SEC Info - Altice USA, Inc. - ‘10-K’ for 12/31/19

Dexter Goei

(Principal Executive Officer)

/s/ Michael J. Grau

Chief Financial Officer

Michael J. Grau

/s/ Layth Taki

Senior Vice President and Chief Accounting Officer

Layth Taki

(Principal Accounting Officer)

/s/ Patrick Drahi

Chairman and Director

Patrick Drahi

/s/ Gerrit Jan Bakker

Director

Gerrit Jan Bakker

/s/ Manon Brouillette

Director

Manon Brouillette

/s/ David Drahi

Director

David Drahi

/s/ Mark Mullen

Director

Mark Mullen

/s/ Dennis Okhuijsen

Director

Dennis Okhuijsen

/s/ Charles Stewart

Director

Charles Stewart

/s/ Raymond Svider

Director

Raymond Svider

INDEX TO FINANCIAL STATEMENTS


		Page

Reports of Independent Registered Public Accounting Firm			F-2
ALTICE USA, INC. AND SUBSIDIARIES
Consolidated Financial Statements
	Consolidated Balance Sheets - December 31, 2019 and 2018	F-6
	Consolidated Statements of Operations - years ended December 31, 2019, 2018 and 2017	F-8
	Consolidated Statements of Comprehensive Income (Loss) - years ended December 31, 2019, 2018 and 2017	F-9
	Consolidated Statements of Stockholders' Equity - years ended December 31, 2019, 2018 and 2017	F-10
	Consolidated Statements of Cash Flows - years ended December 31, 2019, 2018 and 2017	F-13
	Combined Notes to Consolidated Financial Statements	F-24
Supplemental Financial Statements Furnished:
CSC HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Financial Statements
	Consolidated Balance Sheets - December 31, 2019 and 2018	F-15
	Consolidated Statements of Operations - years ended December 31, 2019, 2018 and 2017	F-17
	Consolidated Statements of Comprehensive Income (Loss) - years ended December 31, 2019, 2018 and 2017	F-18
	Consolidated Statements of Member's Equity - years ended December 31, 2019, 2018 and 2017	F-19
	Consolidated Statements of Cash Flows - years ended December 31, 2019, 2018 and 2017	F-22
	Combined Notes to Consolidated Financial Statements	F-24

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Altice USA, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Altice USA, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements), and our report dated February 14, 2020 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

New York, NY

F-2

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Altice USA, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Altice USA, Inc. and subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission”, and our report dated February 14, 2020 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

•As discussed in Note 3 to the consolidated financial statements, the Company adopted ASU No. 2016-02 Leases (Topic 842) as of January 1, 2019.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of capitalization of subcontractor labor, internal labor, and other related costs

As discussed in Note 8 to the consolidated financial statements, the Company capitalizes materials, subcontractor labor, internal labor, and other related costs associated with the initial deployment of new customer premise equipment (“CPE”) using standard capitalization rates developed from actual costs and applicable operational data associated with connection activities. The departmental activities supporting the connection process are tracked through specific metrics, and the portion of departmental costs that is capitalized is determined through a time weighted activity allocation of costs incurred based on time studies used to estimate the average time spent on each activity.

F-3

We identified the evaluation of capitalization of subcontractor labor, internal labor, and other related costs as a critical audit matter. The Company’s methodology for calculating amounts to be capitalized requires inputs from various sources. Obtaining an understanding of the systems, databases, and processes used to accumulate the data for these inputs involved especially challenging auditor judgment and required significant auditor effort, including specialized knowledge related to information technology (IT) applications and databases. Specifically, evaluating the processes, and the related internal controls to determine the average amount of time required to perform CPE installation activities and to calculate the quantity of CPE deployed required significant auditor effort.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s capitalization process for subcontractor labor, internal labor, and other related costs, including general IT controls and IT applications controls. We involved IT professionals with specialized skills and knowledge, who assisted in evaluating these general IT controls and IT applications controls. We also assessed the Company’s manual controls related to the development and accumulation of data used within the methodology to calculate the amounts to be capitalized. We observed technicians perform CPE installations to corroborate our understanding of the installation activities. We evaluated the Company’s capitalization methodology for consistency with prior periods. We evaluated the costs included in the development of the capitalization rates by comparing to prior year costs, and considering current year expectations. We developed estimates of amounts to be capitalized and compared our expectations to the amounts recorded by the Company. We also assessed the relationships between the amounts capitalized by the Company to relevant expense account balances observed over time.

Evaluation of revenue

As discussed in Note 2 to the consolidated financial statements, the Company had $9.8 billion in revenues for the year ended December 31, 2019, of which $7.8 billion was residential related, $1.4 billion was business services related, and $476 million was advertising related. Each of these categories of revenue has multiple revenue streams, and the Company’s process for revenue recognition differs between these discrete revenue streams.

We identified the evaluation of revenue as a critical audit matter. Obtaining an understanding of the systems, databases, and processes used in the Company’s revenue recognition process involved especially challenging auditor judgment and required significant auditor effort, including specialized knowledge related to IT applications. Specifically, evaluating the processes and the related internal controls for multiple revenue streams, including the number of related IT applications required significant auditor effort.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s revenue recognition processes, including general IT controls and IT application controls. We involved IT professionals with specialized skills and knowledge, who assisted in testing certain IT applications that are used by the Company in its revenue recognition processes. We observed technicians perform service installations to gain an understanding of the revenue related activities, including the use of IT applications. We evaluated the Company’s revenue recognition policies by examining the Company’s published terms and conditions, and analyzing a selection of customer contracts to understand the contractual terms and conditions. For certain revenue streams, we assessed the recorded revenue by comparing the total cash received during the year to the revenue recorded in the general ledger. For other revenue streams, we assessed the recorded revenue by selecting a sample of transactions and comparing the amounts recognized for consistency with underlying documentation.

/s/ KPMG LLP

We have served as the Company’s auditor since 2016.

New York, NY

F-4

Report of Independent Registered Public Accounting Firm

The Board of Directors

CSC Holdings, LLC:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of CSC Holdings, LLC and its subsidiaries (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, changes in total member’s equity, and cash flows for each of the years in the three-year period ended December 31, 2019, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting principles.

Change in Accounting Principle

•As discussed in Note 3 to the consolidated financial statements, the Company adopted ASU No. 2016-02 Leases (Topic 842) as of January 1, 2019.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board United States (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2016.

New York, New York

F-5

ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2019 and 2018
(In thousands)

ASSETS

Current Assets:

Cash and cash equivalents

i 701,898

i 298,781

Restricted cash

i 262

i 257

Accounts receivable, trade (less allowance for doubtful accounts of $14,683 and $13,520)

i 457,118

i 448,399

Prepaid expenses and other current assets

i 215,304

i 136,285

Amounts due from affiliates

i 6,774

i 17,557

Derivative contracts

i —

i 1,975

Total current assets

i 1,381,356

i 903,254

Property, plant and equipment, net of accumulated depreciation of $5,276,921 and $4,044,671

i 5,753,401

i 5,828,881

Right-of-use operating lease assets

i 280,340

i —

Investment securities pledged as collateral

i 1,931,697

i 1,462,626

Derivative contracts

i 25,207

i 109,344

Other assets

i 92,622

i 84,382

Amortizable intangibles, net of accumulated amortization of $3,670,679 and $2,882,787

i 3,481,109

i 4,192,824

Indefinite-lived cable television franchises

i 13,020,081

Goodwill

i 8,142,309

i 8,012,416

Total assets

i 34,108,122

i 33,613,808

See accompanying notes to consolidated financial statements.

F-6

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

December 31, 2019 and 2018

(In thousands, except share and per share amounts)


LIABILITIES AND STOCKHOLDERS' EQUITY	December 31, 2019		December 31, 2018
Current Liabilities:
Accounts payable	$	i 799,618	$	i 857,502
Interest payable	i 385,655		i 386,475
Accrued employee related costs	i 111,337		i 139,806
Amounts due to affiliates	i 7,456		i 26,096
Deferred revenue	i 124,777		i 140,053
Debt	i 170,682		i 158,625
Other current liabilities	i 378,954		i 312,634
Total current liabilities	i 1,978,479		i 2,021,191
Defined benefit plan obligations	i 57,190		i 96,794
Other liabilities	i 147,714		i 174,760
Deferred tax liability	i 4,762,595		i 4,723,937
Liabilities under derivative contracts	i 255,666		i 132,908
Right-of-use operating lease liability	i 269,062		i —
Long-term debt, net of current maturities	i 24,249,603		i 22,653,975
Total liabilities	i 31,720,309		i 29,803,565
Commitments and contingencies (Note 17)	i		i
Redeemable equity	i 108,551		i 130,007
Stockholders' Equity:
Preferred stock, $.01 par value, 100,000,000 shares authorized, no shares issued and outstanding	i —		i —
Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 457,207,079 and 446,749,307 issued and outstanding as of December 31, 2019 and 496,064,027 shares issued and outstanding as of December 31, 2018	i 4,572		i 4,961
Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 issued, 186,245,832 shares outstanding as of December 31, 2019 and 212,976,259 shares outstanding as of December 31, 2018	i 1,862		i 2,130
Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding	i —		i —
Paid-in capital	i 2,039,918		i 3,423,803
Retained earnings	i 390,766		i 251,830
	i 2,437,118		i 3,682,724
Treasury stock, at cost (10,457,772 Class A common shares at December 31, 2019)	( i 163,904)		i —
Accumulated other comprehensive loss	( i 3,250)		( i 11,783)
Total stockholders' equity	i 2,269,964		i 3,670,941
Noncontrolling interest	i 9,298		i 9,295
Total stockholders' equity	i 2,279,262		i 3,680,236
	$	i 34,108,122	$	i 33,613,808

See accompanying notes to consolidated financial statements.

F-7

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2019, 2018 and 2017

(In thousands, except per share amounts)

2019

2018

2017

Revenue (including revenue from affiliates of $3,974, $2,575 and $1,100 respectively) (See Note 16)

i 9,760,859

i 9,566,608

i 9,306,950

Operating expenses:

Programming and other direct costs (including charges from affiliates of $11,580, $7,261 and $4,176 respectively) (See Note 16)

i 3,300,528

i 3,173,076

i 3,035,655

Other operating expenses (including charges from affiliates of $8,355, $16,307 and $33,140 respectively) (See Note 16)

i 2,300,398

i 2,290,266

i 2,347,315

Restructuring and other expense

i 72,978

i 38,548

i 152,401

Depreciation and amortization (including impairments)

i 2,263,144

i 2,382,339

i 2,930,571

i 7,937,048

i 7,884,229

i 8,465,942

Operating income

i 1,823,811

i 1,682,379

i 841,008

Other income (expense):

Interest expense (including interest expense to affiliates and related parties of $600 and $90,405 in 2018 and 2017, respectively) (See Note 16)

( i 1,536,559)

( i 1,556,282)

( i 1,603,132)

Interest income

i 5,709

i 10,856

i 1,921

Gain (loss) on investments and sale of affiliate interests, net

i 473,406

( i 250,877)

i 237,354

Gain (loss) on derivative contracts, net

( i 282,713)

i 218,848

( i 236,330)

Gain (loss) on interest rate swap contracts

( i 53,902)

( i 61,697)

i 5,482

Loss on extinguishment of debt and write-off of deferred financing costs (including $513,723 related to affiliates and related parties in 2017) (See Note 16)

( i 243,806)

( i 48,804)

( i 600,240)

Other income (expense), net

i 1,183

( i 12,484)

( i 13,651)

( i 1,636,682)

( i 1,700,440)

( i 2,208,596)

Income (loss) before income taxes

i 187,129

( i 18,061)

( i 1,367,588)

Income tax benefit (expense)

( i 47,190)

i 38,655

i 2,862,352

Net income

i 139,939

i 20,594

i 1,494,764

Net income attributable to noncontrolling interests

( i 1,003)

( i 1,761)

( i 1,587)

Net income attributable to Altice USA, Inc. stockholders

i 138,936

i 18,833

i 1,493,177

Income per share:

Basic income per share

i 0.21

i 0.03

i 2.15

Basic weighted average common shares (in thousands)

i 660,384

i 730,088

i 696,055

Diluted income per share

i 0.21

i 0.03

i 2.15

Diluted weighted average common shares (in thousands)

i 662,541

i 730,088

i 696,055

Cash dividends declared per common share

i —

i 2.035

i 1.29

See accompanying notes to consolidated financial statements.

F-8

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 2019, 2018 and 2017

(In thousands)

2019

2018

2017

Net income

i 139,939

i 20,594

i 1,494,764

Other comprehensive income:

Defined benefit pension plans:

Unrecognized actuarial gain (loss)

i 12,074

i 830

( i 18,632)

Applicable income taxes

( i 3,644)

( i 220)

i 7,441

Unrecognized gain (loss) arising during period, net of income taxes

i 8,430

i 610

( i 11,191)

Amortization of actuarial losses

i 89

i —

Applicable income taxes

( i 24)

i —

Amortization of actuarial losses included in other expense, net of tax

i 65

i —

Settlement loss included in other expense, net

i 1,643

i 1,268

i 1,845

Applicable income taxes

( i 441)

( i 342)

( i 738)

Settlement loss included in other expense, net, net of income taxes

i 1,202

i 926

i 1,107

Curtailment loss

i —

( i 3,195)

Applicable income taxes

i —

i 1,278

Curtailment loss, net of income taxes

i —

( i 1,917)

Foreign currency translation adjustment

( i 1,164)

i 967

i —

Applicable income taxes

i —

( i 261)

i —

Foreign currency translation adjustment, net

( i 1,164)

i 706

i —

Other comprehensive income (loss)

i 8,533

i 2,242

( i 12,001)

Comprehensive income

i 148,472

i 22,836

i 1,482,763

Comprehensive income attributable to noncontrolling interests

( i 1,003)

( i 1,761)

( i 1,587)

Comprehensive income attributable to Altice USA, Inc. stockholders

i 147,469

i 21,075

i 1,481,176

See accompanying notes to consolidated financial statements.

F-9

ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended December 31, 2019, 2018 and 2017
(In thousands)

Class A
Common
Stock

Class B
Common
Stock

Paid-in
Capital

Retained Earnings (Accumulated
Deficit)

Accumulated
Other
Comprehensive
Income (Loss)

Total
Stockholders'
Equity

Non-controlling
Interest

Total
Equity

Balance at January 1, 2017

i —

i 3,003,554

( i 963,312)

i 1,979

i 2,042,221

i 287

i 2,042,508

Net income attributable to stockholders

—

i 1,493,177

—

i 1,493,177

—

i 1,493,177

Net income attributable to noncontrolling interests

—

i 1,587

Pension liability adjustments, net of income taxes

—

( i 12,001)

—

( i 12,001)

Share-based compensation expense

—

i 57,430

—

i 57,430

—

i 57,430

Change in redeemable equity

—

( i 163,142)

—

( i 163,142)

—

( i 163,142)

Contributions from stockholders

—

i 51,135

—

i 51,135

—

i 51,135

Receivable from parent

—

( i 50,000)

—

( i 50,000)

—

( i 50,000)

Distributions to stockholders/non-controlling interest

—

( i 839,700)

—

( i 839,700)

( i 335)

( i 840,035)

Recognition of previously unrealized excess tax benefits related to share-based awards in connection with the adoption of ASU 2016-09

—

i 310,771

—

i 310,771

—

i 310,771

Issuance of common stock pursuant to organizational transactions prior to IPO

i 2,349

i 4,901

i 2,257,002

—

i 2,264,252

—

i 2,264,252

Issuance of common stock pursuant to IPO

i 121

—

i 348,950

—

i 349,071

—

i 349,071

Balance at December 31, 2017

i 2,470

i 4,901

i 4,665,229

i 840,636

( i 10,022)

i 5,503,214

i 1,539

i 5,504,753

See accompanying notes to consolidated financial statements.

F-10

ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
Years ended December 31, 2019, 2018 and 2017
(In thousands)

Class A
Common
Stock

Class B
Common
Stock

Paid-in
Capital

Retained Earnings (Accumulated
Deficit)

Accumulated
Other
Comprehensive
Income (Loss)

Total
Stockholders'
Equity

Non-controlling
Interest

Total
Equity

Balance at January 1, 2018

i 2,470

i 4,901

i 4,665,229

i 840,636

( i 10,022)

i 5,503,214

i 1,539

i 5,504,753

Net income attributable to stockholders

—

i 18,833

—

i 18,833

—

i 18,833

Net income attributable to noncontrolling interests

—

i 1,761

Contributions from noncontrolling interests

—

i 5,995

Pension liability adjustments, net of income taxes

—

i 1,536

—

i 1,536

Foreign currency translation adjustment, net of income taxes

—

i 706

—

i 706

Share-based compensation expense

—

i 59,812

—

i 59,812

—

i 59,812

Redeemable equity vested

—

i 169,452

—

i 169,452

—

i 169,452

Change in redeemable equity

—

( i 68,169)

—

( i 68,169)

—

( i 68,169)

Dividend payment

—

( i 963,711)

( i 536,224)

—

( i 1,499,935)

—

( i 1,499,935)

Class A shares acquired through share repurchase program and retired

( i 280)

—

( i 499,720)

—

( i 500,000)

—

( i 500,000)

Conversion of Class B to Class A shares, including $2,424 in connection with the Distribution

i 2,771

( i 2,771)

—

Impact of i24 Acquisition

—

i 61,769

( i 73,578)

( i 1,840)

( i 13,649)

—

( i 13,649)

Other changes to equity

—

( i 859)

—

( i 859)

—

( i 859)

Adoption of ASU No. 2018-02

—

i 2,163

( i 2,163)

—

Balance at December 31, 2018

i 4,961

i 2,130

i 3,423,803

i 251,830

( i 11,783)

i 3,670,941

i 9,295

i 3,680,236

See accompanying notes to consolidated financial statements.

F-11

ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)
Years ended December 31, 2019, 2018 and 2017 (In thousands)

Class A
Common
Stock

Class B
Common
Stock

Paid-in
Capital

Retained Earnings

Treasury Stock

Accumulated
Other
Comprehensive
Loss

Total
Stockholders'
Equity

Non-controlling
Interest

Total
Equity

Balance at January 1, 2019

i 4,961

i 2,130

i 3,423,803

i 251,830

i —

( i 11,783)

i 3,670,941

i 9,295

i 3,680,236

Net income attributable to stockholders

—

i 138,936

—

i 138,936

—

i 138,936

Net income attributable to noncontrolling interests

—

i 1,003

Distributions
to noncontrolling
interests

—

( i 1,000)

Pension liability adjustments, net of income taxes

—

i 9,697

—

i 9,697

Foreign currency translation adjustment, net of income taxes

—

( i 1,164)

—

( i 1,164)

Share-based compensation expense (equity classified)

—

i 99,077

—

i 99,077

—

i 99,077

Redeemable equity vested

i 187,966

—

i 187,966

—

i 187,966

Change in redeemable equity

—

( i 166,511)

—

( i 166,511)

—

( i 166,511)

Class A shares acquired through share repurchase program and retired

( i 727)

—

( i 1,686,146)

—

( i 1,686,873)

—

( i 1,686,873)

Conversion of Class B to Class A shares

i 268

( i 268)

—

Issuance of common shares pursuant to employee long term incentive plan

i 65

—

i 7,099

—

( i 42)

—

i 7,122

—

i 7,122

Issuance of

common shares to

acquire

partnership

interests in

Neptune LP

—

i 163,862

—

( i 163,862)

—

Class A shares issued in connection with acquisition

i 5

—

i 10,768

—

i 10,773

—

i 10,773

Balance at December 31, 2019

i 4,572

i 1,862

i 2,039,918

i 390,766

( i 163,904)

( i 3,250)

i 2,269,964

i 9,298

i 2,279,262

See accompanying notes to consolidated financial statements.

F-12

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2019, 2018 and 2017

(In thousands)

2019

2018

2017

Cash flows from operating activities:

Net income

i 139,939

i 20,594

i 1,494,764

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization (including impairments)

i 2,263,144

i 2,382,339

i 2,930,571

Non-cash restructuring charges

i 16,826

i —

Equity in net loss of affiliates

i —

i 10,849

i 10,040

Loss (gain) on investments and sale of affiliate interests, net

( i 473,406)

i 250,877

( i 237,354)

Loss (gain) on derivative contracts, net

i 282,713

( i 218,848)

i 236,330

Loss on extinguishment of debt and write-off of deferred financing costs

i 243,806

i 48,804

i 600,240

Amortization of deferred financing costs and discounts (premiums) on indebtedness

i 106,214

i 85,121

i 31,046

Settlement loss related to pension plan

i 1,732

i 1,268

i 1,845

Share-based compensation expense related to equity classified awards

i 99,078

i 59,812

i 57,430

Deferred income taxes

i 14,931

( i 67,603)

( i 2,880,154)

Non-cash lease expense

i 46,581

i —

Provision for doubtful accounts

i 91,520

i 71,426

i 74,183

Change in assets and liabilities, net of effects of acquisitions and dispositions:

Accounts receivable, trade

( i 91,718)

( i 144,079)

( i 89,683)

Other receivables

( i 21,755)

i 4,246

( i 12,835)

Prepaid expenses and other assets

( i 100,343)

( i 14,889)

( i 7,426)

Amounts due from and due to affiliates

( i 7,857)

i 11,049

( i 34,326)

Accounts payable

( i 33,107)

i 12,455

i 73,888

Accrued liabilities

( i 44,083)

( i 130,631)

( i 241,701)

Deferred revenue

( i 10,384)

i 72,426

i 12,310

Liabilities related to interest rate swap and derivative contracts

i 30,338

i 53,101

( i 921)

Net cash provided by operating activities

i 2,554,169

i 2,508,317

i 2,018,247

Cash flows from investing activities:

Capital expenditures

( i 1,355,350)

( i 1,153,589)

( i 951,349)

Payment for acquisitions, net of cash acquired

( i 172,269)

( i 10,753)

( i 46,703)

Sale of affiliate interest

i 1,958

( i 3,537)

i —

Proceeds related to sale of equipment, including costs of disposal

i 3,909

i 10,779

i 9,743

Decrease (increase) in other investments

i 354

i 9,327

( i 4,773)

Settlement of put call options

i —

( i 97,410)

Additions to other intangible assets

( i 4,071)

( i 584)

( i 1,707)

Net cash used in investing activities

( i 1,525,469)

( i 1,148,357)

( i 1,092,199)

See accompanying notes to consolidated financial statements.

F-13

ALTICE USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Years ended December 31, 2019, 2018 and 2017

(In thousands)

2019

2018

2017

Cash flows from financing activities:

Proceeds from credit facility debt, net of discounts

i 5,040,000

i 3,489,313

i 5,593,675

Repayment of credit facility debt

( i 3,832,062)

( i 2,221,175)

( i 4,411,581)

Issuance of senior notes, including premiums

i 4,054,375

i 2,050,000

i —

Redemption of senior notes, including premiums and fees

( i 4,225,786)

( i 2,628,962)

( i 1,729,400)

Proceeds from collateralized indebtedness, net

i 93,000

i 516,513

i 838,794

Repayment of collateralized indebtedness and related derivative contracts, net

i —

( i 516,513)

( i 831,059)

Dividends to stockholders

i —

( i 1,499,935)

( i 919,317)

Proceeds from notes payable

i 65,854

i 15,955

i 33,733

Repayment of notes payable

( i 102,066)

( i 32,632)

i —

Principal payments on finance lease obligations

( i 8,980)

( i 10,228)

( i 15,157)

Purchase of shares of Altice USA, Inc. Class A common stock, pursuant to a share repurchase program

( i 1,686,873)

( i 500,000)

i —

Additions to deferred financing costs

( i 23,583)

( i 28,468)

( i 8,600)

Other

i —

( i 859)

i —

Proceeds from stock option exercises

i 3,209

i —

Contingent payment for acquisition

( i 500)

( i 30,000)

i —

Proceeds from IPO, net of fees

i —

i 349,071

Contributions from stockholders

i —

i 1,135

Contributions from (distributions to) noncontrolling interests, net

( i 1,000)

i 5,995

( i 335)

Net cash used in financing activities

( i 624,412)

( i 1,390,996)

( i 1,099,041)

Net increase (decrease) in cash and cash equivalents

i 404,288

( i 31,036)

( i 172,993)

Effect of exchange rate changes on cash and cash equivalents

( i 1,166)

( i 26)

i —

Net increase (decrease) in cash and cash equivalents

i 403,122

( i 31,062)

( i 172,993)

Cash, cash equivalents and restricted cash at beginning of year

i 299,038

i 330,100

i 503,093

Cash, cash equivalents and restricted cash at end of year

i 702,160

i 299,038

i 330,100

See accompanying notes to consolidated financial statements.

F-14

CSC HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2019 and 2018
(In thousands)

ASSETS

Current Assets:

Cash and cash equivalents

i 697,741

i 298,527

Restricted cash

i 262

i 257

Accounts receivable, trade (less allowance for doubtful accounts of $14,683 and $13,520)

i 457,118

i 448,399

Prepaid expenses and other current assets

i 211,642

i 141,267

Amounts due from affiliates

i 6,774

i 4,385

Derivative contracts

i —

i 1,975

Total current assets

i 1,373,537

i 894,810

Property, plant and equipment, net of accumulated depreciation of $5,276,921 and $4,044,671

i 5,753,401

i 5,828,881

Right-of-use operating lease assets

i 280,340

i —

Investment securities pledged as collateral

i 1,931,697

i 1,462,626

Derivative contracts

i 25,207

i 109,344

Other assets

i 92,622

i 65,183

Amortizable intangibles, net of accumulated amortization of $3,670,679 and $2,882,787

i 3,481,109

i 4,192,824

Indefinite-lived cable television franchises

i 13,020,081

Goodwill

i 8,142,309

i 8,012,416

Total assets

i 34,100,303

i 33,586,165

See accompanying notes to consolidated financial statements.

F-15

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

December 31, 2019 and 2018

(In thousands, except per membership unit amounts)

LIABILITIES AND MEMBER'S EQUITY

Current Liabilities:

Accounts payable

i 799,618

i 857,502

Interest Payable

i 385,655

i 366,644

Accrued employee related costs

i 111,337

i 139,806

Amounts due to affiliates

i 7,456

i 179,417

Deferred revenue

i 124,777

i 140,053

Debt

i 170,682

i 158,625

Other current liabilities

i 378,948

i 301,783

Total current liabilities

i 1,978,473

i 2,143,830

Defined benefit plan obligations

i 57,190

i 96,794

Other liabilities

i 147,714

i 174,757

Deferred tax liability

i 4,980,599

i 5,349,947

Liabilities under derivative contracts

i 255,666

i 132,908

Right-of-use operating lease liability

i 269,062

i —

Long-term debt, net of current maturities

i 24,249,603

i 21,558,782

Total liabilities

i 31,938,307

i 29,457,018

Commitments and contingencies (Note 17)

Redeemable equity

i 108,551

i 130,007

Member's Equity:

Retained earnings

i 13,515

i 549,691

Other member's equity (100 membership units issued and outstanding)

i 2,033,882

i 3,451,937

i 2,047,397

i 4,001,628

Accumulated other comprehensive loss

( i 3,250)

( i 11,783)

Total member's equity

i 2,044,147

i 3,989,845

Noncontrolling interest

i 9,298

i 9,295

Total member's equity

i 2,053,445

i 3,999,140

i 34,100,303

i 33,586,165

See accompanying notes to consolidated financial statements.

F-16

CSC HOLDINGS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years ended December 31, 2019, 2018 and 2017

(In thousands)

2019

2018

2017

Revenue (including revenue from affiliates of $3,974, $2,575 and $1,100 respectively) (See Note 16)

i 9,760,859

i 9,566,608

i 9,306,950

Operating expenses:

Programming and other direct costs (including charges from affiliates of $11,580, $7,261 and $4,176 respectively) (See Note 16)

i 3,300,528

i 3,173,076

i 3,035,655

Other operating expenses (including charges from affiliates of $8,355, $16,307 and $33,140 respectively) (See Note 16)

i 2,300,398

i 2,290,266

i 2,347,315

Restructuring and other expense

i 72,978

i 38,548

i 152,283

Depreciation and amortization (including impairments)

i 2,263,144

i 2,382,339

i 2,930,571

i 7,937,048

i 7,884,229

i 8,465,824

Operating income

i 1,823,811

i 1,682,379

i 841,126

Other income (expense):

Interest expense (including interest expense to affiliates and related parties of $600 in 2018) (See Note 16)

( i 1,455,302)

( i 1,253,176)

( i 1,128,317)

Interest income (including interest income to affiliates and related parties of $2,429 and $6,496 in 2018 and 2017 respectively) (See Note 16)

i 5,709

i 13,228

i 1,039

Gain (loss) on investments and sale of affiliate interests, net

i 473,406

( i 261,536)

i 237,354

Gain (loss) on derivative contracts, net

( i 282,713)

i 218,848

( i 138,920)

Gain (loss) on interest rate swap contracts

( i 53,902)

( i 61,697)

i 5,482

Loss on extinguishment of debt and write-off of deferred financing costs

( i 228,130)

( i 7,883)

( i 53,988)

Other income (expense), net

i 1,181

( i 12,274)

( i 13,651)

( i 1,539,751)

( i 1,364,490)

( i 1,091,001)

Income (loss) before income taxes

i 284,060

i 317,889

( i 249,875)

Income tax benefit (expense)

( i 71,243)

( i 57,563)

i 2,827,751

Net income

i 212,817

i 260,326

i 2,577,876

Net income attributable to noncontrolling interests

( i 1,003)

( i 1,761)

( i 1,587)

Net income attributable to CSC Holdings, LLC sole member

i 211,814

i 258,565

i 2,576,289

See accompanying notes to consolidated financial statements.

F-17

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years ended December 31, 2019, 2018 and 2017

(In thousands)

2019

2018

2017

Net income

i 212,817

i 260,326

i 2,577,876

Other comprehensive income:

Defined benefit pension plans:

Unrecognized actuarial gain (loss)

i 12,074

i 830

( i 18,632)

Applicable income taxes

( i 3,644)

( i 220)

i 7,441

Unrecognized gain (loss) arising during period, net of income taxes

i 8,430

i 610

( i 11,191)

Amortization of actuarial losses

i 89

i —

Applicable income taxes

( i 24)

i —

Amortization of actuarial losses included in other expense, net of tax

i 65

i —

Settlement loss included in other expense, net

i 1,643

i 1,268

i 1,845

Applicable income taxes

( i 441)

( i 342)

( i 738)

Settlement loss included in other expense, net, net of income taxes

i 1,202

i 926

i 1,107

Curtailment loss

i —

( i 3,195)

Applicable income taxes

i —

i 1,278

Curtailment loss, net of income taxes

i —

( i 1,917)

Foreign currency translation adjustment

( i 1,164)

i 967

i —

Applicable income taxes

i —

( i 261)

i —

Foreign currency translation adjustment, net

( i 1,164)

i 706

i —

Other comprehensive income (loss)

i 8,533

i 2,242

( i 12,001)

Comprehensive income

i 221,350

i 262,568

i 2,565,875

Comprehensive income attributable to noncontrolling interests

( i 1,003)

( i 1,761)

( i 1,587)

Comprehensive income attributable to CSC Holdings, LLC's sole member

i 220,347

i 260,807

i 2,564,288

See accompanying notes to consolidated financial statements.

F-18

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL MEMBER'S EQUITY

(In thousands)

Accumulated Deficit/Retained Earnings

Other Member's Equity

Accumulated Other Comprehensive Income (Loss)

Total Member's Equity

Noncontrolling Interests

Total Equity

Balance at January 1, 2017

( i 685,576)

i 9,542,074

i 1,979

i 8,858,477

i 287

i 8,858,764

Net income attributable to CSC

Holdings' sole member

i 2,576,289

—

i 2,576,289

—

i 2,576,289

Net income attributable to

noncontrolling interests

—

i 1,587

Pension liability adjustments, net of income taxes

—

( i 12,001)

—

( i 12,001)

Share-based compensation expense

—

i 57,430

—

i 57,430

—

i 57,430

Change in redeemable equity

—

( i 163,141)

—

( i 163,141)

—

( i 163,141)

Contributions from Cablevision

—

i 761,316

—

i 761,316

—

i 761,316

Cash distributions to Cablevision

—

( i 2,777,498)

—

( i 2,777,498)

—

( i 2,777,498)

Distributions to non-controlling

interest

—

( i 335)

Recognition of previously unrealized excess tax benefits of share-based awards in connection with ASU 2016-09

i 143,859

—

i 143,859

—

i 143,859

Balance at December 31, 2017

i 2,034,572

i 7,420,181

( i 10,022)

i 9,444,731

i 1,539

i 9,446,270

See accompanying notes to consolidated financial statements.

F-19

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL MEMBER'S EQUITY (continued)

(In thousands)

Retained Earnings

Other Member's Equity

Accumulated Other Comprehensive Income (Loss)

Total Member's Equity

Noncontrolling Interests

Total Equity

Balance at January 1, 2018

i 2,034,572

i 7,420,181

( i 10,022)

i 9,444,731

i 1,539

i 9,446,270

Net income attributable to CSC

Holdings' sole member

i 258,565

—

i 258,565

—

i 258,565

Net income attributable to

noncontrolling interests

—

i 1,761

Contributions from noncontrolling

interests

—

i 5,995

Pension liability adjustments, net

of income taxes

—

i 1,536

—

i 1,536

Foreign currency translation

adjustment, net of income taxes

—

i 706

—

i 706

Share-based compensation

expense

—

i 59,812

—

i 59,812

—

i 59,812

Redeemable equity vested

—

i 169,452

—

i 169,452

—

i 169,452

Change in redeemable equity

—

( i 68,169)

—

( i 68,169)

—

( i 68,169)

Cash distributions

( i 1,672,031)

( i 1,386,716)

—

( i 3,058,747)

—

( i 3,058,747)

Contributions from Cablevision

—

i 50,000

—

i 50,000

—

i 50,000

Impact of i24 Acquisition

( i 73,578)

i 61,769

( i 1,840)

( i 13,649)

—

( i 13,649)

Adoption of ASU No. 2018-02

i 2,163

—

( i 2,163)

—

Cequel debt exchanged for CSC

Holdings debt

—

( i 2,854,392)

—

( i 2,854,392)

—

( i 2,854,392)

Balance at December 31, 2018

i 549,691

i 3,451,937

( i 11,783)

i 3,989,845

i 9,295

i 3,999,140

See accompanying notes to consolidated financial statements.

F-20

CSC HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL MEMBER'S EQUITY (continued)

(In thousands)

Retained Earnings

Other Member's Equity

Accumulated Other Comprehensive Loss

Total Member's Equity

Noncontrolling Interests

Total Equity

Balance at January 1, 2019

i 549,691

i 3,451,937

( i 11,783)

i 3,989,845

i 9,295

i 3,999,140

Net income attributable to CSC Holdings' sole member

i 211,814

—

i 211,814

—

i 211,814

Net income attributable to

noncontrolling interests

—

i 1,003

Distributions to noncontrolling

interests

—

( i 1,000)

Pension liability adjustments, net

of income taxes

—

i 9,697

—

i 9,697

Foreign currency translation

adjustment, net of income taxes

—

( i 1,164)

—

( i 1,164)

Share-based compensation

expense

—

i 99,077

—

i 99,077

—

i 99,077

Redeemable equity vested

—

i 187,967

—

i 187,967

—

i 187,967

Change in redeemable equity

—

( i 166,511)

—

( i 166,511)

—

( i 166,511)

Cash distributions to parent

( i 747,990)

( i 1,531,482)

—

( i 2,279,472)

—

( i 2,279,472)

Non-cash contributions from
parent

—

i 151,455

—

i 151,455

—

i 151,455

Impact of Cheddar acquisition

—

i 10,773

—

i 10,773

—

i 10,773

Assumption of Cablevision debt

and acquisition of Cablevision

assets

—

( i 169,334)

—

( i 169,334)

—

( i 169,334)

Balance at December 31, 2019

i 13,515

i 2,033,882

( i 3,250)

i 2,044,147

i 9,298

i 2,053,445

See accompanying notes to consolidated financial statements.

F-21

CSC HOLDINGS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31, 2019, 2018 and 2017

2019

2018

2017

Cash flows from operating activities:

Net income

i 212,817

i 260,326

i 2,577,876

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization (including impairments)

i 2,263,144

i 2,382,339

i 2,930,571

Non-cash restructuring charges

i 16,826

i —

Equity in net loss of affiliates

i —

i 10,849

i 10,040

Loss (gain) on investments and sale of affiliate interests, net

( i 473,406)

i 261,536

( i 237,354)

Loss (gain) on derivative contracts, net

i 282,713

( i 218,848)

i 138,920

Loss on extinguishment of debt and write-off of deferred financing costs

i 228,130

i 7,883

i 53,988

Amortization of deferred financing costs and discounts (premiums) on indebtedness

i 90,706

i 43,135

i 13,226

Settlement loss related to pension plan

i 1,732

i 1,268

i 1,845

Share-based compensation expense related to equity classified awards

i 99,078

i 59,812

i 57,430

Deferred income taxes

( i 238,709)

( i 251,593)

( i 3,026,782)

Non-cash lease expense

i 46,581

i —

Provision for doubtful accounts

i 91,520

i 71,426

i 74,183

Change in assets and liabilities, net of effects of acquisitions and dispositions:

Accounts receivable, trade

( i 91,718)

( i 144,079)

( i 89,683)

Other receivables

( i 12,512)

i 4,048

( i 12,707)

Prepaid expenses and other assets

( i 100,343)

( i 27,986)

( i 12,135)

Amounts due from and due to affiliates

i 247,917

i 175,159

( i 413,930)

Accounts payable

( i 33,107)

i 12,455

i 73,888

Accrued liabilities

( i 27,581)

( i 7,182)

( i 97,154)

Deferred revenue

( i 10,384)

i 72,426

i 20,634

Liabilities related to interest rate swap and derivative contracts

i 30,338

i 53,101

( i 921)

Net cash provided by operating activities

i 2,623,742

i 2,766,075

i 2,061,935

Cash flows from investing activities:

Capital expenditures

( i 1,355,350)

( i 1,153,589)

( i 951,349)

Payment for acquisitions, net of cash acquired

( i 172,269)

( i 10,753)

( i 46,703)

Sale of affiliate interest

i 1,958

( i 3,537)

i —

Proceeds related to sale of equipment, including costs of disposal

i 3,909

i 10,779

i 9,743

Decrease (increase) in other investments

i 354

( i 2,500)

( i 4,773)

Additions to other intangible assets

( i 4,071)

( i 584)

( i 1,707)

Net cash used in investing activities

( i 1,525,469)

( i 1,160,184)

( i 994,789)

See accompanying notes to consolidated financial statements.

F-22

CSC HOLDINGS LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years ended December 31, 2019, 2018 and 2017

2019

2018

2017

Cash flows from financing activities:

Proceeds from credit facility debt, net of discounts

i 5,040,000

i 3,489,313

i 5,593,675

Repayment of credit facility debt

( i 3,832,062)

( i 2,221,175)

( i 4,411,581)

Issuance of senior notes, including premiums

i 4,054,375

i 1,000,000

i —

Redemption of senior notes, including premiums and fees

( i 3,703,454)

( i 805,206)

( i 350,120)

Proceeds from collateralized indebtedness, net

i 93,000

i 516,513

i 838,794

Repayment of collateralized indebtedness and related derivative contracts, net

i —

( i 516,513)

( i 831,059)

Distributions to parent

( i 2,279,472)

( i 3,058,750)

( i 2,777,497)

Contributions from parent

i —

i 50,000

i 761,316

Proceeds from notes payable

i 65,854

i 15,955

i 33,733

Repayment of notes payable

( i 102,066)

( i 32,632)

i —

Principal payments on finance lease obligations

( i 8,980)

( i 10,228)

( i 15,157)

Additions to deferred financing costs

( i 23,583)

( i 28,471)

( i 8,171)

Contingent payment for acquisition

( i 500)

( i 30,000)

i —

Contributions from (distributions to) noncontrolling interests, net

( i 1,000)

i 5,995

( i 335)

Net cash used in financing activities

( i 697,888)

( i 1,625,199)

( i 1,166,402)

Net increase (decrease) in cash and cash equivalents

i 400,385

( i 19,308)

( i 99,256)

Effect of exchange rate changes on cash and cash equivalents

( i 1,166)

( i 26)

i —

Net increase (decrease) in cash and cash equivalents

i 399,219

( i 19,334)

( i 99,256)

Cash, cash equivalents and restricted cash at beginning of year

i 298,784

i 318,118

i 417,374

Cash, cash equivalents and restricted cash at end of year

i 698,003

i 298,784

i 318,118

See accompanying notes to consolidated financial statements.

F-23

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 1. i DESCRIPTION OF BUSINESS AND RELATED MATTERS

The Company and Related Matters

Altice USA, Inc. ("Altice USA") was incorporated in Delaware on September 14, 2015. Through June 8, 2018, Altice USA was majority-owned by Altice Europe N.V. ("Altice Europe"), a public company with limited liability (naamloze vennootshcap) under Dutch law. On June 8, 2018, Altice Europe distributed substantially all of its equity interest in the Company through a distribution in kind to holders of Altice Europe's common shares A and common shares B (the “Distribution”). Altice USA is now majority-owned by Patrick Drahi through Next Alt. S.a.r.l. ("Next Alt").

Altice USA is a holding company that does not conduct any business operations of its own. Altice Europe, through a subsidiary, acquired Cequel Corporation ("Cequel" or "Suddenlink") on December 21, 2015 and Cequel was contributed to Altice USA on June 9, 2016. Altice USA acquired Cablevision Systems Corporation ("Cablevision" or "Optimum") on June 21, 2016.

Altice USA, through CSC Holdings, LLC (a wholly-owned subsidiary of Cablevision) and its consolidated subsidiaries ("CSC Holdings," and collectively with Altice USA, the "Company"), principally provides broadband communications and video services in the United States. It markets its residential services primarily under two brands: Optimum, in the New York metropolitan area, and Suddenlink, principally in markets in the south-central United States. It operates enterprise services under the brands Lightpath and Altice Business. It delivers broadband, video, telephony services, proprietary content and advertising services to residential and business customers. In September 2019, the Company launched Altice Mobile, a full service voice and data offering, to consumers across its footprint. As these brands are managed on a consolidated basis, the Company classifies its operations in i one segment.

The accompanying combined consolidated financial statements ("consolidated financial statements") of Altice USA include the accounts of Altice USA and its majority-owned subsidiaries and the accompanying consolidated financial statements of CSC Holdings include the accounts of CSC Holdings and its majority-owned subsidiaries and gives effect to the ATS Acquisition and the i24 Acquisition discussed below. Altice USA has no business operations independent of its CSC Holdings subsidiary, whose operating results and financial position are consolidated into Altice USA. The consolidated balance sheets and statements of operations of Altice USA are essentially identical to the consolidated balance sheets and statements of operations of CSC Holdings, with the following significant exceptions: Altice USA has additional cash and deferred taxes on its consolidated balance sheet and as of December 31, 2018, Altice USA also had additional senior notes aggregating $ i 1,095,193 issued by Cablevision Systems Corporation, its wholly owned subsidiary, on its consolidated balance sheet. In addition, CSC Holdings and its subsidiaries have certain intercompany receivables from and payables to Altice USA. Differences between Altice USA's results of operations and those of CSC Holdings primarily include incremental interest expense for periods prior to the assumption of Cablevision senior notes by CSC Holdings in November 2019, interest income, loss on extinguishment of debt, the write-off of deferred financing costs, and income tax benefit.

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

The accompanying consolidated financial statements also reflect the retrospective adoption of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers and ASU No. 2017‑07 Compensation-Retirement Benefits (Topic 715). See Note 4 for further details of the impact on the Company's historical financial statements.

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

F-24

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Acquisition of Neptune Holding US Limited Partnership

In December 2019, Altice USA entered into an agreement with CVC 3 B.V., an indirect subsidiary of Altice Europe ("CVC 3"), whereby CVC 3 assigned all of its interest (the "Partnership Interest") in Neptune Holding US Limited Partnership (“Neptune LP”) to Altice USA in exchange for i 6,290,292 shares of Class A common stock of Altice USA with an aggregate value of $ i 163,862. At the time of the assignment, the Partnership Interest represented i 6,290,292 shares of Class A common stock of Altice USA held by Neptune LP. As a result of this transaction, Altice USA obtained control of Neptune LP and accordingly, Neptune LP is consolidated within the Altice USA financial statements. The assets of Neptune LP which consisted solely of shares of class A common stock of Altice USA are presented as treasury stock in the consolidated balance sheet of Altice USA at December 31, 2019.

Acquisition of Altice Technical Services US Corp

Altice Technical Services US Corp. ("ATS") was formed to provide network construction and maintenance services and commercial and residential installations, disconnections, and maintenance. During the second quarter of 2017, a portion of the Company's technical workforce became employees of ATS and ATS commenced operations and began to perform services for the Company. Another portion of the Company's technical workforce became employees of ATS in December 2017. Additionally, in the second quarter of 2017, the Company entered into an Independent Contractor Agreement with ATS that governed the terms of the services provided to the Company and entered into a Transition Services Agreement for the use of the Company's resources to provide various overhead functions to ATS, including accounting, legal and human resources and for the use of certain facilities, vehicles and technician tools during a transitional period. The Transition Services Agreement required ATS to reimburse the Company for its cost to provide such services.

In January 2018, the Company acquired i 70% of the equity interests in ATS for $ i 1.00 (the "ATS Acquisition") and the Company became the owner of i 100% of the equity interests in ATS in March 2018. ATS was previously owned by Altice Europe and a member of ATS's management through a holding company. As the acquisition is a combination of businesses under common control, the Company combined the results of operations and related assets and liabilities of ATS for all periods since its formation. See Note 4 for the impact of the ATS Acquisition on the Company's consolidated statement of operations for the year ended December 31, 2017. In connection with the ATS Acquisition, the Company recorded goodwill of $ i 23,101, representing the amount previously transferred to ATS.

Acquisition of i24NEWS

In April 2018, Altice Europe transferred its ownership of i24 US and i24 Europe ("i24NEWS"), Altice Europe's 24/7 international news and current affairs channels to the Company for minimal consideration (the "i24 Acquisition"). As the acquisition was a combination of businesses under common control, the Company combined the results of operations and related assets and liabilities of i24NEWS as of April 1, 2018. Operating results for periods prior to April 1, 2018 have not been revised to reflect the i24 Acquisition as the impact was deemed immaterial.

Initial Public Offering

In June 2017, Altice USA completed its initial public offering ("IPO") of i 71,724,139 shares of its Class A common stock ( i 12,068,966 shares sold by Altice USA and i 59,655,173 shares sold by existing stockholders) at a price to the public of $ i 30.00 per share, including the underwriters full exercise of their option to purchase i 7,781,110 shares to cover overallotments. At the date of the IPO, Altice Europe owned approximately i 70.2% of Altice USA''s issued and outstanding common stock, which represented approximately i 98.2% of the voting power of Altice USA's outstanding common stock. Altice USA’s Class A common stock began trading on June 22, 2017, on the New York Stock Exchange under the symbol "ATUS".

In connection with the sale of its Class A common stock, Altice USA received proceeds of approximately $ i 362,069, before deducting the underwriting discount and expenses directly related to the issuance of the securities of $ i 12,998. Altice USA did not receive any proceeds from the sale of shares by the selling stockholders. In July 2017, the Altice USA used approximately $ i 350,120 of the proceeds to fund the redemption of $ i 315,779 principal amount of i 10.875% senior notes that matured in 2025 issued by CSC Holdings and the related call premium of approximately $ i 34,341.

The following organizational transactions were consummated prior to the IPO:

•Altice USA amended and restated its certificate of incorporation to, among other things, provide for Class A common stock, Class B common stock and Class C common stock;

F-25

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

•BC Partners LLP ("BCP") and Canada Pension Plan Investment Board ("CPPIB" and together with BCP, the "Sponsors") and Uppernext S.C.S.p. ("Uppernext"), an entity controlled by Mr. Patrick Drahi (founder and controlling stockholder of Altice Europe), exchanged their indirect ownership interest in Altice USA for shares of Altice USA’s common stock;

•Neptune Management LP ("Management LP") redeemed its Class B units for shares of Altice USA’s common stock that it received from the redemption of its Class B units in Neptune LP;

•Altice USA converted $ i 525,000 aggregate principal amount of notes issued by Altice USA to the Sponsors (together with accrued and unpaid interest and applicable premium) into shares of Altice USA’s common stock at the IPO price (see Note 11 for further details);

•$ i 1,225,000 aggregate principal amount of notes issued by Altice USA to a subsidiary of Altice Europe (together with accrued and unpaid interest and applicable premium) was transferred to CVC 3 B.V., and then Altice USA converted such notes into shares of Altice USA’s common stock at the IPO price (see Note 11 for further details);

•the Sponsors, Neptune LP, A4 S.A. (an entity controlled by the family of Mr. Drahi), and former Class B unitholders of Management LP (including Uppernext) exchanged shares of Altice USA’s common stock for new shares of Altice USA’s Class A common stock; and

•CVC 3 and A4 S.A. exchanged shares of Altice USA’s common stock for new shares of Altice USA’s Class B common stock.

Altice Europe Distribution

On June 8, 2018, Altice Europe distributed substantially all of its equity interest in Altice USA through a distribution in kind to holders of Altice Europe's common shares A and common shares B (the "Distribution'). The Distribution took place by way of a special distribution in kind by Altice Europe of its i 67.2% interest in Altice USA to Altice Europe shareholders. Each shareholder of Altice Europe on May 23, 2018, the Distribution record date, received i 0.4163 shares of Altice USA's common stock for every share held by such shareholder in Altice Europe.

Prior to Altice Europe's announcement of the Distribution, the Board of Directors of Altice USA, acting through its independent directors, approved the payment of a $ i 2.035 per share dividend to all shareholders of record on May 22, 2018. The payment of the dividend, aggregating $ i 1,499,935, was made on June 6, 2018, and was funded with cash at CSC Holdings from financings completed in January 2018, and cash generated from operations. In connection with the payment of the dividend, Altice USA recorded a decrease in retained earnings of $ i 536,224, representing the cumulative earnings through the payment date, and a decrease in paid in capital of $ i 963,711.

Immediately following the Distribution, there were i 489,384,523 shares of Altice USA Class A common stock and i 247,684,443 shares of Altice USA Class B common stock outstanding.

In connection with the Distribution, the Management Advisory and Consulting Services Agreement with Altice Europe which provided certain consulting, advisory and other services was terminated. See Note 16 for further details.

Stock Repurchase Plan

In June 2018, the Board of Directors of Altice USA authorized a share repurchase program of $ i 2.0 billion, and on July 30, 2019, the Board of Directors authorized a new incremental three-year share repurchase program of $ i 5.0 billion that took effect following the completion in August 2019 of the $ i 2.0 billion repurchase program. Under these repurchase programs, shares of Altice USA Class A common stock may be purchased from time to time in the open market and may include trading plans entered into with one or more brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. Size and timing of these purchases will be determined based on market conditions and other factors.

For the year ended December 31, 2019, Altice USA repurchased an aggregate of i 72,668,712 shares for a total purchase price of approximately $ i 1,686,873. From inception through December 31, 2019, Altice USA repurchased an aggregate of i 100,697,392 shares for a total purchase price of approximately $ i 2,186,874. These acquired shares were retired and the cost of these shares was recorded in paid in capital in Altice USA's consolidated balance sheet. As of December 31, 2019, Altice USA had approximately $ i 4,813,126 of availability remaining under the incremental share repurchase program and had i 632,995,139 combined Class A and Class B shares outstanding.

F-26

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

NOTE 2. i SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Summary of Significant Accounting Policies

Revenue Recognition

Residential Services

The Company derives revenue through monthly charges to residential customers of its broadband, video, and telephony services, including installation services. In addition, the Company derives revenue from digital video recorder ("DVR"), video-on-demand ("VOD"), pay-per-view, and home shopping commissions which are reflected in "Residential video" revenues. The Company recognizes broadband, video, and telephony revenues as the services are provided to a customer on a monthly basis. Revenue from the sale of bundled services at a discounted rate is allocated to each product based on the standalone selling price of each performance obligation within the bundled offer. The standalone selling price requires judgment and is typically determined based on the current prices at which the separate services are sold by the Company. Installation revenue for the Company's residential services is deferred and recognized over the benefit period, which is estimated to be less than one year. The estimated benefit period takes into account both quantitative and qualitative factors including the significance of average installation fees to total recurring revenue per customer.

The Company is assessed non-income related taxes by governmental authorities, including franchising authorities (generally under multi-year agreements), and collects such taxes from its customers. In instances where the tax is being assessed directly on the Company, amounts paid to the governmental authorities are recorded as programming and other direct costs and amounts received from the customers are recorded as revenue. For the years ended i December 31, 2019, 2018 and 2017, the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $ i 254,227, $ i 257,467 and $ i 259,075, respectively.

Business and Wholesale Revenue

The Company derives revenue from the sale of products and services to both large enterprise and small and medium-sized business ("SMB") customers, including broadband, telephony, networking, and video services reflected in "Business services and wholesale" revenues. The Company's business services also include Ethernet, data transport, and IP-based virtual private networks. The Company also provides managed services to businesses, including hosted telephony services (cloud based SIP-based private branch exchange), managed WiFi, managed desktop and server backup and managed collaboration services including audio and web conferencing. The Company also offers fiber-to-the-tower services to wireless carriers for cell tower backhaul and enable wireline communications service providers to connect to customers that their own networks do not reach. The Company recognizes revenues for these services as the services are provided to a customer on a monthly basis.

Substantially all of our SMB customers are billed monthly and large enterprise customers are billed in accordance with the terms of their contracts which is typically also on a monthly basis. Contracts with large enterprise customers typically range from i three years to i five years. Installation revenue related to our large enterprise customers is deferred and recognized over the average contract term. Installation revenue related to SMB customers is deferred and recognized over the benefit period, which is less than one year. The estimated benefit period for SMB customers takes into account both quantitative and qualitative factors including the significance of average installation fees to total recurring revenue per customer.

News and Advertising Revenue

As part of the agreements under which the Company acquires video programming, the Company typically receives an allocation of scheduled advertising time during such programming into which the Company's cable systems can insert commercials. In several of the markets in which the Company operates, it has entered into agreements commonly referred to as interconnects with other cable operators to jointly sell local advertising. In some of these markets, the Company represents the advertising sales efforts of other cable operators; in other markets, other cable operators represent the Company. Advertising revenues are recognized when commercials are aired. Arrangements in which the Company controls the sale of advertising and acts as the principal to the transaction, the Company recognizes revenue earned from the advertising customer on a gross basis and the amount remitted to the distributor as an operating expense. Arrangements in which the Company does not control the sale of advertising and acts as an agent to the transaction, the Company recognizes revenue net of any fee remitted to the distributor.

F-27

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The Company's advanced advertising businesses provide data-driven, audience-based advertising solutions using advanced analytics tools that provide granular measurement of consumer groups, accurate hyper-local ratings and other insights into target audience behavior not available through traditional sample-based measurement services. Revenue earned from the Company's advanced advertising businesses are recognized when services are provided.

Affiliation fee revenue derived by our news business is recognized as the programming services are provided.

Mobile Revenue

In September 2019, the Company commercially launched Altice Mobile, a mobile service providing data, talk and text to consumers in or near our service areas. Customers can purchase or finance a variety of mobile devices. Revenue from the sales of devices is recognized at the time of sale. Customers are billed monthly, in advance, for access to and usage of our mobile services. The Company recognizes mobile service revenue as the services are provided to the customers.

Other Revenue

Revenues derived from other sources are recognized when services are provided or events occur.

Contract Assets

Incremental costs incurred in obtaining a contract with a customer are deferred and recorded as a contract asset if the period of benefit is expected to be greater than one year. Sales commissions for enterprise and certain SMB customers are deferred and amortized over the average contract term. For sales commission expenses related to residential and SMB customers with a term of one year or less, the Company is utilizing the practical expedient and is recognizing the costs when incurred. The costs of fulfilling a contract with a customer are deferred and recorded as a contract asset if they generate or enhance resources of the Company that will be used in satisfying future performance obligations and are expected to be recovered. Installation costs related to residential and SMB customers that are not capitalized as part of the initial deployment of new customer premise equipment are expensed as incurred pursuant to industry-specific guidance.

The following table provides information about contracts assets and contract liabilities related to contracts with customers:

December 31,

2019

2018

Contract assets (a)

i 30,758

i 26,405

Deferred revenue (b)

i 182,034

i 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 portion of the Company's deferred revenue represents payments for services for up to one month in advance from residential and SMB customers which is realized within the following month as services are performed and the remaining portion is recognized over the contract period.

A significant portion of our revenue is derived from residential and SMB customer contracts which are month-to month. As such, the amount of revenue related to unsatisfied performance obligations is not necessarily indicative of the future revenue to be recognized from our existing customer base. Contracts with enterprise customers generally range from i three years to i five years, and services may only be terminated in accordance with the contractual terms.

F-28

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The following table presents the composition of revenue:

Years Ended December 31,

2019

2018

2017

Residential:

Broadband

i 3,222,605

i 2,887,455

i 2,608,595

Video

i 3,997,873

i 4,156,428

i 4,274,122

Telephony

i 598,694

i 652,895

i 700,765

Business services and wholesale

i 1,428,532

i 1,362,758

i 1,298,213

News and advertising

i 475,904

i 487,264

i 396,187

Mobile

i 21,264

i —

Other

i 15,987

i 19,808

i 29,068

Total revenue

i 9,760,859

i 9,566,608

i 9,306,950

Multiple-Element Transactions

In the normal course of business, the Company may enter into multiple-element transactions where it is simultaneously both a customer and a vendor with the same counterparty or in which it purchases multiple products and/or services, or settles outstanding items contemporaneously with the purchase of a product or service, from a single counterparty. The Company's policy for accounting for each transaction negotiated contemporaneously is to record each deliverable of the transaction based on its best estimate of selling price in a manner consistent with that used to determine the price to sell each deliverable on a standalone basis. In determining the fair value of the respective deliverable, the Company utilizes historical transactions, quoted market prices (as available), or comparable transactions.

Technical and Operating Expenses

Costs of revenue related to sales of services and goods are classified as "programming and other direct costs" in the accompanying consolidated statements of operations.

Programming Costs

Programming expenses related to the Company's video service represent fees paid to programming distributors to license the programming distributed to customers. This programming is acquired generally under multi-year distribution agreements, with rates usually based on the number of customers that receive the programming. If there are periods when an existing distribution agreement has expired and the parties have not finalized negotiations of either a renewal of that agreement or a new agreement for certain periods of time, the Company continues to carry and pay for these services until execution of definitive replacement agreements or renewals. The amount of programming expense recorded during the interim period is based on the Company's estimates of the ultimate contractual agreement expected to be reached, which is based on several factors, including previous contractual rates, customary rate increases and the current status of negotiations. Such estimates are adjusted as negotiations progress until new programming terms are finalized.

In addition, the Company has received, or may receive, incentives from programming distributors for carriage of the distributors' programming. The Company generally recognizes these incentives as a reduction of programming costs in "programming and other direct costs", generally over the term of the distribution agreement.

i Advertising Expenses

Advertising costs are charged to expense when incurred and are reflected in "other operating expenses" in the accompanying consolidated statements of operations. Advertising costs amounted to $ i 233,326, $ i 240,273 and $ i 224,120 for the years ended i December 31, 2019, 2018 and 2017, respectively.

Share-Based Compensation

Share-based compensation cost expense which primarily relates to awards of units in a carried unit plan and stock options is based on the fair value of share-based payment awards at the date of grant.

F-29

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

For carried interest units, the Company measures share-based compensation cost at the grant date fair value and recognizes the expense over the requisite service period or when it is probable any related performance condition will be met. For carried interest units with graded vesting, compensation cost is recognized on an accelerated method under the graded vesting method over the requisite service period. Share-based compensation cost related to carried interest units that vest entirely at the end of the vesting period are expensed on a straight-line basis.

The grant date fair value of carried interest units was estimated using an option pricing model. Key inputs that were used in applying the option pricing method were total equity value, equity volatility, risk free rate and time to liquidity event. The estimate of total equity value was determined using a combination of the income approach, which incorporated cash flow projections that were discounted at an appropriate rate, and the market approach, which involved applying a market multiple to the Company’s projected operating results. The Company estimated volatility based on the historical equity volatility of comparable publicly-traded companies. Subsequent to the IPO, such subjective valuations and estimates were no longer necessary as the Company relied on the market price of the Company’s common stock to determine the fair value of share-based compensation awards.

For stock option awards, the Company recognizes compensation expense based on the estimated grant date fair value using the Black-Scholes valuation model and amortizes the fair value to share-based compensation expense over the requisite service period.

See Note 15 to the consolidated financial statements for additional information about our share-based compensation.

i Income Taxes

The Company's provision for income taxes is based on current period income, changes in deferred tax assets and liabilities and changes in estimates with regard to uncertain tax positions. Deferred tax assets are subject to an ongoing assessment of realizability. The Company provides deferred taxes for the outside basis difference of its investment in partnerships.

Cash and Cash Equivalents

The Company's cash investments are placed with money market funds and financial institutions that are investment grade as rated by S&P Global Ratings and Moody's Investors Service. The Company selects money market funds that predominantly invest in marketable, direct obligations issued or guaranteed by the United States government or its agencies, commercial paper, fully collateralized repurchase agreements, certificates of deposit, and time deposits.

The Company considers the balance of its investment in funds that substantially hold securities that mature within three months or less from the date the fund purchases these securities to be cash equivalents. The carrying amount of cash and cash equivalents either approximates fair value due to the short-term maturity of these instruments or are at fair value.

Accounts Receivable

Accounts receivable are recorded at net realizable value. The Company periodically assesses the adequacy of valuation allowances for uncollectible accounts receivable by evaluating the collectability of outstanding receivables and general factors such as historical collection experience, length of time individual receivables are past due, and the economic and competitive environment.

i Investment Securities

Investment securities and investment securities pledged as collateral are carried at fair value with realized and unrealized holding gains and losses included in the consolidated statements of operations.

Long-Lived Assets and Amortizable Intangible Assets

Property, plant and equipment, including construction materials, are carried at cost, and include all direct costs and certain indirect costs associated with the construction of cable systems, and the costs of new equipment installations. Equipment under finance leases is recorded at the present value of the total minimum lease payments. Depreciation on equipment is calculated on the straight-line basis over the estimated useful lives of the assets or, with respect to equipment under finance lease obligations and leasehold improvements, amortized over the shorter of the lease term or the assets' useful lives and reported in depreciation and amortization (including impairments) in the consolidated statements of operations.

F-30

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

i The Company capitalizes certain internal and external costs incurred to acquire or develop internal-use software. Capitalized software costs are amortized over the estimated useful life of the software and reported in depreciation and amortization.

i Customer relationships, trade names and other intangibles established in connection with acquisitions that are finite-lived are amortized in a manner that reflects the pattern in which the projected net cash inflows to the Company are expected to occur, such as the sum of the years' digits method, or when such pattern does not exist, using the straight-line basis over their respective estimated useful lives.

i The Company reviews its long-lived assets (property, plant and equipment, and intangible assets subject to amortization that arose from acquisitions) for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and the value of franchises acquired in purchase business combinations which have indefinite useful lives are not amortized. Rather, such assets are tested for impairment annually or upon the occurrence of a triggering event.

The Company assesses qualitative factors for its reporting units that carry goodwill. If the qualitative assessment results in a conclusion that it is more likely than not that the fair value of a reporting unit exceeds the carrying value, then no further testing is performed for that reporting unit.

When the qualitative assessment is not used, or if the qualitative assessment is not conclusive and it is necessary to calculate the fair value of a reporting unit, then the impairment analysis for goodwill is performed at the reporting unit level using a two-step approach. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of the reporting unit with its carrying amount, including goodwill utilizing an enterprise-value based premise approach. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of goodwill impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill which would be recognized in a business combination.

The Company assesses qualitative factors to determine whether it is necessary to perform the one-step quantitative identifiable indefinite-lived intangible assets impairment test. This quantitative test is required only if the Company concludes that it is more likely than not that a unit of accounting’s fair value is less than its carrying amount. When the qualitative assessment is not used, or if the qualitative assessment is not conclusive, the impairment test for other intangible assets not subject to amortization requires a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

F-31

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Deferred Financing Costs

Deferred financing costs are being amortized to interest expense using the effective interest method over the terms of the related debt.

i Derivative Financial Instruments

The Company accounts for derivative financial instruments as either assets or liabilities measured at fair value. The Company uses derivative instruments to manage its exposure to market risks from changes in certain equity prices and interest rates and does not hold or issue derivative instruments for speculative or trading purposes. These derivative instruments are not designated as hedges, and changes in the fair values of these derivatives are recognized in the consolidated statements of operations as gain (loss) on derivative contracts or gain (loss) on interest rate swap contracts.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when the Company believes it is probable that a liability has been incurred and the amount of the contingency can be reasonably estimated.

i Foreign Currency

Certain of the Company's i24NEWS subsidiaries are located outside the United States. The functional currency for these subsidiaries is determined based on the primary economic environment in which the subsidiary operates. Revenues and expenses for these subsidiaries are translated into U.S. dollars using rates that approximate those in effect during the period while the assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of each period. The resulting gains and losses from these translations are recognized in cumulative translation adjustment included in accumulated other comprehensive loss in stockholders’ equity on the consolidated balance sheets.

Common Stock of Altice USA

Each holder of Class A common stock has i one vote per share while holders of Class B common stock have i twenty-five votes per share. Class B shares can be converted to Class A common stock at anytime with a conversion ratio of i one Class A common share for one Class B common share.

The following table provides details of Altice USA's shares of common stock outstanding:

Shares of Common Stock Outstanding

Class A
Common Stock

Class B
Common Stock

Balance at June 21, 2017 and December 31, 2017

i 246,982,292

i 490,086,674

Altice Europe Distribution on June 8, 2018 (see Note 1)

i 242,402,231

( i 242,402,231)

Conversion of Class B common stock to Class A common stock

i 34,708,184

( i 34,708,184)

Retirement of Class A common shares in connection with the Company's stock

repurchase plan (see Note 1)

( i 28,028,680)

i —

Balance at December 31, 2018

i 496,064,027

i 212,976,259

Conversion of Class B common stock to Class A common stock

i 26,730,427

( i 26,730,427)

Issuance of common shares

i 6,897,190

i —

Option exercises

i 184,147

i —

Retirement of Class A common shares in connection with the Company's stock

repurchase plan (see Note 1)

( i 72,668,712)

i —

Treasury shares (a)

( i 10,457,772)

i —

Balance at December 31, 2019

i 446,749,307

i 186,245,832

(a)Primarily represent Altice USA shares held by Neptune LP which are presented as treasury stock in the consolidated balance sheet of Altice USA at December 31, 2019.

F-32

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

CSC Holdings Membership Interests

As of December 31, 2019 and 2018, CSC Holdings had i 100 membership units issued and outstanding, which are all indirectly owned by Altice USA.

Dividends and Distributions

Altice USA

Altice USA may pay dividends on its capital stock only from net profits and surplus as determined under Delaware law. If dividends are paid on the Altice USA common stock, holders of the Altice USA Class A common stock and Altice USA Class B common stock are entitled to receive dividends, and other distributions in cash, stock or property, equally on a per share basis, except that stock dividends with respect to Altice USA Class A common stock may be paid only with shares of Altice USA Class A common stock and stock dividends with respect to Altice USA Class B common stock may be paid only with shares of Altice USA Class B common stock.

The Company's indentures restrict the amount of dividends and distributions in respect of any equity interest that can be made.

During 2019, there were no dividends paid to shareholders by Altice USA. In 2018, Altice USA paid dividends of $ i 1,499,935 (see discussion in Note 1). Prior to Altice USA's IPO, Altice USA declared and paid cash distributions to stockholders aggregating $ i 839,700 in the second quarter of 2017. In 2016, Altice USA declared cash distributions of $ i 445,176 of which $ i 365,559 were paid in 2016 and $ i 79,617 were paid in the first quarter of 2017.

CSC Holdings

CSC Holdings may make distributions in the future on its membership interests only if sufficient funds exist as determined under Delaware law.

CSC Holdings made cash equity distribution payments to Cablevision aggregating $ i 2,279,472, $ i 3,058,747, and $ i 2,777,498, respectively, during the years ended December 31, 2019, 2018 and 2017. In connection with CSC Holdings' distributions to Cablevision, CSC Holdings recorded a decrease in retained earnings of $ i 747,990, representing the cumulative earnings through the distribution dates, and a decrease in other member's equity of $ i 1,531,482.

Net Income Per Share

Basic net income per common share attributable to Altice USA stockholders is computed by dividing net income attributable to Altice USA stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share attributable to Altice USA stockholders reflects the dilutive effects of stock options and restricted stock. Diluted net loss per common share attributable to Altice USA stockholders excludes the effects of common stock equivalents as they are anti-dilutive.

The weighted average shares used in the calculation of the diluted net income per share attributable to Altice USA stockholders for the year ended December 31, 2019 includes weighted average common stock equivalents totaling approximately i 2,157,000 shares. Weighted average common stock equivalents aggregating approximately i 4,245,000 were anti-dilutive and not included in the calculation for the year ended December 31, 2019.

The weighted average shares used in the calculation of the diluted net income per share attributable to Altice USA stockholders for the years ended December 31, 2018 and 2017 is the same as the weighted average shares used in the calculation of basic net income per share as the weighted average common stock equivalents totaling approximately i 6,292,000 and i 14,000 shares, respectively, were anti-dilutive.

F-33

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Concentrations of Credit Risk

Financial instruments that may potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents and trade account receivables. The Company monitors the financial institutions and money market funds where it invests its cash and cash equivalents with diversification among counterparties to mitigate exposure to any single financial institution. The Company's emphasis is primarily on safety of principal and liquidity and secondarily on maximizing the yield on its investments. Management believes that no significant concentration of credit risk exists with respect to its cash and cash equivalents because of its assessment of the creditworthiness and financial viability of the respective financial institutions.

The Company did not have a single customer that represented i 10% or more of its consolidated revenues for the years ended i December 31, 2019, 2018 and 2017 or i 10% or more of its consolidated net trade receivables at i December 31, 2019, and 2018, respectively.

Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. See Note 13 for a discussion of fair value estimates.

Reclassifications

Certain reclassifications have been made to the 2018 and 2017 financial statements to conform to the 2019 presentation.

NOTE 3. i ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

Accounting Standards Codification ("ASC"), Topic 842, Leases ("ASC 842")

On January 1, 2019, the Company adopted Financial Accounting Standards Board ("FASB") ASC 842, which increases transparency and comparability by recognizing a lessee’s rights and obligations resulting from leases by recording them on the balance sheet as lease assets and lease liabilities. The new guidance requires the recognition of the right-of-use ("ROU") assets and related operating and finance lease liabilities on the balance sheet. The Company adopted the new guidance using the modified retrospective approach with a cumulative-effect adjustment recorded on January 1, 2019. As a result, the consolidated balance sheet as of December 31, 2018 was not restated and is not comparative. See Note 9 for a further information regarding the adoption of ASC 842.

Accounting Standards Update ("ASU") No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income ("ASU 2018-02")

During the first quarter of 2018, the Company adopted ASU 2018-02. The primary provision of ASU 2018-02 allows for the reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 also requires certain disclosures about stranded tax effects. The adoption resulted in the reclassification of stranded tax amounts of $ i 2,163 associated with net unrecognized losses from the Company's pension plans from accumulated other comprehensive loss to retained earnings.

ASU No. 2017-09, Compensation-Stock Compensation (Topic 718) ("ASU 2017-09")

On January 1, 2018, the Company adopted ASU No. 2017-09 which provides clarity and guidance on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The adoption of ASU 2017-09 had no impact to the Company's consolidated financial statements.

ASU No. 2017-07, Compensation-Retirement Benefits (Topic 715) ("ASU 2017-07")

On January 1, 2018, the Company adopted ASU 2017-07 and was applied retrospectively. ASU No. 2017-07 requires that an employer disaggregate the service cost component from the other components of net benefit cost. It also provides guidance on how to present the service cost component and the other components of net benefit cost in the income statement and what component of net benefit cost is eligible for capitalization. As a result of the adoption, the Company reclassified the non-service cost components of the Company's pension expense for the year

F-34

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

ended December 2017 and 2016 from other operating expenses to other income (expense), net. The Company elected to apply the practical expedient which allowed it to reclassify amounts disclosed previously in the benefits plan note as the basis for applying retrospective presentation for comparative periods, as the Company determined it was impracticable to disaggregate the cost components for amounts capitalized and amortized in those periods. See Note 4 for information on the impact of the adoption of ASU 2017-07.

ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business ("ASU No. 2017-01")

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which amends Topic 805 to interpret the definition of a business by adding guidance to assist in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company adopted the new guidance on January 1, 2018 and it had no impact to the Company's consolidated financial statements.

ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers ("ASU No. 2016-20")

In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, in order to clarify the Codification and to correct any unintended application of the guidance. The amendments in this update affected the guidance in ASC 606. ASC 606 was adopted by the Company on January 1, 2018 on a full retrospective basis, which required the Company to reflect the impact of the updated guidance for all periods presented. The adoption of ASC 606 did not have a material impact on the Company’s financial position or results of operations. See Note 4 for information on the impact of the adoption of ASC 606.

ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18")

In November 2016, the FASB issued ASU No. 2016-18 which requires that the statement of cash flows disclose the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Restricted cash should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. ASU 2016-18 provides specific guidance on the presentation of restricted cash in the statement of cash flows. ASU 2016-18 was adopted by the Company on January 1, 2018 and was applied retrospectively for all periods presented.

ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15")

In August 2016, the FASB issued ASU No. 2016-15 which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The Company adopted the new guidance on January 1, 2018 and it had no impact to the Company's consolidated financial statements.

ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities ("ASU 2016-01")

In January 2016, the FASB issued ASU 2016-01 which modifies how entities measure certain equity investments and also modifies the recognition of changes in the fair value of financial liabilities measured under the fair value option. Entities will be required to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. For financial liabilities measured using the fair value option, entities will be required to record changes in fair value caused by a change in instrument-specific credit risk (own credit risk) separately in other comprehensive income. ASU 2016-01 was adopted by the Company on January 1, 2018 and it had no impact to the Company's consolidated financial statements.

ASU No. 2014-09, Revenue from Contracts with Customers ("ASC 606")

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASC 606"), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASC 606 replaced most existing revenue recognition guidance in GAAP. The Company adopted the guidance pursuant to ASC 606 on January 1, 2018. See Note 4 for information on the impact of the adoption of ASC 606.

F-35

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Recently Issued But Not Yet Adopted Accounting Pronouncements

ASU No. 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12")

In December 2019, the FASB issued ASU 2019-12 which provides amendments to simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 becomes effective for the Company on January 1, 2021. Early adoption of the amendments is permitted, including adoption in any interim period for public business entities for periods for which financial statements have not yet been issued. The Company is currently in the process of evaluating the impact that the adoption of ASU 2019-12 will have on its consolidated financial statements.

ASU No. 2018-15, Customer’s Accounting for Implementation Costs in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15")

In August 2018, the FASB issued ASU 2018-15 which requires upfront implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract to be amortized to hosting expense over the term of the arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. ASU 2018-15 became effective for the Company on January 1, 2020 and will be applied prospectively.

ASU No. 2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14")

In August 2018, the FASB issued ASU 2018-14 which amends ASC 715 to clarify certain disclosure requirements related to defined benefit pension and other postretirement plans. ASU 2018-14 becomes effective for the Company for its annual and interim reporting periods beginning December 31, 2020, although early adoption is permitted. The Company does not expect the adoption of ASU 2018-14 to have a material impact on its consolidated financial statements.

ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350) ("ASU 2017-04")

In January 2017, the FASB issued ASU 2017-04 which simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual, or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 became effective for the Company on January 1, 2020 and will be applied prospectively.

ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13")

In June 2016, the FASB issued ASU 2016-13 which requires a financial asset (or a group of financial assets) measured at amortized cost to be assessed for impairment under the current expected credit loss model rather than an incurred loss model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 become effective for the Company on January 1, 2020 and will be applied prospectively.

NOTE 4. CHANGE IN ACCOUNTING POLICIES AND ATS ACQUISITION

Adoption of ASC 606 - Revenue from Contracts with Customers

On January 1, 2018, the Company adopted the guidance pursuant to ASC 606. The Company elected to apply the guidance on a full retrospective basis, which required the Company to reflect the impact of the updated guidance for all periods presented. The adoption of the guidance resulted in the deferral of certain installation revenue, the deferral of certain commission expenses, and a reduction of revenue due to the reclassification of certain third-party giveaways and incentives from operating expense. Additionally, the Company made changes in the composition of revenue resulting from the allocation of value related to bundled services sold to residential customers at a discount.

Installation Services Revenue

Pursuant to ASC 606, the Company's installation services revenue is deferred and recognized over the benefit period. For residential customers, the benefit period is less than one year. For business and wholesale customers, the benefit period is the contract term. Prior to the adoption of ASC 606, the Company recognized installation services revenue for residential and SMB customers when installations were completed. As a result of the deferral of installation

F-36

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

services revenue for residential and SMB customers, the Company recognized contract liabilities of $ i 6,978 and recorded a cumulative effect adjustment of $ i 5,093 (net of tax of $ i 1,885) to retained earnings. The accounting for installation services revenue related to business and wholesale customers has not changed.

Commission Expenses

Pursuant to ASC 606, the Company defers commission expenses related to obtaining a contract with a customer when the expected amortization is greater than one year and amortizes these costs over the average contract term. For commission expenses related to customer contracts with a term of one year or less, the Company is utilizing the practical expedient and is recognizing the costs when incurred. Prior to the adoption of ASC 606, the Company recognized commission expenses related to the sale of its services when incurred. As a result of the change in the timing of recognition of these commission expenses, the Company recognized contract assets of $ i 24,329 and recorded a cumulative effect adjustment of $ i 17,759 (net of tax of $ i 6,570) to retained earnings.

Third-Party Product Giveaways and Incentives

When the Company acts as the agent in providing certain product giveaways or incentives, revenue is recorded net of the costs of the giveaways and incentives. For the periods prior to January 1, 2018, costs for the giveaways and incentives recorded in other operating expense have been reclassified as a reduction to revenue.

Bundled Services

The Company provides bundled services at a discounted rate to its customers. Under ASC 606, revenue should be allocated to separate performance obligations within a bundled offering based on the relative stand-alone selling price of each service within the bundle. In connection with the adoption of ASC 606, the Company revised the amounts allocated to each performance obligation within its bundled offerings which reduced previously reported revenue for telephony services and increased previously reported revenue allocated to video and broadband services.

Adoption of ASU No. 2017-07 - Compensation-Retirement Benefits (Topic 715)

On January 1, 2018, the Company adopted the guidance pursuant to ASU No. 2017-07. ASU No. 2017-07 requires that an employer disaggregate the service cost component from the other components of net benefit cost. In connection with the adoption of ASU No. 2017-07, the Company retroactively reclassified certain pension costs from other operating expenses to other income (expense), net. The adoption of ASU No. 2017-07 had no impact on the Company's consolidated balance sheet.

Acquisition of Altice Technical Services US Corp

As discussed in Note 1, the Company completed the ATS Acquisition in the first quarter of 2018. ATS was previously owned by Altice Europe and a member of ATS's management through a holding company. As the acquisition is a combination of businesses under common control, the Company combined the results of operations and related assets and liabilities of ATS for all periods since the formation of ATS, including goodwill of $ i 23,101, representing the amount previously transferred to ATS.

Cequel Communications Holdings II, LLC Merger into CSC Holdings

In November 2018, in connection with the credit silo combination described in Note 11, (i) Cequel Communications Holdings I, LLC ("CCHI") merged into Cablevision, with Cablevision as the surviving entity (the "Holdco Merger"), and (ii) Cequel Communications Holdings II, LLC ("CCHII") merged into CSC Holdings, with CSC Holdings as the surviving entity (the "CCHII Merger"). As a result of the Holdco Merger, the balance sheet and operating results of CCHI have been presented on a combined basis with Cablevision beginning January 1, 2016 as these entities were under common control. In addition, as a result of the CCHII Merger, the balance sheet and operating results of CCHII have been presented on a combined basis with CSC Holdings beginning January 1, 2016 as these entities were under common control.

F-37

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The following table summarizes the impact of adopting ASC 606 and ASU No. 2017-07 and the impact of the ATS Acquisition on Altice USA's consolidated statements of operations:

Altice USA

Year Ended December 31, 2017

As Reported

Impact of ASC 606

Impact of ASU No. 2017-07

Impact of ATS Acquisition

As Adjusted

Residential:

Broadband

i 2,563,772

i 45,192

i —

( i 369)

i 2,608,595

Video

i 4,214,745

i 59,878

i —

( i 501)

i 4,274,122

Telephony

i 823,981

( i 122,981)

i —

( i 235)

i 700,765

Business services and wholesale

i 1,298,817

( i 604)

i —

i 1,298,213

News and advertising (a)

i 396,187

i —

i 396,187

Other (a)

i 29,068

i —

i 29,068

Total revenue

i 9,326,570

( i 18,515)

i —

( i 1,105)

i 9,306,950

Programming and other direct costs

i 3,035,655

i —

i 3,035,655

Other operating expenses

i 2,342,655

( i 18,515)

( i 11,863)

i 35,038

i 2,347,315

Restructuring and other expense

i 152,401

i —

i 152,401

Depreciation and amortization

i 2,930,475

i —

i 96

i 2,930,571

Operating income

i 865,384

i —

i 11,863

( i 36,239)

i 841,008

Other expense, net

( i 2,196,733)

i —

( i 11,863)

i —

( i 2,208,596)

Loss before income taxes

( i 1,331,349)

i —

( i 36,239)

( i 1,367,588)

Income tax benefit

i 2,852,967

i —

i 9,385

i 2,862,352

Net income

i 1,521,618

i —

( i 26,854)

i 1,494,764

(a)Certain reclassifications were made between revenue categories to conform to the 2019 presentation.

F-38

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The following table summarizes the impact of adopting ASC 606 and ASU No. 2017-07, the impact of the ATS acquisition and the impact of the CCHII Merger on CSC Holdings' consolidated statements of operations:

CSC Holdings

Year Ended December 31, 2017

As Reported

Impact of CCHII Merger

Impact of ASC 606

Impact of ASU No. 2017-07

Impact of ATS Acquisition

As Adjusted

Residential:

Broadband

i 1,603,015

i 960,757

i 45,192

i —

( i 369)

i 2,608,595

Video

i 3,113,238

i 1,101,507

i 59,878

i —

( i 501)

i 4,274,122

Telephony

i 693,478

i 130,503

( i 122,981)

i —

( i 235)

i 700,765

Business services and wholesale

i 923,161

i 375,656

( i 604)

i —

i 1,298,213

Advertising (a)

i 325,470

i 70,717

i —

i 396,187

Other (a)

i 6,426

i 22,642

i —

i 29,068

Total revenue

i 6,664,788

i 2,661,782

( i 18,515)

i —

( i 1,105)

i 9,306,950

Programming and other direct costs

i 2,280,062

i 755,593

i —

i 3,035,655

Other operating expenses

i 1,675,665

i 666,990

( i 18,515)

( i 11,863)

i 35,038

i 2,347,315

Restructuring and other expense

i 112,384

i 39,899

i —

i 152,283

Depreciation and amortization

i 2,251,614

i 678,861

i —

i 96

i 2,930,571

Operating income

i 345,063

i 520,439

i —

i 11,863

( i 36,239)

i 841,126

Other expense, net

( i 898,612)

( i 180,526)

i —

( i 11,863)

i —

( i 1,091,001)

Loss before income taxes

( i 553,549)

i 339,913

i —

( i 36,239)

( i 249,875)

Income tax benefit

i 2,233,716

i 584,062

i —

i 9,973

i 2,827,751

Net income

i 1,680,167

i 923,975

i —

( i 26,266)

i 2,577,876

(a)Certain reclassifications were made between revenue categories to conform to the 2019 presentation.

NOTE 5. i ALLOWANCE FOR DOUBTFUL ACCOUNTS

Activity related to the Company's allowance for doubtful accounts is presented below:

Balance at Beginning of Period

Provision for Bad Debt

Deductions/ Write-Offs and Other Charges

Balance at End of Period

Year Ended December 31, 2019

Allowance for doubtful accounts

i 13,520

i 91,520

( i 90,357)

i 14,683

Year Ended December 31, 2018

Allowance for doubtful accounts

i 13,420

i 71,426

( i 71,326)

i 13,520

Year Ended December 31, 2017

Allowance for doubtful accounts

i 11,677

i 74,183

( i 72,440)

i 13,420

F-39

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

NOTE 6. i SUPPLEMENTAL CASH FLOW INFORMATION

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

Years Ended December 31,

2019

2018

2017

Non-Cash Investing and Financing Activities:

Altice USA and CSC Holdings:

Conversion of notes payable to affiliates and related parties of $1,750,000 (together with accrued and unpaid interest and applicable premium) to common stock (See Note 11)

i —

i 2,264,252

Property and equipment accrued but unpaid

i 188,067

i 213,936

i 171,604

Leasehold improvements paid by landlord

i —

i 350

i 3,998

Notes payable issued to vendor for the purchase of equipment and other assets

i 35,124

i 95,394

i 40,131

Right-of-use assets acquired in exchange for finance lease obligations

i 54,532

i 13,548

i 9,385

Deferred financing costs accrued but unpaid

i 8

i 1,005

i —

Contingent consideration for acquisitions

i 1,555

i 6,195

i 32,233

Altice USA:

Receivable related to the sale of an investment

i —

i 4,015

i —

CSC Holdings:

Assumption of Cablevision debt, net of the acquisition of Cablevision assets

i 169,334

i —

Contributions from parent

i 19,697

i —

Supplemental Data:

Altice USA:

Cash interest paid

i 1,436,332

i 1,481,468

i 1,765,126

Income taxes paid, net

i 10,263

i 13,667

i 29,006

CSC Holdings:

Cash interest paid

i 1,350,756

i 1,163,942

i 1,174,003

Income taxes paid, net

i 10,263

i 13,667

i 352,316

NOTE 7. i RESTRUCTURING AND OTHER EXPENSE

Restructuring

Beginning in the first quarter of 2016, the Company commenced restructuring initiatives that were intended to simplify the Company's organizational structure ("2016 Restructuring Plan").

F-40

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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, 2016

i 102,119

i 8,397

i 110,516

Restructuring charges

i 142,679

i 7,243

i 149,922

Payments and other

( i 131,324)

( i 6,014)

( i 137,338)

Accrual balance at December 31, 2017

i 113,474

i 9,626

i 123,100

Restructuring charges

i 15,580

i 15,447

i 31,027

Payments and other

( i 107,600)

( i 11,458)

( i 119,058)

Accrual balance at December 31, 2018

i 21,454

i 13,615

i 35,069

Restructuring charges

i 6,606

i 6,317

i 12,923

Payments and other

( i 26,384)

( i 3,751)

( i 30,135)

Impact of the adoption of ASC 842 (a)

i —

( i 13,849)

Accrual balance at December 31, 2019

i 1,676

i 2,332

i 4,008

(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 9).

In May 2019, the Company commenced another restructuring initiative to further simplify the Company's organization structure ("2019 Restructuring Plan").

In addition, for the year ended December 31, 2019, the Company recorded restructuring charges of $ i 12,160 related primarily to the impairment of right-of-use operating lease assets, included in the Company's restructuring initiatives, as their carrying amount was not recoverable and exceeded their fair value.

Cumulative costs to date relating to these initiatives amounted to $ i 432,609.


The following table summarizes the activity for the 2019 Restructuring Plan:
	Severance and Other Employee Related Costs
Restructuring charges	$	i 42,715
Payments and other	( i 4,769)
Accrual balance at December 31, 2019	$	i 37,946

Transaction Costs

For the year ended i December 31, 2019, the Company incurred transaction costs of $ i 5,180 primarily related to certain transactions not related to the Company's operations. For the year ended December 31, 2018, the Company incurred transaction costs of $ i 7,521 relating to the Distribution discussed in Note 1. For the year ended December 31, 2017, the Company incurred transaction costs of $ i 2,479, of which $ i 2,361 related to CSC Holdings, primarily for the acquisition of a business during the first quarter of 2017 and other transactions.

NOTE 8. i PROPERTY, PLANT AND EQUIPMENT

Costs incurred in the construction of the Company's cable systems, including line extensions to, and upgrade of, the Company's hybrid fiber/coaxial infrastructure and construction of the parallel fiber to the home ("FTTH") infrastructure, are capitalized. This includes initial placement of the feeder cable to connect a customer that had not been previously connected, and headend facilities. These costs consist of materials, subcontractor labor, direct consulting fees, and internal labor and related costs associated with the construction activities. The internal costs that are capitalized consist of salaries and benefits of the Company's employees and the portion of facility costs, including rent, taxes, insurance and utilities, that supports the construction activities. These costs are depreciated over the estimated life of the plant ( i 10 to i 25 years) and headend facilities ( i 5 to i 25 years). Costs of operating the plant and the technical facilities, including repairs and maintenance, are expensed as incurred.

F-41

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Installation costs associated with the initial deployment of new customer premise equipment ("CPE") necessary to provide broadband, video or telephony services are also capitalized. These costs include materials, subcontractor labor, internal labor, and other related costs associated with the connection activities. The departmental activities supporting the connection process are tracked through specific metrics, and the portion of departmental costs that is capitalized is determined through a time weighted activity allocation of costs incurred based on time studies used to estimate the average time spent on each activity. These installation costs are amortized over the estimated useful lives of the CPE necessary to provide broadband, video or telephony services. The portion of departmental costs related to disconnecting services and removing CPE from a customer, costs related to connecting CPE that has been previously connected to the network and repair and maintenance are expensed as incurred.

Property, plant and equipment (including equipment under finance leases) consist of the following assets, which are depreciated or amortized on a straight-line basis over the estimated useful lives shown below:

i December 31, 2019

Estimated
Useful Lives

Customer premise equipment

i 1,563,729

i 1,354,510

3 to 5 years

Headends and related equipment

i 2,023,684

i 1,852,105

5 to 25 years

Infrastructure

i 5,314,322

i 4,595,143

5 to 25 years

Equipment and software

i 1,111,577

i 1,083,166

3 to 10 years

Construction in progress (including materials and supplies)

i 192,571

i 215,684

Furniture and fixtures

i 63,478

i 57,448

5 to 8 years

Transportation equipment

i 151,627

i 146,387

5 to 10 years

Buildings and building improvements

i 457,174

i 411,573

10 to 40 years

Leasehold improvements

i 103,734

i 109,110

Term of lease

Land

i 48,426

i 11,030,322

i 9,873,552

Less accumulated depreciation and amortization

( i 5,276,921)

( i 4,044,671)

i 5,753,401

i 5,828,881

For the years ended i December 31, 2019, 2018 and 2017, the Company capitalized certain costs aggregating $ i 132,966, $ i 134,265 and $ i 151,646, respectively, related to the acquisition and development of internal use software, which are included in the table above.

Depreciation expense on property, plant and equipment (including finance leases) for the years ended i December 31, 2019, 2018 and 2017 amounted to $ i 1,475,251, $ i 1,508,125 and $ i 1,588,764, respectively.

NOTE 9. LEASES

On January 1, 2019, the Company adopted ASC 842 which increases transparency and comparability by recognizing a lessee’s rights and obligations resulting from leases by recording them on the balance sheet as lease assets and lease liabilities. The new guidance requires the recognition of the right-of-use ("ROU") assets and related operating and finance lease liabilities on the balance sheet. The Company adopted the new guidance using the modified retrospective approach with a cumulative-effect adjustment recorded on January 1, 2019. As a result, the consolidated balance sheet as of December 31, 2018 was not restated and is not comparative.

The adoption of ASC 842 resulted in the recognition of ROU assets of $ i 274,292 and lease liabilities for operating leases of $ i 299,900 on the Company's consolidated balance sheet as of January 1, 2019, with no material impact to its consolidated statements of operations. The difference between the ROU assets and the operating lease liability represents the reclassification of (i) deferred rent balances, resulting from the historical operating leases, and (ii) certain accrued restructuring liabilities (See Note 7). The Company's accounting for finance leases remained substantially unchanged from its accounting for capital leases in prior periods.

F-42

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The Company elected the package of practical expedients permitted within the standard, which allow an entity to forgo reassessing (i) whether a contract contains a lease, (ii) classification of leases, and (iii) whether capitalized costs associated with a lease meet the definition of initial direct costs. Also, the Company elected the expedient allowing an entity to use hindsight to determine the lease term and impairment of ROU assets and the expedient related to land easements which allows the Company not to retrospectively treat land easements as leases; however, the Company must apply lease accounting prospectively to land easements if they meet the definition of a lease.

For contracts entered into on or after the effective date, at the inception of a contract the Company will assess whether the contract is, or contains, a lease. The Company's assessment is based on: (i) whether the contract involves the use of a distinct identified asset, (ii) whether the Company obtained the right to substantially all the economic benefit from the use of the asset throughout the period, and (iii) whether the Company has the right to direct the use of the asset. Leases entered into prior to January 1, 2019, are accounted for under ASC 840 and were not reassessed for classification.

For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments. For finance leases, the lease liability is initially measured in the same manner and date as for operating leases, and is subsequently measured at amortized cost using the effective interest method. The Company generally uses its incremental borrowing rate as the discount rate for leases, unless an interest rate is implicitly stated in the lease. The lease term for all of the Company’s leases includes the noncancellable period of the lease plus any additional periods covered by either a Company option to extend the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. All ROU assets are reviewed for impairment.

Lease expense for operating leases consists of the lease payments plus any initial direct costs and is recognized on a straight-line basis over the lease term. Lease expense for finance leases consists of the amortization of the asset on a straight-line basis over the earlier of the lease term or its useful life and interest expense determined on an amortized cost basis. The lease payments are allocated between a reduction of the lease liability and interest expense.

The Company's operating leases are comprised primarily of facility leases and finance leases are comprised primarily of vehicle and equipment leases.

Balance sheet information related to our leases is presented below:

Balance Sheet location

January 1, 2019

Operating leases:

Right-of-use lease assets

Right-of-use operating lease assets

i 280,340

i 274,292

i —

Right-of-use lease liability, current

Other current liabilities

i 38,836

i 48,033

i —

Right-of-use lease liability, long-term

Right-of-use operating lease liability

i 269,062

i 251,867

i —

Finance leases:

Right-of-use lease assets

Property, plant and equipment

i 70,339

i 30,891

Right-of-use lease liability, current

Current portion of long-term debt

i 22,017

i 5,928

Right-of-use lease liability, long-term

Long-term debt

i 47,403

i 19,262

The following provides details of the Company's lease expense:


	Year Ended December 31, 2019
Operating lease expense, net	$	i 60,364
Finance lease expense:
Amortization of assets	i 9,347
Interest on lease liabilities	i 2,106
Total finance lease expense	i 11,453
	$	i 71,817

F-43

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Other information related to leases is presented below:


	As of December 31, 2019
Right-of-use assets acquired in exchange for operating lease obligations	$	i 61,244

Cash Paid For Amounts Included In Measurement of Liabilities:
Operating cash flows from finance leases	i 2,106
Operating cash flows from operating leases	i 65,352
Weighted Average Remaining Lease Term:
Operating leases	i 9.4 years
Finance leases	i 3.4 years
Weighted Average Discount Rate:
Operating leases	i 5.96		%
Finance leases	i 5.49		%

/ i i

The minimum future annual payments under non-cancellable leases during the next five years and thereafter, at rates now in force, are as follows:


	Finance leases		Operating leases
2020	$	i 25,500	$	i 48,899
2021	i 22,516		i 47,894
2022	i 18,271		i 48,509
2023	i 5,788		i 38,500
2024	i 3,343		i 34,055
Thereafter	i 283		i 193,018
Total future minimum lease payments, undiscounted	i 75,701		i 410,875
Less: Imputed interest	( i 6,281)		( i 102,977)
Present value of future minimum lease payments	$	i 69,420	$	i 307,898

The following table presents the Company’s unadjusted lease commitments as of December 31, 2018 as a required disclosure for companies adopting the lease standard prospectively without revising comparative period information.


	Finance leases		Operating leases

2020	$	i 5,087	$	i 50,356
2021	i 3,969		i 43,362
2022	i 4,146		i 34,882
2023	i 3,828		i 25,234
Thereafter	i 2,232		i 167,941

/ /

F-44

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

NOTE 10. i INTANGIBLE ASSETS

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

As of December 31, 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

i 6,017,524

( i 2,843,561)

i 3,173,963

i 5,970,884

( i 2,162,110)

i 3,808,774

8 to 18 years

Trade names

i 1,081,083

( i 798,484)

i 282,599

i 1,067,083

( i 701,998)

i 365,085

2 to 5 years

Other amortizable intangibles

i 53,181

( i 28,634)

i 24,547

i 37,644

( i 18,679)

i 18,965

1 to 15 years

i 7,151,788

( i 3,670,679)

i 3,481,109

i 7,075,611

( i 2,882,787)

i 4,192,824

Amortization expense for the years ended December 31, 2019, 2018 and 2017 aggregated $ i 787,893, $ i 874,214 and $ i 1,341,807, respectively.

The following table sets forth the estimated amortization expense on intangible assets for the periods presented:


Estimated amortization expense
Year Ending December 31, 2020	$	i 710,537
Year Ending December 31, 2021	i 629,095
Year Ending December 31, 2022	i 542,371
Year Ending December 31, 2023	i 378,643
Year Ending December 31, 2024	i 300,387

/ i

The carrying amount of goodwill is presented below:






Goodwill as of December 31, 2017	$	i 8,019,861
Reclassification of goodwill to property, plant and equipment related to Cequel	( i 15,041)
Goodwill recorded in connection with an acquisition	i 7,608
Adjustment to purchase accounting relating to business acquired	( i 12)
Goodwill as of December 31, 2018	i 8,012,416
Goodwill recorded in connection with an acquisition of Cheddar Inc. ("Cheddar")	i 130,039
Adjustments to purchase accounting relating to business acquired	( i 146)
Goodwill as of December 31, 2019	$	i 8,142,309

In June 2019, the Company completed the acquisition of Cheddar, a digital-first news company, for approximately $ i 198,754 in cash and stock. The acquisition was accounted for as a business combination in accordance with ASC Topic 805. The purchase price was allocated to the identifiable tangible and intangible assets and liabilities of Cheddar based on their fair values. The Company recorded goodwill of $ i 130,039, customer relationships of $ i 46,640, trade names of $ i 14,000 and other amortizable intangible assets of $ i 11,780.

In connection with certain acquisitions completed in 2018, the Company recorded goodwill of $ i 7,462 which represents the excess of the estimated purchase price of approximately $ i 9,888 (based on current probability of contingent consideration) over the net book value of assets acquired.

F-45

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

NOTE 11. i DEBT

The following details the Company's outstanding debt:

Interest Rate

Date Issued

Maturity Date

Principal Amount

Carrying Amount (a)

Principal Amount

Carrying Amount (a)

Senior Notes:

February 12, 2009

February 15, 2019

i 8.625

i —

i 526,000

i 527,749

April 15, 2010

April 15, 2020

i 8.000

(g)(h)

i —

i 500,000

i 495,302

November 15, 2011

November 15, 2021

i 6.750

i 1,000,000

i 979,178

i 1,000,000

i 969,285

September 27, 2012

September 15, 2022

i 5.875

(h)

i 649,024

i 600,849

i 649,024

i 585,817

May 23, 2014

June 1, 2024

i 5.250

i 750,000

i 683,940

i 750,000

i 671,829

October 18, 2018

July 15, 2025

i 7.750

(h)

i 1,740

i 1,695

i 1,740

i 1,690

October 9, 2015

January 15, 2023

i 10.125

i —

i 1,800,000

i 1,781,424

October 9, 2015

October 15, 2025

i 10.875

i 1,684,221

i 1,665,237

i 1,684,221

i 1,663,027

October 18, 2018

April 1, 2028

i 7.500

(h)

i 4,118

i 4,112

i 4,118

i 4,110

October 18, 2018

December 15, 2021

i 5.125

(d)(h)

i —

i 8,886

i 8,274

December 15, 2021

i 5.125

(f)

i —

i 1,240,762

i 1,155,264

July 15, 2025

i 7.750

i 617,881

i 605,583

i 617,881

i 603,889

April 1, 2028

i 7.500

i 1,045,882

i 1,044,278

i 1,045,882

i 1,044,143

July 10 and October 7, 2019

January 15, 2030

i 5.750

i 2,250,000

i 2,289,168

i —

Senior Guaranteed Notes:

October 9, 2015

October 15, 2025

i 6.625

i 1,000,000

i 989,483

i 1,000,000

i 988,052

September 23, 2016

April 15, 2027

i 5.500

i 1,310,000

i 1,305,430

i 1,310,000

i 1,304,936

January 29, 2018

February 1, 2028

i 5.375

i 1,000,000

i 992,757

i 1,000,000

i 992,064

July 15, 2023

i 5.375

i 1,095,825

i 1,081,879

i 1,095,825

i 1,078,428

May 15, 2026

i 5.500

i 1,498,806

i 1,485,911

i 1,498,806

i 1,484,278

January 24, 2019

February 1, 2029

i 6.500

i 1,750,000

i 1,746,996

i —

i 15,657,497

i 15,476,496

i 15,733,145

i 15,359,561

CSC Holdings Restricted Group:

Revolving Credit Facility

(c)

(b)

i —

i 250,000

i 231,425

Term Loan B

July 17, 2025

i 3.99%

i 2,925,000

i 2,911,729

i 2,955,000

i 2,939,425

Incremental Term Loan B-2

January 25, 2026

i —%

(g)

i —

i 1,492,500

i 1,475,778

Incremental Term Loan B-3

January 15, 2026

i 3.99%

i 1,265,438

i 1,260,200

i 1,275,000

i 1,268,931

Incremental Term Loan B-5

April 15, 2027

i 4.24%

i 3,000,000

i 2,976,358

i —

i 7,190,438

i 7,148,287

i 5,972,500

i 5,915,559

Collateralized indebtedness (see Note 12)

i 1,759,017

i 1,585,088

i 1,459,638

i 1,406,182

Finance lease obligations (see Note 9)

i 69,420

i 25,190

Notes payable and supply chain financing (e)

i 140,994

i 106,108

i 24,817,366

i 24,420,285

i 23,296,581

i 22,812,600

Less: current portion of credit facility debt

( i 65,250)

( i 54,563)

Less: current portion of finance lease obligations

( i 22,017)

( i 5,928)

Less: current portion of notes payable and supply chain financing

( i 83,415)

( i 98,134)

( i 170,682)

( i 158,625)

Long-term debt

i 24,646,684

i 24,249,603

i 23,137,956

i i 22,653,975 /

__________________________________

F-46

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

(b)At i December 31, 2019, $ i 178,014 of the revolving credit facility was restricted for certain letters of credit issued on behalf of the Company and $ i 2,296,986 of the facility was undrawn and available, subject to covenant limitations.

(c)The revolving credit facility of an aggregate principal amount of $ i 2,275,000 matures in January 2024 and priced at LIBOR plus i 2.25%. The remaining revolving credit facility of an aggregate principal amount of $ i 200,000 matures in November 2021 and priced at LIBOR plus 3.25%.

(d)In July 2019, the Company redeemed $ i 8,886 principal amount of these senior notes.

(e)Includes $ i 65,854 related to supply chain financing agreements entered into in the second quarter of 2019 that is required to be repaid within one year from the date of the respective agreement.

(f)The notes were repaid with proceeds from the issuance of an additional $ i 1,250,000 aggregate principal amount of CSC Holdings i 5.750% senior notes due 2030 issued in October 2019.

(g)Outstanding amounts were repaid with proceeds from borrowings under the Incremental Term Loan B-5.

(h)Prior to the Assumption of Cablevision Senior Notes in November 2019 described below, these notes were obligations of Cablevision.

Credit Silo Combination

In October 2018, the Company combined its Suddenlink and Optimum businesses under a single credit silo (the "Combination"). The integration of the Suddenlink and Optimum businesses was aimed at aligning Altice USA’s debt capital structure and to simplify Altice USA’s financing strategy and financial reporting requirements. The Combination was effected mainly by the following transactions:

•In October 2018, Altice US Finance, Cequel Capital Corporation and Cequel Communications Holdings I, LLC ("CCHI") commenced an offer to exchange (the "Exchange Offer") any and all outstanding senior notes and senior secured notes issued by them (the "Original Cequel Notes") for up to $ i i 5,520,000 / aggregate principal amount of new notes (the "New Cequel Notes") and, in the case of the i 5.375% senior secured notes due 2023 and i 5.500% senior secured notes due 2026, and cash of $ i i 6,500 / The Exchange Offer was accompanied by a consent solicitation to amend the terms of each series of the notes subject to the Exchange Offer (except the i 5.125% senior notes due 2021) and the indentures governing such notes. Approximately $ i i 5,500,050 / of the outstanding notes subject to the Exchange Offer were exchanged into corresponding series of New Cequel Notes. The proposed amendments in the consent solicitation, which have become operative effective November 27, 2018 (the "Combination Date"), eliminated or waived substantially all of the restrictive covenants, eliminated certain events of default, and modified or eliminated certain other provisions governing the Original Cequel Notes (except the i 5.125% senior notes due 2021) to the extent that they remain outstanding.

•In October 2018, CSC Holdings entered into a Sixth Amendment to the CSC Credit Facilities Agreement (the "Combination Incremental Term Loan Agreement"). The Combination Incremental Term Loan Agreement provided for, among other things, new incremental term loan commitments in an aggregate principal amount of $ i 1,275,000.

On or following the Combination Date the following transactions were completed:

•The Company redeemed $ i 5,206 principal amount of the Original Cequel Notes that were outstanding after the consummation of the Exchange Offer.

•New Cequel Notes with an aggregate principal balance of $ i 5,500,050 were converted into $ i 5,499,156 principal amount of CSC Holdings senior note (see detail below).

•Pursuant to the Combination Incremental Term Loan Agreement, on the Combination Date, CSC Holdings entered into a $ i 1,275,000 ($1,265,438 outstanding at December 31, 2019) incremental term loan facility (the "Incremental Term Loan B-3") under its existing credit facilities agreement. The proceeds from the Incremental Term Loan B-3 were used to repay the entire principal amount of loans under Cequel’s then existing term loan facility and other transaction costs related to the Combination. The Incremental Term Loan B-3 is comprised of eurodollar borrowings or alternative base rate borrowings, and will bear interest at a rate per annum equal to the Adjusted LIBOR or the alternate base rate, as applicable, plus the applicable margin, where the applicable margin is (i) with respect to any alternate base rate loan, 1.25% per annum and (ii) with respect to any eurodollar loan, 2.25% per annum.

F-47

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The Company is required to make scheduled quarterly payments equal to i 0.25% (or $ i 3,188) of the principal amount of the Incremental Term Loan B-3, beginning with the fiscal quarter ended June 30, 2019, with the remaining balance scheduled to be paid on January 15, 2026.

•The Combination was implemented by a series of corporate transactions, including: (i) CCHI merging into Cablevision, with Cablevision as the surviving entity (the "Holdco Merger"), and (ii) Cequel Communications Holdings II, LLC (the direct parent of Cequel) merging into CSC Holdings, with CSC Holdings as the surviving entity. In connection with the Holdco Merger, Cablevision assumed all of the obligations of CCHI that remained outstanding after giving effect to the Exchange Offer under the indentures governing the outstanding Original Cequel Notes. In July 2019, the Company redeemed in full the aggregate principal amount of the outstanding 5.125% senior notes due 2021 that were not exchanged in connection with the Exchange Offer. Pursuant to the Assumption of Cablevision Senior Notes as described below, the remaining original Cequel Notes that were assumed by Cablevision under the Combination became obligations of CSC Holdings.

The following is a summary of the results of the Exchange Offer:

Original Cequel Notes

Remaining Original Cequel Notes

Notes Redeemed in Cash

Principal of New CSC Holdings Notes at December 31, 2018

5.375% Senior Secured Notes due 2023

i 1,100,000

—

i 4,157

i 1,095,825

5.5% Senior Secured Notes due 2026

i 1,500,000

—

i 1,049

i 1,498,806

5.125% Senior Notes due 2021

i 1,250,000

i 8,886

—

i 1,240,762

7.75% Senior Notes due 2025

i 620,000

i 1,740

—

i 617,881

7.5% Senior Notes due 2028

i 1,050,000

i 4,118

—

i 1,045,882

i 5,520,000

i 14,744

i 5,206

i 5,499,156

CSC Holdings Credit Facilities

In October 2015, a wholly-owned subsidiary of Altice USA, which merged with and into CSC Holdings on June 21, 2016, entered into a senior secured credit facility, which currently provides U.S. dollar term loans currently in an aggregate principal amount of $ i 3,000,000 ($ i 2,925,000 outstanding at i December 31, 2019) (the "CSC Term Loan Facility", and the term loans extended under the CSC Term Loan Facility, the "CSC Term Loans") and U.S. dollar revolving loan commitments in an aggregate principal amount of $ i 2,475,000 at i December 31, 2019 (the "CSC Revolving Credit Facility" and, together with the CSC Term Loan Facility, the "CSC Credit Facilities"), which are governed by a credit facilities agreement entered into by, inter alios, CSC Holdings certain lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent and security agent (as amended, restated, supplemented or otherwise modified on June 20, 2016, June 21, 2016, July 21, 2016, September 9, 2016, December 9, 2016, March 15, 2017, January 12, 2018, October 15, 2018, January 24, 2019, February 7, 2019, May 14, 2019 and October 3, 2019, respectively, and as further amended, restated, supplemented or otherwise modified from time to time, the "CSC Credit Facilities Agreement").

The amendment to the CSC Credit Facilities Agreement entered into on March 15, 2017 ("Extension Amendment") increased the Term Loan by $ i 500,000 to $ i 3,000,000 and the maturity date for this facility was extended to July 17, 2025 ('Term Loan B"). The closing of the Extension Amendment occurred in April 2017 and the proceeds were used to refinance the entire $ i 2,493,750 principal amount of the then existing CSC Term Loans and redeem $ i 500,000 of the i 8.625% senior notes due September 2017 issued by Cablevision. In connection with the Extension Amendment and the redemption of the senior notes, the Company recorded a loss on extinguishment of debt and write-off of deferred financing costs aggregating $ i 18,976. The Term Loan B is comprised of eurodollar borrowings or alternate base rate borrowings, and bears interest at a rate per annum equal to the adjusted LIBOR or the alternate base rate, as

F-48

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

applicable, plus the applicable margin, where the applicable margin is (i) with respect to any alternate base rate loan, i 1.25% per annum and (ii) with respect to any eurodollar loan, i 2.25% per annum. The Company is required to make scheduled quarterly payments equal to i 0.25% (or $ i 7,500) of the principal amount of the Term Loan B, beginning with the fiscal quarter ended September 30, 2017, with the remaining balance scheduled to be paid on July 17, 2025. The Company recorded deferred financing costs and an original issue discount of $ i 4,390 and $ i 15,000, respectively, which are both being amortized to interest expense over the term of the Term Loan.

In January 2018, CSC Holdings entered into a $ i 1,500,000 incremental term loan facility (the "Incremental Term Loan B-2") under its existing credit facilities agreement. The Incremental Term Loan B-2 was priced at i 99.5% and was due to mature on January 25, 2026. The Incremental Term Loan B-2 was comprised of eurodollar borrowings or alternate base rate borrowings, and bore interest at a rate per annum equal to the adjusted LIBOR or the alternate base rate, as applicable, plus the applicable margin, where the applicable margin was (i) with respect to any alternate base rate loan, i 1.50% per annum and (ii) with respect to any eurodollar loan, i 2.50% per annum. The Company was required to make scheduled quarterly payments equal to i 0.25% (or $ i 3,750) of the principal amount of the Incremental Term Loan B-2, beginning with the fiscal quarter ended September 30, 2018, with the remaining balance scheduled to be paid on January 25, 2026. The Incremental Term Loan B-2 was repaid in full in October 2019 with proceeds from the Incremental Term Loan B-5 discussed below.

In February 2019, CSC Holdings entered into a $ i 1,000,000 incremental term loan facility ("Incremental Term Loan B-4") under its existing credit facilities agreement. The proceeds from the Incremental Term Loan B-4 were used to redeem $894,700 in aggregate principal amount of CSC Holdings’ i 10.125% senior notes due 2023, representing the entire aggregate principal amount outstanding, and paying related fees, costs and expenses. The Incremental Term Loan B-4 was due to mature on April 15, 2027 and was issued with an original issue discount of i 1.0%. The Incremental Term Loan B-4 was comprised of eurodollar borrowings or alternative base rate borrowings and bore interest at a rate per annum equal to the adjusted LIBOR or the alternate base rate, as applicable, plus the applicable margin, where the applicable margin was (i) with respect to any alternate base rate loan, 2.00% per annum and (ii) with respect to any eurodollar loan, i 3.0%. The Incremental Term Loan B-4 was repaid in full in October 2019 with proceeds from Incremental Term Loan B-5 discussed below.

In October 2019, CSC Holdings entered into a $ i 3,000,000, incremental term loan facility ("Incremental Term Loan B-5") under its existing credit facilities agreement, out of which $500,000 was available on a delayed draw basis. The Incremental Term Loan B-5 matures on April 15, 2027 and was issued at par. The Incremental Term Loan B-5 may be comprised of eurodollar borrowings or alternative base rate borrowings, and will bear interest at a rate per annum equal to the Adjusted LIBOR or the alternate base rate, as applicable, plus the applicable margin, where the applicable margin is (i) with respect to any alternate base rate loan, i 1.50% per annum and (ii) with respect to any eurodollar loan, i 2.50% per annum. The Company is required to make scheduled quarterly payments equal to i 0.25% (or $ i 7,500) of the principal amount of the Incremental Term Loan B-5, beginning with the fiscal quarter ended June 30, 2020. Voluntary prepayments of the Incremental Term Loan B-5 in connection with certain repricing transactions on or prior to the date that is six months after the draw date will be subject to a call premium of i 1.00%.

The initial proceeds of the Incremental Term Loan B-5 were used to repay approximately $ i 2,500,000 of the outstanding term loans (Incremental Term Loan B-2 and Incremental Term Loan B-4) under the credit agreement, and the proceeds of the delayed draw tranche of the Incremental Term Loan B-5 were used to distribute $ i 500,000 in cash to Cablevision, the proceeds of which were used to redeem Cablevision’s i 8.00% senior notes due 2020, representing the entire aggregate principal amount outstanding, and in each case, paying related fees, costs and expenses in connection with such transactions, with the remainder being used to fund cash on the balance sheet. In connection with the repayment of approximately $ i 2,500,000 of the outstanding term loans, a portion of the unamortized discount and unamortized deferred financing costs was written-off and recorded as a loss on extinguishment of debt in the fourth quarter of 2019 (see table below).

During the year ended i December 31, 2019, CSC Holdings borrowed $ i 1,050,000 under its revolving credit facility and repaid $ i 1,300,000 of amounts outstanding under the revolving credit facility.

The CSC Credit Facilities Agreement requires the prepayment of outstanding CSC Term Loans, subject to certain exceptions and deductions, with (i) i 100% of the net cash proceeds of certain asset sales, subject to reinvestment rights and certain other exceptions; and (ii) on a pari ratable share (based on the outstanding principal amount of the Term Loans divided by the sum of the outstanding principal amount of all pari passu indebtedness and the Term Loans) of i 50% of annual excess cash flow, which will be reduced to i 0% if the consolidated net senior secured leverage ratio of CSC Holdings is less than or equal to i 4.5 to 1.

F-49

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

The obligations under the CSC Credit Facilities are guaranteed by each restricted subsidiary of CSC Holdings (other than CSC TKR, LLC and its subsidiaries and certain excluded subsidiaries) (the "Initial Guarantors") and, subject to certain limitations, will be guaranteed by each future material wholly-owned restricted subsidiary of CSC Holdings. The obligations under the CSC Credit Facilities (including any guarantees thereof) are secured on a first priority basis, subject to any liens permitted by the Credit Facilities, by capital stock held by CSC Holdings or any guarantor in certain subsidiaries of CSC Holdings, subject to certain exclusions and limitations.

The CSC Credit Facilities Agreement includes certain negative covenants which, among other things and subject to certain significant exceptions and qualifications, limit CSC Holdings' ability and the ability of its restricted subsidiaries to: (i) incur or guarantee additional indebtedness, (ii) make investments, (iii) create liens, (iv) sell assets and subsidiary stock, (v) pay dividends or make other distributions or repurchase or redeem our capital stock or subordinated debt, (vi) engage in certain transactions with affiliates, (vii) enter into agreements that restrict the payment of dividends by subsidiaries or the repayment of intercompany loans and advances; and (viii) engage in mergers or consolidations. In addition, the CSC Revolving Credit Facility includes a financial maintenance covenant solely for the benefit of the lenders under the CSC Revolving Credit Facility consisting of a maximum consolidated net senior secured leverage ratio of CSC Holdings and its restricted subsidiaries of i 5.0 to 1.0. The financial covenant will be tested on the last day of any fiscal quarter, but only if on such day there are outstanding borrowings under the CSC Revolving Credit Facility (including swingline loans but excluding any cash collateralized letters of credit and undrawn letters of credit not to exceed the letter of credit sublimit).

The CSC Credit Facilities Agreement also contains certain customary representations and warranties, affirmative covenants and events of default (including, among others, an event of default upon a change of control). If an event of default occurs, the lenders under the CSC Credit Facilities will be entitled to take various actions, including the acceleration of amounts due under the CSC Credit Facilities and all actions permitted to be taken by a secured creditor.

CSC Holdings was in compliance with all of its financial covenants under the CSC Credit Facilities as of i December 31, 2019.

Cequel Credit Facilities

In October 2018, in connection with the Combination described above, amounts outstanding pursuant to the Cequel Credit Facilities, defined below, aggregating $ i 1,249,188 were repaid from the proceeds of the Incremental Term Loan B-3 described above and all commitments pursuant to the Cequel Credit Facilities were cancelled.

Prior to the Combination, an indirect wholly-owned subsidiary of Cequel had entered into a senior secured credit facility which provided term loans in an aggregate principal amount of $ i 1,265,000 (the "Cequel Term Loan Facility") and revolving loan commitments in an aggregate principal amount of $ i 350,000 (the "Cequel Revolving Credit Facility" and, together with the Cequel Term Loan Facility, the "Cequel Credit Facilities"). The Company was required to make scheduled quarterly payments equal to i 0.25% (or $ i 3,163) of the principal amount of the outstanding Cequel term loan, beginning with the fiscal quarter ended September 30, 2017, with the remaining balance scheduled to be paid on July 28, 2025.

In April 2017, Cequel used proceeds from the term loan facility to refinance the entire $ i 812,963 principal amount of loans under the then outstanding term loan and redeem $ i 450,000 of the i 6.375% Senior Notes due September 15, 2020. In connection with the redemption of the senior notes, the Company recorded a loss on extinguishment of debt and write-off of deferred financing costs aggregating $ i 28,684.

Loans comprising each eurodollar borrowing or alternate base rate borrowing, as applicable, bore interest at a rate per annum equal to the adjusted LIBOR or the alternate base rate, as applicable, plus the applicable margin, where the applicable margin was:

•in respect of the Cequel term loans, (i) with respect to any alternate base rate loan, i 1.25% per annum and (ii) with respect to any eurodollar loan, i 2.25% per annum, and

•in respect of Cequel Revolving Credit Facility loans (i) with respect to any alternate base rate loan, i 2.25% per annum and (ii) with respect to any eurodollar loan, i 3.25% per annum.

F-50

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Senior Guaranteed Notes, Senior Secured Notes, and Senior Notes

In January 2018, CSC Holdings issued $ i 1,000,000 aggregate principal amount of i 5.375% senior guaranteed notes due February 1, 2028 (the "2028 Guaranteed Notes"). The 2028 Guaranteed Notes are senior unsecured obligations and rank pari passu in right of payment with all of the existing and future senior indebtedness, including the existing senior notes and the CSC Credit Facilities and rank senior in right of payment to all of existing and future subordinated indebtedness.

The proceeds from the 2028 Guaranteed Notes, together with proceeds from the Incremental Term Loan B-2 (discussed above), borrowings under the CSC revolving credit facility and cash on hand, were used in February 2018 to repay $ i 300,000 principal amount of CSC Holdings' senior notes due in February 2018 and $ i 750,000 principal amount of Cablevision senior notes due in April 2018 and a portion was used to fund the dividend of $ i 1,499,935 to the Company's stockholders immediately prior to and in connection with the Distribution discussed in Note 1. In connection with the redemption of Cablevision senior notes, the Company paid a call premium of approximately $ i 7,019, which was recorded as a loss on extinguishment of debt and also recorded a write-off of the unamortized premium of $ i 2,314.

In April 2018, CCHI and Cequel Capital Corporation each an indirect, wholly owned subsidiary of the Company, issued $ i 1,050,000 aggregate principal amount of i 7.50% senior notes due April 1, 2028 (the "2028 Senior Notes"). The proceeds of these notes were used in April 2018 to redeem the $ i 1,050,000 aggregate principal amount 6.375% senior notes due September 15, 2020. In connection with the redemption of these notes, the Company paid a call premium of approximately $ i 16,737, which was recorded as a loss on extinguishment of debt and also recorded a write-off of deferred financing costs aggregating $ i 20,173. See discussion above regarding the exchange of these notes as a result of the Combination.

In January 2019, CSC Holdings issued $ i 1,500,000 in aggregate principal amount of senior guaranteed notes due 2029 ("CSC Holdings 2029 Guaranteed Notes"). The notes bear interest at a rate of i 6.50% and will mature on February 1, 2029. The net proceeds from the sale of the notes were used to repay certain indebtedness, including to repay at maturity $ i 526,000 aggregate principal amount of CSC Holdings' i 8.625% senior notes due February 2019 plus accrued interest, redeem approximately $ i 905,300 of the aggregate outstanding amount of CSC Holdings' i 10.125% senior notes due 2023 at a redemption price of i 107.594% plus accrued interest, and paid fees and expenses associated with the transactions.

In February 2019, CSC Holdings issued an additional $ i 250,000 CSC Holdings 2029 Guaranteed Notes at a price of i 101.75% of the principal amount, plus accrued interest from January 31, 2019. The proceeds of these notes were used to repay the outstanding balance under the CSC Revolving Credit Facility.

In July 2019, CSC Holdings issued $ i 1,000,000 in aggregate principal amount of senior notes which bear interest at a rate of i 5.75% and will mature on January 15, 2030 ("2030 Senior Notes"). The net proceeds from the sale of the notes were used to repay outstanding borrowings under the CSC Revolving Credit Facility of approximately $ i 622,857, along with accrued interest and pay fees associated with the transactions. The remaining proceeds were used for general corporate purposes.

In October 2019, CSC Holdings issued an additional $ i 1,250,000 aggregate principal amount of its 2030 Senior Notes at a price of i 104.00% of the principal amount plus accrued interest from July 10, 2019 until October 7, 2019. The proceeds of these notes were used to redeem $ i 1,240,762 aggregate outstanding principal amount of CSC Holdings i 5.125% senior notes due 2021 in full and to pay accrued interest, fees, costs and expenses associated with these transactions. In connection with the redemption, the Company recorded a loss on extinguishment of debt of $ i 65,151, representing the unamortized discount and deferred financing costs as of the redemption date.

The indentures under which the Senior Guaranteed Notes and Senior Notes were issued contain certain customary covenants and agreements, including limitations on the ability of CSC Holdings and its restricted subsidiaries to (i) incur or guarantee additional indebtedness, (ii) make investments or other restricted payments, (iii) create liens, (iv) sell assets and subsidiary stock, (v) pay dividends or make other distributions or repurchase or redeem our capital stock or subordinated debt, (vi) engage in certain transactions with affiliates, (vii) enter into agreements that restrict the payment of dividends by subsidiaries or the repayment of intercompany loans and advances, and (viii) engage in mergers or consolidations, in each case subject to certain exceptions. The indentures also contain certain customary events of default. If an event of default occurs, the obligations under the notes may be accelerated.

Subject to customary conditions, the Company may redeem some or all of the notes at the redemption price set forth

F-51

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

in the relevant indenture, plus accrued and unpaid interest, plus a specified "make-whole" premium (in the event the notes are redeemed prior to a certain specified time set forth in the indentures).

The Company was in compliance with all of its financial covenants under these indentures as of i December 31, 2019.

Assumption of Cablevision Senior Notes

In November 2019, pursuant to an asset contribution agreement (the "Asset Contribution"), Cablevision contributed to CSC Holdings substantially all of its assets and CSC Holdings assumed all of Cablevision’s liabilities, including Cablevision’s i 5.875% senior notes due September 2022 with an aggregate outstanding principal amount of $ i 649,024, Cablevision’s i 7.750% senior notes due July 2025 with an aggregate outstanding principal amount of $ i 1,740, and Cablevision's i 7.500% senior notes due April 2028 with an aggregate outstanding principal amount of $ i 4,118 (the "Assumption of Cablevision Senior Notes").

Notes Payable to Affiliates and Related Parties

On June 21, 2016, in connection with the Cablevision Acquisition, Altice USA issued notes payable to affiliates and related parties aggregating $ i 1,750,000, of which $ i 875,000 bore interest at i 10.75% and matured on December 20, 2023 and $ i 875,000 bore interest at i 11% and matured on December 20, 2024.

In connection with Altice USA's IPO in June 2017, Altice USA converted the notes payable to affiliates and related parties (together with accrued and unpaid interest of $ i 529 and applicable premium of $ i 513,723) into shares of Altice USA’s common stock at the IPO price. The premium was recorded as a loss on extinguishment of debt on Altice USA's consolidated statement of operations for the year ended December 31, 2017. In connection with the conversion of the notes, Altice USA recorded a credit to paid in capital of $ i 2,264,252 for the year ended December 31, 2017.

For the year ended December 31, 2017, Altice USA recognized interest expense of $ i 90,405 related to these notes prior to their conversion.

The following table provides a summary of the loss (gain) on extinguishment of debt and the write-off of deferred financing costs recorded by the Company upon the redemption of senior notes and the refinancing of credit facilities:


For the Year Ended December 31, 2019:
	CSC Holdings 5.125% Senior Notes due 2021	$	i 65,151
	CSC Holdings 10.125% Senior Notes due 2023	i 154,666
	Refinancing and subsequent amendment to CSC Holdings credit facility	i 8,313
	Subtotal - CSC Holdings	i 228,130
	Cablevision 5.125% Senior Notes due 2021	i 500
	Cablevision 8.000% Senior Notes due 2020	i 15,176
		$	i 243,806


For the Year Ended December 31, 2018:
	Cequel Credit Facility	$	i 7,733
	Cequel senior and senior secured notes pursuant to the Exchange Offer discussed above	i 150
	Subtotal - CSC Holdings	i 7,883
	Cequel 6.375% Senior Notes due 2020	i 36,910
	Cequel senior and senior secured notes pursuant to the Exchange Offer discussed above	( i 695)
	Cablevision 7.75% Senior Notes due 2018	i 4,706
		$	i 48,804

F-52

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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


For the Year Ended December 31, 2017:
	CSC Holdings Term Loan B	$	i 12,675
	CSC Holdings 10.875% Senior Notes due 2025	i 38,858
	Cequel Term Loan Facility	i 2,455
	Subtotal - CSC Holdings	i 53,988
	Cablevision 8.625% Senior Notes due 2017	i 6,300
	Cequel 6.375% Senior Notes due 2020	i 26,229
	Altice USA notes payable to affiliates and related parties	i 513,723
		$	i 600,240

Summary of Debt Maturities

The future maturities of debt payable by the Company under its various debt obligations outstanding as of i December 31, 2019, including notes payable and collateralized indebtedness (see Note 12), but excluding finance lease obligations (see Note 9), are as follows:


Years Ending December 31,
2020	$	i 148,665
2021	i 1,078,499
2022	i 728,785
2023	i 2,928,347
2024	i 822,888
Thereafter	i 18,996,836

NOTE 12. i DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS

Prepaid Forward Contracts

The Company has entered into various transactions to limit the exposure against equity price risk on its shares of Comcast Corporation ("Comcast") common stock. The Company has monetized all of its stock holdings in Comcast through the execution of prepaid forward contracts, collateralized by an equivalent amount of the respective underlying stock. At maturity, the contracts provide for the option to deliver cash or shares of Comcast stock with a value determined by reference to the applicable stock price at maturity. These contracts, at maturity, are expected to offset declines in the fair value of these securities below the hedge price per share while allowing the Company to retain upside appreciation from the hedge price per share to the relevant cap price.

The Company received cash proceeds upon execution of the prepaid forward contracts discussed above which has been reflected as collateralized indebtedness in the accompanying consolidated balance sheets. In addition, the Company separately accounts for the equity derivative component of the prepaid forward contracts. These equity derivatives have not been designated as hedges for accounting purposes. Therefore, the net fair values of the equity derivatives have been reflected in the accompanying consolidated balance sheets as an asset or liability and the net increases or decreases in the fair value of the equity derivative component of the prepaid forward contracts are included in gain (loss) on derivative contracts in the accompanying consolidated statements of operations.

All of the Company's monetization transactions are obligations of its wholly-owned subsidiaries that are not part of the Restricted Group; however, CSC Holdings has provided guarantees of the subsidiaries' ongoing contract payment expense obligations and potential payments that could be due as a result of an early termination event (as defined in the agreements). If any one of these contracts was terminated prior to its scheduled maturity date, the Company would be obligated to repay the fair value of the collateralized indebtedness less the sum of the fair values of the underlying stock and equity collar, calculated at the termination date. As of i December 31, 2019, the Company did not have an early termination shortfall relating to any of these contracts.

The Company monitors the financial institutions that are counterparties to its equity derivative contracts. All of the counterparties to such transactions carry investment grade credit ratings as of i December 31, 2019.

F-53

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Put/Call Options

In the third quarter of 2017, Altice USA entered into a put-call contract that expired in the third quarter of 2018 whereby Altice USA sold a put option and purchased a call option with the same strike price. These put-call options were settled as of December 31, 2017 and Altice USA recorded a loss on investments of $ i 97,410 for the year ended December 31, 2017, which represents the difference between the strike price and the closing price of the underlying shares.

Interest Rate Swap Contracts

The following is a summary of interest rate swap contracts outstanding at December 31, 2019:

Trade Date

Maturity Date

Notional Amount

Company Pays

Company Receives

May 2016

May 2026

i 750,000

Six- month LIBOR

Fixed rate of 1.665%

June 2016

May 2026

i 750,000

Six- month LIBOR

Fixed rate of 1.68%

December 2018

January 2022

i 500,000

Fixed rate of 2.7177%

Three-month LIBOR

December 2018

January 2022

i 500,000

Fixed rate of 2.733%

Three-month LIBOR

December 2018

January 2022

i 500,000

Fixed rate of 2.722%

Three-month LIBOR

December 2018

December 2026

i 750,000

Fixed rate of 2.9155%

Three-month LIBOR

December 2018

December 2026

i 750,000

Fixed rate of 2.9025%

Three-month LIBOR

April 2019

April 2020

i 1,255,513

Three- month LIBOR minus 0.1075%

One- month LIBOR

As of December 31, 2019, the Company did not hold and has not issued derivative instruments for trading or speculative purposes.

i The following represents the location of the assets and liabilities associated with the Company's derivative instruments within the consolidated balance sheets:

Derivatives Not Designated as Hedging Instruments

Balance Sheet Location

Fair Value at December 31,

2019

2018

Asset Derivatives:

Interest rate swap contracts

Derivative contracts, current

i —

i 1,975

Prepaid forward contracts

Derivative contracts, long-term

i 25,207

i 109,344

i 25,207

i 111,319

Liability Derivatives:

Prepaid forward contracts

Other current liabilities

i —

Interest rate swap contracts

Other current liabilities

( i 469)

( i 70)

Prepaid forward contracts

Liabilities under derivative contracts, long-term

( i 94,795)

i —

Interest rate swap contracts

Liabilities under derivative contracts, long-term

( i 160,871)

( i 132,908)

( i 256,135)

( i 132,978)

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

F-54

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

Years Ended December 31,

2019

2018

2017

Gain (loss) on derivative contracts related to change in the value of

equity derivative contracts related to Comcast common stock

( i 282,713)

i 218,848

( i 138,920)

Gain (loss) on derivative contracts related to put/call options - Altice

USA

—

(97,410)

Change in fair value of Comcast common stock included in gain

(loss) on investments

i 469,071

( i 261,993)

i 237,328

Gain (loss) on interest rate swap contracts

( i 53,902)

( i 61,697)

i 5,482

The following table summarizes the settlement of the Company's collateralized indebtedness relating to Comcast shares that were settled by delivering cash equal to the collateralized loan value, net of the value of the related equity derivative contracts during the years presented:

Years Ended December 31,

2019

2018

Number of shares

i —

i 16,139,868

Collateralized indebtedness settled

i —

( i 516,537)

Derivatives contracts settled

i —

i 24

i —

( i 516,513)

Proceeds from monetization contracts

i 93,000

i 516,513

Net cash proceeds

i 93,000

i —

The cash to settle the collateralized indebtedness was obtained from the proceeds of new monetization contracts covering an equivalent number of Comcast shares. The terms of the new contracts allow the Company to retain upside participation in Comcast shares up to each respective contract's upside appreciation limit with downside exposure limited to the respective hedge price.

In April 2017, the Company entered into monetization contracts related to i 32,153,118 shares of Comcast common stock held by us, which synthetically reversed the then existing contracts related to these shares (the "Synthetic Monetization Closeout"). As the then existing collateralized debt matured, the Company settled the contracts with proceeds received from the new monetization contracts. The monetization contracts mature on April 28, 2021. The monetization contracts provide the Company with downside protection below the hedge price of $ i 35.47 and upside benefit of stock price appreciation up to $ i 44.72 per share. In connection with the execution of these contracts, the Company recorded (i) the fair value of the equity derivative contracts of $ i 53,316 (in a net asset position), (ii) notes payable of $ i 111,657, representing the fair value of the existing equity derivative contracts, in a liability position, and (iii) a discount on notes payable of $ i 58,341.

In November 2019, the Company entered into a new monetization contract related to i 5,337,750 shares of Comcast common stock held by us, which synthetically reversed the existing contract related to these shares. In addition, the Company entered into amendments to monetization contracts related to i 37,617,486 shares of Comcast common stock held by us. The new and amended monetization contracts extended the maturity date to April 28, 2023 and provide the Company with downside protection below the hedge price of $ i 40.95 per share and upside benefit of stock price appreciation up to $ i 49.55 per share. In connection with the execution of these contracts, the Company received cash of $ i 93,000 and recorded (i) an increase in the fair value of the equity derivative contracts of $103,781, ii) an increase in notes payable, net of discount, of $ i 36,587, and (iii) an increase in collateralized debt, net of discount, of $ i 160,194.

NOTE 13. i FAIR VALUE MEASUREMENT

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

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

F-55

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

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

The following table presents for each of these hierarchy levels, the Company's financial assets and financial liabilities that are measured at fair value on a recurring basis:

Fair Value
Hierarchy

i December 31, 2019

Assets:

Money market funds

Level I

i 563,704

i 91,852

Investment securities pledged as collateral

Level I

i 1,931,697

i 1,462,626

Prepaid forward contracts

Level II

i 25,207

i 109,344

Interest rate swap contracts

Level II

i —

i 1,975

Liabilities:

Prepaid forward contracts

Level II

i 94,795

i —

Interest rate swap contracts

Level II

i 161,340

i 132,978

Contingent consideration related to 2017 and 2018 acquisitions

Level III

i 7,250

i 6,195

The Company's cash equivalents (money market funds) and investment securities pledged as collateral are classified within Level I of the fair value hierarchy because they are valued using quoted market prices.

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

Fair Value of Financial Instruments

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

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

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

i The carrying values, estimated fair values, and classification under the fair value hierarchy of the Company's financial instruments, excluding those that are carried at fair value in the accompanying consolidated balance sheets, are summarized as follows:

F-56

ALTICE USA, INC. AND SUBSIDIARIES

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

i December 31, 2019