XML 55 R35.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2024

Residential Services

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

Also, we offer mobile services providing data, talk and text to consumers in or near our service areas. Customers are billed monthly for access to and usage of our mobile services. We recognize mobile service revenue ratably over the monthly service period as the services are provided to the customers.

We are assessed non-income related taxes by governmental authorities, including franchising authorities (generally under multi-year agreements), and collect such taxes from our customers. In instances where the tax is being assessed directly on us, amounts paid to the governmental authorities are recorded as programming and other direct costs and amounts received from the customers are recorded as revenue. For the years ended December 31, 2024, 2023 and 2022, the amount of franchise fees and certain other taxes and fees included as a component of revenue aggregated $212,207, $219,988 and $232,795, respectively.

Business and Wholesale Revenue

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

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

News and Advertising Revenue

News and advertising revenue is primarily derived from the sale of (i) advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), (ii) digital advertising, (iii) data analytics, and (iv) affiliation fees for news programming.

As part of the agreements under which we acquire video programming, we typically receive an allocation of scheduled advertising time during such programming into which our cable systems can insert commercials. In several

of the markets in which we operate, we have entered into agreements commonly referred to as interconnects with other cable operators to jointly sell local advertising. In some of these markets, we represent the advertising sales efforts of other cable operators; in other markets, other cable operators represent us.

We also offer customers the opportunity to advertise on digital platforms. Advertising revenues are recognized when the advertising is distributed. For arrangements in which we control the sale of advertising and act as the principal to the transaction, we recognize revenue earned from the advertising customer on a gross basis and the amount remitted to the distributor as an operating expense. For arrangements in which we do not control the sale of advertising and act as an agent to the transaction, we recognize revenue net of any fee remitted to the distributor.

Revenue earned from the data-driven, audience-based advertising solutions using advanced analytics tools is recognized when services are provided.

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

Other Revenue

Other revenue includes revenue derived from the sale of mobile devices which is recognized upon delivery and acceptance of the equipment by the customer. Under our mobile device payment plan, the customer is sold the device in exchange for a non-interest-bearing installment note, which is repaid by the customer, typically over a 36-month term, and concurrently enters into a month-to-month contract for mobile service. We may offer certain promotions regarding mobile devices that provide billing credits applied over a specified term, contingent upon the customer maintaining service. These credits are included in the transaction price, which are allocated to the performance obligations based on their relative selling price and are recognized when earned.

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

Customer Contract Costs

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

Deferred enterprise sales commission costs are included in other current and noncurrent assets in the consolidated balance sheet and totaled $19,743 and $18,109 as of December 31, 2024 and 2023, respectively.

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

Multiple-Element Transactions

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

Technical and Operating Expenses and Programming Costs

Programming and Other Direct Costs

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

Programming Costs

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

In addition, we receive, or may receive, incentives from programming distributors for carriage of the distributors' programming. We generally recognize these incentives as a reduction of programming costs and are recorded in "programming and other direct costs", generally over the term of the distribution agreement.

Advertising Expenses

Advertising costs are charged to expense when incurred and are reflected in "other operating expenses" in the accompanying consolidated statements of operations. Advertising costs amounted to $263,529, $253,777 and $299,590 for the years ended December 31, 2024, 2023 and 2022, respectively.

Share-based Compensation

Share-Based Compensation

Share-based compensation expense which primarily relates to awards of stock options, restricted shares, and performance stock units, is based on the fair value of share-based payment awards at the date of grant. We recognize share-based compensation expense over the requisite service period or when it is probable any related performance

condition will be met. For awards with graded vesting, compensation cost is recognized on an accelerated method under the graded vesting method over the requisite service period. Share-based compensation expense related to awards that vest entirely at the end of the vesting period are expensed on a straight-line basis. We account for forfeitures as they occur.

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

Income Taxes

Our provision for income taxes is based on current period income, changes in deferred tax assets and liabilities and changes in estimates with regard to uncertain tax positions. Deferred tax assets are subject to an ongoing assessment of realizability.

Cash and Cash Equivalents

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

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

Accounts Receivable

Accounts receivable are recorded at net realizable value. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amounts.

Investments

Investment Securities

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

Long-Lived Assets and Amortizable Intangible Assets

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

Internal Use Software

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

Amortizable Intangible Assets

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

Asset Impairment

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

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and the value of indefinite-lived cable franchise rights acquired in business combinations are not amortized. Rather, such assets are tested for impairment annually or whenever events or changes in circumstances indicate that it is more likely than not that the assets may be impaired.

The assessment of recoverability may first consider qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit or the indefinite-lived cable franchise right is less than its carrying amount. These qualitative factors include macroeconomic conditions such as changes in interest rates, industry and market considerations, recent and projected financial performance of the reporting units, as well as other factors. A quantitative test is performed if we conclude that it is more likely than not that the fair value of a reporting unit or an indefinite-lived cable franchise right is less than its carrying amount or if a qualitative assessment is not performed. In 2024, we performed quantitative assessments for our goodwill and our indefinite-lived cable franchise rights recoverability tests. In 2023, we performed a quantitative assessment for our goodwill recoverability test and a qualitative assessment for our indefinite-lived cable franchise rights recoverability test. See Note 10 for a discussion of the results of our annual impairment tests.

Goodwill

Goodwill resulted from business combinations and represents the excess amount of the consideration paid over the identifiable assets and liabilities recorded in the acquisition. We test goodwill for impairment at the reporting unit level: (i) Telecommunications and (ii) News and Advertising.

The quantitative test for goodwill identifies potential impairment by comparing the fair value of the reporting unit with its carrying amount. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

We estimate the fair value of our reporting units by considering both (i) a discounted cash flow method, which is based on the present value of projected cash flows over a discrete projection period and a terminal value, which is based on the expected normalized cash flows of the reporting units following the discrete projection period, and (ii) a market approach, which includes the use of multiples of publicly-traded companies whose services are comparable to ours. Significant judgments in estimating the fair value of our reporting units include cash flow projections and the selection of the discount rate.

The estimates and assumptions utilized in estimating the fair value of our reporting units could have a significant impact on whether an impairment charge is recognized and also the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in nature and involve uncertainties and matters of significant judgments. Changes in assumptions could significantly affect the estimates.

Indefinite-lived Cable Franchise Rights

Our indefinite-lived cable franchise rights reflect the value of agreements we have with state and local governments that allow us to construct and operate a cable business within a specified geographic area and allow us to solicit and service potential customers in the service areas defined by the franchise rights currently held by us. We have concluded that our cable franchise rights have an indefinite useful life since there are no legal, regulatory, contractual, competitive, economic or other factors that limit the period over which these rights will contribute to our cash flows. For impairment testing purposes, we have concluded that our cable franchise rights are a single unit of account.

When the qualitative assessment is not used, or if the qualitative assessment is not conclusive, the impairment test for our indefinite-lived cable franchise rights requires a comparison of the estimated fair value of the cable franchise rights with its carrying value. If the carrying value of the indefinite-lived cable franchise rights exceed its fair value, an impairment loss is recognized in an amount equal to that excess. Estimates and assumptions utilized in estimating the fair value of our indefinite-lived cable franchise rights could have a significant impact on whether an impairment charge is recognized and also the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in nature and involve uncertainties and matters of significant judgments. Changes in assumptions could significantly affect the estimates.

Deferred Financing Costs

Deferred financing costs, which are presented as a reduction of debt, are amortized to interest expense using the effective interest method over the terms of the related debt.

Derivative Financial Instruments

We account for derivative financial instruments as either assets or liabilities measured at fair value. We currently use derivative instruments to manage our exposure to market risks from interest rates. Through January 2023 we used derivative instruments to manage our exposure against equity price risk on shares of Comcast Corporation ("Comcast") common stock we previously owned. We do not hold or issue derivative instruments for speculative or trading purposes. Our derivative instruments are not designated as hedges, and changes in the fair values of these derivatives are recognized in the consolidated statements of operations as gain (loss) on derivative contracts or gain (loss) on interest rate swap contracts.

Commitments and Contingencies

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

Foreign Currency

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

Common Stock and Membership Interests

Common Stock of Altice USA

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

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


	Shares of Common Stock Outstanding
	Class A Common Stock	Class B Common Stock




















Balance at December 31, 2022	271,833,063	184,329,229
Conversion of Class B common stock to Class A common stock	104,801	(104,801)
Issuance of common shares in connection with the vesting of restricted stock units	1,357,983	—
Retirement of Class A common shares due to forfeiture	(1,522,965)	—
Treasury shares reissued	96	—
Balance at December 31, 2023	271,772,978	184,224,428
Conversion of Class B common stock to Class A common stock	413	(413)
Issuance of common shares in connection with the vesting of restricted stock units	5,224,768	—
Issuance of common shares in connection with the vesting of deferred cash awards, net of shares recorded as Treasury stock	1,982,371	—


Balance at December 31, 2024	278,980,530	184,224,015

CSC Holdings Membership Interests

As of December 31, 2024 and 2023, CSC Holdings had 100 membership units issued and outstanding, which are all indirectly owned by Altice USA.

Dividends and Distributions

Altice USA

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

Our indentures restrict the amount of dividends and distributions in respect of any equity interest that can be made.

During 2024, 2023 and 2022, there were no dividends paid to shareholders by Altice USA.

CSC Holdings

CSC Holdings may make distributions on its membership interests only if sufficient funds exist as determined under Delaware law. See Note 16 for a discussion of equity distributions that CSC Holdings made to its parent.

Concentrations of Credit Risk

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

We did not have a single customer that represented 10% or more of our consolidated revenues for the years ended December 31, 2024, 2023 and 2022 or 10% or more of our consolidated net trade receivables at December 31, 2024, and 2023, respectively.

Use of Estimates in Preparation of Financial Statements

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

Reclassifications

Certain reclassifications have been made to the 2023 and 2022 amounts to conform to the 2024 presentation.