Optimum Communications, Inc.OPTU
Optimum Communications, Inc. Fair Value Disclosure
FAIR VALUE MEASUREMENT
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:
•Level I - Quoted prices for identical instruments in active markets.
•Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
•Level III - Instruments whose significant value drivers are unobservable.
The following table presents our financial assets and financial liabilities that are measured at fair value on a recurring basis and their classification under the fair value hierarchy:
| Fair Value Hierarchy | December 31, | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Assets: | |||||||||||||||||
| Money market funds (a) | Level I | $ | 937,365 | $ | 158,648 | ||||||||||||
| Interest rate swap contracts | Level II | 2,274 | 8,466 | ||||||||||||||
| Liabilities: | |||||||||||||||||
| Interest rate swap contracts | Level II | 1,342 | — | ||||||||||||||
| Contingent consideration related to acquisitions | Level III | 4,941 | 6,974 | ||||||||||||||
(a)Money market funds at CSC Holdings amounted to $929,604 and $151,205 as of December 31, 2025 and 2024, respectively.
Our money market funds which are classified as cash equivalents are classified within Level I of the fair value hierarchy because they are valued using quoted market prices.
The interest rate swap contracts on our consolidated balance sheets are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility. When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit risk considerations. Such adjustments are generally based on available market evidence. Since model inputs can generally be verified and do not involve significant management judgment, we have concluded that these instruments should be classified within Level II of the fair value hierarchy.
The fair value of the contingent consideration as of December 31, 2025 and 2024 related to certain acquisitions was determined using a probability assessment of the contingent payment for the respective periods.
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate fair value of each class of financial instruments for which it is practicable to estimate:
Credit Facility Debt, Senior Notes, Senior Guaranteed Notes, Senior Secured Notes, Notes Payable, and Supply Chain Financing
The fair values of each of our debt instruments are based on quoted market prices of these instruments. The carrying value of outstanding amounts related to supply chain financing agreements approximates the fair value due to their short-term maturity (less than one year).
Receivables Facility Loan and UnSub Group Credit Facility
The fair value of the receivables loan facility and unsub group credit facility are based on Level 3 inputs, as these facilities are not actively traded and were determined using a discounted cash flow ("DCF") model. This model estimates the present value of the expected future interest and principal payments under the terms of the receivables loan facility and unsub group credit facility.
The carrying values, estimated fair values, and classification under the fair value hierarchy of our financial instruments, excluding those that are carried at fair value in the accompanying consolidated balance sheets, are summarized below:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||
| Fair Value Hierarchy | Carrying Amount (a) | Estimated Fair Value | Carrying Amount (a) | Estimated Fair Value | |||||||||||||||||||||||||
| Credit facility debt | Level II | $ | 5,613,602 | $ | 5,621,683 | $ | 7,156,989 | $ | 7,200,408 | ||||||||||||||||||||
| UnSub Group Credit Facility | Level III | 1,898,893 | 1,995,498 | — | — | ||||||||||||||||||||||||
| Receivables facility loan | Level III | 881,175 | 990,076 | — | — | ||||||||||||||||||||||||
| Senior guaranteed and senior secured notes | Level II | 11,128,572 | 7,929,625 | 11,119,314 | 9,503,825 | ||||||||||||||||||||||||
| Senior notes | Level II | 6,578,353 | 2,841,963 | 6,585,181 | 3,825,788 | ||||||||||||||||||||||||
| Notes payable and supply chain financing | Level II | — | — | 50,642 | 50,642 | ||||||||||||||||||||||||
| $ | 26,100,595 | $ | 19,378,845 | $ | 24,912,126 | $ | 20,580,663 | ||||||||||||||||||||||
(a)Amounts are net of unamortized deferred financing costs and discounts/premiums.
The table above excludes the estimated fair value of CSC Holding's note payable to Captive of $82,500 and $90,500 for the years ended December 31, 2025 and 2024, as it is eliminated in the Optimum Communications' consolidated financial statements (see Note 16). The carrying value of the note payable approximates fair value due to its short-term maturity (less than one year).
The fair value estimates related to our debt instruments presented above are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 13, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 12, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Mar 1, 2019 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.