☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended
|
June 30, 2019
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from
|
|
to
|
|
|
Commission File Number
|
|
Registrant; State of Incorporation; Address and Telephone Number
|
|
IRS Employer Identification No.
|
||
|
|
|
|
|
|
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001-38126
|
|
|
|
38-3980194
|
||
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|
Altice USA, Inc.
|
|
|
||
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Delaware
|
|
|
||
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1 Court Square West
|
|
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||
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Long Island City,
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New York
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11101
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|
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(516)
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803-2300
|
|
|
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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.
|
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|
|||
Yes
|
☒
|
No
|
☐
|
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files).
|
|
|
|||||
Yes
|
☒
|
No
|
☐
|
Indicate by check mark whether each Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)
|
||||
Large Accelerated Filer
|
☒
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
(Do not check if a smaller reporting company)
|
|
|
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
|
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
Yes
|
☐
|
No
|
☒
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Class A Common Stock, par value $0.01 per share
|
ATUS
|
New York Stock Exchange
|
Number of shares of common stock outstanding as of July 26, 2019:
|
647,731,515
|
|
|
|
|
|
|
|
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|
ALTICE USA, INC. AND SUBSIDIARIES
|
|
|
FORM 10-Q
|
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
PART I. FINANCIAL INFORMATION
|
|
|
|
Page
|
|
Item 1. Financial Statements of Altice USA, Inc. and Subsidiaries
|
|
|
|
Consolidated Balance Sheets - June 30, 2019 (Unaudited) and December 31, 2018
|
|
|
Consolidated Statements of Operations - Three and six months ended June 30, 2019 and 2018 (Unaudited)
|
|
|
Consolidated Statements of Comprehensive Income (Loss) - Three and six months ended June 30, 2019 and 2018 (Unaudited)
|
|
|
Consolidated Statements of Stockholders’ Equity - Three and six months ended June 30, 2019 and 2018 (Unaudited)
|
|
|
Consolidated Statements of Cash Flows - Six months ended June 30, 2019 and 2018 (Unaudited)
|
|
|
|
|
|
Notes to Consolidated Financial Statements (Unaudited)
|
|
|
|
|
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|
||
|
|
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
|
||
|
|
|
Item 4. Controls and Procedures
|
||
|
|
|
PART II. OTHER INFORMATION
|
|
|
|
|
|
Item 1. Legal Proceedings
|
||
|
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
||
|
|
|
Item 6. Exhibits
|
||
|
|
|
SIGNATURES
|
•
|
competition for broadband, video and telephony customers from existing competitors (such as broadband communications companies, wireless data and telephony providers, direct broadcast satellite ("DBS") providers and Internet-based providers) and new competitors entering our footprint;
|
•
|
changes in consumer preferences, laws and regulations or technology that may cause us to change our operational strategies;
|
•
|
increased difficulty negotiating programming agreements on favorable terms, if at all, resulting in increased costs to us and/or the loss of popular programming;
|
•
|
increasing programming costs and delivery expenses related to our products and services;
|
•
|
our ability to achieve anticipated customer and revenue growth, to successfully introduce new products and services and to implement our growth strategy;
|
•
|
our ability to complete our capital investment plans on time and on budget, including our plan to build a fiber-to-the-home ("FTTH") network, and deploy Altice One, our home communications hub;
|
•
|
our ability to develop and deploy mobile voice and data services pursuant to the agreement we entered into with Sprint in the fourth quarter of 2017, 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;
|
•
|
the disruption or failure of our network, information systems or technologies as a result of computer hacking, computer viruses, “cyber-attacks,” misappropriation of data, outages, natural disasters and other material events;
|
•
|
our ability to obtain necessary hardware, software, communications equipment and services and other items from our vendors at reasonable costs;
|
•
|
our ability to effectively integrate acquisitions and to maximize expected operating efficiencies from our acquisitions or as a result of the transactions, if any;
|
•
|
significant unanticipated increases in the use of bandwidth-intensive Internet-based services;
|
•
|
the outcome of litigation, government investigations and other proceedings;
|
•
|
our ability to successfully operate our business following the completion of our separation from Altice Europe; and
|
•
|
other risks and uncertainties inherent in our cable and other broadband communications businesses and our other businesses, including those listed under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") filed on March 1, 2019 (the "Annual Report").
|
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|||||||
ASSETS
|
June 30, 2019
(Unaudited) |
|
December 31, 2018
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
138,715
|
|
|
$
|
298,781
|
|
Restricted cash
|
260
|
|
|
257
|
|
||
Accounts receivable, trade (less allowance for doubtful accounts of $15,881 and $13,520)
|
420,321
|
|
|
448,399
|
|
||
Prepaid expenses and other current assets
|
182,401
|
|
|
136,285
|
|
||
Amounts due from affiliates
|
1,222
|
|
|
17,557
|
|
||
Derivative contracts
|
—
|
|
|
1,975
|
|
||
Total current assets
|
742,919
|
|
|
903,254
|
|
||
Property, plant and equipment, net of accumulated depreciation of $4,704,512 and $4,044,671
|
5,814,965
|
|
|
5,828,881
|
|
||
Right-of-use operating lease assets
|
289,932
|
|
|
—
|
|
||
Investment securities pledged as collateral
|
1,816,147
|
|
|
1,462,626
|
|
||
Derivative contracts
|
—
|
|
|
109,344
|
|
||
Other assets
|
92,518
|
|
|
84,382
|
|
||
Amortizable intangibles, net of accumulated amortization of $3,284,685 and $2,882,787
|
3,865,003
|
|
|
4,192,824
|
|
||
Indefinite-lived cable television franchises
|
13,020,081
|
|
|
13,020,081
|
|
||
Goodwill
|
8,138,086
|
|
|
8,012,416
|
|
||
Total assets
|
$
|
33,779,651
|
|
|
$
|
33,613,808
|
|
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except share and per share amounts)
|
|||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
June 30, 2019
(Unaudited)
|
|
December 31, 2018
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
909,120
|
|
|
$
|
857,502
|
|
Interest payable
|
335,063
|
|
|
386,475
|
|
||
Accrued employee related costs
|
133,817
|
|
|
139,806
|
|
||
Amounts due to affiliates
|
6,479
|
|
|
26,096
|
|
||
Deferred revenue
|
141,546
|
|
|
140,053
|
|
||
Debt
|
660,223
|
|
|
158,625
|
|
||
Other current liabilities
|
332,692
|
|
|
312,634
|
|
||
Total current liabilities
|
2,518,940
|
|
|
2,021,191
|
|
||
Other liabilities
|
238,872
|
|
|
271,554
|
|
||
Deferred tax liability
|
4,765,958
|
|
|
4,723,937
|
|
||
Liabilities under derivative contracts
|
289,156
|
|
|
132,908
|
|
||
Right-of-use operating lease liability
|
277,744
|
|
|
—
|
|
||
Long-term debt, net of current maturities
|
22,980,286
|
|
|
22,653,975
|
|
||
Total liabilities
|
31,070,956
|
|
|
29,803,565
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Redeemable equity
|
174,931
|
|
|
130,007
|
|
||
Stockholders' Equity:
|
|
|
|
||||
Preferred stock, $.01 par value, 100,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 468,084,705 shares issued and 468,068,226 shares outstanding as of June 30, 2019 and 496,064,027 shares issued and outstanding as of December 31, 2018
|
4,681
|
|
|
4,961
|
|
||
Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 shares issued and 187,157,804 shares outstanding as of June 30, 2019 and 212,976,259 shares outstanding as of December 31, 2018
|
1,872
|
|
|
2,130
|
|
||
Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Paid-in capital
|
2,220,348
|
|
|
3,423,803
|
|
||
Retained earnings
|
313,198
|
|
|
251,830
|
|
||
|
2,540,099
|
|
|
3,682,724
|
|
||
Treasury stock, at cost (16,479 Altice USA Class A common shares)
|
—
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
(14,474
|
)
|
|
(11,783
|
)
|
||
Total stockholders' equity
|
2,525,625
|
|
|
3,670,941
|
|
||
Noncontrolling interest
|
8,139
|
|
|
9,295
|
|
||
Total stockholders' equity
|
2,533,764
|
|
|
3,680,236
|
|
||
|
$
|
33,779,651
|
|
|
$
|
33,613,808
|
|
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,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue (including revenue from affiliates of $496, $727, $1,088 and $852, respectively) (See Note 15)
|
$
|
2,451,081
|
|
|
$
|
2,364,153
|
|
|
$
|
4,847,648
|
|
|
$
|
4,693,867
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Programming and other direct costs (including charges from affiliates of $2,087, $3,865, $3,774 and $5,019 respectively) (See Note 15)
|
818,994
|
|
|
795,127
|
|
|
1,631,979
|
|
|
1,582,488
|
|
||||
Other operating expenses (including charges from affiliates of $2,020, $6,255, $4,266 and $14,249, respectively) (See Note 15)
|
569,459
|
|
|
575,749
|
|
|
1,133,891
|
|
|
1,158,772
|
|
||||
Restructuring and other expense
|
11,465
|
|
|
9,691
|
|
|
26,709
|
|
|
13,278
|
|
||||
Depreciation and amortization (including impairments)
|
568,620
|
|
|
648,527
|
|
|
1,130,048
|
|
|
1,291,232
|
|
||||
|
1,968,538
|
|
|
2,029,094
|
|
|
3,922,627
|
|
|
4,045,770
|
|
||||
Operating income
|
482,543
|
|
|
335,059
|
|
|
925,021
|
|
|
648,097
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(381,218
|
)
|
|
(390,543
|
)
|
|
(769,501
|
)
|
|
(767,801
|
)
|
||||
Interest income
|
605
|
|
|
5,313
|
|
|
2,424
|
|
|
8,416
|
|
||||
Gain (loss) on investments and sale of affiliate interests, net
|
103,146
|
|
|
(45,113
|
)
|
|
357,871
|
|
|
(293,715
|
)
|
||||
Gain (loss) on derivative contracts, net
|
(49,624
|
)
|
|
42,159
|
|
|
(226,653
|
)
|
|
210,511
|
|
||||
Loss on interest rate swap contracts
|
(26,900
|
)
|
|
(12,929
|
)
|
|
(50,572
|
)
|
|
(44,851
|
)
|
||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
(1,194
|
)
|
|
(36,911
|
)
|
|
(159,096
|
)
|
|
(41,616
|
)
|
||||
Other income (expense), net
|
212
|
|
|
(629
|
)
|
|
292
|
|
|
(12,287
|
)
|
||||
|
(354,973
|
)
|
|
(438,653
|
)
|
|
(845,235
|
)
|
|
(941,343
|
)
|
||||
Income (loss) before income taxes
|
127,570
|
|
|
(103,594
|
)
|
|
79,786
|
|
|
(293,246
|
)
|
||||
Income tax benefit (expense)
|
(41,160
|
)
|
|
5,590
|
|
|
(18,574
|
)
|
|
66,293
|
|
||||
Net income (loss)
|
86,410
|
|
|
(98,004
|
)
|
|
61,212
|
|
|
(226,953
|
)
|
||||
Net loss (income) attributable to noncontrolling interests
|
(43
|
)
|
|
149
|
|
|
156
|
|
|
147
|
|
||||
Net income (loss) attributable to Altice USA, Inc. stockholders
|
$
|
86,367
|
|
|
$
|
(97,855
|
)
|
|
$
|
61,368
|
|
|
$
|
(226,806
|
)
|
Income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Basic income (loss) per share
|
$
|
0.13
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.31
|
)
|
Basic weighted average common shares (in thousands)
|
668,031
|
|
|
737,069
|
|
|
681,703
|
|
|
737,069
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted income (loss) per share:
|
$
|
0.13
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.31
|
)
|
Diluted weighted average common shares (in thousands)
|
668,648
|
|
|
737,069
|
|
|
682,014
|
|
|
737,069
|
|
||||
Cash dividends declared per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
|
|||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
86,410
|
|
|
$
|
(98,004
|
)
|
|
$
|
61,212
|
|
|
$
|
(226,953
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Defined benefit pension plans:
|
|
|
|
|
|
|
|
||||||||
Unrecognized actuarial gain (loss)
|
(8,567
|
)
|
|
(359
|
)
|
|
(3,648
|
)
|
|
4,192
|
|
||||
Applicable income taxes
|
2,282
|
|
|
97
|
|
|
989
|
|
|
(1,131
|
)
|
||||
Unrecognized actuarial gain (loss) arising during period, net of income taxes
|
(6,285
|
)
|
|
(262
|
)
|
|
(2,659
|
)
|
|
3,061
|
|
||||
Settlement loss included in other expense, net
|
367
|
|
|
258
|
|
|
538
|
|
|
864
|
|
||||
Applicable income taxes
|
(101
|
)
|
|
(70
|
)
|
|
(147
|
)
|
|
(234
|
)
|
||||
Settlement loss included in other expense, net, net of income taxes
|
266
|
|
|
188
|
|
|
391
|
|
|
630
|
|
||||
Foreign currency translation adjustment
|
(336
|
)
|
|
914
|
|
|
(580
|
)
|
|
914
|
|
||||
Applicable income taxes
|
93
|
|
|
(338
|
)
|
|
157
|
|
|
(338
|
)
|
||||
Foreign currency translation adjustment, net
|
(243
|
)
|
|
576
|
|
|
(423
|
)
|
|
576
|
|
||||
Other comprehensive income (loss)
|
(6,262
|
)
|
|
502
|
|
|
(2,691
|
)
|
|
4,267
|
|
||||
Comprehensive income (loss)
|
80,148
|
|
|
(97,502
|
)
|
|
58,521
|
|
|
(222,686
|
)
|
||||
Comprehensive loss (income) attributable to noncontrolling interests
|
(43
|
)
|
|
149
|
|
|
156
|
|
|
147
|
|
||||
Comprehensive income (loss) attributable to Altice USA, Inc. stockholders
|
$
|
80,105
|
|
|
$
|
(97,353
|
)
|
|
$
|
58,677
|
|
|
$
|
(222,539
|
)
|
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
|
|||||||||||||||||||||||||||||||||||
|
Class A
Common
Stock
|
|
Class B
Common
Stock
|
|
Paid-in
Capital
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
|
Non-controlling
Interest
|
|
Total
Equity
|
||||||||||||||||||
Balance at March 31, 2019
|
$
|
4,909
|
|
|
$
|
1,888
|
|
|
$
|
2,777,554
|
|
|
$
|
226,831
|
|
|
$
|
—
|
|
|
$
|
(8,212
|
)
|
|
$
|
3,002,970
|
|
|
$
|
8,096
|
|
|
$
|
3,011,066
|
|
Net income attributable to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
86,367
|
|
|
—
|
|
|
—
|
|
|
86,367
|
|
|
—
|
|
|
86,367
|
|
|||||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
43
|
|
|||||||||
Pension liability adjustments, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,019
|
)
|
|
(6,019
|
)
|
|
—
|
|
|
(6,019
|
)
|
|||||||||
Foreign currency translation adjustment, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(243
|
)
|
|
(243
|
)
|
|
—
|
|
|
(243
|
)
|
|||||||||
Share-based compensation expense (equity classified)
|
—
|
|
|
—
|
|
|
16,077
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,077
|
|
|
—
|
|
|
16,077
|
|
|||||||||
Redeemable equity vested
|
—
|
|
|
—
|
|
|
61,702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61,702
|
|
|
—
|
|
|
61,702
|
|
|||||||||
Change in redeemable equity
|
—
|
|
|
—
|
|
|
(46,294
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,294
|
)
|
|
—
|
|
|
(46,294
|
)
|
|||||||||
Class A shares acquired through share repurchase program and retired
|
(249
|
)
|
|
—
|
|
|
(599,703
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(599,952
|
)
|
|
—
|
|
|
(599,952
|
)
|
|||||||||
Conversion of Class B to Class A shares
|
16
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Issuance of common shares pursuant to employee long term incentive plan
|
—
|
|
|
—
|
|
|
244
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
244
|
|
|
—
|
|
|
244
|
|
|||||||||
Class A shares issued in connection with acquisition
|
5
|
|
|
—
|
|
|
10,768
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,773
|
|
|
—
|
|
|
10,773
|
|
|||||||||
Balance at June 30, 2019
|
$
|
4,681
|
|
|
$
|
1,872
|
|
|
$
|
2,220,348
|
|
|
$
|
313,198
|
|
|
$
|
—
|
|
|
$
|
(14,474
|
)
|
|
$
|
2,525,625
|
|
|
$
|
8,139
|
|
|
$
|
2,533,764
|
|
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Continued)
(In thousands)
(Unaudited)
|
|||||||||||||||||||||||||||||||
|
Class A
Common
Stock
|
|
Class B
Common
Stock
|
|
Paid-in
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders'
Equity
|
|
Non-controlling
Interest
|
|
Total
Equity
|
||||||||||||||||
Balance at January 1, 2018, as adjusted
|
$
|
2,470
|
|
|
$
|
4,901
|
|
|
$
|
4,665,229
|
|
|
$
|
840,636
|
|
|
$
|
(10,022
|
)
|
|
$
|
5,503,214
|
|
|
$
|
1,539
|
|
|
$
|
5,504,753
|
|
Net loss attributable to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(128,951
|
)
|
|
—
|
|
|
(128,951
|
)
|
|
—
|
|
|
(128,951
|
)
|
||||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||||
Pension liability adjustments, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,765
|
|
|
3,765
|
|
|
—
|
|
|
3,765
|
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
21,623
|
|
|
—
|
|
|
—
|
|
|
21,623
|
|
|
—
|
|
|
21,623
|
|
||||||||
Change in redeemable equity
|
—
|
|
|
—
|
|
|
(3,347
|
)
|
|
—
|
|
|
—
|
|
|
(3,347
|
)
|
|
—
|
|
|
(3,347
|
)
|
||||||||
Other changes to equity
|
—
|
|
|
—
|
|
|
(859
|
)
|
|
—
|
|
|
—
|
|
|
(859
|
)
|
|
—
|
|
|
(859
|
)
|
||||||||
Adoption of ASU No. 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
2,163
|
|
|
(2,163
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Balance at March 31, 2018
|
2,470
|
|
|
4,901
|
|
|
4,682,646
|
|
|
713,848
|
|
|
(8,420
|
)
|
|
5,395,445
|
|
|
1,541
|
|
|
5,396,986
|
|
||||||||
Net loss attributable to stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
(97,855
|
)
|
|
—
|
|
|
(97,855
|
)
|
|
—
|
|
|
(97,855
|
)
|
||||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(149
|
)
|
|
(149
|
)
|
||||||||
Contributions from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,995
|
|
|
5,995
|
|
||||||||
Pension liability adjustments, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
(74
|
)
|
|
—
|
|
|
(74
|
)
|
||||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
576
|
|
|
576
|
|
|
—
|
|
|
576
|
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
12,226
|
|
|
—
|
|
|
—
|
|
|
12,226
|
|
|
—
|
|
|
12,226
|
|
||||||||
Redeemable equity vested
|
—
|
|
|
—
|
|
|
111,521
|
|
|
—
|
|
|
—
|
|
|
111,521
|
|
|
—
|
|
|
111,521
|
|
||||||||
Change in redeemable equity
|
—
|
|
|
—
|
|
|
(47,049
|
)
|
|
—
|
|
|
—
|
|
|
(47,049
|
)
|
|
—
|
|
|
(47,049
|
)
|
||||||||
Dividend payment
|
—
|
|
|
—
|
|
|
(963,711
|
)
|
|
(536,224
|
)
|
|
—
|
|
|
(1,499,935
|
)
|
|
—
|
|
|
(1,499,935
|
)
|
||||||||
Conversion of Class B to Class A shares, including $2,424 in connection with the Distribution
|
2,458
|
|
|
(2,458
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Impact of i24 Acquisition
|
—
|
|
|
—
|
|
|
61,049
|
|
|
(73,578
|
)
|
|
(2,520
|
)
|
|
(15,049
|
)
|
|
—
|
|
|
(15,049
|
)
|
||||||||
Balance at June 30, 2018
|
$
|
4,928
|
|
|
$
|
2,443
|
|
|
$
|
3,856,682
|
|
|
$
|
6,191
|
|
|
$
|
(10,438
|
)
|
|
$
|
3,859,806
|
|
|
$
|
7,387
|
|
|
$
|
3,867,193
|
|
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|||||||
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
61,212
|
|
|
$
|
(226,953
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization (including impairments)
|
1,130,048
|
|
|
1,291,232
|
|
||
Equity in net loss of affiliates
|
—
|
|
|
10,849
|
|
||
Loss (gain) on investments and sale of affiliate interests, net
|
(357,871
|
)
|
|
293,715
|
|
||
Loss (gain) on derivative contracts, net
|
226,653
|
|
|
(210,511
|
)
|
||
Loss on extinguishment of debt and write-off of deferred financing costs
|
159,096
|
|
|
41,616
|
|
||
Amortization of deferred financing costs and discounts (premiums) on indebtedness
|
53,876
|
|
|
36,971
|
|
||
Settlement loss related to pension plan
|
538
|
|
|
864
|
|
||
Share-based compensation expense related to equity classified awards
|
29,867
|
|
|
33,849
|
|
||
Deferred income taxes
|
19,604
|
|
|
(80,280
|
)
|
||
Provision for doubtful accounts
|
34,814
|
|
|
29,462
|
|
||
Change in assets and liabilities, net of effects of acquisitions and dispositions:
|
|
|
|
||||
Accounts receivable, trade
|
1,804
|
|
|
(37,224
|
)
|
||
Other receivables
|
2,740
|
|
|
(5,926
|
)
|
||
Prepaid expenses and other assets
|
(39,477
|
)
|
|
(31,951
|
)
|
||
Amounts due from and due to affiliates
|
(3,282
|
)
|
|
8,573
|
|
||
Accounts payable
|
18,549
|
|
|
49,449
|
|
||
Interest payable, accrued employee related costs and other liabilities
|
(98,551
|
)
|
|
(110,227
|
)
|
||
Deferred revenue
|
12,022
|
|
|
20,536
|
|
||
Liabilities related to interest rate swap and derivative contracts
|
41,322
|
|
|
45,199
|
|
||
Net cash provided by operating activities
|
1,292,964
|
|
|
1,159,243
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(657,253
|
)
|
|
(498,297
|
)
|
||
Payment for acquisitions, net of cash acquired
|
(172,659
|
)
|
|
(5,308
|
)
|
||
Sale of affiliate interest
|
—
|
|
|
(3,537
|
)
|
||
Proceeds related to sale of equipment, including costs of disposal
|
898
|
|
|
6,858
|
|
||
Increase in other investments
|
—
|
|
|
(2,500
|
)
|
||
Additions to other intangible assets
|
(867
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(829,881
|
)
|
|
(502,784
|
)
|
||
|
|
|
|
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(In thousands)
(Unaudited)
|
|||||||
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from credit facility debt, net of discounts
|
$
|
1,940,000
|
|
|
$
|
1,642,500
|
|
Repayment of credit facility debt
|
(602,830
|
)
|
|
(621,325
|
)
|
||
Issuance of senior notes and debentures, including premiums
|
1,754,375
|
|
|
2,050,000
|
|
||
Redemption of senior notes, including premiums and fees
|
(2,462,692
|
)
|
|
(2,123,756
|
)
|
||
Proceeds from collateralized indebtedness, net
|
—
|
|
|
337,124
|
|
||
Repayment of collateralized indebtedness and related derivative contracts, net
|
—
|
|
|
(337,124
|
)
|
||
Dividends to stockholders
|
—
|
|
|
(1,499,935
|
)
|
||
Proceeds from notes payable
|
39,856
|
|
|
—
|
|
||
Repayment of notes payable
|
(74,061
|
)
|
|
(446
|
)
|
||
Principal payments on finance lease obligations
|
(3,273
|
)
|
|
(6,019
|
)
|
||
Purchase of shares of Class A common stock, pursuant to a share repurchase program
|
(1,199,953
|
)
|
|
—
|
|
||
Additions to deferred financing costs
|
(12,488
|
)
|
|
(22,277
|
)
|
||
Contingent payment for acquisition
|
(500
|
)
|
|
(28,940
|
)
|
||
Contributions from (distributions to) noncontrolling interests
|
(1,000
|
)
|
|
5,995
|
|
||
Other
|
—
|
|
|
(859
|
)
|
||
Net cash used in financing activities
|
(622,566
|
)
|
|
(605,062
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(159,483
|
)
|
|
51,397
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(580
|
)
|
|
(104
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(160,063
|
)
|
|
51,293
|
|
||
Cash, cash equivalents and restricted cash at beginning of year
|
299,038
|
|
|
330,100
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
138,975
|
|
|
$
|
381,393
|
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||
|
|
(in thousands)
|
||||
Basic weighted average shares outstanding
|
668,031
|
|
|
681,703
|
|
|
Effect of dilution:
|
|
|
|
|
||
Stock options
|
566
|
|
|
285
|
|
|
Restricted stock
|
51
|
|
|
26
|
|
|
Diluted weighted average shares outstanding
|
668,648
|
|
|
682,014
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Residential:
|
|
|
|
|
|
|
|
||||||||
Video
|
$
|
1,018,426
|
|
|
$
|
1,034,404
|
|
|
$
|
2,035,756
|
|
|
$
|
2,068,112
|
|
Broadband
|
806,250
|
|
|
712,202
|
|
|
1,581,823
|
|
|
1,413,823
|
|
||||
Telephony
|
150,232
|
|
|
163,499
|
|
|
304,696
|
|
|
329,537
|
|
||||
Business services and wholesale
|
357,806
|
|
|
337,388
|
|
|
708,495
|
|
|
670,478
|
|
||||
Advertising
|
112,953
|
|
|
109,898
|
|
|
206,498
|
|
|
197,480
|
|
||||
Other
|
5,414
|
|
|
6,762
|
|
|
10,380
|
|
|
14,437
|
|
||||
Total revenue
|
$
|
2,451,081
|
|
|
$
|
2,364,153
|
|
|
$
|
4,847,648
|
|
|
$
|
4,693,867
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contract assets (a)
|
$
|
28,236
|
|
|
$
|
26,405
|
|
Deferred revenue (b)
|
204,440
|
|
|
190,056
|
|
|
(a)
|
Contract assets include primarily sales commissions for enterprise customers that are deferred and amortized over the average contract term.
|
(b)
|
Deferred revenue represents payments received from customers for services that have yet to be provided and installation revenue which is deferred and recognized over the benefit period. A significant portion of the Company's deferred revenue represents payments for services for up to one month in advance from residential and small and medium-sized business ("SMB") customers which is realized within the following month as services are performed.
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Non-Cash Investing and Financing Activities:
|
|
|
|
||||
|
|
|
|
||||
Property and equipment accrued but unpaid
|
$
|
245,692
|
|
|
$
|
120,958
|
|
Leasehold improvements paid by landlord
|
—
|
|
|
350
|
|
||
Notes payable issued to vendor for the purchase of equipment
|
16,204
|
|
|
44,466
|
|
||
Right-of-use assets acquired in exchange for finance lease obligations
|
6,501
|
|
|
1,349
|
|
||
Deferred financing costs accrued but unpaid
|
853
|
|
|
—
|
|
||
Supplemental Data:
|
|
|
|
||||
Cash interest paid
|
763,819
|
|
|
732,231
|
|
||
Income taxes paid (refunded), net
|
6,247
|
|
|
8,940
|
|
The following table summarizes the activity for the 2016 Restructuring Plan:
|
|
|
|||||||||
|
Severance and Other Employee Related Costs
|
|
Facility Realignment and Other Costs
|
|
Total
|
||||||
Accrual balance at December 31, 2018
|
$
|
21,454
|
|
|
$
|
13,615
|
|
|
$
|
35,069
|
|
Restructuring charges
|
6,363
|
|
|
5,140
|
|
|
11,503
|
|
|||
Payments and other
|
(20,749
|
)
|
|
(1,734
|
)
|
|
(22,483
|
)
|
|||
Impact of the adoption of ASC 842 (a)
|
—
|
|
|
(13,849
|
)
|
|
(13,849
|
)
|
|||
Accrual balance at June 30, 2019
|
$
|
7,068
|
|
|
$
|
3,172
|
|
|
$
|
10,240
|
|
|
(a)
|
Certain accrued restructuring liabilities were netted against right-of-use operating assets on the Company's consolidated balance sheet as of January 1, 2019 in connection with the Company's adoption of ASC 842 (see Note 8).
|
|
|
|
June 30,
|
|
January 1,
|
|
December 31,
|
||||||
|
Balance Sheet location
|
|
2019
|
|
2019
|
|
2018
|
||||||
Operating leases:
|
|
|
|
|
|
|
|
||||||
Right-of-use lease assets
|
Right-of-use operating lease assets
|
|
$
|
289,932
|
|
|
$
|
274,292
|
|
|
$
|
—
|
|
Right-of-use lease liability, current
|
Other current liabilities
|
|
39,123
|
|
|
48,033
|
|
|
—
|
|
|||
Right-of-use lease liability, long-term
|
Right-of-use operating lease liability
|
|
277,744
|
|
|
251,867
|
|
|
—
|
|
|||
Finance leases:
|
|
|
|
|
|
|
|
||||||
Right-of-use lease assets
|
Property, plant and equipment
|
|
28,460
|
|
|
30,891
|
|
|
30,891
|
|
|||
Right-of-use lease liability, current
|
Current portion of long-term debt
|
|
6,464
|
|
|
5,928
|
|
|
5,928
|
|
|||
Right-of-use lease liability, long-term
|
Long-term debt
|
|
20,632
|
|
|
19,262
|
|
|
19,262
|
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating lease expense, net
|
$
|
14,948
|
|
|
$
|
30,226
|
|
Finance lease expense:
|
|
|
|
||||
Amortization of assets
|
1,630
|
|
|
3,192
|
|
||
Interest on lease liabilities
|
388
|
|
|
746
|
|
||
Total finance lease expense
|
2,018
|
|
|
3,938
|
|
||
|
$
|
16,966
|
|
|
$
|
34,164
|
|
|
As of June 30,
|
||
|
2019
|
||
Right-of-use assets acquired in exchange for operating lease obligations
|
$
|
43,441
|
|
|
|
||
Cash Paid For Amounts Included In Measurement of Liabilities:
|
|
||
Operating cash flows from finance leases
|
746
|
|
|
Operating cash flows from operating leases
|
32,481
|
|
|
|
|
||
Weighted Average Remaining Lease Term:
|
|
||
Operating leases
|
9.6 years
|
|
|
Finance leases
|
4.6 years
|
|
|
Weighted Average Discount Rate:
|
|
||
Operating leases
|
6.06
|
%
|
|
Finance leases
|
5.86
|
%
|
|
Financing leases
|
|
Operating leases
|
||||
2019 (excluding the six months ended June 30, 2019)
|
$
|
3,874
|
|
|
$
|
27,832
|
|
2020
|
7,173
|
|
|
50,248
|
|
||
2021
|
5,853
|
|
|
45,440
|
|
||
2022
|
5,824
|
|
|
47,024
|
|
||
2023
|
5,282
|
|
|
36,869
|
|
||
Thereafter
|
2,884
|
|
|
218,129
|
|
||
Total future minimum lease payments, undiscounted
|
30,890
|
|
|
425,542
|
|
||
Less: Imputed interest
|
(3,794
|
)
|
|
(108,675
|
)
|
||
Present value of future minimum lease payments
|
$
|
27,096
|
|
|
$
|
316,867
|
|
|
Financing leases
|
|
Operating leases
|
||||
2019
|
$
|
5,928
|
|
|
$
|
47,905
|
|
2020
|
5,087
|
|
|
50,356
|
|
||
2021
|
3,969
|
|
|
43,362
|
|
||
2022
|
4,146
|
|
|
34,882
|
|
||
2023
|
3,828
|
|
|
25,234
|
|
||
Thereafter
|
2,232
|
|
|
167,941
|
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
|
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Estimated Useful Lives
|
||||||||||||
Customer relationships
|
$
|
6,017,994
|
|
|
$
|
(2,512,269
|
)
|
|
$
|
3,505,725
|
|
|
$
|
5,970,884
|
|
|
$
|
(2,162,110
|
)
|
|
$
|
3,808,774
|
|
|
8 to 18 years
|
Trade names
|
1,081,083
|
|
|
(749,615
|
)
|
|
331,468
|
|
|
1,067,083
|
|
|
(701,998
|
)
|
|
365,085
|
|
|
2 to 5 years
|
||||||
Other amortizable intangibles
|
50,611
|
|
|
(22,801
|
)
|
|
27,810
|
|
|
37,644
|
|
|
(18,679
|
)
|
|
18,965
|
|
|
1 to 15 years
|
||||||
|
$
|
7,149,688
|
|
|
$
|
(3,284,685
|
)
|
|
$
|
3,865,003
|
|
|
$
|
7,075,611
|
|
|
$
|
(2,882,787
|
)
|
|
$
|
4,192,824
|
|
|
|
Goodwill as of December 31, 2018
|
$
|
8,012,416
|
|
Goodwill recorded in connection with the acquisition of Cheddar Inc.
|
125,651
|
|
|
Adjustments to purchase accounting
|
19
|
|
|
Goodwill as of June 30, 2019
|
$
|
8,138,086
|
|
|
|
|
|
Interest Rate at June 30, 2019
|
|
June 30, 2019
|
|
December 31, 2018
|
|||||||||||||
Date Issued
|
|
Maturity Date
|
|
|
Principal Amount
|
|
Carrying Amount (a)
|
|
Principal Amount
|
|
Carrying Amount (a)
|
||||||||||
CSC Holdings Senior Notes:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
February 12, 2009
|
|
February 15, 2019
|
|
8.625
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
526,000
|
|
|
$
|
527,749
|
|
November 15, 2011
|
|
November 15, 2021
|
|
6.750
|
%
|
|
1,000,000
|
|
|
974,093
|
|
|
1,000,000
|
|
|
969,285
|
|
||||
May 23, 2014
|
|
June 1, 2024
|
|
5.250
|
%
|
|
750,000
|
|
|
677,720
|
|
|
750,000
|
|
|
671,829
|
|
||||
October 9, 2015
|
|
January 15, 2023
|
|
10.125
|
%
|
|
—
|
|
|
—
|
|
|
1,800,000
|
|
|
1,781,424
|
|
||||
October 9, 2015
|
|
October 15, 2025
|
|
10.875
|
%
|
|
1,684,221
|
|
|
1,664,092
|
|
|
1,684,221
|
|
|
1,663,027
|
|
||||
November 27, 2018
|
|
December 15, 2021
|
|
5.125
|
%
|
|
1,240,762
|
|
|
1,168,267
|
|
|
1,240,762
|
|
|
1,155,264
|
|
||||
November 27, 2018
|
|
July 15, 2025
|
|
7.750
|
%
|
|
617,881
|
|
|
604,712
|
|
|
617,881
|
|
|
603,889
|
|
||||
November 27, 2018
|
|
April 1, 2028
|
|
7.500
|
%
|
|
1,045,882
|
|
|
1,044,209
|
|
|
1,045,882
|
|
|
1,044,143
|
|
||||
CSC Holdings Senior Guaranteed Notes:
|
|
|
|
|
|
|
|
|
|||||||||||||
October 9, 2015
|
|
October 15, 2025
|
|
6.625
|
%
|
|
1,000,000
|
|
|
988,750
|
|
|
1,000,000
|
|
|
988,052
|
|
||||
September 23, 2016
|
|
April 15, 2027
|
|
5.500
|
%
|
|
1,310,000
|
|
|
1,305,177
|
|
|
1,310,000
|
|
|
1,304,936
|
|
||||
January 29, 2018
|
|
February 1, 2028
|
|
5.375
|
%
|
|
1,000,000
|
|
|
992,403
|
|
|
1,000,000
|
|
|
992,064
|
|
||||
November 27, 2018
|
|
July 15, 2023
|
|
5.375
|
%
|
|
1,095,825
|
|
|
1,080,114
|
|
|
1,095,825
|
|
|
1,078,428
|
|
||||
November 27, 2018
|
|
May 15, 2026
|
|
5.500
|
%
|
|
1,498,806
|
|
|
1,485,076
|
|
|
1,498,806
|
|
|
1,484,278
|
|
||||
January 24, 2019
|
|
February 1, 2029
|
|
6.500
|
%
|
|
1,750,000
|
|
|
1,746,881
|
|
|
—
|
|
|
—
|
|
||||
Cablevision Senior Notes (b):
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
April 15, 2010
|
|
April 15, 2020
|
|
8.000
|
%
|
|
500,000
|
|
|
497,045
|
|
|
500,000
|
|
|
495,302
|
|
||||
September 27, 2012
|
|
September 15, 2022
|
|
5.875
|
%
|
|
649,024
|
|
|
593,104
|
|
|
649,024
|
|
|
585,817
|
|
||||
October 19, 2018
|
|
December 15, 2021 (e)
|
|
5.125
|
%
|
|
8,886
|
|
|
8,367
|
|
|
8,886
|
|
|
8,274
|
|
||||
October 19, 2018
|
|
July 15, 2025
|
|
7.750
|
%
|
|
1,740
|
|
|
1,692
|
|
|
1,740
|
|
|
1,690
|
|
||||
October 19, 2018
|
|
April 1, 2028
|
|
7.500
|
%
|
|
4,118
|
|
|
4,111
|
|
|
4,118
|
|
|
4,110
|
|
||||
|
|
15,157,145
|
|
|
14,835,813
|
|
|
15,733,145
|
|
|
15,359,561
|
|
|||||||||
CSC Holdings Credit Facility Debt (Restricted Group):
|
|
|
|
|
|
|
|
|
|||||||||||||
Revolving Credit Facility (c) (d)
|
|
4.730
|
%
|
|
622,857
|
|
|
609,754
|
|
|
250,000
|
|
|
231,425
|
|
||||||
Term Loan B
|
|
July 17, 2025
|
|
4.644
|
%
|
|
2,940,000
|
|
|
2,925,564
|
|
|
2,955,000
|
|
|
2,939,425
|
|
||||
Incremental Term Loan B-2
|
|
January 25, 2026
|
|
4.894
|
%
|
|
1,485,000
|
|
|
1,469,340
|
|
|
1,492,500
|
|
|
1,475,778
|
|
||||
Incremental Term Loan B-3
|
|
January 15, 2026
|
|
4.644
|
%
|
|
1,271,813
|
|
|
1,266,155
|
|
|
1,275,000
|
|
|
1,268,931
|
|
||||
Incremental Term Loan B-4
|
|
April 15, 2027
|
|
5.394
|
%
|
|
1,000,000
|
|
|
986,518
|
|
|
—
|
|
|
—
|
|
||||
|
7,319,670
|
|
|
7,257,331
|
|
|
5,972,500
|
|
|
5,915,559
|
|
||||||||||
Collateralized indebtedness (see Note 11)
|
1,459,638
|
|
|
1,417,647
|
|
|
1,459,638
|
|
|
1,406,182
|
|
||||||||||
Finance lease obligations (see Note 8)
|
27,096
|
|
|
27,096
|
|
|
25,190
|
|
|
25,190
|
|
||||||||||
Notes payable and supply chain financing (f)
|
102,622
|
|
|
102,622
|
|
|
106,108
|
|
|
106,108
|
|
||||||||||
|
24,066,171
|
|
|
23,640,509
|
|
|
23,296,581
|
|
|
22,812,600
|
|
||||||||||
Less: current portion of senior notes debt
|
(508,886
|
)
|
|
(505,412
|
)
|
|
—
|
|
|
—
|
|
||||||||||
Less: current portion of credit facility debt
|
(67,750
|
)
|
|
(67,750
|
)
|
|
(54,563
|
)
|
|
(54,563
|
)
|
||||||||||
Less: current portion of notes payable and supply chain financing
|
(80,597
|
)
|
|
(80,597
|
)
|
|
(98,134
|
)
|
|
(98,134
|
)
|
||||||||||
Less: current portion of finance lease obligations
|
(6,464
|
)
|
|
(6,464
|
)
|
|
(5,928
|
)
|
|
(5,928
|
)
|
||||||||||
|
|
(663,697
|
)
|
|
(660,223
|
)
|
|
(158,625
|
)
|
|
(158,625
|
)
|
|||||||||
Long-term debt
|
$
|
23,402,474
|
|
|
$
|
22,980,286
|
|
|
$
|
23,137,956
|
|
|
$
|
22,653,975
|
|
|
(a)
|
The carrying amount is net of the unamortized deferred financing costs and/or discounts/premiums and with respect to certain notes, a fair value adjustment resulting from the Cequel and Cablevision acquisitions.
|
(b)
|
The issuers of these notes have no ability to service interest or principal on the notes, other than through any dividends or distributions received from CSC Holdings. CSC Holdings is restricted, in certain circumstances, from paying dividends or distributions to the issuers by the terms of the CSC Holdings credit facilities agreement.
|
(c)
|
At June 30, 2019, $178,014 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $1,674,129 of the facility was undrawn and available, subject to covenant limitations.
|
(d)
|
The revolving credit facility matures on January 31, 2024, however $200,000 is due on November 30, 2021. As discussed in Note 17, the balance of the revolving credit facility was repaid in July 2019 with proceeds from the issuance of $1,000,000 principal amount of senior notes due January 2030.
|
(e)
|
In July 2019, the Company redeemed $8,886 principal amount of these senior notes. As a result of the early redemption, the principal amount of these senior notes was reclassified from long-term debt to current debt.
|
(f)
|
Includes $39,856 related to supply chain financing agreements entered into in the second quarter of 2019 that is required to be repaid within one year from the date of the respective agreement.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 30, 2019
|
||||||
|
|
|
|
||||
CSC Holdings 10.125% Senior Notes due 2023
|
$
|
—
|
|
|
$
|
154,666
|
|
Refinancing and subsequent amendment to CSC Holdings credit facility
|
1,194
|
|
|
4,430
|
|
||
|
$
|
1,194
|
|
|
$
|
159,096
|
|
|
|
|
|
||||
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 30, 2018
|
||||||
Cablevision 7.75% Senior Notes due 2018
|
$
|
1
|
|
|
$
|
4,706
|
|
Cequel 6.375% Senior Notes due 2020
|
36,910
|
|
|
36,910
|
|
||
|
$
|
36,911
|
|
|
$
|
41,616
|
|
2019 (excluding the six months ended June 30, 2019)
|
$
|
74,124
|
|
2020
|
623,128
|
|
|
2021
|
3,776,104
|
|
|
2022
|
723,807
|
|
|
2023
|
1,164,330
|
|
|
Thereafter
|
17,677,582
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Balance Sheet Location
|
|
Fair Value at
|
||||||
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||
|
|
|
|
|
|
|
||||
Asset Derivatives:
|
|
|
|
|
|
|
||||
Interest rate swap contracts
|
|
Derivative contracts, current
|
|
$
|
—
|
|
|
$
|
1,975
|
|
Prepaid forward contracts
|
|
Derivative contracts, long-term
|
|
—
|
|
|
109,344
|
|
||
|
|
|
|
—
|
|
|
111,319
|
|
||
Liability Derivatives:
|
|
|
|
|
|
|
||||
Interest rate swap contracts
|
|
Other current liabilities
|
|
(478
|
)
|
|
(70
|
)
|
||
Prepaid forward contracts
|
|
Liabilities under derivative contracts, long-term
|
|
(117,309
|
)
|
|
—
|
|
||
Interest rate swap contracts
|
|
Liabilities under derivative contracts, long-term
|
|
(171,847
|
)
|
|
(132,908
|
)
|
||
|
|
|
|
$
|
(289,634
|
)
|
|
$
|
(132,978
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||||||
Gain (loss) on derivative contracts (related to change in the value of equity derivative contracts related to Comcast common stock)
|
|
$
|
(49,624
|
)
|
|
$
|
(226,653
|
)
|
|
$
|
42,159
|
|
|
$
|
210,511
|
|
Change in fair value of Comcast common stock included in gain (loss) on investments
|
|
98,794
|
|
|
353,519
|
|
|
(58,420
|
)
|
|
(310,996
|
)
|
||||
Loss on interest rate swap contracts
|
|
(26,900
|
)
|
|
(50,572
|
)
|
|
(12,929
|
)
|
|
(44,851
|
)
|
•
|
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.
|
|
Fair Value
Hierarchy
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets:
|
|
|
|
|
|
||||
Money market funds
|
Level I
|
|
$
|
26,280
|
|
|
$
|
91,852
|
|
Investment securities pledged as collateral
|
Level I
|
|
1,816,147
|
|
|
1,462,626
|
|
||
Prepaid forward contracts
|
Level II
|
|
—
|
|
|
109,344
|
|
||
Interest rate swap contracts
|
Level II
|
|
—
|
|
|
1,975
|
|
||
Liabilities:
|
|
|
|
|
|
||||
Prepaid forward contracts
|
Level II
|
|
117,309
|
|
|
—
|
|
||
Interest rate swap contracts
|
Level II
|
|
172,325
|
|
|
132,978
|
|
||
Contingent consideration related to 2017 and 2018 acquisitions
|
Level III
|
|
5,139
|
|
|
6,195
|
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Fair Value
Hierarchy
|
|
Carrying
Amount (a)
|
|
Estimated
Fair Value
|
|
Carrying
Amount (a)
|
|
Estimated
Fair Value
|
||||||||
CSC Holdings debt instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Credit facility debt
|
Level II
|
|
$
|
7,257,331
|
|
|
$
|
7,319,670
|
|
|
$
|
5,915,559
|
|
|
$
|
5,972,500
|
|
Collateralized indebtedness
|
Level II
|
|
1,417,647
|
|
|
1,413,259
|
|
|
1,406,182
|
|
|
1,374,203
|
|
||||
Senior guaranteed notes
|
Level II
|
|
7,598,401
|
|
|
8,038,302
|
|
|
5,847,758
|
|
|
5,646,468
|
|
||||
Senior notes and debentures
|
Level II
|
|
6,133,093
|
|
|
6,824,137
|
|
|
8,416,610
|
|
|
8,972,722
|
|
||||
Notes payable and supply chain financing
|
Level II
|
|
102,622
|
|
|
103,341
|
|
|
106,108
|
|
|
105,836
|
|
||||
Cablevision debt instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes and debentures
|
Level II
|
|
1,104,319
|
|
|
1,213,355
|
|
|
1,095,193
|
|
|
1,163,843
|
|
||||
|
|
|
$
|
23,613,413
|
|
|
$
|
24,912,064
|
|
|
$
|
22,787,410
|
|
|
$
|
23,235,572
|
|
|
(a)
|
Amounts are net of unamortized deferred financing costs and discounts/premiums.
|
|
Number of Time
Vesting Awards
|
|
Number of Performance
Based Vesting Awards
|
|
Weighted Average Grant Date Fair Value
|
||||
Balance, December 31, 2018
|
83,575,000
|
|
|
10,000,000
|
|
|
$
|
1.14
|
|
Vested
|
(21,918,750
|
)
|
|
—
|
|
|
0.79
|
|
|
Forfeited
|
(3,000,000
|
)
|
|
—
|
|
|
0.91
|
|
|
Balance, June 30, 2019
|
58,656,250
|
|
|
10,000,000
|
|
|
$
|
1.31
|
|
|
(a)
|
The aggregate intrinsic value is calculated as the difference between the exercise price and the closing price of the Company's Class A common stock at the respective date.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
$
|
496
|
|
|
$
|
727
|
|
|
$
|
1,088
|
|
|
$
|
852
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Programming and other direct costs
|
$
|
(2,087
|
)
|
|
$
|
(3,865
|
)
|
|
$
|
(3,774
|
)
|
|
$
|
(5,019
|
)
|
Other operating expenses, net
|
(2,020
|
)
|
|
(6,255
|
)
|
|
(4,266
|
)
|
|
(14,249
|
)
|
||||
Operating expenses, net
|
(4,107
|
)
|
|
(10,120
|
)
|
|
(8,040
|
)
|
|
(19,268
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income, net
|
—
|
|
|
149
|
|
|
—
|
|
|
149
|
|
||||
Net charges
|
$
|
(3,611
|
)
|
|
$
|
(9,244
|
)
|
|
$
|
(6,952
|
)
|
|
$
|
(18,267
|
)
|
Capital Expenditures
|
$
|
2,536
|
|
|
$
|
1,108
|
|
|
$
|
5,890
|
|
|
$
|
2,734
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Due from:
|
|
|
|
||||
CVC 3 (a)
|
$
|
—
|
|
|
$
|
13,100
|
|
Newsday (b)
|
476
|
|
|
490
|
|
||
Altice Europe (b)
|
332
|
|
|
1,271
|
|
||
Altice Dominican Republic (b)
|
—
|
|
|
2,550
|
|
||
Other Altice Europe subsidiaries (b)
|
414
|
|
|
146
|
|
||
|
$
|
1,222
|
|
|
$
|
17,557
|
|
Due to:
|
|
|
|
||||
Newsday (b)
|
$
|
—
|
|
|
$
|
22
|
|
Altice Europe (c)
|
—
|
|
|
15,235
|
|
||
Altice Labs S.A. (d)
|
1,935
|
|
|
4,864
|
|
||
Other Altice Europe subsidiaries (d)
|
4,544
|
|
|
5,975
|
|
||
|
$
|
6,479
|
|
|
$
|
26,096
|
|
|
(a)
|
Represents interest on senior notes paid by the Company on behalf of Altice US Finance S.A., which merged into CVC 3 in 2018.
|
(b)
|
Represents amounts paid by the Company on behalf of or for services provided to the respective related party and for Newsday, the net amounts due from the related party also include charges for certain transition services provided.
|
(c)
|
Includes $13,250 at December 31, 2018 related to the agreement discussed above.
|
(d)
|
Represents amounts due to affiliates for the purchase of equipment and advertising services, as well as reimbursement for payments made on our behalf.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Residential:
|
|
|
|
|
|
|
|
||||||||
Video
|
$
|
1,018,426
|
|
|
$
|
1,034,404
|
|
|
$
|
2,035,756
|
|
|
$
|
2,068,112
|
|
Broadband
|
806,250
|
|
|
712,202
|
|
|
1,581,823
|
|
|
1,413,823
|
|
||||
Telephony
|
150,232
|
|
|
163,499
|
|
|
304,696
|
|
|
329,537
|
|
||||
Business services and wholesale
|
357,806
|
|
|
337,388
|
|
|
708,495
|
|
|
670,478
|
|
||||
Advertising
|
112,953
|
|
|
109,898
|
|
|
206,498
|
|
|
197,480
|
|
||||
Other
|
5,414
|
|
|
6,762
|
|
|
10,380
|
|
|
14,437
|
|
||||
Total revenue
|
2,451,081
|
|
|
2,364,153
|
|
|
4,847,648
|
|
|
4,693,867
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Programming and other direct costs
|
818,994
|
|
|
795,127
|
|
|
1,631,979
|
|
|
1,582,488
|
|
||||
Other operating expenses
|
569,459
|
|
|
575,749
|
|
|
1,133,891
|
|
|
1,158,772
|
|
||||
Restructuring and other expense
|
11,465
|
|
|
9,691
|
|
|
26,709
|
|
|
13,278
|
|
||||
Depreciation and amortization (including impairments)
|
568,620
|
|
|
648,527
|
|
|
1,130,048
|
|
|
1,291,232
|
|
||||
Operating income
|
482,543
|
|
|
335,059
|
|
|
925,021
|
|
|
648,097
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(380,613
|
)
|
|
(385,230
|
)
|
|
(767,077
|
)
|
|
(759,385
|
)
|
||||
Gain (loss) on investments and sale of affiliate interests, net
|
103,146
|
|
|
(45,113
|
)
|
|
357,871
|
|
|
(293,715
|
)
|
||||
Gain (loss) on derivative contracts, net
|
(49,624
|
)
|
|
42,159
|
|
|
(226,653
|
)
|
|
210,511
|
|
||||
Loss on interest rate swap contracts
|
(26,900
|
)
|
|
(12,929
|
)
|
|
(50,572
|
)
|
|
(44,851
|
)
|
||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
(1,194
|
)
|
|
(36,911
|
)
|
|
(159,096
|
)
|
|
(41,616
|
)
|
||||
Other income (expense), net
|
212
|
|
|
(629
|
)
|
|
292
|
|
|
(12,287
|
)
|
||||
Income (loss) before income taxes
|
127,570
|
|
|
(103,594
|
)
|
|
79,786
|
|
|
(293,246
|
)
|
||||
Income tax benefit (expense)
|
(41,160
|
)
|
|
5,590
|
|
|
(18,574
|
)
|
|
66,293
|
|
||||
Net income (loss)
|
86,410
|
|
|
(98,004
|
)
|
|
61,212
|
|
|
(226,953
|
)
|
||||
Net loss (income) attributable to noncontrolling interests
|
(43
|
)
|
|
149
|
|
|
156
|
|
|
147
|
|
||||
Net income (loss) attributable to Altice USA, Inc. stockholders
|
$
|
86,367
|
|
|
$
|
(97,855
|
)
|
|
$
|
61,368
|
|
|
$
|
(226,806
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
86,410
|
|
|
$
|
(98,004
|
)
|
|
$
|
61,212
|
|
|
$
|
(226,953
|
)
|
Income tax expense (benefit)
|
41,160
|
|
|
(5,590
|
)
|
|
18,574
|
|
|
(66,293
|
)
|
||||
Other expense (income), net (a)
|
(212
|
)
|
|
629
|
|
|
(292
|
)
|
|
12,287
|
|
||||
Loss on interest rate swap contracts
|
26,900
|
|
|
12,929
|
|
|
50,572
|
|
|
44,851
|
|
||||
Loss (gain) on derivative contracts, net
|
49,624
|
|
|
(42,159
|
)
|
|
226,653
|
|
|
(210,511
|
)
|
||||
Loss (gain) on investments and sales of affiliate interests, net
|
(103,146
|
)
|
|
45,113
|
|
|
(357,871
|
)
|
|
293,715
|
|
||||
Loss on extinguishment of debt and write-off of deferred financing costs
|
1,194
|
|
|
36,911
|
|
|
159,096
|
|
|
41,616
|
|
||||
Interest expense, net
|
380,613
|
|
|
385,230
|
|
|
767,077
|
|
|
759,385
|
|
||||
Depreciation and amortization
|
568,620
|
|
|
648,527
|
|
|
1,130,048
|
|
|
1,291,232
|
|
||||
Restructuring and other expense
|
11,465
|
|
|
9,691
|
|
|
26,709
|
|
|
13,278
|
|
||||
Share-based compensation
|
16,535
|
|
|
12,226
|
|
|
30,325
|
|
|
33,849
|
|
||||
Adjusted EBITDA
|
$
|
1,079,163
|
|
|
$
|
1,005,503
|
|
|
$
|
2,112,103
|
|
|
$
|
1,986,456
|
|
|
(a)
|
Includes the non-service cost components of the Company's pension expense, net of dividends received on Comcast common stock owned by the Company.
|
|
As of
June 30, 2019
|
|
As of
March 31, 2019
|
|
As of
June 30, 2018
|
||||||
|
|
||||||||||
Homes passed (a)
|
8,788.6
|
|
|
8,761.9
|
|
|
8,671.0
|
|
|||
Total customer relationships (b)(c)
|
4,942.2
|
|
|
4,942.1
|
|
|
4,915.1
|
|
|||
Residential
|
4,562.6
|
|
|
4,563.7
|
|
|
4,539.8
|
|
|||
SMB
|
379.6
|
|
|
378.4
|
|
|
375.3
|
|
|||
Residential customers:
|
|
|
|
|
|
||||||
Video
|
3,276.5
|
|
|
3,297.3
|
|
|
3,350.9
|
|
|||
Broadband
|
4,168.1
|
|
|
4,155.0
|
|
|
4,082.1
|
|
|||
Telephony
|
2,486.8
|
|
|
2,511.1
|
|
|
2,545.6
|
|
|||
Residential triple product customer penetration (d)
|
48.4
|
%
|
|
48.9
|
%
|
|
49.8
|
%
|
|||
Penetration of homes passed (e)
|
56.2
|
%
|
|
56.4
|
%
|
|
56.7
|
%
|
|||
ARPU(f)
|
$
|
144.27
|
|
|
$
|
142.57
|
|
|
$
|
140.19
|
|
|
(a)
|
Represents the estimated number of single residence homes, apartments and condominium units passed by the cable distribution network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our cable distribution network. Broadband services were not available to approximately 100 homes passed and telephony services were not available to approximately 600 homes passed.
|
(b)
|
Represents number of households/businesses that receive at least one of the Company's services.
|
(c)
|
Customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets. In calculating the number of customers, we count all customers other than inactive/disconnected customers. Free 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
|
(d)
|
Represents the number of customers that subscribe to three of our services divided by total residential customer relationships.
|
(e)
|
Represents the number of total customer relationships divided by homes passed.
|
(f)
|
Calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video and telephony services to residential customers for the respective quarter by the average number of total residential customers for the same period.
|
|
Three Months
|
|
Six Months
|
||||
Increase in programming costs due primarily to contractual rate increases, partially offset by lower video customers
|
$
|
22,338
|
|
|
$
|
52,319
|
|
Increase primarily in costs of digital media and linear advertising spots for resale
|
2,877
|
|
|
4,984
|
|
||
Decrease in call completion and transport costs primarily due to lower level of activity
|
(3,484
|
)
|
|
(7,085
|
)
|
||
Other net increases (decreases) (net of an increase in costs related to i24NEWS of $1,493 during the six-month period)
|
2,136
|
|
|
(727
|
)
|
||
|
$
|
23,867
|
|
|
$
|
49,491
|
|
|
Three Months
|
|
Six Months
|
||||
Decrease in management fee relating to certain executive, administrative and managerial services provided to the Company from Altice Europe prior to separation in June 2018
|
$
|
(5,750
|
)
|
|
$
|
(13,250
|
)
|
Increase (decrease) in share-based compensation
|
4,308
|
|
|
(3,525
|
)
|
||
Decrease in marketing costs
|
(7,216
|
)
|
|
(12,447
|
)
|
||
Decrease in repairs and maintenance costs relating to our operations
|
(6,186
|
)
|
|
(7,493
|
)
|
||
Increase in labor costs and benefits (includes an increase in costs related to i24NEWS of $6,425 during the six-month period), net of an increase in capitalizable activity
|
5,136
|
|
|
3,197
|
|
||
Increase in bad debt
|
3,760
|
|
|
5,352
|
|
||
Other net increases (decreases) (includes an increase in costs related to i24NEWS of $3,027 during the six-month period)
|
(342
|
)
|
|
3,285
|
|
||
|
$
|
(6,290
|
)
|
|
$
|
(24,881
|
)
|
|
Three Months
|
|
Six Months
|
||||
Decrease due to changes in average debt balances and interest rates on our indebtedness and collateralized debt
|
$
|
(17,892
|
)
|
|
$
|
(17,940
|
)
|
Lower interest income
|
4,708
|
|
|
5,992
|
|
||
Other net increases, primarily amortization of deferred financing costs and original issue discounts
|
8,567
|
|
|
19,640
|
|
||
|
$
|
(4,617
|
)
|
|
$
|
7,692
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 30, 2019
|
||||||
CSC Holdings 10.125% Senior Notes due 2023
|
$
|
—
|
|
|
$
|
154,666
|
|
Refinancing and subsequent amendment to CSC Holdings credit facility
|
1,194
|
|
|
4,430
|
|
||
|
$
|
1,194
|
|
|
$
|
159,096
|
|
|
|
|
|
||||
|
June 30, 2018
|
||||||
Cablevision 7.75% Senior Notes due 2018
|
$
|
1
|
|
|
$
|
4,706
|
|
Cequel 6.375% Senior Notes due 2020
|
36,910
|
|
|
36,910
|
|
||
|
$
|
36,911
|
|
|
$
|
41,616
|
|
|
As of June 30, 2019
|
||||||||||
|
CSC Holdings
|
|
Cablevision
|
|
Total
|
||||||
Debt outstanding:
|
|
|
|
|
|
||||||
Credit facility debt
|
$
|
7,257,331
|
|
|
$
|
—
|
|
|
$
|
7,257,331
|
|
Senior guaranteed notes
|
7,598,401
|
|
|
—
|
|
|
7,598,401
|
|
|||
Senior notes and debentures
|
6,133,093
|
|
|
1,104,319
|
|
|
7,237,412
|
|
|||
Subtotal
|
20,988,825
|
|
|
1,104,319
|
|
|
22,093,144
|
|
|||
Finance lease obligations
|
27,096
|
|
|
—
|
|
|
27,096
|
|
|||
Notes payable and supply chain financing
|
102,622
|
|
|
—
|
|
|
102,622
|
|
|||
Subtotal
|
21,118,543
|
|
|
1,104,319
|
|
|
22,222,862
|
|
|||
Collateralized indebtedness relating to stock monetizations (a)
|
1,417,647
|
|
|
—
|
|
|
1,417,647
|
|
|||
Total debt
|
$
|
22,536,190
|
|
|
$
|
1,104,319
|
|
|
$
|
23,640,509
|
|
Interest expense:
|
|
|
|
|
|
||||||
Credit facility debt, senior notes, finance leases, notes payable and supply chain financing
|
$
|
689,966
|
|
|
$
|
48,645
|
|
|
$
|
738,611
|
|
Collateralized indebtedness relating to stock monetizations (a)
|
30,890
|
|
|
—
|
|
|
30,890
|
|
|||
Total interest expense
|
$
|
720,856
|
|
|
$
|
48,645
|
|
|
$
|
769,501
|
|
|
(a)
|
This indebtedness is collateralized by shares of Comcast common stock. We intend to settle this debt by (i) delivering shares of Comcast common stock and the related equity contracts, or (ii) delivering cash from the net proceeds on new monetization contracts.
|
|
Maturity Date
|
|
Interest Rate
|
|
Principal
|
|
Carrying Value
|
||||
|
|
|
|
|
|
|
|
||||
CSC Holdings Revolving Credit Facility (a)
|
$200,000 on November 30, 2021, remaining balance of $2,275,000 on January 31, 2024
|
|
4.730%
|
|
$
|
622,857
|
|
|
$
|
609,754
|
|
CSC Holdings Term Loan B
|
July 17, 2025
|
|
4.644%
|
|
2,940,000
|
|
|
2,925,564
|
|
||
CSC Holdings Incremental Term Loan B-2
|
January 25, 2026
|
|
4.894%
|
|
1,485,000
|
|
|
1,469,340
|
|
||
CSC Holdings Incremental Term Loan B-3
|
January 15, 2026
|
|
4.644%
|
|
1,271,813
|
|
|
1,266,155
|
|
||
CSC Holdings Incremental Term Loan B-4
|
April 15, 2027
|
|
5.394%
|
|
1,000,000
|
|
|
986,518
|
|
||
|
|
|
|
|
$
|
7,319,670
|
|
|
$
|
7,257,331
|
|
|
(a)
|
At June 30, 2019, $178,014 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $1,674,129 of the facility was undrawn and available, subject to covenant limitations.
|
|
|
Total
|
||
2019
|
|
$
|
785,404
|
|
2020
|
|
2,023,344
|
|
|
2021 (a)
|
|
5,132,583
|
|
|
2022
|
|
1,923,029
|
|
|
2023
|
|
2,330,861
|
|
|
Thereafter (b)
|
|
20,850,393
|
|
|
Total
|
|
$
|
33,045,614
|
|
|
(a)
|
Includes $1,459,638 related to the Company's collateralized indebtedness (including related interest). This indebtedness is collateralized by shares of Comcast common stock. We intend to settle this debt by (i) delivering shares of Comcast common stock and the related equity contracts or (ii) delivering cash from the net proceeds on new monetization contracts.
|
(b)
|
Includes $622,857 of borrowings outstanding under the revolving credit facility that were repaid in July 2019.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Customer premise equipment
|
$
|
102,890
|
|
|
$
|
80,675
|
|
|
$
|
177,827
|
|
|
$
|
161,402
|
|
Network infrastructure
|
138,548
|
|
|
82,042
|
|
|
278,526
|
|
|
154,883
|
|
||||
Support and other
|
29,256
|
|
|
36,671
|
|
|
123,033
|
|
|
99,513
|
|
||||
Business services
|
46,173
|
|
|
41,294
|
|
|
77,867
|
|
|
82,499
|
|
||||
Capital purchases (cash basis)
|
$
|
316,867
|
|
|
$
|
240,682
|
|
|
$
|
657,253
|
|
|
$
|
498,297
|
|
Capital purchases (including accrued not paid and financed capital)
|
$
|
406,065
|
|
|
$
|
277,042
|
|
|
$
|
711,715
|
|
|
$
|
493,707
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Fair Value of Equity Derivative Contracts
|
|
||
|
|
||
Fair value as of December 31, 2018, net asset position
|
$
|
109,344
|
|
Change in fair value, net
|
(226,653
|
)
|
|
Fair value as of June 30, 2019, net liability position
|
$
|
(117,309
|
)
|
|
|
|
|
Hedge Price
|
|
Cap Price (b)
|
||||||
# of Shares Deliverable (a)
|
|
Maturity
|
|
per Share (a)
|
|
Low
|
|
High
|
||||
|
|
|
|
|
|
|
|
|
||||
42,955,236
|
|
2021
|
|
$29.25- $35.47
|
|
$
|
43.88
|
|
|
$
|
44.80
|
|
|
(a)
|
Represents the price below which we are provided with downside protection and above which we retain upside appreciation. Also represents the price used in determining the cash proceeds payable to us at inception of the contracts.
|
(b)
|
Represents the price up to which we receive the benefit of stock price appreciation.
|
Trade Date
|
|
Maturity Date
|
|
Notional Amount
|
|
Company Pays
|
|
Company Receives
|
||
May 2016
|
|
May 2026
|
|
$
|
750,000
|
|
|
Six- month LIBOR
|
|
Fixed rate of 1.665%
|
June 2016
|
|
May 2026
|
|
750,000
|
|
|
Six- month LIBOR
|
|
Fixed rate of 1.68%
|
|
April 2019
|
|
April 2020
|
|
1,255,513
|
|
|
Three- month LIBOR minus 0.1075%
|
|
One-month LIBOR
|
|
December 2018
|
|
January 2022
|
|
500,000
|
|
|
Fixed rate of 2.7177%
|
|
Three-month LIBOR
|
|
December 2018
|
|
January 2022
|
|
500,000
|
|
|
Fixed rate of 2.733%
|
|
Three-month LIBOR
|
|
December 2018
|
|
January 2022
|
|
500,000
|
|
|
Fixed rate of 2.722%
|
|
Three-month LIBOR
|
|
December 2018
|
|
December 2026
|
|
750,000
|
|
|
Fixed rate of 2.9155%
|
|
Three-month LIBOR
|
|
December 2018
|
|
December 2026
|
|
750,000
|
|
|
Fixed rate of 2.9025%
|
|
Three-month LIBOR
|
(a)
|
Sales of Unregistered Securities
|
|
(a)
Total Number of Shares (or Units) Purchased
|
|
(b)
Average Price Paid per Share (or Unit)
|
|
(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1)(2)
|
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1)
|
||||||
|
|
|
|
|
|
|
|
||||||
April 1 - April 30
|
5,347,302
|
|
|
$
|
23.05
|
|
|
62,631,656
|
|
|
$
|
776,721,702
|
|
May 1- May 31
|
9,276,181
|
|
|
24.21
|
|
|
71,907,837
|
|
|
552,136,601
|
|
||
June 1 - June 30
|
10,375,518
|
|
|
24.30
|
|
|
82,283,355
|
|
|
300,046,502
|
|
|
(1)
|
On June 8, 2018, the Company's Board of Directors authorized the repurchase of up to $2.0 billion of Altice USA Class A common stock. Under the repurchase program, shares of Altice USA Class A common stock may be purchased from time to time in the open market. The program does not have an expiration date and may be suspended at any time at the discretion of the Board of Directors.
|
(2)
|
This column reflects the cumulative number of shares acquired pursuant to the repurchase program at the end of the respective period.
|
EXHIBIT NO.
|
|
DESCRIPTION
|
|
Transition Agreement and Separation Agreement with David Connolly.
|
|
|
Section 302 Certification of the CEO.
|
|
|
Section 302 Certification of the CFO.
|
|
|
Section 906 Certifications of the CEO and CFO.
|
|
101
|
|
The following financial statements from Altice USA's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 filed with the Securities and Exchange Commission on July 31, 2019, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income (Loss); (iv) the Consolidated Statement of Stockholders' Equity; (v) the Consolidated Statements of Cash Flows; and (vi) the Notes to Consolidated Financial Statements.
|
|
|
|
ALTICE USA, INC.
|
|
Date:
|
July 31, 2019
|
|
|
/s/ Charles Stewart
|
|
|
|
By:
|
Charles Stewart as Co-President and Chief Financial Officer
|
1.
|
Transition Period and Separation.
|
2.
|
Equity.
|
3.
|
Severance Benefits. Upon the Separation Date or, if earlier, the date your employment is terminated by the Company without Cause or you voluntarily terminate your employment pursuant to an Approved Early Resignation, you will be entitled to the severance payments and benefits described in the Separation Agreement; provided, that (i) you execute and do not revoke the Separation Agreement prior to the applicable revocation period stated therein , and (ii) you continue to comply with any confidentiality , non-disparagement and any other restrictive covenants applicable to you. For the avoidance of doubt, if your employment is terminated for Cause or due to death or Disability, or you voluntarily terminate your employment for any reason prior to the Separation Date (other than pursuant to an Approved Early Resignation), you shall not be entitled to the severance payments and benefits described in the Separation Agreement, other than the accelerated vesting of the Unvested Units upon a termination due to death or Disability described in Section 2(b) above.
|
4.
|
Non-Disparagement. You represent, warrant and agree, for yourself and any other representatives while they are acting on your behalf, that you (and they) will not engage in any disparaging conduct, including but not limited to making disparaging or negative statements, that is intended to or does damage to the good will of, or the business or personal reputations of, any of the Company and its subsidiaries and affiliates and their officers, employees, directors or shareholders, past, present and future, provided that nothing in this Agreement shall prohibit or restrict you from making any disclosure of information required or expressly protected by law, including providing truthful testimony regarding your employment with the Company, or any Company matter, if requested by a director, or if required to do so by court order or legal or administrative process to the extent set forth in Section 7 of the Separation Agreement as if set forth in its entirety herein. The Company shall direct its senior executive officers and directors not to engage in any disparaging conduct, including but not limited to making disparaging or negative statements, that is intended to or does damage to your good will , or your business or persona l reputation , provided that nothing in this Agreement shall prohibit or restrict the Company from making any disclosure of information required or expressly protected by law, including providing truthful testimony regarding your employment with the
|
5.
|
Indemnification. During your employment and at all times thereafter, you shall be indemnified as provided in the Company's Certificate of Incorporation for current officers of the Company to the maximum extent allowed under the laws of the State of Delaware, and you shall be entitled to the advancement of expenses (including attorneys' fees) as provided in the Company's Certificate of Incorporation for current officers of the Company. No amendment to the Certificate of Incorporation of the Company after the date of this Agreement shall reduce the foregoing indemnification or advancement of expenses obligations. In addition, you shall be entitled to the protection afforded an officer of the Company under any insurance policies the Company may elect to maintain generally for the benefit of its directors and officers against all costs, charges and expenses incurred or sustained by you in connection with any action, suit or proceeding to which you may be made a party by reason of your being or having been a director, officer or employee of the Company or any of its subsidiaries (other than any dispute, claim or controversy arising under or relating to this Agreement).
|
6.
|
Executive Release
|
7.
|
Company Release.
|
8.
|
Choice of Law; Forum; Waiver of Jury Trial; Contract Interpretation.
|
9.
|
Public Statements. The Company agrees to provide you with the opportunity to review and consent to all of its public written disclosures (internal and external) about this Agreement; provided such consent will not be unreasonably withheld, conditioned, or delayed, and that nothing herein shall prevent the Company from providing any truthful information concerning your separation as may be necessary to comply with the law.
|
1.
|
Separation of Employment/Effect on Benefits
|
2.
|
Severance Benefits
|
3.
|
Executive Release
|
4.
|
Company Release.
|
5.
|
Confidentiality
|
6.
|
Physical and Intellectual Property
|
7.
|
Exception for Disclosure Pursuant to Law
|
8.
|
Further Cooperation
|
9.
|
Right to Counsel/Voluntary Waiver
|
10.
|
Revocation
|
11.
|
Post-Employment Restrictions
|
12.
|
Choice of Law/Forum/Waiver of Jury Trial/Contract Interpretation
|
13.
|
Additional Provisions
|
14.
|
Acknowledgments and Waivers Including Express Waiver Under the ADEA
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Altice USA, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
July 31, 2019
|
|
By:
|
/s/ Dexter Goei
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Dexter Goei
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Chief Executive Officer and Director
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1.
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I have reviewed this report on Form 10-Q of Altice USA, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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(d)
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disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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July 31, 2019
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By:
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/s/ Charles Stewart
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Charles Stewart
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Co-President, Chief Financial Officer and Director
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Date:
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July 31, 2019
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By:
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/s/ Dexter Goei
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Dexter Goei
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Chief Executive Officer and Director
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Date:
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July 31, 2019
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By:
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/s/ Charles Stewart
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Charles Stewart
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Co-President, Chief Financial Officer and Director
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