Optimum Communications, Inc.: Form 10-Q for the period ended Mar 31, 2026

This Form 10-Q contains statements that constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Act of 1934, as amended. In this Form 10-Q there are statements concerning our future operating results and future financial performance. Words such as "expects", "anticipates", "believes", "estimates", "may", "will", "should", "could", "potential", "continue", "intends", "plans" and similar words and terms used in the discussion of future operating results, future financial performance and future events identify forward-looking statements. Investors are cautioned that such forward-looking statements are not guarantees of future performance, results or events and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors.

We operate in a highly competitive, consumer and technology driven and rapidly changing business that is affected by government regulation and economic, strategic, technological, political and social conditions. Various factors could adversely affect our operations, business or financial results in the future and cause our actual results to differ materially from those contained in the forward-looking statements. In addition, important factors that could cause our actual results to differ materially from those in our forward-looking statements include:

• competition for broadband, video, and telephony customers from existing competitors (such as broadband communications companies, direct broadcast satellite providers, wireless data and telephony providers and Internet-based providers) and new fiber-based competitors entering our footprint;
• changes in consumer preferences, laws and regulations or technology that may cause us to change our operational strategies;
• increased difficulty negotiating programming agreements on favorable terms, if at all, resulting in increased costs to us and the loss of popular programming;
• increasing programming costs and delivery expenses related to our products and services;
• our ability to achieve anticipated customer and revenue growth, to successfully introduce new products and services and to implement our growth strategy;
• our ability to complete our capital investment plans on time and on budget, including our plan to build a parallel fiber-to-the-home ("FTTH") network;
• our ability to develop mobile voice and data services and our ability to attract customers to these services;
• the effects of economic conditions or other factors which may negatively affect our customers’ demand for our current and future products and services;
• the effects of industry conditions;
• demand for digital and linear advertising products and services;
• our substantial indebtedness and debt service obligations;
• adverse changes in the credit market and availability of capital to refinance or repay future debt obligations, and our ability to adequately address the substantial doubt as to our ability to continue as a going concern;
• changes as a result of any tax reforms that may affect our business;
• financial community and rating agency perceptions of our business, operations, financial condition, and the industries in which we operate;
• the restrictions contained in our financing agreements;
• our ability to generate sufficient cash flow to meet our debt service obligations;
• fluctuations in interest rates which may cause our interest expense to vary from quarter to quarter;
• technical failures, equipment defects, physical or electronic break-ins to our services, computer viruses, and similar problems;
• cybersecurity incidents as a result of hacking, phishing, denial of service attacks, dissemination of computer viruses, ransomware and other malicious software, misappropriation of data, and other malicious attempts;
• disruptions to our networks, infrastructure, and facilities as a result of natural disasters, power outages, accidents, maintenance failures, telecommunications failures, degradation of plant assets, terrorist attacks, and similar events;
• our ability to obtain necessary hardware, software, communications equipment and services and other items from our vendors at reasonable costs;
• our ability to effectively integrate acquisitions and to maximize expected operating efficiencies from our acquisitions, if any;
• significant unanticipated increases in the use of bandwidth-intensive Internet-based services;
• the outcome of litigation, government investigations and other proceedings; and
• other risks and uncertainties inherent in our cable and broadband communications businesses and our other businesses, including those listed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 13, 2026 (the "Annual Report").

These factors are not necessarily all of the important factors that could cause our actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors could cause our actual results to differ materially from those expressed in any of our forward-looking statements.

Given these uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made only as of the date of this Quarterly Report. Except to the extent required by law, we do not undertake, and specifically decline any obligation, to update any forward-looking statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

You should read this Quarterly Report with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. We qualify all forward-looking statements by these cautionary statements.

Certain numerical figures included in this Quarterly Report have been subject to rounding adjustments. Accordingly, such numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

All dollar amounts, except per customer and per share data, included in the following discussion, are presented in thousands.

Overview

Our Business

We principally provide broadband communications and video services in the United States and market our services under the Optimum brand. We deliver broadband, video, telephony, and mobile services to approximately 4.3 million residential and business customers across our footprint. Our footprint extends across 21 states (primarily in the New York metropolitan area and various markets in the south-central United States) through a fiber-rich hybrid-fiber coaxial ("HFC") broadband network and a FTTH network with approximately 10.0 million total passings as of March 31, 2026. Additionally, we offer news programming and advertising services.

Key Factors Impacting Operating Results and Financial Condition

Our future performance is dependent, to a large extent, on the impact of direct competition, general economic conditions (including capital and credit market conditions), our ability to manage our businesses effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers. For more information, see "Risk Factors" and "Business–Competition" included in our Annual Report and the cautionary statement regarding forward-looking statements included in this Quarterly Report.

We derive revenue principally through monthly charges to residential customers of our broadband, video, telephony and mobile services. We also derive revenue from digital video recorder, video-on-demand ("VOD"), pay-per-view, installation and home shopping commissions. Our residential broadband, video, telephony and mobile services accounted for approximately 41%, 29%, 3%, and 2%, respectively, of our consolidated revenue for the three months ended March 31, 2026. We also derive revenue from the sale of a wide and growing variety of products and services to both large enterprise and small and medium-sized business ("SMB") customers, including broadband, telephony, networking, video, and mobile services. For the three months ended March 31, 2026, 18% of our consolidated revenue was derived from these business services. In addition, we derive revenue from the sale of advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), digital advertising, data analytics and affiliation fees for news programming, which accounted for approximately 6% of our consolidated revenue for the three months ended March 31, 2026. Our other revenue (which primarily consists of mobile equipment revenue) for the three months ended March 31, 2026 accounted for approximately 1% of our consolidated revenue.

Revenue is impacted by rate increases, changes in promotional offerings, changes in the number of customers that subscribe to our services, including additional services sold to our existing customers, programming package changes by our video customers, speed tier changes by our broadband customers, acquisitions/dispositions and construction of cable systems that result in the addition of new customers. Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.

We operate in a highly competitive, consumer-driven industry and we compete against a variety of broadband, video, mobile, fixed wireless broadband and fixed-line telephony providers and delivery systems, including broadband communications companies, wireless data and telephony providers, fiber-based service providers, satellite-based connectivity providers, Internet-delivered video content and broadcast television signals available to residential and business customers in our service areas. Emerging satellite broadband providers are beginning to offer high-speed connectivity in certain geographies that can compete with traditional broadband, although their overall presence in our footprint remains limited. Our competitors include Verizon Communications Inc., AT&T Inc., T-Mobile US, Inc., Charter Communications, Inc., Comcast Corporation, and emerging satellite-based broadband providers, as well as DirecTV, DISH Network (a wholly-owned subsidiary of EchoStar Corporation), Lumen Technologies, Inc.'s consumer brands, including CenturyLink and Quantum Fiber, and other providers. Consumers' selection of an alternate source of service, whether due to economic constraints, technological advances, or preference, negatively impacts the demand for our services. For more information on our competitive landscape, see "Risk Factors" and "Business–Competition" included in our Annual Report.

Our programming costs, which are the most significant component of our operating expenses, are impacted by changes in contractual rates, changes in the number of customers receiving certain programming services, new channel launches, and channel drops. We expect contractual rates to increase in the future. See "Results of Operations" below for more information regarding the key factors impacting our revenues and operating expenses.

Historically, we have made substantial investments in our network and the development of new and innovative products and other service offerings for our customers as a way of differentiating ourselves from our competitors and we expect to do so in the future. Our FTTH network build has enabled us to deliver multi-gig broadband speeds to FTTH customers in order to meet the growing data needs of residential and business customers. Additionally, we are investing in our HFC network which includes a multi-gig network upgrade plan through targeted mid-split upgrades. Finally, we offer a full service mobile offering to consumers across our footprint. We may incur greater than anticipated capital expenditures in connection with these initiatives, fail to realize anticipated benefits, experience delays and business disruptions, or encounter other challenges to executing them as planned. See "Liquidity and Capital Resources– Capital Expenditures" for additional information regarding our capital expenditures.

Non-GAAP Financial Measures

We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, gain (loss) on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization, share-based compensation, restructuring, impairments and other operating items (such as significant legal settlements and contractual payments for terminated employees). See reconciliation of net income (loss) to Adjusted EBITDA below.

Adjusted EBITDA eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our business and from intangible assets recognized from acquisitions, as well as certain non-cash and other operating items that affect the period-to-period comparability of our operating performance. In addition, Adjusted EBITDA is unaffected by our capital and tax structures and by our investment activities.

We believe Adjusted EBITDA is an appropriate measure for evaluating our operating performance. Adjusted EBITDA and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in our industry. Internally, we use revenue and Adjusted EBITDA measures as important indicators of our business performance and evaluate management’s effectiveness with specific reference to these indicators. We believe Adjusted EBITDA provides management and investors a useful measure for period-to-period comparisons of our core business and operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to our ongoing operating results. Adjusted EBITDA should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss) and other measures of performance presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.

We also use Free Cash Flow (defined as net cash flows from operating activities less cash capital expenditures) as a liquidity measure. We believe this measure is useful to investors in evaluating our ability to service our debt and make continuing investments with internally generated funds, although it may not be directly comparable to similar measures reported by other companies.

Results of Operations - Optimum Communications

(unaudited)

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The following is a reconciliation of net loss to Adjusted EBITDA (unaudited):

The following is a reconciliation of net cash flow from operating activities to Free Cash Flow (Deficit) (unaudited):

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The following table sets forth certain customer metrics (unaudited):

(in thousands)

(a) Represents the estimated number of single residence homes, apartments, and condominium units passed by our HFC and FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our HFC and FTTH network. Broadband services were not available to approximately 26 thousand passings and telephony services were not available to approximately 460 thousand passings.

(b) Represents number of households/businesses that receive at least one of our fixed-line services. Customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our HFC and FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk residential customers, such as an apartment building, we count each subscribing unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual rooms at that hotel. Total customer relationships exclude mobile-only customer relationships.

(c) Represents the number of total customer relationships divided by total passings.

(d) Calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video, telephony, and mobile services to residential customers by the average number of total residential customers for the same period (excluding mobile-only customer relationships).

(e) Mobile lines represent the number of residential and business customers’ wireless connections, which include mobile phone handsets and other mobile wireless connected devices. An individual customer relationship may have multiple mobile lines. The total mobile ending lines as of March 31, 2026, December 31, 2025 and March 31, 2025 include approximately 20.9 thousand, 17.6 thousand and 7.5 thousand lines related to business customers, respectively. The service revenue related to these business customers is reflected in business services and wholesale in the table above.

(f) Represents the estimated number of single residence homes, apartments, and condominium units passed by the FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our FTTH network.

(g) Represents number of households/businesses that receive at least one of our fixed-line services on our FTTH network. FTTH customers represent each customer account (set up and segregated by customer name and address), weighted equally and counted as one customer, regardless of size, revenue generated, or number of boxes, units, or outlets on our FTTH network. Free accounts are included in the customer counts along with all active accounts, but they are limited to a prescribed group. Most of these accounts are also not entirely free, as they typically generate revenue through pay-per view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion. In counting bulk residential customers, such as an apartment building, we count each subscribing unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual rooms at that hotel.

(h) Represents the number of total FTTH customer relationships divided by FTTH total passings.

(i) Customer metrics as of March 31, 2026 reflect adjustments that relate to prior periods resulting in a decrease of 8.6 thousand residential customer relationships, 8.1 thousand broadband customers and 8.6 thousand video customers. The impact of these adjustments to customer relationships, broadband and video customer net additions was not material for any one period presented and as such prior period metrics were not restated.

Comparison of Results for the Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025

Broadband Revenue

Broadband revenue for the three months ended March 31, 2026 and 2025 was $850,039 and $899,561, respectively. Broadband revenue is derived principally through monthly charges to residential subscribers of our broadband services. Broadband revenue decreased $49,522 (6%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease was due primarily to a decline in broadband customers and lower average recurring broadband revenue per broadband subscriber.

Video Revenue

Video revenue for the three months ended March 31, 2026 and 2025 was $602,223 and $665,568, respectively. Video revenue is derived principally through monthly charges to residential customers of our video services. Video revenue decreased $63,345 (10%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease was due primarily to a decline in video customers, partially offset by higher average recurring video revenue per video customer, primarily driven by certain rate increases. In addition, customer credits attributable to the temporary interruption of certain video programming during the three months ended March 31, 2025 partially offset the year-over-year decline.

Telephony Revenue

Telephony revenue for the three months ended March 31, 2026 and 2025 was $58,406 and $66,412, respectively. Telephony revenue is derived principally through monthly charges to residential customers of our telephony services. Telephony revenue decreased $8,006 (12%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease was due primarily to declines in telephony customers, partially offset by higher average recurring telephony revenue per telephony customer.

Mobile Service Revenue

Mobile service revenue for the three months ended March 31, 2026 and 2025 was $49,549 and $36,699, respectively. The increase of $12,850 (35%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily due to an increase in mobile lines, as well as an increase in certain fees and surcharges as compared to the prior year.

Business Services and Wholesale Revenue

Business services and wholesale revenue for the three months ended March 31, 2026 and 2025 was $364,300 and $363,545, respectively. Business services and wholesale revenue is derived primarily from the sale of fiber-based telecommunications services to the business market, and the sale of broadband, video, telephony, and mobile services to SMB customers.

Business services and wholesale revenue increased $755 for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily due to increases in Ethernet and other fees and surcharges revenue from our Lightpath business, partially offset by a decline in SMB customers.

News and Advertising Revenue

News and advertising revenue for the three months ended March 31, 2026 and 2025 was $119,674 and $102,410, respectively. News and advertising revenue is primarily derived from the sale of (i) advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), (ii) digital advertising, (iii) data analytics, and (iv) affiliation fees for news programming.

News and advertising revenue increased $17,264 (17%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily due to an increase in linear advertising revenue.

Other Revenue

Other revenue for the three months ended March 31, 2026 and 2025 was $21,177 and $18,087, respectively. Other revenue includes revenue from sales of mobile equipment and other miscellaneous revenue streams. Other revenue increased $3,090 (17%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily due to higher mobile equipment sales during 2026 as compared to the same period in the prior year.

Programming and Other Direct Costs

Programming and other direct costs for the three months ended March 31, 2026 and 2025 amounted to $631,129 and $670,531, respectively. Programming and other direct costs include cable programming costs, which are costs paid to programmers (net of amortization of any incentives received from programmers for carriage) for cable content (including costs of VOD and pay-per-view) and are generally paid on a per-customer basis. These costs are impacted by changes in contractual rates, changes in the number of customers receiving certain programming services, new channel launches, and channel drops. These costs also include interconnection, call completion, circuit and transport fees paid to other telecommunication companies for the transport and termination of voice and data services, which typically vary based on rate changes and the level of usage by our customers. These costs also include franchise fees which are payable to the state governments and local municipalities where we operate and are primarily based on a percentage of certain categories of revenue derived from the provision of video service over our cable systems, which vary by state and municipality. These costs change in relation to changes in such categories of revenues or rate changes. Additionally, these costs include the cost of media for advertising spots sold, the cost of mobile devices sold to our customers and direct costs of providing mobile services.

The decrease in programming and other direct costs of $39,402 (6%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily attributable to the following:

Programming costs

Programming costs aggregated $441,342 and $504,756 for the three months ended March 31, 2026 and 2025, respectively. Our programming costs in 2026 will continue to be impacted by changes in the number of video customers and by changes in programming rates, the latter of which we expect will increase.

Other Operating Expenses

Other operating expenses for the three months ended March 31, 2026 and 2025 amounted to $660,203 and $698,186, respectively. Other operating expenses include staff costs and employee benefits including salaries of company employees and related taxes, benefits and other employee related expenses, as well as third-party labor costs. Other operating expenses also include network management and field service costs, which represent costs associated with the maintenance of our broadband network, including costs of certain customer connections and other costs associated with providing and maintaining services to our customers.

Customer installation and network repair and maintenance costs may fluctuate as a result of changes in the level of capitalizable activities, maintenance activities and the utilization of contractors as compared to employees. Costs associated with the initial deployment of new customer premise equipment necessary to provide services are capitalized. The costs of redeployment of customer premise equipment are expensed as incurred.

Other operating expenses also include costs related to our call center operations that handle customer inquiries and billing and collection activities, and sales and marketing costs, which include advertising production and placement costs associated with acquiring and retaining customers. These costs vary period to period and certain of these costs, such as sales and marketing, may increase with intense competition. Additionally, other operating expenses include various other administrative costs.

The decrease in other operating expenses of $37,983 (5%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was attributable to the following:

Restructuring, Impairments and Other Operating Items

Restructuring, impairments and other operating items for the three months ended March 31, 2026 and 2025 amounted to $2,727,629 and $21,622, respectively, and comprised the following:

(a) See Note 8 for a discussion of the impairment charge related to our indefinite-lived cable franchise rights.

(b) Amounts reflect estimated amounts for certain legal matters, including adjustments to these estimates, and costs to early terminate contracts with vendors.

Depreciation and Amortization

Depreciation and amortization for the three months ended March 31, 2026 and 2025 amounted to $406,496 and $418,485, respectively. The decrease in depreciation and amortization of $11,989 (3%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was primarily due to lower amortization.

Adjusted EBITDA

Adjusted EBITDA amounted to $789,013 and $799,014 for the three months ended March 31, 2026 and 2025, respectively.

Adjusted EBITDA is a non-GAAP measure that is defined as net income (loss) excluding income taxes, non-operating income or expenses, gain (loss) on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization, share-based compensation, restructuring, impairments and other operating items (such as significant legal settlements and contractual payments for terminated employees). See reconciliation of net income (loss) to Adjusted EBITDA above.

The decrease in Adjusted EBITDA of $10,001 (1%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was due to a decrease in revenue, partially offset by a decrease in operating expenses during 2026 (excluding depreciation and amortization, share-based compensation, restructuring, impairments and other operating items), as discussed above.

Free Cash Flow (Deficit)

Free Cash Flow (Deficit) was $(137,421) and $(168,641) for the three months ended March 31, 2026 and 2025, respectively. The decrease in Free Cash Flow (Deficit) of $31,220 for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was due to a decrease in capital expenditures, offset by lower net cash provided by operating activities.

Interest Expense, net

Interest expense, net was $457,819 for the three months ended March 31, 2026 as compared to $428,016 for the same periods in the prior year. The increase of $29,803 (7%) for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 was attributable to the following:

Gain (Loss) on Interest Rate Swap Contracts, net

Gain (loss) on interest rate swap contracts, net was $2,398 and $(1,719) for the three months ended March 31, 2026 and 2025, respectively. These amounts primarily represent the change in the fair value of our interest rate swap contracts. These swap contracts are not designated as hedges for accounting purposes. The gain for the three months ended March 31, 2026 included a $2,458 gain related to the early termination of Lightpath interest rate swap agreements with an aggregate notional value of $575,000.

Loss on Extinguishment of Debt and Write-off of Deferred Financing Costs

Loss on extinguishment of debt and write-off of deferred financing costs amounted to $106,045 for the three months ended March 31, 2026, and related to the following:

Other Expense, net

Other expense, net amounted to $529 and $963 for the three months ended March 31, 2026 and 2025, respectively. These amounts include the non-service benefit or cost components of our pension plans.

Income Tax Benefit

For the three months ended March 31, 2026, we recorded a tax benefit of $45,108 on pre-tax loss of $2,922,084, resulting in an effective tax rate that was lower than the U.S. statutory tax rate. The lower rate is primarily due to the nonrecognition for tax purposes of the intangible impairment charge.

For the three months ended March 31, 2025, we recorded a tax benefit of $15,964 on pre-tax loss of $87,235. The effective tax rate was lower than the U.S. statutory tax rate primarily due to the increase in tax deficiencies on share-based compensation.

CSC HOLDINGS, LLC

The consolidated statements of operations of CSC Holdings are essentially identical to the consolidated statements of operations of Optimum Communications, except for the following (unaudited):

Refer to Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" herein.

The following is a reconciliation of CSC Holdings' net loss to Adjusted EBITDA (unaudited):

Refer to Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" herein.

The following is a reconciliation of CSC Holdings' net cash flow from operating activities to Free Cash Flow (Deficit) (unaudited):

The differences in Adjusted EBITDA and Free Cash Flow (Deficit) between CSC Holdings and Optimum Communications relate to the Captive which holds certain workers' compensation, general and automobile liabilities. See Note 13.

CSC HOLDINGS RESTRICTED GROUP

For financing purposes, CSC Holdings is structured as a "Restricted Group" and an "Unrestricted Group." The Restricted Group was historically comprised of CSC Holdings and substantially all of its wholly-owned operating subsidiaries. These Restricted Group subsidiaries are subject to the covenants and restrictions of the CSC Holdings' Credit Facility and the indentures governing the notes issued by CSC Holdings. The Unrestricted Group includes certain designated subsidiaries and investments (the "Unrestricted Group") which are not subject to such covenants.

The composition of the Restricted Group was modified as a result of the NYC ABS transaction in July 2025 and an amendment to the CSC Holdings' Credit Facility in November 2025, which resulted in certain subsidiaries being re-designated as unrestricted subsidiaries. The Company’s financial information is now presented to reflect the current composition of the Restricted Group following these re-designations.

The financial information set forth below reflects the financial condition and results of operations of the Restricted Group, presented separately from the financial condition and results of operations of the Unrestricted Group. To provide a meaningful comparison of the current composition of the Restricted Group, the financial information as of and for the three months ended March 31, 2026 and 2025 is presented on a pro forma basis as if the July 2025 designation and the November 2025 designation had, in each case, occurred on January 1, 2025.

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LIQUIDITY AND CAPITAL RESOURCES

Optimum Communications has no operations independent of its subsidiaries. Funding for our subsidiaries has generally been provided by cash flow from their respective operations, cash on hand and borrowings under the CSC Holdings revolving credit facility and the proceeds from the issuance of securities and borrowings under syndicated term loans in the capital markets. Our decision as to the use of cash generated from operating activities, cash on hand, borrowings under the revolving credit facility or accessing the capital markets has been based upon an ongoing review of the funding needs of the business, the optimal allocation of cash resources, the timing of cash flow generation and the cost of borrowing under the revolving credit facility, debt securities, and syndicated term loans.

We expect to utilize Free Cash Flow and availability under the CSC Holdings revolving credit facility, as well as future refinancing transactions, to further extend the maturities of, or reduce the principal on, our debt obligations. The timing and terms of any refinancing transactions will be subject to, among other factors, market conditions. Additionally, we may, from time to time, depending on market conditions and other factors, use cash on hand and the proceeds from other borrowings to repay the outstanding debt through open market purchases, privately negotiated purchases, tender offers, exchange offers or redemptions, or engage in similar transactions.

We believe existing cash balances, operating cash flows and availability under the CSC Holdings revolving credit facility will provide adequate funds to support our current operating plan and make planned capital expenditures for the next twelve months. However, we must refinance or restructure our debt, or raise additional capital sufficient to satisfy our debt maturities in April 2027. Our ability to refinance our debt or access the capital markets is subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control. Competition, market disruptions or a deterioration in economic conditions could lead to lower demand for our products, as well as lower levels of advertising, and increased incidence of customers' inability to pay for the services we provide. These events would adversely impact our results of operations, cash flows and financial position. Although we currently believe amounts available under the CSC Holdings revolving credit facility will be available in accordance with its terms, we can provide no assurance that access to such funds will not be impacted by adverse conditions in the financial markets or other conditions beyond our control. The obligations of the financial institutions under the revolving credit facility are several and not joint and, as a result, a funding default by one or more institutions does not need to be made up by the others.

In the longer term, we may not be able to generate sufficient cash from operations to fund anticipated capital expenditures, meet all existing future contractual payment obligations and repay our debt at maturity. As a result, we could be dependent upon our continued access to the capital and credit markets to issue additional debt or equity or refinance existing debt obligations. We intend to raise significant amounts of funding over the next several years to fund capital expenditures, repay existing obligations and meet other obligations, and the failure to do so successfully could adversely affect our business, financial condition, liquidity, and results of operations. If we are unable to do so, we will need to take other actions including deferring capital expenditures, selling assets, seeking strategic investments from third parties or reducing discretionary uses of cash.

As reflected on the consolidated financial statements, as of March 31, 2026, we had cash and cash equivalents of $1,048,634, and we had principal amounts of debt of $4,130,000 maturing in April 2027 and $2,125,000 maturing in July 2027. Our ability to address these maturities depends on our ability to successfully refinance, restructure or otherwise extend such indebtedness or to raise additional capital to repay the indebtedness.

Because we do not currently have committed financing or cash and cash equivalents combined with projected future cash flows sufficient to satisfy our debt maturities arising within the next twelve months, substantial doubt exists about our ability to continue as a going concern within one year after the date these consolidated financial statements are issued. While management is pursuing efforts to refinance or restructure the Company’s debt, or to raise additional capital sufficient to satisfy these debt maturities, there is no assurance these efforts will be successful. See “Risk Factors—We currently do not have the necessary cash on hand, projected future cash flows or committed financing to fund our obligations over the next twelve months, which raises substantial doubt about our ability to continue as a going concern” for additional information on risks related to our indebtedness.

Debt Outstanding

The following tables summarize the carrying value of our outstanding debt, net of unamortized deferred financing costs, discounts and premiums (excluding accrued interest) as of March 31, 2026, as well as interest expense for the three months ended March 31, 2026:

(a) Excludes principal balance of notes payable to affiliate reflected on CSC Holdings' balance sheet and the related interest expense which are eliminated in the Optimum Communications consolidated financial statements. See Note 13.

(b) Includes interest expense of $3,167 related to the NYC ABS receivables facility loan that was repaid in January 2026.

Payment Obligations Related to Debt

As of March 31, 2026, total amounts payable in connection with our outstanding obligations, including related interest, but excluding finance lease obligations and the impact of our interest swap agreements, were as follows:

For financing purposes, we have three debt silos: CSC Holdings, the UnSub Group (defined below) and Lightpath. The CSC Holdings silo is structured as a restricted group (the "CSC Holdings Restricted Group") and an unrestricted group, which includes certain designated subsidiaries. The CSC Holdings Restricted Group is comprised of CSC Holdings and its wholly-owned operating subsidiaries, excluding Lightpath and certain of its designated subsidiaries, Cablevision Litchfield, LLC ("Cablevision Litchfield"), CSC Optimum Holdings, LLC ("CSC Optimum") and certain subsidiaries of CSC Holdings designated as "unrestricted subsidiaries" for the purposes of the CSC Holdings silo (collectively, the "UnSub Group"). The CSC Holdings Restricted Group is subject to the covenants and restrictions of CSC Holdings' credit facility and indentures governing the notes issued by CSC Holdings. The Lightpath silo includes substantially all of Lightpath's operating subsidiaries which are subject to the covenants and restrictions of the secured fiber network revenue notes issued by Lightpath. The UnSub Group is subject to the covenants and restrictions of the UnSub Group Facility.

CSC Holdings Restricted Group

Sources of cash for the CSC Holdings Restricted Group include primarily cash flow from the operations of the businesses in the CSC Holdings Restricted Group, borrowings under its credit facility and issuance of securities in the capital markets, contributions from its parent, and, from time to time, distributions or loans from its subsidiaries. The CSC Holdings Restricted Group's principal uses of cash include: capital spending, in particular, the capital requirements associated with the upgrade of our digital broadband, video, and telephony services, including costs to build our FTTH network; debt service; other corporate expenses and changes in working capital; and investments that it may fund from time to time.

CSC Holdings Credit Facilities

In October 2015, a wholly-owned subsidiary of Optimum Communications, which merged with and into CSC Holdings on June 21, 2016, entered into a senior secured credit facility, which, as amended, currently provides for U.S. dollar term loans comprising (i) an incremental term loan amount of $3,000,000 ($2,820,000 outstanding as of March 31, 2026) ("Incremental Term Loan B-5") and U.S. dollar revolving loan commitments in an aggregate principal amount of $2,475,000 ($2,125,000 outstanding as of March 31, 2026) (the "CSC Revolving Credit Facility" and, together with the Incremental Term Loan B-5, the "CSC Credit Facilities"), which are governed by a credit facilities agreement entered into by, inter alios, CSC Holdings, certain lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent and security agent (as amended, restated, supplemented, or otherwise modified from time to time, the "CSC Credit Facilities Agreement").

In November 2025, the proceeds from the issuance of the Incremental Term Loan B-7 were used to (i) repay the outstanding principal balance of the Incremental Term Loan B-6 and (ii) pay the fees, costs and expenses associated with these transactions.

At March 31, 2026, $200,261 of the CSC Revolving Credit Facility was restricted for certain letters of credit issued on our behalf and $149,739 was undrawn and available, subject to covenant limitations.

As of March 31, 2026, CSC Holdings was in compliance with applicable financial covenants under the CSC Credit Facilities.

See Note 9 to our consolidated financial statements for further information regarding the CSC Credit Facilities Agreement.

Senior Guaranteed Notes and Senior Notes

As of March 31, 2026, CSC Holdings was in compliance with applicable financial covenants under each respective indenture by which the senior guaranteed notes and senior notes were issued.

UnSub Group Credit Facility

On November 25, 2025, Cablevision Litchfield, LLC ("Cablevision Litchfield"), and CSC Optimum LLC ("CSC Optimum"), each an indirect wholly-owned subsidiary of the Company, entered into a Credit Agreement (the "Initial UnSub Group Credit Facility"), by and among Cablevision Litchfield and CSC Optimum, each as a borrower, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. The Initial UnSub Group Credit Facility provided for, among other things, initial term loans in an aggregate principal amount of $2,000,000 (the "Initial UnSub Group Credit Facility Loans"). The Initial UnSub Group Credit Facility Loans were used to repay in full the Incremental Term Loan B-7 under the CSC Credit Facilities.

On January 12, 2026, Cablevision Litchfield and CSC Optimum entered into an Amended and Restated Credit Agreement (the "A&R UnSub Credit Agreement"), by and among Cablevision Litchfield and CSC Optimum, each as a borrower, the guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. The A&R UnSub Credit Agreement provided for, among other things, incremental term loans in an aggregate principal amount of $1,100,000 (the "Incremental UnSub Credit Facility Loans" and, together with the Initial UnSub Group Credit Facility Loans, the "Credit Facility Loans"). Effective February 11, 2026, Cablevision Funding joined the A&R UnSub Credit Agreement as borrower under solely the Incremental UnSub Credit Facility Loans. The A&R UnSub Credit Agreement amended and restated the Initial UnSub Group Credit Facility in its entirety (as so amended and restated, the "UnSub Group Credit Facility"). The Incremental UnSub Credit Facility Loans were used to repay in full the NYC ABS Loan and Security Agreement (defined above) and pay certain costs associated with the transactions. The remaining proceeds are being used for other general corporate purposes. The UnSub Group Credit Facility Loans will (i) mature on November 25, 2028, (ii) accrue interest at a fixed rate per annum equal to 9.0%, and (iii) not amortize.

Lightpath

Sources of cash for Lightpath include existing cash balances, operating cash flows from its operating subsidiaries and availability under the Variable Funding Notes and a Liquidity Funding Note facility discussed below.

Lightpath Secured Fiber Network Revenue Notes

On March 3, 2026, Cablevision Lightpath LLC ("Lightpath") refinanced all of its outstanding indebtedness through an asset‑backed securitization ("ABS") transaction. In connection with the refinancing, Lightpath repaid in full and terminated all prior debt facilities, including its senior notes, senior secured notes and its term loan facility balance previously outstanding. Upon repayment, all liens and guarantees associated with the prior facilities were released and all commitments were terminated.

The refinancing was executed through the issuance by Lightpath Fiber Issuer LLC (the “Issuer”) of Secured Fiber Network Revenue Notes, Series 2026‑1 (the “Series 2026‑1 Notes”). The Issuer is a newly formed, wholly owned and bankruptcy-remote indirect subsidiary of Lightpath.

The notes consist of $1,527,000 in aggregate principal amount of Series 2026-1, Class A-2 Notes (the “Class A-2 Notes”) and $130,000 in aggregate principal amount of Series 2026-1, Class B Notes (the “Class B Notes”). The Class A-2 Notes bear interest at a rate of 5.597%, and the Class B Notes bear interest at a rate of 5.890%.

In addition to the Series 2026-1 Notes, the Issuer also entered into a Variable Funding Note (“VFN”) facility with a revolving commitment of up to $100,000 (expandable to $300,000 subject to conditions), and a Liquidity Funding Note facility of up to $45,000, designed to support working capital and liquidity needs within the ABS structure.

Proceeds from the issuance of the Series 2026-1 Notes were used to repay all outstanding Lightpath indebtedness existing prior to the refinancing, fund required reserve accounts, including a liquidity reserve account, pay transaction fees, expenses, and other costs associated with the ABS issuance and general corporate purposes.

The Series 2026‑1 Term Notes are secured by substantially all of the fiber network assets and related customer agreements of Lightpath's asset‑owning securitized subsidiaries, which collectively serve as collateral for the securitization. The Notes are non‑recourse to Lightpath and its non‑securitized subsidiaries, other than through the guarantees provided within the ABS structure by the asset‑owning entities and Lightpath Fiber Guarantor LLC.

Interest on the Series 2026-1 Notes is fixed, payable monthly in arrears, beginning April 2026, and mature in March 2031. The securitization includes customary cash‑flow waterfalls, reserve accounts, financial covenants—including a senior debt service coverage ratio—and provisions for optional and mandatory prepayments.

Following this refinancing, Lightpath's revolving credit facility is no longer available, and borrowings will occur within the ABS structure through the Variable Funding Notes, subject to meeting required borrowing conditions. As of March 31, 2026, $6,088 of the available VFN facility was restricted for certain letters of credit issued on Lightpath's behalf.

Fair Value of Debt

At March 31, 2026, the fair value of our fixed rate debt, comprised of our senior guaranteed, our senior notes, Unsub Group Credit Facility and secured fiber network revenue notes of $14,526,161 was lower than its carrying value of $21,399,100 by $6,872,939. The fair value of these financial instruments is estimated based on reference to quoted market prices for these or comparable securities or in the case of our UnSub Group Credit Facility loan based on a discounted cash flow model. Our floating rate borrowings, comprised of our term loan and revolving credit facilities bear interest in reference to current SOFR-based market rates and thus their principal values approximate fair value. The effect of a hypothetical 100 basis point decrease in interest rates prevailing at March 31, 2026 would increase the estimated fair value of our fixed rate debt by $404,877 to $14,931,038. This estimate is based on the assumption of an immediate and parallel shift in interest rates across all maturities.

Interest Rate Risk

To manage interest rate risk, we have from time to time entered into interest rate swap contracts to adjust the proportion of total debt that is subject to variable and fixed interest rates. Such contracts effectively fix the borrowing rates on floating rate debt to provide an economic hedge against the risk of rising rates and effectively convert fixed rate borrowings to variable rates to permit us to realize lower interest expense in a declining interest rate environment. We monitor the financial institutions that are counterparties to our interest rate swap contracts and we only enter into interest rate swap contracts with financial institutions that are rated investment grade. All such contracts are carried at their fair market values on our consolidated balance sheets, with changes in fair value reflected in the consolidated statements of operations. Our interest rate swap contracts are not designated as hedges for accounting purposes. In

February 2026, we terminated all our interest rate swap agreements and received cash of $2,458. For the three months ended March 31, 2026, we recorded a gain on interest rate swap contracts of $2,398.

As of March 31, 2026, we did not hold and have not issued derivative instruments for trading or speculative purposes.

Capital Expenditures

The following table presents our capital expenditures:

Customer premise equipment includes expenditures for drop cable, fiber gateways, modems, routers and other equipment installed at customer locations. Network infrastructure includes (i) scalable infrastructure, such as headend and related equipment, (ii) line extensions, such as fiber and coaxial cable, amplifiers, electronic equipment and design and engineering costs to expand the network, and (iii) upgrade and rebuild, including costs to modify or replace existing segments of the network. Support and other capital expenditures include costs associated with the replacement or enhancement of non-network assets, such as software systems, vehicles, facilities, and office equipment. Business services capital expenditures include primarily equipment, support and other costs related to our fiber-based telecommunications business serving enterprise customers.

Cash Flow Discussion

Optimum Communications

Operating Activities

Net cash provided by operating activities amounted to $170,283 for the three months ended March 31, 2026 as compared to $187,483 for the three months ended March 31, 2025.

The decrease in net cash provided by operating activities of $17,200 in 2026 as compared to 2025 resulted from a decrease of $31,265 due to changes in working capital (including a decrease in interest payments of $67,135, offset by an increase in tax payments of $11,011) as a result of the timing of payments of liabilities, and collections of accounts receivable, among other items, partially offset by an increase in net income before depreciation and amortization and other non-cash items of $14,065.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2026 was $304,673 compared to $363,549 for the three months ended March 31, 2025. Our investing activities consisted primarily of capital expenditures of $307,704 and $356,124 for the three months ended March 31, 2026 and 2025, respectively.

Financing Activities

Net cash provided by financing activities amounted to $106,025 for the three months ended March 31, 2026, compared to $198,727 for the three months ended March 31, 2025.

In 2026, our financing activities consisted of proceeds from long-term debt of $2,756,954, partially offset by the repayment of debt of $2,524,081, additions to deferred financing costs of $112,630, principal payments on finance lease obligations of $6,289, and other cash payments of $7,929.

In 2025, our financing activities consisted of proceeds from long-term debt of $450,000, partially offset by the repayment of debt of $220,014, principal payments on finance lease obligations of $17,262 and other cash payments of $13,997.

CSC Holdings

Operating Activities

Net cash provided by operating activities amounted to $164,790 for the three months ended March 31, 2026 as compared to $189,707 for the three months ended March 31, 2025.

The decrease in cash provided by operating activities of $24,917 in 2026 as compared to 2025 resulted from a decrease of $38,863 due to changes in working capital (including a decrease in interest payments of $67,256, offset by an increase in tax payments of $11,011) as a result of the timing of payments of liabilities and collections of accounts receivable, among other items, partially offset by an increase in net income before depreciation and amortization and other non-cash items of $13,946.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2026 was $304,673 compared to $363,549 for the three months ended March 31, 2025. CSC Holdings' investing activities consisted primarily of capital expenditures of $307,704 and $356,124 for the three months ended March 31, 2026 and 2025, respectively.

Financing Activities

Net cash provided by financing activities amounted to $109,794 for the three months ended March 31, 2026, compared to $196,677 for the three months ended March 31, 2025.

In 2026, CSC Holdings' financing activities consisted of proceeds from long-term debt of $2,756,954, partially offset by repayment of debt of $2,526,081, additions to deferred financing costs of $112,630, principal payments on finance lease obligations of $6,289, and other cash payments of $2,160.

In 2025, CSC Holdings' financing activities consisted of proceeds from long-term debt of $450,000, partially offset by repayment of debt of $222,014, principal payments on finance lease obligations of $17,262, distributions to parent of $8,547 and other cash payments of $5,500.

Commitments and Contingencies

As of March 31, 2026, our commitments and contingencies not reflected on our balance sheet decreased to approximately $4,000,000 as compared to approximately $4,100,000 as of December 31, 2025. This decrease relates primarily to payments made in 2026 pursuant to programming commitments and a reduction in programming commitments due to a decrease in the number of video customers as of March 31, 2026 as compared to December 31, 2025.

The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses. For a complete discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our consolidated financial statements, please refer to our Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report.

Information relating to market risk is included in Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" under the captions "Fair Value of Debt" and "Interest Rate Risk."

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of Optimum Communications' management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined under SEC rules). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective as of March 31, 2026.

Changes in Internal Control

During the three months ended March 31, 2026, there were no changes in our internal control over financial reporting that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

We currently do not have the necessary cash on hand, projected future cash flows or committed financing to fund our obligations over the next twelve months, which raises substantial doubt about our ability to continue as a going concern.

As of the date of this report, we have significant near-term debt maturities, including $4,130,000 principal amount of debt maturing in April 2027. We do not currently have sufficient cash on hand, projected future cash flows from operations or committed financing, or other definitive arrangements, to pay this amount at maturity. These conditions raise substantial doubt about our ability to continue as a going concern, as further discussed in Note 2 in the notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

Our ability to address our future debt obligations will depend on our ability to refinance, restructure or otherwise extend the maturities of such indebtedness or to raise additional capital. While we are pursuing efforts in respect of these alternatives, there can be no assurance that we will be successful in obtaining such financing or completing a transaction on acceptable terms, on a timely basis or at all. Further, if we are unable to successfully raise additional capital, negotiate with debt holders to refinance, restructure or extend the maturities of our indebtedness, or otherwise secure adequate sources of liquidity, we may be forced to delay, curtail or discontinue certain operations or strategic initiatives.

The presence of this uncertainty surrounding our ability to continue as a going concern may also adversely impact the price of our securities, harm our current, future and potential relationships with suppliers, vendors, customers, employees and creditors, and may limit our ability to access additional financing on acceptable terms or at all. There can be no assurance that management’s plans to mitigate these risks will be successful. If we are unable to secure adequate liquidity on an acceptable timeline or at all, we may not be able to continue as a going concern, which could result in a total loss of your investment. In addition, as our cash and cash equivalents balance declines, the risks described above may continue, increase or accelerate at any time and with or without notice. We cannot guarantee the timing or outcome of any resolution and any resolution we may negotiate may materially adversely impact our business, financial condition and operations.