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What changed in Cable One, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Cable One, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+248 added−259 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in Cable One, Inc.'s 2023 10-K

248 paragraphs added · 259 removed · 199 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

78 edited+28 added−25 removed104 unchanged
Biggest changeSuch acquisitions and strategic investments could involve a number of risks and uncertainties, including: ● uncertainties as to the timing of any acquisition or strategic investment and the risk that such transactions may not be completed in a timely manner or at all; ● the possibility that any or all of the conditions to the consummation of any acquisition or strategic investment may not be satisfied or waived, including failure to receive any required regulatory approvals (or any conditions, limitations or restrictions placed in connection with such approvals); ● uncertainties related to our ability to obtain any necessary financing, or to obtain financing on favorable terms, to complete any acquisition or strategic investment; ● the difficulty in integrating new Strategic Acquirees and their operations in an efficient and effective manner; ● the challenge in achieving strategic objectives, cost savings and other anticipated benefits; ● the potential loss of key associates of a Strategic Acquiree and the difficulties of integrating personnel; ● the potential diversion of senior management’s attention from our ongoing operations; ● the difficulty of maintaining relationships with the customers, suppliers and other business partners of a Strategic Acquiree; ● the potential loss of brand recognition, customer loyalty or reputation from any rebranding efforts; ● exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, such as claims from terminated employees, customers, former stockholders or other third parties; 29 Table of Contents ● the difficulty and amount of time necessary to realize expected synergies and other benefits of the acquisitions or strategic investments; ● the risks associated with integrating financial reporting and internal control systems as well as with creating uniform standards, procedures, policies and information systems; ● the difficulty in adapting and expanding information technology systems and other business processes to incorporate the Strategic Acquirees; ● potential future impairments of goodwill associated with the Strategic Acquirees; ● in some cases, the potential for increased regulation; ● risks relating to minority ownership positions in our strategic investments, including our initial minority ownership position in MBI, such as our ability to appoint only a minority of members of the board of managers of MBI, the fact that the managers of MBI will not owe the same fiduciary duties to us that directors of a corporation would owe to stockholders and the limited category of transactions for which our consent will be needed under MBI’s operating agreement; and ● uncertainties related to the exercise of the Call Option or the Put Option (each as defined under " Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition: Liquidity and Capital Resources – Liquidity " in this Annual Report on Form 10-K) in the MBI investment, including our ability to finance the purchase of the remaining equity interests in MBI on terms acceptable to us or at all.
Biggest changeSuch acquisitions and strategic investments could involve a number of risks and uncertainties, including: • uncertainties as to the timing of any acquisition or strategic investment and the risk that such transactions may not be completed in a timely manner or at all; • the possibility that any or all of the conditions to the consummation of any acquisition or strategic investment may not be satisfied or waived, including failure to receive any required regulatory approvals (or any conditions, limitations or restrictions placed in connection with such approvals); • uncertainties related to our ability to obtain any necessary financing, or to obtain financing on favorable terms, to complete any acquisition or strategic investment; • the difficulty in integrating new Strategic Acquirees and their operations in an efficient and effective manner; • the challenge in achieving strategic objectives, cost savings and other anticipated benefits; • the potential loss of key associates of a Strategic Acquiree and the difficulties of integrating personnel; • the potential diversion of senior management’s attention from our ongoing operations; • the difficulty of maintaining relationships with the customers, suppliers and other business partners of a Strategic Acquiree; • the potential loss of brand recognition, customer loyalty or reputation from any rebranding efforts; • exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, such as claims from terminated employees, customers, former stockholders or other third parties; • the difficulty and amount of time necessary to realize expected synergies and other benefits of the acquisitions or strategic investments; • the risks associated with integrating financial reporting and internal control systems as well as with creating uniform standards, procedures, policies and information systems; • the difficulty in adapting and expanding information technology systems and other business processes to incorporate the Strategic Acquirees; • potential future impairments of goodwill associated with the Strategic Acquirees; • in some cases, the potential for increased regulation; • risks relating to minority ownership positions in our strategic investments, including our initial minority ownership position in MBI, such as our ability to appoint only a minority of members of the board of managers of MBI, the fact that the board of managers of MBI do not owe the same fiduciary duties to us that directors of a corporation would owe to stockholders and the limited category of transactions for which our consent will be needed under MBI’s operating agreement; • risks relating to our strategic investment in Clearwave Fiber, including the fact that the board of managers of Clearwave Fiber do not owe the same fiduciary duties to us that directors of a corporation would owe to stockholders, and we do not control the vote of the Clearwave Fiber board of managers with respect to most significant transactional and operational matters under the terms of Clearwave Fiber's operating agreement; and 28 Table of Contents • uncertainties related to the exercise of the Call Option or the Put Option (each as defined under "Management's Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition: Liquidity and Capital Resources – Liquidity" in this Annual Report on Form 10-K) relating to our MBI investment, including, if the Put Option is exercised, the difference between the purchase price under the Put Option and the fair value of the underlying equity interests in MBI at the time the Put Option is exercised and our ability to finance the purchase price of the Put Option on terms acceptable to us or at all.
Our systems generally operate pursuant to franchises, permits and similar authorizations issued by states or local governments controlling the public rights-of-way, which typically are non-exclusive and limited in time, contain various conditions and limitations and provide for the payment of fees to the local authority, determined generally as a percentage of revenues.
Our systems generally operate pursuant to franchises, permits and similar authorizations issued by states or local governments controlling the public rights-of-way, which typically are non-exclusive and limited in time, contain various conditions and limitations and provide for the payment of fees to a local authority, determined generally as a percentage of revenues.
Our competitors have historically included, and we expect will continue to include, DBS providers, telephone companies that offer data and video services through DSL technology or fiber-to-the-node networks, municipalities with fiber-based networks, regional fiber providers and other service providers that have been granted a franchise to operate in a geographic market in which we are already operating.
Our competitors have historically included, and we expect will continue to include, telephone companies that offer data and video services through DSL technology or fiber-to-the-node networks, municipalities with fiber-based networks, regional fiber providers and other service providers that have been granted a franchise to operate in a geographic market in which we are already operating.
Although we would likely choose to carry all primary video feeds of local broadcast stations in the markets in which we operate voluntarily, so-called “must carry” rules could, in the future, require us to carry some local broadcast television signals on some of our systems that we might not otherwise carry.
Although we would likely choose to carry all primary video feeds of local broadcast stations in the markets in which we operate voluntarily, so-called “must carry” rules could require us to carry some local broadcast television signals on some of our systems that we might not otherwise carry.
Further overbuilding could cause more of our customers to purchase data and video services from our competitors instead of from us. We also face increasing competition from wireless telephone companies for residential voice services, as our customers continue to replace our residential voice services completely with wireless voice services.
Further overbuilding could cause more of our customers to purchase data and video services from our competitors instead of from us. We also face increasing competition from wireless telephone companies for residential voice services, as our customers continue to replace our residential voice services with wireless voice services.
We depend on a limited number of third-party suppliers and licensors to supply some of the hardware and software necessary to provide some of our services, including our access to the network backbone, the modems that we lease to our customers and the delivery of our IPTV video service.
We depend on a limited number of third-party suppliers and licensors to supply some of the hardware and software necessary to provide some of our services, including our access to the network backbone, the modems we lease to our customers and the delivery of our IPTV video service.
The market price of our common stock may fluctuate significantly, depending on many factors, some of which may be beyond our control, including: ● actual or anticipated fluctuations in our operating results due to factors related to our business; ● success or failure of our business strategies; ● our quarterly or annual earnings, or those of other companies in our industry; ● our ability to obtain financing as needed; ● announcements by us or our competitors of significant acquisitions, dispositions or strategic investments; ● changes in accounting standards, policies, guidance, interpretations or principles; ● the failure of securities analysts to cover, or maintain coverage of, our common stock; ● changes in earnings estimates by securities analysts or our ability to meet those estimates; ● the operating and stock price performance of other comparable companies; ● investor perception of the Company and our industry; ● overall market fluctuations; ● results from any material litigation or government investigation; ● changes in laws and regulations (including tax laws and regulations) affecting our business; ● changes in capital gains taxes and taxes on dividends affecting stockholders; and ● general economic conditions and other external factors.
The market price of our common stock may fluctuate significantly, depending on many factors, some of which may be beyond our control, including: • actual or anticipated fluctuations in our operating results due to factors related to our business; • success or failure of our business strategies; • our quarterly or annual earnings, or those of other companies in our industry; • our ability to obtain financing as needed; • announcements by us or our competitors of significant acquisitions, dispositions or strategic investments; • changes in accounting standards, policies, guidance, interpretations or principles; • the failure of securities analysts to cover, or maintain coverage of, our common stock; • changes in earnings estimates by securities analysts or our ability to meet those estimates; • the operating and stock price performance of other comparable companies; • investor perception of the Company and our industry; 37 Table of Contents • overall market fluctuations; • results from any material litigation or government investigation; • changes in laws and regulations (including tax laws and regulations) affecting our business; • changes in capital gains taxes and taxes on dividends affecting stockholders; and • general economic conditions and other external factors.
These licensing fees have been the source of litigation in the past, and we cannot predict with certainty whether license fee disputes may arise in the future. 32 Table of Contents In addition, Congress, the FCC and other government agencies have implemented regulations that affect the types of set-top boxes that we can lease or deploy to our subscribers, and we expect these regulations may change in the future.
These licensing fees have been the source of litigation in the past, and we cannot predict with certainty whether license fee disputes may arise in the future. 31 Table of Contents In addition, Congress, the FCC and other government agencies have implemented regulations that affect the types of set-top boxes that we can lease or deploy to our subscribers, and we expect these regulations may change in the future.
These may restrict our ability to take some or all of the following actions: ● incur or guarantee additional indebtedness or sell disqualified or preferred stock; ● pay dividends on, make distributions in respect of, repurchase or redeem, capital stock; ● make acquisitions or investments; ● sell, transfer or otherwise dispose of certain assets; ● create or allow to exist liens; ● enter into sale/leaseback transactions; ● enter into agreements restricting the ability to pay dividends or make other intercompany transfers; ● consolidate, merge, sell or otherwise dispose of all or substantially all of our or our subsidiaries’ assets; 34 Table of Contents ● enter into transactions with affiliates; ● prepay, repurchase or redeem certain kinds of indebtedness; ● issue or sell stock of our subsidiaries; and/or ● significantly change the nature of our business.
These may restrict our ability to take some or all of the following actions: • incur or guarantee additional indebtedness or sell disqualified or preferred stock; • pay dividends on, make distributions in respect of, repurchase or redeem, capital stock; • make acquisitions or investments; • sell, transfer or otherwise dispose of certain assets; • create or allow to exist liens; • enter into sale/leaseback transactions; • enter into agreements restricting the ability to pay dividends or make other intercompany transfers; • consolidate, merge, sell or otherwise dispose of all or substantially all of our or our subsidiaries’ assets; • enter into transactions with affiliates; • prepay, repurchase or redeem certain kinds of indebtedness; • issue or sell stock of our subsidiaries; and/or • significantly change the nature of our business.
Although FCC rules provide that a transfer application shall be deemed granted if it is not acted upon within 120 days after submission, as a practical matter, cable operators often waive the deadline if the LFA has not completed its review to facilitate discussions and thereby avoid an LFA denying the transfer of control.
Although FCC rules provide that a transfer application shall be deemed granted if not acted upon within 120 days after submission, as a practical matter, cable operators often waive the deadline if the LFA has not completed its review to facilitate discussions and thereby avoid an LFA denying the transfer of control.
We also had $920.0 million of Convertible Notes outstanding as of December 31, 2022 that may further dilute your percentage ownership in the Company in the future if such Convertible Notes are converted. Any damage to our reputation or brand image could adversely affect our business, financial condition or results of operations.
We also had $920.0 million of Convertible Notes outstanding as of December 31, 2023 that may further dilute your percentage ownership in the Company in the future if such Convertible Notes are converted. Any damage to our reputation or brand image could adversely affect our business, financial condition or results of operations.
Intellectual property and proprietary rights of others could prevent us from using necessary technology to provide our services or subject us to expensive in tellectual property litigation. We periodically receive claims from third parties alleging that our network and information technology infrastructure infringes the intellectual property rights of others.
Intellectual property and proprietary rights of others could prevent us from using necessary technology to provide our services or subject us to expensive intellectual property litigation. We periodically receive claims from third parties alleging that our network and information technology infrastructure infringes the intellectual property rights of others.
Moreover, if the FCC adopts rules that are not competitively neutral, cable operators could be placed at a disadvantage versus other video providers. 33 Table of Contents The FCC took steps in 2017 to relax its media ownership rules, including restrictions on the number of commonly owned television stations per market as well as on newspaper/broadcast and radio/television station cross-ownership.
Moreover, if the FCC adopts rules that are not competitively neutral, cable operators could be placed at a disadvantage versus other video providers. The FCC took steps in 2017 to relax its media ownership rules, including restrictions on the number of commonly owned television stations per market as well as on newspaper/broadcast and radio/television station cross-ownership.
Several states, including Oregon and Washington (w here we also have subscribers), have adopted legislation that requires entities providing broadband internet access service in the state to comply with net neutrality requirements or that prohibits state and local government agencies from contracting with internet service providers that engage in certain network management activities based on paid prioritization, content blocking or other discrimination.
Several states, including Oregon and Washington (where we also have subscribers), have adopted legislation that requires entities providing broadband internet access service in the state to comply with net neutrality requirements or that prohibits state and local government agencies from contracting with internet service providers that engage in certain network management activities based on paid prioritization, content blocking or other discrimination.
We cannot predict the outcome of the ongoing reviews by the FCC and any subsequent review by the courts, and whether or to what extent any further revisions of the rules by the FCC or the courts may affect our operations or impose additional costs on our business.
We cannot predict the outcome of future reviews by the FCC and any subsequent review by the courts, and whether or to what extent any further revisions of the rules by the FCC or the courts may affect our operations or impose additional costs on our business.
There can be no assurance that we will continue to pay any dividend in the future. Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Delaware law may discourage takeovers and the concentration of ownership of our common stock will affect the voting results of matters subm itted for stockholder approval.
There can be no assurance that we will continue to pay any dividend in the future. Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws and Delaware law may discourage takeovers and the concentration of ownership of our common stock will affect the voting results of matters submitted for stockholder approval.
In the event our creditors accelerate the repayment of our borrowings, we may not have sufficient assets to repay such indebtedness and our financial condition will be materially negatively affected. We have variable rate indebtedness that subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
In the event our creditors accelerate the repayment of our borrowings, we may not have sufficient assets to repay such indebtedness and our financial condition will be materially negatively affected. 34 Table of Contents We have variable rate indebtedness that subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Low trading volume for our stock, which may occur if an active trading market is not sustained, among other reasons, would amplify the effect of the above factors on our stock price volatility. 39 Table of Contents Stock markets in general can experience volatility that is unrelated to the operating performance of a particular company.
Low trading volume for our stock, which may occur if an active trading market is not sustained, among other reasons, would amplify the effect of the above factors on our stock price volatility. Stock markets in general can experience volatility that is unrelated to the operating performance of a particular company.
Failure to obtain such consents on commercially reasonable and satisfactory terms may impair our entitlement to the benefit of these franchise agreements in the event of a potential transfer of control of the Company or transfers of individual franchises to another entity. We may encounter i ncreased pole attachment costs.
Failure to obtain such consents on commercially reasonable and satisfactory terms may impair our entitlement to the benefit of these franchise agreements in the event of a potential transfer of control of the Company or transfers of individual franchises to another entity. We may encounter increased pole attachment costs.
We rely on network and information systems and other technology, and a disruption or failure of such networks, systems or technology as a result of cybersecurity incidents , as well as outages, natural disasters (including extreme weather), pandemics, terrorist attacks, accidental releases of information or similar ev ents, may disrupt our business.
We rely on network and information systems and other technology, and a disruption or failure of such networks, systems or technology as a result of cybersecurity incidents, as well as outages, natural disasters (including extreme weather), pandemics, terrorist attacks, accidental releases of information or similar events, may disrupt our business.
Risks Relating to Our Business We face significant competition from other service providers , as well as other well-capitalized entrants in the video and data services industry, which could reduce our mark et share and lower our profits.
Risks Relating to Our Business We face significant competition from other service providers, as well as other well-capitalized entrants in the video and data services industry, which could reduce our market share and lower our profits.
For example, in 2019 we identified an information security incident that could affect the personal information of some of our current and former associates as well as, in some cases, their dependents, beneficiaries and others.
For example, in 2019 we identified an information security incident that could have affected the personal information of some of our current and former associates as well as, in some cases, their dependents, beneficiaries and others.
Programming costs and retransmission fees paid to major programmers and broadcasters may continue to increase as content providers are expected to continue to seek higher fees.
Programming costs and retransmission fees paid to major programmers and broadcasters may continue to increase as content providers continue to seek higher fees.
Any of the following risks could materially and adversely affect our business, financial results, financial condition and results of operations and the actual outcome of matters as to which forward-looking statements are made in this Annual Report on Form 10-K.
Any of the following risks could materially and adversely affect our business, financial results, financial condition and results of operations and the actual outcome of matters as to which forward-looking statements are made in this Annual Report on Form 10-K or in our other public disclosures.
If we are unable to meet our service level requirements, or more broadly, the expectations of our business customers, or if pandemic-related headwinds associated with business sales resume, our business sales may not increase and our results of operations may be materially negatively affected.
If we are unable to meet our service level requirements, or more broadly, the expectations of our business customers, or if economic-related headwinds associated with business sales continue, our business sales may not increase and our results of operations may be materially negatively affected.
Similarly, under these conditions the business customers that we serve in the United States may delay purchasing decisions, delay full implementation of service offerings or reduce their use of services.
Similarly, under these conditions the business customers that we serve may delay purchasing decisions, delay full implementation of service offerings or reduce their use of services.
The ability of some of our competitors to introduce new technologies, products and services more quickly than we can may adversely affect our competitive position.
The ability of some of our competitors to introduce new technologies, products and services more quickly than we are able to may adversely affect our competitive position.
Risks Relating to Our Indebtedness We have incurred substantial indebtedness , including in connection with various acquisition s , and the degree to which we are now leveraged may have a material adverse effect on our business, financial condition or result s of operations and cash flows.
Risks Relating to Our Indebtedness We have incurred substantial indebtedness, including in connection with various acquisitions, and the degree to which we are now leveraged may have a material adverse effect on our business, financial condition or results of operations and cash flows.
The inclusion of this provision in our Amended and Restated Certificate of Incorporation may discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited us and our stockholders.
The inclusion of this provision in our Amended and Restated Certificate of Incorporation may discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited us and our stockholders. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Unfavorable general economic conditions, such as a recession or economic slowdown in the United States, heightened inflation, increased unemployment levels, higher interest rates and the continuing impact of the COVID-19 pandemic, could negatively affect the affordability of and demand for some of our products and services.
Unfavorable general economic conditions, such as a recession or economic slowdown in the United States, heightened inflation, increased unemployment levels and higher interest rates, could negatively affect the affordability of and demand for some of our products and services.
The increase in programming costs and retransmission fees may continue in the future, resulting in lo wer margins and/or decreased demand for our video products.
The increase in programming costs and retransmission fees may continue in the future, resulting in lower margins and/or decreased demand for our video products.
Over the past few years, the sales margins on our residential video services, which accounted for 19.1%, 21.2% and 25.1% of our total revenues in 2022, 2021 and 2020, respectively, have decreased as a result of increased programming costs and retransmission fees and customer cord-cutting.
Over the past few years, the sales margins on our residential video services, which accounted for 15.4%, 19.1% and 21.2% of our total revenues in 2023, 2022 and 2021, respectively, have generally decreased as a result of increased programming costs and retransmission fees and customer cord-cutting.
We may also face increasing competition from various providers of wireless internet offerings, including FWA providers that are deploying high-speed “5G” wireless networks where they have higher capacity spectrum and public locations or co mmercial establishments offering Wi-Fi at no cost.
We may also face increasing competition from various providers of wireless internet offerings, including FWA data providers deploying high-speed “5G” wireless networks where they have higher capacity spectrum and public locations or commercial establishments offering Wi-Fi at no cost.
If we repurchase the Convertible Notes for cash, which holders may require upon a fundamental change as described in the applicable Convertible Note Indenture, or settle such Convertible Notes by cash or by a combination of cash and shares of our common stock in the event a holder elects to convert their Convertible Notes following a fundamental change, we will be required to make cash payments with respect to the Convertible Notes being converted or repurchased.
If we repurchase the Convertible Notes (as defined elsewhere in this Annual Report on Form 10-K) for cash, which holders may require upon a fundamental change as described in the applicable Convertible Note Indenture (as defined elsewhere in this Annual Report on Form 10-K), or settle such Convertible Notes by cash or by a combination of cash and shares of our common stock in the event a holder elects to convert their Convertible Notes following a fundamental change, we will be required to make cash payments with respect to the Convertible Notes being converted or repurchased.
As a general matter, changes to our pole attachment rate structure could significantly increase our annual pole attachment costs and materially negatively impact our operations, business, financial condition and results of operations. Changes in broadcast carriage regulations could impos e significant additional costs.
As a general matter, changes to our pole attachment rate structure could significantly increase our annual pole attachment costs and materially negatively impact our operations, business, financial condition and results of operations. 32 Table of Contents Changes in broadcast carriage regulations could impose significant additional costs.
In some cases, the FCC has adopted rules that streamline entry for new competitors (particularly those affiliated with telephone companies) and reduce franchising burdens for these new entrants. As of December 31, 2022 , approximately one-third of our footprint has been overbuilt by high-speed data service providers offering speeds of 100 Mbps or higher.
In some cases, the FCC has adopted rules that streamline entry for new competitors (particularly those affiliated with telephone companies) and reduce franchising burdens for these new entrants. As of December 31, 2023, approximately half of our footprint has been overbuilt by wired competitors offering high-speed data services with speeds of 100 Mbps or higher.
The occurrence of pandemics, epidemics or disease outbreaks could materially affect our business, financial condition, results of operations and cash flows, including due to negative impacts to the global economy, disruptions to global supply chains and workforce participation, and volatility and disruption of financial markets.
The occurrence of pandemics, epidemics or disease outbreaks, including the reemergence of the COVID-19 pandemic in severity, could materially affect our business, financial condition, results of operations and cash flows, including due to negative impacts on the global economy, disruptions to global supply chains and workforce participation, and volatility and disruption of financial markets.
These customer losses and increased costs could result in further decreases in our residential video margins, adversely impact our revenues and revenue growth rates, and adversely impact our business. 28 Table of Contents We may not be able to obtain necessary hardware, so ftware and operational support.
These customer losses and increased costs could result in further decreases in our residential video margins, adversely impact our revenues and revenue growth rates, and adversely impact our business. We may not be able to obtain necessary hardware, software and operational support.
The demand for our residential data and business services may be lower than we expect. The future growth in demand for our services is difficult to predict and may differ materially from our current expectations.
The future growth in demand for our services is difficult to predict and may differ materially from our current expectations. Our business could be adversely affected if the future demand for our services, including in particular our residential data and business services, is materially lower than we expect.
The regulation of broadband activities, including any net neutrality obligations, and any related court decisions could cause us to incur additional compliance costs, restrict our ability to profit from our existing broadband network, limit the return we can expect to achieve on past and future investments in our broadband networks and adversely affect our business.
The regulation of broadband activities, including the net neutrality, non-discrimination and other obligations described above or under " Business – Regulation and Legislation – Broadband Internet Access Services ," and any related court decisions could cause us to incur additional compliance costs, restrict our ability to profit from our existing broadband network, limit the return we can expect to achieve on past and future investments in our broadband networks and adversely affect our business.
If technical problems or other significant issues arise in connection with the implementation or operation of the new ERP system, it could have a material adverse impact on our operations, business, financial results and financial condition.
If technical problems or other significant issues arise in connection with the implementation or operation of the new ERP system, it could have a material adverse impact on our operations, business, financial results and financial condition. We are also planning to implement a new billing system beginning in 2024.
In order to continue to generate Adjusted EBITDA less capital expenditures at our desired level from data services, we need the continued flexibility to develop and refine business models that respond to changing consumer uses and demands and to manage data usage efficiently, including by charging our data subscribers higher rates based on the speed as well as overall bandwidth capacity available to, or used by, them, referred to as “usage-based billing.” Our ability to implement usage-based billing or other network management initiatives in the future may be restricted by regulations attached to new government funding programs or any new net neutrality requirements on cable operators.
In order to continue to generate Adjusted EBITDA less capital expenditures at our desired level from data services, we need the continued flexibility to develop and refine business models that respond to changing consumer uses and demands and to manage data usage efficiently, including the option of charging our data subscribers higher rates based on the speed as well as overall bandwidth capacity available to, or used by, them, referred to as “usage-based billing.” Our ability to implement usage-based billing or other network management initiatives in the future may be restricted by regulations attached to new government funding programs or any new net neutrality requirements on cable operators. 30 Table of Contents To the extent the FCC in the future limits our ability to price our data services, we may not be able to generate the margins on our data services that we anticipated in shifting our focus from video to data services, and our business could see a materially negative impact.
Alternatively, if a court were to find these provisions of our Amended and Restated Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Alternatively, if a court were to find these provisions of our Amended and Restated Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. 36 Table of Contents General Risk Factors Adverse conditions in the U.S. economy could impact our results of operations.
Furthermore, the lenders of this indebtedness may require that we pledge our assets as collateral as security for our repayment obligations. If we were unable to repay any amount of this indebtedness when due and payable, the lenders could proceed against the collateral that secures this indebtedness.
Furthermore, we have pledged our assets as collateral for our repayment obligations under a portion of our indebtedness. If we were unable to repay any amount of this indebtedness when due and payable, the lenders of this indebtedness could proceed against the collateral that secures this indebtedness.
If any of these events were to occur, it could have a material negative effect on our operations, business, financial condition and results of operations. 37 Table of Contents Pandemics, epidemics or disease outbreaks, such as t he C OVID-19 pandemic, have, and may continue to, disrupt our business and operations, which could materially affect our business, financial condition, results of operations and cash flows .
If any of these events were to occur, it could have a material negative effect on our operations, business, financial condition and results of operations. Pandemics, epidemics or disease outbreaks, such as the COVID-19 pandemic, have, and may in the future, disrupt our business and operations, which could materially affect our business, financial condition, results of operations and cash flows.
This provision eliminates a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty; provided that such provision will not eliminate or limit a director’s liability: ● for any breach of the director’s duty of loyalty; ● for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; ● under Section 174 of the DGCL (including for unlawful dividends); or ● for any transaction from which the director derives an improper personal benefit. 40 Table of Contents The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL.
This provision eliminates a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty; provided that such provision will not eliminate or limit a director’s liability: • for any breach of the director’s duty of loyalty; • for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; • under Section 174 of the DGCL (including for unlawful dividends); or • for any transaction from which the director derives an improper personal benefit.
The implementation has required and may continue to require significant investments of time, money and resources and may result in the diversion of senior management’s attention from our ongoing operations.
We implemented a new ERP system in the second quarter of 2021. The implementation has required and may continue to require significant investments of time, money and resources and may result in the diversion of senior management’s attention from our ongoing operations.
The FCC’s pole attachment rules contain a formula for calculating pole rental rates that provide for similar rates for telecommunications attachments and cable attachments and prohibit utility companies from charging higher rates for pole attachments used to provide broadband internet access service. The FCC has also adopted rules to facilitate new attachments, including a one-touch make-ready procedure for new attachments.
The FCC’s pole attachment rules contain a formula for calculating pole rental rates that provide for similar rates for telecommunications attachments and cable attachments and prohibit utility companies from charging higher rates for pole attachments used to provide broadband internet access service.
As of December 31, 2022, we had approximately $2.3 billion of outstanding term loans and an additional $500.0 million of undrawn revolving credit capacity under the Credit Agreement (as defined elsewhere in this Annual Report on Form 10-K).
As of December 31, 2023, we had approximately $1.8 billion of outstanding term loans and an additional $338.0 million of revolving credit borrowings under the New Credit Agreement (as defined elsewhere in this Annual Report on Form 10-K).
Additional government-mandated broadcast carriage obligations, including those related to the FCC’s enhanced technical broadcasting option (Advanced Television Systems Committee 3.0), could disrupt existing programming commitments and increase our costs of carrying such programming.
Additional government-mandated broadcast carriage obligations, including those related to the FCC’s enhanced technical broadcasting option (Advanced Television Systems Committee 3.0), could disrupt existing programming commitments and increase our costs of carrying such programming. Our costs also could increase if the FCC requires us to refund subscribers affected by programming blackouts due to retransmission consent negotiations.
These include provisions that: 36 Table of Contents ● prior to the full declassification of our board following our annual meeting of stockholders to be held in 2023, divide our Board into classes of directors, standing for election on a staggered basis, such that less than all of the directors constituting our Board may change each year; ● do not permit our stockholders to act by written consent and require that stockholder action must take place at an annual or special meeting of our stockholders; ● provide that only our Chief Executive Officer and a majority of our directors, and not our stockholders, may call a special meeting of our stockholders; ● require the approval of our Board or the affirmative vote of stockholders holding a majority of the voting power of our capital stock to amend our Amended and Restated By-laws; and ● limit our ability to enter into business combination transactions with certain stockholders.
These include provisions that: • do not permit our stockholders to act by written consent and require that stockholder action must take place at an annual or special meeting of our stockholders; • provide that only our Chief Executive Officer and a majority of our directors, and not our stockholders, may call a special meeting of our stockholders; • require the approval of our Board or the affirmative vote of stockholders holding a majority of the voting power of our capital stock to amend our Amended and Restated By-laws; and • limit our ability to enter into business combination transactions with certain stockholders.
Also, our ability to gain new customers is to a certain extent dependent on the pace of households moving residences and new housing construction within our markets, which are influenced by both national and local economic conditions.
Also, our ability to gain new customers is to a certain extent dependent on the pace of households moving residences and new housing construction within our markets, which are influenced by both national and local economic conditions. In addition, adverse economic conditions may lead to an increased number of our residential and business customers becoming unable to pay for services.
The consequences of using SOFR could include an increase in the cost of our variable rate indebtedness. 35 Table of Contents Our inability to raise funds necessary to repurchase, or settle conversions of, either series of t he Convertible Notes (as defined below), upon a fundamental change as described in the applicable Convertible Notes Indenture (as defined below), may lead to defaults under such indenture and under agreements governing our existing or future indebtedness.
Our inability to raise funds necessary to repurchase, or settle conversions of, either series of our convertible notes upon a fundamental change as described in the applicable indenture, may lead to defaults under such indenture and under agreements governing our existing or future indebtedness.
Our video business also faces substantial and increasing competition from other forms of in-home and mobile entertainment, including, among others, Amazon Prime Video, Apple TV+, Disney+, HBO Max, Hulu, Netflix, Paramount+, Peacock, YouTube TV and an increasing number of new entrants who offer OTT video programming, including many traditional programmers.
The entrance of more municipalities as competitors in our markets would add to the competition we face and could lead to customer attrition. 25 Table of Contents Our video business also faces substantial and increasing competition from other forms of in-home and mobile entertainment, including, among others, Amazon Prime Video, Apple TV+, Disney+, Hulu, Max, Netflix, Paramount+, Peacock, YouTube TV and an increasing number of new entrants who offer OTT video programming, including many traditional programmers.
Numerous parties also have urged the FCC to take action regarding net neutrality. Further, Congress and numerous states, including Arizona, Minnesota and Missouri (where we have subscribers) have proposed legislation and/or administrative actions in the past or are currently considering actions, which could lead to increased regulation of our provision of data services, including proposed rules regarding net neutrality.
Any such action by the FCC likely would be subject to further judicial review. Further numerous states, including Arizona, Minnesota and Missouri (where we have subscribers) have proposed administrative actions and/or legislation in the past or are currently considering actions, which could lead to increased regulation of our provision of data services.
If a Strategic Acquiree fails to operate as anticipated or cannot be successfully integrated with our existing business, our operations, business, results of operations and financial condition could be materially negatively affected. Implementation of our new ERP system could disrupt business operations. We implemented a new ERP system in the second quarter of 2021.
If a Strategic Acquiree fails to operate as anticipated or cannot be successfully integrated with our existing business, our operations, business, results of operations and financial condition could be materially negatively affected. Implementation of our new ERP and billing systems could have a material adverse impact on our operations, business, financial results and financial condition.
Federal law requires most telephone companies and electric power utilities owning utility poles to provide cable systems with access to poles and underground conduits. Federal law also requires those utilities to charge reasonable rates to cable operators for utilizing space on such poles or in such underground conduits.
Federal law requires most telephone companies and electric power utilities owning utility poles to provide cable systems with access to poles and underground conduits at reasonable rates.
In addition, we generally seek to leverage overall industry experience before rolling out new technology in order to avoid investing in technology that has not been proven successful in other markets.
In addition, we generally seek to leverage overall industry experience before rolling out new technology in order to avoid investing in technology that has not been proven successful in other markets. We implement this approach to avoid costly mistakes made by early adopters of new technology that does not provide expected returns.
While the FCC has eliminated most net neutrality requirements, the FCC, Congress, states or the courts may revisit this determination in the future. For example, in July 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy that encouraged the FCC to consider adopting net neutrality rules similar to those originally adopted in 2015.
In July 2021, President Biden issued an Executive Order on Promoting Competition in the American Economy that encouraged the FCC to consider adopting net neutrality rules similar to those originally adopted in 2015.
Such an event also could result in large expenditures necessary to repair or replace such networks or information systems or to protect them from similar events or damage in the future. Further, the impacts associated with extreme weather, such as intensified storm activity, may cause increased business interruptions.
Such an event also could result in large expenditures necessary to repair or replace such networks or information systems or to protect them from similar events or damage in the future.
For example, our success may be dependent upon our ability to develop, deploy and operate new technologies, service offerings and customer service platforms. Our success is, to a large extent, dependent on our ability to acquire, develop, adopt, upgrade and exploit new and existing technologies to address changing consumer demands and distinguish our services from those of our competitors.
Our success is, to a large extent, dependent on our ability to acquire, develop, adopt, upgrade and exploit new and existing technologies to address changing consumer demands and distinguish our services from those of our competitors. We may not be able to accurately predict technological trends or the success of new products and services.
In addition, the existence of the Convertible Notes may encourage short selling by market participants because the conversion of the Convertible Notes could be used to satisfy short positions or anticipated conversion of the Convertible Notes into shares of our common stock could depress the price of our common stock.
In addition, the existence of the Convertible Notes may encourage short selling by market participants because the conversion of the Convertible Notes could be used to satisfy short positions or anticipated conversion of the Convertible Notes into shares of our common stock could depress the price of our common stock. 35 Table of Contents Risks Relating to Our Common Stock and the Securities Market We cannot assure you that we will continue to pay dividends on our common stock, and our indebtedness limits our ability to pay dividends on our common stock.
Although we intend to oppose such subsidies to competitors when directed to areas that we already serve, our challenge efforts may not always be successful and efforts to use governmental funds to subsidize the deployment of broadband in areas that we already serve could adversely affect our business and results of operations.
Our challenge efforts may not always be successful and efforts to use governmental funds to subsidize the deployment of broadband in areas we already serve could adversely affect our business and results of operations. Any of these events could have a material adverse impact on our operations, business, financial results and financial condition.
Competition for dedicated fiber-optic services for enterprise business customers is also intense as both local telephone companies and regional overbuilders offer data and voice services over dedicated fiber connections. 27 Table of Contents In addition, in recent years, federal and state governments have offered billions of dollars in subsidies to companies deploying broadband to areas deemed to be “unserved” or “underserved,” using funds from the FCC’s RDOF auction in 2020, the ARPA and the Infrastructure Act.
In addition, in recent years, federal and state governments have offered billions of dollars in subsidies to companies deploying broadband to areas deemed to be “unserved” or “underserved,” using funds from the FCC’s RDOF auction in 2020, the ARPA and the Infrastructure Act.
Cyber-attacks could result in an unauthorized release of information, degradation to our network and information systems or disruption to our data, video and voice services, all of which could adversely affect our reputation and results of operations. 30 Table of Contents Our network and information systems are also vulnerable to damage or interruption from power outages, natural disasters (including extreme weather arising from short-term weather patterns or any long-term changes), pandemics, terrorist attacks and similar events, and the individuals responsible for such systems may also be imperiled by certain such events.
Our network and information systems are also vulnerable to damage or interruption from power outages, natural disasters (including extreme weather arising from short-term weather patterns or more severe and/or frequent weather events that could arise as a result of long-term climate change), pandemics, terrorist attacks and similar events, and the individuals responsible for such systems may also be imperiled by certain such events.
Security breaches and other disruptions , including cyber- attacks, and our actual or perceived failure to adequately protect business and consumer data could give rise to liability or reputational harm.
Further, the impacts associated with extreme weather, such as intensified storm activity, may cause increased business interruptions. 29 Table of Contents Security breaches and other disruptions, including cyber-attacks, and our actual or perceived failure to adequately protect business and consumer data could give rise to liability or reputational harm.
We may fail to realize some of the anticipated benefits of the Hargray Acquisition or may not realize some of the anticipated benefits within the anticipated timeframe if the integration process takes longer than expected or is more costly than expected.
We may fail to realize some of the anticipated benefits of the Hargray Acquisition or may not realize some of the anticipated benefits within the anticipated timeframe if the integration process takes longer than expected or is more costly than expected. 27 Table of Contents We recently made numerous acquisitions and strategic investments, and may make other acquisitions and strategic investments in the future, which expose us to risks and uncertainties associated with acquisitions and strategic investments.
It may also increase our vulnerability to adverse economic, market and industry conditions, limit our flexibility in planning for, or reacting to, changes in our business operations or to our industry overall, and place us at a disadvantage in relation to our competitors that have lower debt levels.
It may also increase our vulnerability to adverse economic, market and industry conditions, limit our flexibility in planning for, or reacting to, changes in our business operations or to our industry overall, and place us at a disadvantage in relation to our competitors that have lower debt levels. 33 Table of Contents Our ability to make payments on and to refinance our indebtedness, including the debt incurred in connection with acquisitions, as well as any future debt that we may incur, will depend on our ability to generate cash in the future from operations, financings or asset sales.
The majority of our Adjusted EBITDA less capital expenditures comes from residential data services, and a majority of our residential customers are data-only. We have aligned our resources to emphasize increased sales of data services as well as sales to business customers.
We have aligned our resources to emphasize increased sales of data services as well as sales to business customers.
If we are unable to sufficiently maintain the necessary infrastructure and internal support functions necessary to service these customers, potential future growth of our business services revenues would be limited. In many cases, business customers have service level agreements that require us to provide higher standards of service and reliability.
To accommodate this expansion, we expect to commit a greater proportion of our expenditures on technology, equipment and personnel toward our business customers in future years. If we are unable to sufficiently maintain the necessary infrastructure and internal support functions necessary to service these customers, potential future growth of our business services revenues would be limited.
If we raise additional funds by issuing debt, we may be subject to limitations on our operations due to restrictive covenants. Our Amended and Restated Certificate of Incorporation includes provisions limiting the personal liability of our directors for breaches of fiduciary duty under the DGCL.
If we raise additional funds by issuing debt, we may be subject to limitations on our operations due to restrictive covenants.
If any such claims are successful, then the outcome would likely affect our services utilizing the intellectual property at issue and could have a material adverse effect on our operating results. 31 Table of Contents Risks Relating to Regulation and Legislation The profitability of our data service offerings may be impacted by legislative or regulatory efforts to impose net neutrality and other new r equirements on cable operators.
If any such claims are successful, then the outcome would likely affect our services utilizing the intellectual property at issue and could have a material adverse effect on our operating results.
We implement this approach to avoid costly mistakes made by early adopters of new technology that does not provide expected returns, and it exposes us to the risk that one of our competitors will adopt successful new technology before us and leverage this new technology to attract our customers, increasing the level of customer attrition we experience and adversely affecting our business.
However, this approach exposes us to the risk that our competitors may adopt successful new technology before us and leverage this new technology to attract our customers, increasing the level of customer attrition we experience and adversely affecting our business. 26 Table of Contents Business services sales increasingly contribute to our results of operations, and we face risks as we attempt to further focus on sales to our business customers.
Any of these events could have a material adverse impact on our operations, business, financial results and financial condition. Our business is subject to rapid technological change, and if we do not adapt to technological changes and respond appropriately to changes in consumer demand, our competitive position may be harmed.
Our business is subject to rapid technological change, and if we do not adapt to technological changes and respond appropriately to changes in consumer demand, our competitive position may be harmed. For example, our success may be dependent upon our ability to develop, deploy and operate new technologies, service offerings and customer service platforms.
Risks Relating to Our Common Stock and the Securities Market We cannot assure you that we will continue to pay dividends on our common stock, and our indebtedness limits our ability to pay dividends o n our common stock. The timing, declaration, amount and payment of future dividends to stockholders falls within the discretion of our Board.
The timing, declaration, amount and payment of future dividends to stockholders falls within the discretion of our Board.
From time to time, third parties make malicious attempts to access our network or the networks of third-party vendors we use.
From time to time, third parties make malicious attempts to access our network or the networks of third-party vendors we use. Cyber-attacks could result in an unauthorized release of information, degradation to our network and information systems or disruption to our data, video and voice services, all of which could adversely affect our reputation and results of operations.
Our business could be adversely affected if the future demand for our services, including in particular our residential data and business services, is materially lower than we expect. Our stock price may fluctuate significantly, depending on many factors, some of which may be beyond our control .
Our stock price may fluctuate significantly, depending on many factors, some of which may be beyond our control.
We may encounter additional challenges as we continue our initiative to expand sales of data, voice and video services to our business customers. To accommodate this expansion, we expect to commit a greater proportion of our expenditures on technology, equipment and personnel toward our business customers in recent years.
The COVID-19 pandemic and the government's associated responses, as well as recent economic conditions, have resulted in suppressed sales growth from small business customers. We may encounter additional challenges as we continue our initiative to expand sales of data, voice and video services to our business customers.
Removed
The entrance of more municipalities as competitors in our markets would add to the competition we face and could lead to customer attrition.
Added
Historically, we have focused on retaining customers who are likely to produce higher relative value over the life of their service relationship with us, are less attracted to discounting, require less support and churn less.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe physical components of our broadband network requires maintenance and periodic upgrades to improve performance and capacity and support existing and new services and products. We also operate a network operations center that monitors our network at all times. We believe that our properties are generally in good condition and are suitable and adequate to support our operations.
Biggest changeThe physical components of our broadband network require maintenance and periodic upgrades to improve performance and capacity and support existing and new services and products. We also operate a network operations center that monitors our network at all times. We believe that our properties are generally in good condition and are suitable and adequate to support our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe do not view any of these proceedings as material to our business and are currently not subject to any other material legal proceedings.
Biggest changeWe do not view any of these proceedings as material to our business and are currently not subject to any other material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 41 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph is furnished solely to accompany this Annual Report on Form 10-K and is not being filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act. 43 Table of Contents Purchases of Equity Securities by the Issuer The following table sets forth certain information relating to the purchases of our common stock by us and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the three months ended December 31, 2022 (dollars in thousands, except per share data): Approximate Dollar Total Number of Value of Shares Shares Purchased as that May Yet Be Total Number Part of Publicly Purchased of Shares Average Price Announced Plans or Under the Plans Period Purchased Paid per Share Programs (1) or Programs October 1 to 31, 2022 (2) 20,727 $ 815.82 20,475 $ 271,355 November 1 to 30, 2022 20,475 $ 725.73 20,475 $ 256,496 December 1 to 31, 2022 20,475 $ 717.88 20,475 $ 241,797 Total 61,677 $ 753.40 61,425 (1) On July 1, 2015, the Board authorized up to $250.0 million of share repurchases (subject to a total cap of 600,000 shares of common stock), which was announced on August 7, 2015 (the "2015 Program").
Biggest changePurchases of Equity Securities by the Issuer The following table sets forth certain information relating to the purchases of our common stock by us and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the three months ended December 31, 2023 (dollars in thousands, except per share data): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 to 31, 2023 (2) 102 $ 615.64 — $ 143,104 November 1 to 30, 2023 (2) 59 $ 550.05 — $ 143,104 December 1 to 31, 2023 (2) 1 $ 526.40 — $ 143,104 Total 162 $ 591.20 — (1) On May 20, 2022, the Company's Board authorized up to $450.0 million of share repurchases (with no cap as to the number of shares of common stock), which was announced on May 23, 2022 (the "Share Repurchase Program").
For purposes of this graph, it assumes a hypothetical $100 investment on December 31, 2017 and that dividends, if any, were reinvested. The Peer Group of data, video and voice services companies consists of Altice USA, Inc.; Charter Communications, Inc.; Comcast Corporation; and WideOpenWest, Inc.
For purposes of this graph, it assumes a hypothetical $100 investment on December 31, 2018 and that dividends, if any, were reinvested. The Peer Group of data, video and voice services companies consists of Altice USA, Inc.; Charter Communications, Inc.; Comcast Corporation; and WideOpenWest, Inc.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is publicly traded under the ticker symbol “CABO” on the New York Stock Exchange. Holders As of February 17, 2023, there were approximately 1,053 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is publicly traded under the ticker symbol “CABO” on the New York Stock Exchange. Holders As of February 16, 2024, there were approximately 750 holders of record of our common stock.
The average price paid per share for the common stock withheld was based on the closing price of our common stock on the applicable vesting or exercise measurement date. 44 Table of Contents
The average price paid per share for the common stock withheld was based on the closing price of the Company's common stock on the applicable vesting or exercise measurement date. ITEM 6. [RESERVED] 43 Table of Contents
Dividends We currently expect to continue to pay comparable quarterly cash dividends on shares of our common stock, subject to approval of the Board. 42 Table of Contents Performance Graph The following graph compares the cumulative total stockholder return of our common stock between December 31, 2017 and December 31, 2022 with the cumulative total returns of the Standard & Poor’s 500 Stock Index and a custom peer group index (the “Peer Group”).
Performance Graph The following graph compares the cumulative total stockholder return of our common stock between December 31, 2018 and December 31, 2023 with the cumulative total returns of the Standard & Poor’s 500 Stock Index and a custom peer group index (the “Peer Group”).
(2) Includes shares withheld from associates to satisfy estimated tax withholding obligations in connection with the vesting of restricted stock and/or exercises of stock appreciation rights under the Incentive Compensation Plans (as defined elsewhere in this Annual Report on Form 10-K).
The size and timing of these purchases are based on a number of factors, including share price and business and market conditions. (2) Includes shares withheld from associates to satisfy estimated tax withholding obligations in connection with the vesting of restricted stock and/or exercises of stock appreciation rights under the Company's incentive compensation plans.
The 2022 Program was in addition to the repurchase authorization then remaining under the 2015 Program. The authorizations do not have an expiration date. The Company exhausted the share repurchase authorization under the 2015 Program during the second quarter of 2022 and had $241.8 million of remaining share repurchase authorization under the 2022 Program as of December 31, 2022.
The authorization does not have an expiration date. The Company had $143.1 million of remaining share repurchase authorization under the Share Repurchase Program as of December 31, 2023. Additional purchases under the Share Repurchase Program may be made from time to time on the open market and in privately negotiated transactions.
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The stock price performance shown on this graph is based on historical results and is not necessarily indicative of future stock price performance.
Added
Dividends We currently expect to continue to pay comparable quarterly cash dividends on shares of our common stock, subject to approval of the Board.
Removed
On May 20, 2022, the Board authorized up to $450.0 million of additional share repurchases (with no cap as to the number of shares of common stock), which was announced on May 23, 2022 (the "2022 Program" and, together with the 2015 Program, the "Share Repurchase Programs").
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Comparison of 60 Month Cumulative Return 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Cable One, Inc. $ 100.00 $ 182.82 $ 275.01 $ 218.88 $ 89.27 $ 71.10 S&P 500 Index $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 Peer Group $ 100.00 $ 145.72 $ 183.18 $ 174.76 $ 111.76 $ 139.13 Source: S&P Global Market Intelligence © 2024 42 Table of Contents The stock price performance shown on this graph is based on historical results and is not necessarily indicative of future stock price performance.
Removed
Additional purchases under the 2022 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.
Added
The graph is furnished solely to accompany this Annual Report on Form 10-K and is not being filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

104 edited+18 added−32 removed58 unchanged
Biggest changePSU and Customer Counts Selected subscriber data for the periods presented was as follows (in thousands, except percentages): As of December 31, Annual Net Gain/(Loss) 2022 2021 Change % Change Residential data PSUs 963.7 957.4 6.4 0.7 Residential video PSUs 171.2 246.9 (75.7 ) (30.7 ) Residential voice PSUs 91.3 105.3 (14.0 ) (13.3 ) Total residential PSUs 1,226.3 1,309.6 (83.3 ) (6.4 ) Business data PSUs 96.6 97.3 (0.7 ) (0.7 ) Business video PSUs 10.3 13.8 (3.5 ) (25.1 ) Business voice PSUs 40.8 44.0 (3.2 ) (7.3 ) Total business services PSUs 147.7 155.1 (7.3 ) (4.7 ) Total data PSUs 1,060.4 1,054.7 5.7 0.5 Total video PSUs 181.5 260.7 (79.2 ) (30.4 ) Total voice PSUs 132.1 149.3 (17.2 ) (11.5 ) Total PSUs 1,374.0 1,464.6 (90.6 ) (6.2 ) Residential customer relationships 1,010.2 1,046.9 (36.7 ) (3.5 ) Business customer relationships 101.6 105.1 (3.5 ) (3.4 ) Total customer relationships 1,111.7 1,151.9 (40.2 ) (3.5 ) Homes passed 2,704.3 2,662.0 42.3 1.6 49 Table of Contents In recent years, our customer mix has shifted away from double- and triple-play packages combining data, video and/or voice services, which is in line with our strategy of focusing on our higher margin residential data and business services product lines.
Biggest changeRefer to our Annual Report on Form 10-K for the year ended December 31, 2022 for discussion and analysis of our financial condition and results of operations for 2022 compared to 2021 contained in “ Management’s Discussion and Analysis of Financial Condition and Results of Operations .” Results of Operations Key Performance Measures Summary The following table summarizes certain key measures of our results of operations (dollars in thousands): Year Ended December 31, 2023 2022 $ Change % Change Revenues $ 1,678,081 $ 1,706,043 $ (27,962) (1.6) % Total costs and expenses $ 1,151,178 $ 1,167,054 $ (15,876) (1.4) % Income from operations $ 526,903 $ 538,989 $ (12,086) (2.2) % Net income $ 267,436 $ 234,118 $ 33,318 14.2 % Cash flows from operating activities $ 663,170 $ 738,040 $ (74,870) (10.1) % Cash flows from investing activities $ (341,904) $ (448,267) $ 106,363 (23.7) % Cash flows from financing activities $ (346,127) $ (463,425) $ 117,298 (25.3) % Adjusted EBITDA $ 916,944 $ 911,851 $ 5,093 0.6 % Capital expenditures $ 371,028 $ 414,095 $ (43,067) (10.4) % 47 Table of Contents PSU and Customer Counts Selected subscriber data for the periods presented was as follows (in thousands, except percentages): As of December 31, Annual Net Gain/(Loss) 2023 2022 Change % Change Residential data PSUs 960.5 963.7 (3.3) (0.3) % Residential video PSUs 134.2 171.2 (37.1) (21.6) % Residential voice PSUs 79.2 91.3 (12.1) (13.3) % Total residential PSUs 1,173.8 1,226.3 (52.4) (4.3) % Business data PSUs 98.8 96.6 2.2 2.3 % Business video PSUs 8.1 10.3 (2.2) (21.7) % Business voice PSUs 39.5 40.8 (1.3) (3.1) % Total business services PSUs 146.4 147.7 (1.3) (0.9) % Total data PSUs 1,059.3 1,060.4 (1.1) (0.1) % Total video PSUs 142.3 181.5 (39.3) (21.6) % Total voice PSUs 118.7 132.1 (13.4) (10.1) % Total PSUs 1,320.2 1,374.0 (53.8) (3.9) % Residential customer relationships 994.4 1,010.2 (15.8) (1.6) % Business customer relationships 102.6 101.6 1.1 1.1 % Total customer relationships 1,097.0 1,111.7 (14.7) (1.3) % Homes passed 2,774.9 2,704.3 70.6 2.6 % In recent years, our customer mix has shifted away from double- and triple-play packages combining data, video and/or voice services, which is in line with our strategy of focusing on our higher margin residential data and business services product lines.
We assess our indefinite-lived intangible assets for impairment as of October 1st of each year, or more frequently whenever events or substantive changes in circumstances indicate that the assets might be impaired. We have identified a single unit of accounting for our franchise agreements for use in impairment assessments based on our current operations and the use of our assets.
We assess our indefinite-lived intangible asset for impairment as of October 1st of each year, or more frequently whenever events or substantive changes in circumstances indicate that the asset might be impaired. We have identified a single unit of accounting for our franchise agreements for use in impairment assessments based on our current operations and the use of our assets.
Residential video service is an increasingly costly and fragmented business, with programming costs and retransmission fees continuing to escalate in the face of a proliferation of streaming content alternatives. We intend to continue our strategy of focusing on the higher-margin businesses of residential data and business services while de-emphasizing our residential video business.
Residential video service is an increasingly fragmented business, with programming costs and retransmission fees continuing to escalate in the face of a proliferation of streaming content alternatives. We intend to continue our strategy of focusing on the higher-margin businesses of residential data and business services while de-emphasizing our residential video business.
Upon the occurrence of a Change of Control and a Below Investment Grade Rating Event (each as defined in the Senior Notes Indenture), we are required to offer to repurchase the Senior Notes at 101% of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. 56 Table of Contents Convertible Notes In March 2021, we completed a private offering of $575.0 million aggregate principal amount of 0.000% convertible senior notes due 2026 (the “2026 Notes”) and $345.0 million aggregate principal amount of 1.125% convertible senior notes due 2028 (the “2028 Notes” and, together with the 2026 Notes, the “Convertible Notes,” and the Convertible Notes collectively with the Senior Notes, the "Notes").
Upon the occurrence of a Change of Control and a Below Investment Grade Rating Event (each as defined in the Senior Notes Indenture), we are required to offer to repurchase the Senior Notes at 101% of the principal amount of such Senior Notes, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase. 54 Table of Contents Convertible Notes In March 2021, we completed a private offering of $575.0 million aggregate principal amount of 0.000% convertible senior notes due 2026 (the “2026 Notes”) and $345.0 million aggregate principal amount of 1.125% convertible senior notes due 2028 (the “2028 Notes” and, together with the 2026 Notes, the “Convertible Notes,” and the Convertible Notes collectively with the Senior Notes, the "Notes").
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements or financing arrangements with special-purpose entities. 59 Table of Contents Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements or financing arrangements with special-purpose entities. 57 Table of Contents Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements.
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, 2022 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.
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, 2023 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.
We serve our customers through a plant and network with capacity generally measuring 750 megahertz or higher and have DOCSIS 3.1 capabilities throughout our systems. Our technically advanced fiber-based infrastructure provides for delivery of a full suite of data, video and voice products.
We serve our customers through a plant and network with capacity generally measuring 750 megahertz or higher and have DOCSIS 3.1 capabilities throughout our systems. Our technologically advanced fiber-based infrastructure provides for delivery of a full suite of data, video and voice products.
We attribute this growth to our strategic focus on increasing sales to business customers and our efforts to attract enterprise business customers. We expect to experience continued growth in business data customers and revenues over the long-term. Margins for products sold to business customers have remained attractive, which we expect will continue.
We attribute this growth to our strategic focus on increasing sales to business customers and our efforts to attract enterprise business customers. We expect to experience continued growth in business data customers and revenues over the long-term. Margins for products sold to business customers have remained attractive, which we expect will continue. • Residential video.
This measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of debt financing. These costs are evaluated through other financial measures. 52 Table of Contents We use Adjusted EBITDA to assess our performance.
This measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of debt financing. These costs are evaluated through other financial measures. We use Adjusted EBITDA to assess our performance.
If we do not exercise the Call Option, then investors affiliated with GTCR LLC, a private equity firm based in Chicago, have the right, but not the obligation, to sell (and to cause all members of MBI other than us to sell) to us and, in such case, we are obligated to purchase all but not less than all of the direct and indirect equity interests in MBI that we do not already own between July 1, 2025 through September 30, 2025 (the "Put Option").
Investors affiliated with GTCR LLC, a private equity firm based in Chicago, have the right, but not the obligation, to sell (and to cause all members of MBI other than us to sell) to us and, in such case, we are obligated to purchase all but not less than all of the direct and indirect equity interests in MBI that we do not already own between July 1, 2025 through September 30, 2025 (the "Put Option").
As part of our 45% minority equity interest in MBI, we acqui red the right, but not the obligation, to purchase all but not less than all of the remaining equity interests in MBI that we do not already own between January 1, 2023 and June 30, 2024 (the "Call Option").
As part of our 45% minority equity interest in MBI, we acquired the right, but not the obligation, to purchase all but not less than all of the remaining equity interests in MBI that we do not already own between January 1, 2023 and June 30, 2024 (the "Call Option").
Adjusted EBITDA is defined as net income plus interest expense, income tax provision, depreciation and amortization, equity-based compensation, (gain) loss on deferred compensation, acquisition-related costs, (gain) loss on asset sales and disposals, system conversion costs, rebranding costs, (gain) loss on sales of businesses, equity method investment (income) loss, other (income) expense and other unusual items, as provided in the following table.
Adjusted EBITDA is defined as net income plus interest expense, income tax provision, depreciation and amortization, equity-based compensation, severance and contract termination costs, (gain) loss on deferred compensation, acquisition-related costs, (gain) loss on asset sales and disposals, system conversion costs, (gain) loss on sales of businesses, equity method investment (income) loss, other (income) expense and other unusual items, as provided in the following table.
We also acquired certain assets and assumed certain liabilities from CableAmerica for $113.1 million in late 2021. In recent years, we have made investments in several broadband-centric providers serving non-urban markets that follow various strategies similar to our own.
We also acquired certain assets and assumed certain liabilities from CableAmerica for $113.1 million in late 2021. 46 Table of Contents In recent years, we have made investments in several broadband-centric providers serving non-urban markets that follow various strategies similar to our own.
Significant judgments in this area involve determining whether an event has occurred, determining the future cash flows for the assets involved and selecting the appropriate discount rate to be applied in determining estimated fair value. 60 Table of Contents Goodw ill and Indefinite-Lived Intangible Assets We have a significant amount of goodwill and indefinite-lived intangible assets that are reviewed at least annually for impairment.
Significant judgments in this area involve determining whether an event has occurred, determining the future cash flows for the assets involved and selecting the appropriate discount rate to be applied in determining estimated fair value. Goodwill and Indefinite-Lived Intangible Assets We have a significant amount of goodwill and indefinite-lived intangible assets that are reviewed at least annually for impairment.
We recorded debt discount amortization of $4.3 million and $3.5 million during 2022 and 2021, respectively, within interest expense in the consolidated statement of operations and comprehensive income. On May 3, 2022, we entered into a letter of credit agreement with MUFG Bank, Ltd. which provides for an additional $75.0 million letter of credit issuing capacity.
We recorded debt discount amortization of $4.3 million during both 2023 and 2022 within interest expense in the consolidated statement of operations and comprehensive income. On May 3, 2022, we entered into a letter of credit agreement with MUFG Bank, Ltd. which provides for an additional $75.0 million letter of credit issuing capacity.
We believe that the capacity and reliability of our networks exceeds that of our competitors in most of our markets and best positions u s to meet the continuously increasing consumption demands of customers.
We believe that the capacity and reliability of our networks exceeds that of our competitors in most of our markets and best positions us to meet the continuously increasing consumption demands of customers.
As a result of our video strategy, we expect that residential video customers and revenues will decline further in the future. We now offer Sparklight TV, an IPTV video service that allows customers with our Sparklight TV app to stream our video channels from the cloud.
As a result of our video strategy, we expect that residential video customers and revenues will continue to decline. We now offer Sparklight TV, an IPTV video service that allows customers with our Sparklight TV app to stream our video channels from the cloud.
This is largely because some residential video customers have defected to DBS services and OTT offerings and households continue to discontinue residential voice service. In addition, we have focused on selling data-only packages to new customers rather than cross-selling video to these customers.
This is largely because some residential video customers have switched to OTT offerings and households continue to discontinue residential voice services. In addition, we have focused on selling data-only packages to new customers rather than cross-selling video to these customers.
Our broadband plant generally consists of a fiber-to-the-premises or HFC network with ample unused capacity, and nearly all of our homes passed have access to Gigabit download speeds, which we believe meaningfully distinguishes our offerings from competitors in most of our markets.
Our broadband plant generally consists of a fiber-to-the-premises or HFC network with ample unused capacity, and nearly all of our homes passed have access to Gigabit download speeds, including certain markets that have access to multi-Gigabit download speeds, which we believe meaningfully distinguishes our offerings from certain competitors in our markets.
This margin disparity is largely the result of significant programming costs and retransmission fees incurred to deliver residential video services, which in each of the last three years represented between 64% and 66% of total residential video revenues.
This margin disparity is largely the result of significant programming costs and retransmission fees incurred to deliver residential video services, which in each of the last three years represented between 63% and 65% of total residential video revenues.
As a result of multi-year investments in our legacy Cable One plant, we increased broadband capacity and reliability, which has enabled and will continue to enable us to offer even higher download speeds to our customers.
As a result of multi-year investments in our plant and network, we increased broadband capacity and reliability, which has enabled and will continue to enable us to offer even higher download speeds to our customers.
In connection with these obligations under existing franchise agreements, we obtain surety bonds or letters of credit guaranteeing performance to municipalities and public utilities and payment of insurance premiums. Such surety bonds and letters of credit totaled $52.1 million and $42.1 million as of December 31, 2022 and 2021, respectively.
In connection with these obligations under existing franchise agreements, we obtain surety bonds or letters of credit guaranteeing performance to municipalities and public utilities and payment of insurance premiums. Such surety bonds and letters of credit totaled $29.8 million and $52.1 million as of December 31, 2023 and 2022, respectively.
We exhausted the share repurchase authorization under the 2015 Program during the second quarter of 2022 and had $241.8 million of remaining share repurchase authorization under the 2022 Program as of December 31, 2022. Additional purchases under the 2022 Program may be made from time to time on the open market and in privately negotiated transactions.
We exhausted the share repurchase authorization under the 2015 authorization during the second quarter of 2022 and had $143.1 million of remaining share repurchase authorization under the Share Repurchase Program as of December 31, 2023. Additional purchases under the Share Repurchase Program may be made from time to time on the open market and in privately negotiated transactions.
Refer to the following section for further information on our financing activity. 54 Table of Contents On July 1, 2015, the Board authorized up to $250.0 million of share repurchases (subject to a total cap of 600,000 shares of our common stock).
R efer to the following section for further information on our financing activity. 52 Table of Contents On July 1, 2015, the Board authorized up to $250.0 million of share repurchases (subject to a total cap of 600,000 shares of our common stock).
The estimated useful lives assigned to our property, plant and equipment are reviewed on an annual basis or more frequently if circumstances warrant and such lives are revised to the extent necessary due to changing facts and circumstances. Any changes in estimated useful lives are reflected prospectively.
The estimated useful lives assigned to our property, plant and equipment are reviewed on an annual basis or more frequently if circumstances warrant and such lives are revised to the extent necessary due to changing facts and circumstances.
We test goodwill for impairment at the reporting unit level, for which we have identified a single goodwill reporting unit based on the chief operating decision maker’s performance monitoring and resource allocation process and the similarity of our geographic divisions. Ind efinite-Lived Intangible Assets Units of Accounting .
We test goodwill for impairment at the reporting unit level, for which we have identified a single goodwill reporting unit based on the chief operating decision maker’s performance monitoring and resource allocation process and the similarity of our geographic divisions. Indefinite-Lived Intangible Asset Unit of Accounting .
We expect our franchise agreements to provide us with substantial benefit for a period that extends beyond the foreseeable horizon, and we have historically obtained renewals and extensions of such agreements without material modifications to the agreements for nominal costs, and these costs are expensed as incurred.
We expect our franchise agreements to provide substantial benefit for a period that extends beyond the foreseeable horizon, and we have historically been able to obtain renewals and extensions of such agreements without material modifications to the agreements for nominal costs. These costs are expensed as incurred.
Congress and numerous states, including Arizona, Minnesota and Missouri (where we have subscribers), have proposed legislation and/or administrative actions in the past or currently are considering such actions, which could lead to increased regulation of our provision of data services, including proposed rules regarding net neutrality.
Numerous states, including Arizona, Minnesota and Missouri (where we have subscribers), also have proposed administrative actions and/or legislation in the past or currently are considering such actions, which could lead to increased regulation of our provision of data services.
In 2020, we acquired Valu-Net for $38.9 million. In 2020, we contributed the assets of our Anniston System to Hargray in exchange for an approximately 15% equity interest in Hargray and subsequently acquired the remaining approximately 85% equity interest in 2021 for approximately $2.0 billion.
In 2020, we contributed the assets of our Anniston System to Hargray in exchange for an approximately 15% equity interest in Hargray and subsequently acquired the remaining approximately 85% equity interest in 2021 for approximately $2.0 billion.
Under the first swap agreement, with respect to a notional amount of $850.0 million, our monthly payment obligation is determined at a fixed base rate of 2.653%. Under the second swap agreement, with respect to a notional amount of $350.0 million, our monthly payment obligation is determined at a fixed base rate of 2.739%.
Under the second swap agreement, with respect to a notional amount of $350.0 million, our monthly payment obligation is determined at a fixed base rate of 2.691%.
We believe these investments will reinforce our competitive strength in this area. 47 Table of Contents In addition to our organic growth, we have also completed a number of acquisitions in recent years. In 2017, we acquired NewWave for $740.2 million. In 2019, we acquired Clearwave for $358.8 million and Fidelity for $531.4 million.
We believe these investments will reinforce our competitive strength in this area. In addition to our organic growth, we have also completed a number of acquisitions in recent years. In 2017, we acquired NewWave for $740.2 million. In 2019, we acquired Clearwave for $358.8 million and Fidelity for $531.4 million. In 2020, we acquired Valu-Net for $38.9 million.
We recorded debt issuance cost amortization of $5.3 million and $5.6 million for 2022 and 2021, respectively, within interest expense in the consolidated statements of operations and comprehensive income.
We recorded debt issuance cost amortization of $4.7 million and $5.3 million for 2023 and 2022, respectively, within interest expense in the consolidated statements of operations and comprehensive income.
Neither of our other primary product lines has direct costs representing as substantial a portion of revenues as programming costs and retransmission fees represent for residential video, and indirect costs are generally allocated on a per PSU basis. 45 Table of Contents We focus on growing our higher margin businesses, namely residential data and business services, rather than on growing revenues through maximizing customer PSUs.
Neither of our other primary product lines has direct costs representing as substantial a portion of revenues as programming costs and retransmission fees represent for residential video, and indirect costs are generally allocated on a per PSU basis. We focus on growing our higher margin businesses, namely residential data and business services.
During the fourth quarter of 2022, the Board approved a quarterly dividend of $2.85 per share of common stock, which was paid on December 16, 2022, bringing total dividends distributed during 2022 to $66.3 million.
During the fourth quarter of 2023, the Board approved a quarterly dividend of $2.95 per share of common stock, which was paid on December 15, 2023, bringing total dividends distributed during 2023 to $66.3 million.
Adjusted EBITDA is also a s ignificant performance measure used by us in our incentive compensation programs. Adjusted EBITDA does not take into account cash used for mandatory debt service requirements or other non-discretionary expenditures, and thus does not represent residual funds available for discretionary uses.
Adjusted EBITDA is also a significant performance measure that we have used in our incentive compensation programs. Adjusted EBITDA does not take into account cash used for mandatory debt service requirements or other non-discretionary expenditures, and thus does not represent residual funds available for discretionary uses.
Capital expenditu res are funded primarily by cash on hand and cash flows from operating activities.
Capital expenditures are funded primarily by cash on hand and cash flows from operating activities.
In addition, we expect to deploy symmetrical Gigabit speeds over our data network in select markets by the end of 2023 and deploy DOCSIS 4.0 beginning in 2024. These upgrades will allow us to further increase plant capacity in support of ongoing increases in consumer demand.
In addition, we began the deployment of symmetrical Gigabit speeds over our data network in select markets during 2023 and plan to begin deploying DOCSIS 4.0 by the end of 2024. These upgrades will allow us to further increase plant capacity in support of ongoing increases in consumer demand.
Rent expense for pole attachments was $12.3 million and $11.5 million for 2022 and 2021, respectively. ● Fees imposed on us by various governmental authorities, including franchise fees, are passed through monthly to our customers and are periodically remitted to authorities. These fees were $31.2 million and $31.4 million for 2022 and 2021, respectively.
Rent expense for pole attachments was $15.0 million and $12.3 million for 2023 and 2022, respectively. • Fees imposed on us by various governmental authorities, including franchise fees, are passed through monthly to our customers and are periodically remitted to authorities. These fees were $26.9 million and $31.2 million for 2023 and 2022, respectively.
Programming purchases pursuant to non-binding commitments are not reflected in the amounts shown. (2) Lease payments include payment obligations related to our outstanding finance and operating lease arrangements as of December 31, 2022. (3) Debt payments include principal repayment obligations for our outstanding debt instruments as of December 31, 2022.
Programming purchases pursuant to non-binding commitments are not reflected in the amounts shown. (2) Lease payments include payment obligations related to our outstanding finance and operating lease arrangements as of December 31, 2023.
Our broadband plant generally consists of a fiber-to-the-premises or HFC network with ample unused capacity, and we offer our data customers internet products at faster speeds than those available from competitors in most of our markets.
Our broadband plant generally consists of a fiber-to-the-premises or HFC network with ample unused capacity, and we offer our data customers internet products at some of the fastest speeds available in our markets.
Similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measures of homes passed, PSUs and customer relationships may not be directly comparable to similarly titled measures reported by other companies.
Adjusted EBITDA and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of Adjusted EBITDA may not be directly comparable to similarly titled measures reported by other companies.
Ranked by share of our total revenues during 2022, they are residential data (54.8%), residential video (19.1%) and business services (data, voice and video provided to businesses: 17.9%). The profit margins, growth rates and/or capital intensity of these three primary product lines vary significantly due to competition, product maturity and relative costs.
Ranked by share of our total revenues during 2023, they are residential data (58.4%), business services (data, voice and video provided to businesses: 18.1%) and residential video (15.4%). The profit margins, growth rates and/or capital intensity of these three primary product lines vary significantly due to competition, product maturity and relative costs.
Our intangible assets with an indefinite life are from franchise agreements that we have with state and local governments and trademark and trade name. Franchise agreements allow us to contract and operate our business within specified geographic areas.
Our intangible asset with an indefinite life is from franchise agreements that we have with state and local governments. Franchise agreements allow us to contract and operate our business within specified geographic areas.
The following tables present certain information regarding our net property, plant and equipment and our cash paid for property, plant and equipment for the periods indicated (dollars in thousands): As of December 31, 2022 2021 Property, plant and equipment, net $ 1,701,755 $ 1,854,104 Total assets $ 6,913,890 $ 6,953,994 Property, plant and equipment, net as a percentage of total assets 24.6 % 26.7 % Cash Paid for Property, Plant Year Ended December 31, and Equipment 2022 $ 410,737 2021 $ 384,527 2020 $ 302,517 Property, plant and equipment represents the costs incurred in the design, construction and implementation of plant, infrastructure and capacity improvements and upgrades.
The following tables present certain information regarding our net property, plant and equipment and our cash paid for property, plant and equipment for the periods indicated (dollars in thousands): As of December 31, 2023 2022 Property, plant and equipment, net $ 1,791,120 $ 1,701,755 Total assets $ 6,846,933 $ 6,913,890 Property, plant and equipment, net as a percentage of total assets 26.2 % 24.6 % Year Ended December 31, 2023 2022 2021 Cash paid for property, plant and equipment $ 367,704 $ 410,737 $ 384,527 Property, plant and equipment represents the costs incurred in the design, construction and implementation of plant, infrastructure and capacity improvements and upgrades.
We also plan to continue seeking broadband-related acquisition and strategic investment opportunities in rural markets in addition to pursuing organic growth through market expansion projects.
We also plan to seek broadband-related acquisition and strategic investment opportunities in rural markets in addition to the pursuit of organic growth through market expansion projects.
("JPMorgan"), as administrative agent, and the lenders party thereto, dated as of October 30, 2020 (as amended prior to February 22, 2023, the "Credit Agreement"), provides for senior secured term loans in original aggregate principal amounts of $700.0 million maturing in 2025 (the “Term Loan A-2”), $250.0 million maturing in 2027 (the “Term Loan B-2”), $625.0 million maturing in 2027 (the “Term Loan B-3”) and $800.0 million maturing in 2028 (the "Term Loan B-4"), as well as a $500.0 million revolving credit facility maturing in 2025 (the “Revolving Credit Facility” and, together with the Term Loan A-2, the Term Loan B-2, the Term Loan B-3 and the Term Loan B-4, the “Senior Credit Facilities”).
Financing Activity Senior Credit Facilities Prior to February 22, 2023, we had in place the third amended and restated credit agreement among us and our lenders, dated as of October 30, 2020 (as amended prior to February 22, 2023, the "Credit Agreement"), that provided for senior secured term loans in original aggregate principal amounts of $700.0 million maturing in 2025 (the “Term Loan A-2”), $250.0 million maturing in 2027 (the “Term Loan B-2”), $625.0 million maturing in 2027 (the “Term Loan B-3”) and $800.0 million maturing in 2028 (the "Term Loan B-4"), as well as a $500.0 million revolving credit facility maturing in 2025 (the “Revolving Credit Facility” and, together with the Term Loan A-2, the Term Loan B-2, the Term Loan B-3 and the Term Loan B-4, the “Senior Credit Facilities”).
Unamortized debt issuance costs consisted of the following (in thousands): As of December 31, 2022 2021 Revolving Credit Facility portion: Other noncurrent assets $ 1,904 $ 2,576 Term loans and Notes portion: Long-term debt (contra account) 23,913 28,572 Total $ 25,817 $ 31,148 Unamortized debt discount associated with the Convertible Notes was $16.3 million and $20.6 million as of December 31, 2022 and 2021, respectively.
Unamortized debt issuance costs consisted of the following (in thousands): As of December 31, 2023 2022 Revolving Credit Facility portion: Other noncurrent assets $ 3,087 $ 1,904 Term loans and Notes portion: Long-term debt (contra account) 22,532 23,913 Total $ 25,619 $ 25,817 Unamortized debt discount associated with the Convertible Notes was $12.0 million and $16.3 million as of December 31, 2023 and 2022, respectively.
Other Income (Expense) , Net Other expense, net, was $25.9 million for 2022 and consisted primarily of a $40.7 million non-cash loss on fair value adjustment associated with the MBI Net Option, partially offset by $13.7 million of interest and investment income.
Other expense, net, was $25.9 million for 2022 and consisted primarily of a $40.7 million non-cash loss on fair value adjustment associated with the MBI Net Option, partially offset by $13.7 million of interest and investment income. Income Tax Provision Income tax provision was $89.7 million for 2023 and decreased $36.6 million , or 29.0%, compared to 2022 .
The method of conversion into cash, shares of our common stock or a combination thereof is at our election. Other Debt-Related Information In connection with financing transactions completed during 2021, we capitalized $13.7 million of debt issuance costs and wrote-off $2.1 million of existing unamortized debt issuance costs.
The method of conversion into cash, shares of our common stock or a combination thereof is at our election. Other Debt-Related Information In connection with the refinancing transaction completed during 2023, we capitalized $7.8 million of debt issuance costs and wrote-off to other expense $3.3 million of existing unamortized debt issuance costs.
(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 our consolidated balance sheet.
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 our consolidated balance sheet.
The New Credit Agreement amended the Credit Agreement to, among other things, (i) increase the aggregate principal amount of commitments under the Revolving Credit Facility by $500.0 million to $1.0 billion; (ii) extend the scheduled maturity of the Revolving Credit Facility from October 2025 to February 2028; (iii) upsize the Term Loan B-3 by $150.0 million to $757.0 million (the "TLB-3 Upsize"); (iv) extend the scheduled maturities of the Term Loan B-2 and the Term Loan B-3 from October 2027 to October 2029; (v) increase the fixed spreads on the Term Loan B-2 and the Term Loan B-3 from 2.00% to 2.25%; and (vi) transition the benchmark interest rate for the Revolving Credit Facility, the Term Loan B-2 and the Term Loan B-3 from LIBOR to SOFR plus a 10 basis point credit spread adjustment by March 1, 2023.
On February 22, 2023, we entered into the fourth amended and restated credit agreement with our lenders to amend and restate the Credit Agreement (as amended and restated, the "New Credit Agreement") to, among other things, (i) increase the aggregate principal amount of commitments under the Revolving Credit Facility by $500.0 million to $1.0 billion; (ii) extend the scheduled maturity of the Revolving Credit Facility from October 2025 to February 2028; (iii) upsize the Term Loan B-3 by $150.0 million to $757.0 million (the "TLB-3 Upsize"); (iv) extend the scheduled maturities of the Term Loan B-2 and the Term Loan B-3 from October 2027 to October 2029 (subject to adjustment as described in the notes to the table below summarizing our outstanding term loans as of December 31, 2023); (v) increase the fixed spreads on the Term Loan B-2 and the Term Loan B-3 from 2.00% to 2.25%; and (vi) transition the benchmark interest rate for the Revolving Credit Facility, the Term Loan B-2 and the Term Loan B-3 from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") plus a 10 basis point credit spread adjustment.
Separately, we have also focused on retaining customers who are likely to produce higher relative value over the life of their service relationships with us, are less attracted by discounting, require less support and churn less. This strategy focuses on increasing Adjusted EBITDA, driving higher margins and delivering attractive levels of Adjusted EBITDA less capital expenditures.
Separately, we have also historically focused on retaining customers who are likely to produce higher relative value over the life of their service relationships with us, are less attracted by discounting, require less support and churn less.
To achieve these goals, we intend to continue our disciplined cost management approach, remain focused on customers with expected higher relative value and follow through with further planned investments in broadband plant upgrades, including the deployment of DOCSIS 4.0 capabilities and new data service offerings for residential and business customers.
To achieve these goals, we intend to continue our disciplined cost management approach, remain focused on customers with expected higher relative value, supplement our growth by targeting a broader scope of incremental customers, including those who are more value-conscious, combat competitive threats in our markets through more targeted pricing and product offerings and follow through with further planned investments in broadband plant upgrades, including the deployment of DOCSIS 4.0 capabilities and new data service offerings for residential and business customers.
These balances were as follows (dollars in thousands): As of December 31, 2022 2021 Goodwill and indefinite-lived intangible assets $ 3,030,293 $ 3,114,725 Total assets $ 6,913,890 $ 6,953,994 Goodwill and indefinite-lived intangible assets as a percentage of total assets 43.8 % 44.8 % Goodwill Reporting Unit .
These balances were as follows (dollars in thousands): As of December 31, 2023 2022 Goodwill and indefinite-lived intangible assets $ 3,029,493 $ 3,030,293 Total assets $ 6,846,933 $ 6,913,890 Goodwill and indefinite-lived intangible assets as a percentage of total assets 44.2 % 43.8 % 58 Table of Contents Goodwill Reporting Unit .
Operating expenses as a percentage of revenues were 27.6% and 28.4% for 2022 and 2021, respectively. Selling, general and administrati ve expenses were $350.3 million for 2022 and increased $3.3 million, or 0.9% , compared to 2021 .
Operating expenses as a percentage of revenues were 26.3% and 27.6% for 2023 and 2022, respectively. Selling, general and administrati ve expenses were $354.7 million for 2023 and increased $4.4 million , or 1.2% , compared to 2022 .
In addition, a key objective of our capital allocation process is to invest in initiatives designed to drive revenue and Adjusted EBITDA expansion. Approximately 65% of our total capital expenditures since 2017 were focused on infrastructure improvements that were intended to grow these measures.
Because of the levels of competition we face, we believe it is important to make investments in our infrastructure. In addition, a key objective of our capital allocation process is to invest in initiatives designed to drive revenue and Adjusted EBITDA expansion. Approximately 69% of our total capital expenditures since 2017 focused on infrastructure improvements intended to grow these measures.
During the fourth quarter of 2022, our average residential data customer use d 639 Gigabytes of data per month, with nearly 20% of our customers using over 1 Terabyte of data per month.
During the fourth quarter of 2023, our average residential data customer used 705 Gigabytes of data per month, with nearly 25% of our customers using over 1 Terabyte of data per month.
As of December 31, 2022, $32.4 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 1.00% per annum.
As of December 31, 2023, $10.5 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 1.0% per annum. We were in compliance with all debt covenants as of December 31, 2023.
Our capital expenditures by category for the years ended December 31, 2022 and 2021 were as follows (in thousands): Year Ended December 31, 2022 2021 Customer premise equipment (1) $ 101,252 $ 70,763 Commercial (2) 34,282 64,603 Scalable infrastructure (3) 52,086 56,179 Line extensions (4) 52,839 50,616 Upgrade/rebuild (5) 87,284 75,876 Support capital (6) 86,352 73,897 Total $ 414,095 $ 391,934 (1) Customer premise equipment includes costs incurred at customer locations, including installation costs and customer premise equipment (e.g., modems and set-top boxes).
Our capital expenditures by category for the years ended December 31, 2023 and 2022 were as follows (in thousands): Year Ended December 31, 2023 2022 Customer premise equipment (1) $ 62,066 $ 101,252 Commercial (2) 38,893 34,282 Scalable infrastructure (3) 54,097 52,086 Line extensions (4) 51,466 52,839 Upgrade/rebuild (5) 60,898 87,284 Support capital (6) 103,608 86,352 Total $ 371,028 $ 414,095 (1) Customer premise equipment includes costs incurred at customer locations, including installation costs and customer premise equipment (e.g., modems and set-top boxes).
Business Combination Purchase Price Allocation The application of the acquisition method requires the allocation of the purchase price amongst the acquisition date fair values of identifiable assets acquired and liabilities assumed in a business combination.
Any changes in estimated useful lives are reflected prospectively. 59 Table of Contents Business Combination Purchase Price Allocation The application of the acquisition method requires the allocation of the purchase price amongst the acquisition date fair values of identifiable assets acquired and liabilities assumed in a business combination.
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 our and our restricted subsidiaries’ other material debt, bankruptcy or insolvency, the entry against us or any of our 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. 55 Table of Contents As of December 31, 2022, we had $2.3 billion of aggregate outstanding term loans and $500.0 million available for borrowing under the Revolving Credit Facility.
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 our and our restricted subsidiaries’ other material debt, bankruptcy or insolvency, the entry against us or any of our 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.
Costs associated with the installation and upgrade of services and the acquiring and deploying of customer premise equipment, including materials, internal and external labor costs and related indirect and overhead costs, are also capitalized. 61 Table of Contents Capitalized labor costs include the direct costs of engineers and technical personnel involved in the design and implementation of plant and infrastructure; the costs of technicians involved in the installation and upgrades of services and customer premise equipment; and the costs of support personnel directly involved in capitalizable activities, such as project managers and supervisors.
Capitalized labor costs include the direct costs of engineers and technical personnel involved in the design and implementation of plant and infrastructure; the costs of technicians involved in the installation and upgrades of services and customer premise equipment; and the costs of support personnel directly involved in capitalizable activities, such as project managers and supervisors.
The Senior Notes bear interest at a rate of 4.00% per annum payable semi-annually in arrears on May 15th and November 15th of each year, beginning on May 15, 2021.
Senior Notes In November 2020, we completed a private offering of $650.0 million aggregate principal amount of 4.00% senior notes due 2030 (the “Senior Notes”). The Senior Notes bear interest at a rate of 4.00% per annum payable semi-annually in arrears on May 15th and November 15th of each year, beginning on May 15, 2021.
In 2022 , our Adjusted EBITDA margins for residential data and business services were approximately five and six times grea ter, respectively, than for residential video, compared to nine and eleven times greater, respectively, in 2021.
In 2023, our Adjusted EBITDA margins for residential data and business services were approximately four and five times greater, respectively, than for residential video.
Of these customers, approximately 1,060,000 subscribed to data services, 182,000 subscribed to video services and 132,000 subscribed to voice services as of December 31, 2022. We generate substantially all of our revenues through three primary product lines.
We provided services to approximately 1.1 million residential and business customers out of approximately 2.8 million homes passed as of December 31, 2023. Of these customers, approximately 1,059,000 subscribed to data services, 142,000 subscribed to video services and 119,000 subscribed to voice services as of December 31, 2023. We generate substantially all of our revenues through three primary product lines.
The capital enhancements associated with recent acquisitions include rebuilding low-capacity markets; reclaiming bandwidth from analog video services ; implementing 32-channel bonding; deploying DOCSIS 4.0; consolidating back-office functions such as billing, accounting and service provisioning; migrating products to Cable One's platf orms; and expanding our high-capacity fiber network.
The capital enhancements associated with acquisitions include rebuilding low-capacity markets; reclaiming bandwidth from analog video services; implementing 32-channel bonding; deploying DOCSIS 4.0; consolidating back-office functions such as billing, accounting and service provisioning; migrating products to Cable One's platforms; and expanding our high-capacity fiber network. 45 Table of Contents Our primary goals are to continue growing residential data and business services revenues, to increase profit margins and to deliver strong Adjusted EBITDA and Adjusted EBITDA less capital expenditures over the long-term.
Se lling, general and administrative expenses as a percentage of revenues were 20.5% and 21.6% for 2022 and 2021, respectively. Depreciation and amortization expense was $350.5 million for 2022 and increased $11.4 million, or 3.4%, compared to 2021.
Selling, general and administrative expenses as a percentage of revenues were 21.1% and 20.5% for 2023 and 2022, respectively. Depreciation and amortization expense was $342.9 million for 2023 and decreased $7.6 million, or 2.2%, compared to 2022.
ARPU and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of ARPU may not be directly comparable to similarly titled measures reported by other companies. 2022 Compared to 2021 Revenues Revenues increased $100.2 million, or 6.2%, due primarily to $96.8 million of additional revenues from the Acquired Operations as well as an increase in higher margin residential data and business services revenues from operations not contributed to Clearwave Fiber, partially offset by the contribution of Clearwave operations to Clearwave Fiber that generated $22.5 million of revenues in the prior year and decreases in residential video and residential voice revenues.
ARPU and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of ARPU may not be directly comparable to similarly titled measures reported by other companies. 2023 Compared to 2022 Revenues Revenues decreased $28.0 million, or 1.6%, due primarily to decreases in residential video and residential voice revenues, partially offset by an increase in residential data revenues.
We believe the services we provide are critical to the development of new businesses and drive economic growth in the non-metropolitan, secondary and tertiary markets that we serve in 24 Western, Midwestern and Southern states.
We believe the services we provide are critical to the development of new businesses and drive economic growth in the non-metropolitan, secondary and tertiary markets that we serve in 24 Western, Midwestern and Southern states. As of December 31, 2023 , approximately 74% of our customers were located in seven states: Arizona, Idaho, Mississippi, Missouri, Oklahoma, South Carolina and Texas.
We expect growth for this product line to continue over the long-term as we believe upgrades made in our broadband capacity, our ability to offer higher access speeds than many of our competitors, the reliability and flexibility of our data service offerings and our Wi-Fi support service will enable us to continue to grow ARPU from our existing customers and capture additional market share from both data subscribers who use other providers as well as households in our footprint that do not yet subscribe to data services from any provider.
We believe upgrades made in our broadband capacity, our ability to offer higher access speeds than many of our competitors, the reliability and flexibility of our data service offerings, our Wi-Fi support service and continuously growing data usage by consumers and their demand for higher speeds will enable us to continue to grow ARPU from our existing customers over the long-term and capture additional market share.
The increase in selling, general and administrative expenses was primarily attributable to increases of $4.7 million in professional fees, $4.0 million in bad debt expense, $3.1 million in software costs, and $2.8 million in health insurance costs, partially offset by decreases of $7.6 million in acquisition-related costs and $3.4 million in system conversion costs.
The increase in selling, general and administrative expenses wa s primarily attributable to increases of $9.3 million in marketing costs, $5.4 million in labor and other compensation-related costs and $4.2 million in software expense, partially offset by decreases of $9.4 million in property taxes, $4.3 million in health insurance costs and $3.2 million in professional services fees.
We continue to invest capital to, among other things, increase fiber density and coverage, expand our foot print, increase plant and data capacity, enhance network reliability and improve the customer experience.
We continue to invest capital to, among other things, increase fiber density and coverage, expand our footprint, increase plant and data capacity, enhance network reliability and improve the customer experience. We have rolled out multi-Gigabit download data service to certain markets and currently offer Gigabit download data service to nearly all of our homes passed.
Use of Adjusted EBITDA We use certain measures that are not defined by GAAP to evaluate various aspects of our business. Adjusted EBITDA is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, net income reported in accordance with GAAP.
Adjusted EBITDA is a non-GAAP financial measure and should be considered in addition to, not as superior to, or as a substitute for, net income reported in accordance with GAAP. Adjusted EBITDA is reconciled to net income below, the most directly comparable GAAP financial measure.
We believe that existing cash balances, our Senior Credit Facilities and operating cash flows will provide adequate support for these funding requirements over the next 12 months.
Financial Condition: Liquidity and Capital Resources Liquidity Our primary funding requirements are for our ongoing operations, capital expenditures, potential acquisitions and strategic investments, payments of quarterly dividends and share repurchases. We believe that existing cash balances, our Senior Credit Facilities and operating cash flows will provide adequate support for these funding requirements over the next 12 months.
The purchase price payable upon the exercise of the Call Option or the Put Option, as applicable, will be calculated under a formula based on a multiple of MBI’s adjusted EBITDA. We have not yet obtained the capital that we believe will be necessary to pay the purchase price if either the Call Option or the Put Option are exercised.
We have not yet obtained the capital that we believe will be necessary to pay the purchase price if either the Call Option or the Put Option are exercised. At this time, we do not expect to exercise the Call Option.
The increase in operating expenses was primarily attributable to $28.0 million of additional expenses related to the Acquired Operations and increases of $6.2 million in labor and other compensation-related costs, $2.6 million in fuel costs, $2.6 million in health insurance costs and $2.2 million in professional fees, partially offset by a $26.6 million reduction in programming and franchise fees as a result of video customer losses and a decrease of $2.6 million in rent expense.
The decrease in operating expenses was primarily attribut able to $49.9 million of lower programming and franchise fees as a result of video customer losses, partially offset by increases of $10.9 million in property taxes, $2.9 million in rent expense, $2.5 million in health insurance costs and $2.0 million in maintenance costs.
A summary of the term loans outstanding under the Credit Agreement as of December 31, 2022 is as follows (dollars in thousands): Final Balance Draw Original Amortization Outstanding Maturity Due Upon Benchmark Applicable Interest Instrument Date(s) Principal Per Annum (1) Principal Date Maturity Rate Margin (2) Rate Term Loan A-2 5/8/2019 (3) $ 700,000 Varies (4) $ 638,313 10/30/2025 $ 476,607 LIBOR 1.75% 6.13% 10/1/2019 (3) Term Loan B-2 1/7/2019 250,000 1.0% 240,625 10/30/2027 228,750 LIBOR 2.00% 6.38% Term Loan B-3 6/14/2019 (5) 625,000 1.0% 606,966 10/30/2027 577,472 LIBOR 2.00% 6.38% 10/30/2020 (5) Term Loan B-4 5/3/2021 800,000 1.0% 788,000 5/3/2028 746,000 LIBOR 2.00% 6.38% Total $ 2,375,000 $ 2,273,904 $ 2,028,829 (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).
A summary of the term loans outstanding under the New Credit Agreement as of December 31, 2023 is as follows (dollars in thousands): Instrument Draw Date(s) Original Principal Amortization Per Annum (1) Outstanding Principal Final Scheduled Maturity Date Final Scheduled Principal Payment Benchmark Rate Fixed Margin Interest Rate Term Loan B-2 1/7/2019 $ 250,000 1.0% $ 238,125 10/30/2029 (2) $ 223,750 SOFR + 10.0 bps 2.25% 7.71% Term Loan B-3 6/14/2019 10/30/2020 2/22/2023 325,000 300,000 150,000 1.0% 749,223 10/30/2029 (2) 704,695 SOFR + 10.0 bps 2.25% 7.71% Term Loan B-4 5/3/2021 800,000 1.0% 780,000 5/3/2028 746,000 SOFR + 11.4 bps 2.00% 7.47% Total $ 1,825,000 $ 1,767,348 $ 1,674,445 (1) Payable in equal quarterly installments (expressed as a percentage of the original principal amount and subject to customary adjustments in the event of any prepayment).
Other expense, net, was $6.0 million for 2021 and consisted primarily of a $50.3 million non-cash loss on fair value adjustment associated with the MBI Net Option and $2.1 million of debt issuance cost write-offs, partially offset by a $33.4 million non-cash gain on fair value adjustment associated with our existing investment in Hargray upon the Hargray Acquisition, $11.6 million of interest and investment income and a $2.3 million non-cash mark-to-market investment gain.
Other Income (Expense), Net Other income, net, was $54.6 million for 2023 and consisted primarily of a $28.0 million non-cash gain on fair value adjustment associated with the MBI Net Option, $18.6 million of interest and investment income, a $12.3 million non-cash mark-to-market gain on the investment in Point Broadband and a $1.8 million gain on the redemption of the Wisper equity investment, partially offset by a $3.4 million loss on the sale of the Tristar equity investment and $3.3 million of debt issuance costs written off in connection with the entry into the New Credit Agreement.
We recognized losses of $11.9 million and $31.3 million on interest rate swaps for 2022 and 2021, respectively, which were reflected within interest expense in the consolidated statements of operations and comprehensive income.
We recognized income of $29.0 million and expense of $11.9 million on interest rate swaps for 2023 and 2022, respectively, which were reflected within interest expense in the consolidated statements of operations and comprehensive income. 55 Table of Contents Refer to notes 10 and 12 to the consolidated financial statements for further details regarding our financing activity, outstanding debt and interest rate swaps.
The interest margins applicable to the Senior Credit Facilities are, at our option, equal to either (a) SOFR plus 10 basis points (or, in the case of the Term Loan B-2 and the Term Loan B-3 for any day prior to March 1, 2023, and in the case of the Term Loan B-4, LIBOR) or (b) a base rate, plus an applicable margin equal to, (i) with respect to the Revolving Credit Facility, 1.25% to 1.75% for SOFR loans and 0.25% to 0.75% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on our Total Net Leverage Ratio (as defined in the Credit Agreement), (ii) with respect to the Term Loan B-2 and the Term Loan B-3, (x) for any day prior to March 1, 2023, 2.25% for LIBOR loans and 1.0% for base rate loans and (y) for any day thereafter through its repayment, 2.25% for SOFR loans and 1.0% for base rate loans, and (iii) with respect to the Term Loan B-4, 2.0% for LIBOR loans and 1.0% for base rate loans.
As of December 31, 2023, the interest margins applicable to the Senior Credit Facilities are, at our option, equal to either SOFR or a base rate, plus an applicable margin equal to, (i) with respect to the Revolving Credit Facility, 1.25% to 1.75% plus a 10 basis point credit spread adjustment for SOFR loans and 0.25% to 0.75% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on our Total Net Leverage Ratio (as defined in the New Credit Agreement), (ii) with respect to the Term Loan B-2 and the Term Loan B-3, 2.25% plus a 10 basis point credit spread adjustment for SOFR loans and 1.25% for base rate loans and (iii) with respect to the Term Loan B-4, 2.0% plus an approximately 11.4 to 42.8 basis point credit spread adjustment based on the interest period elected for SOFR loans and 1.0% for base rate loans. 53 Table of Contents 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeBased on the principal then-outstanding under our Senior Credit Facilities with exposure to LIBOR at December 31, 2021, assuming, hypothetically, that the LIBOR applicable to the Senior Credit Facilities was 100 basis points higher, our annual interest expense would have been $11.1 million higher in 2021. 62 Table of Contents
Biggest changeBased on the principal outstanding under our Senior Credit Facilities with exposure to SOFR at December 31, 2023, assuming, hypothetically, that the SOFR applicable to the Senior Credit Facilities was 100 basis points higher, our annual interest expense would have increased $9.1 million.
As of December 31, 2022, our market risk sensitive instruments consisted of our Senior Credit Facilities and interest rate swaps, as each is described within the section entitled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition: Liquidity and Capital Resources — Financing Activity” and notes 10, 12 and 19 to the consolidated financial statements.
As of December 31, 2023, our market risk sensitive instruments consisted of our Senior Credit Facilities and interest rate swaps, as each is described within the section entitled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition: Liquidity and Capital Resources — Financing Activity” and notes 10 and 12 to the consolidated financial statements.
Based on the principal outstanding under our Senior Credit Facilities with exposure to LIBOR at December 31, 2022, assuming, hypothetically, that the LIBOR applicable to the Senior Credit Facilities was 100 basis points higher, our annual interest expense would have increased $10.7 million.
Based on the principal then-outstanding under our Senior Credit Facilities with exposure to LIBOR at December 31, 2022, assuming, hypothetically, that the LIBOR applicable to the Senior Credit Facilities was 100 basis points higher, our annual interest expense would have been $10.7 million higher in 2022.
We are also party to two interest rate swap agreements to effectively convert the variable rate interest to fixed base rates of 2.653% and 2.739% for $850.0 million and $350.0 million of such outstanding debt, respectively.
We are also party to two interest rate swap agreements to effectively convert the variable rate interest to fixed base rates of 2.595% and 2.691% for $850.0 million and $350.0 million of such outstanding debt, respectively.
As of December 31, 2021, outstanding borrowings under our Senior Credit Facilities were approximately $2.3 billion and the notional amount of our effective interest rate swap agreement was $1.2 b illion.
As of December 31, 2022, outstanding borrowings under our Senior Credit Facilities were approximately $2.3 billion and the notional amount of our effective interest rate swap agreement was $1.2 billion.
Additionally, as of December 31, 2022, we had $650.0 million, $575.0 million and $345.0 million aggregate principal amount of the Senior Notes, 2026 Notes a nd 2028 Notes, respectively, outstanding.
Additionally, as of December 31, 2023, we had $650.0 million, $575.0 million and $345.0 million aggregate principal amount of the Senior Notes, 2026 Notes and 2028 Notes, respectively, outstanding.
Outstanding borrowings under our Senior Credit Facilities, which bear interest, at our option, at a rate per annum determined by reference to either LIBOR or a base rate, in each case plus an applicable interest rate margin, were approximately $2.3 billion at December 31, 2022.
Outstanding borrowings under our Senior Credit Facilities, which bear interest, at our option, at a rate per annum determined by reference to either SOFR or a base rate, in each case plus an applicable credit spread adjustment and interest rate margin, were approximately $2.1 billion at December 31, 2023.
Although the Senior Notes and 2028 Notes are based on fixed rates and the 2026 Notes do not bear interest, changes in interest rates could impact the fair market value of such notes. As of December 31, 2022, the fair market values of the Senior Notes, 2026 Notes and 2028 Notes were $512.7 million, $453.2 million and $257.0 million, respectively.
Although the Senior Notes and 2028 Notes are based on fixed rates and the 2026 Notes do not bear interest, changes in interest rates could impact the fair market value of such notes. As of December 31, 2023, the fair market values of the Senior Notes, 2026 Notes and 2028 Notes were $529.8 million, $491.6 million and $263.9 million, respectively.

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