10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q 

 (Mark One)

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

For the quarterly period ended June 30, 2017

or

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

Commission File Number: 1-36863

Cable One, Inc. 

(Exact name of registrant as specified in its charter)

Delaware	13-3060083
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
210 E. Earll Drive, Phoenix, Arizona	85012
(Address of Principal Executive Offices)	(Zip Code)

(602) 364-6000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
(Do not check if a smaller reporting company)
		Emerging growth company	☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:

Description of Class	Shares Outstanding as of August 4, 2017
Common Stock, par value $0.01	5,725,853

CABLE ONE, INC.

FORM 10-Q

 TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
	Signatures	33

i 

Table of Contents

PART I:  FINANCIAL INFORMATION

Item 1.     Consolidated Financial Statements

CABLE ONE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share data)	June 30, 2017			December 31, 2016
	(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	89,793		$	138,040
Accounts receivable, net		45,812			32,526
Income tax receivable		16,539			4,547
Prepaid assets		13,256			10,824
Total Current Assets		165,400			185,937
Property, plant and equipment, net		803,383			619,621
Intangibles, net		971,673			497,480
Goodwill		178,374			84,928
Other assets		5,664			9,305
Total Assets	$	2,124,494		$	1,397,271
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	86,601		$	82,703
Deferred revenue		36,795			22,190
Long-term debt - current portion		11,250			6,250
Total Current Liabilities		134,646			111,143
Long-term debt		1,167,458			530,886
Deferred income taxes		294,850			276,297
Accrued compensation and other liabilities		24,392			24,434
Total Liabilities		1,621,346			942,760
Commitments and contingencies (see Note 12)
Stockholders' Equity
Preferred stock ($0.01 par value; 4,000,000 shares authorized; none issued or outstanding)		-			-
Common stock ($0.01 par value; 40,000,000 shares authorized; 5,887,899 shares issued; and 5,725,095 and 5,708,223 shares outstanding as of June 30, 2017 and December 31, 2016, respectively)		59			59
Additional paid-in capital		22,514			17,669
Retained earnings		556,401			511,776
Accumulated other comprehensive loss		(442	)		(446	)
Treasury stock, at cost (162,804 and 179,676 shares held as of June 30, 2017 and December 31, 2016, respectively)		(75,384	)		(74,547	)
Total Stockholders' Equity		503,148			454,511
Total Liabilities and Stockholders' Equity	$	2,124,494		$	1,397,271

See accompanying notes to unaudited Consolidated Financial Statements.

1

Table of Contents

CABLE ONE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands, except per share and share data)	2017			2016			2017			2016
Revenues	$	241,042		$	204,557		$	448,469		$	407,362
Costs and expenses
Operating (excluding depreciation and amortization)		83,849			75,672			152,932			152,100
Selling, general and administrative		51,194			43,482			96,927			87,375
Depreciation and amortization		46,890			34,689			85,295			69,382
(Gain) loss on disposal of assets		462			157			(5,686	)		565
Total operating costs and expenses		182,395			154,000			329,468			309,422
Income from operations		58,647			50,557			119,001			97,940
Interest expense		(11,782	)		(7,549	)		(19,389	)		(15,104	)
Other income (expense), net		(322	)		183			(35	)		693
Income before income taxes		46,543			43,191			99,577			83,529
Provision for income taxes		17,967			16,558			37,787			29,852
Net income	$	28,576		$	26,633		$	61,790		$	53,677
Other comprehensive gain (loss), net of tax		2			(28	)		4			(55	)
Comprehensive income	$	28,578		$	26,605		$	61,794		$	53,622
Net income per common share:
Basic	$	5.03		$	4.64		$	10.88		$	9.30
Diluted	$	4.97		$	4.62		$	10.76		$	9.27
Weighted average common shares outstanding:
Basic		5,678,394			5,743,465			5,677,411			5,769,859
Diluted		5,745,617			5,766,312			5,740,837			5,788,385

See accompanying notes to unaudited Consolidated Financial Statements.

2

Table of Contents

CABLE ONE, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

						Additional					Treasury			Accumulated Other			Total
	Common Stock					Paid-In		Retained			Stock,			Comprehensive			Stockholders’
(in thousands, except share data)	Shares			Amount		Capital		Earnings			at cost			Loss			Equity
Balance at December 31, 2016		5,708,223		$	59	$	17,669	$	511,776		$	(74,547	)	$	(446	)	$	454,511
Net income		-			-		-		61,790			-			-			61,790
Changes in pension, net of tax		-			-		-		-			-			4			4
Equity-based compensation		-			-		4,845		-			-			-			4,845
Issuance of restricted stock awards, net of forfeitures		18,238			-		-		-			-			-			-
Repurchases of common stock		(700	)		-		-		-			(399	)		-			(399	)
Withholding tax for equity awards		(666	)		-		-		-			(438	)		-			(438	)
Dividends paid to stockholders		-			-		-		(17,165	)		-			-			(17,165	)
Balance at June 30, 2017		5,725,095		$	59	$	22,514	$	556,401		$	(75,384	)	$	(442	)	$	503,148

See accompanying notes to unaudited Consolidated Financial Statements.

3

Table of Contents

CABLE ONE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
(in thousands)	2017			2016
Cash flows from operating activities:
Net income	$	61,790		$	53,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		85,295			69,382
Amortization of debt issuance costs		1,191			809
Equity-based compensation		4,845			6,466
Write-off of debt issuance costs		613			-
Deferred income taxes		7,832			(3,330	)
(Gain) loss on disposal of assets		(5,686	)		565
Changes in operating assets and liabilities:
Accounts receivable, net		1,741			3,612
Income tax receivable		(11,992	)		-
Prepaid assets		(1,248	)		(1,388	)
Accounts payable and accrued liabilities		(14,073	)		(4,974	)
Deferred revenue		89			(160	)
Income taxes payable		-			(23	)
Other assets and liabilities, net		462			944
Net cash provided by operating activities		130,859			125,580
Cash flows from investing activities:
Purchase of business, net of cash acquired		(728,783	)		-
Capital expenditures		(76,430	)		(65,023	)
Change in accrued expenses related to capital expenditures		(1,505	)		(10,958	)
Proceeds from sales of property, plant and equipment		10,912			459
Net cash used in investing activities		(795,806	)		(75,522	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		750,000			-
Payment of debt issuance costs		(15,224	)		-
Payments on long-term debt		(95,008	)		(1,258	)
Repurchases of common stock		(399	)		(46,511	)
Payment of withholding tax for equity awards		(438	)		-
Dividends paid to stockholders		(17,165	)		(17,303	)
Cash overdraft		(5,066	)		(1,444	)
Net cash provided by (used in) financing activities		616,700			(66,516	)
Change in cash and cash equivalents		(48,247	)		(16,458	)
Cash and cash equivalents, beginning of period		138,040			119,199
Cash and cash equivalents, end of period	$	89,793		$	102,741
Supplemental cash flow disclosures:
Cash paid for interest	$	14,031		$	14,248
Cash paid for income taxes	$	41,947		$	32,615

See accompanying notes to unaudited Consolidated Financial Statements.

4

Table of Contents

CABLE ONE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business. Cable One, Inc. (“Cable One” or the “Company”) owns and operates cable systems that provide data, video and voice services to residential and commercial subscribers in 21 Western, Midwestern and Southern states of the United States of America. Prior to July 1, 2015, Cable One operated as a wholly owned subsidiary of Graham Holdings Company (“GHC”). As of June 30, 2017, Cable One provided service to 640,337 data customers, 384,004 video customers and 138,286 voice customers. On May 1, 2017, Cable One completed the acquisition of all of the outstanding equity interests of RBI Holding LLC (“NewWave”) and NewWave became a wholly owned subsidiary of Cable One. Cable One paid a purchase price of $741.0 million in cash on a debt-free basis and subject to customary post-closing adjustments. See Note 2 for details on this transaction.

Unless otherwise stated or the context otherwise indicates, all references in this Quarterly Report on Form 10-Q to “Cable One,” “us,” “our,” “we” or the “Company” refer to Cable One, Inc. and its wholly owned subsidiaries.

Basis of Presentation. The accompanying Consolidated Financial Statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States (“GAAP”) for interim financial information; and (ii) the guidance of Rule 10-01 of Regulation S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for financial statements required to be filed with the Securities and Exchange Commission (the “SEC”). As permitted under such rule, certain notes and other financial information normally required by GAAP have been omitted. Management believes the accompanying Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations and cash flows as of and for the periods presented herein. These Consolidated Financial Statements are unaudited and should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. The Company’s interim results of operations may not be indicative of its future results.

The December 31, 2016 year-end balance sheet data was derived from the Company’s audited financial statements, but does not include all disclosures required by GAAP.

Certain reclassifications have been made to prior period amounts to conform to the current period presentation.

Principles of Consolidation. The accompanying Consolidated Financial Statements include the accounts of the Company, including its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Segment Reporting. Accounting Standard Codification (“ASC”) 280 - Segment Reporting requires the disclosure of factors used to identify an enterprise’s reportable segments. The Company’s operations are organized and managed on the basis of cable systems within its geographic regions. Each cable system derives revenues from the delivery of similar products and services to a customer base that is also similar. Each cable system deploys similar technology to deliver the Company’s products and services, operates within a similar regulatory environment, has similar economic characteristics and is managed by the Company’s chief operating decision maker as part of an aggregate of all cable systems. Management evaluated the criteria for aggregation under ASC 280 and believes that the Company meets each of the respective criteria set forth therein. Accordingly, management has identified one reportable segment.

Use of Estimates. The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates and underlying assumptions.

Change in Accounting Estimate. As a result of additional information available from new systems and processes, the Company changed its accounting estimate related to the capitalization of certain internal labor and related costs associated with construction and customer installation activities beginning in the first quarter of 2017. Capitalized labor costs increased $5.1 million in the second quarter of 2017 compared to the second quarter of 2016 and $11.0 million for the six months ended June 30, 2017 compared to the year ago period as a result of the change in estimate.

5

Table of Contents

Recently Adopted and Issued Accounting Pronouncements. In May 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in accordance with Topic 718. The ASU is effective for all entities for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 removes Step 2 of the current goodwill impairment test under ASC 350 and replaces it with a simplified model. Under the simplified model, a goodwill impairment will be calculated as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. The amount of any impairment under the simplified model may differ from what would have been recognized under the two-step test. The ASU is effective for annual and any interim impairment tests performed for periods beginning after December 15, 2019, with early adoption permitted. The provisions of ASU 2017-04 would not have affected our last goodwill impairment assessment, but no assurance can be provided that the simplified testing methodology will not affect our goodwill impairment assessment in the future.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The purpose of the amendment is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public entities, the amendments in ASU 2017-01 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is evaluating the impact of adopting this guidance on any future transactions.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The guidance clarifies the way in which certain cash receipts and cash payments should be classified on the statement of cash flows and also how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 is effective for the first quarter of 2018, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. ASU 2016-09 was effective beginning in the first quarter of 2017. The Company will prospectively record a deferred tax benefit or expense associated with the difference between book and tax for equity-based compensation expense, which is expected to result in increased volatility to the Company’s income tax expense.The Company also established an accounting policy election to assume zero forfeitures for stock award grants and account for forfeitures when they occur which prospectively impacts stock compensation expense. Other aspects of the adoption of ASU 2016-09 did not have a material impact to the Company’s Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to record most of their leases on the balance sheet, which will be recognized as a right-of-use asset and a lease liability. The Company will be required to classify each separate lease component as an operating or finance lease at the lease commencement date. Initial measurement of the right-of-use asset and lease liability is the same for operating and finance leases, however, expense recognition and amortization of the right-of-use asset differs. Operating leases will reflect lease expense on a straight-line basis similar to current operating leases. The straight-line expense will reflect the interest expense on the lease liability (effective interest method) and amortization of the right-of-use asset, which will be presented as a single line item in the operating expense section of the income statement. Finance leases will reflect a front-loaded expense pattern similar to the pattern for current capital leases. ASU 2016-02 is effective for the first quarter of 2019, with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 provides new guidance related to how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also expands the required disclosures to include the disaggregation of revenue from contracts with customers into categories that depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. During 2016, the FASB issued additional interpretive guidance relating to the standard which covered the topics of principal versus agent considerations and identifying performance obligations and licensing. The standard is effective for the Company in the first quarter of 2018. The two permitted transition methods under the standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company is currently in the process of evaluating which method of transition will be utilized. Further, the Company is currently conducting an assessment to prepare for implementation of this guidance. To date, this assessment has included using workshops and questionnaires to identify revenue streams, analyzing contracts and assessing other areas that may result in different accounting treatment under this topic, including installation and commission structure. The Company has reached a preliminary conclusion that the majority of its residential customer revenue is not under an extended contract and will be evaluated on a month-to-month basis, and as such, does not anticipate significant changes related to revenue recognition for such customers. Revenue related to business contracts, installation and other up-front charges, costs to obtain contracts and other topics are still being evaluated. The Company continues to evaluate the impact of the standard on related disclosures as well as the acquired NewWave operations.

6

Table of Contents

2. NEWWAVE ACQUISITION

On January 18, 2017, Cable One announced that it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire NewWave from funds affiliated with GTCR LLC, a private equity firm based in Chicago. NewWave was a cable operator providing data, video and voice services to residential and business customers throughout non-urban areas of Arkansas, Illinois, Indiana, Louisiana, Mississippi, Missouri and Texas. Cable One and NewWave shared similar strategies, customer demographics, and products. Accordingly, the acquisition of NewWave offers the Company opportunities for revenue growth and adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margin expansion as well as the potential to realize cost synergies. The Company paid a purchase price of $741.0 million in cash and completed the transaction on May 1, 2017. See Note 6 for details regarding the financing of the acquisition.

The Company accounted for the NewWave acquisition as a business combination pursuant to ASC 805 - Business Combinations. Accordingly, acquisition costs are not included as components of consideration transferred, and instead are accounted for as expenses in the period in which the costs are incurred. During the three and six months ended June 30, 2017, the Company incurred acquisition-related costs of approximately $3.2 million and $4.7 million, respectively, which are included in Selling, general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Income.

In accordance with ASC 805, Cable One uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase price consideration over the fair value of net tangible and identifiable intangible assets acquired. The adjustments described below were developed based on Cable One management's assumptions and estimates, including assumptions relating to the consideration paid and the allocation thereof to the assets acquired and liabilities assumed from NewWave based on preliminary estimates of fair value. The preliminary estimates of the fair values of consideration transferred and assets acquired and liabilities assumed are based on the information that was available as of the acquisition date. Cable One believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The preliminary measurements of fair value set forth herein are subject to change and such changes could be material. The Company expects to finalize the valuation as soon as practicable but no later than one year from the acquisition date. The following table summarizes the provisional allocation of the purchase price consideration as of the acquisition date (in thousands):

	Provisional Allocation
Assets
Cash and cash equivalents	$	12,220
Accounts receivable		15,027
Prepaid assets		1,184
Property, plant and equipment		192,234
Intangibles		476,300
Other assets		370
Total		697,335
Liabilities
Accounts payable and accrued liabilities		24,542
Deferred revenue		14,516
Deferred income taxes		10,720
Total		49,778
Net assets acquired		647,557
Purchase price consideration		741,003
Goodwill recognized	$	93,446

7

Table of Contents

Acquired intangible assets consist of the following (dollars in thousands):

	Provisional Estimated Fair Value		Provisional Estimated Weighted Average Useful Life (in years)
Franchise agreements	$	320,000	Indefinite
Customer relationships	$	155,000		14
Trademark and trade name	$	1,300		1

The total weighted average amortization period for the acquired intangibles is 13.9 years.

The acquisition produced $93.4 million of goodwill, increasing the Company’s goodwill balance to $178.4 million at June 30, 2017. Goodwill represents the excess of the purchase price consideration over the fair value of the underlying net assets acquired and largely results from expected future synergies from combining operations as well as an assembled workforce, which does not qualify for separate recognition. As an indefinite-lived asset, goodwill is not amortized but rather is subject to impairment testing on at least an annual basis. Goodwill arising from the NewWave acquisition is deductible for tax purposes.

For the period from May 1, 2017 to June 30, 2017, the Company recognized revenue of $32.2 million and net income of $2.1 million relating to NewWave, which included charges for the amortization of acquired intangible assets of $2.1 million.

The following unaudited pro forma combined results of operations for the three and six months ended June 30, 2017 and 2016 have been prepared as if the acquisition of NewWave had occurred on January 1, 2016 and include adjustments for depreciation expense, amortization of intangibles, interest expense from financing, non-recurring acquisition-related transaction fees and the related aggregate impact on the provision for income taxes (in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Revenues	$	257,195	$	249,790	$	512,385	$	496,950
Net income	$	30,585	$	23,922	$	63,525	$	47,550
Net income per common share:
Basic	$	5.39	$	4.17	$	11.19	$	8.24
Diluted	$	5.32	$	4.15	$	11.07	$	8.21

The unaudited pro forma combined results of operations is provided for informational purposes only and is not necessarily indicative of or intended to represent the results that would have been achieved had the NewWave acquisition been consummated as of January 1, 2016 or the results that may be achieved in the future.

3. REVENUES

The Company’s revenues by product line were as follows (in thousands):   

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Residential
Data	$	103,155	$	86,031	$	193,356	$	169,470
Video		84,873		74,016		157,328		148,869
Voice		11,417		10,944		21,284		22,258
Business services		32,543		24,491		59,505		48,318
Advertising sales		5,970		6,616		11,592		13,619
Other		3,084		2,459		5,404		4,828
Total revenues	$	241,042	$	204,557	$	448,469	$	407,362

The amount of franchise fees recorded on a gross basis and included in residential video revenues above was $4.0 million and $3.6 million for the three months ended June 30, 2017 and 2016, respectively, and $7.5 million and $7.2 million for the six months ended June 30, 2017 and 2016, respectively.

8

Table of Contents

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following (in thousands):  

	June 30, 2017			December 31, 2016
Cable distribution systems	$	1,243,192		$	1,048,790
Customer premise equipment		201,360			181,852
Other equipment and fixtures		380,871			359,957
Buildings and leasehold improvements		94,426			88,592
Capitalized software		87,752			83,815
Construction in progress		53,335			64,822
Land		11,591			9,612
Total property, plant and equipment		2,072,527			1,837,440
Less accumulated depreciation		(1,269,144	)		(1,217,819	)
Property, plant and equipment, net	$	803,383		$	619,621

Depreciation expense was $44.8 million and $34.7 million for the three months ended June 30, 2017 and 2016, respectively, and $83.2 million and $69.3 million for the six months ended June 30, 2017 and 2016, respectively.

The Company's previous headquarters building and adjoining property were held for sale at December 31, 2016. In January 2017, the Company sold a portion of this property for $10.1 million in gross proceeds and recognized a related gain of $6.6 million. The remaining property’s carrying value of $4.6 million is included in Other assets in the Consolidated Balance Sheet as assets held for sale at June 30, 2017.

5. GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill at June 30, 2017 and December 31, 2016 was $178.4 million and $84.9 million, respectively, with the increase attributable to the NewWave acquisition on May 1, 2017. The Company historically has not recorded any impairment of goodwill.

Intangible assets (excluding goodwill) consisted of the following (dollars in thousands):   

					June 30, 2017
	Useful				Gross				Net
	Life				Carrying		Accumulated		Carrying
	Range (years)				Amount		Amortization		Amount
Amortized Intangible Assets
Cable franchise renewals and access rights		1	-	25	$	4,138	$	3,840	$	298
Customer relationships			14		$	155,000	$	1,845	$	153,155
NewWave trademark and trade name			1		$	1,300	$	217	$	1,083
Indefinite-Lived Intangible Assets (Excluding Goodwill)
Franchise agreements					$	817,137

9

Table of Contents

				December 31, 2016
	Useful			Gross				Net
	Life			Carrying		Accumulated		Carrying
	Range (years)			Amount		Amortization		Amount
Amortized Intangible Assets
Cable franchise renewals and access rights	1	-	25	$	4,138	$	3,794	$	344
Indefinite-Lived Intangible Assets (Excluding Goodwill)
Franchise agreements				$	497,136

6. LONG-TERM DEBT

The carrying amount of long-term debt as of June 30, 2017 and December 31, 2016 consisted of the following (in thousands):

	June 30, 2017			December 31, 2016
Notes	$	450,000		$	450,000
Senior Credit Facilities		750,000			95,000
Capital lease obligation		276			284
Total debt		1,200,276			545,284
Less unamortized debt issuance costs		(21,568	)		(8,148	)
Less current portion of long-term debt		(11,250	)		(6,250	)
Total Long-term debt	$	1,167,458		$	530,886

Senior Unsecured Notes. On June 17, 2015, the Company issued $450 million aggregate principal amount of 5.75% senior unsecured notes due 2022 (the “Notes”). The Notes mature on June 15, 2022 and interest is payable on June 15^th and December 15^th of each year.

The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws. The Notes were offered in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act.

The Notes were issued pursuant to an indenture (the “Indenture”) dated as of June 17, 2015. The Indenture provides for early redemption of the Notes, at the option of the Company, at the prices and subject to the terms specified in the Indenture. The Indenture includes certain covenants relating to debt incurrence, liens, restricted payments, asset sales and transactions with affiliates, changes in control and mergers or sales of all or substantially all of the Company’s assets. The Indenture also provides for customary events of default (subject, in certain cases, to customary grace periods).

Senior Credit Facilities. On June 30, 2015, the Company entered into a Credit Agreement (the “Credit Agreement”) among the Company, as borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, and the other agents party thereto.  The Credit Agreement provided for a five-year revolving credit facility in an aggregate principal amount of $200 million (the “Revolving Credit Facility”) and a five-year term loan facility in an aggregate principal amount of $100 million (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “Original Credit Facilities”). Concurrently with its entry into the Credit Agreement, the Company borrowed the full amount of the Term Loan Facility (the “Term Loan”).

Borrowings under the Original Credit Facilities bore interest, at the Company’s option, at a rate per annum determined by reference to either the London Interbank Offered Rate (“LIBOR”) or an adjusted base rate, in each case plus an applicable interest rate margin. The applicable interest rate margin with respect to LIBOR borrowings was a rate per annum between 1.50% and 2.25% and the applicable interest rate margin with respect to adjusted base rate borrowings was a rate per annum between 0.50% and 1.25%, in each case determined on a quarterly basis by reference to a pricing grid based upon the Company’s total net leverage ratio. In addition, the Company is required to pay commitment fees on any unused portion of the Revolving Credit Facility at a rate between 0.25% per annum and 0.40% per annum, determined by reference to the pricing grid.

10

Table of Contents

The Revolving Credit Facility also gives the Company the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility. Letter of credit issuances under the Revolving Credit Facility of $2.8 million at June 30, 2017 were held for the benefit of certain general and liability insurance matters and bore interest at a rate of 1.625% per annum. The Company had $197.2 million available for borrowing under the Revolving Credit Facility at June 30, 2017.

On May 1, 2017, the Company entered into a Restatement Agreement (the “Restatement Agreement”) with JPMorgan, as administrative agent, and the lenders party thereto, pursuant to which the Company amended and restated the Credit Agreement (as so amended and restated, the “Amended and Restated Credit Agreement”) and incurred $750 million of senior secured loans (the “New Loans”) which were used, together with cash on hand, to (i) finance the transactions contemplated by the Merger Agreement, (ii) repay in full the Term Loan and (iii) pay related fees and expenses.

The New Loans consist of (a) a five-year incremental term “A” loan in an aggregate principal amount of $250 million (the “Term Loan A”) and (b) a seven-year incremental term “B” loan in an aggregate principal amount of $500 million (the “Term Loan B” and, together with the Term Loan A and the Revolving Credit Facility, the “Senior Credit Facilities”), which are guaranteed by the Company’s wholly owned subsidiaries and are secured, subject to certain exceptions, by substantially all assets of the Company and the guarantors.

The interest margins applicable to the New Loans under the Amended and Restated Credit Agreement are, at the Company’s option, equal to either LIBOR or a base rate, plus an applicable margin equal to, (x) with respect to the Term Loan A, 2.25% to 1.50% for LIBOR loans and 1.25% to 0.50% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on the Company’s total net leverage ratio and (y) with respect to the Term Loan B, 2.25% for LIBOR loans and 1.25% for base rate loans. The Term Loan A may be prepaid at any time without premium and amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 2.5% per annum for the first year after funding, 5.0% per annum for the second year after funding, 7.5% for the third year after funding and 10.0% per annum for the fourth and fifth years after funding, with the balance due upon maturity. The Term Loan B amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 1.0% per annum, with the balance due upon maturity. The Term Loan B is subject to a 1.0% prepayment penalty if prepaid within six months of funding, benefits from certain “most favored nation” pricing protections and is not subject to the financial maintenance covenants under the Amended and Restated Credit Agreement. Other than as set forth above, the New Loans are subject to terms substantially similar to those under the Credit Agreement.

As of June 30, 2017, outstanding borrowings under the Term Loan A and Term Loan B were $250 million and $500 million, and bore interest at a rate of 2.93% per annum and 3.43% per annum, respectively.

In connection with the New Loans, the Company incurred $15.2 million in debt issuance costs, of which $0.6 million was written off during the quarter ended June 30, 2017. Unamortized debt issuance costs totaled $21.6 million and $8.1 million at June 30, 2017 and December 31, 2016, respectively.

The Company may, subject to the terms and conditions of the Amended and Restated Credit Agreement, obtain additional credit facilities of up to $425 million under the Amended and Restated Credit Agreement plus an unlimited amount so long as, on a pro forma basis, the Company’s First Lien Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) is no greater than 1.80 to 1.00. The Amended and Restated Credit Agreement contains customary representations, warranties and affirmative and negative covenants, including limitations on indebtedness, liens, restricted payments, prepayments of certain indebtedness, investments, dispositions of assets, restrictions on subsidiary distributions and negative pledge clauses, fundamental changes, transactions with affiliates and amendments to organizational documents. The Amended and Restated Credit Agreement also requires the Company to maintain specified ratios of total net leverage and first lien net leverage to consolidated operating cash flow. The Amended and Restated Credit Agreement also contains customary events of default, including non-payment of principal, interest, fees or other amounts, material inaccuracy of any representation or warranty, failure to observe or perform any covenant, default in respect of other material debt of the Company and of its restricted subsidiaries, bankruptcy or insolvency, the entry against the Company or any of its restricted subsidiaries of a material judgment, the occurrence of certain ERISA events, impairment of the loan documentation and the occurrence of a change of control. 

The Company was in compliance with all debt covenants as of June 30, 2017. 

11

Table of Contents

As of June 30, 2017, the future maturities of long-term debt were as follows (in thousands): 

Years Ending December 31,	Amount
2017 (remaining months)	$	5,633
2018		14,392
2019		20,642
2020		26,892
2021		30,017
Thereafter		1,102,700
Total	$	1,200,276

7. FAIR VALUE MEASUREMENTS

The Company’s deferred compensation liabilities were $17.9 million and $18.2 million at June 30, 2017 and December 31, 2016, respectively. These liabilities are included in Accounts payable and accrued liabilities (for the current portion) and Accrued compensation and other liabilities (for the noncurrent portion) in the Consolidated Balance Sheets. These liabilities represent the market value of a participant’s balance in a notional investment account that is comprised primarily of mutual funds, which is based on observable market prices. However, since the deferred compensation obligations are not exchanged in an active market, they are classified as Level 2 in the fair value hierarchy. Realized and unrealized gains (losses) on deferred compensation are included in operating income.

The carrying amounts and fair values of the Company’s money market and commercial paper investments and long-term debt (including the current portion) as of June 30, 2017 were as follows (in thousands):

	June 30, 2017
	Carrying		Fair
	Amount		Value
Assets:
Money market investments	$	32,248	$	32,248
Commercial paper	$	39,957	$	39,942
Long-term debt, including current portion:
Notes	$	450,000	$	473,625
Senior Credit Facilities	$	750,000	$	750,000

Money market investments are included in Cash and cash equivalents in the Consolidated Balance Sheets. Commercial paper investments with original maturities of 90 days or less are also included in Cash and cash equivalents. These investments are primarily held in U.S. Treasury securities and registered money market funds. These investments were valued using a market approach based on the quoted market prices of the money market investments (Level 1) or inputs that include quoted market prices for investments similar to the commercial paper (Level 2). The fair value of the Notes was estimated based on market prices in active markets (Level 2). The fair value of the New Loans was estimated based on discounting the remaining principal and interest payments using current market rates for similar debt (Level 2). 

8. TREASURY STOCK

Share Repurchase Program. On July 1, 2015, the Company’s board of directors (the “Board”) authorized up to $250 million of share repurchases (subject to a total cap of 600,000 shares of Company common stock). Purchases under the share repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases are based on a number of factors, including share price and business and market conditions. Since the inception of the share repurchase program through June 30, 2017, the Company had repurchased 165,633 shares at an aggregate cost of $73.1 million. During the first half of 2017, the Company repurchased 700 shares at an aggregate cost of $0.4 million, of which all occurred during the first quarter.

Restricted Stock Tax Withholding. Treasury stock is recorded at cost and is presented as a reduction of Stockholders’ equity in the Consolidated Financial Statements. Shares of common stock with a fair market value equal to the applicable statutory minimum amount of the employee withholding taxes due are withheld by the Company upon vesting of restricted stock and exercises of stock appreciation rights (“SARs”) to pay the applicable statutory minimum amount of employee withholding taxes and are considered common stock repurchases. The Company then pays the applicable statutory minimum amount of withholding taxes in cash. The amounts remitted during the three and six months ended June 30, 2017 were $0.1 million and $0.4 million, for which the Company withheld 149 and 666 shares of common stock, respectively. Treasury shares of 162,804 held at June 30, 2017 include the aforementioned shares withheld for withholding tax.

12

Table of Contents

9. EQUITY-BASED COMPENSATION

On June 5, 2015, the Board adopted the Cable One, Inc. 2015 Omnibus Incentive Compensation Plan (the “Original 2015 Plan”), which became effective July 1, 2015. On May 2, 2017, the Company’s stockholders approved the Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation (the “2015 Plan”), which automatically terminated, replaced and superseded the Original 2015 Plan, except that any outstanding awards granted under the Original 2015 Plan will remain in effect pursuant to their terms. The 2015 Plan is designed to promote the interests of the Company and its stockholders by providing the employees and directors of the Company with incentives and rewards to encourage them to continue in the service of the Company and with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. Any of the directors, officers and employees of the Company and its affiliates are eligible to be granted one or more of the following types of awards under the 2015 Plan: (1) incentive stock options, (2) non-qualified stock options, (3) restricted stock awards, (4) SARs, (5) restricted stock units (“RSUs”), (6) cash-based awards, (7) performance-based awards, (8) dividend equivalent rights and (9) other stock-based awards, including, without limitation, performance stock units and deferred stock units. The 2015 Plan includes the authority to grant awards that are intended to qualify as “qualified performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended. Unless the 2015 Plan is sooner terminated by the Board, no awards may be granted under the 2015 Plan after May 2, 2027.

The 2015 Plan provides that, subject to certain adjustments for specified corporate events, the maximum number of shares of Company common stock that may be issued under the 2015 Plan is 334,870, which is equal to the number of remaining shares of Company common stock available for future issuance under the Original 2015 Plan as of May 2, 2017, regardless of whether such shares were subject to outstanding awards as of such date, and no more than 329,962 shares may be issued pursuant to incentive stock options. At June 30, 2017, 331,552 shares were available for issuance under the 2015 Plan.

Restricted Stock Awards. The Company has granted restricted shares of Company common stock subject to service-based and performance-based vesting conditions to employees of the Company. Restricted share awards generally cliff-vest on the three-year anniversary of the grant date or in four equal ratable installments beginning on the first anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date), except in the case of awards made to individuals (i) whose equity awards issued by GHC were forfeited in connection with the Company’s spin-off (the “spin-off”) from GHC (the “Replacement Shares”), which Replacement Shares vested on December 12, 2016 (with certain exceptions as provided in the applicable award agreement), or (ii) who did not receive an equity award from GHC in 2015 in anticipation of the spin-off (the “Staking Shares”), which Staking Shares are scheduled to cliff-vest on January 2, 2018. Performance-based restricted shares are or were subject to performance metrics related primarily to year-over-year or three-year cumulative growth in Adjusted EBITDA less capital expenditures or year-over-year growth in Adjusted EBITDA and capital expenditures as a percentage of total revenues. Restricted shares are subject to the terms and conditions of the Original 2015 Plan or the 2015 Plan (in the case of awards made on or following May 2, 2017) and are otherwise subject to the terms and conditions of the applicable award agreement.

The compensation arrangements for the Company’s non-employee directors as of June 30, 2017 provided that each non-employee director is entitled to an annual retainer of $75,000 in cash, plus an additional annual cash retainer for each non-employee director who serves as a committee chair or as lead independent director and approximately $125,000 in RSUs.  Such RSUs will generally be granted on the date of the Company’s annual stockholders’ meeting and will vest on the earlier of the first anniversary of the grant date or the annual stockholders’ meeting date immediately following the grant date, subject to the director’s continued service through such vesting date.  Settlement of such RSUs will be in the form of one share of the Company’s common stock and will follow vesting, unless the director has previously elected to defer such settlement until his or her separation from service from the Board. Any dividends associated with RSUs granted prior to the 2017 annual grant of RSUs will be converted into Dividend Equivalent Units (“DEUs”), which will be delivered at the time of settlement of the associated RSUs. Commencing with the 2017 annual grant of RSUs, dividends associated with RSUs will be paid out in cash at the time of settlement. As of June 30, 2017, 3,175 RSUs, including DEUs, were vested and deferred.

13

Table of Contents

Restricted shares, RSUs and DEUs are collectively referred to as “restricted stock.” A summary of restricted stock activities for the six months ended June 30, 2017 is as follows:

				Weighted Average
				Grant Date
	Restricted			Fair Value
	Stock			Per Share
Outstanding as of December 31, 2016		38,425		$	402.21
Granted		15,660		$	624.42
Granted due to performance achievement		5,006		$	433.66
Forfeited		(3,992	)	$	418.58
Vested		(1,693	)	$	436.29
Outstanding as of June 30, 2017		53,406		$	466.62
Vested and unissued as of June 30, 2017		3,175		$	436.06

Compensation expense associated with restricted stock is recognized on a straight-line basis over the vesting period. The expense recognized each period is dependent upon the Company’s estimate of the number of shares that will ultimately vest. Equity-based compensation expense for restricted stock was $1.6 million and $3.3 million for the three and six months ended June 30, 2017, respectively.  At June 30, 2017, there was $9.8 million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over a weighted average period of 1.3 years.

Stock Appreciation Rights. The Company has granted SARs to certain executives and other employees of the Company. The SARs are scheduled to vest in four equal ratable installments beginning on the first anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date). The SARs are subject to the terms and conditions of the Original 2015 Plan or the 2015 Plan (in the case of awards made on or following May 2, 2017) and will otherwise be subject to the terms and conditions of the applicable award agreement.

A summary of SAR activity is as follows:

	Stock Appreciation Rights			Weighted Average Exercise Price		Weighted Average Fair Value		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Term (in years)
Outstanding as of December 31, 2016		136,000		$	426.80	$	88.07	$	26,510		8.7
Granted		21,572		$	620.64	$	138.01	$	-		9.5
Exercised		(6,775	)	$	422.31	$	87.22
Forfeited		(8,700	)	$	422.31	$	87.22
Outstanding as of June 30, 2017		142,097		$	456.72	$	95.74	$	36,118		8.4
Vested and exercisable as of June 30, 2017		24,150		$	422.81	$	87.33	$	6,957		8.2

The fair value of the SARs was measured based on the Black-Scholes model. The weighted average inputs used in the model for the six months ended June 30, 2017 were as follows:  

	2017
Expected volatility		20.90	%
Risk-free interest rate		2.14	%
Expected term (in years)		6.25
Expected dividend yield		0.96	%

Compensation expense associated with SARs is recognized on a straight-line basis over the vesting period. Equity-based compensation expense for SARs was $0.8 million and $1.5 million for the three and six months ended June 30, 2017, respectively. At June 30, 2017, there was $8.9 million of unrecognized compensation expense related to SARs, which is expected to be recognized over a weighted average period of 1.4 years.

14

Table of Contents

Compensation Expense. Total equity-based compensation expense recognized was $2.4 million and $3.4 million for the three months ended June 30, 2017 and 2016, respectively, and $4.8 million and $6.5 million for the six months ended June 30, 2017 and 2016, respectively, and was included in Selling, general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Income. The Company has recorded an income tax benefit of $3.7 million related to equity-based awards granted through June 30, 2017. The deferred tax asset related to all outstanding equity-based awards was $6.3 million as of June 30, 2017.  

10. INCOME TAXES

The Company’s effective tax rate was 38.6% and 38.3% for the three months ended June 30, 2017 and 2016, respectively, and 37.9% and 35.7% for the six months ended June 30, 2017 and 2016, respectively. The increase in the effective tax rate for the six months ended June 30, 2017 as compared to the prior year period primarily relates to $2.2 million of income tax benefits from certain spin-off and state tax items recognized in the first quarter of 2016, which did not recur.

1

1. NET INCOME PER SHARE

Basic net income per common share is computed by dividing the net income allocable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per share further includes any common shares available to be issued upon vesting or exercise of outstanding equity awards if such inclusion would be dilutive.

The following table sets forth the computation of basic and diluted net income per common share (in thousands, except share and per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Numerator:
Net income	$	28,576	$	26,633	$	61,790	$	53,677
Denominator:
Weighted average common shares outstanding - basic		5,678,394		5,743,465		5,677,411		5,769,859
Effect of dilutive equity awards (1)		67,223		22,847		63,426		18,526
Weighted average common shares outstanding - diluted		5,745,617		5,766,312		5,740,837		5,788,385
Net income per share:
Basic	$	5.03	$	4.64	$	10.88	$	9.30
Diluted	$	4.97	$	4.62	$	10.76	$	9.27

⁽¹⁾ SARs outstanding that were not included in the diluted net income per share calculation because the effect would have been anti-dilutive were 2,477 and 12,098 for the three months ended June 30, 2017 and 2016, respectively, and 1,438 and 6,830 for the six months ended June 30, 2017 and 2016, respectively.

12. COMMITMENTS AND CONTINGENCIES

Litigation and Legal Matters. The Company is subject to complaints and administrative proceedings and is a defendant in various civil lawsuits that have arisen in the ordinary course of its business. Such matters include: contract disputes; actions alleging negligence; invasion of privacy; trademark, copyright and patent infringement; violations of applicable wage and hour laws; statutory or common law claims involving current and former employees; and other matters. Although the outcomes of the legal claims and proceedings against the Company cannot be predicted with certainty, based on currently available information, management believes that there are no existing claims or proceedings that are likely to have a material effect on the Company’s business, financial condition, results of operations or cash flows. Also, based on currently available information, management is of the opinion that the exposure to future material losses from existing legal proceedings is not reasonably possible or that future material losses in excess of the amounts accrued are not reasonably possible.

15

Table of Contents

Regulation in the Cable Industry. The operation of a cable system is extensively regulated by the Federal Communications Commission (the “FCC”), some state governments and most local governments. The FCC has the authority to enforce its regulations through the imposition of substantial fines, the issuance of cease and desist orders and/or the imposition of other administrative sanctions, such as the revocation of FCC licenses needed to operate certain transmission facilities used in connection with cable operations. The Telecommunications Act of 1996 altered the regulatory structure governing the nation’s communications providers. It removed barriers to competition in both the cable television market and the voice services market. Among other things, it reduced the scope of cable rate regulation and encouraged additional competition in the video programming industry by allowing telephone companies to provide video programming in their own telephone service areas. Future legislative and regulatory changes could adversely affect the Company’s operations.

GHC Agreements. On June 16, 2015, Cable One entered into several agreements with GHC that set forth the principal actions taken in connection with the spin-off and that govern the relationship of the parties following the spin-off, including a Separation and Distribution Agreement, a Tax Matters Agreement and an Employee Matters Agreement. The aggregate costs and reimbursements paid to GHC totaled $0.1 million and $0.3 million for the three and six months ended June 30, 2017, respectively.

16

Table of Contents

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

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our unaudited Consolidated Financial Statements and related notes included in this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and notes thereto as of and for the year ended December 31, 2016 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with the SEC on March 1, 2017. Our results of operations for the three and six months ended June 30, 2017 may not be indicative of our future results.

Overview

Our Business

We are a fully integrated provider of data, video and voice services in 21 Western, Midwestern and Southern states. We provide these broadband services to residential and business customers in more than 750 communities. The markets we serve are primarily non-metropolitan, secondary markets, with 77% of our customers located in seven states: Arizona, Idaho, Illinois, Mississippi, Missouri, Oklahoma and Texas. Our biggest customer concentrations are in the Mississippi Gulf Coast region and in the greater Boise, Idaho region. We are the seventh-largest cable system operator in the United States based on customers and revenues in 2016, providing service to 805,483 residential and business customers out of approximately 2.1 million homes passed as of June 30, 2017. Of these customers, 640,337 subscribed to data services, 384,004 subscribed to video services and 138,286 subscribed to voice services.

We generate substantially all of our revenues through five primary products. Ranked by share of our total revenues through the first six months of 2017, they are residential data (43.1%), residential video (35.1%), business services (data, video and voice – 13.3%), residential voice (4.7%) and advertising sales (2.6%). The profit margins, growth rates and capital intensity of our five primary products vary significantly due to competition, product maturity and relative costs.

On May 1, 2017, we completed the acquisition of all of the outstanding equity interests of NewWave, and NewWave became a wholly owned subsidiary of ours. We paid a purchase price of $741.0 million in cash on a debt-free basis and subject to customary post-closing adjustments. See Note 2 of the Notes to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for details on this transaction. Our results of operations for the three and six months ended June 30, 2017 include two months of NewWave operations following the completion of the acquisition.

Prior to 2012, we were focused on growing revenues through subscriber retention and growth in overall primary service units (“PSUs”). Accordingly, our strategies consisted of, among others, offering promotional discounts to new and existing subscribers adding new services and to subscribers purchasing more than one service offering. Since 2012, we have adapted our strategy to face the industry-wide trends of declining profitability of residential video services and declining revenues from residential voice services. We believe the declining profitability of residential video services is primarily due to competition from other content providers and increasing programming costs and retransmission fees, and the declining revenues from residential voice services is primarily due to the increasing use of wireless voice services in addition to, or instead of, landline voice service. Beginning in 2013, we shifted our focus away from maximizing customer PSUs and towards growing and maintaining our higher margin businesses, namely residential data and business services. Separately, we have also focused on retaining customers with a high expected lifetime value (“LTV”), who are less attracted by discounting, require less support and churn less. This strategy focuses on increasing Adjusted EBITDA, Adjusted EBITDA less capital expenditures and margins (see “Use of Adjusted EBITDA” for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable GAAP measure).

The trends described above have impacted our four largest product lines in the following ways:

● Residential data. We experienced growth in the number of and revenues from our residential data customers every year since 2013. We expect this growth to continue due to projected increases in the number of potential customers for us to serve, as there are still a number of households in our markets that do not subscribe to data services from any provider. We expect to capture a portion of these customers and anticipate capturing additional market share from existing data subscribers due to our recent upgrades in broadband capacity and our ability to offer higher access speeds than many of our competitors. 

17

Table of Contents

● Residential video. Residential video service is a competitive and highly penetrated business. As we focus on the higher-margin businesses of residential data and business services, we are de-emphasizing our residential video business and, as a result, expect residential video revenues to decline in the future. 

● Residential voice. We have experienced declines in residential voice customers as a result of homes in the United States deciding to terminate their landline voice service and exclusively use wireless voice service. We believe this trend will continue because of competition from wireless voice service. Revenues from residential voice customers have declined over recent years, and we expect this decline will continue.

● Business services. We have experienced significant growth in business data and voice customers and revenues and expect this to continue. We attribute this growth to our strategic focus shift on increasing sales to business customers. More recently, we have expanded our efforts to attract enterprise business customers. Margins in products sold to business customers have remained attractive, and we expect this trend to continue.

We continue to experience increased competition, particularly from telephone companies, cable overbuilders, over-the-top (“OTT”) video providers and direct broadcast satellite (“DBS”) television providers. Because of the levels of competition we face, we believe it is important to make investments in our infrastructure. We made elevated levels of capital investments between 2012 and 2015 to increase our cable plant capacities and reliability, launch all-digital video services, which has freed up approximately three-fourths of average plant bandwidth for data services, and increase data capacity by moving from four-channel bonding to 32-channel bonding. We expect to continue devoting financial resources to infrastructure improvements, including in the new markets we acquired in the NewWave transaction, because we believe these investments are necessary to remain competitive.

Our goals are to continue to grow residential data and business services and to maintain profit margins to deliver strong Adjusted EBITDA. To achieve these goals, we intend to continue our industrial engineering-driven cost management, remain focused on customers with high LTV and follow through with further planned investments in broadband plant upgrades and new data services offerings for residential and business customers.

Our business is subject to extensive governmental regulation. Such regulation has led to increases in our operational and administrative expenses. In addition, we could be significantly impacted by changes to the existing regulatory framework, whether triggered by legislative, administrative or judicial rulings. In 2015, the FCC used its Title II authority to regulate broadband internet access services through the Open Internet Order (the “Order”). According to the Order, the FCC will forbear from systematic rate regulation of internet access service at the subscriber level, which we believe will permit us to continue to manage data usage efficiently by establishing appropriate rates. However, the Order also imposes on all providers of broadband internet access service, including us, obligations that limit the ways certain types of traffic can be managed. In June 2016, the U.S. Court of Appeals for the D.C. Circuit upheld the Order in its entirety. On May 1, 2017, the U.S. Court of Appeals for the D.C. Circuit denied a petition for an en banc rehearing of the June 2016 decision upholding the Order. Parties have been granted until September 28, 2017 to file petitions for certiorari with the U.S. Supreme Court. In May 2017, the FCC issued a Notice of Proposed Rulemaking to revise the Open Internet rules previously adopted in the Order, and the FCC is seeking comment on its proposals with reply comments due by August 16, 2017. Congress also has proposed legislation regarding the Open Internet rules. We cannot predict whether or when future changes to the regulatory framework will occur at the FCC, in Congress or in the courts. We also cannot predict whether or to what extent the rules as revised by the FCC, Congress or the courts may affect our operations or impose costs on our business.

Results of Operations

PSUs and Customer Counts by Primary Products

As of June 30, 2017, our total PSUs increased 194,396 year-over-year, with increases in residential data, video and voice PSUs of 119,446, 41,834, and 10,713, respectively, and an increase in business PSUs of 22,403. Our total customer relationships increased 145,540, or 22.1%, year-over-year. The year-over-year increases were primarily attributable to new customers acquired as a result of the NewWave acquisition during the second quarter of 2017 and continued organic growth in our primary focus product lines of residential data and business services.

18

Table of Contents

The following table provides an overview of selected customer data for our cable systems for the time periods specified:

	As of June 30,				Annual Net Gain/(Loss)
	2017		2016		Change		% Change
Residential data PSUs		585,049		465,603		119,446		25.7
Residential video PSUs (1)		366,816		324,982		41,834		12.9
Residential voice PSUs		114,519		103,806		10,713		10.3
Total residential PSUs		1,066,384		894,391		171,993		19.2
Business data PSUs (2)		55,288		42,714		12,574		29.4
Business video PSUs		17,188		13,992		3,196		22.8
Business voice PSUs (3)		23,767		17,134		6,633		38.7
Total business PSUs		96,243		73,840		22,403		30.3
Total PSUs		1,162,627		968,231		194,396		20.1
Total residential customer relationships		741,225		610,293		130,932		21.5
Total business customer relationships		64,258		49,650		14,608		29.4
Total customer relationships		805,483		659,943		145,540		22.1

(1)	Residential video PSUs include all basic residential customers who receive video services and may have one or more digital set-top boxes or cable cards deployed. Residential bulk multi-dwelling accounts are included in our video PSUs at the individual unit level.
(2)	Business data PSUs include commercial accounts that receive data service via a cable modem and commercial accounts that receive broadband service optically via fiber connections.
(3)	Business voice customers who have multiple voice lines are only counted once in the PSU total.

The following table provides an overview of selected customer data for our legacy Cable One cable systems excluding the impact of PSUs and customers attained as a result of the NewWave acquisition for the time periods specified:

	As of June 30,				Annual Net Gain/(Loss)
	2017		2016		Change			% Change
Residential data PSUs		474,815		465,603		9,212			2.0
Residential video PSUs (1)		284,695		324,982		(40,287	)		(12.4	)
Residential voice PSUs		92,100		103,806		(11,706	)		(11.3	)
Total residential PSUs		851,610		894,391		(42,781	)		(4.8	)
Business data PSUs (2)		46,909		42,714		4,195			9.8
Business video PSUs		13,295		13,992		(697	)		(5.0	)
Business voice PSUs (3)		19,156		17,134		2,022			11.8
Total business PSUs		79,360		73,840		5,520			7.5
Total PSUs		930,970		968,231		(37,261	)		(3.8	)
Total residential customer relationships		601,883		610,293		(8,410	)		(1.4	)
Total business customer relationships		53,426		49,650		3,776			7.6
Total customer relationships		655,309		659,943		(4,634	)		(0.7	)

(1)	Residential video PSUs include all basic residential customers who receive video services and may have one or more digital set-top boxes or cable cards deployed. Residential bulk multi-dwelling accounts are included in our video PSUs at the individual unit level.
(2)	Business data PSUs include commercial accounts that receive data service via a cable modem and commercial accounts that receive broadband service optically via fiber connections.
(3)	Business voice customers who have multiple voice lines are only counted once in the PSU total.

In recent years, our customer mix has shifted, causing subscribers to move from triple-play packages to single and double-play packages. This is because some residential video customers have defected to DBS and OTT offerings in lieu of video and more households have discontinued landline voice service. In addition, we have focused on selling data-only packages to new customers rather than on cross-selling video to these customers.

19

Table of Contents

Comparison of Three Months Ended June 30, 2017 to Three Months Ended June 30, 2016

Revenues

Revenues increased $36.5 million, or 17.8%, due primarily to increases in residential data, residential video and business services revenues of $17.1 million, $10.9 million and $8.1 million, respectively. The increase was the result of the NewWave operations since May 1, 2017 and organic growth in our higher margin product lines of residential data and business services.

Revenues by service offering were as follows for the three months ended June 30, 2017 and 2016, together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):

	Three Months Ended June 30,
	2017				2016				2017 vs. 2016
			% of				% of		$			%
	Revenues		Revenues		Revenues		Revenues		Change			Change
Residential data	$	103,155		42.8	$	86,031		42.1	$	17,124			19.9
Residential video		84,873		35.2		74,016		36.2		10,857			14.7
Residential voice		11,417		4.7		10,944		5.4		473			4.3
Business services		32,543		13.5		24,491		12.0		8,052			32.9
Advertising sales		5,970		2.5		6,616		3.2		(646	)		(9.8	)
Other		3,084		1.3		2,459		1.1		625			25.4
Total revenues	$	241,042		100.0	$	204,557		100.0	$	36,485			17.8

Average monthly revenue per unit for the indicated service offerings were as follows for the three months ended June 30, 2017 and 2016:

	Three Months Ended June 30,				2017 vs. 2016
	2017		2016		$ Change		% Change
Residential data (1)	$	62.52	$	61.49	$	1.03		1.7
Residential video (1)	$	82.11	$	74.59	$	7.52		10.1
Residential voice (1)	$	35.09	$	34.55	$	0.54		1.6
Business services (2)	$	180.38	$	166.61	$	13.77		8.3

(1)

Average monthly per unit values represent the applicable residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each period, except that for any new PSUs added as a result of an acquisition occurring during the reporting period, the associated average monthly per unit values represent the applicable residential service revenues divided by the corresponding weighted average of the number of PSUs during such period.

(2)

Average monthly per unit values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, except that for any new business customer relationships added as a result of an acquisition occurring during the reporting period, the associated average monthly per unit values represent business services revenues divided by the weighted average of the number of business customer relationships during such period.

Revenues by service offering, excluding the impact of revenues related to NewWave, were as follows for the three months ended June 30, 2017 and 2016, together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):

	Three Months Ended June 30,
	2017				2016				2017 vs. 2016
			% of				% of		$			%
	Revenues		Revenues		Revenues		Revenues		Change			Change
Residential data	$	92,413		44.2	$	86,031		42.1	$	6,382			7.4
Residential video		70,840		33.9		74,016		36.2		(3,176	)		(4.3	)
Residential voice		9,803		4.7		10,944		5.4		(1,141	)		(10.4	)
Business services		27,901		13.4		24,491		12.0		3,410			13.9
Advertising sales		5,699		2.7		6,616		3.2		(917	)		(13.9	)
Other		2,200		1.1		2,459		1.1		(259	)		(10.5	)
Total revenues	$	208,856		100.0	$	204,557		100.0	$	4,299			2.1

20

Table of Contents

Average monthly revenue per unit, excluding the impact of revenues and customers attained as a result of the NewWave acquisition in the second quarter of 2017 were as follows for the three months ended June 30, 2017 and 2016:

	Three Months Ended June 30,				2017 vs. 2016
	2017		2016		$ Change		% Change
Residential data (1)	$	64.70	$	61.49	$	3.21		5.2
Residential video (1)	$	81.65	$	74.59	$	7.06		9.5
Residential voice (1)	$	34.98	$	34.55	$	0.43		1.2
Business services (2)	$	175.69	$	166.61	$	9.08		5.4

(1)	Average monthly per unit values represent the applicable residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each period.
(2)	Average monthly per unit values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period.

Residential data service revenues increased $17.1 million, or 19.9%, due primarily to an increase in residential data customers of 25.7% year-over-year as a result of the NewWave operations during the second quarter of 2017 and organic subscriber growth, a reduction in package discounting and increased subscriptions to premium tiers by residential customers.

Residential video service revenues increased $10.9 million, or 14.7%, due primarily to an increase in residential video customers of 12.9% as a result of the NewWave operations during the second quarter of 2017 and a rate adjustment in the first quarter of 2017.

Residential voice service revenues increased $0.5 million, or 4.3%, due primarily to an increase in residential voice customers of 10.3% as a result of the NewWave operations during the second quarter of 2017.

Business services revenues increased $8.1 million, or 32.9%, due primarily to the NewWave operations during the second quarter of 2017, growth in our business data and voice services to small and medium-sized businesses and enterprise customers and a rate adjustment for business video customers in the first quarter of 2017. Total business customer relationships increased 29.4% year-over-year. Overall, business services comprised 13.5% of our total revenues for the second quarter of 2017 compared to 12.0% of our total revenues for the second quarter of 2016.

Advertising sales revenues decreased $0.6 million, or 9.8%, primarily as a result of fewer video customers to be reached by advertising spots.

Other revenues increased $0.6 million, or 25.4%, in the second quarter of 2017.

Operating Costs and Expenses

Operating expenses (excluding depreciation and amortization) were $83.9 million in the second quarter of 2017 and increased $8.2 million, or 10.8%, compared to the second quarter of 2016. Operating expenses as a percentage of revenues were 34.8% for the second quarter of 2017 compared to 37.0% for the year ago quarter. Additional operating expenses attributable to the NewWave operations were $15.9 million for the second quarter of 2017. This increase was partially offset by a $3.9 million decrease in labor costs associated with our change in accounting estimate for capitalized labor costs discussed in Note 1 of the Notes to our Consolidated Financial Statements, a $1.6 million decrease in programming costs resulting from fewer video subscribers, and a decrease in backbone and internet connectivity fees.

Selling, general and administrative expenses increased $7.7 million, or 17.7%, to $51.2 million. Selling, general and administrative expenses as a percentage of revenues were 21.2% and 21.3% for second quarter of 2017 and 2016, respectively. Additional selling, general and administrative expenses attributable to the NewWave operations were $5.0 million for the second quarter of 2017. The remaining increase was due to higher acquisition-related expenses of $2.8 million and severance costs of $1.3 million, partially offset by a $1.2 million decrease in labor costs in the second quarter of 2017 associated with our aforementioned change in accounting estimate for capitalized labor costs.

Depreciation and amortization increased $12.2 million, or 35.2%, including $7.9 million attributable to the NewWave operations. The increase was due primarily to new assets placed in service since the second quarter of 2016, including property, plant and equipment and amortized intangible assets acquired as part of the NewWave acquisition, partially offset by assets that became fully depreciated since the second quarter of 2016. As a percentage of revenues, depreciation and amortization expense was 19.5% for the second quarter of 2017 compared to 17.0% for the second quarter of 2016.

21

Table of Contents

Interest Expense

Interest expense increased $4.2 million, or 56.1%, due primarily to additional debt incurred during the second quarter of 2017 to finance the NewWave acquisition.

Other Income (Expense)

Other expense of $0.3 million in the second quarter of 2017 was primarily attributable to the write-off of $0.6 million of debt issuance costs related to the additional debt incurred to finance the NewWave acquisition, partially offset by interest income. Other income of $0.2 million in the second quarter of 2016 consisted of interest income.

Provision for Income Taxes

Provision for income taxes increased $1.4 million, or 8.5%, due primarily to an increase in income before taxes of $3.4 million. Our effective tax rate was 38.6% and 38.3% for the three months ended June 30, 2017 and 2016, respectively.

Net Income

As a result of the factors described above, our net income was $28.6 million for the second quarter of 2017 compared to $26.6 million for the second quarter of 2016, an increase of 7.3%.

Comparison of Six Months Ended June 30, 2017 to Six Months Ended June 30, 2016

Revenues

Revenues increased $41.1 million, or 10.1%, due primarily to increases in residential data, residential video and business services revenues of $23.9 million, $8.5 million and $11.2 million, respectively. The increase was the result of the NewWave operations since May 1, 2017 and organic growth in our higher margin product lines of residential data and business services, partially offset by decreases in residential voice and advertising revenues of $1.0 million and $2.0 million, respectively.

Revenues by service offering were as follows for the six months ended June 30, 2017 and 2016, together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):

	Six Months Ended June 30,
	2017				2016				2017 vs. 2016
			% of				% of		$			%
	Revenues		Revenues		Revenues		Revenues		Change			Change
Residential data	$	193,356		43.1	$	169,470		41.6	$	23,886			14.1
Residential video		157,328		35.1		148,869		36.5		8,459			5.7
Residential voice		21,284		4.7		22,258		5.5		(974	)		(4.4	)
Business services		59,505		13.3		48,318		11.9		11,187			23.2
Advertising sales		11,592		2.6		13,619		3.3		(2,027	)		(14.9	)
Other		5,404		1.2		4,828		1.2		576			11.9
Total revenues	$	448,469		100.0	$	407,362		100.0	$	41,107			10.1

Average monthly revenue per unit for the indicated service offerings were as follows for the six months ended June 30, 2017 and 2016:

	Six Months Ended June 30,				2017 vs. 2016
	2017		2016		$ Change		% Change
Residential data (1)	$	63.33	$	60.97	$	2.36		3.9
Residential video (1)	$	81.10	$	73.53	$	7.57		10.3
Residential voice (1)	$	34.63	$	34.53	$	0.10		0.3
Business services (2)	$	176.87	$	165.98	$	10.89		6.6

(1)

Average monthly per unit values represent the applicable residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each period, except that for any new PSUs added as a result of an acquisition occurring during the reporting period, the associated average monthly per unit values represent the applicable residential service revenues divided by the corresponding weighted average of the number of PSUs during such period.

(2)

Average monthly per unit values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, except that for any new business customer relationships added as a result of an acquisition occurring during the reporting period, the associated average monthly per unit values represent business services revenues divided by the weighted average of the number of business customer relationships during such period.

22

Table of Contents

Revenues by service offering, excluding the impact of revenues related to NewWave, were as follows for the six months ended June 30, 2017 and 2016, together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):

	Six Months Ended June 30,
	2017				2016				2017 vs. 2016
			% of				% of		$			%
	Revenues		Revenues		Revenues		Revenues		Change			Change
Residential data	$	182,614		43.9	$	169,470		41.6	$	13,144			7.8
Residential video		143,295		34.4		148,869		36.5		(5,574	)		(3.7	)
Residential voice		19,670		4.7		22,258		5.5		(2,588	)		(11.6	)
Business services		54,863		13.2		48,318		11.9		6,545			13.5
Advertising sales		11,321		2.7		13,619		3.3		(2,298	)		(16.9	)
Other		4,520		1.1		4,828		1.2		(308	)		(6.4	)
Total revenues	$	416,283		100.0	$	407,362		100.0	$	8,921			2.2

Average monthly revenue per unit, excluding the impact of revenues and customers attained as a result of the NewWave acquisition in the second quarter of 2017 were as follows for the six months ended June 30, 2017 and 2016:

	Six Months Ended June 30,				2017 vs. 2016
	2017		2016		$ Change		% Change
Residential data (1)	$	64.49	$	60.97	$	3.52		5.8
Residential video (1)	$	80.79	$	73.53	$	7.26		9.9
Residential voice (1)	$	34.54	$	34.53	$	0.01		-
Business services (2)	$	174.25	$	165.98	$	8.27		5.0

(1)	Average monthly per unit values represent the applicable residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each period.
(2)	Average monthly per unit values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period.

Residential data service revenues increased $23.9 million, or 14.1%, due primarily to an increase in residential data customers of 25.7% year-over-year as a result of the NewWave operations during the second quarter of 2017 and organic subscriber growth, a reduction in package discounting and increased subscriptions to premium tiers by residential customers.

Residential video service revenues increased $8.5 million, or 5.7%, due primarily to an increase in residential video customers of 12.9% as a result of the NewWave operations during the second quarter of 2017 and a rate adjustment in the first quarter of 2017.

Residential voice service revenues decreased $1.0 million, or 4.4%, due primarily to a decrease in legacy Cable One voice customers, partially offset by increased customers as a result of the NewWave operations during the second quarter of 2017.

Business services revenues increased $11.2 million, or 23.2%, due primarily to the NewWave operations during the second quarter of 2017, growth in our business data and voice services to small and medium-sized businesses and enterprise customers and a rate adjustment for business video customers in the first quarter of 2017. Total business customer relationships increased 29.4% year-over-year. Overall, business services comprised 13.3% of our total revenues for the six months ended June 30, 2017 compared to 11.9% of our total revenues for the six months ended June 30, 2016.

Advertising sales revenues decreased $2.0 million, or 14.9%, primarily as a result of fewer video customers to be reached by advertising spots.

Other revenues increased $0.6 million, or 11.9%.

23

Table of Contents

Operating Costs and Expenses

Operating expenses (excluding depreciation and amortization) were $152.9 million for the six months ended June 30, 2017 and increased $0.8 million, or 0.5%, compared to the year ago period. Operating expenses as a percentage of revenues were 34.1% for the first half of 2017 compared to 37.3% for the first half of 2016. Additional operating expenses attributable to the NewWave operations were $15.9 million for the first half of 2017. This increase was partially offset by an $8.6 million decrease in labor costs associated with our aforementioned change in accounting estimate for capitalized labor costs, a $2.8 million decrease in programming costs resulting from fewer video subscribers, a $1.6 million decrease in backbone and internet connectivity fees, and lower group insurance and repairs and maintenance costs.

Selling, general and administrative expenses increased $9.5 million, or 10.9%, to $96.9 million. Selling, general and administrative expenses as a percentage of revenues were 21.6% and 21.4% for the six months ended June 30, 2017 and 2016, respectively. Additional selling, general and administrative expenses attributable to the NewWave operations were $5.0 million for the first half of 2017. The remaining increase was due to increases in legacy Cable One acquisition-related expenses of $4.1 million and severance costs of $2.6 million, partially offset by a $2.4 million decrease in labor costs associated with our aforementioned change in accounting estimate for capitalized labor costs.

Depreciation and amortization increased $15.9 million, or 22.9%, including $7.9 million attributable to the NewWave operations. The increase was due primarily to new assets placed in service since the second quarter of 2016, including property, plant and equipment and amortized intangible assets acquired as part of the NewWave acquisition, partially offset by assets that became fully depreciated since the second quarter of 2016. As a percentage of revenues, depreciation and amortization expense was 19.0% for the six months ended June 30, 2017 compared to 17.0% for the six months ended June 30, 2016.

We recognized a net gain on disposal of assets of $5.7 million in the first half of 2017, primarily related to the sale of a portion of a non-operating property that included our previous headquarters building. In the first half of 2016, we recognized a net loss of $0.6 million on disposals of assets.

Interest Expense

Interest expense increased $4.3 million, or 28.4%, due primarily to additional debt incurred during the second quarter of 2017 to finance the NewWave acquisition.

Other Income (Expense)

Other expense of less than $0.1 million for the six months ended June 30, 2017 was primarily attributable to the write-off of $0.6 million of debt issuance costs related to the additional debt incurred to finance the NewWave acquisition, largely offset by interest income. Other income of $0.7 million for the comparable year ago period consisted of interest income and certain tax credits.

Provision for Income Taxes

Provision for income taxes increased $7.9 million, or 26.6%, due primarily to an increase in income before taxes of $16.0 million. Our effective tax rate was 37.9% and 35.7% for the six months ended June 30, 2017 and 2016, respectively. The increase in the effective tax rate primarily relates to $2.2 million of income tax benefits from certain spin-off and state tax items recognized in the first quarter of 2016, which did not recur.

Net Income

As a result of the factors described above, our net income was $61.8 million for the six months ended June 30, 2017 compared to $53.7 million for the six months ended June 30, 2016.

Use of Adjusted EBITDA

We use certain measures that are not defined by GAAP to evaluate various aspects of our business. Adjusted EBITDA is a non-GAAP financial measure and should be considered in addition to, and not as a substitute for, net income reported in accordance with GAAP. This term, as defined by us, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is reconciled to net income below.

Adjusted EBITDA is defined as net income plus interest expense, provision for income taxes, depreciation and amortization, equity-based compensation expense, severance expense, (gain) loss on deferred compensation, acquisition-related costs, (gain) loss on disposal of assets, other (income) expense, net, and other unusual operating expenses, as provided in the table below. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our business as well as other non-cash or special items and is unaffected by our capital structure or investment activities. This measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of financing. These costs are evaluated through other financial metrics.

24

Table of Contents

We use Adjusted EBITDA to assess our performance. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under our outstanding Notes and Senior Credit Facilities to determine compliance with the covenants contained in the Notes and Senior Credit Facilities. For the purpose of calculating compliance with leverage covenants, we use a measure similar to Adjusted EBITDA, as presented. Adjusted EBITDA is also a significant performance measure used by us in our annual incentive compensation program. Adjusted EBITDA does not take into account cash used for mandatory debt service requirements or other non-discretionary expenditures, and thus does not represent residual funds available for discretionary uses.

	Three Months Ended June 30,					2017 vs. 2016
(dollars in thousands)	2017		2016			$ Change			% Change
Net income (1)	$	28,576	$	26,633		$	1,943			7.3
Plus:   Interest expense		11,782		7,549			4,233			56.1
Provision for income taxes		17,967		16,558			1,409			8.5
Depreciation and amortization		46,890		34,689			12,201			35.2
Equity-based compensation expense		2,418		3,420			(1,002	)		(29.3	)
Severance expense		1,345		-			1,345			NM
(Gain) loss on deferred compensation		339		100			239			239.0
Acquisition-related costs		3,242		445			2,797			NM
(Gain) loss on disposal of assets		462		157			305			194.3
Other (income) expense, net		322		(183	)		505			NM
Adjusted EBITDA (1)	$	113,343	$	89,368		$	23,975			26.8

	Six Months Ended June 30,						2017 vs. 2016
(dollars in thousands)	2017			2016			$ Change			% Change
Net income (1)	$	61,790		$	53,677		$	8,113			15.1
Plus:   Interest expense		19,389			15,104			4,285			28.4
Provision for income taxes		37,787			29,852			7,935			26.6
Depreciation and amortization		85,295			69,382			15,913			22.9
Equity-based compensation expense		4,845			6,466			(1,621	)		(25.1	)
Severance expense		2,599			-			2,599			NM
(Gain) loss on deferred compensation		429			(120	)		549			NM
Acquisition-related costs		4,723			544			4,179			NM
(Gain) loss on disposal of assets		(5,686	)		565			(6,251	)		NM
Other (income) expense, net		35			(693	)		728			(105.1	)
Adjusted EBITDA (1)	$	211,206		$	174,777		$	36,429			20.8

NM = Not meaningful.

⁽¹⁾  Net income and Adjusted EBITDA include two months of NewWave operations and the favorable impact of a reduction in expense of $5.1 million and $11.0 million for the three and six months ended June 30, 2017, respectively, due to a change in accounting estimate related to capitalized labor costs. Without the contribution from NewWave operations, net income would have been $26.5 million and $59.7 million and Adjusted EBITDA growth would have been 14.2% and 14.4% for the three and six months ended June 30, 2017, respectively. Excluding both the NewWave impact and the change in estimate related to capitalized labor, net income would have been $23.4 million and $52.9 million and Adjusted EBITDA growth would have been 8.4% and 8.1% for the three and six months ended June 30, 2017, respectively.

We believe Adjusted EBITDA is useful to investors in evaluating the operating performance of our company. Adjusted EBITDA and similar measures with similar titles are commonly used by investors, analysts and peers to compare performance in our industry, although our measure of Adjusted EBITDA may not be directly comparable to similar measures reported by other companies.

25

Table of Contents

Financial Condition: Liquidity and Capital Resources

Liquidity

Our primary funding requirements are for our ongoing operations, planned capital expenditures, payments of quarterly dividends and share repurchases. We believe that existing cash balances, our Senior Credit Facilities, as amended, and operating cash flows will provide adequate support for these funding requirements over the next 12 months. However, our ability to fund operations, make planned capital expenditures, pay quarterly dividends and make share repurchases depends on future operating performance and cash flows, which, in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.

The following table shows a summary of our cash flows for the periods indicated (dollars in thousands):

	Six Months Ended June 30,						2017 vs. 2016
	2017			2016			$ Change			% Change
Net cash provided by operating activities	$	130,859		$	125,580		$	5,279			4.2
Net cash used in investing activities		(795,806	)		(75,522	)		(720,284	)		NM
Net cash provided by (used in) financing activities		616,700			(66,516	)		683,216			NM
Change in cash and cash equivalents		(48,247	)		(16,458	)		(31,789	)		193.2
Cash and cash equivalents, beginning of period		138,040			119,199			18,841			NM
Cash and cash equivalents, end of period	$	89,793		$	102,741		$	(12,948	)		(12.6	)

__________

NM = Not meaningful.

During the first half of 2017, our cash and cash equivalents decreased $48.2 million. At June 30, 2017, we had $89.8 million of cash on hand compared to $138.0 million at December 31, 2016. Our working capital was $30.8 million and $74.8 million at June 30, 2017 and December 31, 2016, respectively.

Net cash provided by operating activities was $130.9 million and $125.6 million for the first half of 2017 and 2016, respectively. The year-over-year change in operating cash flow was primarily attributable to higher net income adjusted for depreciation and amortization, equity-based compensation, deferred taxes and gain on disposal of assets, partially offset by changes in operating assets and liabilities. The change in operating assets and liabilities was due primarily to a change in income taxes receivable and accounts payable and accrued liabilities as a result of the timing of payments compared to the first half of 2016.

Net cash used in investing activities was $795.8 million and $75.5 million for the first half of 2017 and 2016, respectively. The increase was due primarily to the NewWave acquisition during the second quarter of 2017 and increased capital expenditures, partially offset by $10.1 million in proceeds received for the sale of a non-operating property in the first quarter of 2017.

Net cash provided by financing activities was $616.7 million in the first half of 2017 compared to net cash used in financing activities of $66.5 million for the first half of 2016. The change was primarily attributable to new debt incurred in connection with the NewWave acquisition during the second quarter of 2017, partially offset by the payment of debt issuance costs, repayment of the Term Loan and a reduction in share repurchases compared to the comparable prior year period.

On July 1, 2015, the Board authorized up to $250 million of share repurchases (subject to a total cap of 600,000 shares of our common stock). Purchases under the share repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases are based on a number of factors, including share price and business and market conditions. Since the inception of the share repurchase program through the end of the second quarter of 2017, we have repurchased 165,633 shares at an aggregate cost of $73.1 million. During the first half of 2017, we repurchased 700 shares at an aggregate cost of $0.4 million, of which all occurred during the first quarter. Additionally, we currently expect to continue to pay quarterly cash dividends on shares of our common stock, subject to approval of the Board. During the second quarter of 2017, the Board approved a quarterly dividend of $1.50 per share of common stock, which was paid on June 2, 2017.

26

Table of Contents

Financing Activity

On June 17, 2015, we issued $450 million aggregate principal amount of 5.75% senior unsecured notes due 2022. The Notes mature on June 15, 2022 and interest is payable on June 15^th and December 15^th of each year. The Notes are jointly and severally guaranteed on a senior unsecured basis (the “Guarantees”) by each of our existing and future domestic subsidiaries that guarantee the Senior Credit Facilities (the “Guarantors”). The Notes are unsecured and senior obligations of the Company. The Guarantees are unsecured and senior obligations of the Guarantors. At our option, the Notes may be redeemed in whole or in part, at any time prior to June 15, 2018, at a price equal to 100% of the aggregate principal amount of the Notes plus accrued and unpaid interest, if any, to (but excluding) the redemption date plus a “make-whole” premium. We may also redeem the Notes, in whole or in part, at any time on or after June 15, 2018, at the redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, to (but excluding) the redemption date. Additionally, at any time prior to June 15, 2018, we may redeem up to 35% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings at a price equal to 105.75% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but excluding) the redemption date. The Indenture includes certain covenants relating to debt incurrence, liens, restricted payments, assets sales and transactions with affiliates, changes in control and mergers or sales of all or substantially all of our assets.

On June 30, 2015, we entered into the Credit Agreement among the Company, as borrower, the lenders party thereto, JPMorgan, as administrative agent, and the other agents party thereto.  The Credit Agreement provided for a five-year Revolving Credit Facility in an aggregate principal amount of $200 million and a five-year Term Loan Facility in an aggregate principal amount of $100 million. Concurrently with our entry into the Credit Agreement, we borrowed the full amount of the Term Loan Facility. The obligations under the Original Credit Facilities were obligations of the Company and were guaranteed by our subsidiary, Cable One VoIP LLC (“Cable One VoIP”).  The obligations under the Original Credit Facilities were secured, subject to certain exceptions, by substantially all of the assets of the Company and Cable One VoIP.

Borrowings under the Original Credit Facilities bore interest, at our option, at a rate per annum determined by reference to either LIBOR or an adjusted base rate, in each case plus an applicable interest rate margin.  The applicable interest rate margin with respect to LIBOR borrowings was a rate per annum between 1.50% and 2.25% and the applicable interest rate margin with respect to adjusted base rate borrowings was a rate per annum between 0.50% and 1.25%, in each case determined on a quarterly basis by reference to a pricing grid based upon our total net leverage ratio. In addition, we are required to pay commitment fees on any unused portion of the Revolving Credit Facility at a rate between 0.25% per annum and 0.40% per annum, determined by reference to the pricing grid.

The Revolving Credit Facility also gives us the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility. Letter of credit issuances under the Revolving Credit Facility of $2.8 million at June 30, 2017 were held for the benefit of certain general and liability insurance matters and bore interest at a rate of 1.625% per annum. We had $197.2 million available for borrowing under the Revolving Credit Facility at June 30, 2017.

On May 1, 2017, we entered into the Restatement Agreement with JPMorgan, as administrative agent, and the lenders party thereto, pursuant to which we amended and restated the Credit Agreement and incurred $750 million of New Loans which were used, together with cash on hand, to (i) finance the transactions contemplated by the Merger Agreement, (ii) repay in full the Term Loan and (iii) pay related fees and expenses.

The New Loans consist of (a) a five-year Term Loan A in an aggregate principal amount of $250 million and (b) a seven-year Term Loan B in an aggregate principal amount of $500 million, which are guaranteed by our wholly owned subsidiaries and are secured, subject to certain exceptions, by substantially all assets of our company and the guarantors.

The interest margins applicable to the New Loans under the Amended and Restated Credit Agreement are, at our option, equal to either LIBOR or a base rate, plus an applicable margin equal to, (x) with respect to the Term Loan A, 2.25% to 1.50% for LIBOR loans and 1.25% to 0.50% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on our total net leverage ratio and (y) with respect to the Term Loan B, 2.25% for LIBOR loans and 1.25% for base rate loans. The Term Loan A may be prepaid at any time without premium and amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 2.5% per annum for the first year after funding, 5.0% per annum for the second year after funding, 7.5% for the third year after funding and 10.0% per annum for the fourth and fifth years after funding, with the outstanding balance due upon maturity. The Term Loan B amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 1.0% per annum, with the balance due upon maturity. The Term Loan B is subject to a 1.0% prepayment penalty if prepaid within six months of funding, benefits from certain “most favored nation” pricing protections and is not subject to the financial maintenance covenants under the Amended and Restated Credit Agreement. Other than as set forth above, the New Loans are subject to terms substantially similar to those under the Credit Agreement.

27

Table of Contents

As of June 30, 2017, outstanding borrowings under the Term Loan A and Term Loan B were $250 million and $500 million, and bore interest at a rate of 2.93% per annum and 3.43% per annum, respectively.

In connection with the New Loans, we incurred $15.2 million in debt issuance costs, of which $0.6 million was written off during the quarter ended June 30, 2017. Unamortized debt issuance costs totaled $21.6 million and $8.1 million at June 30, 2017 and December 31, 2016, respectively.

Capital Expenditures

We have significant ongoing capital expenditure requirements. Capital expenditures are funded primarily by cash on hand and cash flows from operating activities.

We have adopted capital expenditure disclosure guidance as supported by the Internet & Television Association (“NCTA”). These disclosures are not required under GAAP, nor do they impact our accounting for capital expenditures under GAAP. The amounts of capital expenditures reported in this Quarterly Report on Form 10-Q are calculated in accordance with NCTA disclosure guidelines, which include assets acquired during the relevant periods.

The following table presents our major capital expenditure categories in accordance with NCTA disclosure guidelines for the six months ended June 30, 2017 and 2016 (in thousands):

	Six Months Ended June 30,
	2017		2016
Customer premise equipment	$	13,941	$	12,248
Commercial		4,347		2,909
Scalable infrastructure		16,872		25,163
Line extensions		6,149		4,004
Upgrade/rebuild		10,239		6,459
Support capital		24,882		14,240
Total	$	76,430	$	65,023

Contractual Obligations and Contingent Commitments

The following is a summary of our contractual obligations remaining as of June 30, 2017 (in thousands):

Years ending December 31,	Programming Purchase Commitments		Operating Leases		Total Debt, including Capital Leases		Other Purchase Obligations(1)		Total
2017 (remaining months)	$	108,744	$	1,116	$	5,633	$	12,611	$	128,104
2018		180,550		1,761		14,392		19,204		215,907
2019		131,217		1,218		20,642		12,812		165,889
2020		62,401		827		26,892		6,878		96,998
2021		29,353		550		30,017		5,009		64,929
Thereafter		11		1,004		1,102,700		4,237		1,107,952
Total	$	512,276	$	6,476	$	1,200,276	$	60,751	$	1,779,779

⁽¹⁾ Includes purchase obligations related to capital projects and other legally binding commitments. Other purchase orders made in the ordinary course of business are excluded from the table above. Any amounts for which we are liable under purchase orders are reflected in our Consolidated Balance Sheet within Accounts payable and accrued liabilities.

Programming and content purchases represent contracts that we have with cable television networks and broadcast stations to provide programming services to our subscribers. The amounts included above represent estimates of the future programming costs for these contract requirements and commitments based on tier placement as of June 30, 2017 and estimated subscriber numbers applied to the per-subscriber rates contained in these contracts. Actual amounts due under such contracts may differ from the amounts above based on the actual subscriber numbers and tier placements. In addition, programming purchases sometimes occur pursuant to non-binding commitments, which are not reflected in the summary above.

28

Table of Contents

Total debt relates to principal repayment obligations as defined by the agreements described in the “Financing Activity” section above and for capital leases.

The following items are not included as contractual obligations due to various factors discussed below. However, we incur these costs as part of our operations:

● We rent utility poles used in our operations. Generally, pole rentals are cancellable on short notice, but we anticipate that such rentals will recur. Rent expense for pole attachments was $1.9 million and $1.4 million for the three months ended June 30, 2017 and 2016, respectively, and $3.5 million and $2.9 million for the six months ended June 30, 2017 and 2016, respectively.

● We pay franchise fees under multi-year franchise agreements based on a percentage of revenues generated from video service per year. Franchise fees and other franchise-related costs included in the Consolidated Statements of Operations and Comprehensive Income were $4.0 million and $3.6 million for the three months ended June 30, 2017 and 2016, respectively, and $7.5 million and $7.2 million for the six months ended June 30, 2017 and 2016, respectively.

● We have cable franchise agreements requiring the construction of cable plant and the provision of services to customers within the franchise areas. In connection with these obligations under existing franchise agreements, we obtain surety bonds or letters of credit guaranteeing performance to municipalities and public utilities and payment of insurance premiums. Such surety bonds and letters of credit as of June 30, 2017 and December 31, 2016 totaled $8.8 million and $5.1 million, respectively. Payments under these arrangements are required only in the event of nonperformance. We do not expect that these contingent commitments will result in any amounts being paid.

Off-Balance Sheet Arrangements

With the exception of surety bonds and letters of credit noted above, we do not have any off-balance-sheet arrangements or financing activities with special-purpose entities.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

An accounting policy is considered to be critical if it is important to our results of operations and financial condition and if it requires management’s most difficult, subjective and complex judgments in its application. Except for the change in accounting estimate regarding labor capitalization as discussed in Note 1 of the Notes to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, there have been no material changes to the critical accounting policies and estimates included in our Annual Report on Form 10-K filed with the SEC on March 1, 2017.

29

Table of Contents

Cautionary Statement Regarding Forward-Looking Statements

This document contains “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions and projections about the cable industry and our business and financial results. Forward-looking statements often include words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating or financial performance. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf. Important factors that could cause our actual results to differ materially from those in our forward-looking statements include government regulation, economic, strategic, political and social conditions and the following factors:

● the effect of our acquisition of NewWave on our ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners;

● the potential diversion of senior management’s attention from our ongoing operations due to the acquisition of NewWave;

● uncertainties as to our ability and the amount of time necessary to realize the expected synergies and other benefits of the NewWave transaction;

● our ability to integrate NewWave’s operations into our own in an efficient and effective manner;

● rising levels of competition from historical and new entrants in our markets;

● recent and future changes in technology;

● our ability to continue to grow our business services product;

● increases in programming costs and retransmission fees;

● our ability to obtain support from vendors;

● the effects of any significant acquisitions by us;

● adverse economic conditions;

● the integrity and security of our network and information systems;

● legislative and regulatory efforts to impose new legal requirements on our data services;

● changing and additional regulation of our data, video and voice services;

● our ability to renew cable system franchises;

● increases in pole attachment costs;

● the failure to meet earnings expectations;

● the adequacy of our risk management framework;

● changes in tax and other laws and regulations;

● changes in GAAP or other applicable accounting policies; and

● the other risks and uncertainties detailed in the section titled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 1, 2017.

Any forward-looking statements made by us in this document speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential gain/loss arising from changes in market rates and prices, such as interest rates. There have been no significant changes to our market risk disclosures included in our Annual Report on Form 10-K filed with the SEC on March 1, 2017.

Item 4.     Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

As a result of the NewWave acquisition on May 1, 2017, we have implemented internal controls over financial reporting to include consolidation of NewWave and acquisition-related accounting and disclosures. The NewWave operations utilize separate information and accounting systems and processes. Our management is in the process of reviewing and evaluating the design and operating effectiveness of internal control over financial reporting relating to the NewWave operations.

30

Table of Contents

Except as disclosed above, there has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1.     Legal Proceedings

None.

Item 1A.  Risk Factors

There have been no material changes to our risk factors as previously disclosed in our Annual Report on Form 10-K filed with the SEC on March 1, 2017.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth certain information relating to the purchases of our common stock by us and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the three months ended June 30, 2017 (dollars in thousands, except per share data):

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 to 30, 2017		-	$	-		-	$	176,865
May 1 to 31, 2017		-	$	-		-	$	176,865
June 1 to 30, 2017 (2)		149	$	715.26		-	$	176,865
Total		149	$	715.26		-

(1)

On July 1, 2015, the Board authorized up to $250 million of share repurchases (subject to a total cap of 600,000 shares of Company common stock), which was announced on August 7, 2015. Purchases under the share repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases is based on a number of factors, including share price and business and market conditions.

(2)

Represents shares withheld from employees to satisfy estimated tax withholding obligations in connection with the vesting of restricted shares and exercises of SARs under the 2015 Plan. The average price paid per share for the common stock withheld was based on the closing price of our common stock on the applicable vesting or exercise date.

Item 3.     Defaults Upon Senior Securities

None.

Item 4.     Mine Safety Disclosures

Not applicable.

Item 5.     Other Information

Not applicable.

31

Table of Contents

Item 6.     Exhibits

Exhibit  Number	Description
4.1	First Supplemental Indenture, dated as of May 1, 2017, among Avenue Broadband Communications LLC, Telecommunications Management, LLC, Ultra Communications Group, LLC, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K of Cable One, Inc. filed on May 4, 2017).
10.1	Restatement Agreement, dated as of May 1, 2017, among Cable One, Inc., Cable One VoIP, LLC, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Cable One, Inc. filed on May 4, 2017).
10.2	Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation Plan (incorporated herein by reference to Annex B to the 2017 Proxy Statement of Cable One, Inc. filed on March 28, 2017).
10.3	Form of Non-Employee Director Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Cable One, Inc. filed on May 4, 2017).
31.1	Principal Executive Officer Certification required by Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Principal Financial Officer Certification required by Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*

__________

* Filed herewith.

** Furnished herewith.

32

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Cable One, Inc. (Registrant)
By:	/s/ Julia M. Laulis
	Name:	Julia M. Laulis
	Title:	President and Chief Executive Officer

Date: August 8, 2017

By:	/s/ Kevin P. Coyle
	Name:	Kevin P. Coyle
	Title:	Chief Financial Officer

Date: August 8, 2017

33

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Julia M. Laulis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 of Cable One, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2017

/s/ Julia M. Laulis

Julia M. Laulis

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

 Exhibit 31.2

CERTIFICATION

I, Kevin P. Coyle, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 of Cable One, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2017

/s/ Kevin P. Coyle

Kevin P. Coyle

Chief Financial Officer

(Principal Financial Officer)

EX-32

 Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Cable One, Inc. (the “Company”), for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, Julia M. Laulis, principal executive officer of the Company, and Kevin P. Coyle, principal financial officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his or her knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Julia M. Laulis
	Julia M. Laulis
	Chief Executive Officer
	(Principal Executive Officer)
Date: August 8, 2017

By:	/s/ Kevin P. Coyle
	Kevin P. Coyle
	Chief Financial Officer
	(Principal Financial Officer)
Date: August 8, 2017

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 04, 2017
Document Information [Line Items]
Entity Registrant Name	CABLE ONE, INC.
Entity Central Index Key	0001632127
Trading Symbol	cabo
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		5,725,853
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current Assets:
Cash and cash equivalents	$ 89,793	$ 138,040
Accounts receivable, net	45,812	32,526
Income tax receivable	16,539	4,547
Prepaid assets	13,256	10,824
Total Current Assets	165,400	185,937
Property, plant and equipment, net	803,383	619,621
Intangibles, net	971,673	497,480
Goodwill	178,374	84,928
Other assets	5,664	9,305
Total Assets	2,124,494	1,397,271
Current Liabilities:
Accounts payable and accrued liabilities	86,601	82,703
Deferred revenue	36,795	22,190
Long-term debt - current portion	11,250	6,250
Total Current Liabilities	134,646	111,143
Long-term debt	1,167,458	530,886
Deferred income taxes	294,850	276,297
Accrued compensation and other liabilities	24,392	24,434
Total Liabilities	1,621,346	942,760
Commitments and contingencies (see Note 12)
Stockholders' Equity
Preferred stock ($0.01 par value; 4,000,000 shares authorized; none issued or outstanding)
Common stock ($0.01 par value; 40,000,000 shares authorized; 5,887,899 shares issued; and 5,725,095 and 5,708,223 shares outstanding as of June 30, 2017 and December 31, 2016, respectively)	59	59
Additional paid-in capital	22,514	17,669
Retained earnings	556,401	511,776
Accumulated other comprehensive loss	(442)	(446)
Treasury stock, at cost (162,804 and 179,676 shares held as of June 30, 2017 and December 31, 2016, respectively)	(75,384)	(74,547)
Total Stockholders' Equity	503,148	454,511
Total Liabilities and Stockholders' Equity	$ 2,124,494	$ 1,397,271

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	4,000,000	4,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	5,887,899	5,887,899
Common stock, shares outstanding (in shares)	5,725,095	5,708,223
Treasury stock, shares (in shares)	162,804	179,676

XML

Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues	$ 241,042	$ 204,557	$ 448,469	$ 407,362
Costs and expenses
Operating (excluding depreciation and amortization)	83,849	75,672	152,932	152,100
Selling, general and administrative	51,194	43,482	96,927	87,375
Depreciation and amortization	46,890	34,689	85,295	69,382
(Gain) loss on disposal of assets	462	157	(5,686)	565
Total operating costs and expenses	182,395	154,000	329,468	309,422
Income from operations	58,647	50,557	119,001	97,940
Interest expense	(11,782)	(7,549)	(19,389)	(15,104)
Other income (expense), net	(322)	183	(35)	693
Income before income taxes	46,543	43,191	99,577	83,529
Provision for income taxes	17,967	16,558	37,787	29,852
Net income	28,576	26,633	61,790	53,677
Other comprehensive gain (loss), net of tax	2	(28)	4	(55)
Comprehensive income	$ 28,578	$ 26,605	$ 61,794	$ 53,622
Net income per common share:
Basic (in dollars per share)	$ 5.03	$ 4.64	$ 10.88	$ 9.30
Diluted (in dollars per share)	$ 4.97	$ 4.62	$ 10.76	$ 9.27
Weighted average common shares outstanding:
Basic (in shares)	5,678,394	5,743,465	5,677,411	5,769,859
Diluted (in shares)	5,745,617	5,766,312	5,740,837	5,788,385

XML

Consolidated Statement of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($) $ in Thousands	Dividends Paid to Shareholders [Member] Common Stock [Member]	Dividends Paid to Shareholders [Member] Additional Paid-in Capital [Member]	Dividends Paid to Shareholders [Member] Retained Earnings [Member]	Dividends Paid to Shareholders [Member] Treasury Stock [Member]	Dividends Paid to Shareholders [Member] AOCI Attributable to Parent [Member]	Dividends Paid to Shareholders [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2016							5,708,223
Balance at Dec. 31, 2016							$ 59	$ 17,669	$ 511,776	$ (74,547)	$ (446)	$ 454,511
Net income									61,790			61,790
Changes in pension, net of tax											4	4
Equity-based compensation (in shares)
Equity-based compensation								4,845				4,845
Issuance of restricted stock awards, net of forfeitures (in shares)							18,238
Issuance of restricted stock awards, net of forfeitures
Repurchases of common stock (in shares)							(700)					(700)
Repurchases of common stock										(399)		$ (399)
Withholding tax for equity awards (in shares)							(666)					(666)
Withholding tax for equity awards										(438)		$ (438)
Dividends paid to stockholders			$ (17,165)			$ (17,165)
Balance (in shares) at Jun. 30, 2017							5,725,095
Balance at Jun. 30, 2017							$ 59	$ 22,514	$ 556,401	$ (75,384)	$ (442)	$ 503,148

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net income	$ 61,790	$ 53,677
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	85,295	69,382
Amortization of debt issuance costs	1,191	809
Equity-based compensation	4,845	6,466
Write-off of debt issuance costs	613
Deferred income taxes	7,832	(3,330)
(Gain) loss on disposal of assets	(5,686)	565
Changes in operating assets and liabilities:
Accounts receivable, net	1,741	3,612
Income tax receivable	(11,992)
Prepaid assets	(1,248)	(1,388)
Accounts payable and accrued liabilities	(14,073)	(4,974)
Deferred revenue	89	(160)
Income taxes payable		(23)
Other assets and liabilities, net	462	944
Net cash provided by operating activities	130,859	125,580
Cash flows from investing activities:
Purchase of business, net of cash acquired	(728,783)
Capital expenditures	(76,430)	(65,023)
Change in accrued expenses related to capital expenditures	(1,505)	(10,958)
Proceeds from sales of property, plant and equipment	10,912	459
Net cash used in investing activities	(795,806)	(75,522)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	750,000
Payment of debt issuance costs	(15,224)
Payments on long-term debt	(95,008)	(1,258)
Repurchases of common stock	(399)	(46,511)
Payment of withholding tax for equity awards	(438)
Dividends paid to stockholders	(17,165)	(17,303)
Cash overdraft	(5,066)	(1,444)
Net cash provided by (used in) financing activities	616,700	(66,516)
Change in cash and cash equivalents	(48,247)	(16,458)
Cash and cash equivalents, beginning of period	138,040	119,199
Cash and cash equivalents, end of period	89,793	102,741
Supplemental cash flow disclosures:
Cash paid for interest	14,031	14,248
Cash paid for income taxes	$ 41,947	$ 32,615

XML

Note 1 - Description of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Significant Accounting Policies [Text Block]

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business.

Cable One, Inc. (“Cable One” or the “Company”) owns and operates cable systems that provide data, video and voice services to residential and commercial subscribers in

21

Western, Midwestern and Southern states of the United States of America. Prior to

July 1, 2015,

Cable One operated as a wholly owned subsidiary of Graham Holdings Company (“GHC”). As of

June 30, 2017,

Cable One provided service to

640,337

data customers,

384,004

video customers and

138,286

voice customers. On

May 1, 2017,

Cable One completed the acquisition of all of the outstanding equity interests of RBI Holding LLC (“NewWave”) and NewWave became a wholly owned subsidiary of Cable One. Cable One paid a purchase price of

$741.0

million in cash on a debt-free basis and subject to customary post-closing adjustments. See Note

2

for details on this transaction.

Unless otherwise stated or the context otherwise indicates, all references in this Quarterly Report on Form

10

-Q to “Cable One,” “us,” “our,” “we” or the “Company” refer to Cable One, Inc. and its wholly owned subsidiaries.

Basis of Presentation.

The accompanying Consolidated Financial Statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States (“GAAP”) for interim financial information; and (ii) the guidance of Rule

10

-

01

of Regulation S-

X

under the Securities Exchange Act of

1934,

as amended (the “Exchange Act”), for financial statements required to be filed with the Securities and Exchange Commission (the “SEC”). As permitted under such rule, certain notes and other financial information normally required by GAAP have been omitted. Management believes the accompanying Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations and cash flows as of and for the periods presented herein. These Consolidated Financial Statements are unaudited and should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Company’s Annual Report on Form

10

-K for the fiscal year ended

December 31, 2016.

The Company’s interim results of operations

may

not

be indicative of its future results.

The

December 31, 2016

year-end balance sheet data was derived from the Company’s audited financial statements, but does

not

include all disclosures required by GAAP.

Certain reclassifications have been made to prior period amounts to conform to the current period presentation.

Principles of Consolidation.

The accompanying Consolidated Financial Statements include the accounts of the Company, including its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Segment Reporting.

Accounting Standard Codification (“ASC”)

280

-

Segment Reporting

requires the disclosure of factors used to identify an enterprise’s reportable segments. The Company’s operations are organized and managed on the basis of cable systems within its geographic regions. Each cable system derives revenues from the delivery of similar products and services to a customer base that is also similar. Each cable system deploys similar technology to deliver the Company’s products and services, operates within a similar regulatory environment, has similar economic characteristics and is managed by the Company’s chief operating decision maker as part of an aggregate of all cable systems. Management evaluated the criteria for aggregation under ASC

280

and believes that the Company meets each of the respective criteria set forth therein. Accordingly, management has identified

one

reportable segment.

Use of Estimates.

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods

may

be affected by changes in those estimates and underlying assumptions.

Change in Accounting Estimate.

As a result of additional information available from new systems and processes, the Company changed its accounting estimate related to the capitalization of certain internal labor and related costs associated with construction and customer installation activities beginning in the

first

quarter of

2017.

Capitalized labor costs increased

$5.1

million in the

second

quarter of

2017

compared to the

second

quarter of

2016

and

$11.0

million for the

six

months ended

June 30, 2017

compared to the year ago period as a result of the change in estimate.

Recently Adopted and Issued Accounting Pronouncements.

In

May 2017,

the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)

No.

2017

-

09,

Compensation – Stock Compensation (Topic

718

): Scope of Modification Accounting

. ASU

2017

-

09

provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in accordance with Topic

718.

The ASU is effective for all entities for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In

January 2017,

the FASB issued ASU

No.

2017

-

04,

Intangibles

- Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment.

ASU

2017

-

04

removes Step

2

of the current goodwill impairment test under ASC

350

and replaces it with a simplified model. Under the simplified model, a goodwill impairment will be calculated as the difference between the carrying amount of a reporting unit and its fair value, but

not

to exceed the carrying amount of goodwill. The amount of any impairment under the simplified model

may

differ from what would have been recognized under the

two

-step test. The ASU is effective for annual and any interim impairment tests performed for periods beginning after

December 15, 2019,

with early adoption permitted. The provisions of ASU

2017

-

04

would

not

have affected our last goodwill impairment assessment, but

no

assurance can be provided that the simplified testing methodology will

not

affect our goodwill impairment assessment in the future.

In

January 2017,

the FASB issued ASU

No.

2017

-

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business

. The purpose of the amendment is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public entities, the amendments in ASU

2017

-

01

are effective for interim and annual reporting periods beginning after

December 15, 2017.

The Company is evaluating the impact of adopting this guidance on any future transactions.

In

August 2016,

the FASB issued ASU

No.

2016

-

15,

Statement of Cash Flows (Topic

230

)

:

Classification of Certain Cash Receipts and Cash Payments

. The guidance clarifies the way in which certain cash receipts and cash payments should be classified on the statement of cash flows and also how the predominance principle should be applied when cash receipts and cash payments have aspects of more than

one

class of cash flows. ASU

2016

-

15

is effective for the

first

quarter of

2018,

with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In

March 2016,

the FASB issued ASU

No.

2016

-

09,

Compensation - Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting

. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. ASU

2016

-

09

was effective beginning in the

first

quarter of

2017.

The Company will prospectively record a deferred tax benefit or expense associated with the difference between book and tax for equity-based compensation expense, which is expected to result in increased volatility to the Company’s income tax expense.

The Company also established an accounting policy election to assume

zero

forfeitures for stock award grants and account for forfeitures when they occur which prospectively impacts stock compensation expense. Other aspects of the adoption of ASU

2016

-

09

did

not

have a material impact to the Company’s Consolidated Financial Statements.

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

Leases (Topic

842

)

. ASU

2016

-

02

requires lessees to record most of their leases on the balance sheet, which will be recognized as a right-of-use asset and a lease liability. The Company will be required to classify each separate lease component as an operating or finance lease at the lease commencement date. Initial measurement of the right-of-use asset and lease liability is the same for operating and finance leases, however, expense recognition and amortization of the right-of-use asset differs. Operating leases will reflect lease expense on a straight-line basis similar to current operating leases. The straight-line expense will reflect the interest expense on the lease liability (effective interest method) and amortization of the right-of-use asset, which will be presented as a single line item in the operating expense section of the income statement. Finance leases will reflect a front-loaded expense pattern similar to the pattern for current capital leases. ASU

2016

-

02

is effective for the

first

quarter of

2019,

with early adoption permitted. The Company is evaluating the impact of adopting this guidanceon its Consolidated Financial Statements.

In

May 2014,

the FASB issued ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

)

. ASU

2014

-

09

provides new guidance related to how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also expands the required disclosures to include the disaggregation of revenue from contracts with customers into categories that depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. During

2016,

the FASB issued additional interpretive guidance relating to the standard which covered the topics of principal versus agent considerations and identifying performance obligations and licensing. The standard is effective for the Company in the

first

quarter of

2018.

The

two

permitted transition methods under the standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company is currently in the process of evaluating which method of transition will be utilized. Further, the Company is currently conducting an assessment to prepare for implementation of this guidance. To date, this assessment has included using workshops and questionnaires to identify revenue streams, analyzing contracts and assessing other areas that

may

result in different accounting treatment under this topic, including installation and commission structure. The Company has reached a preliminary conclusion that the majority of its residential customer revenue is

not

under an extended contract and will be evaluated on a month-to-month basis, and as such, does

not

anticipate significant changes related to revenue recognition for such customers. Revenue related to business contracts, installation and other up-front charges, costs to obtain contracts and other topics are still being evaluated. The Company continues to evaluate the impact of the standard on related disclosures as well as the acquired NewWave operations.

XML

Note 2 - NewWave Acquisition

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

2 . NEWWAVE ACQUISITION

On

January 18, 2017,

Cable One announced that it had entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire NewWave from funds affiliated with GTCR LLC, a private equity firm based in Chicago. NewWave was a cable operator providing data, video and voice services to residential and business customers throughout non-urban areas of Arkansas, Illinois, Indiana, Louisiana, Mississippi, Missouri and Texas. Cable One and NewWave shared similar strategies, customer demographics, and products. Accordingly, the acquisition of NewWave offers the Company opportunities for revenue growth and

adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margin expansion as well as the potential to realize cost synergies

. The Company paid a purchase price of

$741.0

million in cash and completed the transaction on

May 1, 2017.

See Note

6

for details regarding the financing of the acquisition.

The Company accounted for the NewWave acquisition as a business combination pursuant to ASC

805

-

Business Combinations

. Accordingly, acquisition costs are

not

included as components of consideration transferred, and instead are accounted for as expenses in the period in which the costs are incurred. During the

three

and

six

months ended

June 30, 2017,

the Company incurred acquisition-related costs of approximately

$3.2

million and

$4.7

million, respectively, which are included in Selling, general and administrative expenses within the Company’s Consolidated Statements of Operations and Comprehensive Income.

In accordance with ASC

805,

Cable One uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of purchase price consideration over the fair value of net tangible and identifiable intangible assets acquired. The adjustments described below were developed based on Cable One management's assumptions and estimates, including assumptions relating to the consideration paid and the allocation thereof to the assets acquired and liabilities assumed from NewWave based on preliminary estimates of fair value. The preliminary estimates of the fair values of consideration transferred and assets acquired and liabilities assumed are based on the information that was available as of the acquisition date. Cable One believes that the information available provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The preliminary measurements of fair value set forth herein are subject to change and such changes could be material. The Company expects to finalize the valuation as soon as practicable but

no

later than

one

year from the acquisition date. The following table summarizes the provisional allocation of the purchase price consideration as of the acquisition date (in thousands):

	Provisional Allocation
Assets
Cash and cash equivalents	$	12,220
Accounts receivable		15,027
Prepaid assets		1,184
Property, plant and equipment		192,234
Intangibles		476,300
Other assets		370
Total		697,335
Liabilities
Accounts payable and accrued liabilities		24,542
Deferred revenue		14,516
Deferred income taxes		10,720
Total		49,778
Net assets acquired		647,557
Purchase price consideration		741,003
Goodwill recognized	$	93,446

Acquired intangible assets consist of the following (dollars in thousands):

	Provisional Estimated F air Value		Provisional Estimated Weighted Average Useful Life (in years)
Franchise agreements	$	320,000	Indefinite
Customer relationships	$	155,000		14
Trademark and trade name	$	1,300		1

The total weighted average amortization period for the acquired intangibles is

13.9

years.

The acquisition produced

$93.4

million of goodwill, increasing the Company’s goodwill balance to

$178.4

million at

June 30, 2017.

Goodwill represents the excess of the purchase price consideration over the fair value of the underlying net assets acquired and largely results from expected future synergies from combining operations as well as an assembled workforce, which does

not

qualify for separate recognition. As an indefinite-lived asset, goodwill is

not

amortized but rather is subject to impairment testing on at least an annual basis. Goodwill arising from the NewWave acquisition is deductible for tax purposes.

For the period from

May 1, 2017

to

June 30, 2017,

the Company recognized revenue of

$32.2

million and net income of

$2.1

million relating to NewWave, which included charges for the amortization of acquired intangible assets of

$2.1

million.

The following unaudited pro forma combined results of operations for the

three

and

six

months ended

June 30, 2017

and

2016

have been prepared as if the acquisition of NewWave had occurred on

January 

1,

2016

and include adjustments for depreciation expense, amortization of intangibles, interest expense from financing, non-recurring acquisition-related transaction fees and the related aggregate impact on the provision for income taxes (in thousands, except per share data):

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Revenues	$	257,195	$	249,790	$	512,385	$	496,950
Net income	$	30,585	$	23,922	$	63,525	$	47,550
Net income per common share:
Basic	$	5.39	$	4.17	$	11.19	$	8.24
Diluted	$	5.32	$	4.15	$	11.07	$	8.21

The unaudited pro forma combined results of operations is provided for informational purposes only and is

not

necessarily indicative of or intended to represent the results that would have been achieved had the NewWave acquisition been consummated as of

January 1, 2016

or the results that

may

be achieved in the future.

XML

Note 3 - Revenues

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Revenue Disclosure [Text Block]

3 . REVENUES

The Company’s revenues by product line were as follows (in thousands):   

	Three Months Ended June 30,				Six Months Ended June 30,
	201 7		201 6		2017		2016
Residential
Data	$	103,155	$	86,031	$	193,356	$	169,470
Video		84,873		74,016		157,328		148,869
Voice		11,417		10,944		21,284		22,258
Business services		32,543		24,491		59,505		48,318
Advertising sales		5,970		6,616		11,592		13,619
Other		3,084		2,459		5,404		4,828
Total revenues	$	241,042	$	204,557	$	448,469	$	407,362

The amount of franchise fees recorded on a gross basis and included in residential video revenues above was

$4.0

million and

$3.6

million for the

three

months ended

June 30, 2017

and

2016,

respectively, and

$7.5

million and

$7.2

million for the

six

months ended

June 30, 2017

and

2016,

respectively.

XML

Note 4 - Property, Plant and Equipment

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

4 . PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following (in thousands):  

	June 30 , 201 7			December 31, 2016
Cable distribution systems	$	1,243,192		$	1,048,790
Customer premise equipment		201,360			181,852
Other equipment and fixtures		380,871			359,957
Buildings and leasehold improvements		94,426			88,592
Capitalized software		87,752			83,815
Construction in progress		53,335			64,822
Land		11,591			9,612
Total property, plant and equipment		2,072,527			1,837,440
Less accumulated depreciation		(1,269,144	)		(1,217,819	)
Property, plant and equipment, net	$	803,383		$	619,621

Depreciation expense was

$44.8

million and

$34.7

million for the

three

months ended

June 30, 2017

and

2016,

respectively, and

$83.2

million and

$69.3

million for the

six

months ended

June 30, 2017

and

2016,

respectively.

The Company's previous headquarters building and adjoining property were held for sale at

December 31, 2016.

In

January 2017,

the Company sold a portion of this property for

$10.1

million in gross proceeds and recognized a related gain of

$6.6

million. The remaining property’s carrying value of

$4.6

million is included in Other assets in the Consolidated Balance Sheet as assets held for sale at

June 30, 2017.

XML

Note 5 - Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

5 . GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill at

June 30, 2017

and

December 31, 2016

was

$178.4

million and

$84.9

million, respectively, with the increase attributable to the NewWave acquisition on

May 1, 2017.

The Company historically has

not

recorded any impairment of goodwill.

Intangible assets (excluding goodwill) consisted of the following (dollars in thousands):   

					June 30, 2017
	Useful				Gross				Net
	Life				Carrying		Accumulated		Carrying
	Range (years)				Amount		Amortization		Amount
Amortized Intangible Assets
Cable franchise renewals and access rights		1	-	25	$	4,138	$	3,840	$	298
Customer relationships			14		$	155,000	$	1,845	$	153,155
NewWave trademark and trade name			1		$	1,300	$	217	$	1,083
Indefinite-Lived Intangible Assets (Excluding Goodwill)
Franchise agreements					$	817,137

				December 31, 2016
	Useful			Gross				Net
	Life			Carrying		Accumulated		Carrying
	Range (years)			Amount		Amortization		Amount
Amortized Intangible Assets
Cable franchise renewals and access rights	1	-	25	$	4,138	$	3,794	$	344
Indefinite-Lived Intangible Assets (Excluding Goodwill)
Franchise agreements				$	497,136

XML

Note 6 - Long-term Debt

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Long-term Debt [Text Block]

6 . LONG-TERM DEBT

The carrying amount of long-term debt as of

June 30, 2017

and

December 31, 2016

consisted of the following (in thousands):

	June 30 , 201 7			December 31, 201 6
Notes	$	450,000		$	450,000
Senior Credit Facilities		750,000			95,000
Capital lease obligation		276			284
Total debt		1,200,276			545,284
Less unamortized debt issuance costs		(21,568	)		(8,148	)
Less current portion of long-term debt		(11,250	)		(6,250	)
Total Long-term debt	$	1,167,458		$	530,886

Senior Unsecured Notes.

On

June 17, 2015,

the Company issued

$450

million aggregate principal amount of

5.75%

senior unsecured notes due

2022

(the “Notes”). The Notes mature on

June 15, 2022

and interest is payable on

June 15

th

and

December 15

th

of each year.

The Notes have

not

been, and will

not

be, registered under the Securities Act of

1933,

as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction and

may

not

be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws. The Notes were offered in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration set forth in Rule

144A

under the Securities Act and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act.

The Notes were issued pursuant to an indenture (the “Indenture”) dated as of

June 17, 2015.

The Indenture provides for early redemption of the Notes, at the option of the Company, at the prices and subject to the terms specified in the Indenture. The Indenture includes certain covenants relating to debt incurrence, liens, restricted payments, asset sales and transactions with affiliates, changes in control and mergers or sales of all or substantially all of the Company’s assets. The Indenture also provides for customary events of default (subject, in certain cases, to customary grace periods).

Senior Credit Facilities.

On

June 30, 2015,

the Company entered into a Credit Agreement (the “Credit Agreement”) among the Company, as borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, and the other agents party thereto.  The Credit Agreement provided for a

five

-year revolving credit facility in an aggregate principal amount of

$200

million (the “Revolving Credit Facility”) and a

five

-year term loan facility in an aggregate principal amount of

$100

million (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “Original Credit Facilities”). Concurrently with its entry into the Credit Agreement, the Company borrowed the full amount of the Term Loan Facility (the “Term Loan”).

Borrowings under the Original Credit Facilities bore interest, at the Company’s option, at a rate per annum determined by reference to either the London Interbank Offered Rate (“LIBOR”) or an adjusted base rate, in each case plus an applicable interest rate margin. The applicable interest rate margin with respect to LIBOR borrowings was a rate per annum between

1.50%

and

2.25%

and the applicable interest rate margin with respect to adjusted base rate borrowings was a rate per annum between

0.50%

and

1.25%,

in each case determined on a quarterly basis by reference to a pricing grid based upon the Company’s total net leverage ratio. In addition, the Company is required to pay commitment fees on any unused portion of the Revolving Credit Facility at a rate between

0.25%

per annum and

0.40%

per annum, determined by reference to the pricing grid.

The Revolving Credit Facility also gives the Company the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility. Letter of credit issuances under the Revolving Credit Facility of

$2.8

million at

June 30, 2017

were held for the benefit of certain general and liability insurance matters and bore interest at a rate of

1.625%

per annum. The Company had

$197.2

million available for borrowing under the Revolving Credit Facility at

June 30, 2017.

On

May 1, 2017,

the Company entered into a Restatement Agreement (the “Restatement Agreement”) with JPMorgan, as administrative agent, and the lenders party thereto, pursuant to which the Company amended and restated the Credit Agreement (as so amended and restated, the “Amended and Restated Credit Agreement”) and incurred

$750

million of senior secured loans (the “New Loans”) which were used, together with cash on hand, to (i) finance the transactions contemplated by the Merger Agreement, (ii) repay in full the Term Loan and (iii) pay related fees and expenses.

The New Loans consist of (a) a

five

-year incremental term “A” loan in an aggregate principal amount of

$250

million (the “Term Loan A”) and (b) a

seven

-year incremental term “B” loan in an aggregate principal amount of

$500

million (the “Term Loan B” and, together with the Term Loan A and the Revolving Credit Facility, the “Senior Credit Facilities”), which are guaranteed by the Company’s wholly owned subsidiaries and are secured, subject to certain exceptions, by substantially all assets of the Company and the guarantors.

The interest margins applicable to the New Loans under the Amended and Restated Credit Agreement are, at the Company’s option, equal to either LIBOR or a base rate, plus an applicable margin equal to, (

x

) with respect to the Term Loan A,

2.25%

to

1.50%

for LIBOR loans and

1.25%

to

0.50%

for base rate loans, determined on a quarterly basis by reference to a pricing grid based on the Company’s total net leverage ratio and (y) with respect to the Term Loan B,

2.25%

for LIBOR loans and

1.25%

for base rate loans. The Term Loan A

may

be prepaid at any time without premium and amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of

2.5%

per annum for the

first

year after funding,

5.0%

per annum for the

second

year after funding,

7.5%

for the

third

year after funding and

10.0%

per annum for the

fourth

and

fifth

years after funding, with the balance due upon maturity. The Term Loan B amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of

1.0%

per annum, with the balance due upon maturity. The Term Loan B is subject to a

1.0%

prepayment penalty if prepaid within

six

months of funding, benefits from certain “most favored nation” pricing protections and is

not

subject to the financial maintenance covenants under the Amended and Restated Credit Agreement. Other than as set forth above, the New Loans are subject to terms substantially similar to those under the Credit Agreement.

As of

June 30, 2017,

outstanding borrowings under the Term Loan A and Term Loan B were

$250

million and

$500

million, and bore interest at a rate of

2.93%

per annum and

3.43%

per annum, respectively.

In connection with the New Loans, the Company incurred

$15.2

million in debt issuance costs, of which

$0.6

million was written off during the quarter ended

June 30, 2017.

Unamortized debt issuance costs totaled

$21.6

million and

$8.1

million at

June 30, 2017

and

December 31, 2016,

respectively.

The Company

may,

subject to the terms and conditions of the Amended and Restated Credit Agreement, obtain additional credit facilities of up to

$425

million under the Amended and Restated Credit Agreement plus an unlimited amount so long as, on a pro forma basis, the Company’s First Lien Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) is

no

greater than

1.80

to

1.00.

The Amended and Restated Credit Agreement contains customary representations, warranties and affirmative and negative covenants, including limitations on indebtedness, liens, restricted payments, prepayments of certain indebtedness, investments, dispositions of assets, restrictions on subsidiary distributions and negative pledge clauses, fundamental changes, transactions with affiliates and amendments to organizational documents. The Amended and Restated Credit Agreement also requires the Company to maintain specified ratios of total net leverage and

first

lien net leverage to consolidated operating cash flow. The Amended and Restated Credit Agreement also contains customary events of default, including non-payment of principal, interest, fees or other amounts, material inaccuracy of any representation or warranty, failure to observe or perform any covenant, default in respect of other material debt of the Company and of its restricted subsidiaries, bankruptcy or insolvency, the entry against the Company or any of its restricted subsidiaries of a material judgment, the occurrence of certain ERISA events, impairment of the loan documentation and the occurrence of a change of control. 

The Company was in compliance with all debt covenants as of

June 30, 2017. 

As of

June 30, 2017,

the future maturities of long-term debt were as follows (in thousands): 

Years Ending December 31 ,	Amount
2017 (remaining months)	$	5,633
2018		14,392
2019		20,642
2020		26,892
2021		30,017
Thereafter		1,102,700
Total	$	1,200,276

XML

Note 7 - Fair Value Measurements

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

7 . FAIR VALUE MEASUREMENTS

The Company’s deferred compensation liabilities were

$17.9

million and

$18.2

million at

June 30, 2017

and

December 31, 2016,

respectively. These liabilities are included in Accounts payable and accrued liabilities (for the current portion) and Accrued compensation and other liabilities (for the noncurrent portion) in the Consolidated Balance Sheets. These liabilities represent the market value of a participant’s balance in a notional investment account that is comprised primarily of mutual funds, which is based on observable market prices. However, since the deferred compensation obligations are

not

exchanged in an active market, they are classified as Level

2

in the fair value hierarchy. Realized and unrealized gains (losses) on deferred compensation are included in operating income.

The carrying amounts and fair values of the Company’s money market and commercial paper investments and long-term debt (including the current portion) as of

June 30, 2017

were as follows (in thousands):

	June 30, 2017
	Carrying		Fair
	Amount		Value
Assets:
Money market investments	$	32,248	$	32,248
Commercial paper	$	39,957	$	39,942
Long-term debt, including current portion :
Notes	$	450,000	$	473,625
Senior Credit Facilities	$	750,000	$	750,000

Money market investments are included in Cash and cash equivalents in the Consolidated Balance Sheets. Commercial paper investments with original maturities of

90

days or less are also included in Cash and cash equivalents. These investments are primarily held in U.S. Treasury securities and registered money market funds. These investments were valued using a market approach based on the quoted market prices of the money market investments (Level

1

) or inputs that include quoted market prices for investments similar to the commercial paper (Level

2

). The fair value of the Notes was estimated based on market prices in active markets (Level

2

). The fair value of the New Loans was estimated based on discounting the remaining principal and interest payments using current market rates for similar debt (Level

2

). 

XML

Note 8 - Treasury Stock

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Treasury Stock [Text Block]

8 . TREASURY STOCK

Share Repurchase Program.

On

July 1, 2015,

the Company’s board of directors (the “Board”) authorized up to

$250

million of share repurchases (subject to a total cap of

600,000

shares of Company common stock). Purchases under the share repurchase program

may

be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases are based on a number of factors, including share price and business and market conditions. Since the inception of the share repurchase program through

June 30, 2017,

the Company had repurchased

165,633

shares at an aggregate cost of

$73.1

million. During the

first

half of

2017,

the Company repurchased

700

shares at an aggregate cost of

$0.4

million, of which all occurred during the

first

quarter.

Restricted Stock Tax Withholding.

Treasury stock is recorded at cost and is presented as a reduction of Stockholders’ equity in the Consolidated Financial Statements. Shares of common stock with a fair market value equal to the applicable statutory minimum amount of the employee withholding taxes due are withheld by the Company upon vesting of restricted stock and exercises of stock appreciation rights (“SARs”) to pay the applicable statutory minimum amount of employee withholding taxes and are considered common stock repurchases. The Company then pays the applicable statutory minimum amount of withholding taxes in cash. The amounts remitted during the

three

and

six

months ended

June 30, 2017

were

$0.1

million and

$0.4

million, for which the Company withheld

149

and

666

shares of common stock, respectively. Treasury shares of

162,804

held at

June 30, 2017

include the aforementioned shares withheld for withholding tax.

XML

Note 9 - Equity-based Compensation

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

9 . EQUITY-BASED COMPENSATION

On

June 5, 2015,

the Board adopted the Cable One, Inc.

2015

Omnibus Incentive Compensation Plan (the “Original

2015

Plan”), which became effective

July 1, 2015.

On

May 2, 2017,

the Company’s stockholders approved the Amended and Restated Cable One, Inc.

2015

Omnibus Incentive Compensation (the

“2015

Plan”), which automatically terminated, replaced and superseded the Original

2015

Plan, except that any outstanding awards granted under the Original

2015

Plan will remain in effect pursuant to their terms. The

2015

Plan is designed to promote the interests of the Company and its stockholders by providing the employees and directors of the Company with incentives and rewards to encourage them to continue in the service of the Company and with a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. Any of the directors, officers and employees of the Company and its affiliates are eligible to be granted

one

or more of the following types of awards under the

2015

Plan: (

1

) incentive stock options, (

2

) non-qualified stock options, (

3

) restricted stock awards, (

4

) SARs, (

5

) restricted stock units (“RSUs”), (

6

) cash-based awards, (

7

) performance-based awards, (

8

) dividend equivalent rights and (

9

) other stock-based awards, including, without limitation, performance stock units and deferred stock units. The

2015

Plan includes the authority to grant awards that are intended to qualify as “qualified performance-based compensation” under Section

162

(m) of the Internal Revenue Code of

1986,

as amended. Unless the

2015

Plan is sooner terminated by the Board,

no

awards

may

be granted under the

2015

Plan after

May 2, 2027.

The

2015

Plan provides that, subject to certain adjustments for specified corporate events, the maximum number of shares of Company common stock that

may

be issued under the

2015

Plan is

334,870,

which is equal to the number of remaining shares of Company common stock available for future issuance under the Original

2015

Plan as of

May 2, 2017,

regardless of whether such shares were subject to outstanding awards as of such date, and

no

more than

329,962

shares

may

be issued pursuant to incentive stock options. At

June 30, 2017,

331,552

shares were available for issuance under the

2015

Plan.

Restricted Stock Awards.

The Company has granted restricted shares of Company common stock subject to service-based and performance-based vesting conditions to employees of the Company. Restricted share awards generally cliff-vest on the

three

-year anniversary of the grant date or in

four

equal ratable installments beginning on the

first

anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date), except in the case of awards made to individuals (i) whose equity awards issued by GHC were forfeited in connection with the Company’s spin-off (the “spin-off”) from GHC (the “Replacement Shares”), which Replacement Shares vested on

December 12, 2016 (

with certain exceptions as provided in the applicable award agreement), or (ii) who did

not

receive an equity award from GHC in

2015

in anticipation of the spin-off (the “Staking Shares”), which Staking Shares are scheduled to cliff-vest on

January 2, 2018. 

Performance-based restricted shares are or were subject to performance metrics related primarily to year-over-year or

three

-year cumulative growth in Adjusted EBITDA less capital expenditures or year-over-year growth in Adjusted EBITDA and capital expenditures as a percentage of total revenues. Restricted shares are subject to the terms and conditions of the Original

2015

Plan or the

2015

Plan (in the case of awards made on or following

May 2, 2017)

and are otherwise subject to the terms and conditions of the applicable award agreement.

The compensation arrangements for the Company’s non-employee directors as of

June 30, 2017

provided that each non-employee director is entitled to an annual retainer of

$75,000

in cash, plus an additional annual cash retainer for each non-employee director who serves as a committee chair or as lead independent director and approximately

$125,000

in RSUs.  Such RSUs will generally be granted on the date of the Company’s annual stockholders’ meeting and will vest on the earlier of the

first

anniversary of the grant date or the annual stockholders’ meeting date immediately following the grant date, subject to the director’s continued service through such vesting date.  Settlement of such RSUs will be in the form of

one

share of the Company’s common stock and will follow vesting, unless the director has previously elected to defer such settlement until his or her separation from service from the Board. Any dividends associated with RSUs granted prior to the

2017

annual grant of RSUs will be converted into Dividend Equivalent Units (“DEUs”), which will be delivered at the time of settlement of the associated RSUs. Commencing with the

2017

annual grant of RSUs, dividends associated with RSUs will be paid out in cash at the time of settlement. As of

June 30, 2017,

3,175

RSUs, including DEUs, were vested and deferred.

Restricted shares, RSUs and DEUs are collectively referred to as “restricted stock.” A summary of restricted stock activities for the

six

months ended

June 30, 2017

is as follows:

				Weighted Average
				Grant Date
	Restricted			Fair Value
	Stock			Per Share
Outstanding as of December 31, 2016		38,425		$	402.21
Granted		15,660		$	624.42
Granted due to performance achievement		5,006		$	433.66
Forfeited		(3,992	)	$	418.58
Vested		(1,693	)	$	436.29
Outstanding as of June 30, 2017		53,406		$	466.62
Vested and unissued as of June 30, 2017		3,175		$	436.06

Compensation expense associated with restricted stock is recognized on a straight-line basis over the vesting period. The expense recognized each period is dependent upon the Company’s estimate of the number of shares that will ultimately vest. Equity-based compensation expense for restricted stock was

$1.6

million and

$3.3

million for the

three

and

six

months ended

June 30, 2017,

respectively.  At

June 30, 2017,

there was

$9.8

million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over a weighted average period of

1.3

years.

Stock Appreciation Rights.

The Company has granted SARs to certain executives and other employees of the Company. The SARs are scheduled to vest in

four

equal ratable installments beginning on the

first

anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date). The SARs are subject to the terms and conditions of the Original

2015

Plan or the

2015

Plan (in the case of awards made on or following

May 2, 2017)

and will otherwise be subject to the terms and conditions of the applicable award agreement.

A summary of SAR activity is as follows:

	Stock Appreciation Rights			Weighted Average Exercise Price		Weighted Average Fair Value		Aggregate Intrinsic Value ( in thousands )		Weighted Average Remaining Contractual Term (in y ears)
Outstanding as of December 31, 2016		136,000		$	426.80	$	88.07	$	26,510		8.7
Granted		21,572		$	620.64	$	138.01	$	-		9.5
Exercised		(6,775	)	$	422.31	$	87.22
Forfeited		(8,700	)	$	422.31	$	87.22
Outstanding as of June 30, 2017		142,097		$	456.72	$	95.74	$	36,118		8.4
Vested and exercisable as of June 30, 2017		24,150		$	422.81	$	87.33	$	6,957		8.2

The fair value of the SARs was measured based on the Black-Scholes model. The weighted average inputs used in the model for the

six

months ended

June 30, 2017

were as follows:  

	2017
Expected volatility		20.90	%
Risk-free interest rate		2.14	%
Expected term (in years)		6.25
Expected dividend yield		0.96	%

Compensation expense associated with SARs is recognized on a straight-line basis over the vesting period. Equity-based compensation expense for SARs was

$0.8

million and

$1.5

million for the

three

and

six

months ended

June 30, 2017,

respectively. At

June 30, 2017,

there was

$8.9

million of unrecognized compensation expense related to SARs, which is expected to be recognized over a weighted average period of

1.4

years.

Compensation Expense

.

Total equity-based compensation expense recognized was

$2.4

million and

$3.4

million for the

three

months ended

June 30, 2017

and

2016,

respectively, and

$4.8

million and

$6.5

million for the

six

months ended

June 30, 2017

and

2016,

respectively, and was included in Selling, general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Income. The Company has recorded an income tax benefit of

$3.7

million related to equity-based awards granted through

June 30, 2017.

The deferred tax asset related to all outstanding equity-based awards was

$6.3

million as of

June 30, 2017.  

XML

Note 10 - Income Taxes

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

10 . INCOME TAXES

The Company’s effective tax rate was

38.6%

and

38.3%

for the

three

months ended

June 30, 2017

and

2016,

respectively, and

37.9%

and

35.7%

for the

six

months ended

June 30, 2017

and

2016,

respectively. The increase in the effective tax rate for the

six

months ended

June 30, 2017

as compared to the prior year period primarily relates to

$2.2

million of income tax benefits from certain spin-off and state tax items recognized in the

first

quarter of

2016,

which did

not

recur.

XML

Note 11 - Net Income Per Share

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

1 . NET INCOME PER SHARE

Basic net income per common share is computed by dividing the net income allocable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per share further includes any common shares available to be issued upon vesting or exercise of outstanding equity awards if such inclusion would be dilutive.

The following table sets forth the computation of basic and diluted net income per common share (in thousands, except share and per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	201 7		201 6		2017		2016
Numerator:
Net income	$	28,576	$	26,633	$	61,790	$	53,677
Denominator:
Weighted average common shares outstanding - basic		5,678,394		5,743,465		5,677,411		5,769,859
Effect of dilutive equity awards (1)		67,223		22,847		63,426		18,526
Weighted average common shares outstanding - diluted		5,745,617		5,766,312		5,740,837		5,788,385
Net income per share:
Basic	$	5.03	$	4.64	$	10.88	$	9.30
Diluted	$	4.97	$	4.62	$	10.76	$	9.27

( 1 ) SARs outstanding that were not included in the diluted net income per share calculation because the effect would have been anti-dilutive were  2,477 and 12,098 for the three months ended  June 30, 2017 and  2016, respectively, and 1,438 and 6,830 for the six months ended June 30, 2017 and 2016, respectively.

XML

Note 12 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

1 2 . COMMITMENTS AND CONTINGENCIES

Litigation and Legal Matters.

 The Company is subject to complaints and administrative proceedings and is a defendant in various civil lawsuits that have arisen in the ordinary course of its business. Such matters include: contract disputes; actions alleging negligence; invasion of privacy; trademark, copyright and patent infringement; violations of applicable wage and hour laws; statutory or common law claims involving current and former employees; and other matters. Although the outcomes of the legal claims and proceedings against the Company cannot be predicted with certainty, based on currently available information, management believes that there are

no

existing claims or proceedings that are likely to have a material effect on the Company’s business, financial condition, results of operations or cash flows. Also, based on currently available information, management is of the opinion that the exposure to future material losses from existing legal proceedings is

not

reasonably possible or that future material losses in excess of the amounts accrued are

not

reasonably possible.

Regulation in the Cable Industry.

The operation of a cable system is extensively regulated by the Federal Communications Commission (the “FCC”), some state governments and most local governments. The FCC has the authority to enforce its regulations through the imposition of substantial fines, the issuance of cease and desist orders and/or the imposition of other administrative sanctions, such as the revocation of FCC licenses needed to operate certain transmission facilities used in connection with cable operations. The Telecommunications Act of

1996

altered the regulatory structure governing the nation’s communications providers. It removed barriers to competition in both the cable television market and the voice services market. Among other things, it reduced the scope of cable rate regulation and encouraged additional competition in the video programming industry by allowing telephone companies to provide video programming in their own telephone service areas. Future legislative and regulatory changes could adversely affect the Company’s operations.

GHC Agreements.

On

June 16, 2015,

Cable One entered into several agreements with GHC that set forth the principal actions taken in connection with the spin-off and that govern the relationship of the parties following the spin-off, including a Separation and Distribution Agreement, a Tax Matters Agreement and an Employee Matters Agreement. The aggregate costs and reimbursements paid to GHC totaled

$0.1

million and

$0.3

million for the

three

and

six

months ended

June 30, 2017,

respectively.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation.

The accompanying Consolidated Financial Statements have been prepared in accordance with: (i) generally accepted accounting principles in the United States (“GAAP”) for interim financial information; and (ii) the guidance of Rule

10

-

01

of Regulation S-

X

under the Securities Exchange Act of

1934,

as amended (the “Exchange Act”), for financial statements required to be filed with the Securities and Exchange Commission (the “SEC”). As permitted under such rule, certain notes and other financial information normally required by GAAP have been omitted. Management believes the accompanying Consolidated Financial Statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations and cash flows as of and for the periods presented herein. These Consolidated Financial Statements are unaudited and should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Company’s Annual Report on Form

10

-K for the fiscal year ended

December 31, 2016.

The Company’s interim results of operations

may

not

be indicative of its future results.

The

December 31, 2016

year-end balance sheet data was derived from the Company’s audited financial statements, but does

not

include all disclosures required by GAAP.

Certain reclassifications have been made to prior period amounts to conform to the current period presentation.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation.

The accompanying Consolidated Financial Statements include the accounts of the Company, including its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Segment Reporting, Policy [Policy Text Block]

Segment Reporting.

Accounting Standard Codification (“ASC”)

280

-

Segment Reporting

requires the disclosure of factors used to identify an enterprise’s reportable segments. The Company’s operations are organized and managed on the basis of cable systems within its geographic regions. Each cable system derives revenues from the delivery of similar products and services to a customer base that is also similar. Each cable system deploys similar technology to deliver the Company’s products and services, operates within a similar regulatory environment, has similar economic characteristics and is managed by the Company’s chief operating decision maker as part of an aggregate of all cable systems. Management evaluated the criteria for aggregation under ASC

280

and believes that the Company meets each of the respective criteria set forth therein. Accordingly, management has identified

one

reportable segment.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates.

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods

may

be affected by changes in those estimates and underlying assumptions.

Change in Accounting Estimate.

As a result of additional information available from new systems and processes, the Company changed its accounting estimate related to the capitalization of certain internal labor and related costs associated with construction and customer installation activities beginning in the

first

quarter of

2017.

Capitalized labor costs increased

$5.1

million in the

second

quarter of

2017

compared to the

second

quarter of

2016

and

$11.0

million for the

six

months ended

June 30, 2017

compared to the year ago period as a result of the change in estimate.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted and Issued Accounting Pronouncements.

In

May 2017,

the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)

No.

2017

-

09,

Compensation – Stock Compensation (Topic

718

): Scope of Modification Accounting

. ASU

2017

-

09

provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in accordance with Topic

718.

The ASU is effective for all entities for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In

January 2017,

the FASB issued ASU

No.

2017

-

04,

Intangibles

- Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment.

ASU

2017

-

04

removes Step

2

of the current goodwill impairment test under ASC

350

and replaces it with a simplified model. Under the simplified model, a goodwill impairment will be calculated as the difference between the carrying amount of a reporting unit and its fair value, but

not

to exceed the carrying amount of goodwill. The amount of any impairment under the simplified model

may

differ from what would have been recognized under the

two

-step test. The ASU is effective for annual and any interim impairment tests performed for periods beginning after

December 15, 2019,

with early adoption permitted. The provisions of ASU

2017

-

04

would

not

have affected our last goodwill impairment assessment, but

no

assurance can be provided that the simplified testing methodology will

not

affect our goodwill impairment assessment in the future.

In

January 2017,

the FASB issued ASU

No.

2017

-

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business

. The purpose of the amendment is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public entities, the amendments in ASU

2017

-

01

are effective for interim and annual reporting periods beginning after

December 15, 2017.

The Company is evaluating the impact of adopting this guidance on any future transactions.

In

August 2016,

the FASB issued ASU

No.

2016

-

15,

Statement of Cash Flows (Topic

230

)

:

Classification of Certain Cash Receipts and Cash Payments

. The guidance clarifies the way in which certain cash receipts and cash payments should be classified on the statement of cash flows and also how the predominance principle should be applied when cash receipts and cash payments have aspects of more than

one

class of cash flows. ASU

2016

-

15

is effective for the

first

quarter of

2018,

with early adoption permitted. The Company is evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

In

March 2016,

the FASB issued ASU

No.

2016

-

09,

Compensation - Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting

. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. ASU

2016

-

09

was effective beginning in the

first

quarter of

2017.

The Company will prospectively record a deferred tax benefit or expense associated with the difference between book and tax for equity-based compensation expense, which is expected to result in increased volatility to the Company’s income tax expense.

The Company also established an accounting policy election to assume

zero

forfeitures for stock award grants and account for forfeitures when they occur which prospectively impacts stock compensation expense. Other aspects of the adoption of ASU

2016

-

09

did

not

have a material impact to the Company’s Consolidated Financial Statements.

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

Leases (Topic

842

)

. ASU

2016

-

02

requires lessees to record most of their leases on the balance sheet, which will be recognized as a right-of-use asset and a lease liability. The Company will be required to classify each separate lease component as an operating or finance lease at the lease commencement date. Initial measurement of the right-of-use asset and lease liability is the same for operating and finance leases, however, expense recognition and amortization of the right-of-use asset differs. Operating leases will reflect lease expense on a straight-line basis similar to current operating leases. The straight-line expense will reflect the interest expense on the lease liability (effective interest method) and amortization of the right-of-use asset, which will be presented as a single line item in the operating expense section of the income statement. Finance leases will reflect a front-loaded expense pattern similar to the pattern for current capital leases. ASU

2016

-

02

is effective for the

first

quarter of

2019,

with early adoption permitted. The Company is evaluating the impact of adopting this guidanceon its Consolidated Financial Statements.

In

May 2014,

the FASB issued ASU

No.

2014

-

09,

Revenue from Contracts with Customers (Topic

606

)

. ASU

2014

-

09

provides new guidance related to how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also expands the required disclosures to include the disaggregation of revenue from contracts with customers into categories that depict how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors. During

2016,

the FASB issued additional interpretive guidance relating to the standard which covered the topics of principal versus agent considerations and identifying performance obligations and licensing. The standard is effective for the Company in the

first

quarter of

2018.

The

two

permitted transition methods under the standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company is currently in the process of evaluating which method of transition will be utilized. Further, the Company is currently conducting an assessment to prepare for implementation of this guidance. To date, this assessment has included using workshops and questionnaires to identify revenue streams, analyzing contracts and assessing other areas that

may

result in different accounting treatment under this topic, including installation and commission structure. The Company has reached a preliminary conclusion that the majority of its residential customer revenue is

not

under an extended contract and will be evaluated on a month-to-month basis, and as such, does

not

anticipate significant changes related to revenue recognition for such customers. Revenue related to business contracts, installation and other up-front charges, costs to obtain contracts and other topics are still being evaluated. The Company continues to evaluate the impact of the standard on related disclosures as well as the acquired NewWave operations.

XML

Note 2 - NewWave Acquisition (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	Provisional Allocation
Assets
Cash and cash equivalents	$	12,220
Accounts receivable		15,027
Prepaid assets		1,184
Property, plant and equipment		192,234
Intangibles		476,300
Other assets		370
Total		697,335
Liabilities
Accounts payable and accrued liabilities		24,542
Deferred revenue		14,516
Deferred income taxes		10,720
Total		49,778
Net assets acquired		647,557
Purchase price consideration		741,003
Goodwill recognized	$	93,446

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

	Provisional Estimated F air Value		Provisional Estimated Weighted Average Useful Life (in years)
Franchise agreements	$	320,000	Indefinite
Customer relationships	$	155,000		14
Trademark and trade name	$	1,300		1

Business Acquisition, Pro Forma Information [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Revenues	$	257,195	$	249,790	$	512,385	$	496,950
Net income	$	30,585	$	23,922	$	63,525	$	47,550
Net income per common share:
Basic	$	5.39	$	4.17	$	11.19	$	8.24
Diluted	$	5.32	$	4.15	$	11.07	$	8.21

XML

Note 3 - Revenues (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Revenue from External Customers by Products and Services [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	201 7		201 6		2017		2016
Residential
Data	$	103,155	$	86,031	$	193,356	$	169,470
Video		84,873		74,016		157,328		148,869
Voice		11,417		10,944		21,284		22,258
Business services		32,543		24,491		59,505		48,318
Advertising sales		5,970		6,616		11,592		13,619
Other		3,084		2,459		5,404		4,828
Total revenues	$	241,042	$	204,557	$	448,469	$	407,362

XML

Note 4 - Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Property, Plant and Equipment [Table Text Block]

	June 30 , 201 7			December 31, 2016
Cable distribution systems	$	1,243,192		$	1,048,790
Customer premise equipment		201,360			181,852
Other equipment and fixtures		380,871			359,957
Buildings and leasehold improvements		94,426			88,592
Capitalized software		87,752			83,815
Construction in progress		53,335			64,822
Land		11,591			9,612
Total property, plant and equipment		2,072,527			1,837,440
Less accumulated depreciation		(1,269,144	)		(1,217,819	)
Property, plant and equipment, net	$	803,383		$	619,621

XML

Note 5 - Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Intangible Assets and Goodwill [Table Text Block]

					June 30, 2017
	Useful				Gross				Net
	Life				Carrying		Accumulated		Carrying
	Range (years)				Amount		Amortization		Amount
Amortized Intangible Assets
Cable franchise renewals and access rights		1	-	25	$	4,138	$	3,840	$	298
Customer relationships			14		$	155,000	$	1,845	$	153,155
NewWave trademark and trade name			1		$	1,300	$	217	$	1,083
Indefinite-Lived Intangible Assets (Excluding Goodwill)
Franchise agreements					$	817,137

				December 31, 2016
	Useful			Gross				Net
	Life			Carrying		Accumulated		Carrying
	Range (years)			Amount		Amortization		Amount
Amortized Intangible Assets
Cable franchise renewals and access rights	1	-	25	$	4,138	$	3,794	$	344
Indefinite-Lived Intangible Assets (Excluding Goodwill)
Franchise agreements				$	497,136

XML

Note 6 - Long-term Debt (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	June 30 , 201 7			December 31, 201 6
Notes	$	450,000		$	450,000
Senior Credit Facilities		750,000			95,000
Capital lease obligation		276			284
Total debt		1,200,276			545,284
Less unamortized debt issuance costs		(21,568	)		(8,148	)
Less current portion of long-term debt		(11,250	)		(6,250	)
Total Long-term debt	$	1,167,458		$	530,886

Schedule of Maturities of Long-term Debt [Table Text Block]

Years Ending December 31 ,	Amount
2017 (remaining months)	$	5,633
2018		14,392
2019		20,642
2020		26,892
2021		30,017
Thereafter		1,102,700
Total	$	1,200,276

XML

Note 7 - Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	June 30, 2017
	Carrying		Fair
	Amount		Value
Assets:
Money market investments	$	32,248	$	32,248
Commercial paper	$	39,957	$	39,942
Long-term debt, including current portion :
Notes	$	450,000	$	473,625
Senior Credit Facilities	$	750,000	$	750,000

XML

Note 9 - Equity-based Compensation (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block]

				Weighted Average
				Grant Date
	Restricted			Fair Value
	Stock			Per Share
Outstanding as of December 31, 2016		38,425		$	402.21
Granted		15,660		$	624.42
Granted due to performance achievement		5,006		$	433.66
Forfeited		(3,992	)	$	418.58
Vested		(1,693	)	$	436.29
Outstanding as of June 30, 2017		53,406		$	466.62
Vested and unissued as of June 30, 2017		3,175		$	436.06

Schedule of Share-based Compensation, Stock Appreciation Rights Award Activity [Table Text Block]

	Stock Appreciation Rights			Weighted Average Exercise Price		Weighted Average Fair Value		Aggregate Intrinsic Value ( in thousands )		Weighted Average Remaining Contractual Term (in y ears)
Outstanding as of December 31, 2016		136,000		$	426.80	$	88.07	$	26,510		8.7
Granted		21,572		$	620.64	$	138.01	$	-		9.5
Exercised		(6,775	)	$	422.31	$	87.22
Forfeited		(8,700	)	$	422.31	$	87.22
Outstanding as of June 30, 2017		142,097		$	456.72	$	95.74	$	36,118		8.4
Vested and exercisable as of June 30, 2017		24,150		$	422.81	$	87.33	$	6,957		8.2

Schedule of Share-based Payment Award, Other than Options, Valuation Assumptions [Table Text Block]

	2017
Expected volatility		20.90	%
Risk-free interest rate		2.14	%
Expected term (in years)		6.25
Expected dividend yield		0.96	%

XML

Note 11 - Net Income Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended June 30,				Six Months Ended June 30,
	201 7		201 6		2017		2016
Numerator:
Net income	$	28,576	$	26,633	$	61,790	$	53,677
Denominator:
Weighted average common shares outstanding - basic		5,678,394		5,743,465		5,677,411		5,769,859
Effect of dilutive equity awards (1)		67,223		22,847		63,426		18,526
Weighted average common shares outstanding - diluted		5,745,617		5,766,312		5,740,837		5,788,385
Net income per share:
Basic	$	5.03	$	4.64	$	10.88	$	9.30
Diluted	$	4.97	$	4.62	$	10.76	$	9.27

XML

Note 1 - Description of Business and Basis of Presentation (Details Textual) $ in Millions		3 Months Ended	6 Months Ended
	May 01, 2017 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)
Number of States in which Entity Operates		21	21
Number of Reportable Segments			1
Reduction in Expense Due to Change in Capitalized Labor Accounting Estimate [Member]
Change in Accounting Estimate, Impact		$ 5.1	$ 11.0
New Wave [Member]
Payments to Acquire Businesses, Gross	$ 741.0

XML

Note 2 - NewWave Acquisition (Details Textual) - USD ($) $ in Thousands		2 Months Ended	3 Months Ended	6 Months Ended
	May 01, 2017	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2017	Dec. 31, 2016
Goodwill		$ 178,374	$ 178,374	$ 178,374	$ 84,928
New Wave [Member]
Payments to Acquire Businesses, Gross	$ 741,000
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	13 years 328 days
Goodwill, Acquired During Period				93,400
Goodwill	$ 93,446
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual		32,200
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual		2,100
Amortization of Intangible Assets		$ 2,100
New Wave [Member] | Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs			$ 3,200	$ 4,700

XML

Note 2 - NewWave Acquisition - Allocation of Purchase Price Consideration (Details) - USD ($) $ in Thousands	Jun. 30, 2017	May 01, 2017	Dec. 31, 2016
Liabilities
Goodwill	$ 178,374		$ 84,928
New Wave [Member]
Assets
Cash and cash equivalents		$ 12,220
Accounts receivable		15,027
Prepaid assets		1,184
Property, plant and equipment		192,234
Intangibles		476,300
Other assets		370
Total		697,335
Liabilities
Accounts payable and accrued liabilities		24,542
Deferred revenue		14,516
Deferred income taxes		10,720
Total		49,778
Net assets acquired		647,557
Purchase price consideration		741,003
Goodwill		$ 93,446

XML

Note 2 - NewWave Acquisition - Acquired Intangible Assets (Details) - New Wave [Member] $ in Millions	May 01, 2017 USD ($)
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	13 years 328 days
Customer Relationships [Member]
Acquired intangible assets	$ 155.0
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	14 years
Trademarks and Trade Names [Member]
Acquired intangible assets	$ 1.3
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	1 year
Franchise Rights [Member]
Acquired intangible assets	$ 320.0

XML

Note 2 - NewWave Acquisition - Pro Forma Information (Details) - New Wave [Member] - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues	$ 257,195	$ 249,790	$ 512,385	$ 496,950
Net income	$ 30,585	$ 23,922	$ 63,525	$ 47,550
Basic (in dollars per share)	$ 5.39	$ 4.17	$ 11.19	$ 8.24
Diluted (in dollars per share)	$ 5.32	$ 4.15	$ 11.07	$ 8.21

XML

Note 3 - Revenues (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Franchise Costs	$ 4.0	$ 3.6	$ 7.5	$ 7.2

XML

Note 3 - Revenues - Revenues by Product Line (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Advertising sales	$ 5,970	$ 6,616	$ 11,592	$ 13,619
Other	3,084	2,459	5,404	4,828
Total revenues	241,042	204,557	448,469	407,362
Data [Member]
Revenues	103,155	86,031	193,356	169,470
Video [Member]
Revenues	84,873	74,016	157,328	148,869
Voice [Member]
Revenues	11,417	10,944	21,284	22,258
Commercial [Member]
Revenues	$ 32,543	$ 24,491	$ 59,505	$ 48,318

XML

Note 4 - Property, Plant and Equipment (Details Textual) - USD ($) $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 31, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Depreciation		$ 44.8	$ 34.7	$ 83.2	$ 69.3
Other Assets [Member]
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment		$ 4.6		$ 4.6
Headquarters Building and Adjoining Property [Member]
Proceeds from Sale of Property Held-for-sale	$ 10.1
Gain (Loss) on Disposition of Property Plant Equipment	$ 6.6

XML

Note 4 - Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Property, plant and equipment gross	$ 2,072,527	$ 1,837,440
Less accumulated depreciation	(1,269,144)	(1,217,819)
Property, plant and equipment, net	803,383	619,621
Other Capitalized Property Plant and Equipment [Member]
Property, plant and equipment gross	1,243,192	1,048,790
Equipment [Member]
Property, plant and equipment gross	201,360	181,852
Furniture and Fixtures [Member]
Property, plant and equipment gross	380,871	359,957
Building and Leasehold Improvements[Member]
Property, plant and equipment gross	94,426	88,592
Software and Software Development Costs [Member]
Property, plant and equipment gross	87,752	83,815
Construction in Progress [Member]
Property, plant and equipment gross	53,335	64,822
Land [Member]
Property, plant and equipment gross	$ 11,591	$ 9,612

XML

Note 5 - Goodwill and Intangible Assets (Details Textual) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Goodwill	$ 178,374	$ 84,928

XML

Note 5 - Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Franchise Rights [Member]
Gross Carrying Amount, Indefinite-lived Intangible Assets	$ 817,137	$ 497,136
Use Rights [Member]
Gross Carrying Amount	4,138	4,138
Accumulated Amortization	3,840	3,794
Net Carrying Amount	298	$ 344
Customer Relationships [Member]
Gross Carrying Amount	155,000
Accumulated Amortization	1,845
Net Carrying Amount	$ 153,155
Useful Life (Year)	14 years
Trademarks and Trade Names [Member]
Gross Carrying Amount	$ 1,300
Accumulated Amortization	217
Net Carrying Amount	$ 1,083
Useful Life (Year)	1 year
Minimum [Member] | Use Rights [Member]
Useful Life (Year)	1 year	1 year
Maximum [Member] | Use Rights [Member]
Useful Life (Year)	25 years	25 years

XML

Note 6 - Long-term Debt (Details Textual) $ in Thousands			6 Months Ended
	May 01, 2017 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Jun. 17, 2015 USD ($)
Debt Issuance Costs, Net			$ 21,568		$ 8,148
Write off of Deferred Debt Issuance Cost			613
Secured Debt [Member]
Debt Instrument, Face Amount	$ 750,000
Debt Issuance Costs, Net			15,200
Write off of Deferred Debt Issuance Cost			$ 600
Optional Additional Available Credit Facilities	$ 425,000
Debt Instrument, Covenant, Maximum First Lien Net Leverage Ratio	1.8
Secured Debt [Member] | Incremental Term Loan A [Member]
Debt Instrument, Interest Rate, Effective Percentage			2.93%
Debt Instrument, Face Amount	$ 250,000
Debt Instrument, Term	5 years
Long-term Debt, Gross			$ 250,000
Long Term Debt, Amortization Rate, First Twelve Months	2.50%
Long Term Debt, Amortization Rate, Year Two	5.00%
Long Term Debt, Amortization Rate, Year Three	7.50%
Long Term Debt, Amortization Rate, Year Four	10.00%
Long Term Debt, Amortization Rate, Year Five	10.00%
Secured Debt [Member] | Incremental Term Loan B [Member]
Debt Instrument, Interest Rate, Effective Percentage			3.43%
Debt Instrument, Face Amount	$ 500,000
Debt Instrument, Term	7 years
Debt Instrument, Prepayment Penalty, Prepaid within Six Months, Percent	1.00%
Long-term Debt, Gross			$ 500,000
Debt Instrument, Amortization Percent on a Quarterly Basis	1.00%
Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | Incremental Term Loan B [Member]
Debt Instrument, Basis Spread on Variable Rate	2.25%
Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Incremental Term Loan A [Member]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Incremental Term Loan A [Member]
Debt Instrument, Basis Spread on Variable Rate	2.25%
Secured Debt [Member] | Base Rate [Member] | Incremental Term Loan B [Member]
Debt Instrument, Basis Spread on Variable Rate	1.25%
Secured Debt [Member] | Base Rate [Member] | Minimum [Member] | Incremental Term Loan A [Member]
Debt Instrument, Basis Spread on Variable Rate	0.50%
Secured Debt [Member] | Base Rate [Member] | Maximum [Member] | Incremental Term Loan A [Member]
Debt Instrument, Basis Spread on Variable Rate	1.25%
Senior Unsecured Notes Due 2022 [Member]
Debt Instrument, Face Amount						$ 450,000
Debt Instrument, Interest Rate, Stated Percentage						5.75%
Senior Credit Facilities Due 2020 [Member] | JPMorgan Chase Bank [Member]
Letters of Credit Outstanding, Amount			$ 2,800
Senior Credit Facilities Due 2020 [Member] | JPMorgan Chase Bank [Member] | Minimum [Member]
Line of Credit Facility, Commitment Fee Percentage			0.25%
Senior Credit Facilities Due 2020 [Member] | JPMorgan Chase Bank [Member] | Maximum [Member]
Line of Credit Facility, Commitment Fee Percentage			0.40%
Senior Credit Facilities Due 2020 [Member] | JPMorgan Chase Bank [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate			1.50%
Senior Credit Facilities Due 2020 [Member] | JPMorgan Chase Bank [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate			2.25%
Senior Credit Facilities Due 2020 [Member] | JPMorgan Chase Bank [Member] | Base Rate [Member] | Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate			0.50%
Senior Credit Facilities Due 2020 [Member] | JPMorgan Chase Bank [Member] | Base Rate [Member] | Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate			1.25%
Senior Credit Facilities Due 2020 [Member] | Revolving Credit Facility [Member] | JPMorgan Chase Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 200,000
Line of Credit Facility, Remaining Borrowing Capacity			$ 197,200
Debt Instrument, Term		5 years
Senior Credit Facilities Due 2020 [Member] | Secured Debt [Member] | JPMorgan Chase Bank [Member]
Debt Instrument, Term		5 years
Long-term Debt, Gross		$ 100,000
Senior Credit Facilities Due 2020 [Member] | Letter of Credit [Member] | JPMorgan Chase Bank [Member]
Debt Instrument, Interest Rate, Effective Percentage			1.625%

XML

Note 6 - Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Capital lease obligation	$ 276	$ 284
Total debt	1,200,276	545,284
Less unamortized debt issuance costs	(21,568)	(8,148)
Less current portion of long-term debt	(11,250)	(6,250)
Total Long-term debt	1,167,458	530,886
Senior Unsecured Notes Due 2022 [Member]
Notes	450,000	450,000
Senior Credit Facilities Due 2020 [Member] | Term Loan [Member]
Long-term Debt, Gross	$ 750,000	$ 95,000

XML

Note 6 - Long-term Debt - Future Maturities (Details) $ in Thousands	Jun. 30, 2017 USD ($)
2017 (remaining months)	$ 5,633
2018	14,392
2019	20,642
2020	26,892
2021	30,017
Thereafter	1,102,700
Total	$ 1,200,276

XML

Note 7 - Fair Value Measurements (Details Textual) - USD ($) $ in Millions	Jun. 30, 2017	Dec. 31, 2016
Deferred Compensation Liability, Current and Noncurrent	$ 17.9	$ 18.2

XML

Note 7 - Fair Value Measurements - Carrying Amounts and Fair Values (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets, carrying amount	$ 89,793	$ 138,040
Notes [Member]
Long-term debt, including current portion, fair value	473,625
Long-term debt, including current portion, carrying amount	450,000
Senior Credit Facilities Due 2020 [Member]
Long-term debt, including current portion, fair value	750,000
Long-term debt, including current portion, carrying amount	750,000
Money Market Funds [Member]
Assets, carrying amount	32,248
Assets, fair value	32,248
Commercial Paper [Member]
Assets, carrying amount	39,957
Assets, fair value	$ 39,942

XML

Note 8 - Treasury Stock (Details Textual) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		24 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Dec. 31, 2016	Jul. 02, 2015
Stock Repurchase Program, Authorized Amount						$ 250,000
Stock Repurchase Program, Number of Shares Authorized to be Repurchased						600,000
Treasury Stock, Shares, Acquired		700		165,633
Treasury Stock, Value, Acquired, Cost Method		$ 399		$ 73,100
Payments Related to Tax Withholding for Share-based Compensation	$ 100	$ 438
Shares Paid for Tax Withholding for Share Based Compensation	149	666
Treasury Stock, Shares	162,804	162,804		162,804	179,676

XML

Note 9 - Equity-based Compensation (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) shares	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) shares	Jun. 30, 2016 USD ($)	Jun. 05, 2015 shares
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense			$ 3,700,000
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost	$ 6,300,000		6,300,000
Allocated Share-based Compensation Expense	2,400,000	$ 3,400,000	$ 4,800,000	$ 6,500,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
Allocated Share-based Compensation Expense	1,600,000		$ 3,300,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	9,800,000		$ 9,800,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 109 days
Share-based Compensation Arrangements by Share-based Payment Award, Vesting Period, Number of Installments			4
Annual Retainer	75,000		$ 75,000
Additional Annual Retainer	$ 125,000		$ 125,000
Restricted Stock Units (RSUs) [Member] | Non-employee Directors [Member
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			1 year
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Vested and Deferred, Number | shares	3,175		3,175
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			4 years
Allocated Share-based Compensation Expense	$ 800,000		$ 1,500,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 8,900,000		$ 8,900,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			1 year 146 days
Share-based Compensation Arrangements by Share-based Payment Award, Vesting Period, Number of Installments			4
The 2015 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | shares	331,552		331,552
The 2015 Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares					334,870
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Authorized for Incentive Stock Options | shares					329,962

XML

Note 9 - Equity-based Compensation - Summary of Restricted Stock (Details) - Restricted Stock and Restricted Stock Units [Member]	6 Months Ended
	Jun. 30, 2017 $ / shares shares
Unvested, restricted stock (in shares) | shares	38,425
Unvested, restricted stock, weighted avergae grant date fair value (in dollars per share) | $ / shares	$ 402.21
Granted, stock appreciation rights (in shares) | shares	15,660
Granted, weighted average fair value (in dollars per share) | $ / shares	$ 624.42
Granted due to performance achievement (in shares) | shares	5,006
Granted due to performance achievement (in dollars per share) | $ / shares	$ 433.66
Forfeited, stock appreciation rights (in shares) | shares	(3,992)
Forfeited, weighted average fair value (in dollars per share) | $ / shares	$ 418.58
Unvested, restricted stock, weighted avergae grant date fair value (in dollars per share) | $ / shares	$ 466.62
Vested and unissued, restricted stock (in shares) | shares	3,175
Vested and unissued, weighted average grant date fair value (in dollars per share) | $ / shares	$ 436.06
Vested, restricted stock (in shares) | shares	(1,693)
Vested, restricted stock, weighted avergae grant date fair value (in dollars per share) | $ / shares	$ 436.29
Unvested, restricted stock (in shares) | shares	53,406

XML

Note 9 - Equity-based Compensation - Summary of Stock Appreciation Rights (Details) - Stock Appreciation Rights (SARs) [Member] - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Outstanding, stock appreciation rights (in shares)	136,000
Outstanding, weighted average exercise price (in dollars per share)	$ 426.80
Outstanding, Beginning Balance, weighted average fair value (in dollars per share)	88.07
Outstanding, Beginning Balance, weighted average fair value (in dollars per share)	$ 95.74	$ 88.07
Outstanding, aggregate intrinsic value	$ 36,118	$ 26,510
Weighted Average Remaining Contractual Term, Outstanding (Year)	8 years 146 days	8 years 255 days
Granted, stock appreciation rights (in shares)	21,572
Granted, weighted average exercise price (in dollars per share)	$ 620.64
Granted, weighted average fair value (in dollars per share)	$ 138.01
Weighted Average Remaining Contractual Term, Granted (Year)	9 years 182 days
Exercised, stock appreciation rights (in shares)	(6,775)
Exercised, weighted average exercise price (in dollars per share)	$ 422.31
Exercised, weighted average fair value (in dollars per share)	87.22
Outstanding, weighted average exercise price (in dollars per share)	$ 456.72	$ 426.80
Forfeited, stock appreciation rights (in shares)	(8,700)
Vested and exercisable, stock appreciation rights (in shares)	24,150
Forfeited, weighted average exercise price (in dollars per share)	$ 422.31
Forfeited, weighted average fair value (in dollars per share)	87.22
Vested and exercisable, weighted average exercise price (in dollars per share)	422.81
Vested and exercisable, weighted average fair value (in dollars per share)	$ 87.33
Vested and exercisable, aggregate intrinsic value	$ 6,957
Outstanding, stock appreciation rights (in shares)	142,097	136,000
Weighted Average Remaining Contractual Term, Vested and exercisable (Year)	8 years 73 days

XML

Note 9 - Equity-based Compensation - Stock Appreciation Rights, Fair Value Assumptions (Details) - Stock Appreciation Rights (SARs) [Member]	6 Months Ended
	Jun. 30, 2017
Expected volatility	20.90%
Risk-free interest rate	2.14%
Expected term (in years) (Year)	6 years 91 days
Expected dividend yield	0.96%

XML

Note 10 - Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Effective Income Tax Rate Reconciliation, Percent	38.60%	38.30%	37.90%	35.70%
Income Tax Benefits Due to Certain Spin-off and State Tax Items			$ 2.2

XML

Note 11 - Net Income Per Share (Details Textual) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,477	12,098	1,438	6,830

XML

Note 11 - Net Income Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Net income		$ 28,576	$ 26,633	$ 61,790	$ 53,677
Basic (in shares)		5,678,394	5,743,465	5,677,411	5,769,859
Effect of dilutive equity awards (in shares)	[1]	67,223	22,847	63,426	18,526
Weighted average common shares outstanding - diluted (in shares)		5,745,617	5,766,312	5,740,837	5,788,385
Net income per common share:
Basic (in dollars per share)		$ 5.03	$ 4.64	$ 10.88	$ 9.30
Diluted (in dollars per share)		$ 4.97	$ 4.62	$ 10.76	$ 9.27

[1] SARs outstanding that were not included in the diluted net income per share calculation because the effect would have been anti-dilutive were 2,477 and 12,098 for the three months ended June 30, 2017 and 2016, respectively, and 1,438 and 6,830 for the six months ended June 30, 2017 and 2016, respectively.

XML

Note 12 - Commitments and Contingencies (Details Textual) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
GHC [Member]
Employee Medical and Worker's Compensation Claims Expense	$ 0.1	$ 0.3