The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 and the related “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both of which are contained in our 2025 Form 10-K. Our results of operations and financial condition discussed herein may not be indicative of our future results and trends.
Throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all totals, percentages and year-over-year changes are calculated using exact numbers. Minor differences may exist due to rounding.
Overview
We are a leading broadband communications provider delivering exceptional service and enabling our customers to thrive and stay connected to what matters most. Through Sparklight, the brand our customers know and trust, we are transforming the future of connectivity with a commitment to innovation, reliability and customer experience. We serve our customers with technologically advanced fiber-based infrastructure that provides for delivery of a full suite of data, video and voice products.
We believe our robust infrastructure and cutting-edge technology keep our customers connected and help drive progress in education, business and everyday life. We believe the services we provide are critical to the development of new businesses and drive economic growth in the non-metropolitan, secondary and tertiary markets that we serve in 24 Western, Midwestern and Southern states. As of June 30, 2026, approximately 76% of our customers were located in seven states: Arizona, Idaho, Mississippi, Missouri, Oklahoma, South Carolina and Texas. We provided services to approximately 1.0 million residential and business customers out of approximately 2.8 million passings as of June 30, 2026. Of these customers, approximately 968,000 subscribed to data services, 78,000 subscribed to video services and 87,000 subscribed to voice services.
We generate substantially all of our revenues through three primary product lines. Ranked by share of our total revenues through the first six months of 2026, they are residential data (60.7%), business data (15.7%) and residential video (11.3%). The profit margins, growth rates and/or capital intensity of these three primary product lines vary significantly due to competition, product maturity and relative costs.
We focus on growing our higher margin businesses, namely residential data and business data services. Our strategy acknowledges the industry-wide trends of declining profitability of video services and declining revenues from residential voice services. The declining profitability of residential video services is due primarily to increasing programming costs and retransmission fees and competition from other streaming content providers, and the declining revenues from residential voice services are due primarily to the increasing use of wireless voice services instead of residential voice services. Separately, we have also historically focused on retaining customers who are likely to produce higher relative value over the life of their service relationships with us, are less attracted by discounting, require less support and churn less, while more recently supplementing our growth by targeting a broader scope of incremental customers, including those who are more value-conscious. This strategy has focused on increasing adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), driving higher margins and delivering attractive levels of Adjusted EBITDA less capital expenditures over the long-term.
Excluding the effects of acquisitions and divestitures, the trends described above have impacted, and are expected to further impact, our three primary product lines in the following ways:
•Residential data. We focus on growing residential data customers and revenues and expect this product line to grow over the long-term, supplemented by growth in related services, such as intelligent Wi-Fi, technology support and network security solutions. In recent periods, we have experienced subscriber losses as a result of increased competition in our markets but believe the 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 offerings and continuously growing data usage by consumers and their demand for higher speeds will enable us to continue to earn a consistent average monthly revenue per unit (“ARPU”) from our existing customers over the long-term and potentially capture additional market share. Our broadband plant generally consists of a fiber-to-the-premises (“fiber”) or hybrid fiber-coaxial (“HFC”) network with ample unused capacity, and we offer our data customers internet products at some of the fastest speeds available in our markets. We believe that the capacity and reliability of our networks is equal to or exceeds that of our competitors in most of our markets and best positions us to meet the continuously increasing consumption demands of customers.
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•Business data. We focus on growing business data customers and revenues over the long term by concentrating our efforts on increasing sales to business customers and attracting enterprise and wholesale business customers. We expect to experience growth in business data revenues over the long-term as we sell-in additional products and services to existing customers and also focus on adding new customers. Margins for products sold to business customers have remained attractive, which we expect will continue.
•Residential video. Residential video service is an increasingly fragmented business, with programming costs and retransmission fees continuing to escalate in the face of a proliferation of streaming content alternatives. We intend to continue our strategy of focusing on the higher-margin businesses of residential data and business data services while de-emphasizing our video business. As a result of our video strategy, we expect that residential video customers and revenues will continue to decline. We offer Sparklight TV, an internet protocol-based (“IPTV”) video service that allows customers with our Sparklight TV app to stream our video channels from the cloud. This IPTV video service optimizes our available bandwidth, maximizing network capacity to increase data speeds and capacity across our network.
We recently launched a mobile service offering with a mobile virtual network enabler to complement our wired broadband product by delivering added convenience and greater flexibility while strengthening our long-term customer relationships with the ultimate goals of enhancing customer lifetime value, improving retention and supporting packaging opportunities to reinforce our core broadband business.
We continue to experience increased competition, particularly from telephone companies; fiber, municipal and cooperative overbuilders; fixed wireless data providers; and over-the-top video providers. Because of the levels of competition we face, we believe it is important to make investments in our infrastructure. In addition, a key objective of our capital allocation process is to invest in initiatives designed to drive revenue and Adjusted EBITDA expansion. We continue to invest capital to, among other things, increase fiber density and coverage, expand our footprint, increase plant and data capacity, enhance network reliability and improve the customer experience. We have rolled out multi-Gigabit download data service to over half of our markets and currently offer Gigabit download data service to all of our passings. We are currently deploying DOCSIS 4.0 capabilities, which, together with Sparklight TV, further increases our network capacity and enables future growth in our residential data and business data product lines. 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 and to support the continually increasing data usage by customers. We believe these investments will reinforce our competitive strength in this area.
We expect to continue to devote financial resources to infrastructure improvements in existing and acquired markets as well as to expand high-speed data service in areas adjacent to our existing network. We believe these investments are necessary to continually meet our customers’ needs and remain competitive. The capital enhancements associated with acquisitions include rebuilding low-capacity markets; reclaiming bandwidth from traditional QAM-based video services; implementing multi-Gigabit download speeds; deploying DOCSIS 4.0 capabilities; consolidating back-office functions such as billing, accounting and service provisioning; migrating products to Cable One platforms; and expanding our high-capacity fiber network.
Our primary financial goals are to grow residential data and business data customers and revenues, to increase profit margins and to deliver strong Adjusted EBITDA and Adjusted EBITDA less capital expenditures over the long-term. To achieve these goals, we intend to continue our disciplined cost management approach, remain focused on customers with expected higher relative value and supplement our growth by targeting a broader scope of incremental customers, including those who are more value-conscious. We combat competitive threats in our markets through targeted pricing and product offerings and further planned investments in broadband plant upgrades, including the continued deployment of DOCSIS 4.0 capabilities and new data service offerings for residential and business customers. Given our strategic focus on our higher margin residential data and business data product lines, we assess our level of capital expenditures relative to Adjusted EBITDA, unlike others in our industry who may compare their capital expenditures to revenues due to their much larger residential video customer bases.
We also evaluate opportunistic broadband-related acquisition and strategic investment opportunities in rural markets in addition to the pursuit of organic growth through market expansion projects. In recent years, we have made investments in several broadband-centric providers serving non-urban markets that follow various strategies similar to our own. Such strategic investments were intended to capitalize on opportunities that may not have existed under a full ownership model, in order to allow us to participate more aggressively in the fiber expansion business and potentially provide future monetization, acquisition or investment opportunities, while allowing our management team to focus on our core business and without burdening our cash flow.
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Results of Operations
Key Performance Measures Summary
The following tables summarize certain key measures of our results of operations (dollars in thousands):
Three Months Ended June 30,
2026 2025 $ Change % Change
Revenues $ 348,926 $ 381,072 $ (32,146) (8.4) %
Total costs and expenses(1) $ 873,843 $ 870,395 $ 3,448 0.4 %
Loss from operations(1) $ (524,917) $ (489,323) $ (35,594) 7.3 %
Net loss(1) $ (1,164,576) $ (437,976) $ (726,600) 165.9 %
Cash flows from operating activities $ 120,857 $ 144,942 $ (24,085) (16.6) %
Cash flows from investing activities $ (77,530) $ (74,037) $ (3,493) 4.7 %
Cash flows from financing activities $ (42,737) $ (67,117) $ 24,380 (36.3) %
Adjusted EBITDA(2) $ 173,460 $ 203,214 $ (29,754) (14.6) %
Capital expenditures $ 74,002 $ 68,374 $ 5,628 8.2 %
Six Months Ended June 30,
2026 2025 $ Change % Change
Revenues $ 701,883 $ 761,673 $ (59,790) (7.8) %
Total costs and expenses(1) $ 1,140,194 $ 1,155,321 $ (15,127) (1.3) %
Loss from operations(1) $ (438,311) $ (393,648) $ (44,663) 11.3 %
Net loss(1) $ (1,128,802) $ (435,369) $ (693,433) 159.3 %
Cash flows from operating activities $ 239,077 $ 261,274 $ (22,197) (8.5) %
Cash flows from investing activities $ (101,435) $ (130,593) $ 29,158 (22.3) %
Cash flows from financing activities $ (124,220) $ (131,436) $ 7,216 (5.5) %
Adjusted EBITDA(2) $ 356,808 $ 405,927 $ (49,119) (12.1) %
Capital expenditures $ 142,426 $ 139,504 $ 2,922 2.1 %
(1)Amounts for the three and six months ended June 30, 2026 reflect $597.7 million of non-cash asset impairment charges. Refer to the section entitled "Critical Accounting Policies and Estimates — Impairment Assessments" for further information. Amounts for the three and six months ended June 30, 2025 reflect $586.0 million of non-cash asset impairment charges.
(2)Adjusted EBITDA is a non-GAAP measure. Refer to "Use of Adjusted EBITDA" below for a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure.
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Primary Service Units ("PSUs") and Customer Counts
Selected subscriber data for the periods presented was as follows (in thousands, except percentages):
As of June 30, Annual Net Gain (Loss)
2026 2025 Change % Change
Residential data PSUs 870.0 932.0 (62.0) (6.6) %
Residential video PSUs 73.5 96.2 (22.8) (23.7) %
Residential voice PSUs 50.7 62.1 (11.4) (18.4) %
Total residential PSUs 994.2 1,090.4 (96.2) (8.8) %
Business data PSUs 98.2 99.3 (1.1) (1.1) %
Business video PSUs 4.1 6.1 (1.9) (31.9) %
Business voice PSUs 36.7 37.3 (0.6) (1.7) %
Total business services PSUs 139.0 142.7 (3.7) (2.6) %
Total data PSUs 968.2 1,031.3 (63.1) (6.1) %
Total video PSUs 77.6 102.3 (24.7) (24.2) %
Total voice PSUs 87.4 99.4 (12.1) (12.1) %
Total PSUs 1,133.2 1,233.0 (99.8) (8.1) %
Residential customer relationships 887.4 955.8 (68.4) (7.2) %
Business customer relationships 105.9 104.7 1.3 1.2 %
Total customer relationships 993.3 1,060.5 (67.1) (6.3) %
Passings(1) 2,847.0 2,870.5 (23.5) (0.8) %
(1)Passings as of June 30, 2026 reflect certain refinements to the service provider's counting methodology during the first quarter of 2026.
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Use of Nonfinancial Metrics and ARPU
We use various nonfinancial metrics to measure, manage and monitor our operating performance on an ongoing basis. Such metrics include PSUs, customer relationships and passings.
A PSU represents a single subscription to a particular service offering. Residential bulk multi-dwelling PSUs are generally classified as residential and are counted at the individual unit level. Business voice customers who have multiple voice lines are counted as a single PSU.
A customer relationship represents a single customer who subscribes to one or more PSUs.
Passings represent the estimated number of serviceable and marketable homes and businesses passed by our active plant based on available information. We use an external reporting service for determining reported passings. The service provider generates updated counts biannually, during the first and third quarters of each year. Therefore, our reported passings for the second and fourth quarters of the year remain unchanged from the preceding sequential quarter.
We believe PSU, customer relationship and passings counts are useful to investors in evaluating our operating performance. Similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measures of PSUs, customer relationships and passings may not be directly comparable to similarly titled measures reported by other companies.
We use ARPU to evaluate and monitor the amount of revenue generated by each type of service subscribed to by customers and the contribution to total revenues as well as to analyze and compare growth patterns. Residential ARPU values represent the applicable residential service revenues (excluding installation and activation fees) divided by the corresponding average of the number of PSUs at the beginning and end of each period, divided by the number of months in the period, except that for any PSUs added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent the applicable residential service revenues (excluding installation and activation fees) divided by the pro-rated average number of PSUs during such period. Business services ARPU values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, divided by the number of months in the period, except that for any business customer relationships added or subtracted as a result of an acquisition or divestiture occurring during the period, the associated ARPU values represent business services revenues divided by the pro-rated average number of business customer relationships during such period.
We believe ARPU is useful to investors in evaluating our operating performance. ARPU and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of ARPU may not be directly comparable to similarly titled measures reported by other companies.
Comparison of Three Months Ended June 30, 2026 to Three Months Ended June 30, 2025
Revenues
Revenues by service offering for the three months ended June 30, 2026 and 2025, together with the percentages of total revenues that each item represented for the periods presented, were as follows (dollars in thousands):
Three Months Ended June 30,
2026 2025 2026 vs. 2025
Revenues % of Total Revenues % of Total $ Change % Change
Residential data $ 212,604 60.9 % $ 229,336 60.2 % $ (16,732) (7.3) %
Residential video 38,487 11.0 % 48,158 12.6 % (9,671) (20.1) %
Residential voice 6,266 1.8 % 6,733 1.8 % (467) (6.9) %
Business data 53,597 15.4 % 57,385 15.1 % (3,788) (6.6) %
Business other 14,199 4.1 % 16,515 4.3 % (2,316) (14.0) %
Other 23,773 6.8 % 22,945 6.0 % 828 3.6 %
Total revenues $ 348,926 100.0 % $ 381,072 100.0 % $ (32,146) (8.4) %
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ARPU for the indicated service offerings for the three months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30, 2026 vs. 2025
2026 2025 $ Change % Change
Residential data $ 80.56 $ 81.23 $ (0.67) (0.8) %
Residential video $ 169.33 $ 162.52 $ 6.81 4.2 %
Residential voice $ 40.05 $ 35.41 $ 4.64 13.1 %
Business services $ 212.75 $ 234.93 $ (22.18) (9.4) %
Residential data service revenues decreased $16.7 million, or 7.3%, due primarily to a decrease in residential data subscribers.
Residential video service revenues decreased $9.7 million, or 20.1%, due primarily to a decrease in residential video subscribers, partially offset by a rate adjustment enacted in the second half of 2025.
Residential voice service revenues decreased $0.5 million, or 6.9%, due primarily to a decrease in residential voice subscribers.
Business data revenues decreased $3.8 million, or 6.6% due primarily to a decrease in business data subscribers.
Business other revenues decreased $2.3 million, or 14.0%, due primarily to a decrease in business video subscribers.
Costs and Expenses
Operating expenses (excluding depreciation and amortization) were $98.7 million for the three months ended June 30, 2026 and decreased $3.6 million, or 3.5%, compared to the three months ended June 30, 2025. The decrease in operating expenses was primarily attributable to decreases of $6.7 million in programming and franchise costs as a result of video customer losses and $1.6 million in maintenance costs, partially offset by a $4.3 million increase in software costs. Operating expenses as a percentage of revenues were 28.3% and 26.9% for the three months ended June 30, 2026 and 2025, respectively.
Selling, general and administrative expenses were $87.6 million for the three months ended June 30, 2026 and decreased $4.3 million, or 4.7%, compared to the three months ended June 30, 2025. The decrease in selling, general and administrative expenses was primarily attributable to decreases of $6.1 million in labor and other compensation-related costs and $5.6 million in billing system conversion costs, partially offset by increases of $2.3 million in software costs, $1.3 million in bad debt expense, $1.2 million in marketing costs and $0.9 million in health insurance costs. Selling, general and administrative expenses as a percentage of revenues were 25.1% and 24.1% for the three months ended June 30, 2026 and 2025, respectively.
Depreciation and amortization expense was $81.8 million for the three months ended June 30, 2026 and decreased $4.3 million, or 5.0%, compared to the three months ended June 30, 2025. Depreciation and amortization expense as a percentage of revenues was 23.4% and 22.6% for the three months ended June 30, 2026 and 2025, respectively.
Asset impairments totaled $597.7 million for the three months ended June 30, 2026, consisting of $526.0 million and $71.7 million of non-cash impairments of our indefinite-lived franchise agreements asset and goodwill, respectively. Refer to the section entitled "Critical Accounting Policies and Estimates - Impairment Assessments" for further information. Asset impairments totaled $586.0 million for the three months ended June 30, 2025, consisting of $497.2 million and $88.8 million of non-cash impairments related to our franchise agreements asset and goodwill, respectively.
Interest Expense, Net
Interest expense, net, was $33.7 million for the three months ended June 30, 2026 and decreased $0.2 million, or 0.5%, compared to the three months ended June 30, 2025 due primarily to lower outstanding debt balances, partially offset by a higher average interest rate.
Other Income (Expense), Net
Other expense, net, was $431.6 million for the three months ended June 30, 2026 and consisted primarily of a $444.0 million non-cash loss on fair value adjustment associated with the MBI option and a $7.6 million revaluation loss on our Point equity investment, partially offset by $19.9 million of gains on debt extinguishments. Other expense, net, was $11.4 million for the three months ended June 30, 2025 and consisted primarily of a $15.3 million non-cash loss on fair value adjustment associated with the MBI Net Option, partially offset by $3.9 million of gains on debt extinguishments.
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Income Tax Benefit
Income tax benefit was $109.5 million and $117.6 million for the three months ended June 30, 2026 and 2025, respectively, and our effective tax benefit rate was 11.1% and 22.0% for the three months ended June 30, 2026 and 2025, respectively. The decrease in the effective tax benefit rate was due primarily to an increase in deferred tax expense resulting from additional valuation allowance recorded in the second quarter of 2026, partially offset by a decrease in deferred tax expense resulting from impairments recognized in the second quarter of 2026.
Equity Method Investment Income (Loss), Net
Equity method investment loss, net, was $283.9 million for the three months ended June 30, 2026 and consisted primarily of a $349.8 million non-cash impairment to the carrying value of our MBI equity investment, partially offset by a $67.7 million upward revaluation of our Clearwave Fiber investment in connection with the Point-Clearwave Fiber Transaction. Equity method investment loss, net, was $21.0 million for the three months ended June 30, 2025 and consisted primarily of our $22.6 million proportionate share of net loss from our Clearwave Fiber investment, partially offset by our $1.4 million proportionate share of net income from our Nextlink investment.
Net Loss
Net losses were $1.16 billion and $438.0 million for the three months ended June 30, 2026 and 2025, respectively, driven largely by the non-cash impairments and fair value adjustments discussed above.
Unrealized Gain (Loss) on Cash Flow Hedges and Other, Net of Tax
Unrealized gain on cash flow hedges and other, net of tax, was $6.4 million for the three months ended June 30, 2026 compared to a $10.1 million loss for the three months ended June 30, 2025. The $16.5 million change was due primarily to an increase in forward interest rates during the three months ended June 30, 2026 compared to a decrease in the prior year period.
Comparison of Six Months Ended June 30, 2026 to Six Months Ended June 30, 2025
Revenues
Revenues by service offering for the six months ended June 30, 2026 and 2025, together with the percentages of total revenues that each item represented for the periods presented, were as follows (dollars in thousands):
Six Months Ended June 30,
2026 2025 2026 vs. 2025
Revenues % of Total Revenues % of Total $ Change % Change
Residential data $ 426,174 60.7 % $ 454,457 59.7 % $ (28,283) (6.2) %
Residential video 79,255 11.3 % 98,962 13.0 % (19,707) (19.9) %
Residential voice 12,775 1.8 % 13,777 1.8 % (1,002) (7.3) %
Business data 109,885 15.7 % 114,678 15.1 % (4,793) (4.2) %
Business other 28,437 4.1 % 33,399 4.4 % (4,962) (14.9) %
Other 45,357 6.5 % 46,400 6.1 % (1,043) (2.2) %
Total revenues $ 701,883 100.0 % $ 761,673 100.0 % $ (59,790) (7.8) %
ARPU for the indicated service offerings for the six months ended June 30, 2026 and 2025 were as follows:
Six Months Ended June 30, 2026 vs. 2025
2026 2025 $ Change % Change
Residential data $ 80.13 $ 80.09 $ 0.04 — %
Residential video $ 168.06 $ 161.96 $ 6.10 3.8 %
Residential voice $ 39.93 $ 35.46 $ 4.47 12.6 %
Business services $ 215.95 $ 234.44 $ (18.49) (7.9) %
Residential data service revenues decreased $28.3 million, or 6.2%, due primarily to a decrease in residential data subscribers.
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Residential video service revenues decreased $19.7 million, or 19.9%, due primarily to a decrease in residential video subscribers, partially offset by rate adjustments enacted during 2025.
Residential voice service revenues decreased $1.0 million, or 7.3%, due primarily to a decrease in residential voice subscribers.
Business data revenues decreased $4.8 million, or 4.2%, due primarily to a decrease in business data subscribers.
Business other revenues decreased $5.0 million, or 14.9%, due primarily to a decrease in business video subscribers.
Costs and Expenses
Operating expenses (excluding depreciation and amortization) were $192.6 million for the six months ended June 30, 2026 and decreased $9.6 million, or 4.7%, compared to the six months ended June 30, 2025. The decrease in operating expenses was primarily attributable to decreases of $13.5 million in programming and franchise costs as a result of video customer losses, $2.0 million in health insurance costs and $1.1 million in professional fees, partially offset by increases of $6.1 million in software costs and $2.4 million in labor and other compensation-related costs. Operating expenses as a percentage of revenues were 27.4% and 26.5% for the six months ended June 30, 2026 and 2025, respectively.
Selling, general and administrative expenses were $174.8 million for the six months ended June 30, 2026 and decreased $12.6 million, or 6.7%, compared to the six months ended June 30, 2025. The decrease in selling, general, and administrative expenses was primarily attributable to decreases of $9.9 million in labor and other compensation-related costs, $9.2 million in billing system conversion costs and $2.1 million in health insurance costs, partially offset by increases of $3.7 million in software costs, $1.6 million in bad debt expense and $1.4 million in marketing costs. Selling, general and administrative expenses as a percentage of revenues were 24.9% and 24.6% for the six months ended June 30, 2026 and 2025, respectively.
Depreciation and amortization expense was $164.3 million for the six months ended June 30, 2026 and decreased $7.3 million, or 4.3%, compared to the six months ended June 30, 2025. Depreciation and amortization expense as a percentage of revenues was 23.4% and 22.5% for the six months ended June 30, 2026 and 2025, respectively.
Asset impairments totaled $597.7 million for the six months ended June 30, 2026, consisting of $526.0 million and $71.7 million of non-cash impairments of our indefinite-lived franchise agreements asset and goodwill, respectively. Refer to the section entitled "Critical Accounting Policies and Estimates - Impairment Assessments" for further information. Asset impairments totaled $586.0 million for the six months ended June 30, 2025, consisting of $497.2 million and $88.8 million of non-cash impairments related to our franchise agreements asset and goodwill, respectively.
Interest Expense, Net
Interest expense, net, was $64.0 million for the six months ended June 30, 2026 and decreased $4.4 million, or 6.4%, compared to the six months ended June 30, 2025 due primarily to lower outstanding debt balances, partially offset by a higher average interest rate.
Other Income (Expense), Net
Other expense, net, was $408.6 million for the six months ended June 30, 2026 and consisted primarily of a $457.8 million non-cash loss on fair value adjustment associated with the MBI option and a $7.6 million revaluation loss on our Point equity investment, partially offset by a $27.6 million gain on sale of fiber-to-the-tower contract rights and $29.7 million of gains on debt extinguishments. Other expense, net, was $12.8 million for the six months ended June 30, 2025 and consisted primarily of a $19.9 million non-cash loss on fair value adjustment associated with the MBI Net Option, partially offset by $3.9 million of gains on debt extinguishments and a $3.2 million gain on sale of an equity investment.
Income Tax Benefit
Income tax benefit was $90.1 million and $117.4 million for the six months ended June 30, 2026 and 2025, respectively, and our effective tax benefit rate was 9.9% and 24.7% for the six months ended June 30, 2026 and 2025, respectively. The decrease in the effective tax benefit rate was due primarily to an increase in deferred tax expense resulting from additional valuation allowance recorded in the second quarter of 2026, partially offset by a decrease in deferred tax expense resulting from impairments recognized in the second quarter of 2026.
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Equity Method Investment Income (Loss), Net
Equity method investment loss, net, was $308.0 million for the six months ended June 30, 2026 and consisted primarily of a $349.8 million non-cash impairment to the carrying value of our MBI equity investment and our $24.1 million proportionate share of Clearwave Fiber's net loss, partially offset by a $67.7 million upward revaluation of our Clearwave Fiber investment in connection with the Point-Clearwave Fiber Transaction. Equity method investment loss, net, was $77.9 million for the six months ended June 30, 2025 and consisted of our $77.5 million and $3.3 million proportionate share of net losses from our Clearwave Fiber and MBI investments, respectively, partially offset by our $2.9 million proportionate share of net income from our Nextlink investment.
Net Loss
Net losses were $1.13 billion and $435.4 million for the six months ended June 30, 2026 and 2025, respectively, driven largely by the non-cash impairments and fair value adjustments discussed above.
Unrealized Gain (Loss) on Cash Flow Hedges and Other, Net of Tax
Unrealized gain on cash flow hedges and other, net of tax, was $10.5 million for the six months ended June 30, 2026 compared to a $25.1 million loss for the six months ended June 30, 2025. The $35.6 million change was due primarily to an increase in forward interest rates during the six months ended June 30, 2026 compared to a decrease in the prior year period.
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 (loss) reported in accordance with GAAP. Adjusted EBITDA is reconciled to net income (loss) below, the most directly comparable GAAP financial measure.
Adjusted EBITDA is defined as net income (loss) plus net interest expense, income tax provision (benefit), depreciation and amortization, equity-based compensation, severance and contract termination costs, acquisition-related costs, net (gain) loss on asset sales and disposals, system conversion costs, net equity method investment (income) loss, asset impairments, executive search and transition costs, MBI integration costs, net other (income) expense and any special items, as applicable, provided in the reconciliation tables below. Executive search and transition costs consist of expenses incurred in connection with changes in executive leadership, including make-whole payment, severance and other separation benefits and costs related to executive search and onboarding. MBI integration costs consist of expenses for planning and implementing system conversion, rebranding, employee-related costs (including severance and retention) and other professional fees incurred in connection with the integration of MBI. These costs are associated with discrete events and are incremental to normal, recurring operating expenses and as such, are excluded from Adjusted EBITDA. Adjusted EBITDA eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our business as well as other non-cash or special items and is unaffected by our capital structure or investment activities. This measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and our cash cost of debt financing. These costs are evaluated through other financial measures.
We use Adjusted EBITDA to assess our performance. In addition, Adjusted EBITDA generally correlates to the measure used in the leverage ratio calculations under the Credit Agreement and the Senior Notes Indenture to determine compliance with the covenants contained in the Credit Agreement and the ability to take certain actions under the Senior Notes Indenture. Adjusted EBITDA is also a significant performance measure that we have used in 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.
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We believe that Adjusted EBITDA is useful to investors in evaluating our operating performance. Adjusted EBITDA and similar measures with similar titles are common measures used by investors, analysts and peers to compare performance in our industry, although our measure of Adjusted EBITDA may not be directly comparable to similarly titled measures reported by other companies.
Three Months Ended June 30,
(dollars in thousands) 2026 2025 $ Change % Change
Net loss $ (1,164,576) $ (437,976) $ (726,600) 165.9 %
Plus: Interest expense, net 33,737 33,905 (168) (0.5) %
Income tax benefit (109,521) (117,575) 8,054 (6.9) %
Depreciation and amortization 81,781 86,118 (4,337) (5.0) %
Equity-based compensation 5,014 10,048 (5,034) (50.1) %
Severance and contract termination costs 2,962 — 2,962 NM
Acquisition-related costs 447 95 352 NM
(Gain) loss on asset sales and disposals, net 7,973 3,908 4,065 104.0 %
System conversion costs 191 6,183 (5,992) (96.9) %
Equity method investment (income) loss, net 283,853 20,951 262,902 NM
Asset impairments 597,715 586,017 11,698 2.0 %
Executive search and transition costs 190 168 22 13.1 %
MBI integration costs 2,104 — 2,104 NM
Other (income) expense, net 431,590 11,372 420,218 NM
Adjusted EBITDA $ 173,460 $ 203,214 $ (29,754) (14.6) %
NM = Not meaningful.
Six Months Ended June 30,
(dollars in thousands) 2026 2025 $ Change % Change
Net loss $ (1,128,802) $ (435,369) $ (693,433) 159.3 %
Plus: Interest expense, net 64,006 68,368 (4,362) (6.4) %
Income tax benefit (90,100) (117,372) 27,272 (23.2) %
Depreciation and amortization 164,275 171,583 (7,308) (4.3) %
Equity-based compensation 12,577 21,359 (8,782) (41.1) %
Severance and contract termination costs 2,962 328 2,634 NM
Acquisition-related costs 2,092 1,528 564 36.9 %
(Gain) loss on asset sales and disposals, net 10,759 8,104 2,655 32.8 %
System conversion costs 819 10,488 (9,669) (92.2) %
Equity method investment (income) loss, net 307,955 77,941 230,014 NM
Asset impairments 597,715 586,017 11,698 2.0 %
Executive search and transition costs 1,095 168 927 NM
MBI integration costs 2,825 — 2,825 NM
Other (income) expense, net 408,630 12,784 395,846 NM
Adjusted EBITDA $ 356,808 $ 405,927 $ (49,119) (12.1) %
NM = Not meaningful.
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Financial Condition: Liquidity and Capital Resources
Liquidity
Our primary funding requirements are for our ongoing operations, capital expenditures, the MBI acquisition (discussed below), potential acquisitions and strategic investments, debt repayment and share repurchases. We believe that our existing cash balances, our Senior Credit Facilities and operating cash flows will provide adequate support for these funding requirements that are expected to arise over the next 12 months. However, our ability to utilize those funding sources to fund ongoing operations, make capital expenditures, complete the MBI acquisition, make future acquisitions and strategic investments, repay debt and make share repurchases depends on future operating performance and cash flows, which, in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control.
From November 2020 to June 30, 2024, we held a call option to purchase all but not less than all of the remaining equity interests in MBI, a data, video and voice services provider in which we acquired an approximately 45% equity interest in November 2020, that we did not already own between January 1, 2023 and June 30, 2024. The call option expired unexercised on June 30, 2024. Further, certain investors in MBI held a put option to sell (and to cause all members of MBI other than us to sell) to us all but not less than all of the remaining equity interests in MBI that we did not already own between July 1, 2025 and September 30, 2025.
In December 2024, we amended our agreement with MBI, to, among other things, (i) reinstate the expired call option to acquire the Call Option; (ii) amend the put option to establish the Put Option; (iii) require us to make the Upfront Payment, which was paid on December 20, 2024; and (iv) provide for the other members of MBI to immediately receive, indirectly, the New MBI Debt. The Put Price payable by us upon the closing of the Put Option exercise is calculated under a formula based on a multiple of MBI’s adjusted EBITDA for the twelve-month period ended June 30, 2025, and MBI’s total net indebtedness. The aggregate amount of the Upfront Payment and the impact of the New MBI Debt will reduce the Put Price payable upon the closing of the Put Option exercise and the impact of the New MBI Debt (and the associated interest and fees) will be excluded from the calculation of MBI's total net indebtedness for purposes of determining such purchase price. Further, if the closing of the Put Option exercise occurs prior to October 1, 2026, the Put Price payable will be discounted, from October 1, 2026 to the closing, at a per annum rate of 12%. The Put Option was exercised on January 2, 2026 and the terms of the Put Option contemplate that the transaction will close on or before October 1, 2026. We may fund the Put Price with a combination of cash resources and indebtedness, and we are actively exploring potential financing options. Further, we are analyzing strategic options available to us, including raising additional funds, amending existing debt agreements, among other financing transactions.
In June 2026, we commenced an offer (the “MBI Term Loan Exchange Offer”) to the term lenders under MBI’s credit agreement to exchange their MBI term loans for a combination of cash and new debt of the Company. As of the expiration of the MBI Term Loan Exchange Offer, we received irrevocable lender acceptances from MBI lenders holding approximately 34% of all outstanding MBI term loans. Although no final determination has been made, we currently expect to exercise our right not to consummate the MBI Term Loan Exchange Offer and will continue to explore all potential options at our discretion.
The following tables summarize select operating and financial metrics for MBI (dollar amounts in thousands):
As of June 30,
2026 2025 Change % Change
Total data PSUs 200,384 212,836 (12,452) (5.9) %
Three Months Ended June 30,
2026 2025 $ Change % Change
Residential data revenues 40,623 45,629 (5,006) (11.0) %
Total residential revenues 52,556 58,690 (6,134) (10.5) %
Total business services revenues 19,432 18,824 608 3.2 %
Total revenues 71,988 77,514 (5,526) (7.1) %
Operating expenses(1) 36,446 31,696 4,750 15.0 %
Capital expenditures 20,261 15,782 4,479 28.4 %
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Six Months Ended June 30,
2026 2025 $ Change % Change
Residential data revenues 82,530 91,537 (9,007) (9.8) %
Total residential revenues 106,701 118,389 (11,688) (9.9) %
Total business services revenues 38,288 37,464 824 2.2 %
Total revenues 144,989 155,853 (10,864) (7.0) %
Operating expenses(1) 72,401 67,187 5,214 7.8 %
Capital expenditures 37,223 35,571 1,652 4.6 %
(1)Excludes depreciation and amortization expense and gain on disposal of assets.
The amounts within the tables above are derived from financial information obtained from MBI. The accounting and reporting methodologies used by MBI when determining the amounts above may differ from the accounting and reporting methodologies used by us when determining the comparable figures for our company. MBI's accounting and reporting methodologies will be aligned with ours after the acquisition is completed.
Based on currently available information and the expected closing of October 1, 2026, (i) the Put Price payable by us for the equity interests of MBI that we do not already own will be approximately $480 million; and (ii) we estimate that MBI’s total net indebtedness that will be outstanding at the time it becomes a wholly-owned subsidiary will be approximately $920 million (in the form of term loans maturing in November 2027). This estimate of MBI's total indebtedness is based on MBI's preliminary financial information, past performance and current forecasts and is subject to numerous assumptions and risks including, without limitation, factors that could impact MBI, such as competition, economic conditions, operating performance and other factors described under “Cautionary Statement Regarding Forward-Looking Statements.” Should the underlying assumptions prove incorrect, or if any of those risks materialize, the amount of MBI’s total net indebtedness outstanding at that time may differ from the estimated range described above.
We believe that our existing cash balances, the anticipated available capacity under the Revolving Credit Facility at the time of the transaction and our operating cash flows will be sufficient to fund the Put Price payable at the closing of the Put Option exercise. However, we may also opportunistically pursue additional incremental financing transactions depending on market conditions and other factors.
The following table shows a summary of our net cash flows for the periods indicated (dollars in thousands):
Six Months Ended June 30,
2026 2025 $ Change % Change
Net cash provided by operating activities $ 239,077 $ 261,274 $ (22,197) (8.5) %
Net cash used in investing activities (101,435) (130,593) 29,158 (22.3) %
Net cash used in financing activities (124,220) (131,436) 7,216 (5.5) %
Change in cash and cash equivalents 13,422 (755) 14,177 NM
Cash and cash equivalents, beginning of period 152,769 153,631 (862) (0.6) %
Cash and cash equivalents, end of period $ 166,191 $ 152,876 $ 13,315 8.7 %
NM = Not meaningful
The $22.2 million year-over-year decrease in net cash provided by operating activities was primarily attributable to a decrease in Adjusted EBITDA, partially offset by favorable changes in working capital.
The $29.2 million year-over-year decrease in net cash used in investing activities was due primarily to $42.0 million of proceeds received from the sale of fiber-to-the-tower contract rights during the first quarter of 2026, partially offset by a $9.6 million reduction in proceeds from sales of equity investments.
The $7.2 million year-over-year decrease in net cash used in financing activities was due primarily to a $17.2 million dividend payment in the prior year that did not recur, partially offset by an $11.4 million increase in net debt repayments.
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On May 20, 2022, the Board authorized up to $450.0 million of share repurchases (with no cap as to the number of shares of common stock). We had $143.1 million of remaining share repurchase authorization under the Share Repurchase Program as of June 30, 2026. Additional purchases under the Share Repurchase Program may be made from time to time on the open market and in privately negotiated transactions, and we may opportunistically and prudently consider buying back shares under our remaining share repurchase authorization. The size and timing of any additional purchases are based on a number of factors, including share price, trading levels and business and market conditions. Since we first became publicly traded in 2015 through June 30, 2026, we have repurchased 646,244 shares of our common stock at an aggregate cost of $556.9 million. We did not repurchase any shares during the six months ended June 30, 2026 or 2025.
Financing Activity
Senior Credit Facilities
The Credit Agreement provides for the Term Loan B-2, the Term Loan B-3, the Term Loan B-4 and the Revolving Credit Facility. The Revolving Credit Facility also gives us the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility.
Under the Credit Agreement, the interest margins applicable to the Senior Credit Facilities are, at our option, equal to either SOFR or a base rate, plus an applicable margin equal to, (i) with respect to the Revolving Credit Facility, 1.25% to 1.75% plus a 10 basis point credit spread adjustment for SOFR loans and 0.25% to 0.75% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on our Total Net Leverage Ratio, (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.
During the six months ended June 30, 2026, we borrowed $575.0 million under the Revolving Credit Facility to fund the repayment in full of the 2026 Notes on the final maturity date thereof and subsequently repaid $25.0 million of such borrowings. Also during the three and six months ended June 30, 2026, we paid $11.0 million and $37.2 million to retire $12.8 million and $40.2 million of the outstanding principal of the Term Loan B-4, recognizing $1.7 million and $2.8 million of gains on debt extinguishments within other income in the condensed consolidated statement of operations and comprehensive income (loss), respectively.
As of June 30, 2026, we had $550.0 million of borrowings outstanding under the Revolving Credit Facility that bore interest at a rate of 5.5% per annum, and $700.0 million of available borrowing capacity under the Revolving Credit Facility. No letters of credit were issued under the Revolving Credit Facility as of June 30, 2026. A summary of our outstanding term loans as of June 30, 2026 is as follows (dollars in thousands):
Instrument Draw Date(s) Original Principal Amortization Per Annum(1) Outstanding Principal Final ScheduledMaturity Date Final ScheduledPrincipal Payment Benchmark Rate Fixed Margin Interest Rate
Term Loan B-2 1/7/2019 $ 250,000 1.0% $ 231,875 10/30/2029(2) $ 223,750 SOFR + 10.0 bps 2.25% 5.99%
Term Loan B-3 6/14/201910/30/20202/22/2023 325,000 300,000 150,000 1.0% 729,863 10/30/2029(2) 704,695 SOFR + 10.0 bps 2.25% 5.99%
Term Loan B-4 5/3/2021 800,000 1.0% 696,094 5/3/2028 683,271 SOFR + 11.4 bps 2.00% 5.76%
Total $ 1,825,000 $ 1,657,832 $ 1,611,716
(1)Payable in equal quarterly installments (expressed as a percentage of the original principal amount and subject to customary adjustments in the event of any prepayment). All loans may be prepaid at any time without penalty or premium (subject to customary SOFR breakage provisions).
(2)The final maturity date of the Term Loan B-2 and the Term Loan B-3, in each case, will adjust to May 3, 2028 if greater than $150.0 million aggregate principal amount of the Term Loan B-4 (together with any refinancing indebtedness in respect of the Term Loan B-4 with a final maturity date prior to the date that is 91 days after October 30, 2029) remains outstanding on May 3, 2028.
Senior Notes
In November 2020, we completed the offering of $650.0 million aggregate principal amount of the Senior Notes. The Senior Notes bear interest at a rate of 4.00% per annum payable semiannually in arrears on May 15th and November 15th of each year, beginning on May 15, 2021. The Senior Notes are required to be guaranteed on a senior unsecured basis by each of our existing and future wholly owned domestic subsidiaries that guarantee our obligations under our Senior Credit Facilities or that guarantee certain of our Notes in an aggregate principal amount in excess of $250.0 million.
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During the three and six months ended June 30, 2026, we repurchased $45.6 million and $79.4 million aggregate principal amount of outstanding Senior Notes for $27.2 million and $51.9 million, recognizing $18.2 million and $26.9 million of gains on debt extinguishments within other income in the condensed consolidated statement of operations and comprehensive income (loss), respectively.
Convertible Notes
In March 2021, we completed the Convertible Notes offering of $575.0 million aggregate principal amount of 2026 Notes and $345.0 million aggregate principal amount of 2028 Notes. The Convertible Notes are senior unsecured obligations of ours and are guaranteed by our wholly owned domestic subsidiaries that guarantee the Senior Credit Facilities or that guarantee certain of our Notes in an aggregate principal amount in excess of $250.0 million. The 2026 Notes did not bear regular interest, and the principal amount of the 2026 Notes did not accrete. The 2028 Notes bear interest at a rate of 1.125% per annum. Interest on the 2028 Notes is payable semiannually in arrears on March 15th and September 15th of each year, beginning on September 15, 2021, unless earlier repurchased, converted or redeemed. The 2026 Notes matured on March 15, 2026 and were repaid in full with borrowings under the Revolving Credit Facility, and the 2028 Notes are scheduled to mature on March 15, 2028. The initial conversion rate of the 2028 Notes is 0.4394 shares of our common stock per $1,000 principal amount of 2028 Notes (equivalent to an initial conversion price of $2,275.83 per share of common stock). The initial conversion price of the 2028 Notes represents a premium of 25.0% over the last reported sale price of $1,820.83 per share of our common stock on March 2, 2021. The 2028 Notes are convertible at the option of the holders. The method of conversion into cash, shares of our common stock or a combination thereof is at our election.
Other Debt-Related Information
Unamortized debt issuance costs consisted of the following (in thousands):
June 30, 2026 December 31, 2025
Revolving Credit Facility portion:
Other noncurrent assets $ 2,020 $ 4,030
Term loans and Notes portion:
Long-term debt (contra account) 10,968 14,416
Total $ 12,988 $ 18,446
We recorded debt issuance cost amortization of $1.2 million for both the three months ended June 30, 2026 and 2025 and $3.3 million and $2.5 million for the six months ended June 30, 2026 and 2025, respectively, within net interest expense in the condensed consolidated statements of operations and comprehensive income (loss).
The unamortized debt discount associated with the Convertible Notes was $2.2 million and $3.4 million as of June 30, 2026 and December 31, 2025, respectively. We recorded debt discount amortization of $0.3 million and $1.1 million for the three months ended June 30, 2026 and 2025, respectively, and $1.2 million and $2.1 million for the six months ended June 30, 2026 and 2025, respectively, within net interest expense in the condensed consolidated statements of operations and comprehensive income (loss).
We have entered into a separate letter of credit agreement which provides for an additional $75.0 million of letter of credit issuing capacity, of which $9.8 million was utilized as of June 30, 2026.
We were in compliance with all debt covenants as of June 30, 2026.
We are party to two interest rate swap agreements to convert our interest payment obligations with respect to an aggregate of $1.2 billion of our variable rate SOFR indebtedness to a fixed rate. Under the first swap agreement, with respect to a notional amount of $850.0 million, our monthly payment obligation is determined at a fixed base rate of 2.595%. Under the second swap agreement, with respect to a notional amount of $350.0 million, our monthly payment obligation is determined at a fixed base rate of 2.691%. Both interest rate swap agreements are scheduled to mature in the first quarter of 2029 but each may be terminated prior to the scheduled maturity at our election or that of the financial institution counterparty under the terms provided in each swap agreement. We recognized income of $3.1 million and $5.2 million on interest rate swaps during the three months ended June 30, 2026 and 2025, respectively, and $6.3 million and $10.3 million for the six months ended June 30, 2026 and 2025, respectively, within net interest expense in the condensed consolidated statements of operations and comprehensive income (loss).
Refer to notes 9 and 11 to our audited consolidated financial statements included in the 2025 Form 10-K and notes 8 and 9 to the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further details regarding our financing activity, outstanding debt and interest rate swaps.
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Capital Expenditures
We have significant ongoing capital expenditure requirements as well as capital enhancements associated with acquired operations and the expansion of our high-capacity network. Capital expenditures are funded primarily by cash on hand and cash flows from operating activities.
Our capital expenditures by category for the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Customer premise equipment(1) $ 20,210 $ 11,104 $ 39,760 $ 27,673
Commercial(2) 3,463 5,499 6,432 10,676
Scalable infrastructure(3) 7,110 7,211 14,389 16,393
Line extensions(4) 13,447 17,366 27,786 31,887
Upgrade/rebuild(5) 5,449 4,261 9,633 7,660
Support capital(6) 24,323 22,933 44,426 45,215
Total $ 74,002 $ 68,374 $ 142,426 $ 139,504
(1)Customer premise equipment includes costs incurred at customer locations, including installation costs and customer premise equipment (e.g., modems and set-top boxes).
(2)Commercial includes costs related to securing business services customers and PSUs, including small and medium-sized businesses and enterprise customers.
(3)Scalable infrastructure includes costs not related to customer premise equipment to secure growth of new customers and PSUs or provide service enhancements (e.g., headend equipment).
(4)Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
(5)Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.
(6)Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles) and capitalized internal labor costs not associated with customer installation activities.
Contractual Obligations and Contingent Commitments
As of June 30, 2026, with the exception of debt activity (refer to note 8 of the condensed consolidated financial statements in this Quarterly Report on Form 10-Q for the updated future maturities of outstanding borrowings table), there have been no material changes to the contractual obligations and contingent commitments previously disclosed in the 2025 Form 10-K.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements or financing arrangements with special-purpose entities.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and other assumptions believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
An accounting policy is considered to be critical if it is important to our results of operations and financial condition and if it requires management’s most difficult, subjective and complex judgments in its application.
Except as set forth below, there have been no material changes to our critical accounting policy and estimate disclosures described in our 2025 Form 10-K.
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Impairment Assessments
During the second quarter of 2026, we determined that a triggering event had occurred that required interim impairment assessments of our indefinite-lived intangible assets and goodwill as a result of the decline in the price of our common stock during the three months ended June 30, 2026.
We performed a qualitative assessment of events and changes in circumstances that occurred since the last impairment assessments of our long-lived assets, consisting primarily of our finite-lived customer relationship intangible assets and property, plant and equipment. Based on such results, and given the accelerated basis on which nearly all of our customer relationship assets are amortized, as well as the use of undiscounted versus discounted cash flows, we concluded that none of our long-lived assets were impaired as of June 30, 2026.
We performed a quantitative impairment assessment of our indefinite-lived franchise agreements intangible asset as of June 30, 2026 and determined that the fair value of such asset was less than its existing $1.61 billion carrying value, resulting in a non-cash impairment charge of $526.0 million. The decline in fair value was a result of reduced estimated future cash flows due to increased competition in certain of our markets. Fair value was determined using the multi-period excess earnings method of the income approach whose significant inputs and assumptions include forecasted revenues, subscriber attrition rates, margins, capital expenditures, contributory asset charges, income tax rates, long-term growth rates and a discount rate. A 100 basis point increase in the calculated discount rate would decrease the resulting fair value by $116 million, while a 100 basis point decrease would increase fair value by $194 million.
We also performed a quantitative goodwill impairment assessment as of June 30, 2026 and determined that, after making the adjustments for the asset impairment discussed above, the implied fair value of goodwill was below its existing $840.8 million carrying value, resulting in a non-cash impairment charge of $71.7 million. Fair value was determined using i) the discounted cash flow method of the income approach, whose significant inputs and assumptions include forecasted revenues, margins, capital expenditures, working capital levels, income tax rates, long-term growth rates and a discount rate and ii) the guideline public company method of the market approach, whose significant inputs and assumptions include the identification of appropriate market participants; consensus earnings before interest, taxes, depreciation and amortization estimates; and the selection of enterprise value multiples. A 100 basis point increase in the calculated discount rate would decrease the resulting fair value by $150 million, while a 100 basis point decrease would increase fair value by $183 million. A 1.0x change in selected multiple would change the resulting fair value by $332 million. After the impairment, the implied control premium on the Company's enterprise value was between 15% and 20%, which is consistent with market transactions and companies with similar capitalization profiles.
We may record additional impairments in future periods should estimated future cash flows decline, discount rates increase and/or our stock price continues to decline, indicating fair values may have fallen below carrying values. Due to the inherent uncertainty involved in making these estimates, actual results could differ from those estimates, which could materially impact the determination of fair value or impairment, or both.
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