atus-20230630

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, 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 28, 2023			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, 2023 (Unaudited) and December 31, 2022	4
	Consolidated Statements of Operations - Three and six months ended June 30, 2023 and 2022 (Unaudited)	5
	Consolidated Statements of Comprehensive Income - Three and six months ended June 30, 2023 and 2022 (Unaudited)	6
	Consolidated Statements of Stockholders' Deficiency - Three and six months ended June 30, 2023 and 2022 (Unaudited)	7
	Consolidated Statements of Cash Flows - Three and six months ended June 30, 2023 and 2022 (Unaudited)	9
	Combined Notes to Consolidated Financial Statements (Unaudited)	15
Supplemental Financial Statements Furnished:
CSC HOLDINGS, LLC AND SUBSIDIARIES
Consolidated Financial Statements
	Consolidated Balance Sheets - June 30, 2023 (Unaudited) and December 31, 2022	10
	Consolidated Statements of Operations - Three and six months ended June 30, 2023 and 2022 (Unaudited)	11
	Consolidated Statements of Comprehensive Income - Three and six months ended June 30, 2023 and 2022 (Unaudited)	12
	Consolidated Statements of Member's Deficiency - Three and six months ended June 30, 2023 and 2022 (Unaudited)	13
	Consolidated Statements of Cash Flows - Three and six months ended June 30, 2023 and 2022 (Unaudited)	14
	Combined Notes to Consolidated Financial Statements (Unaudited)	15
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		29
Item 3. Quantitative and Qualitative Disclosures About Market Risk		43
Item 4. Controls and Procedures		44

PART II. OTHER INFORMATION		45
Item 1. Legal Proceedings		45


Item 5, Other Information		45
Item 6. Exhibits		45
SIGNATURES		46

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 providers, wireless data and telephony providers, and Internet-based providers) and new fiber-based competitors entering our footprint;

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

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

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

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

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

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

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

•the effects of industry conditions;

•demand for digital and linear advertising products and services;

•our substantial indebtedness and debt service obligations;

•adverse changes in the credit market;

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

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

•the restrictions contained in our financing agreements;

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

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

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

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

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

•labor shortages and supply chain disruptions;

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

•our ability to effectively integrate acquisitions and to maximize expected operating efficiencies from our acquisitions 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 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)
	June 30, 2023 (Unaudited)		December 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	219,128	$	305,484
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	736,321		2,568,445
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	$	32,107,704	$	33,664,966
LIABILITIES AND STOCKHOLDERS' 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)	414,848		278,580
Total current liabilities	3,007,376		4,039,701
Other liabilities	231,463		274,623
Deferred tax liability	4,970,285		5,081,661

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	32,489,219		34,168,878
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest	21,618		—
Stockholders' Deficiency:
Preferred stock, $0.01 par value, 100,000,000 shares authorized, no shares issued and outstanding	—		—
Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 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	1,843		1,843
Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding	—		—
Paid-in capital	168,933		182,701
Accumulated deficit	(550,108)		(654,273)
	(376,628)		(467,010)
Treasury stock, at cost (18,921 Class A common shares at December 31, 2022)	—		—
Accumulated other comprehensive loss	(2,245)		(8,201)
Total Altice USA stockholders' deficiency	(378,873)		(475,211)
Noncontrolling interests	(24,260)		(28,701)
Total stockholders' deficiency	(403,133)		(503,912)
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,
	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 Altice USA, Inc. stockholders	$	78,300	$	106,174	$	104,165	$	302,725
Income per share:
Basic income per share	$	0.17	$	0.23	$	0.23	$	0.67
Basic weighted average common shares (in thousands)	454,688		453,230		454,687		453,230

Diluted income per share	$	0.17	$	0.23	$	0.23	$	0.67
Diluted weighted average common shares (in thousands)	454,688		453,230		455,139		453,230
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,
	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 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 (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 (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 CASH FLOWS

(In thousands)

(Unaudited)


	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 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 COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	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.

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL MEMBER'S DEFICIENCY

(In thousands)

(Unaudited)


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

Balance at January 1, 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)


	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.

CSC HOLDINGS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	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	(