0001628280-19-009497.txt : 20190731 0001628280-19-009497.hdr.sgml : 20190731 20190731173035 ACCESSION NUMBER: 0001628280-19-009497 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 92 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190731 DATE AS OF CHANGE: 20190731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Altice USA, Inc. CENTRAL INDEX KEY: 0001702780 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 383980194 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38126 FILM NUMBER: 19989900 BUSINESS ADDRESS: STREET 1: 1 COURT SQUARE WEST CITY: LONG ISLAND CITY STATE: NY ZIP: 11101 BUSINESS PHONE: (516) 803-2300 MAIL ADDRESS: STREET 1: 1 COURT SQUARE WEST CITY: LONG ISLAND CITY STATE: NY ZIP: 11101 10-Q 1 a201963010-qalticeusa.htm 10-Q Document
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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, 2019
 
 
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from
 
to
 
 
 
Commission File Number
 
Registrant; State of Incorporation; Address and Telephone Number
 
IRS Employer Identification No.
 
 
 
 
 
 
 
001-38126
 
alticelogoa37.jpg
 
38-3980194
 
 
Altice USA, Inc.
 
 
 
 
Delaware
 
 
 
 
1 Court Square West
 
 
 
 
Long Island City,
New York
11101
 
 
 
 
(516)
803-2300
 
 
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 
 
 
Yes
No
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files).
 
 
Yes
No
 
Indicate by check mark whether each Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)
 
Large Accelerated Filer
 
Accelerated filer
Non-accelerated filer
 
Smaller reporting company
(Do not check if a smaller reporting company)
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
No
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share
ATUS
New York Stock Exchange
Number of shares of common stock outstanding as of July 26, 2019:
647,731,515

 
 
 
 
 
 
 
 
 
 






ALTICE USA, INC. AND SUBSIDIARIES
 
FORM 10-Q
 
TABLE OF CONTENTS
 
 
 
PART I. FINANCIAL INFORMATION
 
 
Page
Item 1. Financial Statements of Altice USA, Inc. and Subsidiaries
 
 
Consolidated Balance Sheets - June 30, 2019 (Unaudited) and December 31, 2018
 
Consolidated Statements of Operations - Three and six months ended June 30, 2019 and 2018 (Unaudited)
 
Consolidated Statements of Comprehensive Income (Loss) - Three and six months ended June 30, 2019 and 2018 (Unaudited)
 
Consolidated Statements of Stockholders’ Equity - Three and six months ended June 30, 2019 and 2018 (Unaudited)
 
Consolidated Statements of Cash Flows - Six months ended June 30, 2019 and 2018 (Unaudited)
 
 
 
 
Notes to Consolidated Financial Statements (Unaudited)
 
 
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk
 
 
Item 4. Controls and Procedures
 
 
PART II. OTHER INFORMATION
 
 
 
Item 1. Legal Proceedings
 
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
 
Item 6. Exhibits
 
 
SIGNATURES


1






PART I.     FINANCIAL INFORMATION
This Form 10-Q contains statements that constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Act of 1934, as amended.  In this Form 10-Q there are statements concerning our future operating results and future financial performance.  Words such as "expects", "anticipates", "believes", "estimates", "may", "will", "should", "could", "potential", "continue", "intends", "plans" and similar words and terms used in the discussion of future operating results, future financial performance and future events identify forward-looking statements.  Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. 
We operate in a highly competitive, consumer and technology driven and rapidly changing business that is affected by government regulation and economic, strategic, technological, political and social conditions. Various factors could adversely affect our operations, business or financial results in the future and cause our actual results to differ materially from those contained in the forward-looking statements. In addition, important factors that could cause our actual results to differ materially from those in our forward-looking statements include:
competition for broadband, video and telephony customers from existing competitors (such as broadband communications companies, wireless data and telephony providers, direct broadcast satellite ("DBS") providers and Internet-based providers) and new competitors entering our footprint;
changes in consumer preferences, laws and regulations or technology that may cause us to change our operational strategies;
increased difficulty negotiating programming agreements on favorable terms, if at all, resulting in increased costs to us and/or the loss of popular programming;
increasing programming costs and delivery expenses related to our products and services;
our ability to achieve anticipated customer and revenue growth, to successfully introduce new products and services and to implement our growth strategy;
our ability to complete our capital investment plans on time and on budget, including our plan to build a fiber-to-the-home ("FTTH") network, and deploy Altice One, our home communications hub;
our ability to develop and deploy mobile voice and data services pursuant to the agreement we entered into with Sprint in the fourth quarter of 2017, and our ability to attract customers to these services;
the effects of economic conditions or other factors which may negatively affect our customers’ demand for our current and future products and services;
the effects of industry conditions;
demand for digital and linear advertising products and services;
our substantial indebtedness and debt service obligations;
adverse changes in the credit market;
changes as a result of any tax reforms that may affect our business;
financial community and rating agency perceptions of our business, operations, financial condition and the industries in which we operate;
the restrictions contained in our financing agreements;
our ability to generate sufficient cash flow to meet our debt service obligations;
fluctuations in interest rates which may cause our interest expense to vary from quarter to quarter;
technical failures, equipment defects, physical or electronic break-ins to our services, computer viruses and similar problems;

2






the disruption or failure of our network, information systems or technologies as a result of computer hacking, computer viruses, “cyber-attacks,” misappropriation of data, outages, natural disasters and other material events;
our ability to obtain necessary hardware, software, communications equipment and services and other items from our vendors at reasonable costs;
our ability to effectively integrate acquisitions and to maximize expected operating efficiencies from our acquisitions or as a result of the transactions, if any;
significant unanticipated increases in the use of bandwidth-intensive Internet-based services;
the outcome of litigation, government investigations and other proceedings;
our ability to successfully operate our business following the completion of our separation from Altice Europe; and
other risks and uncertainties inherent in our cable and other broadband communications businesses and our other businesses, including those listed under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") filed on March 1, 2019 (the "Annual Report").
These factors are not necessarily all of the important factors that could cause our actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could cause our actual results to differ materially from those expressed in any of our forward-looking statements.
Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made only as of the date of this Annual Report. Except to the extent required by law, we do not undertake, and specifically decline any obligation, to update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
You should read this Quarterly Report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. We qualify all forward-looking statements by these cautionary statements.
Certain numerical figures included in this Quarterly Report have been subject to rounding adjustments. Accordingly, such numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

3






Item 1. Financial Statements
ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
June 30, 2019
(Unaudited)
 
December 31, 2018
Current Assets:
 
 
 
Cash and cash equivalents
$
138,715

 
$
298,781

Restricted cash
260

 
257

Accounts receivable, trade (less allowance for doubtful accounts of $15,881 and $13,520)
420,321

 
448,399

Prepaid expenses and other current assets
182,401

 
136,285

Amounts due from affiliates
1,222

 
17,557

Derivative contracts

 
1,975

Total current assets
742,919

 
903,254

Property, plant and equipment, net of accumulated depreciation of $4,704,512 and $4,044,671
5,814,965

 
5,828,881

Right-of-use operating lease assets
289,932

 

Investment securities pledged as collateral
1,816,147

 
1,462,626

Derivative contracts

 
109,344

Other assets
92,518

 
84,382

Amortizable intangibles, net of accumulated amortization of $3,284,685 and $2,882,787
3,865,003

 
4,192,824

Indefinite-lived cable television franchises
13,020,081

 
13,020,081

Goodwill
8,138,086

 
8,012,416

Total assets
$
33,779,651

 
$
33,613,808

See accompanying notes to consolidated financial statements.


4





ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except share and per share amounts)

LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, 2019
(Unaudited)
 
December 31, 2018
Current Liabilities:
 
 
 
Accounts payable
$
909,120

 
$
857,502

Interest payable
335,063

 
386,475

Accrued employee related costs
133,817

 
139,806

Amounts due to affiliates
6,479

 
26,096

Deferred revenue
141,546

 
140,053

Debt
660,223

 
158,625

Other current liabilities
332,692

 
312,634

Total current liabilities
2,518,940

 
2,021,191

Other liabilities
238,872

 
271,554

Deferred tax liability
4,765,958

 
4,723,937

Liabilities under derivative contracts
289,156

 
132,908

Right-of-use operating lease liability
277,744

 

Long-term debt, net of current maturities
22,980,286

 
22,653,975

Total liabilities
31,070,956

 
29,803,565

Commitments and contingencies (Note 16)


 


Redeemable equity
174,931

 
130,007

Stockholders' Equity:
 
 
 
Preferred stock, $.01 par value, 100,000,000 shares authorized, no shares issued and outstanding

 

Class A common stock: $0.01 par value, 4,000,000,000 shares authorized, 468,084,705 shares issued and 468,068,226 shares outstanding as of June 30, 2019 and 496,064,027 shares issued and outstanding as of December 31, 2018
4,681

 
4,961

Class B common stock: $0.01 par value, 1,000,000,000 shares authorized, 490,086,674 shares issued and 187,157,804 shares outstanding as of June 30, 2019 and 212,976,259 shares outstanding as of December 31, 2018
1,872

 
2,130

Class C common stock: $0.01 par value, 4,000,000,000 shares authorized, no shares issued and outstanding

 

Paid-in capital
2,220,348

 
3,423,803

Retained earnings
313,198

 
251,830

 
2,540,099

 
3,682,724

Treasury stock, at cost (16,479 Altice USA Class A common shares)

 

Accumulated other comprehensive loss
(14,474
)
 
(11,783
)
Total stockholders' equity
2,525,625

 
3,670,941

Noncontrolling interest
8,139

 
9,295

Total stockholders' equity
2,533,764

 
3,680,236

 
$
33,779,651

 
$
33,613,808

See accompanying notes to consolidated financial statements.

5





ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenue (including revenue from affiliates of $496, $727, $1,088 and $852, respectively) (See Note 15)
$
2,451,081

 
$
2,364,153

 
$
4,847,648

 
$
4,693,867

Operating expenses:
 
 
 
 
 
 
 
Programming and other direct costs (including charges from affiliates of $2,087, $3,865, $3,774 and $5,019 respectively) (See Note 15)
818,994

 
795,127

 
1,631,979

 
1,582,488

Other operating expenses (including charges from affiliates of $2,020, $6,255, $4,266 and $14,249, respectively) (See Note 15)
569,459

 
575,749

 
1,133,891

 
1,158,772

Restructuring and other expense
11,465

 
9,691

 
26,709

 
13,278

Depreciation and amortization (including impairments)
568,620

 
648,527

 
1,130,048

 
1,291,232

 
1,968,538

 
2,029,094

 
3,922,627

 
4,045,770

Operating income
482,543

 
335,059

 
925,021

 
648,097

Other income (expense):
 
 
 
 
 
 
 
Interest expense
(381,218
)
 
(390,543
)
 
(769,501
)
 
(767,801
)
Interest income
605

 
5,313

 
2,424

 
8,416

Gain (loss) on investments and sale of affiliate interests, net
103,146

 
(45,113
)
 
357,871

 
(293,715
)
Gain (loss) on derivative contracts, net
(49,624
)
 
42,159

 
(226,653
)
 
210,511

Loss on interest rate swap contracts
(26,900
)
 
(12,929
)
 
(50,572
)
 
(44,851
)
Loss on extinguishment of debt and write-off of deferred financing costs
(1,194
)
 
(36,911
)
 
(159,096
)
 
(41,616
)
Other income (expense), net
212

 
(629
)
 
292

 
(12,287
)
 
(354,973
)
 
(438,653
)
 
(845,235
)
 
(941,343
)
Income (loss) before income taxes
127,570

 
(103,594
)
 
79,786

 
(293,246
)
Income tax benefit (expense)
(41,160
)
 
5,590

 
(18,574
)
 
66,293

Net income (loss)
86,410

 
(98,004
)
 
61,212

 
(226,953
)
Net loss (income) attributable to noncontrolling interests
(43
)
 
149

 
156

 
147

Net income (loss) attributable to Altice USA, Inc. stockholders
$
86,367

 
$
(97,855
)
 
$
61,368

 
$
(226,806
)
Income (loss) per share:
 
 
 
 
 
 
 
Basic income (loss) per share
$
0.13

 
$
(0.13
)
 
$
0.09

 
$
(0.31
)
Basic weighted average common shares (in thousands)
668,031

 
737,069

 
681,703

 
737,069

 
 
 
 
 
 
 
 
Diluted income (loss) per share:
$
0.13

 
$
(0.13
)
 
$
0.09

 
$
(0.31
)
Diluted weighted average common shares (in thousands)
668,648

 
737,069

 
682,014

 
737,069

Cash dividends declared per common share
$

 
$

 
$

 
$


See accompanying notes to consolidated financial statements.

6





ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
(Unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss)
$
86,410

 
$
(98,004
)
 
$
61,212

 
$
(226,953
)
Other comprehensive income (loss):
 
 
 
 
 
 
 
Defined benefit pension plans:
 
 
 
 
 
 
 
Unrecognized actuarial gain (loss)
(8,567
)
 
(359
)
 
(3,648
)
 
4,192

Applicable income taxes
2,282

 
97

 
989

 
(1,131
)
Unrecognized actuarial gain (loss) arising during period, net of income taxes
(6,285
)
 
(262
)
 
(2,659
)
 
3,061

Settlement loss included in other expense, net
367

 
258

 
538

 
864

Applicable income taxes
(101
)
 
(70
)
 
(147
)
 
(234
)
Settlement loss included in other expense, net, net of income taxes
266

 
188

 
391

 
630

Foreign currency translation adjustment
(336
)
 
914

 
(580
)
 
914

Applicable income taxes
93

 
(338
)
 
157

 
(338
)
Foreign currency translation adjustment, net
(243
)
 
576

 
(423
)
 
576

Other comprehensive income (loss)
(6,262
)
 
502

 
(2,691
)
 
4,267

Comprehensive income (loss)
80,148

 
(97,502
)
 
58,521

 
(222,686
)
Comprehensive loss (income) attributable to noncontrolling interests
(43
)
 
149

 
156

 
147

Comprehensive income (loss) attributable to Altice USA, Inc. stockholders
$
80,105

 
$
(97,353
)
 
$
58,677

 
$
(222,539
)

See accompanying notes to consolidated financial statements.


7





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

 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 
Retained Earnings
 
Treasury Stock
 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at January 1, 2019
$
4,961

 
$
2,130

 
$
3,423,803

 
$
251,830

 
$

 
$
(11,783
)
 
$
3,670,941

 
$
9,295

 
$
3,680,236

Net loss attributable to stockholders

 

 

 
(24,999
)
 

 

 
(24,999
)
 

 
(24,999
)
Net loss attributable to noncontrolling interests

 

 

 

 

 

 

 
(199
)
 
(199
)
Distributions from noncontrolling interests

 

 

 

 

 

 

 
(1,000
)
 
(1,000
)
Pension liability adjustments, net of income taxes

 

 

 

 

 
3,752

 
3,752

 

 
3,752

Foreign currency translation adjustment, net of income taxes

 

 

 

 

 
(181
)
 
(181
)
 

 
(181
)
Share-based compensation expense

 

 
13,790

 

 

 

 
13,790

 

 
13,790

Redeemable equity vested

 

 
1,364

 

 

 

 
1,364

 

 
1,364

Change in redeemable equity

 

 
(61,696
)
 

 

 

 
(61,696
)
 

 
(61,696
)
Class A shares acquired through share repurchase program and retired
(294
)
 

 
(599,707
)
 

 

 

 
(600,001
)
 

 
(600,001
)
Conversion of Class B to Class A shares
242

 
(242
)
 

 

 

 

 

 

 

Balance at March 31, 2019
$
4,909

 
$
1,888

 
$
2,777,554

 
$
226,831

 
$

 
$
(8,212
)
 
$
3,002,970

 
$
8,096

 
$
3,011,066

See accompanying notes to consolidated financial statements.

8





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

 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 
Retained Earnings
 
Treasury Stock
 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at March 31, 2019
$
4,909

 
$
1,888

 
$
2,777,554

 
$
226,831

 
$

 
$
(8,212
)
 
$
3,002,970

 
$
8,096

 
$
3,011,066

Net income attributable to stockholders

 

 

 
86,367

 

 

 
86,367

 

 
86,367

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 
43

 
43

Pension liability adjustments, net of income taxes

 

 

 

 

 
(6,019
)
 
(6,019
)
 

 
(6,019
)
Foreign currency translation adjustment, net of income taxes

 

 

 

 

 
(243
)
 
(243
)
 

 
(243
)
Share-based compensation expense (equity classified)

 

 
16,077

 

 

 

 
16,077

 

 
16,077

Redeemable equity vested

 

 
61,702

 

 

 

 
61,702

 

 
61,702

Change in redeemable equity

 

 
(46,294
)
 

 

 

 
(46,294
)
 

 
(46,294
)
Class A shares acquired through share repurchase program and retired
(249
)
 

 
(599,703
)
 

 

 

 
(599,952
)
 

 
(599,952
)
Conversion of Class B to Class A shares
16

 
(16
)
 

 

 

 

 

 

 

Issuance of common shares pursuant to employee long term incentive plan

 

 
244

 

 

 

 
244

 

 
244

Class A shares issued in connection with acquisition
5

 

 
10,768

 

 

 

 
10,773

 

 
10,773

Balance at June 30, 2019
$
4,681

 
$
1,872

 
$
2,220,348

 
$
313,198

 
$

 
$
(14,474
)
 
$
2,525,625

 
$
8,139

 
$
2,533,764


See accompanying notes to consolidated financial statements.


9





ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Continued)
(In thousands)
(Unaudited)
 

Class A
Common
Stock
 

Class B
Common
Stock
 
Paid-in
Capital
 
Retained Earnings
 
Accumulated
Other
Comprehensive
Loss
 
Total
Stockholders'
Equity
 
Non-controlling
Interest
 
Total
Equity
Balance at January 1, 2018, as adjusted
$
2,470

 
$
4,901

 
$
4,665,229

 
$
840,636

 
$
(10,022
)
 
$
5,503,214

 
$
1,539

 
$
5,504,753

Net loss attributable to stockholders

 

 

 
(128,951
)
 

 
(128,951
)
 

 
(128,951
)
Net income attributable to noncontrolling interests

 

 

 

 

 

 
2

 
2

Pension liability adjustments, net of income taxes

 

 

 

 
3,765

 
3,765

 

 
3,765

Share-based compensation expense

 

 
21,623

 

 

 
21,623

 

 
21,623

Change in redeemable equity

 

 
(3,347
)
 

 

 
(3,347
)
 

 
(3,347
)
Other changes to equity

 

 
(859
)
 

 

 
(859
)
 

 
(859
)
Adoption of ASU No. 2018-02

 

 

 
2,163

 
(2,163
)
 

 

 

Balance at March 31, 2018
2,470

 
4,901

 
4,682,646

 
713,848

 
(8,420
)
 
5,395,445

 
1,541

 
5,396,986

Net loss attributable to stockholders

 

 

 
(97,855
)
 

 
(97,855
)
 

 
(97,855
)
Net income attributable to noncontrolling interests

 

 

 

 

 

 
(149
)
 
(149
)
Contributions from noncontrolling interests

 

 

 

 

 

 
5,995

 
5,995

Pension liability adjustments, net of income taxes

 

 

 

 
(74
)
 
(74
)
 

 
(74
)
Foreign currency translation adjustment

 

 

 

 
576

 
576

 

 
576

Share-based compensation expense

 

 
12,226

 

 

 
12,226

 

 
12,226

Redeemable equity vested

 

 
111,521

 

 

 
111,521

 

 
111,521

Change in redeemable equity

 

 
(47,049
)
 

 

 
(47,049
)
 

 
(47,049
)
Dividend payment

 

 
(963,711
)
 
(536,224
)
 

 
(1,499,935
)
 

 
(1,499,935
)
Conversion of Class B to Class A shares, including $2,424 in connection with the Distribution
2,458

 
(2,458
)
 

 

 

 

 

 

Impact of i24 Acquisition

 

 
61,049

 
(73,578
)
 
(2,520
)
 
(15,049
)
 

 
(15,049
)
Balance at June 30, 2018
$
4,928

 
$
2,443

 
$
3,856,682

 
$
6,191

 
$
(10,438
)
 
$
3,859,806

 
$
7,387

 
$
3,867,193


See accompanying notes to consolidated financial statements.

10





ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Six Months Ended June 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income (loss)
$
61,212

 
$
(226,953
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
 
Depreciation and amortization (including impairments)
1,130,048

 
1,291,232

Equity in net loss of affiliates

 
10,849

Loss (gain) on investments and sale of affiliate interests, net
(357,871
)
 
293,715

Loss (gain) on derivative contracts, net
226,653

 
(210,511
)
Loss on extinguishment of debt and write-off of deferred financing costs
159,096

 
41,616

Amortization of deferred financing costs and discounts (premiums) on indebtedness
53,876

 
36,971

Settlement loss related to pension plan
538

 
864

Share-based compensation expense related to equity classified awards
29,867

 
33,849

Deferred income taxes
19,604

 
(80,280
)
Provision for doubtful accounts
34,814

 
29,462

Change in assets and liabilities, net of effects of acquisitions and dispositions:
 
 
 
Accounts receivable, trade
1,804

 
(37,224
)
Other receivables
2,740

 
(5,926
)
Prepaid expenses and other assets
(39,477
)
 
(31,951
)
Amounts due from and due to affiliates
(3,282
)
 
8,573

Accounts payable
18,549

 
49,449

Interest payable, accrued employee related costs and other liabilities
(98,551
)
 
(110,227
)
Deferred revenue
12,022

 
20,536

Liabilities related to interest rate swap and derivative contracts
41,322

 
45,199

Net cash provided by operating activities
1,292,964

 
1,159,243

Cash flows from investing activities:
 
 
 
Capital expenditures
(657,253
)
 
(498,297
)
Payment for acquisitions, net of cash acquired
(172,659
)
 
(5,308
)
Sale of affiliate interest

 
(3,537
)
Proceeds related to sale of equipment, including costs of disposal
898

 
6,858

Increase in other investments

 
(2,500
)
Additions to other intangible assets
(867
)
 

Net cash used in investing activities
(829,881
)
 
(502,784
)
 
 
 
 

11





ALTICE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)