Altice USA, Inc. (NYSE:ATUS) Q2 2022 Results Conference Call April 28, 2022 4:30 PM ET Company Participants Nick Brown - SVP-Corporate Finance & Development Dexter Goei - Chief Executive Officer Mike Grau - Chief Financial Officer Conference Call Participants John Hodulik - UBS Philip Cusick - JP Morgan Craig Moffett - MoffettNathanson Brett Feldman - Goldman Sachs James Ratcliffe - Evercore ISI Michael Rollins - Citigroup Doug Mitchelson - Credit Suisse Kannan Venkateshwar - Barclays Jonathan Chaplin - New ...

Altice USA, Inc. (NYSE:ATUS) Q4 2021 Results Conference Call February 16, 2022 4:30 PM ET Company Participants Nick Brown - SVP-Corporate Finance & Development Dexter Goei - Chief Executive Officer Mike Grau - Chief Financial Officer Conference Call Participants Philip Cusick - JPMorgan Jonathan Chaplin - New Street Research Craig Moffett - MoffettNathanson Brett Feldman - Goldman Sachs Ben Swinburne - Morgan Stanley John Hodulik - UBS James Ratcliffe - Evercore ISI Michael Rollins - Citigroup Kutgun Maral ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Altice USA provides broadband, video, telephony, and mobile services to over five million customers across 21 states, actively expanding its FTTH network amidst a competitive and regulated environment - Altice USA delivers broadband, video, telephony, and mobile services to over **five million** residential and business customers across 21 states under the Optimum and Suddenlink brands[8](index=8&type=chunk) - The company is actively deploying a fiber-to-the-home (FTTH) network to provide multi-gig broadband speeds, supplementing its existing hybrid-fiber coaxial (HFC) network which reaches approximately **9.3 million** passings[8](index=8&type=chunk)[37](index=37&type=chunk) Key Financial Data (2019-2021) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Customer Relationships (thousands)** | 5,014.7 | 5,024.6 | 4,916.3 | | **Revenue ($ thousands)** | 10,090,849 | 9,894,642 | 9,760,859 | | **Adjusted EBITDA ($ thousands)** | 4,427,251 | 4,414,814 | 4,265,471 | | **Adjusted EBITDA Margin (%)** | 43.9% | 44.6% | 43.7% | | **Net Income Attributable to Stockholders ($ thousands)** | 990,311 | 436,183 | 138,936 | Residential Customer Relationships (thousands) | Service | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Total Residential Relationships (thousands)** | 4,632.8 | 4,648.4 | 4,533.3 | | Broadband (thousands) | 4,386.2 | 4,359.2 | 4,187.3 | | Video (thousands) | 2,732.3 | 2,961.0 | 3,179.2 | | Telephony (thousands) | 2,005.2 | 2,214.0 | 2,398.8 | Residential Revenue by Service ($ thousands) | Service | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Broadband ($ thousands)** | $3,925,089 | $3,689,159 | $3,222,605 | | **Video ($ thousands)** | $3,526,205 | $3,670,859 | $3,997,873 | | **Telephony ($ thousands)** | $404,813 | $468,777 | $598,694 | - In December 2020, the company sold a **49.99%** interest in its Lightpath fiber enterprise business for an implied enterprise value of **$3.2 billion**, while retaining a **50.01%** controlling interest[22](index=22&type=chunk) [Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) The company faces intense competition, rising programming costs, high leverage of **$26.5 billion**, and extensive regulation, alongside technological and cybersecurity risks - The company operates in a highly competitive environment, facing pressure from fiber-based competitors like Verizon's Fios and AT&T, satellite providers, and over-the-top (OTT) streaming services such as Netflix, Hulu, and Disney+[75](index=75&type=chunk)[77](index=77&type=chunk) - Programming and retransmission costs are a major expense category and are expected to continue increasing, particularly for sports and broadcast content, potentially impacting financial results and customer retention[79](index=79&type=chunk)[80](index=80&type=chunk) - As of December 31, 2021, the company had substantial indebtedness of approximately **$26.5 billion**, exposing it to risks related to debt service, covenant compliance, and refinancing in volatile economic conditions[85](index=85&type=chunk) - The business is subject to extensive government regulation at federal, state, and local levels, covering areas such as franchise agreements, rate regulation, channel carriage, and net neutrality, which could increase operational expenses and limit revenues[107](index=107&type=chunk) - The tri-class stock structure concentrates approximately **95%** of the voting power with Next Alt, controlled by Patrick Drahi, limiting the influence of other stockholders on corporate matters[122](index=122&type=chunk)[123](index=123&type=chunk) [Unresolved Staff Comments](index=45&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[127](index=127&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) The company's principal physical assets include cable operating plant, headend facilities, fiber optic and coaxial networks, and customer premise equipment - The company's main physical assets include signal receiving equipment, headend facilities, fiber optic and coaxial cable networks, and customer premise equipment like set-top boxes and modems[127](index=127&type=chunk) [Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 17 to the consolidated financial statements - Details on legal proceedings are provided in Note 17 of the consolidated financial statements[128](index=128&type=chunk) [Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[128](index=128&type=chunk) Part II [Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20for%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Altice USA's Class A common stock trades on the NYSE, with no current dividend plans and no share repurchases in Q4 2021 - Class A Common Stock is listed on the NYSE (ATUS); Class B is not listed[130](index=130&type=chunk) - The company has no current plans to pay cash dividends on its common stock[131](index=131&type=chunk) - No shares were repurchased during the quarter ended December 31, 2021[133](index=133&type=chunk) Stock Performance Comparison (June 2017 - Dec 2021) | Index | 6/22/2017 | 12/31/2017 | 12/31/2018 | 12/31/2019 | 12/31/2020 | 12/31/2021 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Altice USA Class A ($)** | $100.00 | $64.90 | $56.30 | $93.17 | $129.06 | $55.14 | | **S&P 500 Index ($)** | $100.00 | $109.82 | $102.97 | $132.71 | $154.29 | $195.78 | | **2021 Peer Group Index ($)** | $100.00 | $105.79 | $96.08 | $127.35 | $138.78 | $127.94 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2021, Altice USA reported **$10.09 billion** in revenue, driven by broadband and business services growth, with net income surging to **$990.3 million** and total debt at **$26.5 billion** Consolidated Results of Operations (2020 vs 2021, in thousands) | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue ($ thousands)** | $10,090,849 | $9,894,642 | $196,207 | | **Operating Income ($ thousands)** | $2,524,627 | $2,115,289 | $409,338 | | **Net Income ($ thousands)** | $1,010,932 | $443,479 | $567,453 | | **Net Income Attributable to Stockholders ($ thousands)** | $990,311 | $436,183 | $554,128 | Reconciliation to Non-GAAP Measures (2020 vs 2021, in thousands) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Net Income ($ thousands)** | $1,010,932 | $443,479 | | **Adjusted EBITDA ($ thousands)** | $4,427,251 | $4,414,814 | | **Capital Expenditures (cash) ($ thousands)** | $1,231,715 | $1,073,955 | | **Operating Free Cash Flow ($ thousands)** | $3,195,536 | $3,340,859 | | **Free Cash Flow ($ thousands)** | $1,622,363 | $1,906,209 | Customer Metrics (as of Dec 31) | Metric | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | **Total Passings (thousands)** | 9,263.3 | 9,034.1 | 229.2 | | **Total Customer Relationships (thousands)** | 5,014.7 | 5,024.6 | (9.9) | | **Residential Broadband Customers (thousands)** | 4,386.2 | 4,359.2 | 27.0 | | **Residential Video Customers (thousands)** | 2,732.3 | 2,961.0 | (228.7) | | **FTTH Total Passings (thousands)** | 1,171.0 | 900.1 | 270.9 | | **FTTH Customer Relationships (thousands)** | 69.7 | 26.1 | 43.6 | - Broadband revenue increased by **$235.9 million (6%)** in 2021, driven by higher average revenue per customer and an increase in broadband customers[159](index=159&type=chunk) - Video revenue decreased by **$144.7 million (4%)** in 2021, primarily due to a decline in video customers[160](index=160&type=chunk) - The company's leverage target for its CSC Holdings subsidiary is a net leverage ratio of **4.5x to 5.0x** over time[194](index=194&type=chunk) - In 2021, the company repurchased **23.6 million** shares for approximately **$804.9 million**, with approximately **$1.19 billion** remaining available under the share repurchase program at year-end[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from Comcast stock holdings and interest rate fluctuations using equity derivatives and interest rate swaps - The company holds Comcast common stock with a fair value of **$2.16 billion** as of December 31, 2021, hedged using equity derivative contracts to limit downside risk[224](index=224&type=chunk) - The fair value of the company's fixed-rate debt was **$17.90 billion**, slightly higher than its carrying value of **$17.83 billion** at year-end 2021[226](index=226&type=chunk) - Interest rate swap contracts are used to manage interest rate risk on floating-rate debt, resulting in a **$92.7 million** gain in 2021[227](index=227&type=chunk) [Financial Statements and Supplementary Data](index=69&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2021, including the auditor's report and detailed financial statements - This item refers to the full financial statements and supplementary data, which are indexed starting on page F-1 of the report[229](index=229&type=chunk)[248](index=248&type=chunk) - The independent auditor, KPMG LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2021[250](index=250&type=chunk)[254](index=254&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=69&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None reported[229](index=229&type=chunk) [Controls and Procedures](index=69&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that disclosure controls and procedures were effective as of December 31, 2021[230](index=230&type=chunk) - Management's annual report concluded that internal control over financial reporting was effective as of December 31, 2021[231](index=231&type=chunk)[232](index=232&type=chunk) [Other Information](index=70&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - None[233](index=233&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=71&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%20and%2014) Information for Items 10 through 14, covering governance, compensation, and ownership, is incorporated by reference from the forthcoming proxy statement - Information for Part III (Items 10-14) is incorporated by reference from the company's forthcoming definitive proxy statement[235](index=235&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=71&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section provides an index of all exhibits filed with the 10-K, including governance documents, material contracts, and certifications[236](index=236&type=chunk)[238](index=238&type=chunk) [Form 10-K Summary](index=76&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary was provided - None[243](index=243&type=chunk)

Financial Data and Key Metrics Changes - Revenue growth in Q3 was 5.8% year over year, with a 2.3% growth after adjusting for regional sports network credits and an additional $69 million of AirStrand revenue [5][6] - Adjusted EBITDA grew 3.4% year over year with a margin of 45.2% [7][27] - Free cash flow for Q3 was $389 million, totaling over $1.3 billion year-to-date, with a target of approximately $1.6 billion for the year [7][29] Business Line Data and Key Metrics Changes - Residential revenue grew 2.2% in Q3 but declined 1.9% when adjusted for RSN credits [8] - Business services revenue grew 21.7% on a reported basis, but only 2% when excluding RSN credits and AirStrand revenue [9] - News and advertising revenue increased by 15.7% in Q3, supported by a strong recovery in local, regional, and national advertising [11] Market Data and Key Metrics Changes - Broadband customer net losses were 13,000 in Q3, with expectations to return to growth in Q4 [6][10] - SMB customer growth in business services was reported at 2.6% in Q3, indicating recovery towards pre-pandemic levels [10] - The company noted improvements in retail and commercial office space vacancy rates, contributing to business service recovery [10] Company Strategy and Development Direction - The company is accelerating its fiber network rollout to enhance broadband service and reduce churn [13][19] - New competitive offers have been rolled out to support customer growth, with a focus on improving customer experience [14][23] - Plans to rebrand Suddenlink to Optimum are in place to unify marketing and customer experience across the country [26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unusual operating environment due to the pandemic and expressed confidence in returning to customer growth [6][10] - There is an expectation of increased operating costs and CapEx in 2022, which may negatively impact margins but is seen as necessary for long-term growth [28][33] - Management remains optimistic about operational performance improvements and customer experience enhancements [26][41] Other Important Information - The company has reduced the pace of share repurchases to $79 million in Q3, now targeting up to $1 billion for the year [7][33] - The updated financial outlook includes expectations for revenue and EBITDA growth, with a cash CapEx target for 2021 at the lower end of the prior guidance range [33] Q&A Session Summary Question: Can you discuss the ability to grow EBITDA next year given the spending? - Management indicated that there may be a decline in EBITDA due to increased expenses and one-off revenue impacts [35][37] Question: What are the thoughts on ARPU trends and pricing strategies? - Management noted that while ARPU levels have slightly declined, they expect to sustain existing ARPU levels through higher speed offerings and competitive pricing [35][38] Question: Can you provide insights on the fiber build aspirations beyond next year? - Management anticipates covering 3.5 to 4 million homes with fiber by the end of 2023, with a focus on strategic areas [45][46] Question: How is the company addressing competition in the broadband market? - Management acknowledged increased competition but expressed confidence in their ability to recover customer losses through improved product offerings and customer experience [58][60] Question: What is the status of the share repurchase program? - Management clarified that while they have a guidance of under $1 billion for share repurchases, they do not plan to spend the remaining amount in the near term [73][74]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents Altice USA, Inc. and CSC Holdings, LLC's unaudited consolidated financial statements, including balance sheets, income statements, cash flows, and detailed accounting notes [Altice USA, Inc. and Subsidiaries Consolidated Financial Statements](index=6&type=section&id=Altice%20USA%2C%20Inc.%20and%20Subsidiaries%20Consolidated%20Financial%20Statements) Altice USA's consolidated financial statements show a slight increase in total assets, significant improvements in revenue and net income, and strong net cash from operating activities for the nine months ended September 30, 2021 Altice USA, Inc. Consolidated Balance Sheet Highlights (in thousands) | Metric | September 30, 2021 (Unaudited) | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $844,729 | $976,566 | | **Total Assets** | $33,432,700 | $33,376,660 | | **Total Current Liabilities** | $3,668,895 | $3,098,103 | | **Long-term Debt, net** | $24,881,833 | $25,476,629 | | **Total Liabilities** | $34,565,387 | $34,554,036 | | **Total Stockholders' Deficiency** | $(1,132,687) | $(1,203,139) | Altice USA, Inc. Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Revenue** | $7,569,711 | $7,359,221 | | **Operating Income** | $1,925,834 | $1,506,570 | | **Net Income** | $750,222 | $107,210 | | **Diluted Income Per Share** | $1.59 | $0.18 | Altice USA, Inc. Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $2,177,479 | $2,188,661 | | **Net Cash Used in Investing Activities** | $(1,187,796) | $(874,665) | | **Net Cash Used in Financing Activities** | $(1,035,513) | $(1,030,308) | | **Net (Decrease) in Cash** | $(45,970) | $282,165 | [CSC Holdings, LLC and Subsidiaries Consolidated Financial Statements](index=15&type=section&id=CSC%20Holdings%2C%20LLC%20and%20Subsidiaries%20Consolidated%20Financial%20Statements) CSC Holdings, LLC's supplemental financial statements, nearly identical to Altice USA's due to its primary operational role, show strong net income and cash from operations, with minor differences from intercompany and tax items - Altice USA operates as a holding company, with **no independent business operations** apart from its **CSC Holdings subsidiary**; their consolidated financial statements are essentially identical, differing only in minor cash, deferred tax, and intercompany balances[57](index=57&type=chunk) CSC Holdings, LLC Statement of Operations Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Revenue** | $7,569,711 | $7,359,221 | | **Operating Income** | $1,925,834 | $1,506,570 | | **Net Income** | $752,519 | $120,921 | CSC Holdings, LLC Statement of Cash Flows Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $2,147,335 | $2,191,803 | | **Net Cash Used in Investing Activities** | $(1,187,796) | $(878,873) | | **Net Cash Used in Financing Activities** | $(1,007,442) | $(1,025,165) | [Combined Notes to Consolidated Financial Statements](index=22&type=section&id=Combined%20Notes%20to%20Consolidated%20Financial%20Statements) These notes detail key financial aspects, including share repurchases, revenue composition by segment, debt structure, derivative usage for hedging, and ongoing legal proceedings - The company repurchased **23.6 million shares** for approximately **$804.9 million** in the nine months ended September 30, 2021, with **$1.19 billion** remaining available under the authorized program[62](index=62&type=chunk) Revenue by Category (in thousands) | Category | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Broadband** | $2,952,136 | $2,747,129 | | **Video** | $2,675,861 | $2,766,608 | | **Telephony** | $310,298 | $358,347 | | **Business services and wholesale** | $1,180,039 | $1,092,309 | | **News and advertising** | $380,462 | $326,348 | | **Total Revenue** | **$7,569,711** | **$7,359,221** | - In May 2021, CSC Holdings issued **$1.5 billion** of 4.500% senior guaranteed notes and **$500 million** of 5.000% senior notes, both due 2031, using proceeds to redeem **$1.5 billion** of 5.500% notes due 2026, incurring a **$51.7 million loss** on extinguishment[97](index=97&type=chunk) - The company is involved in legal proceedings, including a **stockholder class action lawsuit** with a settlement reached in February 2021, and **patent infringement lawsuits** from Sprint concerning VoIP and VOD services[144](index=144&type=chunk)[146](index=146&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=40&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting revenue and Adjusted EBITDA growth driven by broadband and business services, while detailing segment revenue trends, liquidity, capital resources, debt structure, and increased capital expenditures [Results of Operations](index=42&type=section&id=Results%20of%20Operations) This section details the company's operational results, showing revenue growth driven by broadband and business services, despite declines in video and telephony, alongside increases in operating income and Adjusted EBITDA Key Performance Indicators (Customers in thousands) | Metric | Sep 30, 2021 | Sep 30, 2020 | | :--- | :--- | :--- | | **Total Customer Relationships** | 5,027.6 | 5,040.9 | | **Residential Broadband Customers** | 4,388.1 | 4,363.5 | | **Residential Video Customers** | 2,803.0 | 3,035.1 | | **Residential Telephony Customers** | 2,057.1 | 2,279.5 | | **ARPU** | $140.73 | $138.16 | - Broadband revenue increased **7%** for the nine months ended September 30, 2021, driven by higher average recurring revenue per customer and an increase in broadband customers[165](index=165&type=chunk) - Video revenue decreased **3%** for the nine months ended September 30, 2021, primarily due to declining customers and lower pay-per-view revenue, partially offset by prior-year RSN credits and higher ARPU[166](index=166&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Net Income** | $750,222 | $107,210 | | **Adjustments** | $2,593,989 | $3,156,624 | | **Adjusted EBITDA** | **$3,344,211** | **$3,263,834** | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company targets a specific leverage ratio for its CSC Holdings debt, details its total debt structure, and outlines increased capital expenditures focused on network infrastructure and FTTH build, alongside significant share repurchases - The company targets a year-end **leverage ratio of 4.5x to 5.0x** for its CSC Holdings debt silo, planning to use free cash flow and its revolving credit facility to manage debt maturities[202](index=202&type=chunk) Capital Expenditures (Cash Basis, in thousands) | Category | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | **Customer premise equipment** | $153,389 | $127,667 | | **Network infrastructure** | $430,811 | $366,877 | | **Support and other** | $171,595 | $142,984 | | **Business Services** | $89,272 | $91,849 | | **Total Capital Purchases (Cash)** | **$845,067** | **$729,377** | - Net cash used in financing activities for the nine months ended September 30, 2021, totaled **$1.035 billion**, comprising **$3.31 billion** in new debt proceeds, offset by **$3.48 billion** in debt repayments and **$804.9 million** in share repurchases[223](index=223&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages equity price risk from Comcast stock through hedging and addresses interest rate risk on its debt using interest rate swaps, with fair value sensitivities detailed - The company holds **Comcast common stock** with a fair value of **$2.40 billion** as of September 30, 2021, hedged with prepaid forward contracts to monetize value and limit downside risk[231](index=231&type=chunk)[232](index=232&type=chunk) - The fair value of the company's **$19.04 billion fixed-rate debt** exceeded its carrying value by **$241.2 million** at September 30, 2021, with a hypothetical 100 basis point interest rate decrease increasing its fair value by **$807.7 million**[234](index=234&type=chunk) - The company uses **interest rate swap contracts** to manage exposure to fluctuating interest rates on its variable-rate debt, with fair value changes recorded in the statement of operations as these are not designated as hedges[235](index=235&type=chunk) [Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2021[238](index=238&type=chunk) - No material changes occurred in the company's **internal control over financial reporting** during the nine months ended September 30, 2021[239](index=239&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 16 of its financial statements for detailed legal proceedings, including stockholder litigation, a derivative lawsuit, and patent infringement claims from Sprint - For information on legal proceedings, the report refers to **Note 16** of the financial statements[240](index=240&type=chunk) [Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) The company faces key risks from the **COVID-19 pandemic's potential impact** on consumer behavior and operations, and from **network and facility disruptions** due to natural disasters, power outages, and climate change effects - The **COVID-19 pandemic** poses a business risk, potentially impacting customer demand, payment ability, and operations due to government mandates like service disconnection moratoriums[241](index=241&type=chunk) - The company's **networks and infrastructure** are vulnerable to disruptions from natural disasters and power outages, a risk exacerbated by **extreme weather and climate change**, potentially causing service interruptions and financial losses[242](index=242&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity for Q3 2021, including the number of shares bought back and the remaining authorized amount for future repurchases Issuer Purchases of Equity Securities (Q3 2021) | Period | Total Shares Purchased | Average Price Paid per Share | Maximum Dollar Value Remaining for Purchase | | :--- | :--- | :--- | :--- | | **July 2021** | 670,885 | $31.23 | $1,249,759,190 | | **August 2021** | 1,921,894 | $30.42 | $1,191,302,219 | | **September 2021** | — | — | $1,191,302,219 | [Exhibits](index=61&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including a separation agreement, CEO and CFO certifications, and financial statements in XBRL format - Exhibits filed with the report include a **separation agreement**, **CEO/CFO certifications** under Sections 302 and 906, and **XBRL data files**[245](index=245&type=chunk)

Altice USA, Inc. (NYSE:ATUS) Q2 2021 Earnings Conference Call July 28, 2021 4:30 PM ET Company Participants Nick Brown – Senior Vice President-Corporate Finance & Development Dexter Goei – Chief Executive Officer Mike Grau – Chief Financial Officer Conference Call Participants Philip Cusick – JPMorgan Doug Mitchelson – Credit Suisse Brett Feldman – Goldman Sachs John Hodulik – UBS James Ratcliffe – Evercore ISI Ben Swinburne – Morgan Stanley Kutgun Maral – RBC Capital Markets Jonathan Chaplin – New Street C ...