Optimum Communications, Inc.OPTU
Optimum Communications, Inc. Goodwill & Intangibles Disclosure
INTANGIBLE ASSETS
Our amortizable intangible assets primarily consist of customer relationships acquired pursuant to business combinations and represent the value of the business relationship with those customers.
The following table summarizes information relating to our acquired amortizable intangible assets:
| As of December 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Estimated Useful Lives | |||||||||||||||||||||||||||||||||||
| Customer relationships | $ | 6,089,374 | $ | (5,405,190) | $ | 684,184 | $ | 6,089,050 | $ | (5,137,180) | $ | 951,870 | 1 to 18 years | ||||||||||||||||||||||||||||
| Trade names | 1,010,000 | (1,010,000) | — | 1,010,000 | (1,010,000) | — | 4 to 7 years | ||||||||||||||||||||||||||||||||||
| Other amortizable intangibles | 64,664 | (46,381) | 18,283 | 51,909 | (42,974) | 8,935 | 1 to 15 years | ||||||||||||||||||||||||||||||||||
| $ | 7,164,038 | $ | (6,461,571) | $ | 702,467 | $ | 7,150,959 | $ | (6,190,154) | $ | 960,805 | ||||||||||||||||||||||||||||||
Amortization expense for the years ended December 31, 2025, 2024 and 2023 aggregated $270,817, $315,843, and $391,378, respectively.
The following table sets forth the estimated amortization expense on intangible assets for the periods presented:
| Estimated amortization expense | |||||
| Year Ending December 31, 2026 | $221,207 | ||||
| Year Ending December 31, 2027 | 175,398 | ||||
| Year Ending December 31, 2028 | 132,094 | ||||
| Year Ending December 31, 2029 | 89,195 | ||||
| Year Ending December 31, 2030 | 52,999 | ||||
The carrying amount of indefinite-lived cable franchise rights and goodwill is presented below:
| Indefinite-lived Cable Franchise Rights | Goodwill | ||||||||||
| Balance as of December 31, 2022 | $ | 13,216,355 | $ | 8,208,773 | |||||||
| Adjustment related to 2022 acquisition | — | (1,002) | |||||||||
| Impairment charge related to Goodwill | — | (163,055) | |||||||||
| Balance as of December 31, 2023 | 13,216,355 | 8,044,716 | |||||||||
| Adjustment related to the sale of certain cable assets | (5,047) | (3,499) | |||||||||
| Balance as of December 31, 2024 | 13,211,308 | 8,041,217 | |||||||||
| Impairment charge related to cable franchise rights | (1,611,308) | — | |||||||||
| Balance as of December 31, 2025 | $ | 11,600,000 | $ | 8,041,217 | |||||||
Impairment Tests
Goodwill and the value of indefinite-lived cable franchises acquired in business combinations are not amortized. Rather, such assets are tested for impairment annually as of October 1, or whenever events or changes in circumstances indicate that it is more likely than not that the assets may be impaired. A deterioration in the Company’s operating performance, projected future performance or broader macro-economic conditions could be a triggering event that would require testing and may result in an impairment charge prior to the annual testing date.
During the three months ended September 30, 2025, we completed our annual long-term plan, which reflected a decline in estimated future cash flows. Management concluded that this was a triggering event and a quantitative impairment test of our indefinite-lived cable franchise rights and goodwill was performed as of September 30, 2025.
As a result of our quantitative impairment test, we recorded a non-cash impairment charge of $1,611,308 related to our indefinite-lived cable franchise rights in the third quarter of 2025. These intangible assets represent contractual rights to operate cable systems in specific geographic areas. The decline in the estimated fair value of our indefinite-lived franchise rights was attributable to updated long-term financial projections, that reflected a reduction in estimated future cash flows as a result of the sustained competitive environment and macroeconomic conditions. The impairment analysis was conducted using a discounted cash flow methodology, which incorporated updated projections of future cash flows, growth rates, and discount rates consistent with current market assumptions. If we experience a significant shortfall in cash flows from new customers, then we may incur future non-cash impairment charges on our indefinite-lived cable franchise rights. This charge is included in "Restructuring, impairments and other operating items" in the consolidated statement of operations and did not impact our cash flow or liquidity. As the carrying value of our franchise rights represent fair value, any reduction in the fair value of these rights would result in an additional impairment charge. A hypothetical 10% reduction in the fair value of our franchise rights would result in an impairment charge of approximately $1,160,000.
In connection with the quantitative test performed on goodwill, we concluded the estimated fair value of our Telecommunications reporting unit exceeded its carrying value and no impairment was recorded.
Our annual impairment tests as of October 1 in 2025 and 2024 did not result in any impairment charges. However, in 2023, the carrying value of our News and Advertising reporting unit exceeded its fair value resulting in an impairment charge of $163,055, representing the full carrying amount of the goodwill at the annual impairment test date. Approximately $130,040 of the goodwill was recorded in connection with the acquisition of Cheddar Inc. in 2019. The decrease in the fair value of the News and Advertising reporting unit was primarily due to a decrease in projected cash flows due to the overall decline in the advertising market and an increase in the discount rate used in the discounted cash flow method.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 Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.