Cable One, Inc.CABO
Cable One, Inc. Income Taxes Disclosure
INCOME TAXES
The income tax provision (benefit) consisted of the following (in thousands):
| Current | Deferred | Total | ||||||||||||||||||
| Year Ended December 31, 2025 | ||||||||||||||||||||
| U.S. federal | $ | 45,433 | $ | (95,593) | $ | (50,160) | ||||||||||||||
| State and local | 2,025 | (39,726) | (37,701) | |||||||||||||||||
| Total | $ | 47,458 | $ | (135,319) | $ | (87,861) | ||||||||||||||
| Year Ended December 31, 2024 | ||||||||||||||||||||
| U.S. federal | $ | 58,428 | $ | (15,098) | $ | 43,330 | ||||||||||||||
| State and local | 7,188 | (25,317) | (18,129) | |||||||||||||||||
| Total | $ | 65,616 | $ | (40,415) | $ | 25,201 | ||||||||||||||
| Year Ended December 31, 2023 | ||||||||||||||||||||
| U.S. federal | $ | 63,893 | $ | (7,142) | $ | 56,751 | ||||||||||||||
| State and local | 14,333 | 1,754 | 16,087 | |||||||||||||||||
| Total | $ | 78,226 | $ | (5,388) | $ | 72,838 | ||||||||||||||
The income tax provision (benefit) is different than the amount of income tax calculated by applying the U.S. federal statutory rate of 21.0% to income (loss) before income taxes as a result of the following items (amounts in thousands):
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
Amount | Percent | Amount | Percent | Amount | Percent | |||||||||||||||||||||||||||||||||
U.S. federal taxes at statutory rate | $ | (64,339) | 21.0 | % | $ | 51,277 | 21.0 | % | $ | 86,363 | 21.0 | % | ||||||||||||||||||||||||||
State and local income taxes, net of U.S. federal tax | (30,660) | 10.0 | % | (15,333) | (6.3) | % | 12,388 | 3.0 | % | |||||||||||||||||||||||||||||
| Changes in valuation allowance | 11,379 | (3.7) | % | 27,017 | 11.1 | % | (5,878) | (1.4) | % | |||||||||||||||||||||||||||||
Nontaxable or nondeductible items: | ||||||||||||||||||||||||||||||||||||||
Goodwill impairment | 14,679 | (4.8) | % | — | — | — | — | |||||||||||||||||||||||||||||||
Section 162(m) limitation | 5,685 | (1.9) | % | 1,749 | 0.7 | % | 1,985 | 0.5 | % | |||||||||||||||||||||||||||||
Other | 2,411 | (0.8) | % | 2,907 | 1.2 | % | 2,145 | 0.5 | % | |||||||||||||||||||||||||||||
Equity method investments | (28,968) | 9.5 | % | (42,944) | (17.6) | % | (23,926) | (5.8) | % | |||||||||||||||||||||||||||||
Other | 1,952 | (0.7) | % | 528 | 0.2 | % | (239) | (0.1) | % | |||||||||||||||||||||||||||||
Income tax provision (benefit) | $ | (87,861) | 28.7 | % | $ | 25,201 | 10.3 | % | $ | 72,838 | 17.7 | % | ||||||||||||||||||||||||||
The states that contribute to the majority of the state and local taxes are Alabama, Georgia, Idaho and South Carolina in 2025; South Carolina in 2024; and Alabama in 2023.
The net deferred income tax liability consisted of the following (in thousands):
| As of December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Other benefit obligations | $ | 1,853 | $ | 2,157 | ||||||||||
| Equity-based compensation | 8,143 | 8,586 | ||||||||||||
| Net operating losses | 3,731 | 4,295 | ||||||||||||
| Accrued bonus | 2,194 | 3,426 | ||||||||||||
| Reserves | 3,384 | 3,755 | ||||||||||||
| Lease liabilities | 1,578 | 1,878 | ||||||||||||
| Capitalized research and development expenditures | 741 | 8,393 | ||||||||||||
| State tax credit | 7,411 | 4,084 | ||||||||||||
| Unrealized capital losses | 62,188 | 50,165 | ||||||||||||
| Section 163(j) interest limitation | 33 | 4,077 | ||||||||||||
| Other items | 2,729 | 6,044 | ||||||||||||
| Deferred tax assets, gross | 93,985 | 96,860 | ||||||||||||
| Less: Valuation allowance | (62,188) | (49,716) | ||||||||||||
| Deferred tax assets, net | 31,797 | 47,144 | ||||||||||||
| Property, plant and equipment | 322,421 | 314,517 | ||||||||||||
| Goodwill and other intangible assets | 409,184 | 540,255 | ||||||||||||
| Investments in subsidiaries and partnerships | 53,312 | 81,349 | ||||||||||||
| ROU assets | 2,429 | 2,935 | ||||||||||||
| Prepaid expenses | 7,805 | 6,192 | ||||||||||||
| Interest rate swap | 5,947 | 15,175 | ||||||||||||
| Other items | 623 | 763 | ||||||||||||
| Deferred tax liabilities | 801,721 | 961,186 | ||||||||||||
| Net deferred income tax liability | $ | 769,924 | $ | 914,042 | ||||||||||
In 2025, the New MBI Net Option was fair valued, resulting in an increase in the valuation allowance. The Company revalued its net deferred tax liability to reflect changes in state apportionment, recognizing $6.4 million in deferred income tax benefit during 2025.
In 2024, the Old MBI Net Option was fair valued, resulting in an increase in the valuation allowance. The Company revalued its net deferred tax liability to reflect updated changes in state apportionment, recognizing $19.0 million in deferred income tax benefit during 2024.
In 2023, the Company revalued its net deferred tax liability to reflect the new state income tax rate at which the liability is expected to reverse, recognizing $6.7 million in deferred income tax expense during 2023.
The Company has concluded that it is more likely than not that it will realize all of its gross deferred tax assets, except for those that relate to unrealized capital losses associated with the New MBI Net Option. A valuation allowance has been recorded against such deferred tax assets.
The Company had $7.4 million of state tax credits and $3.7 million of tax-effected state net operating loss ("NOL") carryforwards at December 31, 2025, which have expiration dates at various points starting in 2030.
Cash paid for income taxes, net of refunds received, was as follows (in thousands):
Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
U.S. federal | $ | 42,000 | $ | 70,268 | $ | 75,000 | ||||||||||||||
State and local | 3,229 | 11,309 | 17,456 | |||||||||||||||||
Total | $ | 45,229 | $ | 81,577 | $ | 92,456 | ||||||||||||||
No individual state jurisdiction exceeded 5% of total cash paid for income taxes, net of refunds received, during any of the periods presented.
The following table provides a reconciliation of the Company's total balance of unrecognized tax benefits, excluding interest and penalties (in thousands):
| As of December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
Beginning of year | $ | 72,322 | $ | — | ||||||||||
Increase/(decrease) for current year tax positions | — | 72,322 | ||||||||||||
End of year | $ | 72,322 | $ | 72,322 | ||||||||||
As of December 31, 2025, the Company's total liability for uncertain tax positions was approximately $72.3 million. The net amount of the unrecognized tax benefits recorded as of December 31, 2025, if recognized, could impact the effective tax rate by $15.5 million. Accrued interest and penalties associated with our liability for unrecognized tax benefits were not material in any of the periods presented.
The Company files corporate income tax returns with the federal government and with states where it conducts business. The Company’s federal income tax returns are subject to examination by the Internal Revenue Service, with tax years 2015, 2016, 2019 and 2022 onward still subject to examination. The 2015 and 2016 tax years are only subject to the examination of NOLs carried back from 2019 as a result of the Coronavirus Aid, Relief, and Economic Security Act. The Company’s state tax returns are subject to examination by local tax authorities for tax years 2021 onward, but NOL and credit carryforwards arising prior to then could be subject to adjustment.
On July 4, 2025, the “One Big Beautiful Bill Act” (the "OBBBA") was enacted into law, which extended and modified certain provisions of the Tax Cuts and Jobs Act of 2017. The provisions in the OBBBA did not materially impact the Company's effective tax rate but the immediate deductibility of capital expenditures and research costs, along with the rollback of the interest expense deductibility threshold, favorably impacted its cash flows, offset by an increase in its deferred tax liabilities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 23, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2016 | Mar 1, 2017 | |
| 2015 | Mar 7, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.