless an interest rate is implicitly stated in the lease. The lease term for all of the Company’s leases includes the noncancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. All ROU assets are reviewed for impairment.
Lease expense for operating leases consists of the lease payments plus any initial direct costs and is recognized on a straight-line basis over the lease term. Lease expense for finance leases consists of the amortization of the asset on a straight-line basis over the earlier of the lease term or its useful life and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense.
The Company's operating leases are comprised primarily of facility leases and finance leases are comprised primarily of vehicle leases.
Balance sheet information related to our leases is presented below:
 Balance Sheet location September 30, 2019 January 1, 2019 December 31, 2018
Operating leases:       
Right-of-use lease assetsRight-of-use operating lease assets $282,746
 $274,292
 $—
Right-of-use lease liability, currentOther current liabilities 38,104
 48,033
 —
Right-of-use lease liability, long-termRight-of-use operating lease liability 270,564
 251,867
 —
Finance leases:       
Right-of-use lease assetsProperty, plant and equipment 49,380
 30,891
 30,891
Right-of-use lease liability, currentCurrent portion of long-term debt 12,117
 5,928
 5,928
Right-of-use lease liability, long-termLong-term debt 34,972
 19,262
 19,262


The following provides details of the Company's lease expense:
 Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
Operating lease expense, net$15,038
 $45,264
Finance lease expense:   
Amortization of assets2,538
 5,730
Interest on lease liabilities520
 1,266
Total finance lease expense3,058
 6,996
 $18,096
 $52,260


21


ALTICE USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Operating lease expense, net$14,849  $14,948  $29,853  $30,226  

Finance lease expense:
Amortization of assets6,960  1,630  11,420  3,192  
Interest on lease liabilities1,477  388  2,504  746  
Total finance lease expense8,437  $2,018  13,924  3,938  
$23,286  $16,966  $43,777  $34,164  
Other information related to leases is presented below:
 
As of
September 30, 2019
Right-of-use assets acquired in exchange for operating lease obligations$47,232
  
Cash Paid For Amounts Included In Measurement of Liabilities: 
Operating cash flows from finance leases1,266
Operating cash flows from operating leases48,550
  
Weighted Average Remaining Lease Term: 
Operating leases9.5 years
Finance leases3.9 years
Weighted Average Discount Rate: 
Operating leases6.02%
Finance leases5.39%

As of June 30,
20202019
Right-of-use assets acquired in exchange for operating lease obligations$15,430  $43,441  
Cash Paid For Amounts Included In Measurement of Liabilities:
Operating cash flows related to finance leases2,504  746  
Operating cash flows related to operating leases32,126  32,481  
Weighted Average Remaining Lease Term:
Operating leases9.3 years9.6 years
Finance leases2.9 years4.6 years
Weighted Average Discount Rate:
Operating leases5.86 %6.06 %
Finance leases5.66 %5.86 %
The minimum future annual payments under non-cancellable leases during the next five years and thereafter, at rates now in force, are as follows:
Finance leasesOperating leases
2020 (excluding the six months ended June 30, 2020)$30,527  $27,389  
202150,543  43,615  
202246,298  49,668  
202315,501  39,694  
20243,413  35,261  
Thereafter300  200,665  
Total future minimum lease payments, undiscounted146,582  396,292  
Less: Imputed interest(10,533) (96,555) 
Present value of future minimum lease payments$136,049  $299,737  
 Financing leases Operating leases
2019 (excluding the nine months ended September 30, 2019)$3,069
 $11,702
202015,100
 51,110
202113,780
 46,026
202210,796
 47,496
20235,788
 37,376
Thereafter3,626
 219,862
Total future minimum lease payments, undiscounted52,159
 413,572
Less: Imputed interest(5,070) (104,904)
Present value of future minimum lease payments$47,089
 $308,668

The following table presents the Company’s unadjusted lease commitments as of December 31, 2018 as a required disclosure for companies adopting the lease standard prospectively without revising comparative period information.
29
 Financing leases Operating leases
2019$5,928
 $47,905
20205,087
 50,356
20213,969
 43,362
20224,146
 34,882
20233,828
 25,234
Thereafter2,232
 167,941


22


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



NOTE 9. INTANGIBLE ASSETS
The following table summarizes information relating to the Company's acquired amortizable intangible assets: 
 As of September 30, 2019 As of December 31, 2018  
 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Estimated Useful Lives
Customer relationships$6,017,524
 $(2,676,816) $3,340,708
 $5,970,884
 $(2,162,110) $3,808,774
 8 to 18 years
Trade names1,081,083
 (773,716) 307,367
 1,067,083
 (701,998) 365,085
 2 to 5 years
Other amortizable intangibles53,390
 (25,511) 27,879
 37,644
 (18,679) 18,965
 1 to 15 years
 $7,151,997
 $(3,476,043) $3,675,954
 $7,075,611
 $(2,882,787) $4,192,824
  

As of June 30, 2020As of December 31, 2019
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying AmountEstimated Useful Lives
Customer relationships$6,017,524  $(3,174,454) $2,843,070  $6,017,524  $(2,843,561) $3,173,963  8 to 18 years
Trade names1,081,083  (846,929) 234,154  1,081,083  (798,484) 282,599  2 to 5 years
Other amortizable intangibles53,418  (33,426) 19,992  53,181  (28,634) 24,547  1 to 15 years
$7,152,025  $(4,054,809) $3,097,216  $7,151,788  $(3,670,679) $3,481,109  
Amortization expense for the three and ninesix months ended SeptemberJune 30, 2020 and 2019 aggregated to $191,358$183,031 and $593,256, respectively,$384,130 and for the three$201,279 and nine months ended September 30, 2018 aggregated $208,172 and $666,041,$401,898, respectively.
The carrying amount of goodwill is presented below:
30
Goodwill as of December 31, 2018$8,012,416
Goodwill recorded in connection with the acquisition of Cheddar Inc.126,241
Adjustments to purchase accounting(146)
Goodwill as of September 30, 2019$8,138,511

In June 2019, the Company completed the acquisition of Cheddar Inc., a digital-first news company, for approximately$200,000 in cash and stock, subject to certain closing adjustments as set forth in the merger agreement. The acquisition was accounted for as a business combination in accordance with ASC Topic 805. The preliminary purchase price of approximately $198,588 was allocated to the identifiable tangible and intangible assets and liabilities of Cheddar based on preliminary fair value information currently available, which is subject to change within the measurement period (up to one year from the acquisition date). Based on the preliminary purchase price, the Company recorded goodwill of $126,241, customer relationships of $47,110, trade names of $14,000 and other amortizable intangible assets of $11,900.

23


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



NOTE 10. DEBT
The following table provides details of the Company's outstanding debt:
Interest RateJune 30, 2020December 31, 2019
Date IssuedMaturity DatePrincipal AmountCarrying Amount (a)Principal AmountCarrying Amount (a)
Senior Notes:
November 15, 2011November 15, 20216.750 %$1,000,000  $984,412  $1,000,000  $979,178  
September 27, 2012September 15, 20225.875 %649,024  608,861  649,024  600,849  
May 23, 2014June 1, 20245.250 %750,000  690,331  750,000  683,940  
October 18, 2018July 15, 20257.750 %(e)1,740  1,698  1,740  1,695  
October 9, 2015October 15, 202510.875 %1,684,221  1,666,435  1,684,221  1,665,237  
October 18, 2018April 1, 20287.500 %4,118  4,112  4,118  4,112  
November 27, 2018July 15, 20257.750 %(e)617,881  606,479  617,881  605,583  
November 27, 2018April 1, 20287.500 %1,045,882  1,044,349  1,045,882  1,044,278  
July 10 and October 7, 2019January 15, 20305.750 %2,250,000  2,287,660  2,250,000  2,289,168  
June 16, 2020December 1, 20304.625 %625,000  622,176  —  —  
Senior Guaranteed Notes:
October 9, 2015October 15, 20256.625 %1,000,000  990,233  1,000,000  989,483  
September 23, 2016April 15, 20275.500 %1,310,000  1,305,688  1,310,000  1,305,430  
January 29, 2018February 1, 20285.375 %1,000,000  993,116  1,000,000  992,757  
November 27, 2018July 15, 20235.375 %(e)1,095,825  1,083,676  1,095,825  1,081,879  
November 27, 2018May 15, 20265.500 %1,498,806  1,486,760  1,498,806  1,485,911  
January 24, 2019February 1, 20296.500 %1,750,000  1,747,118  1,750,000  1,746,996  
June 16, 2020December 1, 20304.125 %1,100,000  1,095,311  —  —  
17,382,497  17,218,415  15,657,497  15,476,496  
CSC Holdings Restricted Group:
Revolving Credit Facility(c)(c)(b)—  —  —  —  
Term Loan BJuly 17, 20252.435 %2,910,000  2,897,887  2,925,000  2,911,729  
Incremental Term Loan B-3January 15, 20262.435 %1,259,063  1,254,243  1,265,438  1,260,200  
Incremental Term Loan B-5April 15, 20272.685 %2,992,500  2,970,328  3,000,000  2,976,358  
7,161,563  7,122,458  7,190,438  7,148,287  
Collateralized indebtedness (see Note 11)1,699,566  1,601,107  1,699,566  1,585,088  
Finance lease obligations (see Note 8)136,049  136,049  69,420  69,420  
Notes payable and supply chain financing (d)119,889  107,658  156,519  140,994  
26,499,564  26,185,687  24,773,440  24,420,285  
Less: current portion of credit facility debt(72,750) (72,750) (65,250) (65,250) 
Less: current portion of senior guaranteed notes(1,095,825) (1,083,676) —  —  
Less: current portion of senior notes(619,621) (608,177) —  —  
Less: current portion of finance lease obligations(49,478) (49,478) (22,017) (22,017) 
Less: current portion of notes payable and supply chain financing(45,209) (45,209) (83,415) (83,415) 
(1,882,883) (1,859,290) (170,682) (170,682) 
Long-term debt$24,616,681  $24,326,397  $24,602,758  $24,249,603  
    Interest Rate at Sept. 30, 2019 September 30, 2019 December 31, 2018
Date Issued Maturity Date  Principal Amount Carrying Amount (a) Principal Amount Carrying Amount (a)
CSC Holdings Senior Notes:           
February 12, 2009 February 15, 2019 8.625% $—
 $—
 $526,000
 $527,749
November 15, 2011 November 15, 2021 6.750% 1,000,000
 976,610
 1,000,000
 969,285
May 23, 2014 June 1, 2024 5.250% 750,000
 680,800
 750,000
 671,829
October 9, 2015 January 15, 2023 10.125% —
 —
 1,800,000
 1,781,424
October 9, 2015 October 15, 2025 10.875% 1,684,221
 1,664,657
 1,684,221
 1,663,027
November 27, 2018 December 15, 2021 (g) 5.125% 1,240,762
 1,175,069
 1,240,762
 1,155,264
November 27, 2018 July 15, 2025 7.750% 617,881
 605,143
 617,881
 603,889
November 27, 2018 April 1, 2028 7.500% 1,045,882
 1,044,243
 1,045,882
 1,044,143
July 10, 2019 January 15, 2030 5.750% 1,000,000
 996,191
 —
 —
CSC Holdings Senior Guaranteed Notes:        
October 9, 2015 October 15, 2025 6.625% 1,000,000
 989,113
 1,000,000
 988,052
September 23, 2016 April 15, 2027 5.500% 1,310,000
 1,305,303
 1,310,000
 1,304,936
January 29, 2018 February 1, 2028 5.375% 1,000,000
 992,580
 1,000,000
 992,064
November 27, 2018 July 15, 2023 5.375% 1,095,825
 1,080,990
 1,095,825
 1,078,428
November 27, 2018 May 15, 2026 5.500% 1,498,806
 1,485,490
 1,498,806
 1,484,278
January 24, 2019 February 1, 2029 6.500% 1,750,000
 1,746,936
 —
 —
Cablevision Senior Notes (b):          
April 15, 2010 April 15, 2020 (h) 8.000% 500,000
 497,960
 500,000
 495,302
September 27, 2012 September 15, 2022 5.875% 649,024
 596,933
 649,024
 585,817
October 19, 2018 December 15, 2021 (e) 5.125% —
 —
 8,886
 8,274
October 19, 2018 July 15, 2025 7.750% 1,740
 1,694
 1,740
 1,690
October 19, 2018 April 1, 2028 7.500% 4,118
 4,112
 4,118
 4,110
  16,148,259
 15,843,824
 15,733,145
 15,359,561
CSC Holdings Credit Facility Debt (Restricted Group):        
Revolving Credit Facility (c) (d) —% —
 —
 250,000
 231,425
Term Loan B July 17, 2025 4.278% 2,932,500
 2,918,645
 2,955,000
 2,939,425
Incremental Term Loan B-2 January 25, 2026 (i) 4.528% 1,481,250
 1,466,136
 1,492,500
 1,475,778
Incremental Term Loan B-3 January 15, 2026 4.278% 1,268,625
 1,263,177
 1,275,000
 1,268,931
Incremental Term Loan B-4 April 15, 2027 (i) 5.028% 997,500
 984,372
 —
 —
 6,679,875
 6,632,330
 5,972,500
 5,915,559
Collateralized indebtedness (see Note 11)1,459,638
 1,423,519
 1,459,638
 1,406,182
Finance lease obligations (see Note 8)47,089
 47,089
 25,190
 25,190
Notes payable and supply chain financing (f)110,519
 110,519
 106,108
 106,108
 24,445,380
 24,057,281
 23,296,581
 22,812,600
Less: current portion of credit facility debt(57,750) (57,750) (54,563) (54,563)
Less: current portion of notes payable and supply chain financing(91,834) (91,834) (98,134) (98,134)
Less: current portion of finance lease obligations(12,117) (12,117) (5,928) (5,928)
  (161,701) (161,701) (158,625) (158,625)
Long-term debt$24,283,679
 $23,895,580
 $23,137,956
 $22,653,975
(a)The carrying amount is net of the unamortized deferred financing costs and/or discounts/premiums and with respect to certain notes, a fair value adjustment resulting from the Cequel and Cablevision acquisitions.

(b)At June 30, 2020, $141,949 of the revolving credit facility was restricted for certain letters of credit issued on behalf of
24
31


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



the Company and $2,333,051 of the facility was undrawn and available, subject to covenant limitations.
(a)The carrying amount is net of the unamortized deferred financing costs and/or discounts/premiums and with respect to certain notes, a fair value adjustment resulting from the Cequel and Cablevision acquisitions.
(b)The issuer of these notes has no ability to service interest or principal on the notes, other than through any dividends or distributions received from CSC Holdings. CSC Holdings is restricted, in certain circumstances, by the terms of the CSC Holdings credit facilities agreement from paying dividends or distributions to the issuer.
(c)At September 30, 2019, $178,014 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $2,296,986 of the facility was undrawn and available, subject to covenant limitations.
(d)(c)The revolving credit facility matures on January 31, 2024, however $200,000 matures on November 30, 2021.
(e)In July 2019, the Company redeemed $8,886 principal amount of these senior notes.
(f)Includes $65,854 related to supply chain financing agreements entered into in the second quarter of 2019 that is required to be repaid within one year from the date of the respective agreement.
(g)The notes were repaid subsequent to September 30, 2019 with proceeds from the issuance of an additional $1,250,000 aggregate principal amount of CSC Holdings 5.750% senior notes due 2030. See Note 17.
(h)The notes were repaid subsequent to September 30, 2019 with proceeds from borrowings under an incremental term loan. See Note 17. As a result of this transaction, the Company has reclassified these notes to long-term as of September 30, 2019.
(i)The term loan was repaid subsequent to September 30, 2019 with proceeds from borrowings under an incremental term loan. See Note 17.
In January 2019, CSC Holdings issued $1,500,000 in aggregate principal amount of senior guaranteed notes due 2029 ("CSC Holdings 2029 Guaranteed Notes"). The notes bear interest at a rate of 6.5% and will mature on February 1, 2029. The net proceeds from the sale of the notes were used to repay certain indebtedness, including to repay at maturity $526,000 aggregate principal amount of CSC Holdings' 8.625% senior notes due February 2019 plus accrued interest, redeem approximately $905,300 of the aggregate outstanding amount of CSC Holdings' 10.125% senior notes due 2023 at a redemption price of 107.594% plus accrued interest, and paid fees and expenses associated with the transactions. In connection with this refinancing, $526,000 of short-term senior notes were reclassified to long-term debt as of December 31, 2018.
In February 2019, CSC Holdings issued an additional $250,000 CSC Holdings 2029 Guaranteed Notes at a price of 101.75% of the principal value. The proceeds of these notes were used to repay amounts outstanding under the CSC Holdings Revolving Credit Facility.
In July 2019, CSC Holdings issued $1,000,000 in aggregate principal amount of senior notes which bear interest at a rate of 5.75% and will mature on January 15, 2030 ("2030 Senior Notes"). The net proceeds from the sale of the notes were used to repay outstanding borrowings under CSC Holdings' revolving credit facility of approximately $622,857, along with accrued interest and pay fees associated with the transactions. The remaining proceeds were used for general corporate purposes.
During the nine months ended September 30, 2019, CSC Holdings borrowed $1,050,000 under its revolving credit facility and repaid $1,300,000 of amounts outstanding under the revolving credit facility, a portion of which was funded from the proceeds of the issuance of an additional $250,000 principal amount of CSC Holdings 2029 Guaranteed Notes and the issuance of $1,000,000 principal amount of 2030 Senior Notes (see discussion above).
In January and May 2019, CSC Holdings amended its existing revolving credit facility. After the amendments, the total size of the revolving credit facility that the Company can draw upon as of September 30, 2019 amounted to $2,475,000, including $2,275,000 maturingmatures in January 2024 and priced at LIBOR plus 2.25%. The remaining revolving credit facility of an aggregate principal amount of $200,000 matures in November 2021 and is priced at LIBOR plus 3.25%. In connection
(d)Includes $37,581 related to supply chain financing agreements that is required to be repaid within one year from the date of the respective agreement. The principal amounts include $59,451 of notes payable that will be reclassified to collateralized indebtedness upon the maturity, in January 2021, of a monetization contract related to the synthetic monetization closeout transaction in November 2019.
(e)These notes were repaid in July 2020 with proceeds from the amendment entered intoissuance of new notes in May 2019,June 2020. See discussion below. Accordingly, the Company recorded a write-offcarrying amount of deferred financing coststhese notes was reclassified to current debt in the accompanying balance sheets as of $1,195.June 30, 2020.
In February 2019,June 2020, CSC Holdings entered into a $1,000,000 senior secured Term Loan B ("Incremental Term Loan B-4") maturing on April 15, 2027, the proceeds of which were used to redeem $894,700issued $1,100,000 in aggregate principal amount of CSC Holdings’ 10.125% Senior Notes due 2023, representing the entire aggregate principal amount outstanding, and paying related fees, costs and expenses. The Incremental Term Loan B-4 bearssenior guaranteed notes that bear interest at a rate per annum equalof 4.125% and mature on December 1, 2030 and $625,000 in aggregate principal amount of senior notes that bear interest at a rate of 4.625% and mature on December 1, 2030. The net proceeds from the sale of the these notes was used in July 2020 to LIBORearly redeem the $1,095,825 aggregate principal amount of CSC Holdings' 5.375% senior notes due July 15, 2023, the $617,881 and the $1,740 aggregate principal amount of CSC Holdings' 7.750% senior notes due July 15, 2025, plus pay accrued interest and the associated premiums related to the early redemption of these notes. In connection with the early redemptions, the Company will recognize a loss on the extinguishment of debt aggregating $62,096, reflecting the early redemption premiums and the write-off of outstanding deferred financing costs on these notes.

25


ALTICE USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except shareFor financing purposes, the Company is structured as a restricted group (the "Restricted Group") and per share amounts)
(Unaudited)



plus 3.0%an unrestricted group, which includes certain designated subsidiaries and was issued with an original issue discount of 1.0%investments (the "Unrestricted Group"). The Incremental Term Loan B-4 was repaid subsequentRestricted Group is comprised of CSC Holdings and substantially all of its wholly-owned operating subsidiaries. These subsidiaries are subject to September 30, 2019. See Note 17.the covenants and restrictions of the credit facility and indentures governing the notes issued by CSC Holdings. 
The CSC Credit Facilities AgreementHoldings' credit facilities agreement contains certain customary representations and warranties, affirmative covenants and events of default (including, among others, an event of default upon a change of control). If an event of default occurs, the lenders under the CSC Credit Facilitiescredit facilities will be entitled to take various actions, including the acceleration of amounts due under the CSC Credit Facilitiescredit facilities and all actions permitted to be taken by a secured creditor.
As of SeptemberJune 30, 2019, the Company2020, CSC Holdings was in compliance with all of its financial covenants under the CSC Holdings Credit Facilitiesits credit facilities and with all of its financial covenants under the indentures under which the senior and senior guaranteed notes were issued.
The following table provides a summary of the loss on extinguishment of debt and the write-off of deferred financing costs recorded by the Company upon the redemption of senior notes and the refinancing of credit facilities:
Three months ended
June 30, 2019		Six months ended June 30, 2019
CSC Holdings 10.125% Senior Notes due 2023$—  $154,666  
Refinancing and subsequent amendment to CSC Holdings credit facility1,194  4,430  
$1,194  $159,096  
 Three Months Ended Nine Months Ended
 September 30, 2019
    
Cablevision 5.125% Senior Notes due 2021$503
 $503
CSC Holdings 10.125% Senior Notes due 2023—
 154,666
Refinancing and subsequent amendment to CSC Holdings credit facility—
 4,430
 $503
 $159,599
    
 Three Months Ended Nine Months Ended
 September 30, 2018
Cablevision 7.75% Senior Notes due 2018$—
 $4,706
Cequel 6.375% Senior Notes due 2020—
 36,910
 $—
 $41,616
32

ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



Summary of Debt Maturities
The future maturities of debt payable by the Company under its various debt obligations outstanding as of SeptemberJune 30, 2019,2020, including notes payable and collateralized indebtedness (see Note 11), but excluding finance lease obligations (see Note 8), are as follows:
2020 (excluding the six months ended June 30, 2020) (a)$1,782,180  
20211,092,181  
2022728,667  
20231,835,383  
2024822,889  
Thereafter20,102,215  
2019 (excluding the nine months ended September 30, 2019)$30,848
2020645,864
20213,775,998
2022723,667
20231,167,190
Thereafter18,054,724
_____________________

(a)Includes the CSC Holdings notes redeemed in July 2020 discussed above.
The amounts in the table above do not include the effects of the debt transactions discussed in Note 17.
NOTE 11. DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS
Prepaid Forward Contracts
The Company has entered into various transactions to limit the exposure against equity price risk on its shares of Comcast Corporation ("Comcast") common stock.  The Company has monetized all of its stock holdings in Comcast through the execution of prepaid forward contracts, collateralized by an equivalent amount of the respective underlying stock.  At maturity, the contracts provide for the option to deliver cash or shares of Comcast stock with a value determined by reference to the applicable stock price at maturity.  These contracts, at maturity, are expected to offset declines in the

26


ALTICE USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



fair value of these securities below the hedge price per share while allowing the Company to retain upside appreciation from the hedge price per share to the relevant cap price.  
The Company received cash proceeds upon execution of the prepaid forward contracts discussed above which has been reflected as collateralized indebtedness in the accompanying consolidated balance sheets.  In addition, the Company separately accounts for the equity derivative component of the prepaid forward contracts.  These equity derivatives have not been designated as hedges for accounting purposes.  Therefore, the net fair values of the equity derivatives have been reflected in the accompanying consolidated balance sheets as an asset or liability and the net increases or decreases in the fair value of the equity derivative component of the prepaid forward contracts are included in gain (loss) on derivative contracts in the accompanying consolidated statements of operations.
All of the Company's monetization transactions are obligations of its wholly-owned subsidiaries that are not part of the Restricted Group; however, CSC Holdings has provided guarantees of the subsidiaries' ongoing contract payment expense obligations and potential payments that could be due as a result of an early termination event (as defined in the agreements).  If any one of these contracts werewas terminated prior to its scheduled maturity date, the Company would be obligated to repay the fair value of the collateralized indebtedness less the sum of the fair values of the underlying stock and equity collar, calculated at the termination date.  As of SeptemberJune 30, 2019,2020, the Company did not have an early termination shortfall relating to any of these contracts.
The Company monitors the financial institutions that are counterparties to its equity derivative contracts.  All of the counterparties to such transactions carry investment grade credit ratings as of SeptemberJune 30, 2019.2020.
Interest Rate Swap Contracts
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 the Company 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,sheet, with changes in fair value reflected in the consolidated statementsstatement of operations. As of SeptemberJune 30, 2019,2020, the Company did not hold and has not issued derivative instruments for trading or speculative purposes.
33

ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)


The following represents the location of the assets and liabilities associated with the Company's derivative instruments within the consolidated balance sheets:
Derivatives Not Designated as Hedging Instruments Balance Sheet Location Fair Value at
  September 30, 2019 December 31, 2018
       
Asset Derivatives:      
Interest rate swap contracts Derivative contracts, current $—
 $1,975
Interest rate swap contracts Derivative contracts, long-term 2,634
 —
Prepaid forward contracts Derivative contracts, long-term —
 109,344
    2,634
 111,319
Liability Derivatives:      
Interest rate swap contracts Other current liabilities (674) (70)
Prepaid forward contracts Liabilities under derivative contracts, long-term (194,643) —
Interest rate swap contracts Liabilities under derivative contracts, long-term (182,970) (132,908)
    $(378,287) $(132,978)

Derivatives Not Designated as Hedging InstrumentsBalance Sheet LocationFair Value at
June 30, 2020December 31, 2019
Asset Derivatives:
Interest rate swap contractsDerivative contracts, long-term$4,058  $—  
Prepaid forward contractsDerivative contracts, long-term221,733  25,207  
225,791  25,207  
Liability Derivatives:
Interest rate swap contractsOther current liabilities(4,016) (469) 
Prepaid forward contractsLiabilities under derivative contracts, long-term(3,520) (94,795)��
Interest rate swap contractsLiabilities under derivative contracts, long-term(309,396) (160,871) 
 $(316,932) $(256,135) 
The following table presents certain statement of operations data related to our derivative contracts and the underlying common stock:

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Gain (loss) on derivative contracts related to change in the value of equity derivative contracts related to Comcast common stock$(152,061) $(49,624) $287,800  $(226,653) 
Change in the fair value of Comcast common stock included in gain (loss) on investments197,594  98,794  (257,302) 353,519  
Loss on interest rate swap contracts, net of a gain of $74,835 recorded in the 2020 six month period in connection with the early termination of the swap agreements discussed below(33,735) (26,900) (88,567) (50,572) 
In March 2020, the Company terminated two swap agreements whereby the Company was paying a floating rate of interest and receiving a fixed rate of interest on an aggregate notional value of $1,500,000. These contracts were due to mature in May 2026. In connection with the early termination, the Company received cash of $74,835 which has been recorded in loss on interest swap contracts, net in our consolidated statement of operations and presented in operating activities in our consolidated statement of cash flows.
In addition, in March 2020, the Company executed amendments to two interest swap contracts that reduced the fixed rate of interest that the Company was paying on an aggregate notional value of $1,000,000 and extended the maturity date of the contracts to January 15, 2025 from January 15, 2022. The difference in the fair value of the amended contracts and the original contracts on the date of the transaction of $5,689 (an increase in the liability) is being amortized to loss on derivative contracts over the remaining term of the contracts.
During the six months ended June 30, 2020, the Company entered into three new interest rate swap contracts on an aggregate notional value of $3,850,000. See table below.
27
34


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



  Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
  September 30, 2019 September 30, 2018
Gain (loss) on derivative contracts (related to change in the value of equity derivative contracts related to Comcast common stock) $(77,333) $(303,986) $(79,628) $130,883
Change in fair value of Comcast common stock included in gain (loss) on investments 120,277
 473,796
 111,684
 (199,312)
Loss on interest rate swap contracts (11,163) (61,735) (19,554) (64,405)


The following is a summary of interest rate swap contracts outstanding at June 30, 2020:
Trade DateMaturity DateNotional AmountCompany PaysCompany Receives
December 2018January 2025$500,000 Fixed rate of 1.53%Three-month LIBOR
December 2018January 2022500,000 Fixed rate of 2.733%Three-month LIBOR
December 2018January 2025500,000 Fixed rate of 1.625%Three-month LIBOR
December 2018December 2026750,000 Fixed rate of 2.9155%Three-month LIBOR
December 2018December 2026750,000 Fixed rate of 2.9025%Three-month LIBOR
March 2020January 2025500,000 Fixed rate of 1.458%Three-month LIBOR
March 2020January 2022500,000 Three-month LIBORFixed rate of 2.733%
April 2020April 20212,850,000 Six-month LIBOR minus 0.5185%One-month LIBOR

NOTE 12. 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.
•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 for each of these hierarchy levels, the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis:
 
Fair Value
Hierarchy
 September 30, 2019 December 31, 2018
Assets:     
Money market fundsLevel I $44,931
 $91,852
Investment securities pledged as collateralLevel I 1,936,422
 1,462,626
Prepaid forward contractsLevel II —
 109,344
Interest rate swap contractsLevel II 2,634
 1,975
Liabilities:     
Prepaid forward contractsLevel II 194,643
 —
Interest rate swap contractsLevel II 183,644
 132,978
Contingent consideration related to 2017 and 2018 acquisitionsLevel III 5,142
 6,195

Fair Value
Hierarchy		June 30, 2020December 31, 2019
Assets:
Money market fundsLevel I$1,842,086  $563,704  
Investment securities pledged as collateralLevel I1,674,395  1,931,697  
Prepaid forward contractsLevel II221,733  25,207  
Interest rate swap contractsLevel II4,058  —  
Liabilities:
Prepaid forward contractsLevel II3,520  94,795  
Interest rate swap contractsLevel II313,412  161,340  
Contingent consideration related to 2017 and 2018 acquisitionsLevel III1,767  7,250  
The Company's cash equivalents investment securities(money market funds) and investment securities pledged as collateral are classified within Level I of the fair value hierarchy because they are valued using quoted market prices.
The Company's derivative contracts and liabilities under derivative contracts on the Company's 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, the Company has concluded that these instruments should be classified within Level II of the fair value hierarchy.
The fair value of the contingent consideration as of September 30, 2019 is equal to the contractual obligation expected to be paid based on a probability assessment of attaining the targets as of such date. The maximum amount that could be paid if all targets are achieved is approximately $11,000.

2835


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



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, Collateralized Indebtedness, Senior Notes, and Debentures, Senior Guaranteed Notes, Notes Payable and Supply Chain Financing
The fair values of each of the Company's debt instruments are based on quoted market prices for the same or similar issues or on the current rates offered to the Company 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 the short-term nature of their maturity (less than one year).
The carrying values, estimated fair values, and classification under the fair value hierarchy of the Company's financial instruments, excluding those that are carried at fair value in the accompanying consolidated balance sheets, are summarized as follows:
June 30, 2020December 31, 2019
Fair Value
Hierarchy		Carrying
Amount (a)		Estimated
Fair Value		Carrying
Amount (a)		Estimated
Fair Value
Credit facility debtLevel II$7,122,458  $7,161,563  $7,148,287  $7,190,438  
Collateralized indebtednessLevel II1,601,107  1,696,376  1,585,088  1,611,095  
Senior guaranteed notesLevel II8,701,902  9,094,711  7,602,456  8,220,518  
Senior notesLevel II8,516,513  9,037,404  7,874,040  8,728,870  
Notes payable and supply chain financingLevel II107,658  108,619  140,994  141,713  
$26,049,638  $27,098,673  $24,350,865  $25,892,634  
   September 30, 2019 December 31, 2018
 
Fair Value
Hierarchy
 
Carrying
Amount (a)
 
Estimated
Fair Value
 
Carrying
Amount (a)
 
Estimated
Fair Value
CSC Holdings debt instruments:         
Credit facility debtLevel II $6,632,330
 $6,679,875
 $5,915,559
 $5,972,500
Collateralized indebtednessLevel II 1,423,519
 1,423,130
 1,406,182
 1,374,203
Senior guaranteed notesLevel II 7,600,412
 8,136,444
 5,847,758
 5,646,468
Senior notes and debenturesLevel II 7,142,714
 7,912,429
 8,416,610
 8,972,722
Notes payable and supply chain financingLevel II 110,519
 110,580
 106,108
 105,836
Cablevision debt instruments:         
Senior notes and debenturesLevel II 1,100,698
 1,219,360
 1,095,193
 1,163,843
   $24,010,192
 $25,481,818
 $22,787,410
 $23,235,572
(a)Amounts are net of unamortized deferred financing costs and discounts/premiums.
(a)Amounts are net of unamortized deferred financing costs and discounts/premiums.
The fair value estimates related to the Company's 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 13. INCOME TAXES
In general, the Company is required to 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.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security ("CARES Act") was enacted and signed into law. Certain provisions of the CARES Act impacted the 2019 income tax provision computations of the Company and have been reflected in the consolidated financial statements for the six months ended June 30, 2020. The CARES Act modified the interest limitation under section 163(j) of the Internal Revenue Code ("163(j)") for 2019 and 2020, increasing the allowable business interest deduction from 30% to 50% of adjusted taxable income. This modification significantly increased the allowable interest deduction for the Company in 2019, resulting in less utilization of net operating loss carryforwards. For state tax purposes, an estimated net benefit of approximately $10,500 was recognized for the three months ended March 31, 2020 driven by a decrease in federal taxable income for 2019 due to the 163(j) law change under the CARES Act. However, due to the decoupling from the CARES Act by New York State and New York City, the net benefit decreased approximately $8,000 in the three months ended June 30, 2020, resulting in a net state tax benefit of approximately $2,500 for the six months ended June 30, 2020. In addition, the CARES Act accelerated the ability of companies to receive refunds of Alternative Minimum Tax credits. For the Company, the remaining approximately $12,000 in tax credits will be refunded as part of the 2019 tax filing and is included in prepaid expenses and other current assets in the accompanying balance sheets.
36

ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)


Altice USA
For the three and ninesix months ended SeptemberJune 30, 2019, the Company2020, Altice USA recorded incomea tax expense of $37,871$58,826 and $56,445$75,861 on pre-tax income of $115,267$170,303 and $195,053,$185,800, respectively, 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 33%certain non-deductible expenses and 29%,certain state tax expense adjustments, partially offset by a benefit resulting from the recently enacted CARES Act.
For the three and six months ended June 30, 2019, Altice USA recorded a tax expense of $41,160 and $18,574 on pre-tax income of $127,570 and $79,786, respectively, which areresulting in an effective tax rate that was higher than the U.S. federal statutory tax rate of 21%.rate. The primary differences between the effective tax rate and the statutory tax rate are due to a revaluation of state deferred taxes primarily due to certain changes to the state tax rates used to measure the Company’s deferred tax liabilities and certain non-deductible expenses.
CSC Holdings
For the three and ninesix months ended SeptemberJune 30, 2018, the Company2020, CSC Holdings recorded incomea tax expense of $95,968$56,629 and $29,675$61,658 on pre-tax income (loss) of $129,707$170,302 and ($163,539) for$185,453, respectively, 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 and certain state tax expense adjustments, partially offset by a benefit resulting from the recently enacted CARES Act.
For the three and ninesix months ended SeptemberJune 30, 2018, respectively.  Included in the income tax expense for each period was2019, CSC Holdings recorded a tax expense of $49,052 as a result$47,828 and $32,152 on pre-tax income of the reevaluation of the Company's deferred tax liability$151,970 and $128,430, respectively, resulting in connection with tax law changes in the State of New Jersey. Absent, this item, thean effective tax rate forthat was higher than the three months ended September 30, 2018 would have been 36%. For the nine months ended

29


ALTICE USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



September 30, 2018, theU.S. statutory tax benefit at the statutoryrate. The higher tax rate was more thandue to revaluation of state deferred taxes primarily due to certain changes to the state tax rates used to measure CSC Holdings’ deferred tax liabilities, partially offset by the expense resulting from the tax law changes in the State of New Jersey of $49,052.certain non-deductible expenses.
NOTE 14. SHARE-BASED COMPENSATION
Long Term Incentive Plan
Pursuant to the 2017 Altice USA Long Term Incentive Plan, as amended (the "LTIP"), the Company may grant awards of options, restricted shares, restricted share units, stock appreciation rights, performance stock, performance stock units and other awards (the 2017 Long Term Incentive Plan or the "LTIP"). In June 2020, shareholders of the Company approved an increase to the number of shares authorized for issuance under the LTIP by 35,000,000 shares to 54,879,291, and approved the extension of the term to June 10, 2030.
Carry Unit Plan
Certain employees of the Company and its affiliates received awards of units in a carry unit plan of Neptune Management LP, an entity which has an ownership interest in the Company. Neptune Holding US Limited Partnership ("Neptune LP").
The following table summarizes activity relating to these carry units:
 
Number of Time
Vesting Awards
 
Number of Performance
Based Vesting Awards
 Weighted Average Grant Date Fair Value
Balance, December 31, 201883,575,000
 10,000,000
 $1.14
Vested(24,356,250) —
 0.75
Forfeited(3,437,500) —
 0.84
Balance, September 30, 201955,781,250
 10,000,000
 $1.34

Number of Time
Vesting Awards		Weighted Average Grant Date Fair Value
Balance, December 31, 201937,518,750  $2.35  
Vested(27,343,750) 2.31  
Forfeited(212,500) 0.56  
Balance, June 30, 20209,962,500  $2.71  
The weighted average fair value per unit was $3.80$1.75 and $1.95$3.25, as of SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively. For the three and ninesix months ended SeptemberJune 30, 2020 and 2019, the Company recognized anshare-based compensation expense of $7,214$3,937 and $21,548,$7,057, and $7,861 and $14,334, respectively, related to the push down of share-based compensation related to the carry unit plan. For the three and nine months ended September 30, 2018, the Company recognized an expense of $7,510 and $33,004 related to the push down of share-based compensation expense related to the carry unit plan.
Stock Option Plan
The following table summarizes activity related to the Company's employee stock options issued pursuant to the Altice USA 2017 Long Term Incentive Plan (the "2017 LTIP"):
37
 Shares Under Option 
Weighted Average
Exercise
Price Per Share
 
Weighted Average Remaining
Contractual Term
(in years)
  
 
Time
Vesting
 
Performance
Based Vesting
   
Aggregate Intrinsic
Value (a)
Balance at December 31, 201811,230,168
 73,639
 $17.50
 9.47
 $—
Granted3,091,573
 —
 23.43
    
Forfeited(393,670) (16,736) 17.85
    
Balance at September 30, 201913,928,071
 56,903
 18.80
 8.93
 138,194
Options exercisable at September 30, 2019—
 —
 —
 —
 —
(a)The aggregate intrinsic value is calculated as the difference between the exercise price and the closing price of the Company's Class A common stock at the respective date.
The Company recognized share-based compensation expense related to employee stock options for the three and nine months ended September 30, 2019 of $8,780 and $23,914, respectively. The Company recognized share based compensation expense related to employee stock options for the three and nine months ended September 30, 2018 of $4,817 and $13,172, respectively.
Restricted Awards
In June 2019, the Company granted restricted awards to certain employees pursuant to the 2017 LTIP. The majority of these awards vest over 4 years, where 50% vest on the second anniversary, 25% on the third anniversary and 25% on the fourth anniversary of the date of grant. The remaining awards vest monthly over a four year period. The grant date

30


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



Stock Options
The following table summarizes activity related to the stock options granted to Company employees:
 Shares Under OptionWeighted Average
Exercise
Price Per Share		Weighted Average Remaining
Contractual Term
(in years)		Aggregate Intrinsic
Value (a)
Balance at December 31, 201914,083,741  $19.12  8.74$112,915  
Granted26,093,256  28.32  
Exercised(209,105) 17.46  
Forfeited(1,749,476) 21.44  
Balance at June 30, 202038,218,416  25.31  9.1449,108,141  
Options exercisable at June 30, 2020788,053  $17.70  7.17$3,848,578  
(a)The aggregate intrinsic value is calculated as the difference between the exercise price and the closing price of the Company's Class A common stock at the respective date.
The Company recognized share-based compensation expense related to employee stock options for the three and six months ended June 30, 2020 and 2019 of $25,327 and $45,676 and $7,817 and $15,134, respectively. As of June 30, 2020, there was $200,745 of total unrecognized compensation cost related to stock options which is expected to be recognized over a weighted-average period of approximately 3.16 years.
The following weighted-average assumptions were used to calculate the fair values of stock option awards granted during the six months ended June 30, 2020:
Risk-free interest rate1.45%
Expected life (in years)6.38
Dividend yield—%
Volatility28.46%
Grant date fair value$7.74
Performance Stock Unit Awards
In January 2020, certain employees of the Company were granted performance stock units ("PSUs"). Each PSU gives the employee the right to receive one share of Altice USA class A common stock, upon achievement of a specified stock price hurdle. The PSUs will be forfeited if the applicable performance measure is not achieved prior to January 29, 2024 (January 29, 2026 in the event of a recession or market disruption event prior to achievement of the performance measure, which criteria was met in June 2020) or if the employee does not continue to provide services to the Company through the achievement date of the applicable performance measure.
As of June 30, 2020, the Company had 7,480,469 PSUs outstanding. The PSUs have a weighted average grant date fair value of these awards aggregated $27,013.$10.65 per unit. For the three and ninesix months ended SeptemberJune 30, 2019,2020, the Company recognized share based compensation expense of $4,419 and $8,320 related to these PSUs. As of June 30, 2020 there was $71,127 of total unrecognized compensation cost related to outstanding PSUs which is expected to be recognized over a weighted-average period of approximately 5.6 years.
The following assumptions were used to calculate the fair values of the PSUs granted during the six months ended June 30, 2020:
Risk-free interest rate1.46%
Expected life (in years)4 and 6
Dividend yield—%
Volatility34.22%
38

ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)


Restricted Awards
For the three and six months ended June 30, 2020, the Company recorded share based compensation expense of $2,841$636 and $3,698,$1,212, respectively, related to these awards.restricted awards granted to certain employees pursuant to the LTIP. In January 2020, certain restricted awards granted to employees in the prior year were cancelled. These employees received new grants of stock options and PSUs.
NOTE 15. AFFILIATE AND RELATED PARTY TRANSACTIONS
Equity Method Investments
In April 2018, Altice Europe transferred its ownership of i24 US and i24 Europe ('i24NEWS"), Altice Europe's 24/7 international news and current affairs channels to the Company for minimal consideration (the "i24NEWS Acquisition"). As the acquisition was a combination of businesses under common control, the Company combined the results of operations and related assets and liabilities of i24NEWS as of April 1, 2018. Operating results for periods prior to April 1, 2018 and the balance sheet as of December 31, 2017 have not been revised to reflect the combination of i24NEWS as the impact was deemed immaterial.
The Company's equity in the net losses of i24NEWS, prior to April 1, 2018, for the nine months ended September 30, 2018 of $1,130 were recorded using the equity method and reflected in other expense, net in the Company's consolidated statements of operations.
In April 2018, the Company redeemed a 24% interest in Newsday LLC ("Newsday") and recognized a gain of $13,298, reflected in gain (loss) on investments and sale of affiliate interests in the Company's statements of operations. For the nine months ended September 30, 2018, the Company recorded equity in the net loss of Newsday of $9,719, reflected in other expense, net in the Company's statements of operations. From July 7, 2016 through April 2018, the Company held a 25% ownership interest in Newsday and prior to July 7, 2016, Newsday was a wholly-owned subsidiary of Cablevision.
Affiliate and Related Party Transactions
Altice USA is controlled by Patrick Drahi who is also the controlling stockholder of Altice Europe and its subsidiaries.subsidiaries and other entities.
As the transactions discussed below were conducted between entities under common control by Mr. Drahi, and equity method investees, 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 charges related to services provided to or received from subsidiaries of Altice Europeaffiliates and Newsday:related parties:
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Revenue$70
 $545
 $1,158
 $1,397
Operating expenses:       
Programming and other direct costs$(3,508) $(1,671) $(7,282) $(6,690)
Other operating expenses, net(1,602) (905) (5,868) (15,154)
Operating expenses, net(5,110) (2,576) (13,150) (21,844)
        
Other income, net—
 —
 —
 149
Net charges$(5,040) $(2,031) $(11,992) $(20,298)
Capital expenditures$3,456
 $3,945
 $9,346
 $6,679

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue$3,379  $496  $6,867  $1,088  
Operating expenses:
Programming and other direct costs$(1,738) $(2,087) $(3,927) $(3,774) 
Other operating expenses, net(2,161) (2,020) (6,102) (4,266) 
Operating expenses, net(3,899) (4,107) (10,029) (8,040) 
Net charges - Altice USA$(520) $(3,611) $(3,162) $(6,952) 
Capital Expenditures$3,676  $2,536  $10,901  $5,890  
Revenue
The Company recognized revenue primarily from the sale of advertising to a subsidiary of Altice Europe.Europe and a foundation controlled by Patrick Drahi.
Programming and other direct costs
Programming and other direct costs include costs incurred by the Company for advertising services provided by a subsidiary of Altice Europe.

Other operating expenses, net
Other operating expenses primarily include charges for services provided by other subsidiaries of Altice Europe and other related parties.
Capital Expenditures
Capital expenditures primarily include costs for equipment purchased and software development services provided by subsidiaries of Altice Europe.
31
39


ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



Other operating expenses, net
Altice Europe provided certain executive services, as well as consulting, advisory and other services, including, prior to the Company's initial public offering ("IPO") in June 2017, CEO, CFO and COO services, to the Company. Compensation under the terms of the agreement was an annual fee of $30,000 to be paid by the Company. Fees associated with this agreement recorded by the Company amounted to approximately $13,250 for the nine months ended September 30, 2018. This agreement was terminated upon the completion of the Distribution discussed in Note 1.
Other operating expenses also include charges for services provided by other subsidiaries of Altice Europe and other related parties aggregating $1,602 and $5,868, for the three and nine months ended September 30, 2019 and $905 and $1,904 for the three and nine months ended September 30, 2018, respectively.
In addition, in August 2019, the Company issued options to purchase 370,923 shares of Altice USA common stock to a related party for advisory services. The options vest over 4 years, where 50% vest on the second anniversary, 25% on the third anniversary and 25% on the fourth anniversary of the date of grant. The grant date fair value of these options aggregating $3,516 is recorded over the vesting period.
Capital Expenditures
Capital expenditures include $3,456 and $9,346 for the three and nine months ended September 30, 2019 and $3,945 and $6,679, for the three and nine months ended September 30, 2018, respectively, for equipment purchases and software development services provided by subsidiaries of Altice Europe.
Aggregate amounts that were due from and due to affiliates and related parties are summarized below:
 September 30, 2019 December 31, 2018
Due from:   
CVC 3 B.V. (a)$—
 $13,100
Newsday (b)475
 490
Altice Europe (b)67
 1,271
Altice Dominican Republic (b)3,435
 2,550
Other Altice Europe subsidiaries (b)577
 146
 $4,554
 $17,557
Due to:   
Newsday (b)$—
 $22
Altice Europe (c)—
 15,235
Altice Labs S.A. (d)2,418
 4,864
Other Altice Europe subsidiaries (d)4,486
 5,975
 $6,904
 $26,096
Altice USACSC HoldingsAltice USA and CSC Holdings
June 30,
2020		June 30,
2020		December 31, 2019
Due from:
Altice Europe$432  $302  $4,076  
Other affiliates and related parties3,020  3,020  2,698  
$3,452  $3,322  $6,774  
Due to:
Altice Europe$5,722  $5,722  $7,456  
$5,722  $5,722  $7,456  

(a)Represents interest on senior notes paid by the Company on behalf of Altice US Finance S.A., which merged into CVC 3 B.V. in 2018.
(b)Represents
Amounts due from affiliates presented in the table above represent amounts paid by the Company on behalf of or for services provided to the respective related party and for Newsday, the net amounts due from the related party also include charges for certain transition services provided.
(c)Includes $13,250 at December 31, 2018 related to the agreement discussed above.
(d)Represents amounts due to affiliates for the purchase of equipment and advertising services, as well as reimbursement for payments made on our behalf.
Pursuant to the respective related party. Amounts due to affiliates relate to the purchase of equipment and advertising services, as well as reimbursement for payments made on our behalf.
In June 2020, pursuant to the Company's share repurchase program, the Company purchased approximately 14.9 million3,582,525 Altice USA Class A sharescommon stock held by Altice Europe for a total consideration of approximately $350,000$84,906. See further information regarding the Company's share repurchase program in Note 1.
CSC Holdings
CSC Holdings made cash equity distribution payments to its parent aggregating $652,383, and $1,372,733, respectively, during the ninethree and six months ended SeptemberJune 30, 2020. The distributions for the three months ended June 30, 2020 were recorded as a decrease in retained earnings of $105,980, representing the cumulative earnings through the distribution dates, and a decrease in other member's equity of $546,403. The distributions for the six months ended June 30, 2020 were recorded as a decrease in retained earnings of $130,297, representing the cumulative earnings through the distribution dates, and a decrease in other member's equity of $1,242,436.
CSC Holdings made cash equity distribution payments to its parent aggregating $635,028 and $1,229,490, respectively, during the three and six months ended June 30, 2019. The distributions for the three months ended June 30, 2019 were recorded as a decrease in retained earnings of $90,324, representing the cumulative earnings through the distribution dates, and a decrease in other member's equity of $544,704. The distributions for the six months ended June 30, 2019 were recorded as a decrease in retained earnings of $633,541, representing the cumulative earnings through the distribution dates, and a decrease in other member's equity of $595,949.
For the three and six months ended June 30, 2020, CSC Holdings recorded net non-cash equity contributions (distributions) of $35,415 and $(115,187), respectively, which represent the non-cash settlement of intercompany balances with Altice USA. These balances primarily include amounts due to/ due from Suddenvision S.A.R.L., an entity controlled by BC Partners LLP.Altice USA pursuant to a historical tax allocation policy and tax sharing agreements between the entities.

32


ALTICE USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



NOTE 16. COMMITMENTS AND CONTINGENCIES
Legal Matters
In the latter half of 2018, eight named plaintiffs, each on behalf of a putative class of stockholders who purchased Company common stock in the Company'sAltice USA's IPO pursuant to the Registration Statement and Prospectus, filed complaints (seven in New York State Supreme Court, one in United States District Court for the Eastern District of New York). The lawsuits name as defendants the Company,Altice USA, Altice Europe, and the Company'sAltice USA's directors, among others, and assert that all defendants violated Sections 11 and 12 of the Securities Act of 1933 (the “Securities Act”"Securities Act") and that the individual defendants violated Section 15 of the Securities Act as control persons. In a consolidated amended complaint filed in the lawsuit in the Eastern District of New York, plaintiff also asserts violations of Section 10(b) of the Securities Act of 1934 ("34 Act"), Rule 10b-5 promulgated thereunder, and Section 20 of the ‘3434 Act against the Company,Altice USA, Altice Europe, and certain individual directors. The facts underlying each case are substantively similar, with plaintiffs alleging that the Registration Statement and Prospectus misrepresented or omitted material facts
40

ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)


relating to the negative performance of Altice France and Altice Portugal, the disclosure of which in November 2017 negatively impacted the value of Altice USA’s stock. In June of 2019, plaintiffs in the New York State action filed a consolidated amended complaint, which the Company moved to dismiss in July of 2019. The Company moved to dismiss the complaint in the Eastern District of New York in October 2019. On June 26, 2020, the state Court granted the Company’s motion to dismiss. Plaintiffs in the New York State action filed a notice of appeal on July 21, 2020.
On June 23, 2020, a purported stockholder of the Company filed a complaint in the Court of Chancery of the State of Delaware, derivatively on behalf of the Company, against Patrick Drahi, Next Alt S.A.R.L., and those directors of the Company who are members of the Compensation Committee (collectively, the “Director Defendants”).The Company is also named as a nominal defendant in the complaint.The complaint alleges that the Director Defendants breached their fiduciary duties to the Company’s stockholders, and wasted corporate assets, by approving certain equity grants for Patrick Drahi.The complaint seeks rescission of the equity awards, monetary damages, and costs and disbursements for the plaintiff.
The Company intends to vigorously defend thethese lawsuits. Although the outcome of the matter cannot be predicted and the impact of the final resolution of this matterthese matters on the Company’s results of operations in any particular subsequent reporting period is not known at this time, management does not believe that the ultimate resolution of the matterthese matters will have a material adverse effect on the operations or financial position of the Company or the ability of the Company to meet its financial obligations as they become due.
On November 6, 2018, Sprint Communications Company L.P (“Sprint”("Sprint") filed a complaint in the U.S. District Court for the District of Delaware alleging that the Company infringes Sprint’s patents purportedly relating toby providing Voice over Internet Protocol (“VoIP”("VoIP") services. On December 3, 2018, Sprint filed a second complaint alleging that the Company infringes Sprint’s patents purportedly relating toby providing certain VOD related services. The lawsuits are part of a pattern of litigation that was initiated as far back as 20072005 by Sprint against numerous broadband and telecommunications providers.providers, which has resulted in judgments and settlements of significant value for Sprint. The Company is investigating the allegations, and willintends to vigorously defend the lawsuits. Although the outcome of the matter cannot be predicted and the impact of the final resolution of this matter on the Company’s results of operations in any particular subsequent reporting period is not known at this time, management does not believe that the ultimate resolution of the matter will have a material adverse effect on the operations or financial position of the Company or the ability of the Company to meet its financial obligations as they become due, but it could be material to the Company’s consolidated results of operations or cash flows for any one period.
The Company receives notices from third parties and, in some cases, is named as a defendant in certain lawsuits claiming infringement of various patents relating to various aspects of the Company's businesses. In certain of these cases other industry participants are also defendants. In certain of these cases the Company expects that any potential liability would be the responsibility of the Company's equipment vendors pursuant to applicable contractual indemnification provisions.
In the event that the Company is found to infringe on any patent rights, the Company may be subject to substantial damages and/or an injunction that could require the Company or its vendors to modify certain products and services the Company offers to its subscribers, as well as enter into royalty or license agreements with respect to the patents at issue. The Company believes that the claims are without merit, but is unable to predict the outcome of these matters or reasonably estimate a range of possible loss.
In addition to the matters discussed above, the Company is party to various lawsuits, disputes and investigations, some of which may involve claims for substantial damages, fines or penalties. Although the outcome of these other matters cannot be predicted and the impact of the final resolution of these other matters on the Company's results of operations in a particular subsequent reporting period is not known, management does not believe that the resolution of these other lawsuits will have a material adverse effect on the financial position of the Company or the ability of the Company to meet its financial obligations as they become due.

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ALTICE USA, INC. AND SUBSIDIARIES
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except share and per share amounts)
(Unaudited)



NOTE 17. SUBSEQUENT EVENTS
AmendmentOn July 14, 2020, the Company completed its acquisition of certain cable assets in New Jersey for approximately $150,000, subject to Credit Facilitycertain closing adjustments as set forth in the asset purchase agreement.
In October 2019, CSC HoldingsJuly 2020, the Company entered into an eleventh amendmentagreement to sell 49.99% of its credit facilities agreement (the "Eleventh Amendment").Lightpath fiber enterprise business for an implied enterprise value of $3,200,000. The Eleventh Amendment provides for, among other things, new incremental term loan commitments (as defined in the credit agreement) in an aggregate principal amountCompany will receive total gross cash proceeds of $3,000,000, which were availableapproximately $2,300,000 from the effective date until October 31, 2019 (the “Incremental Term Loans”) in two tranches. The Incremental Term Loans mature on April 15, 2027sale and were issued at par. The Incremental Term Loans may be comprised of eurodollar borrowings or alternative base rate borrowings,related financing activity and will bear interest atrecord a rate per annum equal to the Adjusted LIBO 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, 1.50% per annum and (ii) with respect to any eurodollar loan, 2.50% per annum. Voluntary prepaymentsgain upon closing. Approximately $1,100,000 of the Incremental Term Loansnet proceeds after tax are expected to be used by the Company to repay debt such that the transaction is at least leverage-neutral to CSC Holdings. The Company will retain a 50.01% interest in connection with certain repricing transactions on or priorLightpath and maintain control. Accordingly, the Company will continue to consolidate the date that is six months after the draw date will be subject to a call premium of 1.00%. The initial proceedsoperating results of the Incremental Term Loans were usedLightpath business. The transaction is currently expected to repay approximately $2,500,000 of the outstanding term loans under the credit agreement, and the proceeds of the delayed draw tranche of the Incremental Term Loans were used to distribute $500,000 in cash to Cablevision, the proceeds of which were used to redeem Cablevision’s 8.00% senior notes due 2020, representing the entire aggregate principal amount outstanding, and in each case, paying related fees, costs and expenses in connection with such transactions, with the remainder being used to fund cash on the balance sheet.
In connection with the repayment of approximately $2,500,000 of the outstanding term loans, a portion of the unamortized discount and unamortized deferred financing costs aggregating $28,000 as of September 30, 2019, will be written-off and recorded as a loss on extinguishment of debtclose in the fourth quarter of 2019.
Issuance2020 following the satisfaction of Additional Notes
In October 2019,closing conditions, including receipt of necessary regulatory approvals. Upon closing, Lightpath will be financed independently outside of the CSC Holdings issued an additional $1,250,000 aggregate principal amount of its 5.75% senior notes due 2030 (the “Additional Notes”). The Additional Notes were issued as additional notes pursuant to an indenture, dated as of July 10, 2019 (the “Indenture”).restricted group.
The Additional Notes constitute a single series under the Indenture, together with $1,000,000 of CSC Holdings 5.75% senior notes due 2030 issued on July 10, 2019 (the “Original Notes”), and have identical terms as the Original Notes, except that the Additional Notes were issued at a price of 104.00% of the principal amount plus accrued interest. The Additional Notes will bear interest at a rate of 5.75% and will pay interest semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2020. The Additional Notes will mature on January 15, 2030.
The proceeds of the Additional Notes were used to redeem $1,240,762 aggregate principal amount of CSC Holdings 5.125% senior notes due 2021 (the “2021 Notes”), representing the entire aggregate principal amount of 2021 Notes outstanding, and to pay accrued interest, fees, costs and expenses associated with these transactions. In connection with the redemption, the Company will record a loss on extinguishment of debt of approximately $65,000 in the fourth quarter of 2019, representing the unamortized discount and deferred financing costs as of the redemption date.
Pushdown of Cablevision Debt
In November 2019, CSC Holdings assumed Cablevision’s 5.875% senior notes due September 2022 with an aggregate principal amount of $649,024, Cablevision’s 7.75% senior notes due July 2025 with an aggregate principal amount of $1,740 and Cablevision's 7.50% senior notes due April 2028 with an aggregate principal amount of $4,118.  This transaction has no impact on the consolidated financial statements of Altice USA.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
All dollar amounts and customer metrics, except per customer and per share data, included in the following discussion, are presented in thousands.
The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and contingent liabilities.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’sManagement'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, 2018.2019.
Overview
Our Business
We principally provide broadband communications and video services in the United States and market our services primarily under two brands: Optimum, in the New York metropolitan area, and Suddenlink, principally in markets in the south-central United States. We deliver broadband, video, and telephony services proprietary content and advertising services to approximatelymore than 4.9 million residential and business customers in and around the New York metropolitan area and in the south-central United States, with the majority of our customers located in the ten states of Texas, West Virginia, Louisiana, Arkansas, North Carolina, Oklahoma, Arizona, California, Missouri and Ohio.customers. Our footprint extends across 21 states through a fiber-rich broadband network with approximately 8.88.9 million homes passed as of SeptemberJune 30, 2019.2020. Additionally, we offer news programming and content, and advertising services. In September 2019, wethe Company launched Altice Mobile, a full service voice and datamobile offering, to consumers across ourits footprint.
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”"Risk Factors" and “Business-Competition”"Business-Competition" included in our Annual Report on Form 10-K for the year ended December 31, 2018.2019.
In March 2020, the United States declared a national emergency concerning the outbreak of the coronavirus ("COVID-19"). There have also been extraordinary and wide-ranging actions taken by federal, state and local governmental authorities to contain and combat the outbreak and spread of the virus. We have continued to provide our telecommunications services to our customers during this pandemic. We expect that our future results may be impacted, including if residential or business customers discontinue their service or are unable to pay for our products and services, or if advertising revenue continues to decline. Additionally, in order to prioritize the demands of the business, we may continue to delay certain capital investments. Due to the uncertainty surrounding the magnitude and duration of business and economic impacts relating to COVID-19, including the effort to contain and combat the spread of the virus, and business impacts of government actions, we currently cannot reasonably estimate the ultimate impact of COVID-19 on our business. See "Risk Factors - Our business, financial condition and results of operations may be adversely affected by the recent COVID-19 pandemic."
We derive revenue principally through monthly charges to residential customers of our broadband, video, broadband, and telephony services. We also derive revenue from DVR, VOD,digital video recorder ("DVR"), video-on-demand ("VOD"), pay-per-view, installation and home shopping commissions. Our residential broadband, video, broadband, and telephony services accounted for approximately 42%37%, 33%39%, and 6%5%, respectively, of our consolidated revenue for the ninesix months ended SeptemberJune 30, 2019.2020. We also derive revenue from the sale of a wide and growing variety of products and services to both large enterprise and SMB customers, including broadband, telephony, networking and video services. For the ninesix months ended SeptemberJune 30, 2019,2020, 15% of our consolidated revenue was derived from these business services. In addition, we derive revenues from the sale of advertising time available on the programming carried on our cable television systems, digital advertising and data analytics, and affiliation fees for news programming, which accounted for approximately 4% of our consolidated revenue for the ninesix months ended SeptemberJune 30, 2019.2020. Our mobile and other revenue for the ninesix months ended SeptemberJune 30, 20192020 accounted for less thanapproximately 1% of our consolidated revenue.
Revenue is impacted by rate increases, changes in the number of customers 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, and acquisitions and construction of cable systems that result in the addition of new customers.
Our ability to increase the number of customers to our services is significantly related to our penetration rates.
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We operate in a highly competitive consumer-driven industry and we compete against a variety of broadband, video and telephony providers and delivery systems, including broadband communications companies, wireless data and telephony 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 and its DirecTV subsidiary, CenturyLink, DISH, Frontier and Verizon. Consumers’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, 2018.2019.
Our programming costs, which are the most significant component of our operating expenses, have increased and are expected to continue to increase primarily as a result of contractual rate increases and new channel launches.increases. See "Results of Operations" below for more information regarding our key factors impacting our revenues and operating expenses.

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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 may continue to do so in the future. We are constructing a FTTH network, which will enable us to deliver more than 10 Gbps broadband speeds across our entire Optimum footprint and part of our Suddenlink footprint.in areas where FTTH is deployed. In addition, we launched Altice Mobile to consumers across our footprint in September 2019. 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"Liquidity and Capital Resources-Capital Expenditures”Resources" for additional information regarding our capital expenditures.
Certain Transactions
The following transactions occurred during the periods covered by this Management's Discussion and Analysis of Financial Condition and Results of Operations:
In June 2019, the Company completed the acquisition of Cheddar Inc., a digital-first news company and the operating results of Cheddar were consolidated as of June 1, 2019.
Non-GAAP Financial Measures
We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, income (loss) from discontinued operations, non-operating income or expenses, 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, net, interest expense, (including cash interest expense), interest income, depreciation and amortization (including impairments), share-based compensation expense or benefit, restructuring expense or credits and transaction expenses.
We believe Adjusted EBITDA is an appropriate measure for evaluating the operating performance of the Company. 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 the Company’s 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 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 the Company’s financial performance. We believe these measures are one of several benchmarks used by investors, analysts and peers for comparison of performance in the Company’s industry, although they may not be directly comparable to similar measures reported by other companies.
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Results of Operations - Altice USA
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Revenue:       
Residential:       
Video$993,158
 $1,054,667
 $3,028,914
 $3,122,779
Broadband814,328
 729,907
 2,396,151
 2,143,730
Telephony148,231
 161,351
 452,927
 490,888
Business services and wholesale357,628
 344,193
 1,066,123
 1,014,671
News and advertising118,067
 123,913
 327,255
 323,992
Mobile3,174
 —
 3,174
 —
Other4,076
 3,770
 11,766
 15,608
Total revenue2,438,662
 2,417,801
 7,286,310
 7,111,668
Operating expenses:       
Programming and other direct costs820,896
 790,533
 2,452,875
 2,373,021
Other operating expenses568,233
 569,070
 1,702,124
 1,727,842
Restructuring and other expense12,381
 16,587
 39,090
 29,865
Depreciation and amortization (including impairments)565,637
 536,053
 1,695,685
 1,827,285
Operating income471,515
 505,558
 1,396,536
 1,153,655
Other income (expense):       
Interest expense, net(387,276) (388,167) (1,154,353) (1,147,552)
Gain (loss) on investments and sale of affiliate interests, net120,253
 111,684
 478,124
 (182,031)
Gain (loss) on derivative contracts, net(77,333) (79,628) (303,986) 130,883
Loss on interest rate swap contracts(11,163) (19,554) (61,735) (64,405)
Loss on extinguishment of debt and write-off of deferred financing costs(503) —
 (159,599) (41,616)
Other income (expense), net(226) (186) 66
 (12,473)
Income (loss) before income taxes115,267
 129,707
 195,053
 (163,539)
Income tax expense(37,871) (95,968) (56,445) (29,675)
Net income (loss)77,396
 33,739
 138,608
 (193,214)
Net income attributable to noncontrolling interests(157) (1,186) (1) (1,039)
Net income (loss) attributable to Altice USA, Inc. stockholders$77,239
 $32,553
 $138,607
 $(194,253)

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue:
Residential:
Broadband$920,363  $806,250  $1,805,892  $1,581,823  
Video952,526  1,018,426  1,899,587  2,035,756  
Telephony117,322  150,232  242,352  304,696  
Business services and wholesale365,564  357,806  730,094  708,495  
News and advertising96,631  114,450  202,171  209,188  
Mobile19,866  —  38,222  —  
Other2,707  3,917  6,917  7,690  
Total revenue2,474,979  2,451,081  4,925,235  4,847,648  
Operating expenses:
Programming and other direct costs860,875  818,994  1,725,389  1,631,979  
Other operating expenses542,637  569,459  1,124,946  1,133,891  
Restructuring and other expense40,966  11,465  48,260  26,709  
Depreciation and amortization (including impairments)521,794  568,620  1,069,363  1,130,048  
Operating income508,707  482,543  957,277  925,021  
Other income (expense):
Interest expense, net(350,874) (380,613) (714,426) (767,077) 
Gain (loss) on investments and sale of affiliate interests, net197,597  103,146  (257,876) 357,871  
Gain (loss) on derivative contracts, net(152,061) (49,624) 287,800  (226,653) 
Loss on interest rate swap contracts, net(33,735) (26,900) (88,567) (50,572) 
Loss on extinguishment of debt and write-off of deferred financing costs—  (1,194) —  (159,096) 
Other income, net669  212  1,592  292  
Income before income taxes170,303  127,570  185,800  79,786  
Income tax expense(58,826) (41,160) (75,861) (18,574) 
Net income111,477  86,410  109,939  61,212  
Net loss (income) attributable to noncontrolling interests(213) (43) 467  156  
Net income attributable to Altice USA, Inc. stockholders$111,264  $86,367  $110,406  $61,368  
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The following is a reconciliation of net income (loss) to Adjusted EBITDA:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Net income$111,477  $86,410  $109,939  $61,212  
Income tax expense58,826  41,160  75,861  18,574  
Other income, net(669) (212) (1,592) (292) 
Loss on interest rate swap contracts, net33,735  26,900  88,567  50,572  
Loss (gain) on derivative contracts, net152,061  49,624  (287,800) 226,653  
Loss (gain) on investments and sales of affiliate interests, net(197,597) (103,146) 257,876  (357,871) 
Loss on extinguishment of debt and write-off of deferred financing costs—  1,194  —  159,096  
Interest expense, net350,874  380,613  714,426  767,077  
Depreciation and amortization521,794  568,620  1,069,363  1,130,048  
Restructuring and other expense40,966  11,465  48,260  26,709  
Share-based compensation34,318  16,535  62,264  30,325  
Adjusted EBITDA1,105,785  1,079,163  2,137,164  2,112,103  
Capital expenditures (cash)228,723  316,867  527,805  657,253  
Operating Free Cash Flow$877,062  $762,296  $1,609,359  $1,454,850  
Net cash flows from operating activities$935,976  $788,970  $1,529,541  $1,292,964  
Capital expenditures (cash)228,723  316,867  527,805  657,253  
Free Cash Flow$707,253  $472,103  $1,001,736  $635,711  

 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Net income (loss)$77,396
 $33,739
 $138,608
 $(193,214)
Income tax expense37,871
 95,968
 56,445
 29,675
Other expense (income), net (a)226
 186
 (66) 12,473
Loss on interest rate swap contracts11,163
 19,554
 61,735
 64,405
Loss (gain) on derivative contracts, net77,333
 79,628
 303,986
 (130,883)
Loss (gain) on investments and sales of affiliate interests, net(120,253) (111,684) (478,124) 182,031
Loss on extinguishment of debt and write-off of deferred financing costs503
 —
 159,599
 41,616
Interest expense, net387,276
 388,167
 1,154,353
 1,147,552
Depreciation and amortization565,637
 536,053
 1,695,685
 1,827,285
Restructuring and other expense12,381
 16,587
 39,090
 29,865
Share-based compensation18,835
 12,327
 49,160
 46,176
Adjusted EBITDA$1,068,368
 $1,070,525
 $3,180,471
 $3,056,981
(a)Includes the non-service cost components of the Company's pension expense, net of dividends received on Comcast common stock owned by the Company.
The following table sets forth certain customer metrics, excluding Altice Mobile customers, for the Company (unaudited):Company:
June 30,March 31,June 30,
2020 (f)2020 (f)2019 (g)
Homes passed (a)8,880.1  8,834.8  8,750.4  
Total customer relationships (b)(c)4,997.1  4,950.1  4,923.2  
Residential4,621.4  4,568.4  4,538.9  
SMB375.7  381.7  384.4  
Residential customers:
Broadband4,307.8  4,237.4  4,165.4  
Video3,102.9  3,137.5  3,255.3  
Telephony2,337.1  2,359.8  2,485.8  
Penetration of homes passed (d)56.3 %56.0 %56.3 %
ARPU(e)$144.38  $143.39  $145.02  
 
As of
September 30, 2019 (g)(h)
 
As of
June 30, 2019 (g)
 
As of
September 30, 2018 (g)
 (in thousands, except per customer amounts)
Homes passed (a)8,784.6
 8,766.0
 8,679.4
Total customer relationships (b)(c)4,938.5
 4,938.8
 4,904.5
Residential (h)4,538.6
 4,538.9
 4,509.2
SMB (h)399.9
 399.9
 395.3
Residential customers:     
Video3,223.4
 3,255.3
 3,300.3
Broadband4,180.3
 4,165.4
 4,093.3
Telephony2,446.6
 2,485.8
 2,532.4
Residential triple product customer penetration (d)47.8% 48.6% 49.9%
Penetration of homes passed (e)56.2% 56.3% 56.5%
ARPU(f)$143.63
 $145.02
 $143.77
(a)Represents the estimated number of single residence homes, apartments and condominium units passed by the broadband network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our broadband network. Broadband services were not available to approximately 30 homes passed and telephony services were not available to approximately 500 homes passed.
(a)Represents the estimated number of single residence homes, apartments and condominium units passed by the cable distribution network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our cable distribution network. Broadband services were not available to approximately 100 homes passed and telephony services were not available to approximately 500 homes passed.
(b)Represents number of households/businesses that receive at least one of the Company's services.
(c)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.  In calculating the number of customers, we count all customers other than inactive/disconnected customers.  Free
(b)Represents number of households/businesses that receive at least one of the Company's fixed-line services.
(c)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.  In calculating the number of customers, we count all customers other than inactive/disconnected customers.  With the exception of free Altice Advantage customers, 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 included in the customer counts along with all active accounts, but they are limited to a prescribed group.  Most of these accounts are

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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
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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 room units at that hotel.
(d)Represents the number of total customer relationships divided by homes passed.
(e)Calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video and telephony services to residential customers for the quarter by the average number of total residential customers for the same period.
(4)Customer metrics for the 2020 periods include customers that have not been disconnected pursuant to the Keep Americans Connected pledge ("Pledge") that the Company made in response to the COVID-19 pandemic and customers that have not been disconnected pursuant to the New Jersey Executive Order No. 126 ("NJ Order") enacted in April 2020 that protects New Jersey residents from disconnection of internet and voice services for non-payment. However, the metrics exclude new customers with students in the household that are receiving broadband services for free until the end of the 2019-20 school year ("Altice Advantage"). The following table provides details of these COVID-19 related offers and programs:
June 30, 2020March 31, 2020
Pledge and NJ Order (i)Altice Advantage CustomersPledgeAltice Advantage Customers
Included(Excluded)Included(Excluded)
Total customer relationships18.7  (17.8) 0.0(9.3) 
Residential18.1  (17.8) 0.0(9.3) 
SMB0.6  —  —  —  
Residential customers:
Broadband17.9  (17.8) 0.0(9.3) 
Video8.0  —  0.0—  
Telephony8.9  —  0.0—  
(i)Represent customers who would have been disconnected as a result of non-payment under our normal policies, but were not disconnected pursuant to the Pledge and the NJ Order. As of June 30, 2020, an aggregate of 56.1 thousand customers (54.8 thousand residential and 1.3 thousand SMB) with past-due account balances requested protection pursuant to the Pledge or are protected pursuant to the NJ Order.
(f)Customer metrics for prior periods have been adjusted to conform definitions between Suddenlink and Optimum in connection with the migration of Suddenlink customers to the Optimum billing system in 2019. The following table summarizes the adjustments made to previously reported amounts.
(d)Represents the numberAs of customers that subscribe to three of our services divided by total residential customer relationships.
June 30, 2019
(e)Represents the number of total customer relationships divided by homes passed.
(f)Homes passedCalculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video and telephony services to residential customers for the respective quarter by the average number of total residential customers for the same period.(38.2)
(g)Total customer relationshipsCustomer metrics for prior periods have been adjusted to conform definitions between Suddenlink and Optimum in connection with the migration of Suddenlink customers to the Optimum billing system. The following table summarizes the adjustments made to previously reported amounts.(19.0)
 
As of
June 30, 2019
 
As of
September 30, 2018
 increase (decrease)
Homes passed(22.6) (22.3)
Total customer relationships(3.4) (6.7)
Residential(23.7) (25.7)
SMB20.3
 19.0
Residential customers:   
Video(21.2) (22.5)
Broadband(2.7) (3.0)
Telephony(1.1) (1.2)
ARPU$0.75
 $0.81
(h)ResidentialCustomer metrics do not include Altice Mobile customers.(23.7)
SMB4.8 
Residential customers:
Broadband(2.7)
Video(21.2)
Telephony(1.0)
ARPU$0.75 

Altice USA -USA- Comparison of Results for the Three and NineSix Months Ended SeptemberJune 30, 20192020 compared to the Three and NineSix Months Ended SeptemberJune 30, 20182019
Broadband Revenue
Broadband revenue for the three and six months ended June 30, 2020 was $920,363 and $1,805,892, respectively, while broadband revenue for the three and six months ended June 30, 2019 was $806,250 and $1,581,823,
47

respectively. Broadband revenue is derived principally through monthly charges to residential subscribers of our broadband services. Revenue is impacted by rate increases, changes in the number of customers, including additional services sold to our existing subscribers, and changes in speed tiers. Additionally, revenue is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.
Broadband revenue increased $114,113 (14%) and $224,069 (14%) for the three and six months ended June 30, 2020 compared to the three and six months ended June 30, 2019. The increase was due primarily to higher average recurring broadband revenue per broadband customer, primarily driven by certain rate increases and service level changes, and an increase in broadband customers.
Video Revenue
Video revenue for the three and ninesix months ended SeptemberJune 30, 20192020 was $993,158$952,526 and $3,028,914,$1,899,587, respectively. Video revenue for the three and ninesix months ended SeptemberJune 30, 20182019 was $1,054,667$1,018,426 and $3,122,779,$2,035,756, respectively. Video revenue is derived principally through monthly charges to residential customers of our video services. Revenue is impacted by rate increases, changes in the number of customers, including additional services sold to our existing customers, and changes in programming packages. Additionally, revenue is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.
Video revenue decreased $61,509$65,900 (6%) and $93,865 (3%$136,169 (7%) for the three and ninesix months ended SeptemberJune 30, 20192020 compared to the three and ninesix months ended SeptemberJune 30, 2018.2019. The decreases weredecrease was due primarily to a decline in video customers and lower average revenue per video customer.
We believe our video customer declines noted in the table above are largely attributable to competition, particularly from Verizon in our Optimum footprint and DBS providers in our Suddenlink footprint, as well as competition from companies that deliver video content over the Internet directly to customers. These factors are expected to continue to impact our ability to maintain or increase our existing customers and revenue in the future.
Broadband Revenue
Broadband revenue for the three and nine months ended September 30, 2019 was $814,328 and $2,396,151, respectively. Broadband revenue for the three and nine months ended September 30, 2018 was $729,907 and $2,143,730, respectively. Broadband revenue is derived principally through monthly charges to residential subscribers of our broadband services. Revenue is impacted by rate increases, changes in the number of customers, including additional services sold to our existing subscribers, and changes in speed tiers.
Broadband revenue increased $84,421 (12%) and $252,421 (12%) for the three and nine months ended September 30, 2019 compared to the three and nine months ended September 30, 2018. The increases were due primarily to higher

39





average recurring broadband revenue per broadband customer, primarily driven by certain rate increases and service level changes, and an increase in broadband customers.
Telephony Revenue
Telephony revenue for the three and ninesix months ended SeptemberJune 30, 20192020 was $148,231$117,322 and $452,927,$242,352, respectively. Telephony revenue for the three and ninesix months ended SeptemberJune 30, 20182019 was $161,351$150,232 and $490,888,$304,696, respectively. Telephony revenue is derived principally through monthly charges to residential customers of our telephony services. Revenue is impacted by changes in rates for services, changes in the number of customers, and additional services sold to our existing customers. Additionally, revenue is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.
Telephony revenue decreased $13,120 (8%$32,910 (22%) and $37,961 (8%$62,344 (20%) for the three and ninesix months ended SeptemberJune 30, 20192020 compared to the three and nine months ended SeptemberJune 30, 2018.2019, respectively. The decreases weredecrease was due to lower average revenue per telephony customer and a decline in telephony customers.
Business Services and Wholesale Revenue
Business services and wholesale revenue for the three and ninesix months ended SeptemberJune 30, 20192020 was $357,628$365,564 and $1,066,123,$730,094, respectively. Business services and wholesale revenue for the three and ninesix months ended SeptemberJune 30, 20182019 was $344,193$357,806 and $1,014,671,$708,495, 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 and telephony services to SMB customers.
Business services and wholesale revenue increased $13,435 (4%$7,758 (2%) and $51,452 (5%$21,599 (3%) for the three and ninesix months ended SeptemberJune 30, 20192020 compared to the three and ninesix months ended SeptemberJune 30, 2018.2019, respectively. The increases wereincrease was primarily due to higher average recurring broadband revenue per SMB customer, primarily driven by certain rate increases and service level changes and an increase in revenue fromrelated to an indefeasible right of use contract recorded in the backhaulsecond quarter of carrier data.2020, partially offset by a decrease in SMB customers.
News and Advertising Revenue
News and advertising revenue for the three and ninesix months ended SeptemberJune 30, 20192020 was $118,067$96,631 and $327,255,$202,171, respectively. News and advertising revenue for the three and ninesix months ended SeptemberJune 30, 20182019 was $123,913$114,450 and $323,992,$209,188, respectively. News and advertising revenue is primarily derived from the sale of (i) advertising timeinventory available on the programming carried on our cable television systems, over-the-top (OTT) distribution partners,(ii) advertising on over the top ("OTT") platforms, (iii) digital advertising, and (iv) data analyticsanalytics. News and advertising revenue andalso includes affiliation fees for news programming.
News and advertising revenue decreased $5,846 (5%$17,819 (16%) and increased $3,263 (1%$7,017 (3%) for the three and ninesix months ended SeptemberJune 30, 2019,2020, respectively, compared to the three and ninesix months ended SeptemberJune 30, 2018.2019. The decrease in revenue for the three months ended September 30, 2019 relatedwas primarily due to a decline in political advertising spending, partially offset by an increasegrowth in digital advertising while the increasenational and political sales and higher affiliate revenue for the nine months ended related primarily to an increase in digital advertising, partially offset by a decrease in political advertising.News 12.
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Mobile Revenue
Mobile revenue for the three and ninesix months ended SeptemberJune 30, 20192020 was $3,174$19,866 and $38,222, respectively, and relates to oursales of devices and mobile services. Our mobile service that was launched to consumers in September 2019. As of June 30, 2020, we had approximately 144,000 mobile lines.
Other Revenue
Other revenue for the three and ninesix months ended SeptemberJune 30, 2020 and 2019 was $4,076$2,707 and $11,766,$6,917, respectively. Other revenue for the three and ninesix months ended SeptemberJune 30, 20182019 was $3,770$3,917 and $15,608,$7,690, respectively. Other revenue includes revenue from other miscellaneous revenue streams.
Programming and Other Direct Costs
Programming and other direct costs for the three and ninesix months ended SeptemberJune 30, 20192020 amounted to $820,896$860,875 and $2,452,875,$1,725,389, respectively. Programming and other direct costs for the three and ninesix months ended SeptemberJune 30, 20182019 amounted to $790,533$818,994 and $2,373,021,$1,631,979, 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 typically rise due to increases in contractual rates and new channel launches and are also impacted by changes in the

40





number of customers receiving certain programming services. 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 costs of mobile devices sold to our customers and direct costs of providing mobile services.
The increases of $30,363 (4%$41,881 (5%) and $79,854 (3%$93,410 (6%), which include increases of $4,647 and $4,975 related to our mobile service, for the three and ninesix months ended SeptemberJune 30, 2019, respectively,2020, as compared to the three and ninesix months ended SeptemberJune 30, 20182019 are primarily attributable to the following:
 Three Months Nine Months
Increase in programming costs due primarily to contractual rate increases, partially offset by lower video customers$24,379
 $76,698
Increase in costs of digital media and linear advertising spots for resale2,683
 7,667
Decrease in call completion and transport costs primarily due to lower level of activity(3,337) (10,422)
Other net increases, including the cost of mobile devices6,638
 5,911
 $30,363
 $79,854
Three MonthsSix Months
Increase in programming costs due primarily to net contractual rate increases, partially offset by lower video customers$19,718  $47,899  
Costs of mobile devices14,581  25,646  
Increase in call completion and transfer costs primarily related to our mobile business ($6,358 and $13,199 for the three and six months) and an increase in call activity8,132  13,724  
Increase (decrease) primarily relating to costs of digital media and linear advertising spots for resale(828) 6,759  
Other net increase (decrease)278  (618) 
 $41,881  $93,410  
Programming costs
Programming costs aggregated $678,483$702,674 and $2,043,848$1,413,264 for the three and ninesix months ended SeptemberJune 30, 20192020 and $654,104$682,956 and $1,967,150$1,365,365 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively. Our programming costs in 20192020 will continue to be impacted by changes in programming rates, which we expect to increase, and by changes in the number of video customers.
Other Operating Expenses
Other operating expenses for the three and ninesix months ended SeptemberJune 30, 20192020 amounted to $568,233$542,637 and $1,702,124,$1,124,946, respectively. Other operating expenses for the three and ninesix months ended SeptemberJune 30, 20182019 amounted to $569,070,$569,459 and $1,727,842,$1,133,891, 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 activities and the utilization of contractors as compared to employees. Also, customer installation costs fluctuate as
49

the portion of our expenses that we are able to capitalize changes. Costs associated with the initial deployment of new customer premise equipment necessary to provide broadband, video and telephony services are capitalized (asset-based). The redeployment of customer premise equipment is expensed as incurred. Network repair and maintenance and utility costs also fluctuate as capitalizable network upgrade and enhancement activity changes.
Other operating expenses also include costs related to the operation and maintenance of our call center facilities 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, including legal fees, and product development costs.

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The decreases in other operating expenses of $837$26,822 and $25,718 (1%), net$8,945, offset by an increase of increases of $8,317$12,365 and $16,451 related$25,100 relating to our mobile service, for the three and ninesix months ended SeptemberJune 30, 2019,2020, respectively, as compared to the three and ninesix months ended SeptemberJune 30, 2018 are2019 was attributable to the following:
 Three Months Nine Months
Net decrease in labor costs and benefits (partially offset by an increase in costs related to i24NEWS of $6,425 during the nine-month period and an increase of $6,682 and $8,484 related to Cheddar for the three and nine month periods, respectively), and an increase in capitalizable activity$(17,549) $(14,322)
Decrease in management fee relating to certain executive, administrative and managerial services provided to the Company from Altice Europe prior to separation in June 2018—
 (13,250)
Net decrease in repairs and maintenance costs relating to our operations(3,624) (11,117)
Increase (decrease) in marketing costs3,196
 (9,251)
Increase in bad debt5,059
 10,411
Increase in share-based compensation6,508
 2,983
Other net increases (includes an increase in costs related to i24NEWS of $3,027 during the nine-month period)5,573
 8,828
 $(837) $(25,718)
Three MonthsSix Months
Net decrease in labor costs and benefits (offset by an increase in costs related to Cheddar of $3,402 and $10,565 for the three and six months, which was acquired in June 2019), offset by a decrease in capitalizable activity$(33,584) $(42,286) 
Decrease in sales and marketing(14,455) (13,148) 
Decrease in billing costs, primarily due to systems integration(3,160) (8,810) 
Increase in share-based compensation17,783  31,939  
Increase in bad debt expense2,254  7,043  
Increase in rent and property taxes3,100  7,520  
Other net increases1,240  8,797  
$(26,822) $(8,945) 
Restructuring and Other Expense
Restructuring and other expense for the three and ninesix months ended SeptemberJune 30, 20192020 amounted to $12,381$40,966 and $39,090, respectively.$48,260, as compared to $11,465 and $26,709 for the three and six months ended June 30, 2019. Restructuring and other expense for the 2020 periods primarily includes $40,128 related to contractual payments for terminated employees. The amounts for the three and ninesix months ended SeptemberJune 30, 2018 amounted to $16,587 and $29,865, respectively. These amounts2019 primarily relaterelated to severance and other employee related costs resulting from headcount reductions, facility realignment costs and impairments of certain ROU assets, related to initiatives which commenced in 2016 and 2019 that are intended to simplify the Company's organizational structure. We currently anticipate that additional restructuring expenses will be recognized as we continue to analyze and make modifications to our organizational structure.
Depreciation and Amortization
Depreciation and amortization for the three and ninesix months ended SeptemberJune 30, 20192020 amounted to $565,637$521,794 and $1,695,685,$1,069,363, respectively. Depreciation and amortization for the three and ninesix months ended SeptemberJune 30, 20182019 amounted to $536,053$568,620 and $1,827,285,$1,130,048, respectively.
The increasedecreases in depreciation and amortization of $29,584 (6%$46,826 (8%) and $60,685 (5%) for the three and six months ended SeptemberJune 30, 20192020, respectively, as compared to the same period in the prior year is due to an increase in depreciation as a result of asset additions, partially offset by a decrease due to certain fixed assetsthree and intangible assets becoming fully depreciated or amortized.
The decrease in depreciation and amortization of $131,600 (7%) for the ninesix months ended SeptemberJune 30, 2019 as compared to the same period in the prior year is are due to certain fixed assets and intangible assets becoming fully depreciated or amortized, partially offsetoffset by the acceleration of amortization expense related to certain customer relationship intangible assets and an increase in depreciation as a result of asset additions.

50

Adjusted EBITDA
Adjusted EBITDA amounted to $1,068,368$1,105,785 and $3,180,471$2,137,164 for the three and ninesix months ended SeptemberJune 30, 2019, respectively. Adjusted EBITDA amounted2020, respectively as compared to $1,070,525$1,079,163 and $3,056,981$2,112,103 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively.
Adjusted EBITDA is a non-GAAP measure that is defined as net income (loss) excluding income taxes, income (loss) from discontinued operations, non-operating income or expenses, 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, net, interest expense, (including cash interest expense), interest income, depreciation and amortization (including impairments), share-based compensation expense or benefit, restructuring expense or credits and transaction expenses. See reconciliation of net income (loss) to adjusted EBITDA above.
The decreaseincrease in adjusted EBITDA for the three months ended SeptemberJune 30, 20192020 as compared to the three months ended SeptemberJune 30, 20182019 was due to thean increase in revenue and a net decrease in operating expenses (excluding depreciation and amortization,

42





restructuring and other expense and share-based compensation) which more than offset the increase in revenue,, as discussed above.
The increase in adjusted EBITDA for the ninesix months ended SeptemberJune 30, 20192020 as compared to the ninesix months ended SeptemberJune 30, 20182019 was due to thean increase in revenue, which more thanpartially offset theby a net increase in operating expenses (excluding depreciation and amortization, restructuring and other expense and share-based compensation), as discussed above.
Operating Free Cash Flow
Operating free cash flow was $877,062 and $1,609,359 for the three and six months ended June 30, 2020, respectively, and $762,296 and $1,454,850 for the three and six months ended June 30, 2019, respectively. The increase in operating free cash flow in the 2020 periods as compared to 2019 is due to an increase in adjusted EBITDA and a decrease in capital expenditures.
Operating Free Cash Flow is a non-GAAP measure that is defined as Adjusted EBITDA less cash capital expenditures. See discussion above under "Non-GAAP Financial Measures" for further information.
Free Cash Flow
Free cash flow was $707,253 and $1,001,736 for the three and six months ended June 30, 2020, respectively, and $472,103 and $635,711 for the three and six months ended June 30, 2019, respectively. The increase in free cash flow in the 2020 periods as compared to the 2019 periods is due to an increase in cash flows from operating activities and a decrease in capital expenditures.
Free Cash Flow is a non-GAAP measure that is defined as net cash flows from operating activities less cash capital expenditures. See discussion above under "Non-GAAP Financial Measures" for further information.
Interest Expense, netexpense
Interest expense, net was $387,276$350,874 and $1,154,353,$714,426 for the three and ninesix months ended SeptemberJune 30, 2019,2020, respectively, and $388,167$380,613 and $1,147,552$767,077 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively. The increase (decrease)decreases of $(891)$29,739 and $6,801$52,651 for the three and ninesix months ended SeptemberJune 30, 2019,2020, respectively, as compared to the three and ninesix months ended SeptemberJune 30, 20182019 are attributable to the following:
 Three Months Nine Months
Decrease due to changes in average debt balances and interest rates on our indebtedness and collateralized debt$(7,117) $(25,057)
Lower (higher) interest income(97) 5,895
Other net increases, primarily amortization of deferred financing costs and original issue discounts6,323
 25,963
 $(891) $6,801
Three MonthsSix Months
Decrease due to changes in average debt balances and interest rates on our indebtedness, including our collateralized debt$(28,782) $(48,129) 
Lower interest income454  614  
Other net decreases, primarily amortization of deferred financing costs and original issue discounts(1,411) (5,136) 
$(29,739) $(52,651) 
Gain (Loss) on Investments and Sale of Affiliate Interests, net
Gain (loss) on investments, net for the three and ninesix months ended SeptemberJune 30, 2019,2020, of $120,253$197,597 and $478,124,$(257,876), respectively and $111,684$103,146 and $(182,031),$357,871, respectively, for the three and nine months ended September 30, 2018 consists primarily of the increase (decrease) in the fair value of Comcast common stock owned by the Company.Company for the periods. The effects of these gains (losses) are partially offset by the losses (gains) on the related equity derivative contracts, net described below.
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Gain (Loss) on Derivative Contracts, net
Gain (loss) on derivative contracts, net for the three and ninesix months ended SeptemberJune 30, 20192020 amounted to $(77,333)$(152,061) and $(303,986),$287,800, respectively, and $(49,624) and $(226,653) for the three and ninesix months ended SeptemberJune 30, 2018 amounted to $(79,628) and $130,883,2019, respectively, and includes 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. The effects of these gains (losses) are offset by losses (gains) on investment securities pledged as collateral, which are included in gain (loss) on investments, net discussed above.
Loss on Interest Rate Swap Contracts, net
Loss on interest rate swap contracts, net was $11,163$33,735 and $61,735$88,567 for the three and ninesix months ended SeptemberJune 30, 2019,2020, respectively, and $19,554$26,900 and $64,405$50,572 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively. These amounts represent primarily the increase or decrease in the fair value of interest rate swap contracts. For the six months ended June 30, 2020, the loss is net of a gain recognized in connection with the early termination of two interest rate swap contracts. These swap contracts are not designated as hedges for accounting purposes.
Loss on Extinguishment of Debt and Write-off of Deferred Financing Costs
Loss on extinguishment of debt and write-off of deferred financing costs amounted to $503$1,194 and $159,599$159,096 for the three and ninesix months ended SeptemberJune 30, 2019, respectively and $41,616 for the nine months ended September 30, 2018.

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2019.
The following table provides a summary of the loss on extinguishment of debt and the write-off of deferred financing costs recorded by the Company upon the redemption of senior notes and the refinancing of credit facilities:
 Three Months Nine Months
 September 30, 2019
CSC Holdings 10.125% Senior Notes due 2023$—
 $154,666
Cablevision 5.125% Senior Notes due 2021503
 503
Refinancing and subsequent amendment to CSC Holdings credit facility—
 4,430
 $503
 $159,599
    
 September 30, 2018
Cablevision 7.75% Senior Notes due 2018$—
 $4,706
Cequel 6.375% Senior Notes due 2020—
 36,910
 $—
 $41,616
Three months ended June 30, 2019Six months ended June 30, 2019
CSC Holdings 10.125% Senior Notes due 2023$—  $154,666  
Refinancing and subsequent amendment to CSC Holdings credit facility1,194  4,430  
$1,194  $159,096  
Other Income, (Expense), Net
Other income, (expense), net amounted to $(226)$669 and $66,$1,592 for the three and ninesix months ended SeptemberJune 30, 2019,2020, respectively, compared to other expense, net of $(186)$212 and $(12,473),$292 for the three and ninesix months ended SeptemberJune 30, 2018,2019, respectively. These amounts include the non-service cost components of the Company's pension expense, net of dividends received on Comcast common stock owned by the Company. The 2018 amounts also include the equity in the net losses of Newsday through April 2018 and i24NEWS through March 31, 2018.
Income Tax Expense (Benefit)
For the three and ninesix months ended SeptemberJune 30, 2019, the Company2020, Altice USA recorded incomea tax expense of $37,871$58,826 and $56,445$75,861 on pre-tax income of $115,267$170,303 and $195,053,$185,800, respectively, 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 33%certain non-deductible expenses and 29%,certain state tax expense adjustments, partially offset by a benefit resulting from the recently enacted Coronavirus Aid, Relief and Economic Security ("CARES Act"). See further details related to the CARES Act in Note 13 of the consolidated financial statements.
For the three and six months ended June 30, 2019, Altice USA recorded a tax expense of $41,160 and $18,574 on pre-tax income of $127,570 and $79,786, respectively, which areresulting in an effective tax rate that was higher than the U.S. federal statutory tax rate of 21%.rate. The primary differences between the effective tax rate and the statutory tax rate are due to a revaluation of state deferred taxes primarily due to certain changes to the state tax rates used to measure the Company’s deferred tax liabilities and certain non-deductible expenses.
For
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CSC HOLDINGS, LLC
The consolidated statements of operations of CSC Holdings are essentially identical to the three and nine months ended September 30, 2018, the Company recorded income tax expenseconsolidated statements of $95,968 and $29,675 on pre-tax income (loss)operations of $129,707 and ($163,539), respectively.  Included in the income tax expense for each period was tax expense of $49,052 as a result of the reevaluation of the Company's deferred tax liability in connection with tax law changes in the State of New Jersey. Absent, this item, the effective tax rateAltice USA, except for the three months ended September 30, 2018 would have been 36%. For the nine months ended September 30, 2018, the tax benefit at the statutory rate was more than offset by the expense resulting from the tax law changes in the Statefollowing:
 Three months ended June 30,Six months ended June 30,
2020201920202019
(in thousands)(in thousands)
Net income attributable to Altice USA shareholders$111,264  $86,367  $110,406  $61,368  
Less: items included in Altice USA's consolidated statements of operations:
Income tax expense (benefit)2,197  (6,668) 14,203  (13,578) 
Interest expense relating to Cablevision senior notes—  24,400  —  48,644  
Gain on investments and sale of affiliate interest recorded by Altice USA(1) —  (347) —  
Net income attributable to CSC Holdings' sole member$113,460  $104,099  $124,262  $96,434  
Refer to Altice USA's Management's Discussion and Analysis of New JerseyFinancial Condition and Results of $49,052.Operations herein.
The following is a reconciliation of CSC Holdings' net income to Adjusted EBITDA:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Net income$113,673  $104,142  $123,795  $96,278  
Income tax expense56,629  47,828  61,658  32,152  
Other income, net(669) (212) (1,592) (292) 
Loss on interest rate swap contracts, net33,735  26,900  88,567  50,572  
Loss (gain) on derivative contracts, net152,061  49,624  (287,800) 226,653  
Loss (gain) on investments and sales of affiliate interests, net(197,596) (103,146) 258,223  (357,871) 
Loss on extinguishment of debt and write-off of deferred financing costs—  1,194  —  159,096  
Interest expense, net350,874  356,213  714,426  718,433  
Depreciation and amortization521,794  568,620  1,069,363  1,130,048  
Restructuring and other expense40,966  11,465  48,260  26,709  
Share-based compensation34,318  16,535  62,264  30,325  
Adjusted EBITDA1,105,785  1,079,163  2,137,164  2,112,103  
Capital expenditures (cash)228,723  316,867  527,805  657,253  
Operating Free Cash Flow$877,062  $762,296  $1,609,359  $1,454,850  
Net cash flows from operating activities$932,069  $809,873  $1,529,178  $1,321,776  
Capital expenditures (cash)228,723  316,867  527,805  657,253  
Free Cash Flow$703,346  $493,006  $1,001,373  $664,523  
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 theirthe revolving credit facilitiesfacility 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 manage our business totarget a year-end leverage targetratio of 4.5x to 5.0x. We calculate our consolidated net leverage ratio as net debt to L2QA EBITDA (Adjusted EBITDA for the two most recent consecutive fiscal quarters multiplied by 2.0).
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We expect to utilize free cash flow and availability under the CSC Holdings revolving credit facility, 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

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to repay the outstanding debt securities through open market purchases, privately negotiated purchases, tender offers, or redemptions.
We believe existing cash balances, operating cash flows and availability under ourthe CSC Holdings revolving credit facility 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. However, competition,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 that amounts available under the CSC Holdings revolving credit facility 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 facility 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 totake other actions including deferring capital expenditures, selling assets, seeking strategic investments from third parties or reducing or eliminating stock repurchases and 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 well as interest expense.
As of June 30, 2020
Debt outstanding:
Credit facility debt$7,122,458 
Senior guaranteed notes8,701,902 
Senior notes8,516,513 
Subtotal24,340,873 
Finance lease obligations136,049 
Notes payable and supply chain financing107,658 
Subtotal24,584,580 
Collateralized indebtedness relating to stock monetizations (a)1,601,107 
Total debt$26,185,687 
Interest expense:
Credit facility debt, senior notes, finance leases, notes payable and supply chain financing$680,112 
Collateralized indebtedness relating to stock monetizations (a)36,124 
Total interest expense$716,236 
 As of September 30, 2019
 CSC Holdings Cablevision Total
Debt outstanding:     
Credit facility debt$6,632,330
 $—
 $6,632,330
Senior guaranteed notes7,600,412
 —
 7,600,412
Senior notes and debentures7,142,713
 1,100,699
 8,243,412
Subtotal21,375,455
 1,100,699
 22,476,154
Finance lease obligations47,089
 —
 47,089
Notes payable and supply chain financing110,519
 —
 110,519
Subtotal21,533,063
 1,100,699
 22,633,762
Collateralized indebtedness relating to stock monetizations (a)1,423,519
 —
 1,423,519
Total debt$22,956,582
 $1,100,699
 $24,057,281
Interest expense:     
Credit facility debt, senior notes, finance leases, notes payable and supply chain financing$1,038,528
 $73,086
 $1,111,614
Collateralized indebtedness relating to stock monetizations (a)46,687
 —
 46,687
Total interest expense$1,085,215
 $73,086
 $1,158,301
(a)This indebtedness is collateralized by shares of Comcast common stock. We intend to settle this debt by (i) delivering shares of Comcast common stock and the related equity contracts, or (ii) delivering cash from the net proceeds on new monetization contracts.

(a)This indebtedness is collateralized by shares of Comcast common stock. We intend to settle this debt by (i) delivering shares of Comcast common stock and the related equity contracts, or (ii) delivering cash from the net proceeds from new monetization contracts.
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The following table provides details of our outstanding credit facility debt, net of unamortized discounts and deferred financing costs as of SeptemberJune 30, 2019:2020: 
Maturity DateInterest RatePrincipalCarrying Value
Revolving Credit Facility (a)(b)—%$—  $—  
Term Loan BJuly 17, 20252.43%2,910,000  2,897,887  
Incremental Term Loan B-3January 15, 20262.43%1,259,063  1,254,243  
Incremental Term Loan B-5April 15, 20272.68%2,992,500  2,970,328  
$7,161,563  $7,122,458  
 Maturity Date Interest Rate Principal Carrying Value
        
CSC Holdings Revolving Credit Facility (a)$200,000 on November 30, 2021, remaining balance of $2,275,000 on January 31, 2024 —% $—
 $—
CSC Holdings Term Loan BJuly 17, 2025 4.278% 2,932,500
 2,918,645
CSC Holdings Incremental Term Loan B-2January 25, 2026 (b) 4.528% 1,481,250
 1,466,136
CSC Holdings Incremental Term Loan B-3January 15, 2026 4.278% 1,268,625
 1,263,177
CSC Holdings Incremental Term Loan B-4April 15, 2027 (b) 5.028% 997,500
 984,372
     $6,679,875
 $6,632,330
(a)At September 30, 2019, $178,014 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $2,296,986 of the facility was undrawn and available, subject to covenant limitations.
(b)The term loan was repaid subsequent to September 30, 2019 with proceeds from borrowings under an incremental term loan. See Note 17.
(a)At June 30, 2020, $141,949 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $2,333,051 of the facility was undrawn and available, subject to covenant limitations.
(b)The revolving credit facility of an aggregate principal amount of $2,275,000 matures in January 2024 and is priced at LIBOR plus 2.25%. The remaining revolving credit facility of an aggregate principal amount of $200,000 matures in November 2021 and is priced at LIBOR plus 3.25%.
Payment Obligations Related to Debt
As of SeptemberJune 30, 2019,2020, total amounts payable by us in connection with our outstanding obligations, including related interest, as well as notes payable and supply chain financing, and the value deliverable at maturity under monetization contracts, but excluding finance lease obligations (see Note 8)8 to our consolidated financial statements) are as follows:
2020 (excluding the six months ended June 30, 2020)$2,473,003  
20212,361,262  
20221,916,841  
2023 (a)2,971,720  
20241,918,533  
Thereafter23,208,032  
Total$34,849,391  
 Total
2019$309,763
20202,059,211
2021 (a)5,144,683
20221,932,808
20232,341,186
Thereafter21,437,369
Total$33,225,020
(a)Includes $1,459,638
(a)Includes $1,776,378 related to the Company's collateralized indebtedness (including related interest).  This indebtedness is collateralized by shares of Comcast common stock. We intend to settle this debt by (i) delivering shares of Comcast common stock and the related equity contracts or (ii) delivering cash from the net proceeds on new monetization contracts.
The amounts in the table above do not includeCompany's collateralized indebtedness (including related interest).  This indebtedness is collateralized by shares of Comcast common stock. We intend to settle this debt by (i) delivering shares of Comcast common stock and the effects ofrelated equity contracts or (ii) delivering cash from the debt transactions discussed in Note 17.net proceeds on new monetization contracts.
CSC Holdings Restricted Group
For financing purposes, the Company is structured as a restricted group (the "Restricted Group") and an unrestricted group, which includes certain designated subsidiaries and investments (the "Unrestricted Group"). The Restricted Group is comprised of CSC Holdings and thosesubstantially all of its wholly-owned operating subsidiaries. These subsidiaries which conduct our broadband, video and telephony services operations, as well as Lightpath, which provides Ethernet-based data, Internet, voice and video transport and managed services to the business market, comprise the "Restricted Group" as they are subject to the covenants and restrictions of the credit facility and indentures governing the notes and debentures issued by CSC Holdings. In addition, the Restricted Group is also subject to the covenants of the debt issued by Cablevision.
Sources of cash for the Restricted Group include primarily cash flow from the operations of the businesses in the Restricted Group, borrowings under its credit facility and issuance of securities in the capital markets, contributions from its parent,

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and, from time to time, distributions or loans from its subsidiaries.  The 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 a FTTH network and enhancements to its service offerings such as Wi-Fi;WiFi; debt service, includingservice; distributions made to Cablevisionits parent to service interest expense and principal repayments on its debt securities;fund share repurchases; other corporate expenses and changes in working capital; and investments that it may fund from time to time.
CSC Holdings Credit Facility
OnIn October 9, 2015, Finco,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 currently provides U.S. dollar term loans currently in an aggregate principal amount of $3,000,000 ($2,932,5002,910,000 outstanding at SeptemberJune 30, 2019)2020) (the “CSC"CSC Term Loan Facility”Facility", and the term loans extended under the CSC Term Loan Facility, the “CSC"CSC Term Loans”Loans") and U.S. dollar revolving
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loan commitments currently in an aggregate principal amount of $2,475,000 at June 30, 2020 (the “CSC"CSC Revolving Credit Facility”Facility" and, together with the CSC Term Loan Facility, the “CSC"CSC Credit Facilities”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 on June 20, 2016, June 21, 2016, July 21, 2016, September 9, 2016, December 9, 2016, March 15, 2017, January 12, 2018, October 15, 2018, January 24, 2019, February 7, 2019, and May 14, 2019, and October 3, 2019, respectively, and as further amended, restated, supplemented or otherwise modified from time to time, the “CSC"CSC Credit Facilities Agreement”Agreement"). The maturity date of $2,275,000 of the revolving credit facility matures in January 2024 and is priced at LIBOR plus 2.25%. The remaining $200,000 matures in November 2021 and is priced at LIBOR plus 3.25%.
In January 2018, CSC Holdings entered into a $1,500,000 incremental term loan facility (the "Incremental Term Loan B-2") under its existing credit facilities agreement. The Incremental Term Loan B-2 was priced at 99.5% and will mature on January 25, 2026. The Incremental Term Loan B-2 is comprised of eurodollar borrowings or alternate base rate borrowings, and bears interest at a rate per annum equal to the adjusted LIBOR 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, 1.50% per annum and (ii) with respect to any eurodollar loan, 2.50% per annum. The Company is required to make scheduled quarterly payments equal to 0.25% (or $3,750) of the principal amount of the Incremental Term Loan B-2, beginning with the fiscal quarter ended September 30, 2018, with the remaining balance scheduled to be paid on January 26, 2026.
In November 2018, CSC Holdings entered into a $1,275,000 7-year incremental term loan maturing January 2026 (the “Incremental Term Loan B-3”). The proceeds from the Incremental Term Loan B-3 were used to repay the entire principal amount of loans under Cequel’s then existing Term Loan Facility and certain transaction costs. The Incremental Term Loan B-3 has a margin of 2.25% over LIBOR and was issued with an original issue discount of 25 basis points. The Company is required to make scheduled quarterly payments equal to 0.25% (or $3,188) of the principal amount of the Incremental Term Loan B-3, beginning with the fiscal quarter ended June 30, 2019, with the remaining balance scheduled to be paid on January 15, 2026.
In February 2019, CSC Holdings entered into a $1,000,000 senior secured Term Loan B ("Incremental Term Loan B-4") maturing on April 15, 2027, the proceeds of which were used to redeem $894,700 in aggregate principal amount of CSC Holdings’ 10.125% senior notes due 2023, representing the entire aggregate principal amount outstanding, and paying related fees, costs and expenses. The Incremental Term Loan B-4 bears interest at a rate per annum equal to LIBOR plus 3.0% and was issued with an original issue discount of 1.0%. The Company is required to make scheduled quarterly payments equal to 0.25% (or $2,500) of the principal amount of the Incremental Term Loan B-4, beginning with the fiscal quarter ended September 30, 2019, with the remaining balance scheduled to be paid on April 15, 2027.
In October 2019, CSC Holdings entered into an eleventh amendment to its credit facilities agreement (the “Eleventh Amendment”). The Eleventh Amendment provides for, among other things, new incremental term loan commitments (as defined in the credit agreement) in an aggregate principal amount of $3,000,000, which were available from the effective date until October 31, 2019 (the “Incremental Term Loans”) in two tranches. The Incremental Term Loans mature on April 15, 2027, and were issued at par. The Incremental Term Loans may be comprised of eurodollar borrowings or alternative base rate borrowings, and will bear interest at a rate per annum equal to the Adjusted LIBO 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, 1.50% per annum and (ii) with respect to any eurodollar loan, 2.50% per annum. Voluntary

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prepayments of the Incremental Term Loans in connection with certain repricing transactions on or prior to the date that is six months after the draw date will be subject to a call premium of 1.00%.
The initial proceeds of the Incremental Term Loans were used to repay approximately $2,500,000 of the outstanding term loans under the credit agreement, and the proceeds of the delayed draw tranche of the Incremental Term Loans were used to distribute $500,000 in cash to Cablevision, the proceeds of which were used to redeem Cablevision’s 8% senior notes due 2020, representing the entire aggregate principal amount outstanding, and in each case, paying related fees, costs and expenses in connection with such transactions, with the remainder being used to fund cash on the balance sheet. In connection with the repayment of approximately $2,500,000 of the outstanding term loans, a portion of the unamortized discount and unamortized deferred financing costs aggregating $28,000 as of September 30, 2019, will be written-off and recorded as a loss on extinguishment of debt in the fourth quarter of 2019.
During the nine months ended September 30, 2019, CSC Holdings borrowed $1,050,000 under its revolving credit facility and repaid $1,300,000 of amounts outstanding under the revolving credit facility, a portion of which was funded from the proceeds of the issuance of an additional $250,000 principal amount of CSC Holdings 2029 Guaranteed Notes.
In July 2019, outstanding borrowings under CSC Holdings' revolving credit facility were repaid with the proceeds from the issuance of $1,000,000 in aggregate principal amount of senior notes (see discussion below).
The Company was in compliance with all of its financial covenants under the CSC Credit Facilities Agreement as of SeptemberJune 30, 2019.2020.
See Note 10 to our consolidated financial statements for further information regarding the CSC Credit Facilities Agreement.
Senior Guaranteed Notes and Senior Notes
In January 2019,June 2020, CSC Holdings issued $1,500,000$1,100,000 in aggregate principal amount of senior guaranteed notes due 2029 ("CSC Holdings 2029 Guaranteed Notes"). The notesthat bear interest at a rate of 6.5%4.125% and will mature on FebruaryDecember 1, 2029. The net proceeds from the sale of the notes was used to repay certain indebtedness, including to repay at maturity $526,000 aggregate principal amount of CSC Holdings' 8.625% senior notes due February 2019, redeem approximately $905,300 of the aggregate outstanding amount of CSC Holdings' 10.125% senior notes due 2023 at a redemption price of 107.594% plus accrued interest,2030, and paid fees and expenses associated with the transactions.
In February 2019, CSC Holdings issued an additional $250,000 CSC Holdings 2029 Guaranteed Notes at a price of 101.75% of the principal value. The proceeds of these notes were used to repay the outstanding balance on the CSC Revolving Credit Facility.
In July 2019, CSC Holdings issued $1,000,000$625,000 in aggregate principal amount of senior notes whichthat bear interest at a rate of 5.75%4.625% and will mature on January 15,December 1, 2030. The net proceeds from the sale of the these notes werewas used in July 2020 to repay outstanding borrowings underearly redeem the $1,095,825 aggregate principal amount of CSC Holdings' revolving credit facility, along with5.375% senior notes due July 15, 2023, the $617,881 and the $1,740 aggregate principal amount of CSC Holdings' 7.750% senior notes due July 15, 2025, plus pay accrued interest and pay feesthe associated premiums related to the early redemption of these notes. In connection with the transactions. The remaining proceeds will be used for general corporate purposes.
Also, in July 2019,early redemptions, the Company redeemed $8,886 principal amountwill recognize a loss on the extinguishment of Cablevision 2021 seniordebt aggregating $62,096, reflecting the early redemption premiums and the write-off of outstanding deferred financing costs on these notes.
As of SeptemberJune 30, 2019,2020, the Company was in compliance with all of its financial covenants under the indentures under which our senior guaranteed notes and senior notes were issued.
In October 2019, CSC Holdings issued an additional $1,250,000 aggregate principal amount of its 5.75% senior notes due 2030 (the “Additional Notes”). The Additional Notes were issued as additional notes pursuant to an indenture, dated as of July 10, 2019 (the “Indenture”).
The Additional Notes constitute a single series under the Indenture, together with $1,000,000 of CSC Holdings 5.75% senior notes due 2030 issued on July 10, 2019 (the “Original Notes”), and have identical terms as the Original Notes, except that the Additional Notes were issued at a price of 104.00% of the principal amount plus accrued interest. The Additional Notes will bear interest at a rate of 5.75% and will pay interest semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2020. The Additional Notes will mature on January 15, 2030.
The proceeds of the Additional Notes were used to redeem $1,240,762 aggregate principal amount of CSC Holdings 5.125% senior notes due 2021 (the “2021 Notes”), representing the entire aggregate principal amount of 2021 Notes

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outstanding, and to pay accrued interest, fees, costs and expenses associated with these transactions. In connection with the redemption, the Company will record a loss on extinguishment of debt of approximately $65,000 in the fourth quarter of 2019, representing the unamortized discount and deferred financing costs as of the redemption date.
See Note 10 of our consolidated financial statements for further details of the Company’s outstanding senior guaranteed notes and senior notes.
Pushdown of Cablevision Debt
Interest Rate Swap Contracts
In November 2019, CSC Holdings assumed Cablevision’s 5.875% senior notes due September 2022 withMarch 2020, the Company terminated two swap agreements whereby the Company was paying a floating rate of interest and receiving a fixed rate of interest on an aggregate principal amountnotional value of $649,024, Cablevision’s 7.75% senior notes$1,500,000. These contracts were due July 2025to mature in May 2026. In connection with the early termination, the Company received cash of $74,835 which has been recorded in gain (loss) on interest swap contracts in our consolidated statement of operations and presented in operating activities in our consolidated statement of cash flows.
In addition, in March 2020, the Company executed amendments to two interest swap contracts that reduced the fixed rate of interest that the Company was paying on an aggregate principal amountnotional value of $1,740$1,000,000 and Cablevision's 7.50% senior notes due April 2028 withextended the maturity date of the contracts to January 15, 2025 from January 15, 2022. The difference in the fair value of the amended contracts and the original contracts on the date of the transaction of $5,689 (an increase in the liability) is being amortized to loss on derivative contracts over the remaining term of the contracts.
During the six months ended June 30, 2020, the Company entered into three new interest rate swap contracts on an aggregate principal amountnotional value of $4,118.  This transaction has no impact on the consolidated financial statements of Altice USA.$3,850,000.
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Other Event
In June 2019, the Company completed the acquisition of Cheddar Inc., a digital-first news company, for approximately$200,000 in cash and stock, subject to certain closing adjustments as set forth in the merger agreement. See Note 9 to the consolidated financial statements for further details.

Capital Expenditures
The following table presents the Company's capital expenditures:
Three Months Ended September 30, Nine Months Ended September 30,Three Months Ended June 30,Six Months Ended June 30,
2019 2018 2019 20182020201920202019
Customer premise equipment$89,581
 $112,568
 $267,408
 $273,970
Customer premise equipment$45,848  $102,890  $109,183  $177,827  
Network infrastructure181,068
 129,796
 459,594
 284,679
Network infrastructure115,139  138,548  255,202  278,526  
Support and other53,280
 54,809
 176,313
 154,322
Support and other39,226  29,256  99,852  123,033  
Business services51,373
 37,354
 129,240
 119,853
Business services28,510  46,173  63,568  77,867  
Capital purchases (cash basis)$375,302
 $334,527
 $1,032,555
 $832,824
Capital purchases (cash basis)$228,723  $316,867  $527,805  $657,253  
Capital purchases (including accrued not paid and financed capital)$356,728
 $392,498
 $1,068,443
 $886,205
Capital purchases (including accrued not paid and financed capital)$279,878  $406,065  $652,846  $711,715  
Customer premise equipment includes expenditures for set-top boxes, cable modems, routers and other equipment that is placed in a customer's home, as well as installation costs for placing assets into service. Network infrastructure includes: (i) scalable infrastructure, such as headend equipment, (ii) line extensions, such as FTTH and fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering, and (iii) upgrade and rebuild, including costs to modify or replace existing fiber/coaxial cable networks, including enhancements. Support and other capital expenditures includes costs associated with the replacement or enhancement of non-network assets, such as software systems, vehicles, facilities and office equipment, buildings and vehicles.equipment. Business services capital expenditures include primarily equipment, installation, support, and other costs related to our fiber based telecommunications business serving, SMB andprimary enterprise customers.
Other Transactions
On July 14, 2020, the Company completed its acquisition of certain cable assets in New Jersey for approximately $150,000, subject to certain closing adjustments as set forth in the asset purchase agreement.
In July 2020, the Company entered into an agreement to sell 49.99% of its Lightpath fiber enterprise business for an implied enterprise value of $3,200,000. The Company will receive total gross cash proceeds of approximately $2,300,000 from the sale and related financing activity and will record a gain upon closing. Approximately $1,100,000 of the net proceeds after tax are expected to be used by the Company to repay debt such that the transaction is at least leverage-neutral to CSC Holdings. The Company will retain a 50.01% interest in Lightpath and maintain control. Accordingly, the Company will continue to consolidate the operating results of the Lightpath business. The transaction is currently expected to close in the fourth quarter of 2020 following the satisfaction of closing conditions, including receipt of necessary regulatory approvals. Upon closing, Lightpath will be financed independently outside of the CSC Holdings restricted group.
Cash Flow Discussion
Altice USA
Operating Activities
Net cash provided by operating activities amounted to $1,833,987$1,529,541 for the ninesix months ended SeptemberJune 30, 20192020 compared to $1,770,262$1,292,964 for the ninesix months ended SeptemberJune 30, 2018.  2019. 
The 2020 cash provided by operating activities resulted from $1,377,837 of income before depreciation and amortization and non-cash items, increases in liabilities related to interest rate swap contracts of $148,013, a decrease in accounts receivable of $27,522, an increase in accounts payable of $10,256, and a net decrease in amounts due from affiliates of $1,588, partially offset by a decrease in deferred revenue of $17,302, a decrease in accrued expenses of $12,796, and an increase in prepaid expenses and other assets of $5,577.
The 2019 cash provided by operating activities resulted from $2,068,420 of income before depreciation and amortization and non-cash items, an increase in liabilities related to interest rate swap and derivative contracts of $50,008 and accounts payable of $27,018, partially offset by a decrease in interest payable of $107,969, a decrease in accrued employee related costs and other liabilities of $78,796, a decrease in accounts receivable of $46,849, an increase in prepaid expenses and other assets of $41,636, a decrease in deferred revenue of $30,020, and a net decrease in amounts due to affiliates of $6,189.
The 2018 cash provided by operating activities resulted from $1,910,357$1,390,998 of income before depreciation and amortization and non-cash items, an increase in liabilities related to interest rate swap contracts of $62,549,$41,322, an increase in deferred revenue of $56,326,$12,022, a decrease in other receivables of $2,740, and a decrease in accounts receivable of $1,804, partially offset by a decrease in accounts payable and accrued expenses of $80,002, an increase in accounts payableprepaid expenses and other assets of $85,497,$72,638, and a net increasedecrease in amounts due to affiliates of $7,203, partially offset by a net decrease in employee related costs and other liabilities of $122,101, a decrease in interest payable of $76,095, an increase in accounts receivable of $111,446 and an increase in other assets of $42,028.$3,282.
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Investing Activities
Net cash used in investing activities for the ninesix months ended SeptemberJune 30, 20192020 was $1,202,741$525,880 compared to $842,396$829,881 for the ninesix months ended SeptemberJune 30, 2018.2019. The 2020 investing activities consisted primarily of capital expenditures of $527,805. The 2019 investing activities consisted primarily of capital expenditures of $1,032,555,$657,253 and payment for acquisitions, net of cash acquired of $172,659, partially offset$172,659.
Financing Activities
Net cash provided by otherfinancing activities amounted to $247,525 for the six months ended June 30, 2020, compared to net cash receiptsused in financing activities of $2,473.

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The 2018 investing$622,566 for the six months ended June 30, 2019. In 2020, the Company's financing activities consisted primarily of capital expendituresproceeds from the issuance of $832,824senior notes of $1,725,000, proceeds from credit facility debt of $200,000, and proceeds from stock option exercises of $3,650, partially offset by repurchase of common stock pursuant to a share repurchase program of $1,381,235, the repayment of credit facility debt of $228,875, repayment of notes payable of $48,239, principal payments on finance lease obligations of $11,935, and other net cash payments of $9,572.$10,841.
Financing Activities
Net cash used in financing activities amounted to $753,967 for the nine months ended September 30, 2019, compared to $771,881 for the nine months ended September 30, 2018. In 2019, the Company's financing activities consisted primarily of the redemption and repurchase of senior notes, including premiums and fees of $2,471,578,$2,462,692, the repurchase of common stock pursuant to a share repurchase program of $1,686,873,$1,199,953, repayments of credit facility debt of $1,342,625,$602,830, repayment of notes payable of $90,210,$74,061, additions to deferred financing costs of $16,007,$12,488, principal payments on finance lease obligations of $6,736$3,273 and other net cash payments of $1,500, partially offset by proceeds from credit facility debt of $1,940,000, proceeds from the issuance of senior notes, including premiums of $2,754,375, proceeds from credit facility debt of $2,040,000,$1,754,375, and proceeds from notes payable of $67,187.$39,856.
CSC Holdings
Operating Activities
Net cash provided by operating activities amounted to $1,529,178 for the six months ended June 30, 2020 compared to $1,321,776 for the six months ended June 30, 2019. The 2020 cash provided by operating activities resulted from $1,497,012 of income before depreciation and amortization and non-cash items, increases in liabilities related to interest rate swap contracts of $148,013, a decrease in accounts receivable of $27,522, and an increase in accounts payable of $10,256, partially offset by a net increase in amounts due from affiliates of $114,290, a decrease in deferred revenue of $17,302, a decrease in accrued expenses of $12,794, and an increase in prepaid expenses and other assets of $9,239.
The 2019 cash provided by operating activities resulted from $1,430,518 of income before depreciation and amortization and non-cash items, an increase in liabilities related to interest rate swap contracts and derivative contracts of $41,322, an increase in deferred revenue of $12,022, a decrease in other receivables of $2,740 and a decrease in accounts receivable of $1,804, partially offset by a decrease in accounts payable and accrued expenses of $80,324, an increase in prepaid expenses and other assets of $72,638, and a net decrease in amounts due to affiliates of $13,668.
Investing Activities
Net cash used in investing activities for the six months ended June 30, 2020 was $526,226 compared to $829,881 for the six months ended June 30, 2019. The 2020 investing activities consisted primarily of capital expenditures of $527,805. The 2019 investing activities consisted primarily of capital expenditures of $657,253 and payment for acquisitions, net of cash acquired of $172,659.
Financing Activities
Net cash provided by financing activities amounted to $252,377 for the six months ended June 30, 2020 compared to net cash used in financing activities of $652,102 for the six months ended June 30, 2019. In 2018,2020, the Company's financing activities consisted primarily of issuance of senior notes of $1,725,000 and proceeds from credit facility debt of $200,000, partially offset by distributions to its parent of $1,372,733, the redemptionrepayment of credit facility debt of $228,875, repayment of notes payable of $48,239, principal payments of finance lease obligations of $11,935, and repurchaseother net cash payments of $10,841.
In 2019, the Company's financing activities consisted primarily of redemption of senior notes, including premiums and fees of $2,623,756, dividends$2,462,692, distributions to stockholdersparent of $1,499,935, the purchase of common stock pursuant to a share repurchase program of $226,803, the repayment$1,229,489, repayments of credit facility debt of $635,738, payments$602,830, repayment of collateralized indebtedness and related derivativesnotes payable of $516,513, contingent payment for acquisition of $30,000,$74,061, additions to deferred financing costs of $21,570,$12,488, principal payments on finance lease obligations of $3,273 and other net cash payments of $9,440,$1,500, partially offset by proceeds from credit
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facility debt of $2,217,500,$1,940,000, proceeds from the issuance of senior notes, including premiums of $2,050,000, proceeds from collateralized indebtedness of $516,513, contributions from noncontrolling interests of $5,995$1,754,375, and net proceeds from notes payable of $1,866.$39,856.
Commitments and Contingencies
As of SeptemberJune 30, 2019,2020, the Company's commitments and contingencies not reflected in the Company's balance sheet decreased to approximately $7,964,000$6,956,000 as compared to approximately $9,460,000$8,454,000 at December 31, 2018.2019. This decrease relates primarily to payments made pursuant to programming commitments, and the adoption of ASC 842, partially offset by renewed multi-year programming agreements entered into during the ninesix months ended SeptemberJune 30, 2019.2020.
Stock
Share Repurchase PlanProgram
OnIn June 8, 2018, the Company'sBoard of Directors of Altice USA authorized a share repurchase program of $2.0 billion, and on July 30, 2019, the Board of Directors authorized a new incremental three-year share repurchase program of $5.0 billion that took effect following the repurchasecompletion in August 2019 of up tothe $2.0 billion of Altice USA Class A common stock.repurchase program. Under thethese repurchase program,programs, shares of Altice USA Class A common stock may be purchased from time to time in the open market and may include trading plans entered into with one or more brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Size and timing of these purchases will be determined based on market conditions and other factors.  Funding for the repurchase program will be met with cash on hand and/or borrowings under the Company's revolving credit facilities.
During the ninesix months ended SeptemberJune 30, 2019,2020, the Company repurchased 72,668,71256,956,374 shares for a total purchase price of approximately $1,686,873.$1,381,235. From the inception of the repurchase program, the Company acquired 100,697,392157,653,766 for a total purchase price of approximately $2,186,874.$3,568,109. These acquired shares have been retired and the associated cost was recorded in paid-in capital in the Company’s consolidated balance sheet.
On July 30, 2019, the Altice USA Board of Directors authorized a new incremental three-year share repurchase program of $5.0 billion, to take effect following the completion of the current repurchase program. Under the repurchase program, shares of Altice USA Class A common stock may be purchased from time to time in the open market and may include trading plans entered into with one or more brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934.
Recently Issued But Not Yet Adopted Accounting Pronouncements
See Note 3 to the accompanying consolidated financial statements contained in "Part I" for a discussion of recently issued accounting standards.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 3.  Quantitative and Qualitative Disclosures About Market Risk
All dollar amounts, except per share data, included in the following discussion are presented in thousands.
Equity Price Risk
We are exposed to market risks from changes in certain equity security prices.  Our exposure to changes in equity security prices stems primarily from the shares of Comcast common stock we hold.  We have entered into equity derivative contracts consisting of a collateralized loan and an equity collar to hedge our equity price risk and to monetize the value of these securities.  These contracts, at maturity, are expected to offset declines in the fair value of these securities below the hedge price per share while allowing us to retain upside appreciation from the hedge price per share to the relevant cap price.  The contracts' actual hedge prices per share vary depending on average stock prices in effect at the time the contracts were executed.  The contracts' actual cap prices vary depending on the maturity and terms of each contract, among other factors.  If any one of these contracts is terminated prior to its scheduled maturity date due to the occurrence of an event specified in the contract, we would be obligated to repay the fair value of the collateralized indebtedness less the sum of the fair values of the underlying stock and equity collar, calculated at the termination date.  As of SeptemberJune 30, 2019,2020, we did not have an early termination shortfall relating to any of these contracts.
The underlying stock and the equity collars are carried at fair value onin our consolidated balance sheet and the collateralized indebtedness is carried at its principal value, net of discounts. The fair value adjustment isdiscounts are being amortized over the term of the related indebtedness.  The carrying value of our collateralized indebtedness amounted to $1,423,519$1,601,107 at SeptemberJune 30, 2019.2020.  At maturity, the contracts provide for the option to deliver cash or shares of Comcast common stock, with a value determined by reference to the applicable stock price at maturity.
As of SeptemberJune 30, 2019,2020, the fair value and the carrying value of our holdings of Comcast common stock aggregated $1,936,422.$1,674,395.  Assuming a 10% change in price, the potential change in the fair value of these investments would be approximately $193,642.$167,440.  As of SeptemberJune 30, 2019,2020, the net fair value and the carrying value of the equity collar component of the equity derivative contracts entered into to partially hedge the equity price risk of our holdings of Comcast common stock aggregated $194,642,$218,212, a net liabilityasset position.  For the ninesix months ended SeptemberJune 30, 2019,2020, we recorded a net lossgain of $303,986$287,800 related to our outstanding equity derivative contracts and recorded an unrealized gainloss of $473,796$257,302 related to the Comcast common stock that we held.
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Fair Value of Equity Derivative Contracts 
  
Fair value as of December 31, 2018, net asset position$109,344
Change in fair value, net(303,986)
Fair value as of September 30, 2019, net liability position$(194,642)
Fair Value of Equity Derivative Contracts
Fair value as of December 31, 2019, net liability position$(69,588)
Change in fair value, net287,800 
Fair value as of June 30, 2020, net asset position$218,212 
The maturity, number of shares deliverable at the relevant maturity, hedge price per share, and the lowest and highest cap prices received for the Comcast common stock monetized via an equity derivative prepaid forward contract are summarized in the following table:
Hedge PriceCap Price (b)
# of Shares DeliverableMaturityper Share (a)LowHigh
42,955,2362023$40.95$49.55  $49.55  
    Hedge Price Cap Price (b)
# of Shares Deliverable (a) Maturity per Share (a) Low High
         
42,955,236 2021 $29.25- $35.47 $43.88
 $44.80
(a)Represents the price below which we are provided with downside protection and above which we retain upside appreciation.  Also represents the price used in determining the cash proceeds payable to us at inception of the contracts.
(a)Represents the price below which we are provided with downside protection and above which we retain upside appreciation.  Also represents the price used in determining the cash proceeds payable to us at inception of the contracts.
(b)Represents the price up to which we receive the benefit of stock price appreciation.
(b)Represents the price up to which we receive the benefit of stock price appreciation.
Fair Value of Debt
At SeptemberJune 30, 2019,2020, the fair value of our fixed rate debt of $18,801,943$19,937,110 was higher than its carrying value of $17,377,862$18,927,180 by $1,424,081.$1,009,930.  The fair value of these financial instruments is estimated based on reference to quoted

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market prices for these or comparable securities.  Our floating rate borrowings bear interest in reference to current LIBOR-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 SeptemberJune 30, 20192020 would increase the estimated fair value of our fixed rate debt by $414,736$647,347 to $19,216,679.$20,584,457.  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 the Company 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,sheet, with changes in fair value reflected in the consolidated statementsstatement of operations.
The following is a summary of interest rate swap contracts outstanding at SeptemberJune 30, 2019:2020:
Trade Date Maturity Date Notional Amount Company Pays Company Receives
May 2016 May 2026 $750,000
 Six- month LIBOR Fixed rate of 1.665%
June 2016 May 2026 750,000
 Six- month LIBOR Fixed rate of 1.68%
April 2019 April 2020 1,255,513
 Three- month LIBOR minus 0.1075% One-month LIBOR
December 2018 January 2022 500,000
 Fixed rate of 2.7177% Three-month LIBOR
December 2018 January 2022 500,000
 Fixed rate of 2.733% Three-month LIBOR
December 2018 January 2022 500,000
 Fixed rate of 2.722% Three-month LIBOR
December 2018 December 2026 750,000
 Fixed rate of 2.9155% Three-month LIBOR
December 2018 December 2026 750,000
 Fixed rate of 2.9025% Three-month LIBOR
Trade DateMaturity DateNotional AmountCompany PaysCompany Receives
December 2018January 2025$500,000 Fixed rate of 1.53%Three-month LIBOR
December 2018January 2022500,000 Fixed rate of 2.733%Three-month LIBOR
December 2018January 2025500,000 Fixed rate of 1.625%Three-month LIBOR
December 2018December 2026750,000 Fixed rate of 2.9155%Three-month LIBOR
December 2018December 2026750,000 Fixed rate of 2.9025%Three-month LIBOR
March 2020January 2025500,000 Fixed rate of 1.458%Three-month LIBOR
March 2020January 2022500,000 Three-month LIBORFixed rate of 2.733%
April 2020April 20212,850,000 Six-month LIBOR minus 0.5185%One-month LIBOR
These 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 inthrough the statement of operations. For the three and ninesix months ended SeptemberJune 30, 2019,2020, the Company recorded a loss on interest rate swap contracts of $11,163$88,567.
The following represents the location of the assets and $61,735, respectively.liabilities associated with the Company's derivative instruments within the consolidated balance sheets:
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Derivatives Not Designated as Hedging InstrumentsBalance Sheet LocationFair Value at
June 30, 2020
Asset Derivatives:
Interest rate swap contractsDerivative contracts, long-term$4,058 
Prepaid forward contractsDerivative contracts, long-term221,733 
225,791 
Liability Derivatives:
Interest rate swap contractsOther current liabilities(4,016)
Prepaid forward contractsLiabilities under derivative contracts, long-term(3,520)
Interest rate swap contractsLiabilities under derivative contracts, long-term(309,396)
$(316,932)
As of SeptemberJune 30, 2019, our outstanding interest rate swap contracts in a liability position had an aggregate fair value and carrying value of $182,970 reflected in “Liabilities under derivative contracts, long-term” and $674 reflected in "Other current liabilities" on our consolidated balance sheet.
As of September 30, 2019,2020, we did not hold and have not issued derivative instruments for trading or speculative purposes.
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 SeptemberJune 30, 2019.2020.
Changes in Internal Control
During the ninesix months ended SeptemberJune 30, 2019,2020, 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.

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The Company completed its migration of Suddenlink customers to the Optimum billing system platform in September 2019 and is currently upgrading a billing system for certain advertising customers in a phased approach which began this year.


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PART II. OTHER INFORMATION

Item 1.  Legal Proceedings
Refer to Note 16 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of our legal proceedings.
Item 1A. Risk Factors
In our Annual Report on Form 10-K for the year ended December 31, 2019, we described material risk factors facing our business. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Except as set forth below, as of the date of this report, there have been no material changes to the risk factors described in our Annual Report on Form 10-K.
Our business, financial condition and results of operations may be adversely affected by the recent COVID-19 pandemic
The coronavirus pandemic ("COVID-19"), and measures to prevent its spread, may have a material adverse impact on our business, financial condition and results of operations. The severity and timing of the impact will depend on a number of factors, including the level and rapidity of infection, duration of containment measures, changes in consumer spending patterns, measures imposed or taken by governmental authorities in response to the pandemic, macroeconomic conditions in our markets, and negative effects on the financial condition of our customers.
Under difficult economic conditions, including prolonged unemployment and employment furloughs, demand for our products and services could decline and some customers may be unable or unwilling to pay for our products and services. Additionally, in order to prioritize the demands of the business, we may delay certain capital investments, such as FTTH or in other new initiatives, products or services, which may adversely affect our business in the future. If these events occur and were to continue, our revenue may be reduced materially which could result in reduced operating margins and a reduction in cash flows.
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Governmental and non-governmental initiatives to reduce the transmission of COVID-19, such as the imposition of restrictions on work and public gatherings and the promotion of social distancing, along with new government service, collection, pricing or rebate mandates, such as New Jersey’s recent executive order to maintain broadband service for non-paying customers, have impacted and could continue to impact our operations and financial results. Our suppliers and vendors also may be affected by such measures in their ability to provide products and services to us and these measures could also make it more difficult for us to serve our customers.
In addition, the impact that the COVID-19 pandemic will have on our business, financial condition and results of operations could exacerbate the risks identified in "Item 1A. Risk Factors" in our Annual Report on Form 10-K.
Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price of our Class A common stock to decline.
The sale of substantial amounts of shares of our Class A common stock (including shares of Class A common stock issuable upon conversion of shares of our Class B common stock), or the perception that such sales could occur, could cause the prevailing market price of shares of our Class A common stock to decline. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
As of June 30, 2020, we had a total of 393.6 million shares of Class A common stock outstanding and 186.2 million shares of Class B common stock outstanding.
Any shares held by our affiliates, as that term is defined under Rule 144 ("Rule 144") of the Securities Act of 1933, as amended (the "Securities Act"), including Next Alt and its affiliates, may be sold only in compliance with certain limitations.
Pursuant to a stockholders and registration rights agreement between the Company and Next Alt. S.a.r.l. ("Next Alt"), Altice Europe N.V. ("Altice Europe"), BC Partners LLP ("BCP") and entities affiliated with the Canada Pension Plan Investment Board ("CPPIB" and together with BCP, the "Sponsors"), the other parties thereto have the right, subject to certain conditions, to require us to register the sale of their shares of our Class A common stock, or shares of Class A common stock issuable upon conversion of shares of our Class B common stock, under the Securities Act. By exercising their registration rights and selling a large number of shares, our existing owners could cause the prevailing market price of our Class A common stock to decline. Registration of any of these outstanding shares of capital stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement, except for shares received by individuals who are our affiliates.
If these stockholders exercise their registration rights and sell shares of common stock, or if the market perceives that they intend to sell such shares, the market price of our Class A common stock could drop significantly.
In addition, if Next Alt’s lenders foreclose on the shares of Class A and Class B common stock it has pledged in connection with certain transactions, such lenders may have the right to acquire and sell such shares, which could cause the market price of our Class A common stock to drop significantly.

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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
(a)(a) Sales of Unregistered Securities
Set forth below is information related to transactions under the Company's share repurchase program for the quarter ended SeptemberJune 30, 2019.2020.
 (a)
Total Number of Shares (or Units) Purchased		(b)
Average Price Paid per Share (or Unit)		(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)(2)		(d)
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
April 1- April 3011,731,882  $24.83  143,645,533  3,771,824,497  
May 1- May 315,974,344  23.94  149,619,877  3,628,791,681  
June 1 - June 308,033,889  24.51  157,653,766  3,431,890,638  
 
(a)
Total Number of Shares (or Units) Purchased
 
(b)
Average Price Paid per Share (or Unit)
 
(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)(2)
 
(d)
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
        
July 1- July 317,879,215
 $25.38
 90,162,570
 5,100,046,527
August 1- August 318,063,254
 26.90
 98,225,824
 4,883,123,076
September 1 - September 302,471,568
 28.32
 100,697,392
 4,813,125,824

(1)On June 8, 2018, the Company's Board of Directors authorized the repurchase of up to $2.0 billion of Altice USA Class A common stock. On July 30, 2019, the Board of Directors authorized a new incremental three-year share repurchase program of $5.0 billion, to take effect following the completion of the June 2018 repurchase program. Under these repurchase programs, shares of Altice USA Class A common stock may be purchased from time to time in the open market and may include trading plans entered into with one or more brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. The programs do not have an expiration date and may be suspended at any time at the discretion of the Board of Directors.
(2)This column reflects the cumulative number of shares acquired pursuant to the repurchase program at the end of the respective period.

(1)On June 8, 2018, the Company's Board of Directors authorized the repurchase of up to $2.0 billion of Altice USA Class A common stock. On July 30, 2019, the Board of Directors authorized a new incremental three-year share repurchase program of $5.0 billion, to take effect following the completion of the June 2018 repurchase program. Under these repurchase programs, shares of Altice USA Class A common stock may be purchased from time to time in the open market and may include trading plans entered into with one or more brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. The programs do not have an expiration date and may be suspended at any time at the discretion of the Board of Directors.
(2)This column reflects the cumulative number of shares acquired pursuant to the repurchase program at the end of the respective period.

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Item 6.  Exhibits

EXHIBIT NO.DESCRIPTION
EXHIBIT NO.DESCRIPTIONSenior Notes Indenture, dated as of June 16, 2020 between CSC Holdings, LLC, as Issuer, and Deutsche Bank Trust Company Americas, as Trustee (incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K (File No. 001-38126) filed on June 16, 2020).
Senior Guaranteed Notes Indenture, dated as of June 16, 2020 between, inter alios, CSC Holdings, LLC, as Issuer, the Guarantors set forth therein and Deutsche Bank Trust Company Americas, as Trustee (incorporated herein by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K (File No. 001-38126) filed on June 16, 2020).
Section 302 Certification of the CEO.
Section 302 Certification of the CFO.
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 SeptemberJune 30, 20192020 filed with the Securities and Exchange Commission on November 5, 2019,July 30, 2020 formatted in iXBRL (inline eXtensibleXBRL (eXtensible Business Reporting Language):  (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income (Loss);Income; (iv) the Consolidated StatementsStatement of Stockholders' Equity; (v) the Consolidated Statements of Cash Flows; and (vi) the Notes to Consolidated Financial Statements.
104The cover page from this quarterly report on Form 10-Q formatted in Inline XBRL.


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SIGNATURES
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:November 5, 2019July 30, 2020/s/ Michael J. Grau
By:
Michael J. Grau
Chief Financial Officer


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