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			June 30, ~~2022~~2023


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

For the transition period from

Commission File Number

Registrant; State of Incorporation; Address and Telephone Number

IRS Employer Identification No.

001-38126

38-3980194

Altice USA, Inc.

Delaware

1 Court Square West

Long Island City,

New York

11101

(516)

803-2300

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

Yes

☒

☐

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

Yes

☒

☐

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

Large Accelerated Filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

Yes

☐

☒

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


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


Number of shares of common stock outstanding as of July ~~29, 2022~~28, 2023			~~454,668,222~~454,729,330

ALTICE USA, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION		2

Item 1. Financial Statements

ALTICE USA, INC. AND SUBSIDIARIES
Consolidated Financial Statements
	Consolidated Balance Sheets - June 30, ~~2022~~2023 (Unaudited) and December 31, ~~2021~~2022	4
	Consolidated Statements of Operations - Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	5
	Consolidated Statements of Comprehensive Income - Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	6
	Consolidated Statements of Stockholders' Deficiency - Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	7
	Consolidated Statements of Cash Flows - ~~Six~~Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	109
	Combined Notes to Consolidated Financial Statements (Unaudited)	1615
Supplemental Financial Statements Furnished:
CSC HOLDINGS, LLC AND SUBSIDIARIES
Consolidated Financial Statements
	Consolidated Balance Sheets - June 30, ~~2022~~2023 (Unaudited) and December 31, ~~2021~~2022	1110
	Consolidated Statements of Operations - Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	1211
	Consolidated Statements of Comprehensive Income - Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	1312
	Consolidated Statements of Member's Deficiency - Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	1413
	Consolidated Statements of Cash Flows - ~~Six~~Three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 (Unaudited)	1514
	Combined Notes to Consolidated Financial Statements (Unaudited)	1615
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		3029
Item 3. Quantitative and Qualitative Disclosures About Market Risk		4543
Item 4. Controls and Procedures		4644

PART II. OTHER INFORMATION		4745
Item 1. Legal Proceedings		4745


Item 5, Other Information		45
Item 6. Exhibits		4745
SIGNATURES		4846

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, direct broadcast satellite ~~("DBS")~~ providers, wireless data and telephony providers, and Internet-based providers) and new fiber-based competitors entering our footprint;

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

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

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

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

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

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

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

•the effects of industry conditions;

•demand for digital and linear advertising products and services;

•our substantial indebtedness and debt service obligations;

•adverse changes in the credit market;

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

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

•the restrictions contained in our financing agreements;

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

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

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

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

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

•labor shortages and supply chain disruptions;

•~~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; and

•other risks and uncertainties inherent in our cable and broadband communications businesses and our other businesses, including those listed under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February ~~16, 2022~~22, 2023 (the "Annual Report").

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

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

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

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

Item 1. Financial Statements


ALTICE USA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)	ALTICE USA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)					ALTICE USA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
		June 30, 2022 (Unaudited)		December 31, 2021			June 30, 2023 (Unaudited)		December 31, 2022
ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	232,966	$	195,711	Cash and cash equivalents	$	219,128	$	305,484
Restricted cash	Restricted cash	264		264		Restricted cash	273		267
Accounts receivable, trade (less allowance for doubtful accounts of $34,870 and $27,931, respectively)		370,903		406,952
Accounts receivable, trade (less allowance for doubtful accounts of $24,883 and $20,767, respectively)						Accounts receivable, trade (less allowance for doubtful accounts of $24,883 and $20,767, respectively)	332,657		365,992

Prepaid expenses and other current assets ($3,790 and $3,776 due from affiliates, respectively)		333,112		186,707
Prepaid expenses and other current assets ($299 and $572 due from affiliates, respectively)						Prepaid expenses and other current assets ($299 and $572 due from affiliates, respectively)	184,263		130,684
Derivative contracts						Derivative contracts	—		263,873
Investment securities pledged as collateral	Investment securities pledged as collateral	1,685,563		—		Investment securities pledged as collateral	—		1,502,145

Total current assets	Total current assets	2,622,808		789,634		Total current assets	736,321		2,568,445
Property, plant and equipment, net of accumulated depreciation of $7,550,050 and $7,142,852, respectively		6,780,006		6,340,467
Property, plant and equipment, net of accumulated depreciation of $7,999,028 and $7,785,397, respectively						Property, plant and equipment, net of accumulated depreciation of $7,999,028 and $7,785,397, respectively	7,963,047		7,500,780

Right-of-use operating lease assets	Right-of-use operating lease assets	229,275		222,124		Right-of-use operating lease assets	261,630		250,601
Investment securities pledged as collateral		—		2,161,937

Other assets	Other assets	154,402		76,653		Other assets	270,208		259,681
Amortizable intangibles, net of accumulated amortization of $5,343,741 and $5,051,149, respectively		1,910,842		2,202,001
Amortizable intangibles, net of accumulated amortization of $5,758,653 and $5,549,674, respectively						Amortizable intangibles, net of accumulated amortization of $5,758,653 and $5,549,674, respectively	1,451,370		1,660,331
Indefinite-lived cable television franchises	Indefinite-lived cable television franchises	13,216,355		13,216,355		Indefinite-lived cable television franchises	13,216,355		13,216,355
Goodwill	Goodwill	8,205,863		8,205,863		Goodwill	8,208,773		8,208,773
Total assets	Total assets	$	33,119,551	$	33,215,034	Total assets	$	32,107,704	$	33,664,966
LIABILITIES AND STOCKHOLDERS' DEFICIENCY	LIABILITIES AND STOCKHOLDERS' DEFICIENCY					LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:	Current Liabilities:					Current Liabilities:
Accounts payable	Accounts payable	$	1,041,996	$	1,023,045	Accounts payable	$	979,288	$	1,213,806
Interest payable	Interest payable	249,974		244,934		Interest payable	279,085		252,351
Accrued employee related costs	Accrued employee related costs	124,911		124,941		Accrued employee related costs	135,505		139,328

Deferred revenue	Deferred revenue	92,886		94,943		Deferred revenue	87,506		80,559
Debt	Debt	2,693,690		917,313		Debt	1,111,144		2,075,077
Other current liabilities ($25,767 and $31,810 due to affiliates, respectively)		320,921		329,943
Other current liabilities ($51,797 and $20,857 due to affiliates, respectively)						Other current liabilities ($51,797 and $20,857 due to affiliates, respectively)	414,848		278,580
Total current liabilities	Total current liabilities	4,524,378		2,735,119		Total current liabilities	3,007,376		4,039,701
Other liabilities	Other liabilities	158,557		159,082		Other liabilities	231,463		274,623
Deferred tax liability	Deferred tax liability	4,990,046		5,048,129		Deferred tax liability	4,970,285		5,081,661
Liabilities under derivative contracts		—		276,933

Right-of-use operating lease liability	Right-of-use operating lease liability	241,794		237,226		Right-of-use operating lease liability	276,142		260,237
Long-term debt, net of current maturities	Long-term debt, net of current maturities	23,679,410		25,629,447		Long-term debt, net of current maturities	24,003,953		24,512,656
Total liabilities	Total liabilities	33,594,185		34,085,936		Total liabilities	32,489,219		34,168,878
Commitments and contingencies (Note 14)	Commitments and contingencies (Note 14)	0		0		Commitments and contingencies (Note 14)
Redeemable noncontrolling interest						Redeemable noncontrolling interest	21,618		—
Stockholders' Deficiency:	Stockholders' Deficiency:					Stockholders' Deficiency:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, no shares issued and outstanding	Preferred stock, $0.01 par value, 100,000,000 shares authorized, no shares issued and outstanding	—		—		Preferred stock, $0.01 par value, 100,000,000 shares authorized, no shares issued and outstanding	—		—
Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 270,345,124 shares issued and 270,325,554 shares outstanding as of June 30, 2022 and 270,341,685 shares issued and 270,320,798 shares outstanding as of December 31, 2021		2,703		2,703
Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 issued, 184,329,903 shares outstanding as of June 30, 2022 and 184,333,342 shares outstanding as of December 31, 2021		1,843		1,843
Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 270,400,901 shares issued and outstanding as of June 30, 2023 and 271,851,984 shares issued and 271,833,063 shares outstanding as of December 31, 2022						Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 270,400,901 shares issued and outstanding as of June 30, 2023 and 271,851,984 shares issued and 271,833,063 shares outstanding as of December 31, 2022	2,704		2,719
Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 issued, 184,328,429 shares outstanding as of June 30, 2023 and 184,329,229 shares outstanding as of December 31, 2022						Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 issued, 184,328,429 shares outstanding as of June 30, 2023 and 184,329,229 shares outstanding as of December 31, 2022	1,843		1,843
Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding	Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding	—		—		Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding	—		—
Paid-in capital	Paid-in capital	100,213		18,005		Paid-in capital	168,933		182,701
Accumulated deficit	Accumulated deficit	(546,111)		(848,836)		Accumulated deficit	(550,108)		(654,273)
		(441,352)		(826,285)			(376,628)		(467,010)
Treasury stock, at cost (19,570 and 20,887 Class A common shares, respectively)		—		—
Accumulated other comprehensive income		4,876		6,497
Treasury stock, at cost (18,921 Class A common shares at December 31, 2022)						Treasury stock, at cost (18,921 Class A common shares at December 31, 2022)	—		—
Accumulated other comprehensive loss						Accumulated other comprehensive loss	(2,245)		(8,201)
Total Altice USA stockholders' deficiency	Total Altice USA stockholders' deficiency	(436,476)		(819,788)		Total Altice USA stockholders' deficiency	(378,873)		(475,211)
Noncontrolling interests	Noncontrolling interests	(38,158)		(51,114)		Noncontrolling interests	(24,260)		(28,701)
Total stockholders' deficiency	Total stockholders' deficiency	(474,634)		(870,902)		Total stockholders' deficiency	(403,133)		(503,912)
Total liabilities and stockholders' deficiency	Total liabilities and stockholders' deficiency	$	33,119,551	$	33,215,034	Total liabilities and stockholders' deficiency	$	32,107,704	$	33,664,966

See accompanying notes to consolidated financial statements.

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenue (including revenue from affiliates of $478, $3,035, $1,116, and $6,441, respectively) (See Note 13)		$	2,463,014	$	2,516,008	$	4,884,911	$	4,994,829
Revenue (including revenue from affiliates of $604, $478, $682, and $1,116, respectively) (See Note 13)										Revenue (including revenue from affiliates of $604, $478, $682, and $1,116, respectively) (See Note 13)	$	2,324,274	$	2,463,014	$	4,618,252	$	4,884,911
Operating expenses:	Operating expenses:									Operating expenses:
Programming and other direct costs (including charges from affiliates of $2,715, $4,504, $7,333, and $6,732, respectively) (See Note 13)		819,011		849,872		1,647,804		1,701,736
Other operating expenses (including charges from affiliates of $3,037, $2,696, $6,132 and $5,875, respectively) (See Note 13)		673,464		589,180		1,315,370		1,169,613
Restructuring and other expense		2,673		5,864		6,051		9,073
Programming and other direct costs (including charges from affiliates of $3,080, $2,715, $5,722, and $7,333, respectively) (See Note 13)										Programming and other direct costs (including charges from affiliates of $3,080, $2,715, $5,722, and $7,333, respectively) (See Note 13)	762,280		819,011		1,533,999		1,647,804
Other operating expenses (including charges from affiliates of $5,119 , $3,037, $9,795, and $6,132, respectively) (See Note 13)										Other operating expenses (including charges from affiliates of $5,119 , $3,037, $9,795, and $6,132, respectively) (See Note 13)	656,128		673,464		1,307,373		1,315,370
Restructuring expense and other operating items										Restructuring expense and other operating items	5,178		2,673		34,850		6,051
Depreciation and amortization (including impairments)	Depreciation and amortization (including impairments)	446,125		444,327		881,474		879,184		Depreciation and amortization (including impairments)	418,705		446,125		834,917		881,474
		1,941,273		1,889,243		3,850,699		3,759,606			1,842,291		1,941,273		3,711,139		3,850,699
Operating income	Operating income	521,741		626,765		1,034,212		1,235,223		Operating income	481,983		521,741		907,113		1,034,212
Other income (expense):	Other income (expense):									Other income (expense):
Interest expense, net	Interest expense, net	(310,213)		(319,371)		(613,575)		(635,683)		Interest expense, net	(406,709)		(310,213)		(795,987)		(613,575)
Gain (loss) on investments		(325,601)		125,019		(476,374)		198,472
Gain (loss) on investments, net										Gain (loss) on investments, net	—		(325,601)		192,010		(476,374)
Gain (loss) on derivative contracts, net	Gain (loss) on derivative contracts, net	219,114		(98,840)		320,188		(152,405)		Gain (loss) on derivative contracts, net	—		219,114		(166,489)		320,188
Gain (loss) on interest rate swap contracts, net		39,868		(21,574)		163,015		54,079
Loss on extinguishment of debt and write-off of deferred financing costs		—		(51,712)		—		(51,712)
Other income, net		2,521		2,467		4,951		5,326
Gain on interest rate swap contracts, net										Gain on interest rate swap contracts, net	61,165		39,868		46,736		163,015
Gain on extinguishment of debt and write-off of deferred financing costs										Gain on extinguishment of debt and write-off of deferred financing costs	—		—		4,393		—
Other income (loss), net										Other income (loss), net	(1,570)		2,521		8,635		4,951
		(374,311)		(364,011)		(601,795)		(581,923)			(347,114)		(374,311)		(710,702)		(601,795)
Income before income taxes	Income before income taxes	147,430		262,754		432,417		653,300		Income before income taxes	134,869		147,430		196,411		432,417
Income tax expense	Income tax expense	(33,890)		(61,820)		(116,736)		(173,827)		Income tax expense	(48,725)		(33,890)		(79,097)		(116,736)
Net income	Net income	113,540		200,934		315,681		479,473		Net income	86,144		113,540		117,314		315,681
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(7,366)		(3,274)		(12,956)		(7,677)		Net income attributable to noncontrolling interests	(7,844)		(7,366)		(13,149)		(12,956)
Net income attributable to Altice USA, Inc. stockholders	Net income attributable to Altice USA, Inc. stockholders	$	106,174	$	197,660	$	302,725	$	471,796	Net income attributable to Altice USA, Inc. stockholders	$	78,300	$	106,174	$	104,165	$	302,725
Income per share:	Income per share:									Income per share:
Basic income per share	Basic income per share	$	0.23	$	0.43	$	0.67	$	1.02	Basic income per share	$	0.17	$	0.23	$	0.23	$	0.67
Basic weighted average common shares (in thousands)	Basic weighted average common shares (in thousands)	453,230		456,955		453,230		463,060		Basic weighted average common shares (in thousands)	454,688		453,230		454,687		453,230

Diluted income per share	Diluted income per share	$	0.23	$	0.43	$	0.67	$	1.00	Diluted income per share	$	0.17	$	0.23	$	0.23	$	0.67
Diluted weighted average common shares (in thousands)	Diluted weighted average common shares (in thousands)	453,230		463,637		453,230		469,510		Diluted weighted average common shares (in thousands)	454,688		453,230		455,139		453,230
Cash dividends declared per common share	Cash dividends declared per common share	$	—	$	—	$	—	$	—	Cash dividends declared per common share	$	—	$	—	$	—	$	—

See accompanying notes to consolidated financial statements.

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income	Net income	$	113,540	$	200,934	$	315,681	$	479,473	Net income	$	86,144	$	113,540	$	117,314	$	315,681
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Defined benefit pension plans	Defined benefit pension plans	(4,559)		1,492		(2,055)		10,140		Defined benefit pension plans	5,954		(4,559)		7,408		(2,055)
Applicable income taxes	Applicable income taxes	1,204		(404)		543		(2,696)		Applicable income taxes	(1,611)		1,204		(2,004)		543
Defined benefit pension plans, net of income taxes	Defined benefit pension plans, net of income taxes	(3,355)		1,088		(1,512)		7,444		Defined benefit pension plans, net of income taxes	4,343		(3,355)		5,404		(1,512)

Foreign currency translation adjustment	Foreign currency translation adjustment	61		(140)		(109)		479		Foreign currency translation adjustment	740		61		552		(109)
Applicable income taxes		—		—		—		—
Foreign currency translation adjustment, net		61		(140)		(109)		479
Other comprehensive income (loss)	Other comprehensive income (loss)	(3,294)		948		(1,621)		7,923		Other comprehensive income (loss)	5,083		(3,294)		5,956		(1,621)
Comprehensive income	Comprehensive income	110,246		201,882		314,060		487,396		Comprehensive income	91,227		110,246		123,270		314,060
Comprehensive income attributable to noncontrolling interests	Comprehensive income attributable to noncontrolling interests	(7,366)		(3,274)		(12,956)		(7,677)		Comprehensive income attributable to noncontrolling interests	(7,844)		(7,366)		(13,149)		(12,956)
Comprehensive income attributable to Altice USA, Inc. stockholders	Comprehensive income attributable to Altice USA, Inc. stockholders	$	102,880	$	198,608	$	301,104	$	479,719	Comprehensive income attributable to Altice USA, Inc. stockholders	$	83,383	$	102,880	$	110,121	$	301,104

See accompanying notes to consolidated financial statements.

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

Class A
Common
Stock
Class B
Common
Stock Paid-in
Capital Accumulated Deficit Treasury Stock Accumulated
Other
Comprehensive
Income Total
Stockholders'
Deficiency Non-controlling
Interests Total
Deficiency
Balance at January 1, 2022 $ 2,703 $ 1,843 $ 18,005 $ (848,836) $ — $ 6,497 $ (819,788) $ (51,114) $ (870,902)
Net income attributable to stockholders — — — 196,551 — — 196,551 — 196,551
Net income attributable to noncontrolling interests — — — — — — — 5,590 5,590
Pension liability adjustments, net of income taxes — — — — — 1,843 1,843 — 1,843
Foreign currency translation adjustment, net of income taxes — — — — — (170) (170) — (170)
Share-based compensation expense (equity classified) — — 40,512 — — — 40,512 — 40,512
Issuance of common shares pursuant to employee long term incentive plan — — 10 — — — 10 — 10
Balance at March 31, 2022 2,703 1,843 58,527 (652,285) — 8,170 (581,042) (45,524) (626,566)
Net income attributable to stockholders — — — 106,174 — — 106,174 — 106,174
Net income attributable to noncontrolling interests — — — — — — — 7,366 7,366
Pension liability adjustments, net of income taxes — — — — — (3,355) (3,355) — (3,355)
Foreign currency translation adjustment, net of income taxes — — — — — 61 61 — 61
Share-based compensation expense (equity classified) — — 41,680 — — — 41,680 — 41,680
Issuance of common shares pursuant to employee long term incentive plan — — 6 — — — 6 — 6
Balance at June 30, 2022 $ 2,703 $ 1,843 $ 100,213 $ (546,111) $ — $ 4,876 $ (436,476) $ (38,158) $ (474,634)


ALTICE USA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (In thousands) (Unaudited)
	Class A Common Stock		Class B Common Stock		Paid-in Capital		Accumulated Deficit		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Altice USA Stockholders' Deficiency		Non-controlling Interests		Total Deficiency
Balance at January 1, 2023	$	2,719	$	1,843	$	182,701	$	(654,273)	$	—	$	(8,201)	$	(475,211)	$	(28,701)	$	(503,912)
Net income attributable to stockholders	—		—		—		25,865		—		—		25,865		—		25,865
Net income attributable to noncontrolling interests	—		—		—		—		—		—		—		5,305		5,305

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






Change in noncontrolling interest	—		—		(14,166)		—		—		—		(14,166)		(8,027)		(22,193)

Other, net	(15)				(67)		—		—		—		(82)		—		(82)
Balance at March 31, 2023	2,704		1,843		159,750		(628,408)		—		(7,328)		(471,439)		(31,425)		(502,864)
Net income attributable to stockholders	—		—		—		78,300		—		—		78,300		—		78,300
Net income attributable to noncontrolling interests	—		—		—		—		—		—		—		7,844		7,844
Pension liability adjustments, net of income taxes	—		—		—		—		—		4,343		4,343		—		4,343
Foreign currency translation adjustment	—		—		—		—		—		740		740		(2)		738
Share-based compensation expense (equity classified)	—		—		9,091		—		—		—		9,091		—		9,091
Change in noncontrolling interest	—		—		175		—		—		—		175		400		575
Distributions to noncontrolling interests	—		—		—		—		—		—		—		(1,077)		(1,077)
Other, net	—		—		(83)		—		—		—		(83)		—		(83)
Balance at June 30, 2023	$	2,704	$	1,843	$	168,933	$	(550,108)	$	—	$	(2,245)	$	(378,873)	$	(24,260)	$	(403,133)

See accompanying notes to consolidated financial statements.

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

Class A
Common
Stock Class B
Common
Stock Paid-in
Capital Accumulated Deficit Treasury Stock Accumulated
Other
Comprehensive
Income Total
Stockholders'
Deficiency Non-controlling
Interests Total
Deficiency
Balance at January 1, 2021 $ 2,972 $ 1,859 $ — $ (985,641) $ (163,866) $ 3,646 $ (1,141,030) $ (62,109) $ (1,203,139)
Net income attributable to stockholders — — — 274,136 — — 274,136 — 274,136
Net income attributable to noncontrolling interests — — — — — — — 4,403 4,403
Pension liability adjustments, net of income taxes — — — — — 6,356 6,356 — 6,356
Foreign currency translation adjustment, net of income taxes — — — — — 619 619 — 619
Share-based compensation expense (equity classified) — — — 27,964 — — 27,964 — 27,964
Redeemable equity vested — — — 20,131 — — 20,131 — 20,131
Change in redeemable equity — — — 2,528 — — 2,528 — 2,528
Class A shares acquired through share repurchase program and retired (152) — — (522,521) — — (522,673) — (522,673)
Conversion of Class B to Class A shares 1 (1) — — — — — — —
Issuance of common shares pursuant to employee long term incentive plan 1 — — 2,037 6 — 2,044 — 2,044
Other — — — (4,244) — — (4,244) 4,302 58
Balance at March 31, 2021 $ 2,822 $ 1,858 $ — $ (1,185,610) $ (163,860) $ 10,621 $ (1,334,169) $ (53,404) $ (1,387,573)


ALTICE USA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (Continued) (In thousands) (Unaudited)
	Class A Common Stock		Class B Common Stock		Paid-in Capital		Accumulated Deficit		Treasury Stock		Accumulated Other Comprehensive Income		Total Altice USA Stockholders'Deficiency		Non-controlling Interests		Total Deficiency
Balance at January 1, 2022	$	2,703	$	1,843	$	18,005	$	(848,836)	$	—	$	6,497	$	(819,788)	$	(51,114)	$	(870,902)
Net income attributable to stockholders	—		—		—		196,551		—		—		196,551		—		196,551
Net income attributable to noncontrolling interests	—		—		—		—		—		—		—		5,590		5,590

Pension liability adjustments, net of income taxes	—		—		—		—		—		1,843		1,843		—		1,843
Foreign currency translation adjustment	—		—		—		—		—		(170)		(170)		—		(170)
Share-based compensation expense (equity classified)	—		—		40,512		—		—		—		40,512		—		40,512
Issuance of common shares pursuant to employee long term incentive plan	—		—		10		—		—		—		10		—		10
Balance at March 31, 2022	2,703		1,843		58,527		(652,285)		—		8,170		(581,042)		(45,524)		(626,566)
Net income attributable to stockholders	—		—		—		106,174		—		—		106,174		—		106,174
Net income attributable to noncontrolling interests	—		—		—		—		—		—		—		7,366		7,366
Pension liability adjustments, net of income taxes	—		—		—		—		—		(3,355)		(3,355)		—		(3,355)
Foreign currency translation adjustment, net of income taxes	—		—		—		—		—		61		61		—		61
Share-based compensation expense (equity classified)	—		—		41,680		—		—		—		41,680		—		41,680
Issuance of common shares pursuant to employee long term incentive plan	—		—		6		—		—		—		6		—		6
Balance at June 30, 2022	$	2,703	$	1,843	$	100,213	$	(546,111)	$	—	$	4,876	$	(436,476)	$	(38,158)	$	(474,634)

See accompanying notes to consolidated financial statements.

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

Class A
Common
Stock Class B
Common
Stock Paid-in
Capital Accumulated Deficit Treasury Stock Accumulated
Other
Comprehensive
Income Total
Stockholders'
Deficiency Non-controlling
Interests Total
Deficiency
Balance at March 31, 2021 $ 2,822 $ 1,858 $ — $ (1,185,610) $ (163,860) $ 10,621 $ (1,334,169) $ (53,404) $ (1,387,573)
Net income attributable to stockholders — — — 197,660 — — 197,660 — 197,660
Net income attributable to noncontrolling interests — — — — — — — 3,274 3,274
Pension liability adjustments, net of income taxes — — — — — 1,088 1,088 — 1,088
Foreign currency translation adjustment, net of income taxes — — — — — (140) (140) — (140)
Share-based compensation expense (equity classified) — — — 27,385 — — 27,385 — 27,385
Redeemable equity vested — — — 3,618 — — 3,618 — 3,618
Change in redeemable equity — — — (514) — — (514) — (514)
Class A shares acquired through share repurchase program and retired (58) — — (202,787) — — (202,845) — (202,845)
Issuance of common shares pursuant to employee long term incentive plan 8 — — (488) 9,365 — 8,885 — 8,885
Retirement of treasury stock (59) — — (154,436) 154,495 — — — —
Other — — — 92 — — 92 76 168
Balance at June 30, 2021 $ 2,713 $ 1,858 $ — $ (1,315,080) $ — $ 11,569 $ (1,298,940) $ (50,054) $ (1,348,994)

~~See accompanying notes to consolidated financial statements.~~

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

~~(Unaudited)~~

Six Months Ended June 30,
2022 2021
Cash flows from operating activities:
Net income $ 315,681 $ 479,473
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including impairments) 881,474 879,184
Loss (gain) on investments 476,374 (198,472)
Loss (gain) on derivative contracts, net (320,188) 152,405
Loss on extinguishment of debt and write-off of deferred financing costs — 51,712
Amortization of deferred financing costs and discounts (premiums) on indebtedness 41,150 45,917
Share-based compensation expense 77,061 55,927
Deferred income taxes (57,720) 98,769
Decrease in right-of-use assets 22,139 21,691
Provision for doubtful accounts 36,839 28,154
Other (321) 4,344
Change in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade (790) 13,078
Prepaid expenses and other assets 6,689 31,631
Amounts due from and due to affiliates (6,057) 6,505
Accounts payable and accrued liabilities (1,527) (117,467)
Deferred revenue (1,906) 5,782
Liabilities related to interest rate swap contracts (192,344) (79,468)
Net cash provided by operating activities 1,276,554 1,479,165
Cash flows from investing activities:
Capital expenditures (877,497) (535,895)
Payments for acquisitions, net of cash acquired — (340,570)
Other, net (610) (1,074)
Net cash used in investing activities (878,107) (877,539)
Cash flows from financing activities:
Proceeds from long-term debt 460,000 3,160,000
Repayment of long-term debt (758,861) (3,057,469)
Proceeds from collateralized indebtedness and related derivative contracts, net — 185,105
Repayment of collateralized indebtedness and related derivative contracts, net — (185,105)
Principal payments on finance lease obligations (62,221) (37,560)
Purchase of shares of Altice USA Class A common stock, pursuant to a share repurchase program — (725,518)
Other — 1,339
Net cash used in financing activities (361,082) (659,208)
Net increase (decrease) in cash and cash equivalents 37,365 (57,582)
Effect of exchange rate changes on cash and cash equivalents (110) 479
Net increase (decrease) in cash and cash equivalents 37,255 (57,103)
Cash, cash equivalents and restricted cash at beginning of year 195,975 278,686
Cash, cash equivalents and restricted cash at end of period $ 233,230 $ 221,583


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	117,314	$	315,681
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including impairments)	834,917		881,474


Loss (gain) on investments	(192,010)		476,374
Loss (gain) on derivative contracts, net	166,489		(320,188)
Gain on extinguishment of debt and write-off of deferred financing costs	(4,393)		—
Amortization of deferred financing costs and discounts (premiums) on indebtedness	18,359		41,150

Share-based compensation	13,253		77,061
Deferred income taxes	(113,402)		(57,720)
Decrease in right-of-use assets	22,925		22,139
Provision for doubtful accounts	43,946		36,839
Other	9,188		(321)
Change in operating assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade	(10,611)		(790)
Prepaid expenses and other assets	(58,842)		6,689
Amounts due from and due to affiliates	31,213		(6,057)
Accounts payable and accrued liabilities	(22,816)		(1,527)
Deferred revenue	6,649		(1,906)
Interest rate swap contracts	(6,492)		(192,344)
Net cash provided by operating activities	855,687		1,276,554
Cash flows from investing activities:
Capital expenditures	(1,056,342)		(877,497)





Other, net	(1,578)		(610)
Net cash used in investing activities	(1,057,920)		(878,107)
Cash flows from financing activities:
Proceeds from long-term debt	1,900,000		460,000
Repayment of debt	(1,739,493)		(758,861)

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




Principal payments on finance lease obligations	(76,100)		(62,221)







Other, net	(7,974)		—
Net cash provided by (used in) financing activities	115,335		(361,082)
Net increase (decrease) in cash and cash equivalents	(86,898)		37,365
Effect of exchange rate changes on cash and cash equivalents	548		(110)
Net increase (decrease) in cash and cash equivalents	(86,350)		37,255
Cash, cash equivalents and restricted cash at beginning of year	305,751		195,975
Cash, cash equivalents and restricted cash at end of period	$	219,401	$	233,230

See accompanying notes to consolidated financial statements.


CSC HOLDINGS, LLC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
	June 30, 2023 (Unaudited)		December 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	219,121	$	305,477
Restricted cash	273		267
Accounts receivable, trade (less allowance for doubtful accounts of $24,883 and $20,767, respectively)	332,657		365,992

Prepaid expenses and other current assets ($299 and $572 due from affiliates, respectively)	184,263		130,684
Derivative contracts	—		263,873
Investment securities pledged as collateral	—		1,502,145




Total current assets	736,314		2,568,438
Property, plant and equipment, net of accumulated depreciation of $7,999,028 and $7,785,397, respectively	7,963,047		7,500,780

Right-of-use operating lease assets	261,630		250,601


Other assets	270,208		259,681
Amortizable intangibles, net of accumulated amortization of $5,758,653 and $5,549,674, respectively	1,451,370		1,660,331
Indefinite-lived cable television franchises	13,216,355		13,216,355
Goodwill	8,208,773		8,208,773
Total assets	$	32,107,697	$	33,664,959


LIABILITIES AND MEMBER'S DEFICIENCY
Current Liabilities:
Accounts payable	$	979,288	$	1,213,806
Interest payable	279,085		252,351
Accrued employee related costs	135,505		139,328

Deferred revenue	87,506		80,559
Debt	1,111,144		2,075,077
Other current liabilities ($51,797 and $20,857 due to affiliates, respectively)	414,849		278,580
Total current liabilities	3,007,377		4,039,701

Other liabilities	231,463		274,623
Deferred tax liability	4,978,917		5,090,294

Right-of-use operating lease liability	276,142		260,237
Long-term debt, net of current maturities	24,003,953		24,512,656
Total liabilities	32,497,852		34,177,511
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest	21,618		—

Member's deficiency (100 membership units issued and outstanding)	(385,268)		(475,650)
Accumulated other comprehensive loss	(2,245)		(8,201)
Total member's deficiency	(387,513)		(483,851)
Noncontrolling interests	(24,260)		(28,701)
Total deficiency	(411,773)		(512,552)
Total liabilities and member's deficiency	$	32,107,697	$	33,664,959

See accompanying notes to consolidated financial statements.

CSC HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, 2022
(Unaudited)
December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents $ 230,409 $ 193,154
Restricted cash 264 264
Accounts receivable, trade (less allowance for doubtful accounts of $34,870 and $27,931, respectively) 370,903 406,952
Prepaid expenses and other current assets ($3,790 and $3,776 due from affiliates, respectively) 333,112 186,707
Investment securities pledged as collateral 1,685,563 —
Total current assets 2,620,251 787,077
Property, plant and equipment, net of accumulated depreciation of $7,550,050 and $7,142,852, respectively 6,780,006 6,340,467
Right-of-use operating lease assets 229,275 222,124
Investment securities pledged as collateral — 2,161,937
Other assets 154,402 76,653
Amortizable intangibles, net of accumulated amortization of $5,343,741 and $5,051,149, respectively 1,910,842 2,202,001
Indefinite-lived cable television franchises 13,216,355 13,216,355
Goodwill 8,205,863 8,205,863
Total assets $ 33,116,994 $ 33,212,477
CSC HOLDINGS LLC AND SUBSIDIARIES

LIABILITIES AND MEMBER'S DEFICIENCY
Current Liabilities:
Accounts payable $ 1,041,996 $ 1,023,045
Interest payable 249,974 244,934
Accrued employee related costs 124,911 124,941
Deferred revenue 92,886 94,943
Debt 2,693,690 917,313
Other current liabilities ($25,767 and $31,810 due to affiliates, respectively) 320,921 329,944
Total current liabilities 4,524,378 2,735,120
Other liabilities 158,557 159,082
Deferred tax liability 5,009,360 5,067,442
Liabilities under derivative contracts — 276,933
Right-of-use operating lease liability 241,794 237,226
Long-term debt, net of current maturities 23,679,410 25,629,447
Total liabilities 33,613,499 34,105,250
Commitments and contingencies (Note 14)
Member's deficiency (100 membership units issued and outstanding) (463,223) (848,156)
Accumulated other comprehensive income 4,876 6,497
Total member's deficiency (458,347) (841,659)
Noncontrolling interest (38,158) (51,114)
Total deficiency (496,505) (892,773)
Total liabilities and member's deficiency $ 33,116,994 $ 33,212,477
CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue (including revenue from affiliates of $604, $478, $682, and $1,116, respectively) (See Note 13)	$	2,324,274	$	2,463,014	$	4,618,252	$	4,884,911
Operating expenses:
Programming and other direct costs (including charges from affiliates of $3,080, $2,715, $5,722, and $7,333, respectively) (See Note 13)	762,280		819,011		1,533,999		1,647,804
Other operating expenses (including charges from affiliates of $5,119 , $3,037, $9,795, and $6,132, respectively) (See Note 13)	656,128		673,464		1,307,373		1,315,370
Restructuring expense and other operating items	5,178		2,673		34,850		6,051
Depreciation and amortization (including impairments)	418,705		446,125		834,917		881,474
	1,842,291		1,941,273		3,711,139		3,850,699
Operating income	481,983		521,741		907,113		1,034,212
Other income (expense):
Interest expense, net	(406,709)		(310,213)		(795,987)		(613,575)
Gain (loss) on investments, net	—		(325,601)		192,010		(476,374)
Gain (loss) on derivative contracts, net	—		219,114		(166,489)		320,188
Gain on interest rate swap contracts, net	61,165		39,868		46,736		163,015
Gain on extinguishment of debt and write-off of deferred financing costs	—		—		4,393		—
Other income (loss), net	(1,570)		2,521		8,635		4,951
	(347,114)		(374,311)		(710,702)		(601,795)
Income before income taxes	134,869		147,430		196,411		432,417
Income tax expense	(48,725)		(33,890)		(79,097)		(116,736)
Net income	86,144		113,540		117,314		315,681
Net income attributable to noncontrolling interests	(7,844)		(7,366)		(13,149)		(12,956)
Net income attributable to CSC Holdings, LLC sole member	$	78,300	$	106,174	$	104,165	$	302,725

See accompanying notes to consolidated financial statements.

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~

~~(In thousands)~~

~~(Unaudited)~~

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Revenue (including revenue from affiliates of $478, $3,035, $1,116, and $6,441 respectively) (See Note 13) $ 2,463,014 $ 2,516,008 $ 4,884,911 $ 4,994,829
Operating expenses:
Programming and other direct costs (including charges from affiliates of $2,715, $4,504, $7,333 and $6,732, respectively) (See Note 13) 819,011 849,872 1,647,804 1,701,736
Other operating expenses (including charges from affiliates of $3,037, $2,696, $6,132 and $5,875 respectively) (See Note 13) 673,464 589,180 1,315,370 1,169,613
Restructuring and other expense 2,673 5,864 6,051 9,073
Depreciation and amortization (including impairments) 446,125 444,327 881,474 879,184
1,941,273 1,889,243 3,850,699 3,759,606
Operating income 521,741 626,765 1,034,212 1,235,223
Other income (expense):
Interest expense, net (310,213) (319,371) (613,575) (635,683)
Gain (loss) on investments (325,601) 125,019 (476,374) 198,472
Gain (loss) on derivative contracts, net 219,114 (98,840) 320,188 (152,405)
Gain (loss) on interest rate swap contracts, net 39,868 (21,574) 163,015 54,079
Loss on extinguishment of debt and write-off of deferred financing costs — (51,712) — (51,712)
Other income, net 2,521 2,467 4,951 5,326
(374,311) (364,011) (601,795) (581,923)
Income before income taxes 147,430 262,754 432,417 653,300
Income tax expense (33,890) (59,523) (116,736) (171,530)
Net income 113,540 203,231 315,681 481,770
Net income attributable to noncontrolling interests (7,366) (3,274) (12,956) (7,677)
Net income attributable to CSC Holdings, LLC sole member $ 106,174 $ 199,957 $ 302,725 $ 474,093

~~See accompanying notes to consolidated financial statements.~~

~~CSC HOLDINGS, LLC AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF~~ COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

Three Months Ended
June 30, Six Months Ended
June 30,
2022 2021 2022 2021
Net income $ 113,540 $ 203,231 $ 315,681 $ 481,770
Other comprehensive income (loss):
Defined benefit pension plans (4,559) 1,492 (2,055) 10,140
Applicable income taxes 1,204 (404) 543 (2,696)
Defined benefit pension plans, net of income taxes (3,355) 1,088 (1,512) 7,444
Foreign currency translation adjustment 61 (140) (109) 479
Applicable income taxes — — — —
Foreign currency translation adjustment, net 61 (140) (109) 479
Other comprehensive income (loss) (3,294) 948 (1,621) 7,923
Comprehensive income 110,246 204,179 314,060 489,693
Comprehensive income attributable to noncontrolling interests (7,366) (3,274) (12,956) (7,677)
Comprehensive income attributable to CSC Holdings, LLC's sole member $ 102,880 $ 200,905 $ 301,104 $ 482,016


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	86,144	$	113,540	$	117,314	$	315,681
Other comprehensive income (loss):
Defined benefit pension plans	5,954		(4,559)		7,408		(2,055)
Applicable income taxes	(1,611)		1,204		(2,004)		543
Defined benefit pension plans, net of income taxes	4,343		(3,355)		5,404		(1,512)



Foreign currency translation adjustment	740		61		552		(109)
Other comprehensive income (loss)	5,083		(3,294)		5,956		(1,621)
Comprehensive income	91,227		110,246		123,270		314,060
Comprehensive income attributable to noncontrolling interests	(7,844)		(7,366)		(13,149)		(12,956)
Comprehensive income attributable to CSC Holdings, LLC's sole member	$	83,383	$	102,880	$	110,121	$	301,104

See accompanying notes to consolidated financial statements.

1312

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL MEMBER'S DEFICIENCY

(In thousands)

(Unaudited)

Member's Deficiency Accumulated Other Comprehensive Income Total Member's Deficiency Noncontrolling Interests Total Deficiency
Balance at January 1, 2022 $ (848,156) $ 6,497 $ (841,659) $ (51,114) $ (892,773)
Net income attributable to CSC Holdings' sole member 196,551 — 196,551 — 196,551
Net income attributable to noncontrolling interests — — — 5,590 5,590
Pension liability adjustments, net of income taxes — 1,843 1,843 — 1,843
Foreign currency translation adjustment, net of income taxes — (170) (170) — (170)
Share-based compensation expense (equity classified) 40,512 — 40,512 — 40,512
Other 11 — 11 — 11
Balance at March 31, 2022 (611,082) 8,170 (602,912) (45,524) (648,436)
Net income attributable to CSC Holdings' sole member 106,174 — 106,174 — 106,174
Net income attributable to noncontrolling interests — — — 7,366 7,366
Pension liability adjustments, net of income taxes — (3,355) (3,355) — (3,355)
Foreign currency translation adjustment, net of income taxes — 61 61 — 61
Share-based compensation expense (equity classified) 41,680 — 41,680 — 41,680
Other 5 — 5 — 5
Balance at June 30, 2022 $ (463,223) $ 4,876 $ (458,347) $ (38,158) $ (496,505)


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

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

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






Change in noncontrolling interest	(14,166)		—		(14,166)		(8,027)		(22,193)
Other, net	(82)		—		(82)		—		(82)
Balance at March 31, 2023	(472,751)		(7,328)		(480,079)		(31,425)		(511,504)
Net income attributable to CSC Holdings' sole member	78,300		—		78,300				78,300
Net income attributable to noncontrolling interests	—		—		—		7,844		7,844
Pension liability adjustments, net of income taxes	—		4,343		4,343		—		4,343
Foreign currency translation adjustment	—		740		740		(2)		738
Share-based compensation expense (benefit)- equity classified	9,091		—		9,091		—		9,091

Distributions to noncontrolling interests	—		—		—		(1,077)		(1,077)
Change in noncontrolling interest	175		—		175		400		575
Other, net	(83)		—		(83)		—		(83)
Balance at June 30, 2023	$	(385,268)	$	(2,245)	$	(387,513)	$	(24,260)	$	(411,773)

Balance at January 1, 2021 $ (1,172,505) $ 3,646 $ (1,168,859) $ (62,109) $ (1,230,968)
Net income attributable to CSC Holdings' sole member 274,136 — 274,136 — 274,136
Net income attributable to noncontrolling interests — — — 4,403 4,403
Pension liability adjustments, net of income taxes — 6,356 6,356 — 6,356
Foreign currency translation adjustment, net of income taxes — 619 619 — 619
Share-based compensation expense (equity classified) 27,964 — 27,964 — 27,964
Redeemable equity vested 20,131 — 20,131 — 20,131
Change in redeemable equity 2,528 — 2,528 — 2,528
Cash distributions to parent (501,000) — (501,000) — (501,000)
Non-cash distributions to parent (748) — (748) — (748)
Other (4,056) — (4,056) 4,302 246
Balance at March 31, 2021 (1,353,550) 10,621 (1,342,929) (53,404) (1,396,333)
Net income attributable to CSC Holdings' sole member 199,957 — 199,957 — 199,957
Net income attributable to noncontrolling interests — — — 3,274 3,274
Pension liability adjustments, net of income taxes — 1,088 1,088 — 1,088
Foreign currency translation adjustment, net of income taxes — (140) (140) — (140)
Share-based compensation expense (equity classified) 27,385 — 27,385 — 27,385
Redeemable equity vested 3,618 — 3,618 — 3,618
Change in redeemable equity (514) — (514) — (514)
Cash distributions to parent (184,478) — (184,478) — (184,478)
Non-cash distributions to parent (19,660) (19,660) (19,660)
Other 257 — 257 76 333
Balance at June 30, 2021 $ (1,326,985) $ 11,569 $ (1,315,416) $ (50,054) $ (1,365,470)


	Member's Deficiency		Accumulated Other Comprehensive Income		Total Member's Deficiency		Noncontrolling Interests		Total Deficiency

Balance at January 1, 2022	$	(848,156)	$	6,497	$	(841,659)	$	(51,114)	$	(892,773)
Net income attributable to CSC Holdings' sole member	196,551		—		196,551		—		196,551
Net income attributable to noncontrolling interests	—		—		—		5,590		5,590

Pension liability adjustments, net of income taxes	—		1,843		1,843		—		1,843
Foreign currency translation adjustment	—		(170)		(170)		—		(170)
Share-based compensation expense (equity classified)	40,512		—		40,512		—		40,512
Non-cash contribution from parent	11		—		11		—		11
Balance at March 31, 2022	(611,082)		8,170		(602,912)		(45,524)		(648,436)
Net income attributable to CSC Holdings' sole member	106,174		—		106,174		—		106,174
Net income attributable to noncontrolling interests	—		—		—		7,366		7,366
Pension liability adjustments, net of income taxes	—		(3,355)		(3,355)		—		(3,355)
Foreign currency translation adjustment	—		61		61		—		61
Share-based compensation expense (equity classified)	41,680		—		41,680		—		41,680
Other	5		—		5		—		5
Balance at June 30, 2022	$	(463,223)	$	4,876	$	(458,347)	$	(38,158)	$	(496,505)

See accompanying notes to consolidated financial statements.

1413

CSC HOLDINGS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)
Six Months Ended June 30,
2022 2021
Cash flows from operating activities:
Net income $ 315,681 $ 481,770
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including impairments) 881,474 879,184
Loss (gain) on investments 476,374 (198,472)
Loss (gain) on derivative contracts, net (320,188) 152,405
Loss on extinguishment of debt and write-off of deferred financing costs — 51,712
Amortization of deferred financing costs and discounts (premiums) on indebtedness 41,150 45,917
Share-based compensation expense 77,061 55,927
Deferred income taxes (57,720) 87,021
Decrease in right-of-use assets 22,139 21,691
Provision for doubtful accounts 36,839 28,154
Other (321) 4,344
Change in assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade (790) 13,078
Prepaid expenses and other assets 6,689 31,844
Amounts due from and due to affiliates (6,057) (13,903)
Accounts payable and accrued liabilities (1,527) (117,226)
Deferred revenue (1,906) 5,782
Liabilities related to interest rate swap contracts (192,344) (79,468)
Net cash provided by operating activities 1,276,554 1,449,760
Cash flows from investing activities:
Capital expenditures (877,497) (535,895)
Payments for acquisitions, net of cash acquired — (340,570)
Other, net (610) (1,074)
Net cash used in investing activities (878,107) (877,539)
Cash flows from financing activities:
Proceeds from long-term debt 460,000 3,160,000
Repayment of long-term debt (758,861) (3,057,469)
Proceeds from collateralized indebtedness and related derivative contracts, net — 185,105
Repayment of collateralized indebtedness and related derivative contracts, net — (185,105)
Distributions to parent — (685,478)
Principal payments on finance lease obligations (62,221) (37,560)
Other — (9,024)
Net cash used in financing activities (361,082) (629,531)
Net increase (decrease) in cash and cash equivalents 37,365 (57,310)
Effect of exchange rate changes on cash and cash equivalents (110) 479
Net increase (decrease) in cash and cash equivalents 37,255 (56,831)
Cash, cash equivalents and restricted cash at beginning of year 193,418 278,202
Cash, cash equivalents and restricted cash at end of period $ 230,673 $ 221,371


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	117,314	$	315,681
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including impairments)	834,917		881,474



Loss (gain) on investments	(192,010)		476,374
Loss (gain) on derivative contracts, net	166,489		(320,188)
Gain on extinguishment of debt and write-off of deferred financing costs	(4,393)		—
Amortization of deferred financing costs and discounts (premiums) on indebtedness	18,359		41,150

Share-based compensation	13,253		77,061
Deferred income taxes	(113,402)		(57,720)
Decrease in right-of-use assets	22,925		22,139
Provision for doubtful accounts	43,946		36,839
Other	9,188		(321)
Change in operating assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable, trade	(10,611)		(790)
Prepaid expenses and other assets	(58,842)		6,689
Amounts due from and due to affiliates	31,213		(6,057)
Accounts payable and accrued liabilities	(22,816)		(1,527)
Deferred revenue	6,649		(1,906)
Interest rate swap contracts	(6,492)		(192,344)
Net cash provided by operating activities	855,687		1,276,554
Cash flows from investing activities:
Capital expenditures	(1,056,342)		(877,497)


Other, net	(1,578)		(610)
Net cash used in investing activities	(1,057,920)		(878,107)
Cash flows from financing activities:
Proceeds from long-term debt	1,900,000		460,000
Repayment of debt	(1,739,493)		(758,861)

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





Principal payments on finance lease obligations	(76,100)		(62,221)

Other, net	(7,974)		—

Net cash provided by (used in) financing activities	115,335		(361,082)
Net increase (decrease) in cash and cash equivalents	(86,898)		37,365
Effect of exchange rate changes on cash and cash equivalents	548		(110)
Net increase (decrease) in cash and cash equivalents	(86,350)		37,255
Cash, cash equivalents and restricted cash at beginning of year	305,744		193,418
Cash, cash equivalents and restricted cash at end of period	$	219,394	$	230,673

See accompanying notes to consolidated financial statements.

1514

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(Unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND RELATED MATTERS

The Company and Related Matters

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

Altice USA, through CSC Holdings, LLC ~~(a wholly-owned subsidiary of Cablevision Systems Corporation)~~ and its consolidated subsidiaries ("CSC Holdings," and collectively with Altice USA, the "Company"), principally provides broadband communications and video services in the United States. It ~~has marketed~~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. On August 1, 2022, the Company began marketing the Suddenlink services under the Optimum ~~brand. It operates~~brand and provides enterprise services under the brands Lightpath ~~Altice Business,~~and Optimum ~~Business and Suddenlink~~ Business. It delivers broadband, video, telephony services, proprietary content and advertising services to residential and business customers. In addition, the Company offers a ~~full service~~full-service mobile offering to consumers across its footprint. As these brands are managed on a consolidated basis, the Company classifies its operations in 1one segment.

The accompanying consolidated financial statements ("consolidated financial statements") of Altice USA include the accounts of Altice USA and its majority-owned subsidiaries and the accompanying consolidated financial statements of CSC Holdings include the accounts of CSC Holdings and its majority-owned subsidiaries. Altice USA is a holding company and has no business operations independent of its CSC Holdings subsidiary, whose operating results and financial position are consolidated into Altice USA. The consolidated balance sheets and statements of operations of Altice USA are essentially identical to the consolidated balance sheets and statements of operations of CSC Holdings, with the following exceptions: Altice USA has additional cash and deferred taxes on its consolidated balance sheet.

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 eliminated in the CSC Holdings consolidated financial statements, but they are eliminated in the Altice USA consolidated financial statements.

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

NOTE 2. BASIS OF PRESENTATION

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

The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

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, ~~2022.~~2023.

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~~revenues and expenses during the reporting period. Actual results could differ from those estimates. See Note 10 for a discussion of fair value estimates.

1615

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

NOTE 3. ACCOUNTING STANDARDS

Accounting Standards Adopted in ~~2022~~2023

ASU No. ~~2021-08, Business Combinations (Topic 805)~~2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): ~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~Disclosure of Supplier Finance Program Obligations

In ~~October 2021, the Financial Accounting Standards Board ("FASB") issued ASU No. 2021-08,~~ ~~Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~, which will require companies to apply the definition of a performance obligation under ASC Topic 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities relating to contracts with customers that are acquired in a business combination. Under current GAAP, an acquirer generally recognizes assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers, at fair value on the acquisition date. ASU No. 2021-08 will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded before the acquisition under ASC Topic 606. ASU No. 2021-08 is effective for the Company on January 1, 2023, however the Company elected to early adopt this ASU on January 1, 2022. The guidance will be applied to any future business combinations.

~~ASU No. 2021-10, Government Assistance (Topic 832)~~

~~In November 2021,~~September 2022, the FASB issued ASU ~~No. 2021-10,~~2022-04, ~~Government Assistance (Topic 832)~~Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, ~~which~~to enhance transparency about an entity’s use of supplier finance programs. ASU 2022-04 requires ~~business entities~~the buyer in a supplier finance program to disclose information about transactions with a government that are accounted for by applying a grant or contribution model by analogy (for example, IFRS guidance in IAS 20 or guidance on contributions for not-for-profit entities in ASC 958-605). For transactions in the scope of the new standard, business entities will need to provide(a) information about the ~~nature~~key terms of the ~~transaction, including significant terms and conditions, as well as~~program, (b) the ~~amounts and specific financial statement line items affected~~amount outstanding that remains unpaid by the ~~transaction.~~buyer as of the end of the period, (c) a rollforward of such amounts during each annual period, and (d) a description of where in the financial statements outstanding amounts are being presented. The Company adopted ~~the new guidance~~ASU 2022-04 on January 1, ~~2022, and the Company will provide required disclosures~~2023. See Note 8 for ~~any future material transactions.~~further information.

NOTE 4. REVENUE

The following table presents the composition of revenue:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Residential:										Residential:
Broadband	Broadband	$	1,002,680	$	992,155	$	1,988,197	$	1,962,726	Broadband	$	965,865	$	1,002,680	$	1,922,910	$	1,988,197
Video	Video	841,549		892,605		1,683,436		1,798,439		Video	775,138		841,549		1,545,739		1,683,436
Telephony	Telephony	84,621		103,374		169,855		210,355		Telephony	76,069		84,621		153,750		169,855
Residential		1,928,850		1,988,134		3,841,488		3,971,520
Business services and wholesale		371,503		372,010		739,025		739,226
Mobile (a)										Mobile (a)	18,147		16,863		33,673		31,805
Residential revenue										Residential revenue	1,835,219		1,945,713		3,656,072		3,873,293
Business services and wholesale (a)										Business services and wholesale (a)	364,704		371,613		728,345		739,243
News and advertising	News and advertising	133,250		131,767		247,925		236,837		News and advertising	113,465		133,250		212,202		247,925
Mobile		26,440		20,664		50,475		39,899
Other		2,971		3,433		5,998		7,347
Other (a)										Other (a)	10,886		12,438		21,633		24,450
Total revenue	Total revenue	$	2,463,014	$	2,516,008	$	4,884,911	$	4,994,829	Total revenue	$	2,324,274	$	2,463,014	$	4,618,252	$	4,884,911

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

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 six months ended June 30, 2023, the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $55,247 and $111,702, respectively. For the three and six months ended June 30, 2022, the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $58,573 and $117,661, respectively. ~~For the three and six months ended June 30, 2021, the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $65,838 and $131,894, respectively.~~

Customer Contract Costs

Deferred enterprise sales commission costs are included in other current and noncurrent assets in the consolidated

~~ALTICE USA, INC. AND SUBSIDIARIES~~

~~COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

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

~~(Unaudited)~~

balance sheets and totaled ~~$17,296~~$18,172 and ~~$17,669~~$17,511 as of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

A significant portion of our revenue is derived from residential and small and medium-sized business ("SMB") customer contracts which are ~~month-to month.~~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.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

Concentration of Credit Risk

The Company did not have a single customer that represented 10% or more of its consolidated revenues for the three and six months ended June 30, ~~2022~~2023 and ~~2021~~2022 or 10% or more of its consolidated net trade receivables at June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

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, restricted stock, ~~and~~ restricted stock ~~units.~~units, and deferred cash-denominated awards. For ~~such~~ awards that are performance based, the ~~diluted~~dilutive 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 net income per share attributable to Altice USA ~~stockholders for the three and six months ended June 30, 2022 and 2021:~~stockholders:


							Three Months Ended June 30,		Six Months Ended June 30,
		Three Months Ended June 30,		Six Months Ended June 30,			2023	2022	2023	2022
		2022	2021	2022	2021
		(in thousands)					(in thousands)
Basic weighted average shares outstanding	Basic weighted average shares outstanding	453,230	456,955	453,230	463,060	Basic weighted average shares outstanding	454,688	453,230	454,687	453,230
Effect of dilution:	Effect of dilution:					Effect of dilution:
Stock options		—	6,681	—	6,427

Restricted stock	Restricted stock	—	1	—	23	Restricted stock	—	—	122	—

Deferred cash-denominated awards (Note 12)						Deferred cash-denominated awards (Note 12)	—	—	330	—
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	453,230	463,637	453,230	469,510	Diluted weighted average shares outstanding	454,688	453,230	455,139	453,230

Weighted average shares excluded from diluted weighted average shares outstanding:	Weighted average shares excluded from diluted weighted average shares outstanding:					Weighted average shares excluded from diluted weighted average shares outstanding:
Anti-dilutive shares	Anti-dilutive shares	57,921	910	58,160	704	Anti-dilutive shares	43,740	57,921	47,121	58,160
Performance stock units and restricted stock whose performance metrics have not been achieved.		7,445	8,747	7,574	8,748
Share-based compensation awards whose performance metrics have not been achieved						Share-based compensation awards whose performance metrics have not been achieved	24,795	7,445	15,907	7,574

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

~~ALTICE USA, INC. AND SUBSIDIARIES~~

~~COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

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

~~(Unaudited)~~

NOTE 6. SUPPLEMENTAL CASH FLOW INFORMATION

The Company's non-cash investing and financing activities and other supplemental data were as follows:


		Six Months Ended June 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Non-Cash Investing and Financing Activities:	Non-Cash Investing and Financing Activities:					Non-Cash Investing and Financing Activities:
Altice USA and CSC Holdings:	Altice USA and CSC Holdings:					Altice USA and CSC Holdings:

Property and equipment accrued but unpaid and other		$	341,313	$	244,163
Property and equipment accrued but unpaid						Property and equipment accrued but unpaid	$	343,903	$	341,313
Notes payable issued for the purchase of equipment and other assets	Notes payable issued for the purchase of equipment and other assets	51,501		33,818		Notes payable issued for the purchase of equipment and other assets	97,235		51,501

Right-of-use assets acquired in exchange for finance lease obligations	Right-of-use assets acquired in exchange for finance lease obligations	94,771		77,715		Right-of-use assets acquired in exchange for finance lease obligations	83,652		94,771
Other non-cash investing and financing transactions	Other non-cash investing and financing transactions	—		2,083		Other non-cash investing and financing transactions	516		—
CSC Holdings:

Distributions to parent		—		20,408

Supplemental Data:	Supplemental Data:					Supplemental Data:
Altice USA and CSC Holdings:	Altice USA and CSC Holdings:					Altice USA and CSC Holdings:
Cash interest paid, net of capitalized interest	Cash interest paid, net of capitalized interest	565,542		586,176		Cash interest paid, net of capitalized interest	746,856		565,542
Income taxes paid, net	Income taxes paid, net	173,317		107,026		Income taxes paid, net	120,189		173,317

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

NOTE 7. INTANGIBLE ASSETS

The following table summarizes information relating to the Company's acquired amortizable intangible assets:


		As of June 30, 2022						As of December 31, 2021								As of June 30, 2023						As of December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Estimated Useful Lives		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Estimated Useful Lives
Customer relationships	Customer relationships	$	6,113,669	$	(4,263,141)	$	1,850,528	$	6,113,669	$	(4,020,282)	$	2,093,387	3 to 18 years	Customer relationships	$	6,123,586	$	(4,690,651)	$	1,432,935	$	6,123,586	$	(4,484,286)	$	1,639,300	3 to 18 years
Trade names	Trade names	1,081,083		(1,035,675)		45,408		1,081,083		(988,563)		92,520		2 to 10 years	Trade names	1,024,300		(1,019,082)		5,218		1,024,300		(1,018,212)		6,088		4 to 10 years
Other amortizable intangibles	Other amortizable intangibles	59,831		(44,925)		14,906		58,398		(42,304)		16,094		1 to 15 years	Other amortizable intangibles	62,137		(48,920)		13,217		62,119		(47,176)		14,943		1 to 15 years
		$	7,254,583	$	(5,343,741)	$	1,910,842	$	7,253,150	$	(5,051,149)	$	2,202,001			$	7,210,023	$	(5,758,653)	$	1,451,370	$	7,210,005	$	(5,549,674)	$	1,660,331

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Amortization expense related to amortizable intangible assets $ 145,437 $ 161,994 $ 292,592 $ 327,108


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Amortization expense related to amortizable intangible assets	$	103,175	$	145,437	$	208,870	$	292,592

1918

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

NOTE 8. DEBT

The following table provides details of the Company's outstanding debt:


			Interest Rate			June 30, 2022						December 31, 2021									Interest Rate			June 30, 2023						December 31, 2022
Date Issued	Date Issued	Maturity Date			Principal Amount			Carrying Amount (a)			Principal Amount			Carrying Amount (a)	Date Issued			Maturity Date					Principal Amount			Carrying Amount (a)			Principal Amount			Carrying Amount (a)
CSC Holdings Senior Notes:	CSC Holdings Senior Notes:																		CSC Holdings Senior Notes:
September 27, 2012		September 15, 2022	5.875	%		$	649,024		$	644,839		$	649,024		$	635,310
May 23, 2014	May 23, 2014	June 1, 2024	5.250	%		750,000			718,534			750,000			711,137		May 23, 2014			June 1, 2024	5.250	%		$	750,000		$	734,322		$	750,000		$	726,343
October 18, 2018	October 18, 2018	April 1, 2028	7.500	%		4,118			4,113			4,118			4,113		October 18, 2018			April 1, 2028	7.500	%		4,118			4,114			4,118			4,113
November 27, 2018	November 27, 2018	April 1, 2028	7.500	%		1,045,882			1,044,664			1,045,882			1,044,582		November 27, 2018			April 1, 2028	7.500	%		1,045,882			1,044,839			1,045,882			1,044,752
July 10 and October 7, 2019	July 10 and October 7, 2019	January 15, 2030	5.750	%		2,250,000			2,281,214			2,250,000			2,282,875		July 10 and October 7, 2019			January 15, 2030	5.750	%		2,250,000			2,277,736			2,250,000			2,279,483
June 16 and August 17, 2020	June 16 and August 17, 2020	December 1, 2030	4.625	%		2,325,000			2,365,023			2,325,000			2,366,886		June 16 and August 17, 2020			December 1, 2030	4.625	%		2,325,000			2,361,122			2,325,000			2,363,082
May 13, 2021	May 13, 2021	November 15, 2031	5.000	%		500,000			498,304			500,000			498,234		May 13, 2021			November 15, 2031	5.000	%		500,000			498,449			500,000			498,375
						7,524,024			7,556,691			7,524,024			7,543,137									6,875,000			6,920,582			6,875,000			6,916,148
CSC Holdings Senior Guaranteed Notes:	CSC Holdings Senior Guaranteed Notes:																CSC Holdings Senior Guaranteed Notes:
September 23, 2016	September 23, 2016	April 15, 2027	5.500	%		1,310,000			1,306,793			1,310,000			1,306,508		September 23, 2016			April 15, 2027	5.500	%		1,310,000			1,307,393			1,310,000			1,307,091
January 29, 2018	January 29, 2018	February 1, 2028	5.375	%		1,000,000			994,661			1,000,000			994,262		January 29, 2018			February 1, 2028	5.375	%		1,000,000			995,500			1,000,000			995,078
January 24, 2019	January 24, 2019	February 1, 2029	6.500	%		1,750,000			1,747,649			1,750,000			1,747,511		January 24, 2019			February 1, 2029	6.500	%		1,750,000			1,747,942			1,750,000			1,747,795
June 16, 2020	June 16, 2020	December 1, 2030	4.125	%		1,100,000			1,095,870			1,100,000			1,095,672		June 16, 2020			December 1, 2030	4.125	%		1,100,000			1,096,284			1,100,000			1,096,077
August 17, 2020	August 17, 2020	February 15, 2031	3.375	%		1,000,000			997,112			1,000,000			996,970		August 17, 2020			February 15, 2031	3.375	%		1,000,000			997,404			1,000,000			997,258
May 13, 2021	May 13, 2021	November 15, 2031	4.500	%		1,500,000			1,494,923			1,500,000			1,494,710		May 13, 2021			November 15, 2031	4.500	%		1,500,000			1,495,367			1,500,000			1,495,144
April 25, 2023																	April 25, 2023			May 15, 2028	11.250	%		1,000,000			993,564			—			—
						7,660,000			7,637,008			7,660,000			7,635,633									8,660,000			8,633,454			7,660,000			7,638,443
CSC Holdings Restricted Group Credit Facility:	CSC Holdings Restricted Group Credit Facility:																CSC Holdings Restricted Group Credit Facility:
Revolving Credit Facility		January 31, 2024 (c)	3.574	%	(b)	675,000			670,296			900,000			893,864
Revolving Credit Facility (b) (c)																	Revolving Credit Facility (b) (c)				7.497	%		825,000			821,175			1,575,000			1,570,730
Term Loan B(g)	Term Loan B(g)	July 17, 2025	3.574	%		2,850,000			2,842,600			2,865,000			2,856,421		Term Loan B(g)			July 17, 2025	7.443	%		1,528,162			1,525,580			1,535,842			1,532,644
Incremental Term Loan B-3(g)	Incremental Term Loan B-3(g)	January 15, 2026	3.574	%		1,233,563			1,230,444			1,239,938			1,236,394		Incremental Term Loan B-3(g)			January 15, 2026	7.443	%		524,379			523,439			527,014			525,883

Incremental Term Loan B-5(g)	Incremental Term Loan B-5(g)	April 15, 2027	3.824	%		2,932,500			2,916,342			2,947,500			2,929,813		Incremental Term Loan B-5(g)			April 15, 2027	7.693	%		2,902,500			2,889,499			2,917,500			2,902,921
Incremental Term Loan B-6																	Incremental Term Loan B-6			January 15, 2028	9.647	%		1,996,937			1,954,538			2,001,942			1,955,839
						7,691,063			7,659,682			7,952,438			7,916,492									7,776,978			7,714,231			8,557,298			8,488,017
Lightpath Senior Notes:	Lightpath Senior Notes:																Lightpath Senior Notes:
September 29, 2020	September 29, 2020	September 15, 2028	5.625	%		415,000			407,586			415,000			407,104		September 29, 2020			September 15, 2028	5.625	%		415,000			408,601			415,000			408,090
Lightpath Senior Secured Notes:	Lightpath Senior Secured Notes:																Lightpath Senior Secured Notes:
September 29, 2020	September 29, 2020	September 15, 2027	3.875	%		450,000			442,381			450,000			441,739		September 29, 2020			September 15, 2027	3.875	%		450,000			443,715			450,000			443,046
Lightpath Term Loan		November 30, 2027	4.574	%		591,000			577,282			594,000			579,119
Lightpath Term Loan:																	Lightpath Term Loan:			November 30, 2027	8.443	%		585,000			573,671			588,000			575,478
Lightpath Revolving Credit Facility	Lightpath Revolving Credit Facility	November 30, 2025	(d)			—			—			—			—		Lightpath Revolving Credit Facility				(e)			—			—			—			—
						1,456,000			1,427,249			1,459,000			1,427,962									1,450,000			1,425,987			1,453,000			1,426,614
Collateralized indebtedness (see Note 9)						1,759,017			1,726,366			1,759,017			1,706,997
Collateralized indebtedness (see Note 9) (f)																	Collateralized indebtedness (see Note 9) (f)							—			—			1,759,017			1,746,281
Finance lease obligations	Finance lease obligations					251,285			251,285			218,735			218,735		Finance lease obligations							252,147			252,147			244,595			244,595
Notes payable and supply chain financing (e)						114,819			114,819			97,804			97,804
Notes payable and supply chain financing (d)																	Notes payable and supply chain financing (d)							168,696			168,696			127,635			127,635
						26,456,208			26,373,100			26,671,018			26,546,760									25,182,821			25,115,097			26,676,545			26,587,733
Less: current portion of credit facility debt	Less: current portion of credit facility debt					(78,750)			(78,750)			(78,750)			(78,750)		Less: current portion of credit facility debt							(76,648)			(76,648)			(71,643)			(71,643)
Less: current portion of senior notes	Less: current portion of senior notes					(649,024)			(644,839)			(649,024)			(635,310)		Less: current portion of senior notes							(750,000)			(734,322)			—			—
Less: current portion of collateralized indebtedness (f)	Less: current portion of collateralized indebtedness (f)					(1,759,017)			(1,726,366)			—			—		Less: current portion of collateralized indebtedness (f)							—			—			(1,759,017)			(1,746,281)
Less: current portion of finance lease obligations	Less: current portion of finance lease obligations					(129,329)			(129,329)			(109,204)			(109,204)		Less: current portion of finance lease obligations							(131,478)			(131,478)			(129,657)			(129,657)
Less: current portion of notes payable and supply chain financing	Less: current portion of notes payable and supply chain financing					(114,406)			(114,406)			(94,049)			(94,049)		Less: current portion of notes payable and supply chain financing							(168,696)			(168,696)			(127,496)			(127,496)
						(2,730,526)			(2,693,690)			(931,027)			(917,313)									(1,126,822)			(1,111,144)			(2,087,813)			(2,075,077)
Long-term debt	Long-term debt					$	23,725,682		$	23,679,410		$	25,739,991		$	25,629,447	Long-term debt							$	24,055,999		$	24,003,953		$	24,588,732		$	24,512,656

(a)The carrying amount is net of the unamortized deferred financing costs ~~and/or~~and discounts/premiums and with respect to certain notes, a fair value adjustment resulting from the acquisitions of Cequel Corporation and Cablevision ~~acquisitions.~~

~~(b)~~At June 30, 2022, $132,389 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $1,667,611 of the facility was undrawn and available, subject to covenant limitations.Systems Corporation.

2019

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

(b)At June 30, 2023, $139,436 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $1,510,564 of the facility was undrawn and available, subject to covenant limitations. The revolving credit facility is due on the earlier of (i) July 13, 2027 and (ii) April 17, 2025 if, as of such date, any Term Loan B borrowings are still outstanding, unless the Term Loan B maturity date has been extended to a date falling after July 13, 2027. The CSC Holdings' Incremental Term Loan B-6 that is due on the earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of such date, any Incremental Term Loan B-5 borrowings are still outstanding, unless the Incremental Term Loan B-5 maturity date has been extended to a date falling after January 15, 2028.

(c)The revolving credit facility ofprovides for commitments in an aggregate principal amount of $2,475,000 and is priced at ~~LIBOR~~Secured Overnight Financing Rate ("SOFR") plus 2.25%.

(d)Includes $168,281 related to supply chain financing agreements that is required to be repaid within one year from the date of the respective agreement.

(e)There were no borrowings outstanding under the Lightpath Revolving Credit Facility which provides for commitments in an aggregate principal amount of $100,000. Borrowings bear interest at a rate per annum equal to the adjusted LIBOR rate or the alternate base rate, as applicable, plus the applicable margin, where the applicable margin is (i) with respect to any alternate base rate loan, 2.25% per annum and (ii) with respect to any eurodollar loan, 3.25% per annum.

~~(e)~~Includes $107,581 as of June 30, 2022 and $89,898 as of December 30, 2021 related to supply chain financing agreements that are required to be repaid within one year from the date of the respective agreement.

(f)~~This~~The indebtedness iswas collateralized by shares of Comcast common stock. ~~Our intent is to settle such indebtedness with proceeds from new monetization contracts. To~~In January 2023, the ~~extent we do not enter into new monetization contracts, we could settle the existing collateralized indebtedness~~Company settled this debt by ~~(i)~~ delivering shares of Comcast common stock ~~or (ii) delivering cash. Because this collateralized debt matures in May 2023, it has been classified as current in~~and the ~~accompanying balance sheet~~related equity derivative contracts. See Note 9.

(g)Pursuant to the term loan agreement, the interest rate on outstanding borrowings subsequent to the phase-out of London Interbank Offered Rate ("LIBOR") as of June 30, ~~2022,~~2023, is Synthetic USD LIBOR, calculated as Term SOFR plus the spread adjustment for the corresponding LIBOR setting, being 0.11448% (1 month), 0.26161% (3 month) and because there is no assurance that a financing under new monetization contracts can be completed when this debt matures, the related investments held as collateral have also been classified as current.0.42826% (6 month), until September 30, 2024.

For financing purposes, the Company has two debt silos: CSC Holdings and Lightpath. The CSC Holdings silo is structured as a restricted group (the "Restricted Group") and an unrestricted group, which includes certain designated subsidiaries and ~~investments (the "Unrestricted Group").~~investments. The Restricted Group is comprised of CSC Holdings and substantially all of its wholly-owned operating subsidiaries excluding Cablevision Lightpath LLC ("Lightpath"), a 50.01% owned subsidiary of the Company, which became an unrestricted subsidiary in September 2020. These Restricted Group subsidiaries are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by CSC Holdings. The Lightpath silo includes all of its operating subsidiaries which are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by Lightpath.

Both CSC Holdings and Lightpath's credit facilities agreements contain 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 credit facilities will be entitled to take various actions, including the acceleration of amounts due under the credit facilities and all actions permitted to be taken by a secured creditor.

Senior Guaranteed Notes

In April 2023, CSC Holdings issued $1,000,000 in aggregate principal amount of senior guaranteed notes that bear interest at a rate of 11.250% and mature on May 15, 2028. The Company used the proceeds to repay outstanding borrowings drawn under the Revolving Credit Facility.

As of June 30, ~~2022,~~2023, CSC Holdings and ~~Cablevision~~ Lightpath were in compliance with applicable financial covenants under their respective credit facilities and with applicable financial covenants under each respective indenture by which the senior guaranteed notes, senior secured notes and senior notes were issued.

~~On July 13, 2022, CSC Holdings~~Lightpath Credit Facility

In June 2023, Lightpath entered into an amendment (the ~~"Twelfth~~"First Amendment") tounder its ~~senior secured~~existing credit facility ~~(the "Credit Agreement").~~agreement to replace LIBOR-based benchmark rates with SOFR-based benchmark rates. The ~~Twelfth~~First Amendment provides for ~~among other things, new~~interest on borrowings under its term loan and revolving credit ~~commitments (the “2022 Revolving Credit Commitments”) in an aggregate principal amount of $2,325,000 with an extended maturity until the date that is the earlier of~~facility to be calculated for any (i) July 13, 2027 and (ii) April 17, 2025 if, as of such date, any March 2017 Term Loans, as defined in the Credit Agreement are still outstanding, unless the March 2017 Term Loan Maturity Date (as defined in the Credit Agreement) has been extended to a date falling after July 13, 2027. After the effectiveness of the Twelfth Amendment, our existing revolving commitments maturing in January 2024 will equal an aggregate principal amount of $150,000. The loans made pursuant to the 2022 Revolving Credit Commitments may be composed of Term Secured Overnight Financing Rate ("SOFR") borrowings or alternative base rate borrowings, and will bear interestSOFR loan, at a rate per annum equal to the Term SOFR ~~rate~~ (plus ~~a Term SOFR credit adjustment~~ spread adjustments of ~~0.10%)~~0.11448%, 0.26161% and 0.42826% for interest periods of one, three and six months, respectively) or (ii) the alternate base rate loan, at the alternative base rate as applicable, plus the applicable margin in each case, where the applicable margin is ~~(i)~~2.25% per annum with respect to any alternate base rate loan ~~1.25%~~and 3.25% per annum ~~and (ii)~~ with respect to any ~~Term~~ SOFR ~~loan, 2.25% per annum.~~loan.

Supply Chain Financing Arrangement

The Company has a supply chain financing arrangement with a financial institution with credit availability of $175,000 that is used to finance certain of its property and equipment purchases. This arrangement extends the Company's repayment terms beyond a vendor’s original invoice due dates (for up to one year) and as such are

2120

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

classified as debt on our consolidated balance sheets. Amounts outstanding under this arrangement amounted to $168,281 and $123,880 as of June 30, 2023 and December 31, 2022, respectively.

Summary of Debt Maturities

The future ~~maturities of debt payable by~~principal payments under the ~~Company under its~~Company's various debt obligations outstanding as of June 30, ~~2022,~~2023, including notes payable and ~~collateralized indebtedness (see Note 9),~~supply chain financing, but excluding finance lease obligations, are as follows:


2022		$	756,533
2023	2023	1,884,313		2023	$	118,277
2024	2024	1,503,889		2024	915,391
2025		2,823,750
2025 (a)				2025 (a)	2,391,414
2026	2026	1,224,938		2026	567,223
2027				2027	5,141,519
Thereafter(b)	Thereafter(b)	18,011,500		Thereafter(b)	15,796,850

~~The table above does not reflect~~

(a)Includes $825,000 principal amount related to the ~~extension~~CSC Holdings' revolving credit facility that is due on the earlier of (i) July 13, 2027 and (ii) April 17, 2025 if, as of such date, any Term Loan B borrowings are still outstanding, unless the Term Loan B maturity date ~~pursuant~~has been extended to a date falling after July 13, 2027.

(b)Includes $1,996,937 principal amount related to the ~~amendment~~CSC Holdings' Incremental Term Loan B-6 that is due on the earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of such date, any Incremental Term Loan B-5 borrowings are still outstanding, unless the Incremental Term Loan B-5 maturity date has been extended to ~~the Credit Agreement discussed above.~~a date falling after January 15, 2028.

NOTE 9. DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS

Prepaid Forward Contracts

~~The~~Historically, the Company ~~has~~had entered into various transactions to limit the exposure against equity price risk on ~~its~~ shares of Comcast Corporation ("Comcast") common ~~stock.~~stock it previously owned. 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 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~~had been reflected as collateralized indebtedness in the accompanying consolidated balance ~~sheets.~~sheet as of December 31, 2022. In addition, the Company separately ~~accounts~~accounted for the equity derivative component of the prepaid forward contracts. These equity derivatives ~~have~~were not ~~been~~ designated as hedges for accounting ~~purposes. Therefore,~~purposes, therefore, the net fair values of the equity derivatives ~~have~~had been reflected in the accompanying consolidated balance ~~sheets~~sheet as an asset ~~or liability~~at December 31, 2022, and the net increases or decreases in the fair value of the equity derivative component of the prepaid forward contracts ~~are~~were 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 was terminated prior to its scheduled maturity date,In January 2023, the Company ~~would be obligated to repay the fair value of the~~settled its outstanding collateralized indebtedness ~~less~~by delivering the ~~sum~~Comcast shares it held and the related equity derivative contracts. In connection with the settlement, the Company received net cash of approximately $50,500 (including dividends of $11,598) and recorded a gain on the ~~fair values~~extinguishment of ~~the underlying stock and equity collar, calculated at the termination date.~~ debt of $4,393.

As of June 30, ~~2022,~~2023, 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~~hold and has not issued equity derivative ~~contracts. All of the counterparties to such transactions carry investment grade credit ratings as of June 30, 2022.~~

In January 2021, the Company settled collateralized indebtedness and an equity derivative contract aggregating $185,105 upon maturity related to 5,337,750 shares of Comcast common stock held by us, with proceeds of $185,105 received in January 2021 pursuant to the synthetic monetization closeout transaction in November 2019. In connection with this transaction the Company recorded (i) a decrease in notes payable of $59,451 and (ii) an increase in collateralized debt of $59,451.instruments for trading or speculative purposes.

Interest Rate Swap Contracts

~~ALTICE USA, INC. AND SUBSIDIARIES~~

~~COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

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

~~(Unaudited)~~

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 not designated as a hedges for accounting purposes and are carried at their fair market values on our consolidated balance sheets, with changes in fair value reflected in the consolidated statements of operations.

~~As of June 30, 2022, the Company did not hold~~

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Dollars in thousands, except share and ~~has not issued derivative instruments for trading or speculative purposes.~~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	Derivatives Not Designated as Hedging Instruments	Balance Sheet Location		Fair Value at						Derivatives Not Designated as Hedging Instruments		Balance Sheet Location		Fair Value at
			June 30, 2022			December 31, 2021							June 30, 2023			December 31, 2022

Asset Derivatives:	Asset Derivatives:									Asset Derivatives:
Interest rate swap contracts			Prepaid expenses and other current assets			$	—			$	2,993
Prepaid forward contracts		Prepaid expenses and other current assets		158,246				—

Prepaid forward contracts (a)										Prepaid forward contracts (a)		Derivative contracts		$	—		$	263,873
Interest rate swap contracts	Interest rate swap contracts	Other asset, long-term		76,905				—		Interest rate swap contracts		Other assets, long-term		192,113			185,622

				235,151				2,993						$	192,113		$	449,495
Liability Derivatives:

Interest rate swap contracts		Other current liabilities		—				(3,441)
Prepaid forward contracts		Liabilities under derivative contracts, long-term		—				(161,942)
Interest rate swap contracts		Liabilities under derivative contracts, long-term		—				(114,991)
				$	—			$	(280,374)

(a)In January 2023, the Company settled its outstanding collateralized indebtedness by delivering the Comcast shares it held and the related equity derivative contracts.

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Gain (loss) on derivative contracts related to change in the value of equity derivative contracts related to Comcast common stock	Gain (loss) on derivative contracts related to change in the value of equity derivative contracts related to Comcast common stock	$	219,114	$	(98,840)	$	320,188	$	(152,405)	Gain (loss) on derivative contracts related to change in the value of equity derivative contracts related to Comcast common stock	$	—	$	219,114	$	(166,489)	$	320,188
Change in the fair value of Comcast common stock included in gain (loss) on investments	Change in the fair value of Comcast common stock included in gain (loss) on investments	(325,601)		125,000		(476,374)		198,453		Change in the fair value of Comcast common stock included in gain (loss) on investments	—		(325,601)		192,010		(476,374)
Gain (loss) on interest rate swap contracts		39,868		(21,574)		163,015		54,079
Gain on interest rate swap contracts, net										Gain on interest rate swap contracts, net	61,165		39,868		46,736		163,015

Interest Rate Swap Contract

In connection with the phase-out of LIBOR as of June 30, 2023, the Company entered into amendments to its existing interest rate swap contracts that transitioned the reference rates from LIBOR to SOFR.

The following is a summary of the terms of the interest rate swap contracts ~~outstanding~~ at June 30, ~~2022:~~2023:

Notional Amount

Prior to Amendments

Subsequent to Amendments

Maturity Date

~~Notional Amount~~Company Pays

Company Receives

Company Pays

Company Receives

CSC Holdings:

January 2025 (a)

500,000

Fixed rate of 1.53%

Three-month LIBOR

Fixed rate of 1.3281%

One-month SOFR

January 2025 (a)

500,000

Fixed rate of 1.625%

Three-month LIBOR

Fixed rate of 1.4223%

One-month SOFR

January 2025 (a)

500,000

Fixed rate of 1.458%

Three-month LIBOR

Fixed rate of 1.2567%

One-month SOFR

December 2026 (b)

750,000

Fixed rate of 2.9155%

Three-month LIBOR

Fixed rate of 2.7129%

One-month SOFR

December 2026 (b)

750,000

Fixed rate of 2.9025%

Three-month LIBOR

Fixed rate of 2.6999%

One-month SOFR

Lightpath:

December 2026 (a)

300,000

Fixed rate of 2.161%

One-month LIBOR

Fixed rate of 2.11%

One-month SOFR

(a)~~Interest~~Amended rates effective June 15, 2023.

(b)Amended rates effective July 17, 2023.

In April 2023, Lightpath entered into an interest rate swap contract, ~~was~~ effective ~~April 2022.~~June 2023 on a notional amount of $180,000, whereby Lightpath pays interest of 3.523% through December 2026 and receives interest based on one-month SOFR. This swap contract is also not designated as a hedge for accounting purposes. Accordingly, this contract is carried at its fair market value on our consolidated balance sheet, with changes in fair value reflected in the consolidated statements of operations.

2322

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

NOTE 10. 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 the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis and their classification under the fair value hierarchy:


		Fair Value Hierarchy	June 30, 2022		December 31, 2021			Fair Value Hierarchy	June 30, 2023		December 31, 2022
Assets:	Assets:						Assets:
Money market funds	Money market funds	Level I	$	117,940	$	100,015	Money market funds	Level I	$	86,067	$	141,137
Investment securities pledged as collateral(a)	Investment securities pledged as collateral(a)	Level I	1,685,563		2,161,937		Investment securities pledged as collateral(a)	Level I	—		1,502,145
Prepaid forward contracts		Level II	158,246		—
Prepaid forward contracts (a)							Prepaid forward contracts (a)	Level II	—		263,873
Interest rate swap contracts	Interest rate swap contracts	Level II	76,905		2,993		Interest rate swap contracts	Level II	192,113		185,622
Liabilities:	Liabilities:						Liabilities:
Prepaid forward contracts		Level II	—		161,942
Interest rate swap contracts		Level II	—		118,432

Contingent consideration related to acquisition							Contingent consideration related to acquisition	Level III	2,073		8,383

(a)In January 2023, the Company settled its outstanding collateralized indebtedness by delivering the Comcast shares it held and the related equity derivative contracts.

The Company's money market funds which are classified as cash equivalents 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 values of the contingent consideration as of June 30, 2023 and December 31, 2022 relate to an acquisition in the third quarter of 2022 and were determined using a probability assessment of the contingent payment for the respective periods.

Fair Value of Financial Instruments

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

Credit Facility Debt, Collateralized Indebtedness, Senior Notes, Senior Guaranteed Notes, Senior Secured 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 their short-term maturity (less than one year).

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

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 below:


		June 30, 2023				December 31, 2022
	Fair Value Hierarchy	Carrying Amount (a)		Estimated Fair Value		Carrying Amount (a)		Estimated Fair Value

Credit facility debt	Level II	$	8,287,902	$	8,361,978	$	9,063,495	$	9,145,298
Collateralized indebtedness (b)	Level II	—		—		1,746,281		1,731,771
Senior guaranteed notes and senior secured notes	Level II	9,077,169		7,116,168		8,081,489		6,154,075
Senior notes	Level II	7,329,183		3,933,740		7,324,238		4,531,300
Notes payable and supply chain financing	Level II	168,696		168,696		127,635		127,608





		$	24,862,950	$	19,580,582	$	26,343,138	$	21,690,052

~~ALTICE USA, INC. AND SUBSIDIARIES~~

~~COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

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

~~(Unaudited)~~

June 30, 2022 December 31, 2021
Fair Value
Hierarchy Carrying
Amount (a) Estimated
Fair Value Carrying
Amount (a) Estimated
Fair Value
Credit facility debt Level II $ 8,236,964 $ 8,282,063 $ 8,495,611 $ 8,546,438
Collateralized indebtedness Level II 1,726,366 1,715,482 1,706,997 1,741,710
Senior guaranteed notes and senior secured notes Level II 8,079,389 6,728,775 8,077,372 8,180,813
Senior notes Level II 7,964,277 6,073,913 7,950,241 7,883,071
Notes payable and supply chain financing Level II 114,819 114,766 97,804 97,588
$ 26,121,815 $ 22,914,999 $ 26,328,025 $ 26,449,620

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

(b)In January 2023, the Company settled its outstanding collateralized indebtedness by delivering the Comcast shares it held and the related equity derivative contracts.

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 11. INCOME TAXES

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

For the three and six months ended June 30, 2023, the Company recorded a tax expense of $48,725 and $79,097 on pre-tax income of $134,869 and $196,411, respectively, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was primarily due to the impact of certain non-deductible expenses, state tax expense, and tax deficiencies on share-based compensation.

For the three and six months ended June 30, 2022, the Company recorded a tax expense of $33,890 and $116,736 on pre-tax income of $147,430 and $432,417, 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 state tax expense.

For the three and six months ended June 30, 2021, the Company recorded a tax expense of $61,820 and $173,827 on pre-tax income of $262,754 and $653,300, 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 state tax expense.

NOTE 12. SHARE-BASED COMPENSATION

The following table presents share-based compensation expense (benefit) recognized by the Company and unrecognized compensation cost:
Share-Based Compensation Unrecognized Compensation Cost As of June 30, 2022
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Carry Unit Plan $ — $ 44 $ — $ 803 $ —
Awards issued pursuant to LTIP (a):
Stock Option Awards 19,910 24,473 42,407 48,696 112,943
Performance Stock Units 1,601 2,868 3,627 5,850 37,133
Restricted Share Units 15,018 261 31,027 578 83,563
$ 36,529 $ 27,646 $ 77,061 $ 55,927 $ 233,639


	Share-Based Compensation								Unrecognized Compensation Cost as of June 30, 2023
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Awards issued pursuant to LTIP:
Stock option awards (a)	$	(1,082)	$	19,910	$	(6,667)	$	42,407	$	16,748
Performance stock units (a)	(608)		1,601		(7,806)		3,627		14,843
Restricted share units	9,521		15,018		12,917		31,027		78,649
Other	8,045		—		14,809		—		59,338
	$	15,876	$	36,529	$	13,253	$	77,061	$	169,578

~~(a)~~In June 2022, shareholders of the Company approved an increase to the number of shares authorized for issuance under the 2017 Altice USA Long Term Incentive Plan, as amended, by 35,000,000 shares to 89,879,291 shares.

2524

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

(a)The benefit for the six months ended June 30, 2023 include credits due to the modification of awards to certain former executive officers and forfeitures.

Stock Option Awards

The following table summarizes activity related to stock options granted to Company employees:

Shares Under Option Weighted Average
Exercise
Price Per Share Weighted Average Remaining
Contractual Term
(in years) Aggregate Intrinsic
Value (a)
Balance at December 31, 2021 50,998,816 $ 22.51 8.29 $ 6,801
Granted 3,154,016 13.58
Forfeited (3,855,252) 22.95
Balance at June 30, 2022 50,297,580 $ 21.83 8.12 —
Options exercisable at June 30, 2022 18,581,265 $ 24.14 6.88 $ —


	Shares Under Option	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (a)
Balance at December 31, 2022	51,075,675	$	20.27	7.73	$	184
Granted	640	4.69

Forfeited	(1,874,327)	20.22
Exchanged and canceled (b)	(24,015,508)	20.72
Balance at June 30, 2023	25,186,480	$	19.84	6.74	$	—
Options exercisable at June 30, 2023	14,660,985	$	23.04	5.60	$	—

(a)The aggregate intrinsic value is calculated as the difference between the exercise price and the closing price of Altice USA's Class A common stock at the respective date.

~~The~~(b)Options exchanged and canceled in connection with the Company's stock option exchange program discussed below.

As of June 30, 2023, the total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of approximately ~~2.35~~2.49 years.

~~The weighted-average fair value of~~In January 2023, the Company commenced a stock option exchange program (the "Exchange Offer") pursuant to which eligible employees were provided the opportunity to exchange eligible stock options for a number of restricted stock units (“RSU”) and deferred cash-denominated awards (“DCA”) at the exchange ratio of one RSU and ten dollars of DCAs for every seven eligible options tendered. In connection with the Exchange Offer, the Company canceled 24,015,508 options and granted ~~during~~3,430,433 restricted stock units and $34,309 of DCAs awards. The exchange of these options was accounted for as a modification of share-based compensation awards. Accordingly, the ~~six months ended June 30, 2022 was $4.51. The following weighted-average assumptions were used~~Company will recognize the unamortized compensation cost related to ~~calculate~~ the ~~fair values~~canceled options of ~~stock option~~approximately $33,475, as well as the incremental compensation cost associated with the replacement awards ~~granted during the six months ended June 30, 2022:~~


~~Risk-free interest rate~~			~~2.49%~~
~~Expected life (in years)~~			~~6.12~~
~~Dividend yield~~			—%
~~Volatility~~			~~38.42%~~

of $34,000 over their two year vesting term.

Performance Stock ~~Unit Awards~~Units

The following table summarizes activity related to performance stock units ("PSUs") granted to Company employees:


			Number of PSUs
Balance at December 31, ~~2021~~2022			~~6,361,894~~5,179,359
Forfeited			~~(342,117)~~(260,307)
Balance at June 30, ~~2022~~2023			~~6,019,777~~4,919,052

The PSUs have a weighted average grant date fair value of~~$10.65~~ $7.03 per unit. The total unrecognized compensation cost related to the outstanding PSUs is expected to be recognized over a weighted-average period of approximately ~~3.58~~2.58 years.

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

Restricted Share Units

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


			Number of Units
Balance at December 31, ~~2021~~2022			~~6,617,837~~7,495,388
Granted (including 3,430,433 in connection with Exchange Offer) (a)			~~Granted~~13,328,238
Vested			~~1,136,256~~ (142,056)
Forfeited			~~(213,651)~~(891,261)
Balance at June 30, ~~2022~~2023			~~7,540,442~~19,790,309

(a)In March 2023, the Company granted 6,460,792 RSUs to certain employees and directors pursuant to the 2017 LTIP with an aggregate fair value of $21,823 ($3.38 per share) which are being expensed over the vesting period. Most of these awards vest over three years in 33-1/3 annual increments.

Deferred Cash-Denominated Awards

~~ALTICE USA, INC. AND SUBSIDIARIES~~Pursuant to the Exchange Offer, the Company granted $34,309 DCAs, which will be settled in shares of the Company's class A common stock, or cash, at the Company's option. The DCAs vest over a two-year period. As of June 30, 2023, $34,011 awards were outstanding.

~~COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~Cash Performance Awards

~~(Dollars~~In 2023, the Company granted deferred cash performance awards which cliff vest in ~~thousands, except share~~three years. The payout of these awards can range from 0% to 200% of the target value based on the Company’s achievement of certain revenue and ~~per share amounts)~~

~~(Unaudited)~~

adjusted EBITDA targets during a three year performance period. These awards will be settled in shares of the Company's class A common stock, or cash, at the Company's option. As of June 30, 2023, $33,666 awards were outstanding.

Lightpath Plan Awards

As of June 30, ~~2022, 478,725~~2023, 493,890 Class A-1 management incentive units and ~~250,075~~279,956 Class A-2 management incentive units ("Award Units") granted to certain employees of Lightpath were outstanding. Vested units will be redeemed upon a partial exit, a change in control or the completion of an initial public offering, as defined in the Lightpath Holdings LLC agreement. The grant date fair value of the Award Units granted and outstanding aggregated ~~$31,785~~$31,936 as of June 30, 2023 and will be expensed in the period in which a partial exit or a liquidity event is consummated.

NOTE 13. AFFILIATE AND RELATED PARTY TRANSACTIONS

Affiliate and Related Party Transactions

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

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

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenue	Revenue	$	478	$	3,035	$	1,116	$	6,441	Revenue	$	604	$	478	$	682	$	1,116
Operating expenses:	Operating expenses:									Operating expenses:
Programming and other direct costs	Programming and other direct costs	$	(2,715)	$	(4,504)	$	(7,333)	$	(6,732)	Programming and other direct costs	(3,080)		(2,715)		(5,722)		(7,333)
Other operating expenses, net	Other operating expenses, net	(3,037)		(2,696)		(6,132)		(5,875)		Other operating expenses, net	(5,119)		(3,037)		(9,795)		(6,132)

Operating expenses, net	Operating expenses, net	(5,752)		(7,200)		(13,465)		(12,607)		Operating expenses, net	(8,199)		(5,752)		(15,517)		(13,465)

Net charges	Net charges	$	(5,274)	$	(4,165)	$	(12,349)	$	(6,166)	Net charges	$	(7,595)	$	(5,274)	$	(14,835)	$	(12,349)
Capital expenditures	Capital expenditures	$	28,255	$	9,589	$	40,093	$	20,210	Capital expenditures	$	34,758	$	28,255	$	62,892	$	40,093

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

Revenue

The Company recognized revenue primarily from the sale of advertising to certain subsidiaries of Altice Europe ~~including Teads S.A. ("Teads")~~ and ~~in 2021, a foundation controlled by Mr. Drahi.~~other related parties.

Programming and other direct costs

Programming and other direct costs include costs incurred by the Company for advertising services provided by ~~Teads.~~Teads S.A., a subsidiary of Altice Europe ("Teads").

Other operating expenses, net

Other operating expenses primarily include charges for services provided by certain 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.

~~ALTICE USA, INC. AND SUBSIDIARIES~~

~~COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

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

~~(Unaudited)~~

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


		June 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022

Due from:	Due from:					Due from:
Altice Europe	Altice Europe	$	385	$	241	Altice Europe	$	299	$	529
Other affiliates and related parties	Other affiliates and related parties	3,405		3,535		Other affiliates and related parties	—		43
		$	3,790	$	3,776		$	299	$	572
Due to:	Due to:					Due to:
Altice Europe	Altice Europe	$	25,484	$	30,604	Altice Europe	$	48,750	$	19,211
Other affiliates and related parties	Other affiliates and related parties	283		1,206		Other affiliates and related parties	3,047		1,646
		$	25,767	$	31,810		$	51,797	$	20,857

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

CSC Holdings

During the three and six months ended June 30, ~~2022 and 2021,~~2023, CSC Holdings made cash equity distribution payments to its ~~parent. Also, CSC Holdings recorded net non-cash equity contributions (distributions) which represent the non-cash settlement~~parent of ~~intercompany balances with Altice USA. These balances primarily include amounts due to/due from Altice USA pursuant to a tax sharing agreement between the entities. See summary below:~~

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Cash distribution payments to Altice USA $ — $ (184,478) $ — $ (685,478)
Non-cash equity distributions, net to Altice USA — (19,660) — (20,408)
$83 and $166, respectively.

NOTE 14. COMMITMENTS AND CONTINGENCIES

Legal Matters

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.à.r.l.December 14, 2022, BMG Rights Management (US) LLC, UMG Recordings, Inc., Capitol Records, LLC, Concord Music Group, Inc., and ~~those directors of the Company who are members of the Compensation Committee~~Concord Bicycle Assets, LLC (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. On October 15, 2020, the Director Defendants answered the complaint and the Company filed a general denial of liability. Following negotiations with plaintiff, the parties executed a stipulation and agreement of compromise, settlement, and release on April 27, 2022 to settle the litigation. That settlement remains subject to court approval.

~~On November 6, 2018, Sprint Communications Company L.P ("Sprint"~~“BMG” or “Plaintiffs”) filed a complaint in the U.S. District Court for the Eastern District of ~~Delaware~~Texas, alleging that certain of the Company’s Internet subscribers directly infringed over 7,700 of Plaintiffs’ copyrighted works. Plaintiffs seek to hold the Company ~~infringes Sprint’s patents purportedly by providing Voice over Internet Protocol ("VoIP") services. The lawsuit is part~~liable for claims of ~~a pattern~~contributory infringement of ~~litigation that was initiated as far back as 2005 by Sprint against numerous broadband~~copyright and telecommunications providers, which has resulted in judgments and settlements of significant value for Sprint. Trial is scheduled to commence on December 12, 2022, at which we expect Sprint to seek as much as $250 million in damages. The Company intends to vigorously defend the lawsuit.

The Company has received from UMG Recordings, Inc., Capitol Records, LLC, and BMG Rights Management (US) LLC letters alleging that the Company has not adequately addressed copyright infringement on its networks and is subject to liability and damages for secondaryvicarious copyright infringement. The Company intends to vigorously defend these claims.

~~ALTICE USA, INC. AND SUBSIDIARIES~~

~~COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

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

~~(Unaudited)~~

Although the outcome of the above matters cannot be predicted and the impact of a final resolution of these matters on the Company’s results of operations or financial position is not known or reasonably estimable at this time, management does not believe that the ultimate resolution of the matters, individually or together, 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 they could be material to the Company’s consolidated results of operations or cash flows for any one period.

~~In addition to the matters discussed above, the~~The Company also receives notices from third parties, and in some cases is named as a defendant in lawsuits, claiming infringement of various patents or copyrights relating to various aspects of the Company's businesses. In certain of these cases other industry participants are also defendants, and in certain of these cases the Company expects that some or all potential liability would be the responsibility of the Company's vendors pursuant to applicable contractual indemnification provisions. In the event that the Company is found to infringe on any patent or other intellectual property 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

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

(Unaudited)

well as enter into royalty or license agreements with respect to the patents at issue. The Company is also party to various other lawsuits, disputes and investigations arising in the ordinary course of its business, some of which may involve claims for substantial damages, fines or penalties.

Although the outcome of these matters cannot be predicted and the impact of the final resolution of these matters on the Company's results of operations in a particular subsequent reporting period is not known, management does not believe that the resolution of these matters, individually, will have a material adverse effect on the operations or financial position of the Company or the ability of the Company to meet its financial obligations as they become ~~due.~~due, but they could be material to the Company’s consolidated results of operations or cash flows for any one period.

2928

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

All dollar amounts, 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. For a complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our consolidated financial statements, please refer to our Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Overview

Our Business

We principally provide broadband communications and video services in the United States and ~~have marketed~~market our services primarily under two brands: Optimum, primarily in the New York metropolitan area, and Suddenlink, principally in markets in the south-central United States. On August 1, 2022, the Company began marketing the Suddenlink services under the Optimum brand. We deliver broadband, video, telephony, and mobile services to ~~approximately 4.9 million~~ residential and business ~~customers.~~customers across our footprint. Our footprint extends across 21 states (primarily in the New York metropolitan area and various markets in the south-central United States) through a fiber-rich hybrid-fiber coaxial ("HFC") broadband network and a ~~fiber-to-the-home ("FTTH") network with approximately 9.4 million total passings as of June 30, 2022.~~FTTH network. Additionally, we offer news programming and ~~content,~~ advertising ~~services, as well as a full service mobile offering to consumers across our footprint.~~services.

Key Factors Impacting Operating Results and Financial Condition

Our future performance is dependent, to a large extent, on the impact of direct competition, general economic conditions (including capital and credit market conditions), our ability to manage our businesses effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers. For more information, see "Risk Factors" and "Business-Competition" included in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~

~~In March 2020,~~2022 and the United States declared a national emergency concerning the outbreak of COVID-19. Since then, there have 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 and new variants, including lockdowns, social distancing directives and testing, and vaccine mandates. While certain government regulations and mandates have eased and COVID-19 vaccines have become broadly available, governmental authorities continue to monitor the situation and have indicated a willingness to continue taking various actionscautionary statement regarding forward-looking statements included in ~~an effort to slow or prevent an increase in the spread of COVID-19.~~

The COVID-19 pandemic significantly impacted our business, including how our customers use our products and services and how our employees provide services to our customers. Although the ultimate impact of the pandemic on our business cannot be predicted, and we cannot predict how our future results may be impacted if the pandemic continues, we have and will continue to provide our telecommunications services to our customers and work to adapt the environment in which we operate. See "Risk Factors - Our business, financial condition and results of operations may be adversely affected by the recent COVID-19 pandemic." in our Annual Report on Form 10-K for the year ended December 31, 2021.this Quarterly Report.

We derive revenue principally through monthly charges to residential customers of our broadband, video, telephony and ~~telephony services~~mobile services. We also derive revenue from digital video recorder, video-on-demand ("VOD"), pay-per-view, installation and ~~other related services.~~home shopping commissions. Our residential broadband, video, telephony and ~~telephony~~mobile services accounted for approximately ~~41%~~42%, ~~34%~~33%, 3%, and ~~3%,~~1% respectively, of our consolidated revenue for the six months ended June 30, ~~2022.~~2023. We also derive revenue from the sale of a wide and growing variety of products and services to both large enterprise and ~~SMB~~small and medium-sized business ("SMB") customers, including broadband, telephony, networking, video, and ~~video~~mobile services. For the six months ended June 30, ~~2022, 15%~~2023, 16% 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, branded content, affiliation fees for news programming, and data analytics, which accounted for approximately 5% of our consolidated revenue for the six months ended June 30, ~~2022.~~2023. Our other revenue, which includes mobile ~~and other~~equipment revenue, for the six months ended June 30, ~~2022~~2023 accounted for ~~approximately~~less than 1% of our consolidated revenue.

Revenue is impacted by rate increases, changes in the amount of promotional offerings, changes in the number of customers that subscribe to our services, including additional services sold to our existing customers, programming package changes by our

video customers, speed tier changes by our broadband customers, and acquisitions and construction of cable systems that result in the addition of new customers. Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.

Our ability to increase the number of customers to our services is significantly related to our penetration rates.

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

see "Risk Factors" and "Business-Competition" included in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

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

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

~~Certain Transactions~~

~~The following transactions had an impact in the periods covered by this Management's Discussion and Analysis of Financial Condition and Results of Operations:~~

In June 2021, Lightpath completed an acquisition for an aggregate purchase price of approximately $28,260 and the operating results of the acquired business were consolidated as of the acquisition date.

In April 2021, the Company completed its acquisition of the cable assets of Morris Broadband, LLC in North Carolina for approximately $312,184 and the operating results of the acquired business were consolidated as of the acquisition date.

Non-GAAP Financial Measures

We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, ~~loss~~gain (loss) on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization, ~~(including impairments),~~ share-based compensation, ~~expense,~~ restructuring expense and ~~transaction expenses.~~other operating items (such as significant legal settlements, contractual payments for terminated employees, and impairments). See reconciliation of net income to Adjusted EBITDA below.

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

We believe Adjusted EBITDA is an appropriate measure for evaluating 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 two of several benchmarks used by investors, analysts and peers for comparison of performance in ~~the Company’s~~our industry, although they may not be directly comparable to similar measures reported by other companies.

Results of Operations - Altice USA (unaudited)


		Three Months Ended June 30,				Favorable (Unfavorable)		Six Months Ended June 30,				Favorable (Unfavorable)			Three Months Ended June 30,				Favorable (Unfavorable)		Six Months Ended June 30,				Favorable (Unfavorable)
		2022		2021				2022		2021					2023		2022				2023		2022
Revenue:	Revenue:													Revenue:
Broadband	Broadband	$	1,002,680	$	992,155	$	10,525	$	1,988,197	$	1,962,726	$	25,471	Broadband	$	965,865	$	1,002,680	$	(36,815)	$	1,922,910	$	1,988,197	$	(65,287)
Video	Video	841,549		892,605		(51,056)		1,683,436		1,798,439		(115,003)		Video	775,138		841,549		(66,411)		1,545,739		1,683,436		(137,697)
Telephony	Telephony	84,621		103,374		(18,753)		169,855		210,355		(40,500)		Telephony	76,069		84,621		(8,552)		153,750		169,855		(16,105)
Residential revenue		1,928,850		1,988,134		(59,284)		3,841,488		3,971,520		(130,032)
Mobile (a)														Mobile (a)	18,147		16,863		1,284		33,673		31,805		1,868
Residential revenue (a)														Residential revenue (a)	1,835,219		1,945,713		(110,494)		3,656,072		3,873,293		(217,221)

Business services and wholesale revenue		371,503		372,010		(507)		739,025		739,226		(201)

Business services and wholesale (a)														Business services and wholesale (a)	364,704		371,613		(6,909)		728,345		739,243		(10,898)
News and advertising	News and advertising	133,250		131,767		1,483		247,925		236,837		11,088		News and advertising	113,465		133,250		(19,785)		212,202		247,925		(35,723)
Mobile		26,440		20,664		5,776		50,475		39,899		10,576
Other		2,971		3,433		(462)		5,998		7,347		(1,349)

Other (a)														Other (a)	10,886		12,438		(1,552)		21,633		24,450		(2,817)
Total revenue	Total revenue	2,463,014		2,516,008		(52,994)		4,884,911		4,994,829		(109,918)		Total revenue	2,324,274		2,463,014		(138,740)		4,618,252		4,884,911		(266,659)
Operating expenses:	Operating expenses:													Operating expenses:
Programming and other direct costs	Programming and other direct costs	819,011		849,872		30,861		1,647,804		1,701,736		53,932		Programming and other direct costs	762,280		819,011		56,731		1,533,999		1,647,804		113,805
Other operating expenses	Other operating expenses	673,464		589,180		(84,284)		1,315,370		1,169,613		(145,757)		Other operating expenses	656,128		673,464		17,336		1,307,373		1,315,370		7,997
Restructuring and other expense		2,673		5,864		3,191		6,051		9,073		3,022
Restructuring expense and other operating items														Restructuring expense and other operating items	5,178		2,673		(2,505)		34,850		6,051		(28,799)
Depreciation and amortization (including impairments)	Depreciation and amortization (including impairments)	446,125		444,327		(1,798)		881,474		879,184		(2,290)		Depreciation and amortization (including impairments)	418,705		446,125		27,420		834,917		881,474		46,557
Operating income	Operating income	521,741		626,765		(105,024)		1,034,212		1,235,223		(201,011)		Operating income	481,983		521,741		(39,758)		907,113		1,034,212		(127,099)
Other income (expense):	Other income (expense):													Other income (expense):
Interest expense, net	Interest expense, net	(310,213)		(319,371)		9,158		(613,575)		(635,683)		22,108		Interest expense, net	(406,709)		(310,213)		(96,496)		(795,987)		(613,575)		(182,412)
Gain (loss) on investments		(325,601)		125,019		(450,620)		(476,374)		198,472		(674,846)
Gain (loss) on investments, net														Gain (loss) on investments, net	—		(325,601)		325,601		192,010		(476,374)		668,384
Gain (loss) on derivative contracts, net	Gain (loss) on derivative contracts, net	219,114		(98,840)		317,954		320,188		(152,405)		472,593		Gain (loss) on derivative contracts, net	—		219,114		(219,114)		(166,489)		320,188		(486,677)
Gain (loss) on interest rate swap contracts, net		39,868		(21,574)		61,442		163,015		54,079		108,936
Loss on extinguishment of debt and write-off of deferred financing costs		—		(51,712)		51,712		—		(51,712)		51,712
Other income, net		2,521		2,467		54		4,951		5,326		(375)
Gain on interest rate swap contracts, net														Gain on interest rate swap contracts, net	61,165		39,868		21,297		46,736		163,015		(116,279)
Gain on extinguishment of debt and write-off of deferred financing costs														Gain on extinguishment of debt and write-off of deferred financing costs	—		—		—		4,393		—		4,393
Other income (loss), net														Other income (loss), net	(1,570)		2,521		(4,091)		8,635		4,951		3,684
Income before income taxes	Income before income taxes	147,430		262,754		(115,324)		432,417		653,300		(220,883)		Income before income taxes	134,869		147,430		(12,561)		196,411		432,417		(236,006)
Income tax expense	Income tax expense	(33,890)		(61,820)		27,930		(116,736)		(173,827)		57,091		Income tax expense	(48,725)		(33,890)		(14,835)		(79,097)		(116,736)		37,639
Net income	Net income	113,540		200,934		(87,394)		315,681		479,473		(163,792)		Net income	86,144		113,540		(27,396)		117,314		315,681		(198,367)
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(7,366)		(3,274)		(4,092)		(12,956)		(7,677)		(5,279)		Net income attributable to noncontrolling interests	(7,844)		(7,366)		(478)		(13,149)		(12,956)		(193)
Net income attributable to Altice USA, Inc. stockholders	Net income attributable to Altice USA, Inc. stockholders	$	106,174	$	197,660	$	(91,486)	$	302,725	$	471,796	$	(169,071)	Net income attributable to Altice USA, Inc. stockholders	$	78,300	$	106,174	$	(27,874)	$	104,165	$	302,725	$	(198,560)

3231

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income	Net income	$	113,540	$	200,934��	$	315,681	$	479,473	Net income	$	86,144	$	113,540	$	117,314	$	315,681
Income tax expense	Income tax expense	33,890		61,820		116,736		173,827		Income tax expense	48,725		33,890		79,097		116,736
Other income, net		(2,521)		(2,467)		(4,951)		(5,326)
Loss (gain) on interest rate swap contracts, net		(39,868)		21,574		(163,015)		(54,079)
Other loss (income), net										Other loss (income), net	1,570		(2,521)		(8,635)		(4,951)
Gain on interest rate swap contracts, net										Gain on interest rate swap contracts, net	(61,165)		(39,868)		(46,736)		(163,015)
Loss (gain) on derivative contracts, net	Loss (gain) on derivative contracts, net	(219,114)		98,840		(320,188)		152,405		Loss (gain) on derivative contracts, net	—		(219,114)		166,489		(320,188)
Loss (gain) on investments		325,601		(125,019)		476,374		(198,472)
Loss on extinguishment of debt and write-off of deferred financing costs		—		51,712		—		51,712
Loss (gain) on investments, net										Loss (gain) on investments, net	—		325,601		(192,010)		476,374
Gain on extinguishment of debt and write-off of deferred financing costs										Gain on extinguishment of debt and write-off of deferred financing costs	—		—		(4,393)		—
Interest expense, net	Interest expense, net	310,213		319,371		613,575		635,683		Interest expense, net	406,709		310,213		795,987		613,575
Depreciation and amortization (including impairments)		446,125		444,327		881,474		879,184
Restructuring and other expense		2,673		5,864		6,051		9,073
Depreciation and amortization										Depreciation and amortization	418,705		446,125		834,917		881,474
Restructuring expense and other operating items										Restructuring expense and other operating items	5,178		2,673		34,850		6,051
Share-based compensation	Share-based compensation	36,529		27,646		77,061		55,927		Share-based compensation	15,876		36,529		13,253		77,061
Adjusted EBITDA	Adjusted EBITDA	1,007,068		1,104,602		1,998,798		2,179,407		Adjusted EBITDA	921,742		1,007,068		1,790,133		1,998,798
Less: Capital expenditures (cash)		485,126		323,104		877,497		535,895
Capital expenditures (cash)										Capital expenditures (cash)	473,445		485,126		1,056,342		877,497
Operating Free Cash Flow	Operating Free Cash Flow	$	521,942	$	781,498	$	1,121,301	$	1,643,512	Operating Free Cash Flow	$	448,297	$	521,942	$	733,791	$	1,121,301

The following is a reconciliation of net cash flow from operating activities to Free Cash Flow (Deficit) (unaudited):
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Net cash flows from operating activities $ 676,335 $ 729,543 $ 1,276,554 $ 1,479,165
Less: Capital expenditures (cash) 485,126 323,104 877,497 535,895
Free Cash Flow $ 191,209 $ 406,439 $ 399,057 $ 943,270


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Net cash flows from operating activities	$	438,841	$	676,335	$	855,687	$	1,276,554
Less: Capital expenditures (cash)	473,445		485,126		1,056,342		877,497
Free Cash Flow (Deficit)	$	(34,604)	$	191,209	$	(200,655)	$	399,057

3332

The following table sets forth certain customer metrics ~~excluding our mobile customers,~~ for the Company (unaudited):


		June 30,			March 31,			June 30,				June 30, 2023			March 31, 2023			June 30, 2022
		2022			2022			2021 (j)
		(in thousands)										(in thousands)
Total passings (a)	Total passings (a)	9,363.1			9,304.9			9,195.1			Total passings (a)	9,578.6			9,512.2			9,363.1
Total customer relationships ~~(c)~~(b)	Total customer relationships ~~(c)~~(b)	4,947.3			4,995.0			5,051.4			Total customer relationships ~~(c)~~(b)	4,810.5			4,853.3			4,947.3
Residential	Residential	4,564.2			4,612.1			4,670.7			Residential	4,429.5			4,472.4			4,564.2
SMB	SMB	383.1			382.9			380.7			SMB	381.0			380.9			383.1
Residential customers:	Residential customers:										Residential customers:
Broadband	Broadband	4,333.6			4,373.2			4,401.3			Broadband	4,227.0			4,263.7			4,333.6
Video	Video	2,574.2			2,658.7			2,870.5			Video	2,312.2			2,380.5			2,574.2
Telephony	Telephony	1,886.9			1,951.5			2,118.4			Telephony	1,640.8			1,703.5			1,886.9
Penetration of total passings ~~(d)~~(c)	Penetration of total passings ~~(d)~~(c)	52.8		%	53.7		%	54.9		%	Penetration of total passings ~~(d)~~(c)	50.2		%	51.0		%	52.8		%
ARPU (e)		$	140.13		$	137.92		$	142.24
Average revenue per user ("ARPU") (d)											Average revenue per user ("ARPU") (d)	$	137.44		$	135.32		$	141.36

Total mobile lines (e)											Total mobile lines (e)	264.2			247.9			231.3

FTTH total passings (f)	FTTH total passings (f)	1,587.1			1,316.6			982.5			FTTH total passings (f)	2,659.5			2,373.0			1,587.1
FTTH customer relationships (g)(h)		104.4			81.0			47.3
FTTH customer relationships (g)											FTTH customer relationships (g)	249.7			209.9			104.4
FTTH Residential	FTTH Residential	103.7			80.4			47.3			FTTH Residential	245.9			207.2			103.7
FTTH SMB	FTTH SMB	0.7			0.6			0.1			FTTH SMB	3.9			2.7			0.7
Penetration of FTTH total passings (i)		6.6		%	6.1		%	4.8		%
Penetration of FTTH total passings (h)											Penetration of FTTH total passings (h)	9.4		%	8.8		%	6.6		%

(a)Represents the estimated number of single residence homes, apartments and condominium units passed by our HFC and FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our HFC and FTTH network. Broadband services were not available to approximately 30 thousand ~~total~~ passings and telephony services were not available to approximately 500 thousand ~~total~~ passings. ~~Amounts as of June 30, 2021 include approximately 89 thousand total passings that were acquired from Morris Broadband in April 2021.~~

(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 on our HFC and FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per-view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel. ~~Amounts as of June 30, 2021 include 37.3 thousand customer relationships (35.1 thousand residential and 2.2 thousand SMB) that were acquired from Morris Broadband in April 2021.~~

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

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

(e)Includes approximately 200, 23,000 and 35,800 customers receiving free service as of June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

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

(g)Represents number of households/businesses that receive at least one of the Company's fixed-line services on our FTTH network.

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

building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel.

~~(i)~~(h)Represents the number of total FTTH customer relationships divided by FTTH total passings.

~~(j)~~Customer metrics as of June 30, 2021 include customers that were not disconnected pursuant to the New York legislation ("NY Order") enacted in May 2021 that required us, during the pendency of the New York declared COVID-19 State of Emergency and a period thereafter, to maintain broadband, video and voice services for non-paying customers and offer deferred payment plans to customers experiencing financial difficulty. The NY Order was lifted at the end of June 2021, coinciding with the end of the declared COVID-19 State of Emergency in New York, and we have subsequently resumed normal disconnect policies. Customer metrics as of June 30, 2021 also include certain customers impacted by storms in Louisiana in 2020 that were not disconnected pursuant to our normal disconnect policies. See table below for details.

June 30, 2021
NY Order Storms
Included Included
(in thousands)
Total customer relationships 8.4 4.0
Residential 7.3 3.7
SMB 1.1 0.3
Residential customers:
Broadband 7.2 3.4
Video 4.1 2.1
Telephony 3.3 1.0

~~Altice USA-~~ Comparison of Results for the Three ~~and Six~~Months Ended June 30, 2023 compared to the Three Months Ended June 30, 2022 ~~compared to the Three and Six Months Ended June 30, 2021~~

Broadband Revenue

Broadband revenue for the three and six months ended June 30, ~~2022~~2023 was $965,865 and $1,922,910, respectively, and $1,002,680 and $1,988,197, ~~respectively, while broadband revenue~~ for the three and six months ended June 30, ~~2021 was $992,155 and $1,962,726,~~2022, 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 amount of promotional offerings, changes in the number of customers, and changes in speed tiers. Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.

Broadband revenue ~~increased $10,525 (1%~~decreased $36,815 (4%) and ~~$25,471 (1%~~$65,287 (3%) for the three and six months ended June 30, ~~2022~~2023 compared to the three and six months ended June 30, ~~2021, respectively.~~2022. The ~~increases~~decreases were due ~~primarily~~ to ~~higher~~a decline in broadband customers, and lower average recurring broadband revenue per broadband ~~customer, primarily driven by certain rate increases and service level changes, partially offset by a decrease in broadband customers.~~customer.

Video Revenue

Video revenue for the three and six months ended June 30, ~~2022~~2023 was $775,138 and $1,545,739, respectively, and $841,549 and $1,683,436, ~~respectively, and $892,605 and $1,798,439,~~ for the three and six months ended June 30, ~~2021,~~2022, 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 amount of promotional offerings, changes in the number of customers, additional services sold to our existing customers, and changes in programming packages. Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.

Video revenue decreased ~~$51,056 (6%~~$66,411 (8%) and ~~$115,003 (6%~~$137,697 (8%) for the three and six months ended June 30, ~~2022~~2023 compared to the three and six months ended June 30, ~~2021.~~2022. The decreases were due ~~primarily~~ to a decline in video customers, partially offset by higher average recurring video revenue per video customer, primarily driven by certain rate increases.

Telephony Revenue

Telephony revenue for the three and six months ended June 30, ~~2022~~2023 was $76,069 and ~~2021 was~~ ~~$84,621~~$153,750, respectively, and ~~$169,855, respectively, and$103,374~~$84,621 and ~~$210,355~~,$169,855, for the three and six months ended June 30, ~~2021,~~2022, 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 amount of promotional offerings, changes in the number of ~~customers~~,customers, and additional services sold to our existing customers. Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional ~~bundled~~bundled offers.

Telephony revenue decreased ~~$18,753 (18%~~$8,552 (10%) and ~~$40,500 (19%~~$16,105 (9%) for the three and six months ended June 30, ~~2022~~2023 compared to the three and six months ended June 30, ~~2021.~~2022. The decreases were primarily due to a decline in telephony customers.

Mobile Service Revenue

Mobile service revenue for the three and six months ended June 30, 2023 was $18,147 and $33,673, respectively, and $16,863 and $31,805 for the three and six months ended June 30, 2022, respectively. Mobile revenue increased $1,284 (8%) and $1,868 (6%) for the three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022. The increase was due primarily to an increase in mobile customers, ~~and lower average recurring revenue per telephony customer.~~partially offset by an increase in promotional offerings.

Business Services and Wholesale Revenue

Business services and wholesale revenue for the three and six months ended June 30, ~~2022~~2023 was ~~$371,503~~$364,704 and ~~$739,025,~~$728,345, respectively, and ~~$372,010~~$371,613 and ~~$739,226~~$739,243 for the three and six months ended June 30, ~~2021,~~2022, respectively. Business services and wholesale revenue is derived primarily from the sale of fiber-based telecommunications services to the business market, and the sale of broadband, video, telephony, and ~~telephony~~mobile services to small and SMB customers.

Business services and wholesale revenue decreased ~~$507~~$6,909 (2%) and ~~$201~~$10,898 (1%) for the three and six months ended June 30, ~~2022~~2023 compared to the three and six months ended June 30, ~~2021.~~2022. The decreases were due ~~primarily~~ to lower

SMB broadband revenue, lower backhaul revenue attributable to wholesale customers and lower SMB video and telephony revenue, partially offset by higher average broadband recurring revenue per SMB customer, primarily driven by certain rate increases and service level changes and an increase in SMB customers.contract termination fee revenue.

News and Advertising Revenue

News and advertising revenue for the three and six months ended June 30, ~~2022~~2023 was $113,465 and $212,202, respectively, and $133,250 and $247,925 ~~respectively, and $131,767 and $236,837~~ for the three and six months ended June 30, ~~2021,~~2022, respectively. News and advertising revenue is primarily derived from the sale of (i) advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), (ii) digital advertising, (iii) ~~branded content,~~data analytics, and (iv) ~~data analytics.~~branded content. News and advertising revenue also includes affiliation fees for news programming.

News and advertising revenue ~~increased $1,483 (1%~~decreased $19,785 (15%) and ~~$11,088 (5%~~$35,723 (14%) for the three and six months ended June 30, ~~2022~~2023, compared to the three and six months ended June 30, ~~2021. The increase for the six months ended June 30,~~ 2022 ~~compared to June 30, 2021 was~~ primarily due to ~~an increase~~a decrease in ~~advertising revenue, primarily for~~ linear advertising.

~~Mobile Revenue~~

Mobile revenue for the three and six months ended June 30, 2022 and 2021 was $26,440 and $50,475, respectively, and $20,664 and $39,899 for the three and six months ended June 30, 2021, respectively. Mobile revenue is derived from the sales of devices and mobile services. Mobile revenue increased $5,776 (28%) and $10,576 (27%) for the three and six months ended June 30, 2022 compared to the three and six months ended June 30, 2021. The increases were due to higher mobile lines and devices sold. As of June 30, 2022, we had approximately 231,000 mobile lines (including approximately 35,800 receiving free service) compared to approximately 180,000 mobile lines as of June 30, 2021.

Other Revenue

Other revenue for the three and six months ended June 30, ~~2022~~2023 was ~~$2,971~~$10,886 and ~~$5,998,~~$21,633, respectively, and $12,438 and $24,450, for the three and six months ended June 30, ~~2021 was $3,433 and $7,347,~~2022, respectively. Other revenue includes revenue from sales of mobile equipment and other miscellaneous revenue streams.

Programming and Other Direct Costs

Programming and other direct costs for the three and six months ended June 30, ~~2022~~2023 amounted to $762,280 and $1,533,999, respectively, and $819,011 and $1,647,804, ~~respectively, and $849,872 and $1,701,736,~~ for the three and six months ended June 30, ~~2021,~~2022, respectively. Programming and other direct costs include cable programming costs, which are costs paid to programmers (net of amortization of any incentives received from programmers for carriage) for cable content (including costs of VOD and pay-per-view) and are generally paid on a per-customer basis. These costs are impacted by increases in contractual rates, ~~new channel launches, and by~~ changes in the number of customers receiving certain programming ~~services.~~services, and new channel launches. These costs also include interconnection, call completion, circuit and transport fees paid to other telecommunication companies for the transport and termination of voice and data services, which typically vary based on rate changes and the level of usage by our customers. These costs also include franchise fees which are payable to the state governments and local municipalities where we operate and are primarily based on a percentage

of certain categories of revenue derived from the provision of video service over our cable systems, which vary by state and municipality. These costs change in relation to changes in such categories of revenues or rate changes. Additionally, these costs include the costs of mobile devices sold to our customers and direct costs of providing mobile services.

The decreases of ~~$30,861 (4%~~$56,731 (7%) and ~~$53,932 (3%~~$113,805 (7%) for the three and six months ended June 30, ~~2022~~2023 as compared to the three and six months ended June 30, ~~2021~~2022 were primarily attributable to the following:

Three Months Six Months
Decrease in programming costs primarily due to lower video customers, partially offset by net contractual rate increases $ (22,698) $ (38,005)
Decrease in franchise fee costs due to lower video customers (3,260) (6,861)
Net decrease in call completion and transfer costs due to a lower level of activity related to our telephony service, partially offset by an increase related to our mobile services (2,485) (4,020)
Decrease in taxes and surcharges (1,902) (6,216)
Increase in costs of mobile devices 2,547 4,820
Other net decreases (3,063) (3,650)
$ (30,861) $ (53,932)


	Three Months		Six Months
Decrease in programming costs primarily due to lower video customers, partially offset by net contractual rate increases	$	(49,748)	$	(93,527)
Decrease in taxes and surcharges, primarily due to refunds	(10,655)		(16,361)
Decrease in software license fees related to customer premise equipment	(1,779)		(9,482)

Other net increases	5,451		5,565
	$	(56,731)	$	(113,805)

Programming costs

Programming costs aggregated $622,736 and $1,263,103, respectively, for the three and six months ended June 30, 2023, and $672,484 and $1,356,630 for the three and six months ended June 30, 2022, ~~and $695,182 and $1,394,635 for the three and six months ended June 30, 2021,~~ respectively. Our programming costs in ~~2022~~2023 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 six months ended June 30, ~~2022~~2023 amounted to ~~$673,464~~$656,128 and ~~$1,315,370,~~$1,307,373, respectively, and for the three and six months ended June 30, ~~2021~~2022 amounted to ~~$589,180~~$673,464 and ~~$1,169,613,~~$1,315,370, 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 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.

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

The ~~increases~~decreases in other operating expenses of ~~$84,284 (14%~~$17,336 (3%) and ~~$145,757 (12%~~$7,997 (1%), for the three and six months ended June 30, ~~2022~~2023 as compared to the three and six months ended June 30, ~~2021~~2022 were attributable to the following:

Three Months Six Months
Net increase in labor costs and benefits, partially offset by an increase in capitalizable activity $ 37,014 $ 58,575
Increase in repairs and maintenance costs 11,916 25,178
Increase in marketing costs, including costs of rebranding our services from Suddenlink to Optimum 13,624 23,618
Increase in share-based compensation costs 8,883 21,134
Increase in bad debt 5,080 8,685
Decrease in legal fees, including legal settlements in 2021 (5,521) (8,593)
Other net increases 13,288 17,160
$ 84,284 $ 145,757


	Three Months		Six Months
Net increase in labor costs and benefits, partially offset by an increase in capitalizable activity	$	13,270	$	49,277
Increase in repairs and maintenance costs, net of capitalizable activity	3,170		8,551
Increase in bad debt	1,586		7,107
Increase in utility costs	1,191		6,979
Decrease in share-based compensation including credits resulting from the modification of awards to certain former executive officers primarily in the three months ended March 31, 2023	(20,653)		(63,808)
Decrease in marketing costs due to costs incurred in 2022 from the rebranding of our services from Suddenlink to Optimum	(15,688)		(20,122)


Other net increases (decreases), net of capitalizable activity	(212)		4,019
	$	(17,336)	$	(7,997)

Restructuring Expense and Other ~~Expense~~Operating Items

Restructuring expense and other ~~expense~~operating items for the three and six months ended June 30, 2023 amounted to $5,178 and $34,850, respectively, as compared to $2,673 and $6,051 for the three and six months ended June 30, 2022, amounted to $2,673 and $6,051 as compared to $5,864 and $9,073 for the three and six months ended June 30, 2021, respectively. These amounts include severance and other employee related costs resulting from headcount reductions and facility realignment costs and impairments of certain right of use assets of $1,418 and $4,350 and $5,292 and $7,877, respectively, and ~~transactions costs of $1,255 and $1,701 for~~comprised the ~~three and six months ended June 30, 2022 and $573 and $1,197 for the three and six months ended June 30, 2021, respectively.~~following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Contractual payments for terminated employees	$	1,213	$	394	$	29,232	$	1,867
Facility realignment costs	1,329		897		1,711		2,282
Impairment of right-of-use operating lease assets	9,118		127		9,123		201
Remeasurement of contingent consideration related to acquisition	(6,511)		—		(6,310)		—
Transaction costs related to certain transactions not related to the Company's operations	29		1,255		1,094		1,701

	$	5,178	$	2,673	$	34,850	$	6,051

Depreciation and Amortization

Depreciation and amortization for the three and six months ended June 30, ~~2022~~2023 amounted to $418,705 and $834,917, respectively, as compared to $446,125 and $881,474 ~~as compared to $444,327 and $879,184~~ for the three and six months ended June 30, ~~2021,~~2022, respectively.

The ~~increases~~decreases in depreciation and amortization of ~~$1,798~~$27,420 and ~~$2,290~~$46,557 for the three and six months ended June 30, ~~2022~~2023 as compared to the three and six months ended June 30, ~~2021 were~~2022 was due to ~~an increase in~~lower amortization expense resulting from certain assets becoming fully amortized, partially offset by higher depreciation ~~as a result of higher~~expense resulting from increased asset additions in ~~2022 as compared to 2021, partially offset by lower amortization expense on intangible assets.~~2023.

Adjusted EBITDA

Adjusted EBITDA amounted to $921,742 and $1,790,133, respectively, for the three and six months ended June 30, 2023 as compared to $1,007,068 and $1,998,798 for the three and six months ended June 30, 2022, respectively.

Adjusted EBITDA is a non-GAAP measure that is defined as ~~compared~~net income (loss) excluding income taxes, 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, interest expense, net, depreciation and amortization (including impairments), share-based compensation, restructuring expense and other operating items (such as significant legal settlements, contractual payments for terminated employees, and impairments). See reconciliation of net income (loss) to ~~$1,104,602~~adjusted EBITDA above.

The decreases in Adjusted EBITDA of $85,326 and ~~$2,179,407~~$208,665 for the three and six months ended June 30, ~~2021, respectively.~~

~~The decreases in Adjusted EBITDA of $97,534 and $180,609 for the three and six months ended June 30, 2022~~2023 as compared to the three and six months ended June 30, ~~2021,~~2022, respectively, were due to the decreases in revenue, ~~and an increase~~partially offset by decreases in operating expenses during 2023 (excluding depreciation and amortization, restructuring and other ~~expense~~operating items and share-based compensation), as discussed above.

Operating Free Cash Flow

Operating free cash flow was $448,297 and $733,791, respectively. for the three and six months ended June 30, 2023 as compared to $521,942 and $1,121,301 for the three and six months ended June 30, 2022, ~~as compared to $781,498 and $1,643,512 for the three and six months ended June 30, 2021,~~ respectively. The ~~decreases~~decrease in operating free cash flow of ~~$259,556~~$73,645 for the three months ended June 30, 2023 as compared to the same period in 2022 was due to a decrease in Adjusted EBITDA, partially offset by a decrease in capital expenditures. The decrease in operating free cash flow of $387,510 for the six months ended June 30, 2023 as compared to the same period in 2022 was due to a decrease in Adjusted EBITDA and ~~$522,211,~~an increase in capital expenditures.

Free Cash Flow (Deficit)

Free cash flow (deficit) was $(34,604) and $(200,655), respectively, for the three and six months ended June 30, ~~2022~~2023 as compared to ~~the same periods in 2021 were due to increases in capital expenditures and decreases in Adjusted EBITDA.~~

~~Free Cash Flow~~

~~Free cash flow was~~ $191,209 and $399,057 for the three and six months ended June 30, 2022, ~~as compared~~respectively. The decrease in free cash flow of $225,813 in the three month period was due to ~~$406,439~~a decrease in net cash provided by operating activities, partially offset by a decrease in capital expenditures. The decrease in free cash flow of $599,712 in the six month period was due to a decrease in net cash provided by operating activities and ~~$943,270~~an increase in capital expenditures.

Interest Expense, net

Interest expense, net was $406,709 and $795,987, respectively, for the three and six months ended June 30, ~~2021, respectively. The decreases in free cash flow of $215,230~~2023, as compared to $310,213 and ~~$544,213~~$613,575, respectively, for the same periods in the ~~three~~prior year. The increases of $96,496 and ~~six month period, respectively, were due to increases in capital expenditures and a decrease in net cash provided by operating activities.~~

~~Interest Expense, net~~

~~Interest expense, net was $310,213 and $613,575~~$182,412 for the three and six months ended June 30, ~~2022, as compared to $319,371 and $635,683, respectively. The decreases of $9,158 and $22,108 for the three and six months ended June 30, 2022~~2023 as compared to the three and six months ended June 30, ~~2021~~2022 were attributable to the following:

Three Months Six Months
Decrease due primarily to a decrease in average debt balances for the three and six month periods, partially offset by an increase in interest rates in the three month period $ (2,125) $ (13,366)
Capitalized interest related to FTTH network construction (5,248) (5,248)
Higher interest income (323) (348)
Other net decreases, primarily amortization of deferred financing costs and original issue discounts (1,462) (3,146)
$ (9,158) $ (22,108)


	Three Months		Six Months
Increase primarily due to an increase in interest rates, partially offset by a decrease in average debt balances	$	110,688	$	213,615
Lower (higher) capitalized interest related to FTTH network construction	651		(4,617)
Higher interest income	(1,676)		(3,796)
Other net decreases, primarily lower amortization of deferred financing costs and original issue discounts	(13,167)		(22,790)
	$	96,496	$	182,412

Gain (Loss) on Investments

Gain (loss) on investments was $192,010 for the six months ended June 30, 2023 compared to $(325,601) and $(476,374) for the three and six months ended June 30, 2022, ~~as compared to $125,019 and $198,472 for the three and six months ended June 30, 2021,~~ respectively, and ~~consists~~consisted primarily of the increase (decrease) in the fair value of the Comcast common stock owned by the ~~Company.~~Company through January 24, 2023. The effects of these gains (losses) ~~are~~were partially offset by the losses (gains) on the related equity derivative contracts, net described below.

Gain (Loss) on Derivative Contracts, net

Gain (loss) on derivative contracts, net for the ~~three and~~ six months ended June 30, ~~2022~~2023 amounted to $(166,489) compared to $219,114 and $320,188 ~~compared to $(98,840) and $(152,405)~~ for the three and six months ended June 30, ~~2021~~2022, respectively, and ~~includes~~included realized and

unrealized gains or losses due to the change in fair value of equity derivative contracts relating to the Comcast common stock owned by the ~~Company.~~Company through January 24, 2023. The effects of these gains (losses) are partially offset by losses (gains) on investment securities pledged as collateral, which are included in gain (loss) on investments discussed above.

Gain ~~(Loss)~~ on Interest Rate Swap Contracts, net

Gain ~~(loss)~~ on interest rate swap contracts, net was $61,165 and $46,736, respectively, for the three and six months ended June 30, 2023 compared to $39,868 and $163,015 for the three and six months ended June 30, 2022, ~~compared to $(21,574) and $54,079 for the three and six months ended June 30, 2021,~~ respectively. These amounts represent the change in the fair value of the interest rate swap contracts. These swap contracts are not designated as hedges for accounting purposes.

Other Income (Loss), net

Other income (loss), net amounted to $(1,570) and $8,635, respectively, for the three and six months ended June 30, 2023 compared to $2,521 and $4,951 for the three and six months ended June 30, 2022, ~~compared to $2,467 and $5,326 for the three and six months ended June 30, 2021,~~ respectively. These amounts include the non-service benefit or cost components of the Company's pension plans and dividends received on Comcast common stock owned by the Company ~~and the non-service cost/benefit components of the Company's pension plan.~~through January 24, 2023.

Income Tax Expense

For the three and six months ended June 30, 2023, Altice USA recorded a tax expense of $48,725 and $79,097 on pre-tax income of $134,869 and $196,411, respectively, resulting in an effective tax rate that was higher than the U.S. statutory tax rate. The higher tax rate was primarily due to the impact of certain non-deductible expenses, state tax expense, and tax deficiencies on share-based compensation.

For the three and six months ended June 30, 2022, Altice USA recorded a tax expense of $33,890 and $116,736 on pre-tax income of $147,430 and $432,417, ~~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 state tax expense.~~

~~For the three and six months ended June 30, 2021, Altice USA recorded a tax expense of $61,820 and $173,827 on pre-tax income of $262,754 and $653,300,~~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 state tax expense.

CSC HOLDINGS, LLC

The ~~consolidated statements~~following is a reconciliation of ~~operations, adjusted~~CSC Holdings' net income to Adjusted EBITDA and Operating Free Cash ~~Flow of CSC Holdings are identical to the consolidated statements of operations, adjusted EBITDA and Operating Free Cash Flow of Altice USA.~~ Flow:


	CSC Holdings
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	86,144	$	113,540	$	117,314	$	315,681
Income tax expense	48,725		33,890		79,097		116,736
Other income, net	1,570		(2,521)		(8,635)		(4,951)
Gain on interest rate swap contracts, net	(61,165)		(39,868)		(46,736)		(163,015)
Loss (gain) on derivative contracts, net	—		(219,114)		166,489		(320,188)
Loss (gain) on investments, net	—		325,601		(192,010)		476,374
Loss on extinguishment of debt and write-off of deferred financing costs	—		—		(4,393)		—
Interest expense, net	406,709		310,213		795,987		613,575
Depreciation and amortization	418,705		446,125		834,917		881,474
Restructuring expense and other operating items	5,178		2,673		34,850		6,051
Share-based compensation	15,876		36,529		13,253		77,061
Adjusted EBITDA	921,742		1,007,068		1,790,133		1,998,798
Capital expenditures (cash)	473,445		485,126		1,056,342		877,497
Operating Free Cash Flow	$	448,297	$	521,942	$	733,791	$	1,121,301

Refer to Altice USA's Management's Discussion and Analysis of Financial Condition and Results of Operations above.

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

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Net cash flows from operating activities $ 675,576 $ 700,798 $ 1,276,554 $ 1,449,760
Less: Capital expenditures (cash) 485,126 323,104 877,497 535,895
Free Cash Flow $ 190,450 $ 377,694 $ 399,057 $ 913,865



	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Net cash flows from operating activities	$	438,841	$	675,576	$	855,687	$	1,276,554
Less: Capital expenditures (cash)	473,445		485,126		1,056,342		877,497
Free Cash Flow (Deficit)	$	(34,604)	$	190,450	$	(200,655)	$	399,057

LIQUIDITY AND CAPITAL RESOURCES

Altice USA has no operations independent of its subsidiaries. Funding for our subsidiaries has generally been provided by cash flow from their respective operations, cash on hand and borrowings under the CSC Holdings revolving credit facility and the proceeds from the issuance of securities and borrowings under syndicated term loans in the capital markets. Our decision as to the use of cash generated from operating activities, cash on hand, borrowings under the revolving credit facility or accessing the capital markets has been based upon an ongoing review of the funding needs of the business, the optimal allocation of cash resources, the timing of cash flow generation and the cost of borrowing under the revolving credit facility, debt securities and syndicated term loans. We target a year-end leverage ratio of 4.5x to 5.0x for CSC Holdings over time. We calculate our CSC Holdings net leverage ratio as net debt to L2QA EBITDA (Adjusted EBITDA for the two most recent consecutive fiscal quarters multiplied by 2.0).

We expect to utilize free cash flow and availability under the CSC Holdings 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 to repay the outstanding debt securities through open market purchases, privately negotiated purchases, tender offers, or redemptions. With regard to our collateralized indebtedness that matures in May 2023, our intent is to settle such indebtedness with proceeds from new monetization contracts. To the extent we do not enter into new monetization contracts, we could settle the existing collateralized indebtedness by (i) delivering shares of Comcast common stock or (ii) delivering cash. Because this collateralized debt matures in May 2023, it has been classified as current in the accompanying balance sheet as of June 30, 2022, and because there is no assurance that a financing under new monetization contracts can be completed when this debt matures, the related investments held as collateral have also been classified as current.

We believe existing cash balances, operating cash flows and availability under the 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. Competition, market disruptions or a deterioration in economic conditions could lead to lower demand for our products, as well as lower levels of advertising, and increased incidence of customers' inability to pay for the services we provide. These events would adversely impact our results of operations, cash flows and financial position. Although we currently believe amounts available under the CSC Holdings 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 to take 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.

4039

Debt Outstanding

The following tables summarize the carrying value of our outstanding debt, net of unamortized deferred financing costs, discounts and premiums (excluding accrued interest), as of June 30, 2023, as well as interest expense for the six months ended June 30, ~~2022:~~2023:


		CSC Holdings Restricted Group		Lightpath		Other Unrestricted Entities		Altice USA/CSC Holdings			CSC Holdings Restricted Group		Lightpath		Other Unrestricted Entities		Altice USA/CSC Holdings
Debt outstanding:	Debt outstanding:									Debt outstanding:
Credit facility debt	Credit facility debt	$	7,659,682	$	577,282	$	—	$	8,236,964	Credit facility debt	$	7,714,231	$	573,671	$	—	$	8,287,902
Senior guaranteed notes	Senior guaranteed notes	7,637,008		—		—		7,637,008		Senior guaranteed notes	8,633,454		—		—		8,633,454
Senior secured notes	Senior secured notes	—		442,381		—		442,381		Senior secured notes	—		443,715		—		443,715
Senior notes	Senior notes	7,556,691		407,586		—		7,964,277		Senior notes	6,920,582		408,601		—		7,329,183
Subtotal	Subtotal	22,853,381		1,427,249		—		24,280,630		Subtotal	23,268,267		1,425,987		—		24,694,254
Finance lease obligations	Finance lease obligations	251,285		—		—		251,285		Finance lease obligations	252,147		—		—		252,147
Notes payable and supply chain financing	Notes payable and supply chain financing	114,819		—		—		114,819		Notes payable and supply chain financing	168,696		—		—		168,696
Subtotal		23,219,485		1,427,249		—		24,646,734
Collateralized indebtedness relating to stock monetizations (a)		—		—		1,726,366		1,726,366
Total debt	Total debt	$	23,219,485	$	1,427,249	$	1,726,366	$	26,373,100	Total debt	$	23,689,110	$	1,425,987	$	—	$	25,115,097
Interest expense, net:
Interest expense:										Interest expense:
Credit facility debt, senior notes, finance leases, notes payable and supply chain financing	Credit facility debt, senior notes, finance leases, notes payable and supply chain financing	$	540,846	$	34,558	$	—	$	575,404	Credit facility debt, senior notes, finance leases, notes payable and supply chain financing	$	746,360	$	46,635	$	—	$	792,995
Collateralized indebtedness relating to stock monetizations (a)	Collateralized indebtedness relating to stock monetizations (a)	—		—		38,610		38,610		Collateralized indebtedness relating to stock monetizations (a)	—		—		7,227		7,227
Total interest expense, net		$	540,846	$	34,558	$	38,610	$	614,014
Total interest expense										Total interest expense	$	746,360	$	46,635	$	7,227	$	800,222

(a)This indebtedness iswas collateralized by shares of Comcast common stock. ~~Our intent is to settle such indebtedness with proceeds from new monetization contracts. To~~In January 2023, we settled this debt by delivering the ~~extent~~Comcast shares we ~~do not enter into new monetization~~held and the related equity derivative contracts, we could settle the existing collateralized indebtedness by (i) delivering shares of Comcast common stock or (ii) delivering cash. Because this collateralized debt matures in May 2023, it has been classified as currentresulting in the ~~accompanying balance sheet as~~receipt of June 30, 2022, and because there is no assurance that a financing under new monetization contracts can be completed when this debt matures, the related investments held as collateral have also been classified as current.cash of approximately $50,500 (including dividends of $11,598).

Payment Obligations Related to Debt

As of June 30, ~~2022,~~2023, 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 are as follows:


		CSC Holdings Restricted Group (b)		Lightpath		Other Unrestricted Entities (a)		Altice USA/ CSC Holdings			CSC Holdings Restricted Group		Lightpath		Altice USA/ CSC Holdings
2022		$	1,305,710	$	37,715	$	16,989	$	1,360,414
2023	2023	1,198,827		76,862		1,776,378		3,052,067		2023	$	831,906	$	42,357	$	874,263
2024	2024	2,523,185		75,265		—		2,598,450		2024	2,314,250		84,294		2,398,544
2025		3,791,414		75,925		—		3,867,339
2025 (a)										2025 (a)	3,737,290		83,745		3,821,035
2026	2026	2,078,391		73,414		—		2,151,805		2026	1,765,973		79,065		1,845,038
2027										2027	5,202,191		1,108,904		6,311,095
Thereafter(b)	Thereafter(b)	18,835,904		1,506,150		—		20,342,054		Thereafter(b)	16,989,252		438,344		17,427,596
Total	Total	$	29,733,431	$	1,845,331	$	1,793,367	$	33,372,129	Total	$	30,840,862	$	1,836,709	$	32,677,571

(a)Includes ~~$1,793,367~~$825,000 principal amount and related interest related to the ~~Company's collateralized indebtedness (including related interest).~~CSC Holdings' revolving credit facility that is due on the earlier of (i) July 13, 2027 and (ii) April 17, 2025 if, as of such date, any Term Loan B borrowings are still outstanding, unless the Term Loan B maturity date has been extended to a date falling after July 13, 2027.

(b)~~Does not reflect the extension of the maturity date and change in interest rates from LIBOR to SOFR pursuant to the amendment~~Includes $1,996,937 principal amount related to the CSC ~~Holdings Credit Agreement discussed below.~~Holdings' Incremental Term Loan B-6 that is due on the earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of such date, any Incremental Term Loan B-5 borrowings are still outstanding, unless the Incremental Term Loan B-5 maturity date has been extended to a date falling after January 15, 2028.

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").~~investments. The CSC Holdings Restricted Group is comprised of CSC Holdings and substantially all of its wholly-owned operating subsidiaries, excluding Lightpath

which became an unrestricted subsidiary in September 2020. These subsidiaries are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by CSC Holdings.

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, 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 our FTTH network; debt service; distributions made to its parent to 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

In October 2015, a wholly-owned subsidiary of Altice USA, which merged with and into CSC Holdings on June 21, 2016, entered into a senior secured credit facility, which currently provides U.S. dollar term loans currently in an aggregate principal amount of $3,000,000 ($~~2,850,000~~1,528,162 outstanding at June 30, ~~2022)~~2023) (the "CSC Term Loan Facility"), ~~and the term loans extended under the CSC Term Loan Facility, the "CSC Term Loans")~~ and U.S. dollar revolving loan commitments in an aggregate principal amount of $2,475,000 ($~~675,000~~825,000 outstanding at June 30, ~~2022)~~2023) (the "CSC Revolving Credit Facility" and, together with the CSC Term Loan Facility, the "CSC Credit Facilities"), which are governed by a credit facilities agreement entered into by, inter alios, CSC Holdings, certain lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent and security agent (as amended, restated, supplemented or otherwise modified 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, May 14, 2019, October 3, 2019, and July 13, 2022, respectively, and as further amended, restated, supplemented or otherwise modified from time to time, the "CSC Credit Facilities Agreement").

In October 2018, CSC Holdings entered into a $1,275,000 ($~~1,233,563~~524,379 outstanding at June 30, ~~2022)~~2023) incremental term loan facility (the “Incremental Term Loan B-3”) ~~and~~, in October 2019, CSC Holdings entered into a $3,000,000 ($~~2,932,500~~2,902,500 outstanding at June 30, ~~2022)~~2023) incremental term loan facility ("Incremental Term Loan B-5") and in December 2022, CSC Holdings entered into a $2,001,942 ($1,996,937 outstanding at June 30, 2023) incremental term loan facility (the "Incremental Term Loan B-6") under its existing credit facilities agreement.

~~On July 13, 2022,~~Senior Guaranteed Notes

In April 2023, CSC Holdings entered into an amendment (the "Twelfth Amendment") to the CSC Credit Facilities Agreement. The Twelfth Amendment provides for, among other things, new revolving credit commitments (the “2022 Revolving Credit Commitments”)issued $1,000,000 in an aggregate principal amount of ~~$2,325,000 with an extended maturity until the date~~senior guaranteed notes that is the earlier of (i) July 13, 2027 and (ii) April 17, 2025 if, as of such date, any March 2017 Term Loans, as defined in the CSC Credit Facilities Agreement are still outstanding, unless the March 2017 Term Loan Maturity Date (as defined in the CSC Credit Facilities Agreement) has been extended to a date falling after July 13, 2027. After the effectiveness of the Twelfth Amendment, our existing revolving commitments maturing in January 2024 will equal an aggregate principal amount of $150,000. The loans made pursuant to the 2022 Revolving Credit Commitments may be composed of Term Secured Overnight Financing Rate ("SOFR") borrowings or alternative base rate borrowings, and will bear interest at a rate ~~per annum equal~~of 11.250% and mature on May 15, 2028 (the "2028 Senior Guaranteed Notes"). The Company used the proceeds to repay outstanding borrowings drawn under the Term SOFR rate (plus a Term SOFR credit adjustment spread of 0.10%) 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, 1.25% per annum and (ii) with respect to any Term SOFR loan, 2.25% per annum.

CSC Revolving Credit Facility. See Note 8 to our consolidated financial statements for further information regarding the ~~CSC Credit Facilities Agreement.~~2028 Senior Guaranteed Notes.

Lightpath Credit Facility

In November 2020, Lightpath entered into a credit agreement which provides a term loan in an aggregate principal amount of $600,000 ($~~591,000~~585,000 outstanding at June 30, ~~2022)~~2023) and revolving loan commitments in an aggregate principal amount of $100,000. As of June 30, ~~2022,~~2023, there were no borrowings outstanding under the Lightpath revolving credit facility.

In June 2023, Lightpath entered into an amendment (the "First Amendment") under its existing credit facility agreement to replace LIBOR-based benchmark rates with SOFR-based benchmark rates. The First Amendment provides for interest on borrowings under its term loan and revolving credit facility to be calculated for any (i) SOFR loan, at a rate per annum equal to the Term SOFR (plus spread adjustments of 0.11448%,0.26161% and 0.42826% for interest periods of one, three and six months, respectively) or (ii) the alternate base rate loan, at the alternative base rate as applicable, plus the applicable margin in each case, where the applicable margin is 2.25% per annum with respect to any alternate base rate loan and 3.25% per annum with respect to any SOFR loan.

See Note 8 to our consolidated financial statements for further information ~~regarding~~on the ~~Lightpath credit agreement.~~above debt obligations.

4241

~~Lightpath Interest Rate Swap Contract~~

Lightpath entered into an interest rate swap contract, effective April 2022, on a notional amount of $300,000, whereby Lightpath pays interest of 2.161% through December 2026 and receives interest based on the one-month LIBOR rate. This swap contract will not be designated as a hedge for accounting purposes. Accordingly, the changes in the fair value of this interest rate swap contract will be recorded through the statement of operations.

Capital Expenditures

The following table presents the Company's capital expenditures:


		Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021				2023		2022		2023		2022
Customer premise equipment	Customer premise equipment	$	80,266	$	50,399	$	161,850	$	92,235		Customer premise equipment	$	60,849	$	80,266	$	146,910	$	161,850
Network infrastructure	Network infrastructure	313,066		160,896		546,889		277,283			Network infrastructure	239,457		313,066		586,313		546,889
Support and other	Support and other	52,504		77,921		98,164		107,894			Support and other	92,133		52,504		169,106		98,164
Business Services	Business Services	39,290		33,888		70,594		58,483			Business Services	81,006		39,290		154,013		70,594
Capital purchases (cash basis)		485,126		323,104		877,497		535,895
Capital expenditures (cash basis)											Capital expenditures (cash basis)	473,445		485,126		1,056,342		877,497
Right-of-use assets acquired in exchange for finance lease obligations	Right-of-use assets acquired in exchange for finance lease obligations	47,483		39,367		94,771		77,715			Right-of-use assets acquired in exchange for finance lease obligations	48,477		47,483		83,652		94,771
Notes payable issued to vendor for the purchase of equipment and other assets	Notes payable issued to vendor for the purchase of equipment and other assets	16,431		33,818		51,501		33,818			Notes payable issued to vendor for the purchase of equipment and other assets	26,795		16,431		97,235		51,501
Change in accrued and unpaid purchases and other	Change in accrued and unpaid purchases and other	17,498		(22,832)		5,633		37,502			Change in accrued and unpaid purchases and other	(61,310)		17,498		(149,616)		5,633
Capital purchases (accrual basis)		$	566,538	$	373,457	$	1,029,402	$	684,930
Capital expenditures (accrual basis)											Capital expenditures (accrual basis)	$	487,407	$	566,538	$	1,087,613	$	1,029,402

Customer premise equipment includes expenditures for ~~set-top boxes,~~drop cable, fiber gateways, modems, routers, and other equipment ~~that is placed in a customer's home, as well as installation costs for placing assets into service.~~installed at customer locations. Network infrastructure ~~includes:~~includes (i) scalable infrastructure, such as headend and related equipment, (ii) line extensions, such as ~~FTTH~~fiber and ~~fiber/~~coaxial cable, amplifiers, electronic equipment, ~~make-ready~~ and design and engineering costs to expand the network, and (iii) upgrade and rebuild, including costs to modify or replace existing ~~fiber/coaxial cable networks, including enhancements.~~segments of the network. Support and other capital expenditures ~~includes~~include costs associated with the replacement or enhancement of non-network assets, such as software systems, vehicles, facilities, and office equipment. Business services capital expenditures include primarily equipment, ~~installation,~~ support and other costs related to our ~~fiber based~~fiber-based telecommunications business serving ~~primarily~~ enterprise customers.

In February 2022, the Company announced plans to accelerate its fiber network rollout and new build activity, including targeting 6.5 million fiber passings across its footprint by the end of 2025. The Company estimates it will incur approximately $1,700,000 to $1,800,000 of cash capital expenditures in fiscal year 2022 to advance its upgrade and expansion plans.

Cash Flow Discussion

Altice USA

Operating Activities

Net cash provided by operating activities amounted to $855,687 for the six months ended June 30, 2023 compared to $1,276,554 for the six months ended June 30, ~~2022 compared to $1,479,165 for the six months ended June 30, 2021.~~2022.

The decrease in cash provided by operating activities of ~~$202,611~~$420,867 in ~~2022~~2023 as compared to ~~2021~~2022 resulted from a decrease in net income before depreciation and amortization and other non-cash items of ~~$55,996~~$555,903, partially offset by an increase of $135,036 due to changes in working capital (including ~~a decrease~~an increase in interest payments of ~~$20,634~~$181,314 and ~~an increase~~a decrease in tax payments of ~~$66,291)~~$53,128) as well as the timing of payments of liabilities, and collections of accounts receivable, among other ~~items, and a decrease in net income before depreciation and amortization and other non-cash items of $146,615.~~items.

Investing Activities

Net cash used in investing activities for the six months ended June 30, ~~2022~~2023 was ~~$878,107~~$1,057,920 compared to ~~$877,539~~$878,107 for the six months ended June 30, ~~2021.~~2022. The 2023 investing activities consisted primarily of capital expenditures of ~~$877,497~~$1,056,342. The 2022 investing activities consisted primarily of capital expenditures of $877,497.

43Financing Activities

~~and $535,895~~Net cash provided by (used in) financing activities amounted to $115,335 for the six months ended June 30, ~~2022 and 2021, respectively and payments for acquisitions of $340,570~~2023, compared to $(361,082) for the six months ended June 30, ~~2021.~~2022.

~~Financing Activities~~

~~Net cash used in~~In 2023, the Company's financing activities ~~amounted to $361,082 for~~consisted primarily of proceeds from long-term debt of $1,900,000 and net proceeds in connection with the ~~six months ended June 30, 2022, compared to $659,208 for~~settlement of collateralized indebtedness and derivative contracts of $38,902, partially offset by the ~~six months ended June 30, 2021.~~repayment of debt of $1,739,493 and principal payments on finance lease obligations of $76,100.

In 2022, the Company's financing activities consisted of the repayment of ~~long-term~~ debt of $758,861 and principal payments on finance lease obligations of $62,221, partially offset by proceeds from ~~our revolving credit facility~~long-term debt of $460,000.

In 2021, the Company's financing activities consisted of the repayment of long-term debt of $3,057,469, repurchase of common stock pursuant to a share repurchase program of $725,518, repayment of collateralized indebtedness and related derivative contracts, net of $185,105, and principal payments on finance lease obligations of $37,560, partially offset by proceeds from long-term debt of $3,160,000, proceeds from collateralized indebtedness and related derivative contracts, net of $185,105, and other net cash receipts of $1,339.

CSC Holdings

Operating Activities

Net cash provided by operating activities amounted to $855,687 for the six months ended June 30, 2023 compared to $1,276,554 for the six months ended June 30, ~~2022 compared to $1,449,760 for the six months ended June 30, 2021.~~2022.

The decrease in cash provided by operating activities of ~~$173,206~~$420,867 in ~~2022~~2023 as compared to ~~2021~~2022 resulted from a decrease in net income before depreciation and amortization and other non-cash items of ~~$36,042~~$555,903, partially offset by an increase of $135,036 due to changes in working capital (including ~~a decrease~~an increase in interest payments of ~~$20,634~~$181,314 and ~~an increase~~a decrease in tax payments of ~~$66,291)~~$53,128) as well as the timing of payments and collections of accounts receivable, among other ~~items, and a decrease in net income before depreciation and amortization and other non-cash items of $137,164.~~items.

Investing Activities

Net cash used in investing activities for the six months ended June 30, ~~2022~~2023 was ~~$878,107~~$1,057,920 compared to ~~$877,539~~$878,107 for the six months ended June 30, ~~2021.~~2022. The 2023 investing activities consisted primarily of capital expenditures of $1,056,342. The 2022 investing activities consisted primarily of capital expenditures of $877,497. ~~The 2021 investing activities consisted primarily of capital expenditures of $535,895 and payments for acquisitions of $340,570.~~

Financing Activities

Net cash ~~used in~~provided by (used in) financing activities amounted to ~~$361,082~~$115,335 for the six months ended June 30, ~~2022,~~2023, compared to ~~$629,531~~$(361,082) for the six months ended June 30, ~~2021.~~2022.

In 2023, the Company's financing activities consisted primarily of proceeds from long-term debt of 1,900,000, and net proceeds in connection with the settlement of collateralized indebtedness and derivative contracts of $38,902, partially offset by the repayment of debt of $1,739,493 and principal payments on finance lease obligations of $76,100.

In 2021, the Company's financing activities consisted of distributions to its parent of $685,478, repayment of long-term debt of $3,057,469, repayment of collateralized indebtedness and related derivative contracts, net of $185,105, principal payments on finance lease obligations of $37,560, and other net cash payments of $9,024, partially offset by proceeds from long term debt of ~~$3,160,000 and proceeds from collateralized indebtedness and related derivative contracts, net of $185,105.~~$460,000.

Commitments and Contingencies

As of June 30, ~~2022,~~2023, the Company's commitments and contingencies not reflected in the Company's balance sheet decreased to approximately ~~$9,165,000~~$6,700,000 as compared to approximately ~~$10,310,000 at~~$8,100,000 as of December 31, ~~2021.~~2022. This decrease relates primarily to payments made in 2023 pursuant to programming commitments and a reduction in programming commitments due to a decrease in the number of video customers as of June 30, ~~2022~~2023 as compared to December 31, ~~2021.~~2022.

Share Repurchase Program

In June 2018, the Board of Directors of Altice USA authorized a share repurchase program of $2,000,000, and on July 30, 2019, the Board of Directors authorized a new incremental three-year share repurchase program of $5,000,000 that took effect following the completion in August 2019 of the $2,000,000 repurchase program. In November 2020, the Board of Directors authorized an additional ~~incremental~~ $2,000,000 of share repurchases bringing the total amount of cumulative share repurchases authorized to $9,000,000. 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.

For the six months ended June 30, ~~2022,~~2023, Altice USA did not repurchase any shares. From inception through June 30, ~~2022,~~2023, Altice USA repurchased an aggregate of 285,507,773 shares for a total purchase price of approximately $7,808,698. These acquired shares were retired and the cost of these shares was recorded in stockholders' deficiency in the consolidated balance sheet of Altice USA. As of June 30, ~~2022,~~2023, Altice USA had approximately $1,191,302 of availability remaining under the incremental share repurchase ~~program.~~program which expires in November 2023.

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 June 30, 2022, 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 in our consolidated balance sheets and the collateralized indebtedness is carried at its principal value, net of discounts. These discounts are being amortized over the term of the related indebtedness. The carrying value of our collateralized indebtedness amounted to $1,726,366 at June 30, 2022. 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 June 30, 2022, the fair value and the carrying value of our holdings of Comcast common stock aggregated $1,685,563. Assuming a 10% change in price, the potential change in the fair value of these investments would be approximately $168,556. As of June 30, 2022, 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 $158,246, a net liability position. For the six months ended June 30, 2022, we recorded a net gain of $320,188 related to our outstanding equity derivative contracts and recorded an unrealized loss of $476,374 related to the Comcast common stock that we held.


~~Fair Value of Equity Derivative Contracts~~
~~Fair value as of December 31, 2021, net liability position~~	$	~~(161,942)~~
~~Change in fair value, net~~	~~320,188~~
~~Fair value as of June 30, 2022, net liability position~~	$	~~158,246~~

The maturity date, number of shares deliverable at the relevant maturity date, 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:

# of Shares Deliverable Maturity Hedge Price per Share (a) Cap Price (b)
42,955,236 2023 $40.95 $49.55

~~(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.~~

Fair Value of Debt

At June 30, ~~2022,~~2023, the fair value of our fixed rate debt, comprised of our ~~collateralized debt,~~ senior guaranteed and senior secured notes, senior notes, ~~and~~ notes payable and supply chain financing of ~~$14,632,936~~$11,218,604 was lower than its carrying value of ~~$17,884,851~~$16,575,048 by ~~$3,251,915.~~$5,356,444. The fair value of these financial instruments is estimated based on reference to quoted

market prices for these or comparable securities. Our floating rate borrowings, comprised of our term loans and revolving credit facilities bear interest in reference ~~to current LIBOR-based~~SOFR-based market rates and thus their principal values approximate fair value. The effect of a hypothetical 100 basis point decrease in interest rates prevailing at June 30, ~~2022~~2023 would increase the estimated fair value of our fixed rate debt by ~~$749,587~~$498,608 to ~~$15,382,523.~~$11,717,212. 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 in our consolidated balance sheets, with changes in fair value reflected in the consolidated statements of operations. See Note 9 to our ~~Consolidated Financial Statements~~consolidated financial statements for a summary of interest rate swap contracts outstanding at June 30, ~~2022.~~2023. The Company's outstanding interest rate swap contracts are not designated as hedges for accounting purposes. Accordingly, the changes in the fair value of these interest rate swap contracts are recorded through the statement of operations. For the three and six months ended June 30, ~~2022,~~2023, the Company recorded a gain on interest rate swap contracts of ~~$163,015.~~

~~The following represents the location~~$61,165 and $46,736 and had a fair value at June 30, 2023 of ~~the~~$192,113 recorded as other assets, ~~and liabilities associated with the Company's equity derivative contracts and interest rate swap contracts within~~long-term on the consolidated balance ~~sheets:~~

~~Derivatives Not Designated as Hedging Instruments~~sheet.

~~Balance Sheet Location~~

Fair Value at
June 30, 2022

~~Asset Derivatives:~~

~~Prepaid forward contracts~~

~~Prepaid expenses and other current assets~~

~~158,246~~

~~Interest rate swap contracts~~

~~Other asset, long-term~~

~~76,905~~

~~235,151~~

As of June 30, ~~2022,~~2023, 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 June 30, ~~2022.~~2023.

Changes in Internal Control

During the six months ended June 30, ~~2022,~~2023, 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.

4644

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Refer to Note 14 to our consolidated financial statements included in this Quarterly Report on Form 10-Q for a discussion of our legal proceedings.

Item 5. Other Information

(a)Form 8-K Information

The following information is responsive to Items 1.01 and 3.03 of Form 8-K but is being provided in this Quarterly Report on Form 10-Q as permitted under Item 5 of Form 10-Q:

Amendment and Restatement of the Stockholders’ Agreement

On August 2, 2023, Altice USA and Next Alt S.a.r.l. (“Next Alt”) amended and restated that certain Stockholders’ Agreement, dated as of June 7, 2018 (the “2018 SHA”), among Altice USA, Next Alt and A4 S.A., an entity controlled by family members of Patrick Drahi (“A4”), by entering into that certain Amended and Restated Stockholder Agreement, dated as of August 2, 2023 (the “2023 SHA”). Altice USA and Next Alt amended and restated the 2018 SHA in order to, among other things, remove (i) certain consent rights Next Alt was granted under the 2018 SHA and (ii) references to “A4” following the transfer of ownership of A4 to Next Alt and the subsequent dissolution of A4 in October 2022.

The foregoing description of the 2023 SHA does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the 2023 SHA, which is attached to this Quarterly Report on Form 10-Q as Exhibit 4.1 and incorporated herein by reference.

(b)Not applicable.

Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements by Our Directors and Officers

During the quarterly period covered by this Quarterly Report, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as defined under Item 408 of Regulation S-K).

Item 6. Exhibits


EXHIBIT NO.						DESCRIPTION

4.1						Amended and Restated Stockholder Agreement, dated as of August 2, 2023, by and between Altice USA, Inc. and Next Alt S.à r.l.
10.1						~~Amended and Restated Altice USA 2017 Long Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 99.1 of the Company’s Form S-8 (File No. 333-265631) filed on June 15, 2022).~~
~~10.2~~						~~Twelfth~~First Amendment to Credit Agreement, dated as of ~~July 13, 2022, by~~June 20, 2023 between Cablevision Lightpath LLC, as Borrower, and ~~among~~Goldman Sachs Bank USA as administrative agent for the Borrower, each of the other Loan Parties, the Lenders party thereto and JPMorgan Chase Bank, N.A. as the Administrative Agent (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on July 14, 2022).Lenders.
31.1						Section 302 Certification of the CEO.
31.2						Section 302 Certification of the CFO.
32						Section 906 Certifications of the CEO and CFO.
101						The following financial statements from Altice USA's Quarterly Report on Form 10-Q for the quarterly period ended June 30, ~~2022~~2023 filed with the Securities and Exchange Commission on August ~~3, 2022~~2, 2023 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Stockholders' Deficiency; (v) the Consolidated Statements of Cash Flows; and (vi) the Combined Notes to Consolidated Financial Statements.
104						The cover page from this quarterly report on Form 10-Q formatted in Inline XBRL.

4745

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:

August ~~3, 2022~~2, 2023

/s/ ~~Michael J. Grau~~Marc Sirota

By:

~~Michael J. Grau~~

Marc Sirota

Chief Financial Officer

4846


	Member's Deficiency		Accumulated Other Comprehensive Income		Total Member's Deficiency		Noncontrolling Interests		Total Deficiency

Balance at January 1, 2022	$	(848,156)	$	6,497	$	(841,659)	$	(51,114)	$	(892,773)
Net income attributable to CSC Holdings' sole member	196,551		—		196,551		—		196,551
Net income attributable to noncontrolling interests	—		—		—		5,590		5,590

Pension liability adjustments, net of income taxes	—		1,843		1,843		—		1,843
Foreign currency translation adjustment, net of income taxes	—		(170)		(170)		—		(170)
Share-based compensation expense (equity classified)	40,512		—		40,512		—		40,512




Other	11		—		11		—		11
Balance at March 31, 2022	(611,082)		8,170		(602,912)		(45,524)		(648,436)
Net income attributable to CSC Holdings' sole member	106,174		—		106,174		—		106,174
Net income attributable to noncontrolling interests	—		—		—		7,366		7,366
Pension liability adjustments, net of income taxes	—		(3,355)		(3,355)		—		(3,355)
Foreign currency translation adjustment, net of income taxes	—		61		61		—		61
Share-based compensation expense (equity classified)	41,680		—		41,680		—		41,680
Other	5		—		5		—		5
Balance at June 30, 2022	$	(463,223)	$	4,876	$	(458,347)	$	(38,158)	$	(496,505)




Balance at January 1, 2021	$	(1,172,505)	$	3,646	$	(1,168,859)	$	(62,109)	$	(1,230,968)
Net income attributable to CSC Holdings' sole member	274,136		—		274,136		—		274,136
Net income attributable to noncontrolling interests	—		—		—		4,403		4,403

Pension liability adjustments, net of income taxes	—		6,356		6,356		—		6,356
Foreign currency translation adjustment, net of income taxes	—		619		619		—		619
Share-based compensation expense (equity classified)	27,964		—		27,964		—		27,964
Redeemable equity vested	20,131		—		20,131		—		20,131
Change in redeemable equity	2,528		—		2,528		—		2,528
Cash distributions to parent	(501,000)		—		(501,000)		—		(501,000)
Non-cash distributions to parent	(748)		—		(748)		—		(748)
Other	(4,056)		—		(4,056)		4,302		246
Balance at March 31, 2021	(1,353,550)		10,621		(1,342,929)		(53,404)		(1,396,333)
Net income attributable to CSC Holdings' sole member	199,957		—		199,957		—		199,957
Net income attributable to noncontrolling interests	—		—		—		3,274		3,274
Pension liability adjustments, net of income taxes	—		1,088		1,088		—		1,088
Foreign currency translation adjustment, net of income taxes	—		(140)		(140)		—		(140)
Share-based compensation expense (equity classified)	27,385		—		27,385		—		27,385
Redeemable equity vested	3,618		—		3,618		—		3,618
Change in redeemable equity	(514)		—		(514)		—		(514)
Cash distributions to parent	(184,478)		—		(184,478)		—		(184,478)
Non-cash distributions to parent	(19,660)				(19,660)				(19,660)
Other	257		—		257		76		333
Balance at June 30, 2021	$	(1,326,985)	$	11,569	$	(1,315,416)	$	(50,054)	$	(1,365,470)


	June 30, 2021
	NY Order	Storms
	Included	Included
	(in thousands)
Total customer relationships	8.4	4.0
Residential	7.3	3.7
SMB	1.1	0.3
Residential customers:
Broadband	7.2	3.4
Video	4.1	2.1
Telephony	3.3	1.0


	Three Months		Six Months
Decrease due primarily to a decrease in average debt balances for the three and six month periods, partially offset by an increase in interest rates in the three month period	$	(2,125)	$	(13,366)
Capitalized interest related to FTTH network construction	(5,248)		(5,248)
Higher interest income	(323)		(348)
Other net decreases, primarily amortization of deferred financing costs and original issue discounts	(1,462)		(3,146)
	$	(9,158)	$	(22,108)


# of Shares Deliverable	Maturity	Hedge Price per Share (a)	Cap Price (b)

42,955,236	2023	$40.95	$49.55