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目录
美国
证券交易委员会
华盛顿特区20549
表格 10-Q
（标记一）
þ根据1934年证券交易法第13或15(d)节的季度报告
截至季度结束日期的财务报告2024年9月30日
or
o根据1934年证券交易法第13或15(d)节的转型报告书
过渡期从_____到_____
委托文件编号：001-39866001-36863
___________________
12.jpg
Cable One, Inc.
(根据其章程规定的发行人的确切名称)
___________________
特拉华州13-3060083
（注册或组织的）提起诉讼的州或其他司法管辖区（如适用） 组建国的驻地
（纳税人识别号码）
210 E. Earll Drive, 凤凰城, Arizona
85012
(主要领导机构的地址)(邮政编码)
(602) 364-6000
（注册人电话，包括区号）’手机号码，包括区号)
在法案第12(b)条的规定下注册的证券：
每种类别的证券交易标志名称为每个注册的交易所:
普通股，面值0.01美元CABO请使用moomoo账号登录查看New York Stock Exchange
请勾选以下选项以表明注册人：（1）已在过去的12个月内根据《证券交易所法》第13或15（d）条规定提交了所有要求提交的报表（或者在所需提交此类报表的更短期限内），并且（2）在过去的90天内一直遵守了这些申报要求。Yes þ 否 o
请在以下勾选方框表示注册人是否已在Regulation S-T Rule 405规定的前12个月(或在注册人需要提交此类文件的较短期间内)提交了每个互动数据文件。Yes þ 否 o
请勾选标记以说明注册人是大型快速申报人、加速申报人、非加速申报人、较小的报告公司还是新兴成长型公司。请查看《交易所法》第120亿.2条中“大型快速申报人”、“加速申报人”、“较小的报告公司”和“新兴成长型公司”的定义。
大型加速报告人þ加速文件提交人o
非加速文件提交人o较小的报告公司o
新兴成长公司o
如果是新兴成长型企业，请勾选复选标记，表明注册者已选择不使用延长过渡期来符合根据证券交易法第13(a)条规定提供的任何新财务会计准则。 o
请勾选以下选项以指示注册人是否为外壳公司(根据交易所法规则12b-2定义)。是o 否 þ
请指示每个发行人普通股类别在最近可行日期的流通股数：
课程描述
2024年11月1日的流通股份
普通股，面值$0.01
5,619,563

目录
cable one，公司
10-Q表格
目录
本文提及的“cable one”，“我们”，“我们的”，“我们”或“公司”指的是cable one，Inc.及其全资子公司。
i
目录
有关前瞻性声明的警告声明
本文件包含涉及风险和不确定性的“前瞻性声明”。这些声明可以通过它们不严格与历史或当前事实相关，而是基于我们的行业、业务、策略、收购和战略投资、市场扩张计划、宣布的组织变更、股利政策、资本配置、融资策略、如果行使与Mega Broadband Investments Holdings LLC（“MBI”）剩余股权利益相关的看跌期权时应支付的购买价格（“看跌价格”）以及完成此类交易的预期时间表、我们为支付看跌价格的资本来源和能力、MBI未来的负债、我们关于纠正内部财务控制存在的实质性弱点的努力及我们的财务状况和财务结果的计划和意图进行了投射和假设。前瞻性声明通常包括诸如“将”，“应该”，“预期”，“估计”，“期望”，“项目”，“打算”，“计划”，“相信”等词语，以及类似性质的词语和术语，用于讨论未来经营或财务表现。与任何预测或预测一样，前瞻性声明固有地易受不确定性和情况变化的影响。我们的实际结果可能与我们的前瞻性声明中所表达或暗示的结果有差异。因此，不应过分依赖我们或我们代表我们所作出的任何前瞻性声明。可能导致我们的实际结果与我们的前瞻性声明不符的重要因素包括政府监管、经济、战略、政治和社会条件，以及以下因素，这些因素在我们于2024年10月2日向证券交易委员会（“SEC”）提交的修订后的截至2023年12月31日的年度报告表10-K/A中进行了讨论（“2023年10-K/A”）：
•我们市场上的竞争水平正不断上升，来自历史悠久和新进入者。
•近期和未来科技的变化以及我们开发、部署和运营新技术、服务优惠和客户服务平台的能力；
•我们有能力继续增长我们的住宅数据和业务数据收入以及客户群。
•编程成本和转播费用增加；
•我们能够从供应商获取硬件、软件和运营支持;
•我们可能存在风险，未能如预期那样从购买Hargray Acquisition Holdings, LLC（“Hargray”）剩余股权所带来的利益中获益，因为我们并未拥有的部分（“Hargray Acquisition”）；
•与我们现有或未来的收购和战略投资相关的风险，包括与MBI剩余股权相关的看跌期权潜在行使风险;
•新企业资源计划系统和计费系统的实施可能会干扰业务运营；
•我们网络和信息系统的完整性和安防-半导体
•可能的安防-半导体漏洞和其他干扰，包括网络攻击；
•我们未能获得经营业务所需的知识产权和专有权，面临知识产权索赔和诉讼风险；
•与2023年的10-K/A表和SEC于2024年9月24日提交的8-k表中确定的其他受重述影响的时期相关的风险。
•our ability to maintain effective internal control over financial reporting and disclosure controls and procedures, including our ability to remediate any existing material weakness in our internal control over financial reporting and the timing of any such remediation, as well as our ability to reestablish effective disclosure controls and procedures;
•legislative or regulatory efforts to impose network neutrality and other new requirements on our data services;
•additional regulation of our video and voice services;
•our ability to renew cable system franchises;
•increases in pole attachment costs;
•changes in local governmental franchising authority and broadcast carriage regulations;
•changes in government subsidy programs;
•the potential adverse effect of our level of indebtedness on our business, financial condition or results of operations and cash flows;
•the restrictions the terms of our indebtedness place on our business and corporate actions;
•the possibility that interest rates will continue to rise, causing our obligations to service our variable rate indebtedness to increase significantly;
•risks associated with our convertible indebtedness;
•our ability to continue to pay dividends;
•provisions in our charter, by-laws and Delaware law that could discourage takeovers and limit the judicial forum for certain disputes;
•adverse economic conditions, labor shortages, supply chain disruptions, changes in rates of inflation and the level of move activity in the housing sector;
•pandemics, epidemics or disease outbreaks, such as the COVID-19 pandemic, have, and may in the future, disrupt our business and operations, which could materially affect our business, financial condition, results of operations and cash flows;
•lower demand for our residential data and business data products;
•fluctuations in our stock price;
•dilution from equity awards, convertible indebtedness and potential future convertible debt and stock issuances;
•damage to our reputation or brand image;
•our ability to retain key employees (whom we refer to as associates);
•our ability to incur future indebtedness;
•provisions in our charter that could limit the liabilities for directors; and
•the other risks and uncertainties detailed from time to time in our filings with the SEC, including but not limited to those described under "Risk Factors" in our 2023 Form 10-K/A.
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, and expressly disclaim any obligation, except as required by law, to update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.
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PART I: FINANCIAL INFORMATION
ITEM 1.    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CABLE ONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(dollars in thousands, except par values)September 30, 2024December 31, 2023
Assets
Current Assets:
Cash and cash equivalents$226,641 $190,289 
Accounts receivable, net58,449 93,973 
Prepaid and other current assets49,980 58,116 
Total Current Assets335,070 342,378 
Equity investments1,000,011 1,038,024 
Property, plant and equipment, net1,790,759 1,791,120 
Intangible assets, net2,549,417 2,595,892 
Goodwill929,415 928,947 
Other noncurrent assets56,008 63,149 
Total Assets$6,660,680 $6,759,510 
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities$314,884 $156,645 
Deferred revenue25,959 27,169 
Current portion of long-term debt18,943 19,023 
Total Current Liabilities359,786 202,837 
Long-term debt3,468,818 3,626,928 
Deferred income taxes916,545 950,919 
Other noncurrent liabilities30,927 169,556 
Total Liabilities4,776,076 4,950,240 
Commitments and contingencies (refer to note 15)
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; 6,175,399 shares issued; and 5,619,077 and 5,616,987 shares outstanding as of September 30, 2024 and December 31, 2023, respectively)
62 62 
Additional paid-in capital630,506 607,574 
Retained earnings1,830,417 1,761,667 
Accumulated other comprehensive income (loss)23,167 36,745 
Treasury stock, at cost (556,322 and 558,412 shares held as of September 30, 2024 and December 31, 2023, respectively)
(599,548)(596,778)
Total Stockholders' Equity1,884,604 1,809,270 
Total Liabilities and Stockholders' Equity$6,660,680 $6,759,510 
See accompanying notes to the condensed consolidated financial statements.
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CABLE ONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(dollars in thousands, except per share data)
(As Restated)
(As Restated)
Revenues$393,555 $420,348 $1,192,329 $1,266,266 
Costs and Expenses:
Operating (excluding depreciation and amortization)104,603 109,682 316,961 334,651 
Selling, general and administrative88,443 92,726 269,603 265,641 
Depreciation and amortization85,165 82,918 256,119 255,586 
(Gain) loss on asset sales and disposals, net5,045 2,492 9,348 10,714 
Total Costs and Expenses283,256 287,818 852,031 866,592 
Income from operations110,299 132,530 340,298 399,674 
Interest expense, net(34,210)(38,548)(104,957)(114,508)
Other income (expense), net5,252 (25,372)(2,504)(30,612)
Income before income taxes and equity method investment income (loss), net81,341 68,610 232,837 254,554 
Income tax provision15,870 17,258 47,516 52,571 
Income before equity method investment income (loss), net65,471 51,352 185,321 201,983 
Equity method investment income (loss), net(21,256)(21,055)(65,603)(80,857)
Net income$44,215 $30,297 $119,718 $121,126 
Net Income per Common Share:
Basic$7.86 $5.40 $21.30 $21.39 
Diluted$7.58 $5.29 $20.62 $20.71 
Weighted Average Common Shares Outstanding:
Basic5,622,5125,611,2785,620,6235,663,198
Diluted6,037,6246,026,2856,031,1636,074,898
Unrealized gain (loss) on cash flow hedges and other, net of tax$(31,159)$18,569 $(13,578)$22,338 
Comprehensive income$13,056 $48,866 $106,140 $143,464 
See accompanying notes to the condensed consolidated financial statements.
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CABLE ONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(dollars in thousands, except per share data)Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other
Comprehensive Gain (Loss)
Treasury Stock,
at cost
Total Stockholders’ Equity
SharesAmount
Balance at June 30, 20245,619,200$62 $622,150 $1,803,232 $54,326 $(599,510)$1,880,260 
Net income———44,215——44,215 
Unrealized gain (loss) on cash flow hedges and other, net of tax————(31,159)—(31,159)
Equity-based compensation——8,356———8,356 
Issuance of equity awards, net of forfeitures(17)—————— 
Withholding tax for equity awards(106)————(38)(38)
Dividends paid to stockholders ($2.95 per common share)
———(17,030)——(17,030)
Balance at September 30, 20245,619,077$62 $630,506 $1,830,417 $23,167 $(599,548)$1,884,604 
(dollars in thousands, except per share data)Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other
Comprehensive Gain (Loss)
Treasury Stock,
at cost
Total Stockholders’ Equity
SharesAmount
Balance at June 30, 20235,641,056$62 $589,738 $1,661,339 $53,800 $(580,101)$1,724,838 
Net income (As Restated)
—— — 30,297 — — 30,297 
Unrealized gain (loss) on cash flow hedges and other, net of tax—— — — 18,569 — 18,569 
Equity-based compensation—— 10,235 — — — 10,235 
Issuance of equity awards, net of forfeitures(125)— — — — — — 
Repurchases of common stock(23,875)— — — — (16,495)(16,495)
Withholding tax for equity awards(135)— — — — (89)(89)
Dividends paid to stockholders ($2.95 per common share)
—— — (16,699)— — (16,699)
Balance at September 30, 2023 (As Restated)5,616,921$62 $599,973 $1,674,937 $72,369 $(596,685)$1,750,656 
See accompanying notes to the condensed consolidated financial statements.
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CABLE ONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(Unaudited)
(dollars in thousands, except per share data)Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other
Comprehensive Gain (Loss)
Treasury Stock,
at cost
Total Stockholders’ Equity
SharesAmount
Balance at December 31, 20235,616,987$62 $607,574 $1,761,667 $36,745 $(596,778)$1,809,270 
Net income—— — 119,718 — — 119,718 
Unrealized gain (loss) on cash flow hedges and other, net of tax—— — — (13,578)— (13,578)
Equity-based compensation—— 22,932 — — — 22,932 
Issuance of equity awards, net of forfeitures4,600— — — — — — 
Withholding tax for equity awards(2,510)— — — — (2,770)(2,770)
Dividends paid to stockholders ($8.85 per common share)
—— — (50,968)— — (50,968)
Balance at September 30, 20245,619,077$62 $630,506 $1,830,417 $23,167 $(599,548)$1,884,604 
(dollars in thousands, except per share data)Common Stock
Additional Paid-In Capital
Retained Earnings
Accumulated Other
Comprehensive Gain (Loss)
Treasury Stock,
at cost
Total Stockholders’ Equity
SharesAmount
Balance at December 31, 20225,766,011$62 $578,154 $1,603,345 $50,031 $(494,680)$1,736,912 
Net income (As Restated)
— — — 121,126 — — 121,126 
Unrealized gain (loss) on cash flow hedges and other, net of tax— — — — 22,338 — 22,338 
Equity-based compensation— — 21,819 — — — 21,819 
Issuance of equity awards, net of forfeitures(4,102)— — — — — — 
Repurchases of common stock(141,551)— — — — (99,614)(99,614)
Withholding tax for equity awards(3,437)— — — — (2,391)(2,391)
Dividends paid to stockholders ($8.65 per common share)
— — — (49,534)— — (49,534)
Balance at September 30, 2023 (As Restated)5,616,921$62 $599,973 $1,674,937 $72,369 $(596,685)$1,750,656 
See accompanying notes to the condensed consolidated financial statements.
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CABLE ONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
20242023
(in thousands)
(As Restated)
Cash flows from operating activities:
Net income$119,718 $121,126 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization256,119 255,586 
Amortization of debt discount and issuance costs
6,620 6,804 
Equity-based compensation22,932 21,819 
Write-off of debt issuance costs— 3,340 
Change in deferred income taxes(30,090)(11,233)
(Gain) loss on asset sales and disposals, net9,348 10,714 
Equity method investment (income) loss, net65,603 80,857 
Fair value adjustments10,167 27,077 
Changes in operating assets and liabilities:
Accounts receivable, net35,724 (11,948)
Prepaid and other current assets(2,233)(5,272)
Accounts payable and accrued liabilities10,983 7,238 
Deferred revenue(1,245)3,554 
Other(7,139)1,839 
Net cash provided by operating activities496,507 511,501 
Cash flows from investing activities:
Purchase of business
(4,326)— 
Cash paid for debt and equity investments(20,000)(15,520)
Capital expenditures(214,449)(255,428)
Change in accrued expenses related to capital expenditures(5,789)694 
Purchase of wireless licenses(625)— 
Proceeds from sales of property, plant and equipment3,138 1,062 
Proceeds from sales of equity investments— 56,730 
Net cash used in investing activities(242,051)(212,462)
Cash flows from financing activities:
Proceeds from long-term debt borrowings— 638,000 
Payment of debt issuance costs— (8,096)
Payments on long-term debt(164,366)(752,922)
Repurchases of common stock— (99,614)
Payment of withholding tax for equity awards(2,770)(2,391)
Dividends paid to stockholders(50,968)(49,534)
Net cash used in financing activities(218,104)(274,557)
Change in cash and cash equivalents36,352 24,482 
Cash and cash equivalents, beginning of period190,289 215,150 
Cash and cash equivalents, end of period$226,641 $239,632 
Supplemental cash flow disclosures:
Cash paid for interest, net of capitalized interest$109,173 $115,093 
Cash paid for income taxes, net of refunds received$75,851 $76,305 
See accompanying notes to the condensed consolidated financial statements.
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CABLE ONE, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.    DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business. Cable One is a fully integrated provider of data, video and voice services to residential and business customers in 24 Western, Midwestern and Southern U.S. states. As of September 30, 2024, Cable One provided services to approximately 1.1 million residential and business customers, of which approximately 1,059,000 subscribed to data services, 119,000 subscribed to video services and 109,000 subscribed to voice services.
Basis of Presentation. The condensed consolidated financial statements and accompanying notes thereto 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 SEC. As permitted under such guidance, certain notes and other financial information normally required by GAAP have been omitted. Management believes the condensed 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 condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the 2023 Form 10-K/A.
The December 31, 2023 year-end balance sheet data presented herein was derived from the Company’s audited consolidated financial statements included in the 2023 Form 10-K/A, but does not include all disclosures required by GAAP. The Company’s interim results of operations may not be indicative of its future results.
Certain reclassifications have been made to prior period amounts to conform to the current year presentation. Refer to note 13 for further details.
Principles of Consolidation. The accompanying condensed consolidated financial statements include the accounts of the Company, including its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Restatement. The Company amended and restated its condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023 due to an error in the equity method accounting for its partial ownership of Clearwave Fiber LLC, a joint venture transaction in which the Company contributed certain fiber operations (including certain fiber assets of Hargray and a majority of the operations of Delta Communications, LLC) and certain unaffiliated third-party investors contributed cash to a newly formed entity ("Clearwave Fiber"). Specifically, the Company did not appropriately allocate the losses generated by Clearwave Fiber amongst the joint venture partners after considering the liquidation preference and preferred return feature held by the third-party investors. As a result, equity method investment loss was understated, income tax provision was overstated and net income was overstated in the Company's condensed consolidated statements of operations and comprehensive income, which had a corresponding impact on the related consolidated balance sheet and consolidated statement of stockholders' equity items. There was no impact to the Company’s condensed consolidated statement of cash flows except for the presentation of net income offset by the respective adjustments to reconcile net income to net cash provided by operating activities. The accompanying footnotes to the condensed consolidated financial statements have also been updated to reflect the restated amounts. The impact of the correction of the error discussed above on the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2023 is as follows:
Condensed Consolidated Balance Sheet
As of September 30, 2023
(dollars in thousands)As ReportedAdjustmentAs Restated
Equity investments$1,127,185 $(70,127)$1,057,058 
Total assets$6,911,775 $(70,127)$6,841,648 
Deferred income taxes$974,344 $(18,050)$956,294 
Total liabilities$5,109,042 $(18,050)$5,090,992 
Retained earnings$1,727,014 $(52,077)$1,674,937 
Total stockholders' equity$1,802,733 $(52,077)$1,750,656 
Total liabilities and stockholders' equity$6,911,775 $(70,127)$6,841,648 
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Condensed Consolidated Statements of Operations and Comprehensive Income
Three Months Ended September 30, 2023Nine Months Ended September 30, 2023
(dollars in thousands, except per share data)As Reported
Adjustment
As RestatedAs Reported
Adjustment
As Restated
Income tax provision$20,694 $(3,436)$17,258 $63,939 $(11,368)$52,571 
Income before equity method investment income (loss), net$47,916 $3,436 $51,352 $190,615 $11,368 $201,983 
Equity method investment income (loss), net$(8,444)$(12,611)$(21,055)$(38,473)$(42,384)$(80,857)
Net income$39,472 $(9,175)$30,297 $152,142 $(31,016)$121,126 
Comprehensive income$58,041 $(9,175)$48,866 $174,480 $(31,016)$143,464 
Net Income per Common Share:
Basic$7.03 $(1.63)$5.40 $26.87 $(5.48)$21.39 
Diluted$6.81 $(1.52)$5.29 $25.81 $(5.10)$20.71 
Condensed Consolidated Statements of Stockholders' Equity
As of and For the Three Months Ended
September 30, 2023		As of and For the Nine Months Ended
September 30, 2023
(dollars in thousands)As ReportedAdjustmentAs RestatedAs ReportedAdjustmentAs Restated
Net income$39,472 $(9,175)$30,297 $152,142 $(31,016)$121,126 
Retained earnings$1,727,014 $(52,077)$1,674,937 $1,727,014 $(52,077)$1,674,937 
Total stockholders' equity$1,802,733 $(52,077)$1,750,656 $1,802,733 $(52,077)$1,750,656 
Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2023
(dollars in thousands)As Reported
Adjustment
As Restated
Net income$152,142 $(31,016)$121,126 
Change in deferred income taxes$135 $(11,368)$(11,233)
Equity method investment (income) loss, net$38,473 $42,384 $80,857 
Net cash provided by operating activities$511,501 $— $511,501 
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Segment Reporting. Accounting Standards Codification 280 - Segment Reporting requires the disclosure of factors used to identify an entity’s reportable segments. Based on the Company’s chief operating decision maker’s review and assessment of the Company’s operating performance for purposes of performance monitoring and resource allocation, the Company determined that its operations, including the decisions to allocate resources and deploy capital, are organized and managed on a consolidated basis. Accordingly, management has identified one operating segment, which is its reportable segment, under this organizational and reporting structure.
Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make certain 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.
Recently Issued But Not Yet Adopted Accounting Pronouncements. In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional disclosures around tax rate reconciliations, income taxes payments and other tax-related information. The ASU is effective for annual periods beginning after December 15, 2024 and can be applied on either a prospective or retrospective basis. The Company plans to adopt ASU 2023-09 in the first quarter of 2025 on a prospective basis and expects the adoption of the updated guidance to result in the additional disaggregation of certain tax information within the Company's income tax footnote disclosure.
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting. The ASU requires additional disclosures regarding a reportable segment's financial information in which the reportable segment is regularly provided to the chief operating decision marker. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024. The Company plans to adopt ASU 2023-07 in the first quarter of 2025 on a retrospective basis and expects the adoption of the updated guidance to result in additional segment-related footnote disclosures within the notes to the consolidated financial statements.
2.    REVENUES
Revenues by product line and other revenue-related disclosures were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Residential:
Data$230,362 $247,420 $696,585 $736,957 
Video53,650 62,295 171,185 198,719 
Voice7,765 9,080 24,528 28,334 
Business:
Data57,281 55,691 170,609 166,090 
Other17,942 19,884 55,790 62,558 
Other26,555 25,978 73,632 73,608 
Total revenues$393,555 $420,348 $1,192,329 $1,266,266 
Franchise and other regulatory fees$5,908 $6,513 $18,449 $20,473 
Deferred commission amortization$1,612 $1,445 $4,645 $4,202 
Business other revenues include business video, voice and other ancillary service revenues. Other revenues are comprised primarily of regulatory revenues, advertising sales, late charges and reconnect fees.
Fees imposed on the Company by various governmental authorities, including franchise fees, are passed through on a monthly basis to the Company’s customers and are periodically remitted to authorities. As the Company acts as principal, these fees are reported in video and voice revenues on a gross basis with corresponding expenses included within operating expenses in the condensed consolidated statements of operations and comprehensive income.
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Deferred commission amortization expense is included within selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.
Current deferred revenue liabilities consist of refundable customer prepayments, up-front charges and installation fees. As of September 30, 2024, the Company’s remaining performance obligations pertain to the refundable customer prepayments and consist of providing future data, video and voice services to customers. Of the $27.2 million of current deferred revenue at December 31, 2023, $25.6 million was recognized during the nine months ended September 30, 2024. Noncurrent deferred revenue liabilities consist of up-front charges and installation fees from business customers.
3.    OPERATING ASSETS AND LIABILITIES
Accounts receivable consisted of the following (in thousands):
September 30, 2024December 31, 2023
Trade receivables$44,507 $72,076 
Other receivables(1)
16,600 26,006 
Less: Allowance for credit losses(2,658)(4,109)
Total accounts receivable, net$58,449 $93,973 
(1)Balances include amounts due from Clearwave Fiber for services provided under a transition services agreement of $2.3 million and $3.7 million as of September 30, 2024 and December 31, 2023, respectively. The balances also include $4.6 million and $11.4 million of receivables from the federal government under the Secure and Trusted Communications Networks Reimbursement Program as of September 30, 2024 and December 31, 2023, respectively.
The changes in the allowance for credit losses were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Beginning balance$2,724 $3,658 $4,109 $3,191 
Additions - charged to costs and expenses2,498 2,774 6,552 6,996 
Deductions - write-offs(3,697)(3,627)(11,700)(10,006)
Recoveries collected1,133 1,157 3,697 3,781 
Ending balance$2,658 $3,962 $2,658 $3,962 
Prepaid and other current assets consisted of the following (in thousands):
September 30, 2024December 31, 2023
Prepaid repairs and maintenance$5,252 $2,596 
Software implementation costs3,128 1,812 
Prepaid insurance4,981 3,507 
Prepaid rent3,088 2,227 
Prepaid software9,545 9,762 
Deferred commissions5,829 5,371 
Interest rate swap asset14,142 24,511 
Prepaid income tax payments1,138 5,470 
All other current assets2,877 2,860 
Total prepaid and other current assets$49,980 $58,116 
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Other noncurrent assets consisted of the following (in thousands):
September 30, 2024December 31, 2023
Operating lease right-of-use assets$8,742 $10,650 
Deferred commissions11,243 9,793 
Software implementation costs8,616 7,115 
Debt issuance costs2,820 3,087 
Debt investment2,328 2,228 
Assets held for sale— 889 
Interest rate swap asset16,960 24,453 
All other noncurrent assets5,299 4,934 
Total other noncurrent assets$56,008 $63,149 
Accounts payable and accrued liabilities consisted of the following (in thousands):
September 30, 2024December 31, 2023
Accounts payable$32,988 $45,025 
Accrued programming costs17,027 18,453 
Accrued compensation and related benefits27,514 20,149 
Accrued sales and other operating taxes22,265 14,518 
Accrued franchise fees2,672 2,952 
Deposits6,015 5,954 
Operating lease liabilities2,956 3,391 
Accrued insurance costs5,477 5,167 
Cash overdrafts8,959 12,058 
Interest payable10,413 6,340 
Income taxes payable— 2,579 
MBI Net Option(1)
153,480 — 
All other accrued liabilities25,118 20,059 
Total accounts payable and accrued liabilities$314,884 $156,645 
(1)Amount as of September 30, 2024 represents the value of the put option associated with the remaining equity interests in MBI. This liability was classified as an other noncurrent liability within the condensed consolidated balance sheet as of December 31, 2023. Refer to notes 4 and 9 for further information on the MBI Net Option (as defined in note 4).
Other noncurrent liabilities consisted of the following (in thousands):
September 30, 2024December 31, 2023
Operating lease liabilities$5,383 $6,768 
Accrued compensation and related benefits8,349 8,847 
Deferred revenue13,922 15,066 
MBI Net Option(1)
— 136,360 
All other noncurrent liabilities3,273 2,515 
Total other noncurrent liabilities$30,927 $169,556 
(1)Amount as of December 31, 2023 represents the net value of the call and put options associated with the remaining equity interests in MBI, consisting of call and put liabilities of $15.2 million and $121.2 million, respectively. This liability was classified as a current liability within the condensed consolidated balance sheet as of September 30, 2024. Refer to notes 4 and 9 for further information on the MBI Net Option (as defined in note 4).
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4.    EQUITY INVESTMENTS (AS RESTATED)
In June 2024, the Company invested an additional $20.0 million in AMG Technology Holdings, LLC, a wireless internet service provider ("Nextlink"), increasing its equity interest to approximately 22%. Prior to this additional investment, Nextlink was accounted for as a cost method investment. As a result of the additional investment, Nextlink is accounted for as an equity method investment with a one quarter reporting lag.
The carrying value of the Company's equity investments consisted of the following (dollars in thousands):
September 30, 2024December 31, 2023
Ownership PercentageCarrying ValueOwnership PercentageCarrying Value
Cost Method Investments
MetroNet(1)
<10%$7,000 <10%$7,000 
Nextlink
—— <20%77,245 
Point Broadband(2)
<10%42,623 <10%42,623 
Visionary(3)
<10%8,822 <10%8,822 
Ziply(4)
<10%50,000 <10%50,000 
Others<10%14,639 <10%13,926 
Total cost method investments$123,084 $199,616 
Equity Method Investments
Clearwave Fiber(5)
~57%(6)
$209,538 
~58%(6)
$272,453 
Nextlink
~22%104,185 —— 
MBI(7)
45%563,204 45%565,955 
Total equity method investments$876,927 $838,408 
Total equity investments$1,000,011 $1,038,024 
(1)MetroNet Systems, LLC, a fiber internet service provider ("MetroNet").
(2)Point Broadband Holdings, LLC, a fiber internet service provider ("Point Broadband").
(3)Visionary Communications, Inc., an internet service provider ("Visionary").
(4)Northwest Fiber Holdco., LLC, a fiber internet service provider ("Ziply").
(5)The Company does not have a controlling financial interest and does not consolidate Clearwave Fiber for financial reporting purposes but accounts for its interest under the equity method of accounting as the entity’s governance arrangements require certain of the designees of the other unit holders to consent to all significant decisions.
(6)Represents the Company's percentage ownership of the total outstanding equity units in Clearwave Fiber. The Company's ownership interest in Clearwave Fiber is in the form of common equity units and the ownership interest in Clearwave Fiber of the unaffiliated third-party investors is in the form of convertible preferred equity units. The convertible preferred equity units held by the unaffiliated third-party investors are subject to a specified preferred return in relation to the common equity units held by the Company. As a result of the economic and other attributes of the various classes of equity units in Clearwave Fiber, the Company's percentage ownership of the total outstanding equity units in Clearwave Fiber may differ from its economic interest in Clearwave Fiber.
(7)The Company held a call option to purchase all but not less than all of the remaining equity interests in MBI that the Company did not already own between January 1, 2023 and June 30, 2024. The call option expired unexercised on June 30, 2024. Certain investors in MBI hold a put option to sell (and to cause all members of MBI other than the Company to sell) to the Company all but not less than all of the remaining equity interests in MBI that the Company does not already own, which right may be exercised between July 1, 2025 and September 30, 2025. The call and put options (collectively referred to as the “MBI Net Option”) are measured at fair value using Monte Carlo simulations that rely on assumptions around MBI’s equity value, MBI’s and the Company’s equity volatility, MBI’s and the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA” and as adjusted, “Adjusted EBITDA”) volatility, risk adjusted discount rates and the Company’s cost of debt, among others. The final MBI purchase price allocation resulted in $630.7 million being allocated to the MBI equity investment and $19.7 million and $75.5 million being allocated to the call and put options, respectively. The MBI Net Option is remeasured at fair value on a quarterly basis. The carrying value of the MBI Net Option liability of $153.5 million as of September 30, 2024 was classified as a current liability while the carrying value of $136.4 million as of December 31, 2023 was included within other noncurrent liabilities as of December 31, 2023 in the condensed consolidated balance sheets. Refer to note 9 for further information on the MBI Net Option.
The carrying value of MBI exceeded the Company’s underlying equity in MBI’s net assets by $481.7 million and $487.5 million as of September 30, 2024 and December 31, 2023, respectively.
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Equity method investment income (losses), which increase (decrease) the carrying value of the respective investment, and are recorded on a one quarter lag, along with other equity investment activities recorded within other income (expense) in the condensed consolidated statements of operation and comprehensive income, were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(As Restated)
(As Restated)
Equity Method Investment Income (Losses)
Clearwave Fiber$(20,136)$(20,697)$(62,915)$(77,732)
MBI(1)
(1,183)(387)(2,751)(3,627)
Nextlink
63 — 63 — 
Wisper(2)
— 29 — 502 
Total$(21,256)$(21,055)$(65,603)$(80,857)
Other Income (Expense), Net
MBI Net Option change in fair value$(1,510)$(23,910)$(17,120)$(38,650)
Gain (loss) on sale of equity investments, net$— $(1,558)$— $(1,558)
Gain (loss) on fair value adjustment of equity investments, net(3)
$(20)$45 $76 $13,130 
(1)The Company identified a $186.6 million difference between the fair values of certain of MBI’s finite-lived intangible assets and the respective carrying values recorded by MBI, of which $84.0 million was attributable to the Company’s 45% pro rata portion. The Company is amortizing its share on an accelerated basis over the lives of the respective assets. For the three months ended September 30, 2024, the Company recognized $0.9 million of its proportionate share of MBI’s net income and $2.1 million of its proportionate share of basis difference amortization. For the three months ended September 30, 2023, the Company recognized $2.2 million of its proportionate share of MBI’s net income and $2.5 million of its proportionate share of basis difference amortization. For the nine months ended September 30, 2024, the Company recognized $3.9 million of its proportionate share of MBI's net income and $6.6 million of its proportionate share of basis difference amortization. For the nine months ended September 30, 2023, the Company recognized $4.6 million of its proportionate share of MBI's net income and $8.3 million of its proportionate share of basis difference amortization.
(2)Wisper ISP, LLC, a wireless internet service provider ("Wisper"). In July 2023, the Company redeemed its equity investment in Wisper.
(3)Amount for the nine months ended September 30, 2023 includes a $12.3 million non-cash mark-to-market gain on the Company's investment in Point Broadband as a result of an observable market transaction in Point Broadband’s equity.
The carrying value of the Company’s equity investments without readily determinable fair values are determined based on fair valuations as of their respective acquisition dates. The Company assesses each equity investment for indicators of impairment on a quarterly basis. No impairments were recorded for any of the periods presented.
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5.    PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following (in thousands):
September 30, 2024December 31, 2023
Cable distribution systems$2,562,658 $2,491,903 
Customer premise equipment357,131 380,820 
Other equipment and fixtures367,510 376,847 
Buildings and improvements141,306 140,063 
Capitalized software72,856 70,928 
Construction in progress162,124 188,774 
Land16,387 13,641 
Right-of-use assets10,511 10,789 
Property, plant and equipment, gross3,690,483 3,673,765 
Less: Accumulated depreciation and amortization(1,899,724)(1,882,645)
Property, plant and equipment, net$1,790,759 $1,791,120 
The Company classified $0.9 million of property, plant and equipment as held for sale as of December 31, 2023. Such assets are included within other noncurrent assets in the condensed consolidated balance sheet. These assets were sold during the first quarter of 2024 for total proceeds of $2.3 million, resulting in the recognition of a $1.4 million gain on the sale.
Depreciation and amortization expense for property, plant and equipment was $68.6 million and $64.8 million for the three months ended September 30, 2024 and 2023, respectively, and $206.5 million and $201.1 million for the nine months ended September 30, 2024 and 2023, respectively.
6.    GOODWILL AND INTANGIBLE ASSETS
The carrying amount of goodwill was $929.4 million and $928.9 million as of September 30, 2024 and December 31, 2023, respectively, with the increase attributable to a small acquisition on July 1, 2024. The Company has not historically recorded any impairment of goodwill.
Intangible assets consisted of the following (dollars in thousands):
September 30, 2024December 31, 2023
Useful Life Range
(in years)
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
Finite-Lived Intangible Assets
Customer relationships
13.5 – 17
$785,203 $343,523 $441,680 $784,381 $295,817 $488,564 
Trademarks and trade names
2 – 4.2
11,889 10,367 1,522 11,846 8,782 3,064 
Wireless licenses
10 – 15
4,793 811 3,982 4,169 451 3,718 
Total finite-lived intangible assets$801,885 $354,701 $447,184 $800,396 $305,050 $495,346 
Indefinite-Lived Intangible Assets
Franchise agreements$2,102,233 $2,100,546 
Total intangible assets, net$2,549,417 $2,595,892 
Intangible asset amortization expense was $16.6 million and $18.2 million for the three months ended September 30, 2024 and 2023, respectively, and $49.7 million and $54.5 million for the nine months ended September 30, 2024 and 2023, respectively.
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The future amortization of existing finite-lived intangible assets as of September 30, 2024 was as follows (in thousands):
Year Ending December 31,Amount
2024 (remaining three months)$16,551 
202561,258 
202655,733 
202751,841 
202848,242 
Thereafter213,559 
Total$447,184 
Actual amortization expense in future periods may differ from the amounts above as a result of intangible asset acquisitions or divestitures, changes in useful life estimates, impairments or other relevant factors.
7.    DEBT
The carrying amount of long-term debt consisted of the following (in thousands):
September 30, 2024December 31, 2023
Senior Credit Facilities (as defined below)$1,941,665 $2,105,348 
Senior Notes (as defined below)650,000 650,000 
Convertible Notes (as defined below)920,000 920,000 
Finance lease liabilities4,592 5,160 
Total debt3,516,257 3,680,508 
Less: Unamortized debt discount(8,806)(12,025)
Less: Unamortized debt issuance costs(19,690)(22,532)
Less: Current portion of long-term debt(18,943)(19,023)
Total long-term debt$3,468,818 $3,626,928 
Senior Credit Facilities. Prior to February 22, 2023, the Company had in place the third amended and restated credit agreement among the Company and its lenders, dated as of October 30, 2020 (as amended prior to February 22, 2023, the "Credit Agreement") that provided for senior secured term loans in original aggregate principal amounts of $700.0 million maturing in 2025 (the “Term Loan A-2”), $250.0 million maturing in 2027 (the “Term Loan B-2”), $625.0 million maturing in 2027 (the “Term Loan B-3”) and $800.0 million maturing in 2028 (the "Term Loan B-4"), as well as a $500.0 million revolving credit facility maturing in 2025 (the “Revolving Credit Facility” and, together with the Term Loan A-2, the Term Loan B-2, the Term Loan B-3 and the Term Loan B-4, the “Senior Credit Facilities”). 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.
On February 22, 2023, the Company entered into the fourth amended and restated credit agreement with its lenders to amend and restate the Credit Agreement (as amended and restated, the "New Credit Agreement") to, among other things, (i) increase the aggregate principal amount of commitments under the Revolving Credit Facility by $500.0 million to $1.0 billion; (ii) extend the scheduled maturity of the Revolving Credit Facility from October 2025 to February 2028; (iii) upsize the outstanding principal amount under the Term Loan B-3 by $150.0 million to $757.0 million (the "TLB-3 Upsize"); (iv) extend the scheduled maturities of the Term Loan B-2 and the Term Loan B-3 from October 2027 to October 2029 (subject to adjustment as described in the notes to the table below summarizing the Company's outstanding term loans as of September 30, 2024); (v) increase the fixed spreads on the Term Loan B-2 and the Term Loan B-3 from 2.00% to 2.25%; and (vi) transition the benchmark interest rate for the Revolving Credit Facility, the Term Loan B-2 and the Term Loan B-3 from LIBOR to SOFR plus a 10 basis point credit spread adjustment. Except as described above, the New Credit Agreement did not make any material changes to the principal terms of the Term Loan B-2, the Term Loan B-3, the Term Loan B-4 or the Revolving Credit Facility. Upon the effectiveness of the New Credit Agreement, the Company drew $488.0 million under the Revolving Credit Facility and, together with the net proceeds from the TLB-3 Upsize, repaid all $638.3 million aggregate principal amount of its outstanding Term Loan A-2. In July 2023, the Company transitioned the benchmark interest rate for the Term Loan B-4 from LIBOR to SOFR plus a credit spread adjustment that ranges from approximately 11.4 basis points to 42.8 basis points based on the interest period elected.
Refer to note 16 for discussion of additional activity pertaining to the New Credit Agreement occurring subsequent to September 30, 2024.
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Under the New Credit Agreement, the interest margins applicable to the Senior Credit Facilities are, at the Company’s option, equal to either SOFR or a base rate, plus an applicable margin equal to, (i) with respect to the Revolving Credit Facility, 1.25% to 1.75% plus a 10 basis point credit spread adjustment for SOFR loans and 0.25% to 0.75% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on the Company’s Total Net Leverage Ratio (as defined in the New Credit Agreement), (ii) with respect to the Term Loan B-2 and the Term Loan B-3, 2.25% plus a 10 basis point credit spread adjustment for SOFR loans and 1.25% for base rate loans and (iii) with respect to the Term Loan B-4, 2.0% plus an approximately 11.4 to 42.8 basis point credit spread adjustment based on the interest period elected for SOFR loans and 1.0% for base rate loans.
The Company repaid $150.0 million of the outstanding Revolving Credit Facility borrowings during 2023. In each of February, April and July of 2024, the Company repaid $50.0 million of the outstanding Revolving Credit Facility borrowings, reducing the outstanding balance to $188.0 million as of September 30, 2024. The borrowings under the Revolving Credit Facility accrued interest at a rate of 6.70% per annum as of September 30, 2024.
Refer to the table below summarizing the Company’s outstanding term loans as of September 30, 2024 and note 11 to the Company’s audited consolidated financial statements included in the 2023 Form 10-K/A for further details on the Senior Credit Facilities.
As of September 30, 2024, the Company had approximately $1.75 billion of aggregate outstanding term loans and $188.0 million of borrowings (and $812.0 million available for borrowing) under the Revolving Credit Facility. A summary of the Company’s outstanding term loans as of September 30, 2024 is as follows (dollars in thousands):
Instrument
Draw Date(s)
Original Principal
Amortization
Per Annum(1)
Outstanding Principal
Final Scheduled
Maturity Date
Final Scheduled
Principal Payment
Benchmark Rate
Fixed Margin
Interest Rate
Term Loan B-21/7/2019$250,000 1.0%$236,250 
10/30/2029(2)
$223,750 SOFR + 10.0 bps2.25%7.20%
Term Loan B-3
6/14/2019
10/30/2020
2/22/2023
325,000
300,000
150,000
1.0%743,415 
10/30/2029(2)
704,695 SOFR + 10.0 bps2.25%7.20%
Term Loan B-45/3/2021800,000 1.0%774,000 5/3/2028746,000 SOFR + 11.4 bps2.00%6.96%
Total$1,825,000 $1,753,665 $1,674,445 
(1)Payable in equal quarterly installments (expressed as a percentage of the original principal amount and subject to customary adjustments in the event of any prepayment). All loans may be prepaid at any time without penalty or premium (subject to customary SOFR breakage provisions).
(2)The final maturity date of the Term Loan B-2 and the Term Loan B-3, in each case, will adjust to May 3, 2028 if greater than $150.0 million aggregate principal amount of the Term Loan B-4 (together with any refinancing indebtedness in respect of the Term Loan B-4 with a final maturity date prior to the date that is 91 days after October 30, 2029) remains outstanding on May 3, 2028.
Senior Notes. In November 2020, the Company issued $650.0 million aggregate principal amount of 4.00% senior notes due 2030 (the “Senior Notes”). The Senior Notes bear interest at a rate of 4.00% per annum payable semi-annually in arrears on May 15th and November 15th of each year. The terms of the Senior Notes are governed by an indenture dated as of November 9, 2020 (the “Senior Notes Indenture”), among the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (“BNY”), as trustee.
At any time and from time to time prior to November 15, 2025, the Company may redeem some or all of the Senior Notes for cash at a redemption price equal to 100% of their principal amount, plus the “make-whole” premium described in the Senior Notes Indenture and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. Beginning on November 15, 2025, the Company may redeem some or all of the Senior Notes at any time and from time to time at the applicable redemption prices listed in the Senior Notes Indenture, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. In addition, at any time and from time to time prior to November 15, 2023, the Company may redeem up to 40% of the aggregate principal amount of Senior Notes with funds in an aggregate amount not exceeding the net cash proceeds from one or more equity offerings at a redemption price equal to 104% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date.
Upon the occurrence of a Change of Control and a Below Investment Grade Rating Event (each as defined in the Senior Notes Indenture), the Company is required to offer to repurchase the Senior Notes at 101% of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.
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Convertible Notes. In March 2021, the Company issued $575.0 million aggregate principal amount of 0.000% convertible senior notes due 2026 (the “2026 Notes”) and $345.0 million aggregate principal amount of 1.125% convertible senior notes due 2028 (the “2028 Notes” and, together with the 2026 Notes, the “Convertible Notes,” and the Convertible Notes collectively with the Senior Notes, the “Notes”). The terms of the 2026 Notes and the 2028 Notes are each governed by a separate indenture dated as of March 5, 2021 (collectively, the “Convertible Notes Indentures” and together with the Senior Notes Indenture, the “Indentures”), in each case, among the Company, the guarantors party thereto and BNY, as trustee.
The 2026 Notes do not bear regular interest, and the principal amount of the 2026 Notes does not accrete. The 2028 Notes bear interest at a rate of 1.125% per annum. Interest on the 2028 Notes is payable semiannually in arrears on March 15th and September 15th of each year, unless earlier repurchased, converted or redeemed. The 2026 Notes are scheduled to mature on March 15, 2026, and the 2028 Notes are scheduled to mature on March 15, 2028. The initial conversion rate for each of the 2026 Notes and the 2028 Notes is 0.4394 shares of the Company’s common stock per $1,000 principal amount of 2026 Notes and 2028 Notes, as applicable (equivalent to an initial conversion price of $2,275.83 per share of common stock).
The Convertible Notes are convertible at the option of the holders. The method of conversion into cash, shares of the Company’s common stock or a combination thereof is at the election of the Company. Prior to the close of business on the business day immediately preceding December 15, 2025, the 2026 Notes will be convertible at the option of the holders only upon the satisfaction of specified conditions and during certain periods. On or after December 15, 2025, holders may convert their 2026 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the relevant maturity date. Prior to the close of business on the business day immediately preceding December 15, 2027, the 2028 Notes will be convertible at the option of the holders only upon the satisfaction of specified conditions and during certain periods. On or after December 15, 2027, holders may convert their 2028 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the relevant maturity date. If the Company undergoes a “fundamental change” (as defined in the applicable Convertible Notes Indenture), holders of the applicable series of Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes of such series at a purchase price equal to 100% of the principal amount of the Convertible Notes of such series to be repurchased, plus accrued and unpaid interest to, but not including, the fundamental change repurchase date.
The Company may not redeem the 2026 Notes prior to March 20, 2024 and it may not redeem the 2028 Notes prior to March 20, 2025. No “sinking fund” is provided for the Convertible Notes. On or after March 20, 2024 and prior to December 15, 2025, the Company may redeem for cash all or any portion of the 2026 Notes, at its option, and on or after March 20, 2025 and prior to December 15, 2027, the Company may redeem for cash all or any portion of the 2028 Notes, at its option, in each case, if the last reported sale price per share of common stock has been at least 130% of the conversion price for such series of Convertible Notes then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes of such series to be redeemed, plus accrued and unpaid interest to, but not including, the redemption date.
In addition, following a “make-whole fundamental change” (as defined in the applicable Convertible Notes Indenture) or if the Company delivers a notice of redemption in respect of any Convertible Notes of a series, in certain circumstances, the conversion rate applicable to such series of Convertible Notes will be increased for a holder who elects to convert any of such Convertible Notes in connection with such a make-whole fundamental change or convert any of such Convertible Notes called (or deemed called) for redemption during the related redemption period, as the case may be.
The carrying amounts of the Convertible Notes consisted of the following (in thousands):
September 30, 2024December 31, 2023
2026 Notes2028 NotesTotal2026 Notes2028 NotesTotal
Gross carrying amount$575,000 $345,000 $920,000 $575,000 $345,000 $920,000 
Less: Unamortized discount(4,357)(4,449)(8,806)(6,610)(5,415)(12,025)
Less: Unamortized debt issuance costs(119)(126)(245)(180)(153)(333)
Net carrying amount$570,524 $340,425 $910,949 $568,210 $339,432 $907,642 
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Interest expense on the Convertible Notes consisted of the following (dollars in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
2026 Notes2028 NotesTotal2026 Notes2028 NotesTotal2026 Notes2028 NotesTotal2026 Notes2028 NotesTotal
Contractual interest expense$—$970$970 $—$970$970 $—$2,911$2,911 $—$2,911$2,911 
Amortization of discount7563251,081 7563251,081 2,2539663,219 2,2449633,207 
Amortization of debt issuance costs21930 21930 612788 612788 
Total interest expense$777$1,304 $2,081 $777$1,304$2,081 $2,314$3,904$6,218 $2,305$3,901$6,206 
Effective interest rate0.5 %1.5 %0.5 %1.5 %0.5 %1.5 %0.5 %1.5 %
General. The Notes are senior unsecured obligations of the Company and are guaranteed by the Company’s wholly owned domestic subsidiaries that guarantee the Senior Credit Facilities or that guarantee certain capital market debt of the Company in an aggregate principal amount in excess of $250.0 million.
Each Indenture contains covenants that, among other things and subject to certain exceptions, limit (i) the Company’s ability to consolidate or merge with or into another person or sell or otherwise dispose of all or substantially all of the assets of the Company and its subsidiaries (taken as a whole) and (ii) the ability of the guarantors to consolidate with or merge with or into another person. The Senior Notes Indenture also contains a covenant that, subject to certain exceptions, limits the Company’s ability and the ability of its subsidiaries to incur any liens securing indebtedness for borrowed money.
Each Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, default in payment of principal or interest, breach of other agreements or covenants in respect of the relevant Notes by the Company or any guarantors, failure to pay certain other indebtedness at final maturity, acceleration of certain indebtedness prior to final maturity, failure to pay certain final judgments, failure of certain guarantees to be enforceable and certain events of bankruptcy, insolvency or reorganization; and, in the case of each Convertible Notes Indenture, failure to comply with the Company’s obligation to convert the relevant Convertible Notes under the applicable Convertible Notes Indenture and failure to give a fundamental change notice or a notice of a make-whole fundamental change under the applicable Convertible Notes Indenture.
Unamortized debt issuance costs consisted of the following (in thousands):
September 30, 2024December 31, 2023
Revolving Credit Facility portion:
Other noncurrent assets$2,820 $3,087 
Term loans and Notes portion:
Long-term debt (contra account)19,690 22,532 
Total$22,510 $25,619 
The Company recorded debt issuance cost amortization of $1.1 million for both the three months ended September 30, 2024 and 2023 and $3.4 million and $3.6 million for the nine months ended September 30, 2024 and 2023, respectively, within interest expense in the condensed consolidated statements of operations and comprehensive income. The Company capitalized $0.3 million of debt issuance costs during the nine months ended September 30, 2024 related to an amendment to the New Credit Agreement that was entered into in October 2024. Refer to note 16 for additional information on this amendment. The Company capitalized $7.8 million and wrote-off $3.3 million of debt issuance costs during the nine months ended September 30, 2023 in connection with the entry into the New Credit Agreement.
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The future maturities of outstanding borrowings as of September 30, 2024 were as follows (in thousands):
Year Ending December 31,Amount
2024 (remaining three months)$4,561 
202518,244 
2026593,244 
202718,244 
20281,291,244 
Thereafter1,586,128 
Total$3,511,665 
The Company has entered into a letter of credit agreement with MUFG Bank, Ltd. ("MUFG") which provides for an additional $75.0 million letter of credit issuing capacity. As of September 30, 2024, $11.6 million of letters of credit issuances were held for the benefit of performance obligations under government grant programs and certain general and liability insurance matters and bore interest at a rate of 1.00% per annum.
The Company was in compliance with all debt covenants as of September 30, 2024.
8.    INTEREST RATE SWAPS
The Company is party to two interest rate swap agreements, designated as cash flow hedges, to manage the risk of fluctuations in interest rates on its variable rate SOFR debt. Changes in the fair values of the interest rate swaps are reported through other comprehensive income until the underlying hedged debt’s interest expense impacts net income, at which point the corresponding change in fair value is reclassified from accumulated other comprehensive income to interest expense.
A summary of the significant terms of the Company’s interest rate swap agreements is as follows (dollars in thousands):
Entry DateEffective Date
Maturity Date(1)
Notional AmountSettlement TypeSettlement FrequencyFixed Base Rate
Swap A(2)
3/7/20193/11/20193/11/2029$850,000 Receive one-month SOFR, pay fixedMonthly2.595%
Swap B(3)
3/6/20196/15/20202/28/2029350,000 Receive one-month SOFR, pay fixedMonthly2.691%
Total$1,200,000 
(1)Each swap may be terminated prior to the scheduled maturity at the election of the Company or the financial institution counterparty under the terms provided in each swap agreement.
(2)Swap A was amended effective February 28, 2023 to transition the reference rate from LIBOR to SOFR, resulting in the fixed base rate changing from 2.653% to 2.595%.
(3)Swap B was amended effective March 1, 2023 to transition the reference rate from LIBOR to SOFR, resulting in the fixed base rate changing from 2.739% to 2.691%.
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The combined fair values of the Company’s interest rate swaps are reflected within the condensed consolidated balance sheets as follows (in thousands):
September 30, 2024December 31, 2023
Assets:
Current portion:
Prepaid and other current assets$14,142 $24,511 
Noncurrent portion:
Other noncurrent assets16,960 24,453 
Total interest rate swap asset$31,102 $48,964 
Stockholders’ Equity:
Accumulated other comprehensive income$23,357 $36,936 
The combined effect of the Company’s interest rate swaps on the condensed consolidated statements of operations and comprehensive income was as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Interest (income) expense$(8,430)$(7,971)$(24,868)$(20,784)
Unrealized gain (loss) on cash flow hedges, gross$(40,968)$24,463 $31,102 $95,809 
Less: Tax effect9,808 (5,893)(7,745)(23,248)
Unrealized gain (loss) on cash flow hedges, net of tax$(31,160)$18,570 $23,357 $72,561 
The Company does not hold any derivative instruments for speculative trading purposes.
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9.    FAIR VALUE MEASUREMENTS
Financial Assets and Liabilities. The Company has estimated the fair values of its financial instruments as of September 30, 2024 using available market information or other appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the following fair value estimates are not necessarily indicative of the amounts the Company would realize in an actual market exchange.
The carrying amounts, fair values and related fair value hierarchy levels of the Company’s financial assets and liabilities as of September 30, 2024 were as follows (in thousands):
September 30, 2024
Carrying Amount
Fair Value
Fair Value Hierarchy
Assets:
Cash and cash equivalents:
Money market investments$123,747 $123,747 Level 1
Other noncurrent assets (including current portion):
Interest rate swap asset$31,102 $31,102 Level 2
Liabilities:
Long-term debt (including current portion):
Term loans$1,753,665 $1,717,084 Level 2
Revolving Credit Facility$188,000 $186,120 Level 2
Senior Notes$650,000 $515,905 Level 2
Convertible Notes$920,000 $807,703 Level 2
Other noncurrent liabilities:
MBI Net Option$153,480 $153,480 Level 3
Money market investments are held primarily in U.S. Treasury securities and registered money market funds and are valued using a market approach based on quoted market prices (level 1). Money market investments with original maturities of three months or less are included within cash and cash equivalents in the condensed consolidated balance sheets. Interest rate swaps are measured at fair value within the condensed consolidated balance sheets on a recurring basis, with fair value determined using standard valuation models with assumptions about interest rates being based on those observed in underlying markets (level 2). The fair value of the term loans, Revolving Credit Facility, Senior Notes and Convertible Notes are estimated based on market prices for similar instruments in active markets (level 2). The fair value of the MBI Net Option is measured using Monte Carlo simulations that use inputs considered unobservable and significant to the fair value measurement (level 3).
The assumptions used to determine the fair value of the MBI Net Option consisted of the following:
September 30, 2024December 31, 2023
Cable OneMBICable OneMBI
Equity volatility43.0 %40.0 %40.0 %30.0 %
EBITDA volatility10.0 %10.0 %10.0 %10.0 %
EBITDA risk-adjusted discount rate7.5 %7.5 %7.5 %8.5 %
Cost of debt9.0 %8.5 %
The Company regularly evaluates each of the assumptions used in establishing the fair value of the MBI Net Option. Significant changes in any of these assumptions could result in a significantly lower or higher fair value measurement. A change in one of these assumptions is not necessarily accompanied by a change in another assumption. Refer to note 4 for further information on the MBI Net Option.
The carrying amounts of accounts receivable, accounts payable and other financial assets and liabilities approximate fair value because of the short-term nature of these instruments.
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Nonfinancial Assets and Liabilities. The Company’s nonfinancial assets, such as property, plant and equipment, intangible assets and goodwill, are not measured at fair value on a recurring basis. Assets acquired, including identifiable intangible assets and goodwill, and liabilities assumed in acquisitions are recorded at fair value on the respective acquisition dates, subject to potential future measurement period adjustments. Nonfinancial assets are subject to fair value adjustments when there is evidence that impairment may exist. No impairments were recorded during the nine months ended September 30, 2024 or 2023.
10.    STOCKHOLDERS’ EQUITY
Treasury Stock. Treasury stock is recorded at cost and is presented as a reduction of stockholders’ equity in the condensed consolidated financial statements. Treasury shares of 556,322 held at September 30, 2024 include shares repurchased under the Company’s share repurchase programs and shares withheld for withholding tax, as described below.
Share Repurchase Program. On May 20, 2022, the Company's board of directors (the "Board") authorized up to $450.0 million of share repurchases (with no cap as to the number of shares of common stock) (the "Share Repurchase Program"). The Company had $143.1 million of remaining share repurchase authorization under the Share Repurchase Program as of September 30, 2024. Additional 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 Company first became publicly traded in 2015 through September 30, 2024, the Company has repurchased 646,244 shares of its common stock at an aggregate cost of $556.9 million. The Company did not repurchase any of its common stock during the nine months ended September 30, 2024.
Tax Withholding for Equity Awards. At the employee’s option, shares of common stock are withheld by the Company upon the vesting of restricted stock and exercise of stock appreciation rights (“SARs”) to cover the applicable statutory minimum amount of employee withholding taxes, which the Company then pays to the taxing authorities in cash. The amounts remitted during the three months ended September 30, 2024 and 2023 were each less than $0.1 million, for which the Company withheld 106 and 135 shares of common stock, respectively. The amounts remitted during the nine months ended September 30, 2024 and 2023 were $2.8 million and $2.4 million, for which the Company withheld 2,510 and 3,437 shares of common stock, respectively.
11.    EQUITY-BASED COMPENSATION
Our stockholders approved the Cable One, Inc. 2022 Omnibus Incentive Compensation Plan (the “2022 Plan”) at the annual meeting of stockholders held May 20, 2022. The 2022 Plan provides for grants of incentive stock options, non-qualified stock options, restricted stock awards, SARs, restricted stock units (“RSUs”), performance restricted stock units ("PRSUs"), cash-based awards, performance-based awards, dividend equivalent units (“DEUs” and, together with restricted stock awards, RSUs and PRSUs, “Restricted Stock”) and other stock-based awards, including deferred stock units and superseded and replaced the Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation Plan. Directors, officers, employees and consultants of the Company are eligible for grants under the 2022 Plan as part of the Company’s long-term incentive compensation programs. At September 30, 2024, 335,152 shares were available for issuance under the 2022 Plan.
Compensation expense associated with equity-based awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the award, with forfeitures recognized as incurred. The Company’s equity-based compensation expense, included within selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive income, was as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Restricted Stock$8,268 $9,830 $22,436 $20,637 
SARs88 405 496 1,182 
Total$8,356 $10,235 $22,932 $21,819 
The Company recognized excess tax shortfalls of $0.4 million and $0.2 million during the three months ended September 30, 2024 and 2023, respectively, and excess tax shortfalls of $2.1 million and $1.8 million during the nine months ended September 30, 2024 and 2023, respectively. The deferred tax asset related to all outstanding equity-based awards was $7.6 million and $7.4 million as of September 30, 2024 and December 31, 2023, respectively.
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Restricted Stock. A summary of Restricted Stock activity during the nine months ended September 30, 2024 is as follows:
Restricted Stock
Weighted Average Grant Date
Fair Value Per Share
Outstanding as of December 31, 202391,432$952.33 
Granted114,011$540.62 
Forfeited(21,871)$711.08 
Vested and issued(16,491)$1,352.64 
Outstanding as of September 30, 2024167,081$663.46 
Vested and deferred as of September 30, 20247,645$811.64 
At September 30, 2024, there was $48.2 million of unrecognized compensation expense related to Restricted Stock, which is expected to be recognized over a weighted average period of 1.5 years.
The significant inputs and resulting weighted average grant date fair value for market-based award grants were as follows:
20242023
Risk-free interest rate4.0 %4.1 %
Expected volatility35.4 %39.1 %
Simulation term2.99 years2.99 years
Weighted average grant date fair value$603.73$774.30
Stock Appreciation Rights. A summary of SARs activity during the nine months ended September 30, 2024 is as follows:
Stock Appreciation Rights
Weighted Average Exercise Price
Weighted Average Grant Date
Fair Value
Aggregate Intrinsic Value
(in thousands)
Weighted Average
Remaining Contractual Term
(in years)
Outstanding as of December 31, 202335,491$1,093.30 $269.69 $— 5.1
Forfeited(875)$1,835.26 $463.66 
Expired(6,250)$1,282.49 $316.16 
Outstanding as of September 30, 202428,366$1,028.73 $253.47 $— 4.2
Exercisable as of September 30, 202426,491$969.79 $236.12 $— 4.0
At September 30, 2024, there was $0.4 million of unrecognized compensation expense related to SARs, which is expected to be recognized over a weighted average period of 0.5 years.
12.    INCOME TAXES (AS RESTATED)
The Company’s effective tax rate was 19.5% and 25.2% for the three months ended September 30, 2024 and 2023, respectively, and 20.4% and 20.7% for the nine months ended September 30, 2024 and 2023, respectively. The decrease in the effective tax rate for the three months ended September 30, 2024 compared to the prior year period was due primarily to an increase in income tax benefits of $5.4 million resulting from a change in valuation allowance related to the fair value adjustment of the MBI Net Option in the current period. The decrease in the effective tax rate for the nine months ended September 30, 2024 compared to the prior year period was due primarily to an increase in income tax benefits of $5.2 million resulting from a change in valuation allowance related to the fair value adjustment of the MBI Net Option in the current period, partially offset by a decrease in income tax benefits of $3.7 million resulting from lower equity method investment net losses in the current period.
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13.    OTHER INCOME AND EXPENSE
The reclassification of interest and investment income from other income to interest expense, net, in the condensed consolidated statement of operations and comprehensive income has been reflected in prior period amounts to conform to the current year presentation.
Other income (expense) consisted of the following (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
MBI Net Option fair value adjustment$(1,510)$(23,910)$(17,120)$(38,650)
Write-off of debt issuance costs— — — (3,340)
C-band spectrum relocation funding(1)
— — 7,669 — 
Gain (loss) on sale of equity investments, net— (1,558)— (1,558)
Gain (loss) on fair value adjustment of equity investments, net(2)
(20)45 76 13,130 
Other
6,782 51 6,871 (194)
Other income (expense), net$5,252 $(25,372)$(2,504)$(30,612)
(1)Represents the gain related to C-band spectrum relocation funding received from the federal government.
(2)Amount for the nine months ended September 30, 2023 represents a non-cash mark-to-market gain on the Company's investment in Point Broadband as a result of an observable market transaction in Point Broadband’s equity.
14.    NET INCOME PER COMMON SHARE (AS RESTATED)
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. The denominator used in calculating diluted net income per common share further includes any common shares available to be issued upon vesting or exercise of outstanding equity-based compensation awards if such inclusion would be dilutive, calculated using the treasury stock method, and any common shares to be issued upon conversion of the Convertible Notes, calculated using the if-converted method.
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The computation of basic and diluted net income per common share was as follows (dollars in thousands, except per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(As Restated)
(As Restated)
Numerator:
Net income - basic$44,215 $30,297 $119,718 $121,126 
Add: Convertible Notes interest expense, net of tax1,561 1,561 4,664 4,655 
Net income - diluted$45,776 $31,858 $124,382 $125,781 
Denominator:
Weighted average common shares outstanding - basic5,622,5125,611,2785,620,6235,663,198
Effect of dilutive equity-based compensation awards(1)
10,86410,7596,2927,452
Effect of dilution from if-converted Convertible Notes(2)
404,248404,248404,248404,248
Weighted average common shares outstanding - diluted6,037,6246,026,2856,031,1636,074,898
Net Income per Common Share:
Basic$7.86 $5.40 $21.30 $21.39 
Diluted$7.58 $5.29 $20.62 $20.71 
Supplemental Net Income per Common Share Disclosure:
Anti-dilutive shares from equity-based compensation awards(1)
75,43125,86175,43125,861
(1)Equity-based compensation awards whose impact is considered to be anti-dilutive under the treasury stock method were excluded from the diluted net income per common share calculation.
(2)Based on a conversion rate of 0.4394 shares of common stock per weighted $1,000 principal amount of Convertible Notes outstanding during all periods presented.
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15.    COMMITMENTS AND CONTINGENCIES
Contractual Obligations. The Company has obligations to make future payments for goods and services under certain contractual arrangements. These contractual obligations secure the future rights to various goods and services to be used in the normal course of the Company’s operations. In accordance with applicable accounting rules, the future rights and obligations pertaining to firm commitments, such as certain purchase obligations under contracts, are not reflected as assets or liabilities in the condensed consolidated balance sheets.
As of September 30, 2024, with the exception of debt payments (refer to note 7 for the updated future maturities of outstanding borrowings table), there have been no material changes to the contractual obligations previously disclosed in the 2023 Form 10-K/A.
In addition, the Company incurs recurring utility pole rental costs and fees imposed by various governmental authorities, including franchise fees, as part of its operations. However, these costs are not included in the Company’s contractual obligations as they are cancellable on short notice, in the case of pole rental costs, or are passed through on a monthly basis to the Company’s customers and are periodically remitted to authorities, in the case of fees imposed by governmental authorities. The Company also has franchise agreements requiring plant construction and the provision of services to customers within the franchise areas. In connection with these obligations under existing franchise agreements, the Company obtains surety bonds or letters of credit guaranteeing performance to municipalities and public utilities and payment of insurance premiums. Payments under these arrangements are required only in the remote event of nonperformance.
Litigation and Legal Matters. The Company is subject to complaints and administrative proceedings and has been 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, and violations of applicable wage and hour laws; statutory or common law claims involving current and former employees; and other matters. Although the outcomes of any legal claims and proceedings against the Company cannot be predicted with certainty, based on currently available information, the Company believes that there are no existing claims or proceedings that are likely to have a material adverse effect on its business, financial condition, results of operations or cash flows.
Regulation in the Company’s Industry. The Company’s operations are 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. Future legislative and regulatory changes could adversely affect the Company’s operations.
Equity Investments. The Company has certain obligations with respect to certain of its equity investments. Refer to note 4 for further information.
16.    SUBSEQUENT EVENT
On October 7, 2024, the Company entered into Amendment No.2 (the "Amendment") with its lenders to amend the New Credit Agreement. The Amendment provides for (a) an increase of the aggregate principal amount of commitments under the Revolving Credit Facility by $250 million to $1.25 billion; and (b) certain other amendments to the New Credit Agreement that is expected to provide the Company enhanced capital structure optionality in the event MBI becomes a wholly owned restricted subsidiary of the Company under the New Credit Agreement. The Amendment did not make any other material changes to the principal terms of the New Credit Agreement.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and accompanying 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, 2023 and the related “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both of which are contained in our 2023 Form 10-K/A. Our results of operations and financial condition discussed herein may not be indicative of our future results and trends.
Certain financial information as of and for the three and nine months ended September 30, 2023 was previously restated. The "Results of Operations" section within this "Management's Discussion and Analysis of Financial Condition and Results of Operations" has been updated to reflect the restatement. Refer to note 1 to our condensed consolidated financial statements for further details.
Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all totals, percentages and year-over-year changes are calculated using exact numbers. Minor differences may exist due to rounding.
Overview
We are a leading broadband communications provider delivering exceptional service and enabling our customers to thrive and stay connected to what matters most. We strive to deliver an effortless experience by offering solutions that make our customers’ lives easier, and by relating to them personally as our neighbors and local business partners. Through Sparklight® and the associated Cable One family of brands, we are transforming the future of connectivity with a commitment to innovation, reliability and customer experience. Our robust infrastructure and cutting-edge technology keep our customers connected and help drive progress in education, business and everyday life. We believe the services we provide are critical to the development of new businesses and drive economic growth in the non-metropolitan, secondary and tertiary markets that we serve in 24 Western, Midwestern and Southern states. As of September 30, 2024, approximately 74% of our customers were located in seven states: Arizona, Idaho, Mississippi, Missouri, Oklahoma, South Carolina and Texas. We provided services to approximately 1.1 million residential and business customers out of approximately 2.8 million homes passed as of September 30, 2024. Of these customers, approximately 1,059,000 subscribed to data services, 119,000 subscribed to video services and 109,000 subscribed to voice services.
We generate substantially all of our revenues through three primary product lines. Ranked by share of our total revenues through the first nine months of 2024, they are residential data (58.4%), residential video (14.4%) and business data (14.3%). The profit margins, growth rates and/or capital intensity of these three primary product lines vary significantly due to competition, product maturity and relative costs.
We focus on growing our higher margin businesses, namely residential data and business data services. Our strategy acknowledges the industry-wide trends of declining profitability of video services and declining revenues from residential voice services. The declining profitability of video services is due primarily to increasing programming costs and retransmission fees and competition from other streaming content providers, and the declining revenues from residential voice services are due primarily to the increasing use of wireless voice services instead of residential voice services. Separately, we have also historically focused on retaining customers who are likely to produce higher relative value over the life of their service relationships with us, are less attracted by discounting, require less support and churn less. This strategy has focused on increasing Adjusted EBITDA, driving higher margins and delivering attractive levels of Adjusted EBITDA less capital expenditures over the long-term.
Excluding the effects of our recently completed and any potential future acquisitions and divestitures, the trends described above have impacted, and are expected to further impact, our three primary product lines in the following ways:

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•Residential data. We have experienced significant growth in residential data customers and revenues since 2013 and we expect growth for this product line to continue over the long-term. We believe upgrades made in our broadband capacity, our ability to offer higher access speeds than many of our competitors, the reliability and flexibility of our data service offerings, our Wi-Fi support service and continuously growing data usage by consumers and their demand for higher speeds will enable us to continue to grow average monthly revenue per unit ("ARPU") from our existing customers over the long-term and capture additional market share. Our broadband plant generally consists of a fiber-to-the-premises or hybrid fiber-coaxial network with ample unused capacity, and we offer our data customers internet products at some of the fastest speeds available in our markets. We believe that the capacity and reliability of our networks exceeds that of our competitors in most of our markets and best positions us to meet the continuously increasing consumption demands of customers. We experienced elevated growth in residential data revenues during the first two years of the COVID-19 pandemic, which has subsided in recent quarters due in part to macroeconomic headwinds and competition in certain areas of our footprint.
•Residential video. Residential video service is an increasingly fragmented business, with programming costs and retransmission fees continuing to escalate in the face of a proliferation of streaming content alternatives. We intend to continue our strategy of focusing on the higher-margin businesses of residential data and business data while de-emphasizing our video business. As a result of our video strategy, we expect that residential video customers and revenues will continue to decline. We offer Sparklight TV, an internet protocol-based ("IPTV") video service that allows customers with our Sparklight TV app to stream our video channels from the cloud. This transition from linear to IPTV video service enables us to reclaim bandwidth, freeing up network capacity to increase data speeds and capacity across our network.
•Business data. We have experienced significant growth in business data customers and revenues since 2013. We attribute this growth to our strategic focus on increasing sales to business customers and our efforts to attract enterprise business customers. We expect to experience continued growth in business data customers and revenues over the long-term. Margins for products sold to business customers have remained attractive, which we expect will continue.
We continue to experience increased competition, particularly from telephone companies; fiber, municipal and cooperative overbuilders; fixed wireless access data providers; and over-the-top video providers. Because of the levels of competition we face, we believe it is important to make investments in our infrastructure. In addition, a key objective of our capital allocation process is to invest in initiatives designed to drive revenue and Adjusted EBITDA expansion. We continue to invest capital to, among other things, increase fiber density and coverage, expand our footprint, increase plant and data capacity, enhance network reliability and improve the customer experience. We have rolled out multi-Gigabit download data service to certain markets and currently offer Gigabit download data service to nearly all of our homes passed. We have deployed DOCSIS 3.1, which, together with Sparklight TV, further increases our network capacity and enables future growth in our residential data and business data product lines.
We expect to continue to devote financial resources to infrastructure improvements in existing and newly acquired markets as well as to expand high-speed data service in areas adjacent to our existing network. We believe these investments are necessary to continually meet our customers’ needs and remain competitive. The capital enhancements associated with acquisitions include rebuilding low-capacity markets; reclaiming bandwidth from analog video services; implementing 32-channel bonding; deploying DOCSIS 4.0; consolidating back office functions such as billing, accounting and service provisioning; migrating products to Cable One platforms; and expanding our high-capacity fiber network.
Our primary goals are to continue growing residential data and business data revenues, to increase profit margins and to deliver strong Adjusted EBITDA and Adjusted EBITDA less capital expenditures over the long-term. To achieve these goals, we intend to continue our disciplined cost management approach, remain focused on customers with expected higher relative value, supplement our growth by targeting a broader scope of incremental customers, including those who are more value-conscious, combat competitive threats in our markets through more targeted pricing and product offerings and follow through with further planned investments in broadband plant upgrades, including the deployment of DOCSIS 4.0 capabilities and new data service offerings for residential and business customers. We also plan to seek broadband-related acquisition and strategic investment opportunities in rural markets in addition to the pursuit of organic growth through market expansion projects. Given our strategic focus on our higher margin residential data and business data product lines, we assess our level of capital expenditures relative to Adjusted EBITDA, unlike others in our industry who may compare their capital expenditures to revenues due to their much larger video customer bases.
In recent years, we have made investments in several broadband-centric providers serving non-urban markets that follow various strategies similar to our own. Such strategic investments capitalize on opportunities that may not have existed under a full ownership model, allow us to participate more aggressively in the fiber expansion business and may potentially provide future acquisition or investment opportunities, while allowing our management team to focus on our core business and without burdening our cash flow.
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The FCC's Affordable Connectivity Program
In 2021, we participated in the FCC’s Emergency Broadband Benefit (“EBB”) program, which provided qualifying low-income consumers a discount on certain of our broadband internet access services for which we received reimbursement from the FCC. On December 31, 2021, the EBB program transitioned to the Affordable Connectivity Program (“ACP”) as required by the Infrastructure Investment and Jobs Act (the "Infrastructure Act"). The ACP allowed us to seek reimbursement for certain broadband internet access service discounts provided to qualifying low-income consumers. The funding for the ACP authorized under the Infrastructure Act has been depleted and the program ended in the second quarter of 2024. While only a relatively small percentage of our customers received ACP services, we lost approximately 9,800 residential data customers who received ACP services during the nine months ended September 30, 2024, including approximately 5,300 during the three months ended September 30, 2024.
For additional information, see “Risk Factors — Risks Relating to Our Business — Changes in or elimination of the FCC’s Affordable Connectivity Program could affect the profitability of our data services” in Part I, Item 1A of the 2023 Form 10-K/A.
Results of Operations (As Restated)
Key Performance Measures Summary (As Restated)
The following table summarizes certain key measures of our results of operations (dollars in thousands):
Three Months Ended September 30,
20242023 $ Change% Change
(As Restated)
(As Restated)
(As Restated)
Revenues$393,555 $420,348 $(26,793)(6.4)%
Total costs and expenses$283,256 $287,818 $(4,562)(1.6)%
Income from operations$110,299 $132,530 $(22,231)(16.8)%
Net income$44,215 $30,297 $13,918 45.9 %
Cash flows from operating activities$176,209 $180,152 $(3,943)(2.2)%
Cash flows from investing activities$(79,313)$(12,932)$(66,381)NM
Cash flows from financing activities$(71,773)$(88,322)$16,549 (18.7)%
Adjusted EBITDA(1)
$213,591 $230,000 $(16,409)(7.1)%
Capital expenditures$76,970 $77,815 $(845)(1.1)%
NM = Not meaningful.
Nine Months Ended September 30,
20242023$ Change% Change
(As Restated)
(As Restated)
(As Restated)
Revenues$1,192,329 $1,266,266 $(73,937)(5.8)%
Total costs and expenses$852,031 $866,592 $(14,561)(1.7)%
Income from operations$340,298 $399,674 $(59,376)(14.9)%
Net income$119,718 $121,126 $(1,408)(1.2)%
Cash flows from operating activities$496,507 $511,501 $(14,994)(2.9)%
Cash flows from investing activities$(242,051)$(212,462)$(29,589)13.9 %
Cash flows from financing activities$(218,104)$(274,557)$56,453 (20.6)%
Adjusted EBITDA(1)
$643,015 $690,068 $(47,053)(6.8)%
Capital expenditures$214,449 $255,428 $(40,979)(16.0)%
(1)Adjusted EBITDA is a non-GAAP measure. See "Use of Adjusted EBITDA" below for a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income.
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Primary Service Units ("PSUs") and Customer Counts
Selected subscriber data for the periods presented was as follows (in thousands, except percentages):
As of September 30,Annual Net Gain (Loss)
20242023Change% Change
Residential data PSUs(1)
959.8 958.8 0.9 0.1 %
Residential video PSUs112.1 140.5 (28.4)(20.2)%
Residential voice PSUs70.0 81.7 (11.7)(14.3)%
Total residential PSUs1,141.8 1,181.0 (39.1)(3.3)%
Business data PSUs99.7 98.6 1.1 1.1 %
Business video PSUs6.7 8.4 (1.8)(21.2)%
Business voice PSUs38.6 40.0 (1.4)(3.4)%
Total business services PSUs144.9 147.0 (2.1)(1.4)%
Total data PSUs1,059.4 1,057.4 2.0 0.2 %
Total video PSUs118.7 148.9 (30.2)(20.3)%
Total voice PSUs108.6 121.6 (13.1)(10.7)%
Total PSUs1,286.7 1,327.9 (41.2)(3.1)%
Residential customer relationships987.1 994.6 (7.5)(0.8)%
Business customer relationships102.7 102.7 — — %
Total customer relationships1,089.8 1,097.3 (7.5)(0.7)%
Homes passed2,828.5 2,754.4 74.2 2.7 %
(1)Amount as of September 30, 2024 includes 2,100 residential data PSUs acquired in a small acquisition in July 2024.
In recent years, our customer mix has shifted away from double- and triple-play packages combining data, video and/or voice services, which is in line with our strategy of focusing on our higher margin residential data and business data product lines. This is largely because some video customers have defected to direct broadcast satellite services and over-the-top offerings and households continue to discontinue residential voice services. In addition, we have focused on selling data-only packages to new customers rather than cross-selling video to these customers.
Use of Nonfinancial Metrics and ARPU
We use various nonfinancial metrics to measure, manage and monitor our operating performance on an ongoing basis. Such metrics include homes passed, PSUs and customer relationships. Homes passed represents the number of serviceable and marketable homes and businesses passed by our active plant. A PSU represents a single subscription to a particular service offering. Residential bulk multi-dwelling PSUs are generally classified as residential and are counted at the individual unit level. Business voice customers who have multiple voice lines are counted as a single PSU. A customer relationship represents a single customer who subscribes to one or more PSUs.
We believe homes passed, PSUs and customer relationship counts are useful to investors in evaluating our operating performance. Similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measures of homes passed, PSUs and customer relationships may not be directly comparable to similarly titled measures reported by other companies.
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We use ARPU to evaluate and monitor the amount of revenue generated by each type of service subscribed to by customers and the contribution to total revenues as well as to analyze and compare growth patterns. Residential ARPU values represent the applicable residential service revenues (excluding installation and activation fees) divided by the corresponding average of the number of PSUs at the beginning and end of each period, divided by the number of months in the period, except that for any PSUs added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent the applicable residential service revenues (excluding installation and activation fees) divided by the pro-rated average number of PSUs during such period. Business services ARPU values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, divided by the number of months in the period, except that for any business customer relationships added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent business services revenues divided by the pro-rated average number of business customer relationships during such period.
We believe ARPU is useful to investors in evaluating our operating performance. ARPU and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of ARPU may not be directly comparable to similarly titled measures reported by other companies.
Comparison of Three Months Ended September 30, 2024 to Three Months Ended September 30, 2023
Revenues
Revenues by service offering for the three months ended September 30, 2024 and 2023, together with the percentages of total revenues that each item represented for the periods presented, were as follows (dollars in thousands):
Three Months Ended September 30,
202420232024 vs. 2023
Revenues% of TotalRevenues% of Total$ Change% Change
Residential data$230,362 58.5 %$247,420 58.9 %$(17,058)(6.9)%
Residential video53,650 13.6 %62,295 14.8 %(8,645)(13.9)%
Residential voice7,765 2.0 %9,080 2.2 %(1,315)(14.5)%
Business data57,281 14.6 %55,691 13.2 %1,590 2.9 %
Business other17,942 4.6 %19,884 4.7 %(1,942)(9.8)%
Other26,555 6.7 %25,978 6.2 %577 2.2 %
Total revenues$393,555 100.0 %$420,348 100.0 %$(26,793)(6.4)%
Residential data service revenues decreased $17.1 million, or 6.9%, due primarily to a 7.1% decrease in ARPU as a result of the implementation of targeted pricing and product offerings in certain markets, including amongst value-conscious customers.
Residential video service revenues decreased $8.6 million, or 13.9%, due primarily to a decrease in residential video subscribers, partially offset by a rate adjustment enacted earlier in 2024.
Residential voice service revenues decreased $1.3 million, or 14.5%, due primarily to a decrease in residential voice subscribers.
Business data revenues increased $1.6 million, or 2.9%, due primarily to an increase in business data subscribers.
Business other revenues decreased $1.9 million, or 9.8%, due primarily to a decrease in business video subscribers.
ARPU for the indicated service offerings for the three months ended September 30, 2024 and 2023 were as follows:
Three Months Ended September 30,2024 vs. 2023
20242023$ Change% Change
Residential data$79.61 $85.69 $(6.08)(7.1)%
Residential video$154.62 $143.27 $11.35 7.9 %
Residential voice$36.20 $36.34 $(0.14)(0.4)%
Business services$244.02 $245.90 $(1.88)(0.8)%
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Costs and Expenses
Operating expenses (excluding depreciation and amortization) were $104.6 million for the three months ended September 30, 2024 and decreased $5.1 million, or 4.6%, compared to the three months ended September 30, 2023. The decrease in operating expenses was primarily attributable to $7.6 million of lower programming and franchise costs as a result of video customer losses and a decrease in labor and other compensation-related costs, partially offset by higher property and other taxes, software costs, utility expenses and professional services fees. Operating expenses as a percentage of revenues were 26.6% and 26.1% for the three months ended September 30, 2024 and 2023, respectively.
Selling, general and administrative expenses were $88.4 million for the three months ended September 30, 2024 and decreased $4.3 million, or 4.6%, compared to the three months ended September 30, 2023. The decrease in selling, general and administrative expenses was primarily attributable to $4.0 million of lower labor and other compensation-related costs due in part to the organizational changes implemented during the second quarter of 2024 and reductions in marketing costs, property and other taxes and health insurance costs, partially offset by an increase in system conversion costs and rebranding costs that did not occur in the prior year period. Selling, general and administrative expenses as a percentage of revenues were 22.5% and 22.1% for the three months ended September 30, 2024 and 2023, respectively.
Depreciation and amortization expense was $85.2 million for the three months ended September 30, 2024 and increased $2.2 million, or 2.7%, compared to the three months ended September 30, 2023. Depreciation and amortization expense as a percentage of revenues was 21.6% and 19.7% for the three months ended September 30, 2024 and 2023, respectively.
Interest Expense, Net
Interest expense, net, was $34.2 million for the three months ended September 30, 2024 and decreased $4.3 million, or 11.3%, compared to the three months ended September 30, 2023. The decrease in net interest expense was due primarily to lower outstanding debt balances during the three months ended September 30, 2024 compared to the prior year period.
Other Income (Expense), Net
Other income, net, was $5.3 million for the three months ended September 30, 2024 and consisted primarily of a $6.9 million non-cash gain associated with our Nextlink equity investment, partially offset by a $1.5 million non-cash loss on fair value adjustment associated with the MBI Net Option. Other expense, net, was $25.4 million for the three months ended September 30, 2023 and consisted primarily of a $23.9 million non-cash loss on fair value adjustment associated with the MBI Net Option and a $1.6 million net loss on the sale of equity investments.
Income Tax Provision (As Restated)
Income tax provision was $15.9 million and $17.3 million for the three months ended September 30, 2024 and 2023, respectively, and our effective tax rate was 19.5% and 25.2% for the three months ended September 30, 2024 and 2023, respectively. The decrease in the effective tax rate was due primarily to an increase in income tax benefits of $5.4 million resulting from a change in valuation allowance related to the fair value adjustment of the MBI Net Option in the current period.
Equity Method Investment Income (Loss), Net (As Restated)
Equity method investment loss, net, was $21.3 million for the three months ended September 30, 2024 and consisted primarily of our $20.1 million and $1.2 million proportionate share of net losses from our Clearwave Fiber and MBI investments, respectively. Equity method investment loss, net, was $21.1 million for the three months ended September 30, 2023 and consisted primarily of our $20.7 million and $0.4 million proportionate share of net losses from our Clearwave Fiber and MBI investments, respectively.
Net Income (As Restated)
Net income was $44.2 million for the three months ended September 30, 2024 compared to $30.3 million for the three months ended September 30, 2023.
Unrealized Gain (Loss) on Cash Flow Hedges and Other, Net of Tax
Unrealized loss on cash flow hedges and other, net of tax, was $31.2 million for the three months ended September 30, 2024 compared to an $18.6 million unrealized gain for the three months ended September 30, 2023. The $49.7 million change was due to a decline in forward interest rates during the three months ended September 30, 2024 compared to an increase in forward interest rates in the prior year period.
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Comparison of Nine Months Ended September 30, 2024 to Nine Months Ended September 30, 2023
Revenues
Revenues by service offering for the nine months ended September 30, 2024 and 2023, together with the percentages of total revenues that each item represented for the periods presented, were as follows (dollars in thousands):
Nine Months Ended September 30,
202420232024 vs. 2023
Revenues% of TotalRevenues% of Total$ Change% Change
Residential data$696,585 58.4 %$736,957 58.2 %$(40,372)(5.5)%
Residential video171,185 14.4 %198,719 15.7 %(27,534)(13.9)%
Residential voice24,528 2.1 %28,334 2.2 %(3,806)(13.4)%
Business data170,609 14.3 %166,090 13.1 %4,519 2.7 %
Business other55,790 4.7 %62,558 4.9 %(6,768)(10.8)%
Other73,632 6.2 %73,608 5.8 %24 — %
Total revenues$1,192,329 100.0 %$1,266,266 100.0 %$(73,937)(5.8)%
Residential data service revenues decreased $40.4 million, or 5.5%, due primarily to a 5.3% decrease in ARPU as a result of the implementation of targeted pricing and product offerings in certain markets, including amongst value-conscious customers.
Residential video service revenues decreased $27.5 million, or 13.9%, due primarily to a decrease in residential video subscribers, partially offset by a rate adjustment enacted during the first quarter of 2024.
Residential voice service revenues decreased $3.8 million, or 13.4%, due primarily to a decrease in residential voice subscribers.
Business data revenues increased $4.5 million, or 2.7%, due primarily to an increase in business data subscribers.
Business other revenues decreased $6.8 million, or 10.8%, due primarily to a decrease in business video subscribers.
ARPU for the indicated service offerings for the nine months ended September 30, 2024 and 2023 were as follows:
 Nine Months Ended September 30,2024 vs. 2023
 20242023$ Change% Change
Residential data$80.45 $84.92 $(4.47)(5.3)%
Residential video$154.54 $141.50 $13.04 9.2 %
Residential voice$36.51 $36.34 $0.17 0.5 %
Business services$245.05 $248.77 $(3.72)(1.5)%
Costs and Expenses
Operating expenses (excluding depreciation and amortization) were $317.0 million for the nine months ended September 30, 2024 and decreased $17.7 million, or 5.3%, compared to the nine months ended September 30, 2023. The decrease in operating expenses was primarily attributable to $25.0 million of lower programming and franchise costs as a result of video customer losses and a decrease in labor and other compensation-related costs due in part to certain organizational changes implemented during the second quarter of 2024. These decreases were partially offset by higher property and other taxes, software costs, network backbone costs, rent expense and utility costs. Operating expenses as a percentage of revenues were 26.6% and 26.4% for the nine months ended September 30, 2024 and 2023, respectively.
Selling, general and administrative expenses were $269.6 million for the nine months ended September 30, 2024 and increased $4.0 million, or 1.5%, compared to the nine months ended September 30, 2023. The increase in selling, general, and administrative expenses was primarily attributable to $6.6 million of severance costs due largely to the organizational changes implemented during the second quarter of 2024 as well as increases in system conversion costs, software costs and marketing costs, along with rebranding costs that did not occur in the prior year period. These increases were partially offset by lower labor and other compensation-related costs resulting from the aforementioned organizational changes, lower professional services fees and property and other taxes. Selling, general and administrative expenses as a percentage of revenues were 22.6% and 21.0% for the nine months ended September 30, 2024 and 2023, respectively.
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Depreciation and amortization expense was $256.1 million for the nine months ended September 30, 2024 and increased $0.5 million, or 0.2%, compared to the nine months ended September 30, 2023. Depreciation and amortization expense as a percentage of revenues was 21.5% and 20.2% for the nine months ended September 30, 2024 and 2023, respectively.
Interest Expense, Net
Interest expense, net, was $105.0 million for the nine months ended September 30, 2024 and decreased $9.6 million, or 8.3%, compared to the nine months ended September 30, 2023. The decrease was driven primarily by lower outstanding debt balances and higher interest and investment income during the nine months ended September 30, 2024 compared to the prior year period.
Other Income (Expense), Net
Other expense, net, was $2.5 million for the nine months ended September 30, 2024 and consisted primarily of a $17.1 million non-cash loss on fair value adjustment associated with the MBI Net Option, partially offset by a $7.7 million gain related to the C-band spectrum relocation funding received from the federal government and a $6.9 million non-cash gain associated with our Nextlink equity investment. Other expense, net, was $30.6 million for the nine months ended September 30, 2023 and consisted primarily of a $38.7 million non-cash loss on fair value adjustment associated with the MBI Net Option, a $1.6 million net loss on the sale of equity investments and $3.3 million of debt issuance costs written off in connection with the entry into the New Credit Agreement, partially offset by a $12.3 million non-cash mark-to-market gain on our investment in Point Broadband.
Income Tax Provision (As Restated)
Income tax provision was $47.5 million and $52.6 million for the nine months ended September 30, 2024 and 2023, respectively, and our effective tax rate was 20.4% and 20.7% for the nine months ended September 30, 2024 and 2023, respectively. The decrease in the effective tax rate for the nine months ended September 30, 2024 compared to the prior year period was due primarily to an increase in income tax benefits of $5.2 million resulting from a change in valuation allowance related to the fair value adjustment of the MBI Net Option in the current period, partially offset by a decrease in income tax benefits of $3.7 million resulting from lower equity method investment net losses in the current period.
Equity Method Investment Income (Loss), Net (As Restated)
Equity method investment loss, net, was $65.6 million for the nine months ended September 30, 2024 and consisted primarily of our $62.9 million and $2.8 million proportionate share of net losses from our Clearwave Fiber and MBI investments, respectively. Equity method investment loss, net, was $80.9 million for the nine months ended September 30, 2023 and consisted primarily of our $77.7 million and $3.6 million proportionate share of net losses from our Clearwave Fiber and MBI investments, respectively.
Net Income (As Restated)
Net income was $119.7 million for the nine months ended September 30, 2024 compared to $121.1 million for the nine months ended September 30, 2023.
Unrealized Gain (Loss) on Cash Flow Hedges and Other, Net of Tax
Unrealized loss on cash flow hedges and other, net of tax, was $13.6 million for the nine months ended September 30, 2024 compared to a $22.3 million unrealized gain for the nine months ended September 30, 2023. The $35.9 million change was due to due to a decline in forward interest rates during the nine months ended September 30, 2024 compared to an increase in forward interest rates in the prior year period.
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Use of Adjusted EBITDA (As Restated)
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, not as superior to, or as a substitute for, net income reported in accordance with GAAP. Adjusted EBITDA is reconciled to net income below, the most directly comparable GAAP financial measure.
Adjusted EBITDA is defined as net income plus net interest expense, income tax provision, depreciation and amortization, equity-based compensation, severance and contract termination costs, acquisition-related costs, net (gain) loss on asset sales and disposals, system conversion costs, rebranding costs, government program exit costs, net equity method investment (income) loss, net other (income) expense and any special items, as provided in the reconciliation tables 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 debt financing. These costs are evaluated through other financial measures.
We use Adjusted EBITDA to assess our performance. In addition, Adjusted EBITDA generally correlates to the measure used in the leverage ratio calculations under the New Credit Agreement and the Senior Notes Indenture to determine compliance with the covenants contained in the New Credit Agreement and the ability to take certain actions under the Senior Notes Indenture. Adjusted EBITDA is also a significant performance measure that we have used in connection with our incentive compensation programs. 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.
We believe that Adjusted EBITDA is useful to investors in evaluating our operating performance. Adjusted EBITDA and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of Adjusted EBITDA may not be directly comparable to similarly titled measures reported by other companies.
Three Months Ended September 30,2024 vs. 2023
20242023$ Change% Change
(dollars in thousands)
(As Restated)
(As Restated)
(As Restated)
Net income$44,215 $30,297 $13,918 45.9 %
Plus: Interest expense, net34,210 38,548 (4,338)(11.3)%
Income tax provision15,870 17,258 (1,388)(8.0)%
Depreciation and amortization85,165 82,918 2,247 2.7 %
Equity-based compensation8,356 10,235 (1,879)(18.4)%
Severance and contract termination costs845 1,217 (372)(30.6)%
Acquisition-related costs289 409 (120)(29.3)%
(Gain) loss on asset sales and disposals, net5,045 2,492 2,553 102.4 %
System conversion costs1,559 199 1,360 NM
Rebranding costs1,127 — 1,127 NM
Government program exit costs
906 — 906 NM
Equity method investment (income) loss, net21,256 21,055 201 1.0 %
Other (income) expense, net(5,252)25,372 (30,624)(120.7)%
Adjusted EBITDA$213,591 $230,000 $(16,409)(7.1)%
NM = Not meaningful.
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Nine Months Ended September 30,2024 vs. 2023
(dollars in thousands)20242023$ Change% Change
(As Restated)
(As Restated)
(As Restated)
Net income$119,718 $121,126 $(1,408)(1.2)%
Plus: Interest expense, net104,957 114,508 (9,551)(8.3)%
Income tax provision47,516 52,571 (5,055)(9.6)%
Depreciation and amortization256,119 255,586 533 0.2 %
Equity-based compensation22,932 21,819 1,113 5.1 %
Severance and contract termination costs7,492 1,217 6,275 NM
Acquisition-related costs887 859 28 3.3 %
(Gain) loss on asset sales and disposals, net9,348 10,714 (1,366)(12.7)%
System conversion costs3,474 199 3,275 NM
Rebranding costs1,559 — 1,559 NM
Government program exit costs906 — 906 NM
Equity method investment (income) loss, net65,603 80,857 (15,254)(18.9)%
Other (income) expense, net2,504 30,612 (28,108)(91.8)%
Adjusted EBITDA$643,015 $690,068 $(47,053)(6.8)%
NM = Not meaningful.
Financial Condition: Liquidity and Capital Resources
Liquidity
Our primary funding requirements are for our ongoing operations, capital expenditures, potential acquisitions and strategic investments, payments of quarterly dividends and share repurchases. We believe that our existing cash balances, our Senior Credit Facilities and operating cash flows will provide adequate support for these funding requirements over the next 12 months. However, our ability to utilize those funding sources to fund ongoing operations, make capital expenditures, make future acquisitions and strategic investments, 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.
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In connection with our investment in MBI, investors affiliated with GTCR LLC, a private equity firm based in Chicago, have the right, but not the obligation, to sell (and to cause all members of MBI other than us to sell) to us and, in such case, we are obligated to purchase all of the direct and indirect equity interests in MBI that we do not already own, pursuant to such right which may be exercised between July 1, 2025 through September 30, 2025 (the "Put Option"). If the Put Option is exercised, the Put Price payable by us will be calculated under a formula based on a multiple of MBI’s adjusted EBITDA for the twelve-month period ended June 30, 2025 and MBI’s total net indebtedness as specified in the definitive documentation governing our investment in MBI. If the Put Option is exercised, we expect the transaction would be consummated within three to nine months thereafter, subject to customary closing conditions and regulatory approvals. Based on currently available information, if the Put Option is exercised, we estimate that (i) the Put Price payable by us for the equity interests of MBI that we do not already own will range between approximately $760 million and $900 million; and (ii) MBI’s total net indebtedness that will be outstanding at the time it becomes a wholly-owned subsidiary will be approximately $775 million to $825 million. These estimates are based on MBI’s past performance and current forecasts and are subject to numerous assumptions and risks including, without limitation, factors that could impact MBI’s performance, such as competition, economic conditions, operating performance and other factors described under “Cautionary Statement Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Should the underlying assumptions prove incorrect, or risks materialize, the actual Put Price payable if the Put Option is exercised and the amount of MBI’s indebtedness may differ from the estimated amounts described above. MBI's total revenues for the twelve months ended September 30, 2024 were approximately $320 million and MBI had approximately 226,000 residential and business data customers and a network footprint with approximately 674,000 homes passed as of September 30, 2024. We believe that our existing cash balances, the anticipated available capacity under the Revolving Credit Facility at the time of the transaction and our operating cash flows will be sufficient to fund the purchase price payable if the Put Option is exercised without needing to raise additional incremental capital. However, we may also opportunistically pursue additional incremental financing transactions depending on market conditions and other factors.
The following table shows a summary of our net cash flows for the periods indicated (dollars in thousands):
Nine Months Ended September 30,2024 vs. 2023
20242023$ Change% Change
Net cash provided by operating activities$496,507 $511,501 $(14,994)(2.9)%
Net cash used in investing activities(242,051)(212,462)(29,589)13.9 %
Net cash used in financing activities(218,104)(274,557)56,453 (20.6)%
Change in cash and cash equivalents$36,352 $24,482 $11,870 48.5 %
Cash and cash equivalents, beginning of period190,289 215,150 (24,861)(11.6)%
Cash and cash equivalents, end of period$226,641 $239,632 $(12,991)(5.4)%
The $15.0 million year-over-year decrease in net cash provided by operating activities was primarily attributable to a decrease in Adjusted EBITDA, partially offset by favorable changes in working capital.
The $29.6 million year-over-year increase in net cash used in investing activities was due primarily to $56.7 million of combined proceeds from the sale of equity investments during the prior year period that did not recur, a $4.5 million increase in cash paid for equity investments and $4.3 million paid for the Nova acquisition, partially offset by a $34.5 million decrease in cash paid for capital expenditures.
The $56.5 million year-over-year decrease in net cash used in financing activities was due primarily to payments of $99.6 million for share repurchases and $8.1 million for debt issuance costs during the prior year period that did not recur, partially offset by a $49.4 million increase in net debt repayments.
On May 20, 2022, our Board authorized up to $450.0 million of share repurchases (with no cap as to the number of shares of common stock). We had $143.1 million of remaining share repurchase authorization under the Share Repurchase Program as of September 30, 2024. Additional 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 we first became publicly traded in 2015 through September 30, 2024, we have repurchased 646,244 shares of our common stock at an aggregate cost of $556.9 million. We may, from time to time, continue to opportunistically repurchase shares depending on the trading price of our common stock, market conditions and other factors. We did not repurchase any shares during the nine months ended September 30, 2024.
We currently expect to continue to pay comparable quarterly cash dividends on shares of our common stock, subject to approval of the Board. During the third quarter of 2024, the Board approved a quarterly dividend of $2.95 per share of common stock, which was paid on September 13, 2024, resulting in a total dividend distribution of $17.0 million.
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Financing Activity
Senior Credit Facilities
Prior to February 22, 2023, the Credit Agreement provided for the Term Loan A-2, the Term Loan B-2, the Term Loan B-3, the Term Loan B-4 and the Revolving Credit Facility. The Revolving Credit Facility gives us the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility.
On February 22, 2023, we amended and restated the Credit Agreement to, among other things, (i) increase the aggregate principal amount of commitments under the Revolving Credit Facility by $500.0 million to $1.0 billion; (ii) extend the scheduled maturity of the Revolving Credit Facility from October 2025 to February 2028; (iii) upsize the outstanding principal amount under the Term Loan B-3 by $150.0 million to $757.0 million; (iv) extend the scheduled maturities of the Term Loan B-2 and the Term Loan B-3 from October 2027 to October 2029 (subject to adjustment as described in the notes to the table below summarizing our outstanding term loans as of September 30, 2024); (v) increase the fixed spreads on the Term Loan B-2 and the Term Loan B-3 from 2.00% to 2.25%; and (vi) transition the benchmark interest rate for the Revolving Credit Facility, the Term Loan B-2 and the Term Loan B-3 from LIBOR to SOFR plus a 10 basis point credit spread adjustment. Except as described above, the New Credit Agreement did not make any material changes to the principal terms of the Term Loan B-2, the Term Loan B-3, the Term Loan B-4 or the Revolving Credit Facility. Upon the effectiveness of the New Credit Agreement, we drew $488.0 million under the Revolving Credit Facility and, together with the net proceeds from the TLB-3 Upsize, repaid all $638.3 million aggregate principal amount of our outstanding Term Loan A-2. In July 2023, we transitioned the benchmark interest rate for the Term Loan B-4 from LIBOR to SOFR plus a credit spread adjustment that ranges from approximately 11.4 basis points to 42.8 basis points based on the interest period elected.
Under the New Credit Agreement, the interest margins applicable to the Senior Credit Facilities are, at our option, equal to either SOFR or a base rate, plus an applicable margin equal to, (i) with respect to the Revolving Credit Facility, 1.25% to 1.75% plus a 10 basis point credit spread adjustment for SOFR loans and 0.25% to 0.75% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on our Total Net Leverage Ratio (as defined in the New Credit Agreement), (ii) with respect to the Term Loan B-2 and the Term Loan B-3, 2.25% plus a 10 basis point credit spread adjustment for SOFR loans and 1.25% for base rate loans and (iii) with respect to the Term Loan B-4, 2.0% plus an approximately 11.4 to 42.8 basis point credit spread adjustment based on the interest period elected for SOFR loans and 1.0% for base rate loans.
We repaid $150.0 million of the outstanding Revolving Credit Facility borrowings during 2023. In each of February, April and July of 2024, we repaid $50.0 million of the outstanding Revolving Credit Facility borrowings, reducing the outstanding balance to $188.0 million as of September 30, 2024. The borrowings under the Revolving Credit Facility accrued interest at a rate of 6.70% per annum as of September 30, 2024. In October 2024, we repaid an additional $50.0 million of the outstanding Revolving Credit Facility borrowings.
As of September 30, 2024, we had approximately $1.75 billion of aggregate outstanding term loans and $188.0 million of borrowings (and $812.0 million available for borrowing) under the Revolving Credit Facility. A summary of our outstanding term loans as of September 30, 2024 is as follows (dollars in thousands):
Instrument
Draw Date(s)
Original Principal
Amortization Per Annum(1)
Outstanding Principal
Final Scheduled
Maturity Date
Final Scheduled
Principal Payment
Benchmark Rate
Fixed Margin
Interest Rate
Term Loan B-21/7/2019$250,000 1.0%$236,250 
10/30/2029(2)
$223,750 SOFR + 10.0 bps2.25%7.20%
Term Loan B-3
6/14/2019
10/30/2020
2/22/2023
325,000
300,000
150,000
1.0%743,415 
10/30/2029(2)
704,695 SOFR + 10.0 bps2.25%7.20%
Term Loan B-45/3/2021800,000 1.0%774,000 5/3/2028746,000 SOFR + 11.4 bps2.00%6.96%
Total$1,825,000 $1,753,665 $1,674,445 
(1)Payable in equal quarterly installments (expressed as a percentage of the original principal amount and subject to customary adjustments in the event of any prepayment). All loans may be prepaid at any time without penalty or premium (subject to customary SOFR breakage provisions).
(2)The final maturity date of the Term Loan B-2 and the Term Loan B-3, in each case, will adjust to May 3, 2028 if greater than $150.0 million aggregate principal amount of the Term Loan B-4 (together with any refinancing indebtedness in respect of the Term Loan B-4 with a final maturity date prior to the date that is 91 days after October 30, 2029) remains outstanding on May 3, 2028.
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Senior Notes
In November 2020, we completed the offering of $650.0 million aggregate principal amount of Senior Notes due 2030. The Senior Notes bear interest at a rate of 4.00% per annum payable semi-annually in arrears on May 15th and November 15th of each year. The Senior Notes are required to be guaranteed on a senior unsecured basis by each of our existing and future wholly owned domestic subsidiaries that guarantees our obligations under our New Credit Agreement or that guarantees certain capital markets debt of ours or a guarantor in an aggregate principal amount in excess of $250.0 million.
Convertible Notes
In March 2021, we completed the Convertible Notes offering of $575.0 million aggregate principal amount of 2026 Notes and $345.0 million aggregate principal amount of 2028 Notes. The Convertible Notes are senior unsecured obligations of ours and are guaranteed by our wholly owned domestic subsidiaries that guarantee the Senior Credit Facilities or that guarantee certain of our Notes in an aggregate principal amount in excess of $250.0 million. The 2026 Notes do not bear regular interest, and the principal amount of the 2026 Notes do not accrete. The 2028 Notes bear interest at a rate of 1.125% per annum. Interest on the 2028 Notes is payable semiannually in arrears on March 15th and September 15th of each year, unless earlier repurchased, converted or redeemed. The 2026 Notes are scheduled to mature on March 15, 2026, and the 2028 Notes are scheduled to mature on March 15, 2028. The initial conversion rate for each of the 2026 Notes and the 2028 Notes is 0.4394 shares of our common stock per $1,000 principal amount of 2026 Notes and 2028 Notes, as applicable (equivalent to an initial conversion price of $2,275.83 per share of common stock). The initial conversion price of each of the 2026 Notes and the 2028 Notes represents a premium of 25.0% over the last reported sale price of $1,820.83 per share of our common stock on March 2, 2021. The Convertible Notes are convertible at the option of the holders. The method of conversion into cash, shares of our common stock or a combination thereof is at our election.
Other Debt-Related Information
Unamortized debt issuance costs consisted of the following (in thousands):
September 30, 2024December 31, 2023
Revolving Credit Facility portion:
Other noncurrent assets$2,820 $3,087 
Term loans and Notes portion:
Long-term debt (contra account)19,690 22,532 
Total$22,510 $25,619 
We recorded debt issuance cost amortization of $1.1 million for both the three months ended September 30, 2024 and 2023 and $3.4 million and $3.6 million for the nine months ended September 30, 2024 and 2023, respectively, within interest expense in the condensed consolidated statements of operations and comprehensive income. We capitalized $0.3 million of debt issuance costs during the nine months ended September 30, 2024 related to the Amendment discussed below. We capitalized $7.8 million and wrote-off $3.3 million of debt issuance costs during the nine months ended September 30, 2023 in connection with the entry into the New Credit Agreement.
The unamortized debt discount associated with the Convertible Notes was $8.8 million and $12.0 million as of September 30, 2024 and December 31, 2023, respectively. We recorded debt discount amortization of $1.1 million for both the three months ended September 30, 2024 and 2023 and $3.2 million for both the nine months ended September 30, 2024 and 2023 within interest expense in the condensed consolidated statements of operations and comprehensive income.
We have entered into a letter of credit agreement with MUFG which provides for an additional $75.0 million of letter of credit issuing capacity, of which $11.6 million was utilized as of September 30, 2024.
We were in compliance with all debt covenants as of September 30, 2024.
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We are party to two interest rate swap agreements to convert our interest payment obligations with respect to an aggregate of $1.2 billion of our variable rate SOFR indebtedness to a fixed rate. Under the first swap agreement, with respect to a notional amount of $850.0 million, our monthly payment obligation is determined at a fixed base rate of 2.595%. Under the second swap agreement, with respect to a notional amount of $350.0 million, our monthly payment obligation is determined at a fixed base rate of 2.691%. Both interest rate swap agreements are scheduled to mature in the first quarter of 2029 but each may be terminated prior to the scheduled maturity at our election or that of the financial institution counterparty under the terms provided in each swap agreement. We recognized income of $8.4 million and $8.0 million on interest rate swaps during the three months ended September 30, 2024 and 2023, respectively, and income of $24.9 million and $20.8 million on interest rate swaps during the nine months ended September 30, 2024 and 2023, respectively, which were reflected within interest expense in the condensed consolidated statements of operations and comprehensive income.
On October 7, 2024, we entered into the Amendment with our lenders to amend the New Credit Agreement. The Amendment provides for (a) an increase of the aggregate principal amount of commitments under the Revolving Credit Facility by $250 million to $1.25 billion; and (b) certain other amendments to the New Credit Agreement that are expected to provide us enhanced capital structure optionality in the event MBI becomes a wholly owned restricted subsidiary of ours under the New Credit Agreement. The Amendment did not make any other material changes to the principal terms of the New Credit Agreement.
Refer to notes 11 and 13 to our audited consolidated financial statements included in the 2023 Form 10-K/A and notes 7 and 8 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further details regarding our financing activity, outstanding debt and interest rate swaps.
Capital Expenditures
We have significant ongoing capital expenditure requirements as well as capital enhancements associated with acquired operations and the expansion of our high-capacity network. We are entering the final year of capital enhancements associated with acquired operations, which has been focused on upgrading any remaining low-capacity markets and migrating products and billing systems to Cable One platforms. Capital expenditures are funded primarily by cash on hand and cash flows from operating activities.
Our capital expenditures by category for the nine months ended September 30, 2024 and 2023 were as follows (in thousands):
Nine Months Ended September 30,
20242023
Customer premise equipment(1)
$37,430 $45,021 
Commercial(2)
15,073 27,712 
Scalable infrastructure(3)
26,059 27,656 
Line extensions(4)
48,259 33,523 
Upgrade/rebuild(5)
26,545 47,377 
Support capital(6)
61,082 74,139 
Total$214,449 $255,428 
(1)Customer premise equipment includes costs incurred at customer locations, including installation costs and customer premise equipment (e.g., modems and set-top boxes).
(2)Commercial includes costs related to securing business services customers and PSUs, including small and medium-sized businesses and enterprise customers.
(3)Scalable infrastructure includes costs not related to customer premise equipment to secure growth of new customers and PSUs or provide service enhancements (e.g., headend equipment).
(4)Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
(5)Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.
(6)Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles) and capitalized internal labor costs not associated with customer installation activities.
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Contractual Obligations and Contingent Commitments
As of September 30, 2024, with the exception of debt payments (refer to note 7 of the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the updated future maturities of outstanding borrowings table), there have been no material changes to the contractual obligations and contingent commitments previously disclosed in the 2023 Form 10-K/A.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements or financing arrangements with special-purpose entities.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated 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.
There have been no material changes to our critical accounting policy and estimate disclosures described in our 2023 Form 10-K/A.
ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the potential loss arising from changes in market rates and prices. There have been no material changes to the market risk disclosures described in the 2023 Form 10-K/A other than as set forth below.
As of September 30, 2024, we had $650.0 million, $575.0 million and $345.0 million aggregate principal amount of the Senior Notes, 2026 Notes and 2028 Notes, respectively, outstanding. Although the Senior Notes and 2028 Notes are based on fixed rates and the 2026 Notes do not bear interest, changes in interest rates could impact the fair market value of such notes. As of September 30, 2024, the fair market values of the Senior Notes, 2026 Notes and 2028 Notes were $515.9 million, $528.3 million and $279.5 million, respectively.
ITEM 4.    CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management is responsible for establishing and maintaining adequate disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation as of September 30, 2024 of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b).
Based upon this evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of September 30, 2024, due to the existence of a material weakness 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) as described below and in the Company's 2023 Form 10-K/A.
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Previously Reported Material Weakness
As previously disclosed in "Item 9A, Controls and Procedures" in the Company's 2023 Form 10-K/A, management identified a material weakness in the Company's internal control over financial reporting related to its accounting for equity method investments. Specifically, it lacked an effectively designed control activity related to the evaluation of the capital structure of equity method investments when determining the proportionate share of earnings or losses to recognize. This material weakness resulted in the restatement of the Company's consolidated financial statements for the years ended December 31, 2023 and 2022 as well as each of the interim periods within the years ended December 31, 2023 and 2022, excluding the first quarter of 2022, condensed consolidated financial statements for the three months ended March 31, 2024, and condensed consolidated financial statements for the three and six months ended June 30, 2024. Additionally, this material weakness could result in additional misstatements of our equity method investments, proportionate share of earnings or losses and related accounts in our interim or annual consolidated financial statements and disclosures that would result in additional material misstatements that would not be prevented or detected.
Remediation Plan for Material Weakness
Management has designed and implemented a new control activity to fully evaluate the capital structures of equity method investments in its determination of the proportionate share of earnings or losses to recognize. Management believes these measures will remediate the identified material weakness. However, the material weakness will not be considered remediated until there has been sufficient time for the Company to conclude through testing that the controls are operating effectively. As the Company's management, under the oversight of the Audit Committee, continues to evaluate and improve the Company's internal control over financial reporting, management may decide to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete, certain of the remediation measures identified.
Changes in Internal Control Over Financial Reporting
Except as described above, there has been no change in the Company’s internal control over financial reporting during the quarter ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II: OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS
None.
ITEM 1A.    RISK FACTORS
There have been no material changes to the risk factors previously disclosed in the 2023 Form 10-K/A.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Certain information relating to common stock repurchases by the Company and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the three months ended September 30, 2024 were as follows (dollars in thousands, except per share data):
PeriodTotal Number
of Shares Purchased		Average Price Paid Per Share
Total Number of
Shares Purchased as Part of Publicly Announced Plans or Programs(1)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 to 31, 2024(2)
106$348.07 —$143,104 
August 1 to 31, 2024—$— —$143,104 
September 1 to 30, 2024
—$— —$143,104 
Total106$348.07 —
(1)On May 20, 2022, the Company's Board authorized up to $450.0 million of share repurchases (with no cap as to the number of shares of common stock), which was announced on May 23, 2022 (the "Share Repurchase Program"). The authorization does not have an expiration date. The Company had $143.1 million of remaining share repurchase authorization under the Share Repurchase Program as of September 30, 2024. Additional 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.
(2)Includes shares withheld from associates to satisfy estimated tax withholding obligations in connection with the vesting of restricted stock and/or exercises of SARs under the Company's incentive compensation plans. The average price paid per share for the common stock withheld was based on the closing price of the Company’s common stock on the applicable vesting or exercise measurement date.
ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.    OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the three months ended September 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K).
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ITEM 6.    EXHIBITS
Exhibit Number
Description
31.1
31.2
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101.INSInline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCHInline XBRL Taxonomy Extension Schema Document.*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.*
104
The cover page of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (included within the Exhibit 101 attachments).
* Filed herewith.
** Furnished herewith.
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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: Chair of the Board, President and Chief Executive Officer
Date: November 7, 2024
By:
/s/ Todd M. Koetje
Name: Todd M. Koetje
Title: Chief Financial Officer
Date: November 7, 2024
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