Cable One, Inc. - Annual Report: 2024 (Form 10-K)

Direct product costs

()()()

Labor costs

()()()All other accrued liabilities Total accounts payable and accrued liabilities$ $

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$ Accrued compensation and related benefits Deferred revenue

Old MBI Net Option(1)

All other noncurrent liabilities Total other noncurrent liabilities$ $

(1)Amount as of December 31, 2023 represents the net value of the Company's old call and put options associated with the remaining equity interests in MBI, consisting of liabilities of $ million and $ million, respectively. The New MBI Net Option is classified within other noncurrent assets in the consolidated balance sheet as of December 31, 2024. Refer to note 6 for definitions of all capitalized terms and further information on these instruments.

million in Visionary Communications, Inc., an internet service provider ("Visionary"), and funded the remaining $ million under a subscription agreement with Northwest Fiber Holdco, LLC, a fiber internet service provider ("Ziply"). In July 2023, the Company's equity investment in Wisper ISP, LLC, a wireless internet service provider ("Wisper"), was redeemed for total cash proceeds of $ million (the "Wisper Redemption"), which resulted in the recognition of a $ million gain. Also in July 2023, the Company divested its equity investment in Tristar Acquisition I Corp, a special-purpose acquisition company, for total cash proceeds of $ million, which resulted in the recognition of a $ million loss.

In June 2024, the Company invested an additional $ million in AMG Technology Holdings, LLC, a wireless internet service provider ("Nextlink"), increasing its equity interest to approximately %. Prior to this additional investment, Nextlink was accounted for as a cost method investment. After the investment, Nextlink is accounted for as an equity method investment with a one quarter reporting lag.

As of December 31, 2023, the Company held a call option to purchase all but not less than all of the remaining equity interests in Mega Broadband Investments Holdings LLC, a data, video and voice services provider in which the Company owns an approximately % equity interest (“MBI”), that the Company does not already own between January 1, 2023 and June 30, 2024. The call option expired unexercised on June 30, 2024. Certain investors in MBI held 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 between July 1, 2025 and September 30, 2025 (these call and put options are collectively referred to as the "Old MBI Net Option").

In December 2024, the Company amended its agreement with MBI, to, among other things, (i) reinstate the Company's expired call option to acquire the remaining equity interests in MBI, exercisable any time after the availability of MBI's June 30, 2025 financial statements (unless the Put Option (as defined below) has already been exercised) (the "Call Option"); (ii) amend the put option held by certain other investors in MBI to sell (and to cause all members of MBI other than the Company to sell) to the Company all membership interests not held by the Company such that the exercise can occur no earlier than January 1, 2026 (unless a change of control of the Company occurs prior to that date), and the closing can occur no earlier than October 1, 2026 (unless the Company elects to cause the closing to occur earlier) (the "Put Option," and together with the Call Option, the "New MBI Net Option"); (iii) require the Company to make a $ million net upfront cash payment to the other members of MBI (the "Upfront Payment"), which was paid on December 20, 2024; and (iv) provide for the other members of MBI to immediately receive, indirectly, the proceeds from $ million of new indebtedness recently incurred by a subsidiary of MBI (the "New MBI Debt") (collectively, the "MBI Amendment"). The purchase price payable by the Company (such purchase price, the "Call Price" or "Put Price" as applicable) upon the exercise of the Call Option or the Put Option, as applicable, is to 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. The aggregate amount of the Upfront Payment and the impact of the New MBI Debt will reduce the Call Price or Put Price payable upon the exercise of the Call Option or Put Option, as applicable, and the New MBI Debt (and the associated interest and fees) will be excluded from the calculation of MBI's total net indebtedness for purposes of determining such purchase price. Further, if the closing of the Put Option or Call Option occurs prior to October 1, 2026, the Call Price or Put Price payable will be discounted, from October 1, 2026 to the closing, at a per annum rate of %.

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%$ <%$ Nextlink <%

Point(2)

<% <% Visionary<% <% Ziply<% <% Others<% <% Total cost method investments$ $ Equity Method Investments

Clearwave Fiber(3)

~%(4)

MBI(5)

~% ~%

Nextlink

~% Total equity method investments$ $ Total equity investments$ $

(1)MetroNet Systems, LLC, a fiber internet service provider ("MetroNet").

(2)Point Broadband Holdings, LLC, a fiber internet service provider (“Point”).

(3)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 operating and financial decisions.

(4)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 differs from its economic interest in Clearwave Fiber.

(5)As a result of the Company's quarterly equity investment impairment assessment for the fourth quarter of 2024, the Company recorded a $ million non-cash impairment charge to the carrying value of its MBI investment based on MBI's recent financial performance and updated forecast information.

The carrying value of MBI exceeded the Company’s underlying equity in MBI’s net assets by $ million and $ million as of December 31, 2024 and 2023, respectively.

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)$()$()

MBI(2)

()()

Nextlink

Wisper Total$()$()$()Other Income (Expense), Net

Old MBI Net Option change in fair value

$()$ $()

Gain on MBI Amendment(3)

$ $ $

Gain (loss) on fair value adjustment of equity investments, net(4)

$ $ $ Gain (loss) on sale of equity investments, net$ $()$

(1)In the fourth quarter of 2024 Clearwave Fiber performed an impairment assessment of property, plant and equipment and is in the process of evaluating a potential impairment charge of approximately $ million to $ million that may be reflected in Cable One’s equity method investment income (loss) in the first quarter of 2025 as Cable One reports Clearwave Fiber’s results on a one quarter lag.

(2)The Company identified a $ 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 $ million was attributable to the Company’s % pro rata portion. The Company is amortizing its share on an accelerated basis over the lives of the respective assets. The Company recognized $ million, $ million and $ million of its proportionate share of MBI’s net income and $ million, $ million and $ million of its proportionate share of basis difference amortization during 2024, 2023 and 2022, respectively. MBI's equity method investment loss for 2024 also includes the $ million non-cash impairment charge discussed in the preceding table.

(3)Represents, in connection with the MBI Amendment, the excess value of (i) the sum of the Old MBI Net Option liability extinguished and the New MBI Net Option asset established, over (ii) the $ million Upfront Payment and a $ million dividend received from MBI in connection with the MBI Amendment.

(4)Amount for 2023 includes a $ million non-cash mark-to-market gain on the Company's investment in Point as a result of an observable market transaction in Point’s equity.

The following tables present summarized financial information for our equity method investments (in thousands):


	As of December 31,
	2024	2023(1)
Current assets	$	$
Noncurrent assets
Total assets	$	$

Current liabilities	$	$
Noncurrent liabilities
Total liabilities	$	$

(1)Balances as of December 31, 2023 do not include Nextlink, as Nextlink was accounted for as a cost method investment prior to June 2024.

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$ $ Total costs and expenses$ $ $ Income from operations$ $ $ Net income (loss)$()$()$

(1)Amounts for the year ended December 31, 2024 only include Nextlink for the period after the June 2024 additional investment, at which point the investment switched from a cost method to an equity method investment.

(2)Amounts for the year ended December 31, 2023 only include Wisper for the period prior to the July 2023 Wisper Redemption.

Except for the impairment of the MBI investment in the fourth quarter of 2024, no other impairments were recorded for any of the periods presented.

$ Customer premise equipment Other equipment and fixtures Buildings and improvements Capitalized software Construction in progress Land

ROU assets

Property, plant and equipment, gross Less: Accumulated depreciation and amortization()()Property, plant and equipment, net$ $

The Company contributed $ million of property, plant and equipment, net, to the Clearwave Fiber joint venture on January 1, 2022, and recognized a $ million non-cash gain on the transaction. The Company divested $ million of property, plant and equipment, net, in the dispositions of the Tallahassee, Florida system and certain other non-core assets during the second quarter of 2022 and recognized an $ million net loss.

The Company classified $ 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 consolidated balance sheet. These assets were sold during the first quarter of 2024 for total proceeds of $ million, resulting in the recognition of a $ million gain on sale.

million, $ million and $ million in 2024, 2023 and 2022, respectively.

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million and $ million as of December 31, 2024 and 2023, respectively.

July 2024 acquisition

Balance at December 31, 2024$

The Company has historically recorded any impairment of goodwill.

– $ $ $ $ $ $

Trademarks and trade names(1)

–

Wireless licenses

–

Total finite-lived intangible assets$ $ $ $ $ $ Indefinite-Lived Intangible AssetsFranchise agreements$ $ Total intangible assets, net$ $

(1)Certain fully amortized trademarks and trade names were written off during 2024 as a result of the completion of rebranding initiatives.

Intangible asset amortization expense was $ million, $ million and $ million in 2024, 2023 and 2022, respectively.

2026 2027 2028 2029 Thereafter Total$

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.

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to years, with some including an option to extend the lease for up to ten additional years and some including an option to terminate the lease within .

As a lessor, the Company has operating leases for the use of its fiber optic networks, towers and customer premise equipment. These leases have remaining lease terms ranging from less than to , with some including a lessee option to extend the leases for up to three additional years and some including an option to terminate the lease within .

Significant judgment is required when determining whether a fiber optic network access contract contains a lease, defining the duration of the lease term and selecting an appropriate discount rate, as discussed below:

•The Company concluded it was the lessee or lessor for fiber optic network access arrangements only when i) the asset is specifically identifiable, ii) substantially all the economic benefit is obtained by the lessee and iii) the lessee’s right to direct the use of the asset exists.

•The Company’s lease terms are only for periods in which there are enforceable rights. For accounting purposes, a lease is no longer enforceable when both the lessee and the lessor each have the right to terminate the lease without requiring permission from the other party with no more than an insignificant penalty. The Company’s lease terms are impacted by options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

•Most of the Company’s leases do not contain an implicit interest rate. Therefore, the Company held discussions with lenders, evaluated its published credit rating and incorporated interest rates on currently held debt in determining discount rates that reflect what the Company would pay to borrow on a collateralized basis over similar terms for its lease obligations.

As of December 31, 2024, additional operating leases that have not yet commenced were not material. Additionally, lessor accounting disclosures were not material as of and for the years ended December 31, 2024, 2023 and 2022.

Lessee Financial Information.

$ Other noncurrent assets:Operating leases$ $ Lease LiabilitiesAccounts payable and accrued liabilities:Operating leases$ $ Current portion of long-term debt:Finance leases$ $ Long-term debt:Finance leases$ $ Other noncurrent liabilities:Operating leases$ $ Total:Finance leases$ $ Operating leases$ $

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$ $ Interest on lease liabilities Operating lease expense Short-term lease expense Variable lease expense Total lease expense$ $ $

Amortization of ROU assets is included within depreciation and amortization expense; interest on lease liabilities is included within net interest expense; and operating, short-term and variable lease expense is included within operating expenses and selling, general and administrative expenses in the consolidated statements of operations and comprehensive income.

$ $ Finance leases - operating cash flows$ $ $ Operating leases - operating cash flows$ $ $

ROU assets obtained in exchange for lease liabilities:

Finance leases(1)

$ $()$

Operating leases

$ $ $

(1)The amount for 2023 includes a $ million reversal as a result of the remeasurement of an ROU asset due to a change in estimated remaining renewal periods.


	As of December 31,
	2024		2023
Weighted average remaining lease term:
Finance leases (in years)
Operating leases (in years)
Weighted average discount rate:
Finance leases		%		%
Operating leases		%		%

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$ 2026 2027 2028 2029 Thereafter Total Less: Present value discount()()Lease liability$ $

10.

$ Senior Notes (as defined below) Convertible Notes (as defined below) Finance lease liabilities Total debt Less: Unamortized debt discount()()Less: Unamortized debt issuance costs()()Less: Current portion of long-term debt()()Total long-term debt$ $

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 $ million maturing in 2025 (the “Term Loan A-2”), $ million maturing in 2027 (the “Term Loan B-2”), $ million maturing in 2027 (the “Term Loan B-3”) and $ million maturing in 2028 (the "Term Loan B-4"), as well as a $ 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”).

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 $ million to $ 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 $ million to $ 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 December 31, 2024); (v) increase the fixed spreads on the Term Loan B-2 and the Term Loan B-3 from % to %; and (vi) transition the benchmark interest rate for the Revolving Credit Facility, the Term Loan B-2 and the Term Loan B-3 from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") plus a 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 $ million under the Revolving Credit Facility and, together with the net proceeds from the TLB-3 Upsize, repaid all $ 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 basis points to basis points based on the interest period elected.

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million to $ billion; and (ii) certain other amendments to the New Credit Agreement that are 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.

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, % to % plus a basis point credit spread adjustment for SOFR loans and % to % 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, % plus a basis point credit spread adjustment for SOFR loans and % for base rate loans and (iii) with respect to the Term Loan B-4, % plus an approximately to basis point credit spread adjustment based on the interest period elected for SOFR loans and % for base rate loans.

The Senior Credit Facilities are guaranteed by the Company’s wholly owned subsidiaries (the “Guarantors”) and are secured, subject to certain exceptions, by substantially all of the assets of the Company and the Guarantors. The Company may, subject to certain specified terms and provisions, obtain additional credit facilities of up to the greater of $ million and % of Annualized Operating Cash Flow (as defined in the New Credit Agreement) plus an unlimited amount so long as, on a pro forma basis, the Company’s First Lien Net Leverage Ratio (as defined in the New Credit Agreement) is no greater than to 1.0.

The Senior Credit Facilities contain customary representations, warranties and affirmative and negative covenants, including limitations on indebtedness, liens, restricted payments, prepayments of certain indebtedness, investments, dispositions of assets, restrictions on subsidiary distributions and negative pledge clauses, fundamental changes, transactions with affiliates and amendments to organizational documents. The Senior Credit Facilities also require the Company to maintain specified ratios of total net indebtedness and first lien net indebtedness to consolidated operating cash flow. The Senior Credit Facilities also contain customary events of default, including non-payment of principal, interest, fees or other amounts, material inaccuracy of any representation or warranty, failure to observe or perform any covenant, default in respect of other material debt of the Company and of its restricted subsidiaries, bankruptcy or insolvency, the entry against the Company or any of its restricted subsidiaries of a material judgment, the occurrence of certain ERISA events, impairment of the loan documentation and the occurrence of a change of control.

The Revolving Credit Facility gives the Company the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility. letters of credit were issued under the Revolving Credit Facility as of December 31, 2024. The Company is required to pay commitment fees on any unused portion of the Revolving Credit Facility at a rate between % per annum and % per annum, determined on a quarterly basis by reference to a pricing grid based on the Company’s Total Net Leverage Ratio.

The Company repaid $ million of outstanding Revolving Credit Facility borrowings during 2024. In December 2024, the Company borrowed $ million under the Revolving Credit Facility in connection with the MBI Amendment. The borrowings under the Revolving Credit Facility accrued interest at a rate of % per annum as of December 31, 2024.

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billion of aggregate outstanding term loan borrowings and $ million of borrowings and $ million available for borrowing under the Revolving Credit Facility. %$

10/30/2029(2)

$ SOFR + bps%%Term Loan B-3

6/14/2019

10/30/2020

2/22/2023

10/30/2029(2)

SOFR + bps%%Term Loan B-45/3/2021 % 5/3/2028 SOFR + bps%%Total$ $ $

(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 $ 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.

Notes.

Senior Notes

In November 2020, the Company issued $ million aggregate principal amount of % senior notes due 2030 (the “Senior Notes”). The Senior Notes bear interest at a rate of % per annum payable semi-annually in arrears on May 15th and November 15th of each year, beginning on May 15, 2021. 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. 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 the Company obligations under the New Credit Agreement or that guarantees certain capital markets debt of the Company or a guarantor in an aggregate principal amount in excess of $ million.

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 % 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.

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 % of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase.

Convertible Notes

In March 2021, the Company issued $ million aggregate principal amount of % convertible senior notes due 2026 (the “2026 Notes”) and $ million aggregate principal amount of % 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.

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% per annum. Interest on the 2028 Notes is payable semiannually in arrears on March 15th and September 15th of each year, beginning on September 15, 2021, 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 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 $ 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 % 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 2028 Notes prior to March 20, 2025. No “sinking fund” is provided for the Convertible Notes. 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 % of the conversion price for such series of Convertible Notes then in effect for at least trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 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 % 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.

$ $ $ $ $ Less: Unamortized discount()()()()()()Less: Unamortized debt issuance costs()()()()()()Net carrying amount$ $ $ $ $ $

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$$ $$$ Amortization of discount Amortization of debt issuance costs Total interest expense$$$ $$$ Effective interest rate % % % %

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 $ 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.

Other. In connection with the Amendment that was entered into in 2024 and the entry into the New Credit Agreement in 2023, the Company capitalized $ million and $ million of debt issuance costs in 2024 and 2023, respectively. The Company wrote off to other expense $ million of existing unamortized debt issuance costs related to the entry into the New Credit Agreement in 2023. The Company recorded debt issuance cost amortization of $ million, $ million and $ million for 2024, 2023 and 2022, respectively, within net interest expense in the consolidated statements of operations and comprehensive income.

$ Term loans and Notes portion:Long-term debt (contra account) Total$ $

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2026 2027 2028 2029 Thereafter Total$

The Company has entered into a letter of credit agreement with MUFG Bank, Ltd. which provides for an additional $ million letter of credit issuing capacity. As of December 31, 2024, $ million of letter 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 % per annum.

The Company was in compliance with all debt covenants as of December 31, 2024.

11.

$()$ State and local ()()Total$ $()$ Year Ended December 31, 2023U.S. federal$ $()$ State and local Total$ $()$ Year Ended December 31, 2022U.S. federal$ $ $ State and local Total$ $ $

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% to income before income taxes as a result of the following items (in thousands):


	Year Ended December 31,
	2024	2023	2022
U.S. federal taxes at statutory rate	$	$	$
State and local taxes, net of U.S. federal tax
Total interest rate swap asset	$	$

Stockholders’ Equity:
Accumulated other comprehensive income	$	$

The combined effect of the Company’s interest rate swaps on the consolidated statements of operations and comprehensive income was as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Interest (income) expense	$	()	$	()	$

Unrealized gain (loss) on cash flow hedges, gross	$		$	()	$
Less: Tax effect	()				()
Unrealized gain (loss) on cash flow hedges, net of tax	$		$	()	$

The Company does not hold any derivative instruments for speculative trading purposes.

13.

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$ $ $ Other noncurrent assets (including current portion):Interest rate swap assetLevel 2$ $ $ $

New MBI Net Option

Level 3$ $ Liabilities:Long-term debt (including current portion):Term loansLevel 2$ $ $ $ Revolver Credit FacilityLevel 2$ $ $ $ Senior NotesLevel 2$ $ $ $ Convertible NotesLevel 2$ $ $ $ Other noncurrent liabilities:

Old MBI Net Option

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 consolidated balance sheets. Interest rate swaps are measured at fair value within the 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 New MBI Net Option and the Old MBI Net Option are measured using Monte Carlo simulations that use inputs considered unobservable and significant to the fair value measurement (level 3). 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).

%%%EBITDA volatility %%%EBITDA risk-adjusted discount rate %%%Cost of debtN/A%

N/A

The Company regularly evaluates each of the assumptions used in establishing the fair value of the New MBI Net Option (and the Old MBI Net Option prior to December 31, 2024). 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 6 for further information on these instruments.

The carrying amounts of accounts receivable, prepaid and other current assets, accounts payable and accrued liabilities and other financial assets and liabilities approximate fair value because of the short-term nature of these instruments.

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 material impairments were recorded during any of the periods presented.

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14.

held at December 31, 2024 include shares repurchased under the Company’s share repurchase programs and shares withheld for withholding tax, as described below.

Share Repurchase Programs. On May 20, 2022, the Company's Board of Directors (the "Board") authorized up to $ million of share repurchases (with no cap as to the number of shares of common stock) (the "Share Repurchase Program"). The Company had $ million of remaining share repurchase authorization under the Share Repurchase Program as of December 31, 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 trade in 2015 through December 31, 2024, the Company has repurchased shares of its common stock at an aggregate cost of $ million. The Company did repurchase any of its common stock under the Stock Repurchase Program during 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, vesting and distribution of restricted stock units ("RSUs") 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 2024, 2023 and 2022 were $ million, $ million, and $ million, for which the Company withheld , and shares of common stock, respectively.

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15.

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 (unless any retirement eligibility provisions are satisfied earlier), with forfeitures recognized as incurred.

$ $ SARs Total$ $ $

The Company recognized excess tax shortfalls of $ million and $ million and excess tax benefits of $ million related to equity-based awards during 2024, 2023 and 2022, respectively. The deferred tax asset related to all outstanding equity-based awards was $ million and $ million as of December 31, 2024 and 2023, respectively.

Restricted Stock. The Company has granted restricted shares of its common stock and RSUs subject to performance-based and/or service-based vesting conditions to officers and certain employees of the Company. Restricted Stock generally cliff-vest on the anniversary of the grant date or in to equal ratable installments beginning on the first anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date), although certain individual awards have been granted with shorter vesting periods from time to time. Settlement of RSUs are in the form of one share of the Company’s common stock and, for employees, will follow vesting. Performance-based restricted shares are or were subject to performance metrics related primarily to year-over-year growth in Adjusted EBITDA and annual adjusted capital expenditures as a percentage of total revenues or Adjusted EBITDA. Performance-based restricted stock units are subject to a performance metric related primarily to year-over-year growth in Adjusted EBITDA less capital expenditures and a market metric related to three-year cumulative total shareholder return relative to a peer group. Restricted Stock is subject to the terms and conditions of the Incentive Compensation Plans and are otherwise subject to the terms and conditions of the applicable award agreement.

The Company’s non-employee directors are entitled to an annual cash retainer of $, plus an additional annual cash retainer for each committee chair or the lead independent director, and approximately $ in RSUs. Such RSUs will generally be granted on the date of the Company’s annual stockholders’ meeting and will vest on the earlier of the first anniversary of the grant date or the annual stockholders’ meeting date immediately following the grant date, subject to the director’s continued service through such vesting date. Settlement of such RSUs will be in the form of one share of the Company’s common stock and will follow vesting, unless the director has previously elected to defer all or a portion of such settlement until his or her separation from service from the Board or a specified date. Non-employee directors may elect to defer their annual retainer and receive RSUs in lieu of annual cash fees. Any dividends associated with RSUs granted prior to the 2017 annual grant of RSUs are converted into DEUs, which will be delivered at the time of settlement of the associated RSUs.

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$ Granted$ Forfeited()$ Vested and issued()$ Outstanding as of December 31, 2022$ Granted$

Forfeited(1)

()$ Vested and issued()$ Outstanding as of December 31, 2023$ Granted$

Forfeited

()$ Vested and issued()$ Outstanding as of December 31, 2024$ Vested and deferred as of December 31, 2024$

(1)Includes shares forfeited upon the final achievement determination in 2023 for certain performance-based restricted stock awards.

At December 31, 2024, there was $ million of unrecognized compensation expense related to Restricted Stock, which is expected to be recognized over a weighted average period of years.

% %Expected volatility % %Simulation term (in years)Weighted average grant date fair value$$

Stock Appreciation Rights. The Company has granted SARs to certain officers and other employees of the Company. The SARs are generally scheduled to vest in equal ratable installments beginning on the first anniversary of the grant date (generally subject to the holder’s continued employment with the Company through the applicable vesting date). The SARs are subject to the terms and conditions of the Incentive Compensation Plans and will otherwise be subject to the terms and conditions of the applicable award agreement.

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$ $ $ Exercised()$ $ $ —Forfeited()$ $ Expired()$ $ Outstanding as of December 31, 2022$ $ $ Exercised()$ $ $ —Forfeited()$ $ Expired()$ $ Outstanding as of December 31, 2023$ $ $ Forfeited()$ $ Expired()$ $ Outstanding as of December 31, 2024$ $ $ Exercisable as of December 31, 2024$ $ $

At December 31, 2024, there was $ million of unrecognized compensation expense related to SARs, which is expected to be recognized over a weighted average period of years.

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16.

)$ $()

Gain on MBI Amendment(1)

Write-off of debt issuance costs ()

C-band spectrum relocation funding(2)

Gain (loss) on fair value adjustment of equity investment, net(3)

Gain (loss) on sale of equity investments, net ()

Other

() Other income (expense), net$()$ $()

(1)Represents, in connection with the MBI Amendment, the excess value of (i) the sum of the Old MBI Net Option liability extinguished and the New MBI Net Option asset established, over (ii) the $ million Upfront Payment and the $ million dividend received from MBI in connection with the MBI Amendment. Refer to note 6 for further information on these instruments.

(2)Represents a gain related to C-band spectrum relocation funding received from the federal government.

(3)Amount for 2023 includes a $ million non-cash mark-to-market gain on the Company's investment in Point as a result of an observable market transaction in Point’s equity.

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17.

$ $ Add: Convertible Notes interest expense, net of tax Net income - diluted$ $ $ Denominator:Weighted average common shares outstanding - basic

Effect of dilutive equity-based compensation awards(1)

Effect of dilution from if-converted Convertible Notes(2)

Weighted average common shares outstanding - dilutedNet Income per Common Share:Basic$ $ $ Diluted$ $ $ Supplemental Net Income per Common Share Disclosure:

Anti-dilutive shares from equity-based compensation awards(1)

(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 shares of common stock per weighted $1,000 principal amount of Convertible Notes outstanding during all periods presented.

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18.

$ $ $ $ 2026 2027 2028 2029 Thereafter Total$ $ $ $ $

(1)Programming purchase commitments represent contracts that the Company has with cable television networks and broadcast stations to provide programming services to subscribers. The amounts reported represent estimates of the future programming costs for these purchase commitments based on estimated subscriber numbers, tier placements as of December 31, 2024 and the per-subscriber rates contained in the contracts. Actual amounts due under such contracts may differ from the amounts above based on the actual subscriber numbers and tier placements at the time. Programming purchases pursuant to non-binding commitments are not reflected in the amounts shown.

(2)Lease payments include payment obligations related to the Company’s outstanding finance and operating lease arrangements as of December 31, 2024.

(3)Debt payments include principal repayment obligations for the Company’s outstanding debt instruments as of December 31, 2024, including $ million of current outstanding Revolving Credit Facility borrowings that mature in 2028 (which may be repaid before then).

(4)Other purchase obligations include purchase obligations related to capital projects and other legally binding commitments. Other purchase orders made in the ordinary course of business are excluded from the amounts shown but are included within accounts payable and accrued liabilities in the consolidated balance sheet.

Amounts that would be due upon the exercise of the MBI Call Option or Put Option are not included within the contractual obligations table above because the exercise of such instruments is not guaranteed and the timing of any exercise is at the discretion of each respective instrument holder.

The Company incurs the following costs as part of its operations, however, they are not included within the contractual obligations table above for the reasons discussed below:

•The Company rents space on utility poles in order to provide services to subscribers. Generally, pole rentals are cancellable on short notice. However, the Company anticipates that such rentals will recur. Rent expense for pole attachments was $ million, $ million and $ million for 2024, 2023 and 2022, respectively.

•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. These fees were $ million, $ million and $ million for 2024, 2023 and 2022, respectively. As the Company acts as principal in these arrangements, these fees are reported in video and voice revenues on a gross basis with corresponding expenses included within operating expenses in the consolidated statements of operations and comprehensive income.

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million and $ million as of December 31, 2024 and 2023, respectively. Payments under these arrangements are required only in the remote event of nonperformance. The Company does not expect that these contingent commitments will result in any amounts being paid.

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 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 6 for further information.

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Cable One, Inc. - Annual Report: 2024 (Form 10-K)

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