Optimum Communications, Inc.OPTU
Optimum Communications, Inc. Income Taxes Disclosure
INCOME TAXES
Optimum Communications files a federal consolidated and certain state combined income tax returns with its 80% or more owned subsidiaries. CSC Holdings and its subsidiaries are included in the consolidated federal income tax returns of Optimum Communications. The income tax provision for CSC Holdings is determined on a stand-alone basis for all periods presented as if CSC Holdings filed separate consolidated income tax returns.
Pre-tax income (loss) for the years ended December 31, 2025, 2024 and 2023 consist of the following components:
| Optimum Communications | CSC Holdings | ||||||||||||||||||||||||||||||||||
| Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| U.S | $ | (1,871,460) | $ | (43,023) | $ | 148,464 | $ | (1,887,059) | $ | (46,367) | $ | 148,464 | |||||||||||||||||||||||
| International | (58,495) | (39,325) | (29,899) | (58,495) | (39,325) | (29,899) | |||||||||||||||||||||||||||||
| (1,929,955) | (82,348) | 118,565 | (1,945,554) | (85,692) | 118,565 | ||||||||||||||||||||||||||||||
Income tax expense for the years ended December 31, 2025, 2024 and 2023 consist of the following components:
| Optimum Communications | CSC Holdings | ||||||||||||||||||||||||||||||||||
| Years Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Current expense (benefit): | |||||||||||||||||||||||||||||||||||
| Federal | $ | 93,502 | $ | 312,330 | $ | 227,189 | $ | 88,425 | $ | 311,628 | $ | 227,189 | |||||||||||||||||||||||
| State | 32,681 | 79,651 | 39,149 | 32,681 | 79,651 | 47,331 | |||||||||||||||||||||||||||||
| Foreign | (204) | — | 105 | (204) | — | 105 | |||||||||||||||||||||||||||||
| Total current | 125,979 | 391,981 | 266,443 | 120,902 | 391,279 | 274,625 | |||||||||||||||||||||||||||||
| Deferred expense (benefit): | |||||||||||||||||||||||||||||||||||
| Federal | (160,955) | (321,244) | (210,378) | (159,145) | (321,245) | (210,378) | |||||||||||||||||||||||||||||
| State | (61,976) | (74,872) | (16,547) | (61,976) | (78,370) | (21,680) | |||||||||||||||||||||||||||||
| Foreign | 44 | 64 | 10 | 44 | 64 | 10 | |||||||||||||||||||||||||||||
| Total deferred | (222,887) | (396,052) | (226,915) | (221,077) | (399,551) | (232,048) | |||||||||||||||||||||||||||||
| Income tax expense (benefit) | $ | (96,908) | $ | (4,071) | $ | 39,528 | $ | (100,175) | $ | (8,272) | $ | 42,577 | |||||||||||||||||||||||
The income tax expense (benefit) attributable to operations differs from the amount derived by applying the statutory federal rate to pretax income (loss) principally due to the effect of the following items:
| Optimum Communications | ||||||||||||||||||||||||||
| Years Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||||||||||||
| Federal tax expense (benefit) at statutory rate | $ | (405,291) | 21.00 | % | $ | (17,293) | 21.00 | % | $ | 24,899 | 21.00 | % | ||||||||||||||
| State income taxes, net of federal impact (a) | (46,164) | 2.39 | % | (75,578) | 91.78 | % | 27,329 | 23.05 | % | |||||||||||||||||
| Foreign tax effects: | ||||||||||||||||||||||||||
| Israel: | ||||||||||||||||||||||||||
| NOLs net of changes in the valuation allowance | 12,167 | (0.63) | % | 8,444 | (10.25) | % | 6,806 | 5.74 | % | |||||||||||||||||
| Other Foreign Jurisdictions | 98 | (0.01) | % | (214) | 0.26 | % | (131) | (0.11) | % | |||||||||||||||||
| Effect of Cross-Border Tax Laws | (12,235) | 0.63 | % | (8,363) | 10.16 | % | (6,097) | (5.14) | % | |||||||||||||||||
| Tax credits | (5,837) | 0.30 | % | (3,882) | 4.72 | % | (3,529) | (2.98) | % | |||||||||||||||||
| Nontaxable or Nondeductible Items: | ||||||||||||||||||||||||||
| Excess tax deficiencies related to share-based compensation | 2,030 | (0.11) | % | 12,353 | (15.00) | % | 11,696 | 9.86 | % | |||||||||||||||||
| Impairment | 338,375 | (17.53) | % | — | — | % | 34,241 | 28.88 | % | |||||||||||||||||
| Minority interest | (7,394) | 0.38 | % | (5,274) | 6.40 | % | (5,529) | (4.66) | % | |||||||||||||||||
| Business dispositions | 5,694 | (0.30) | % | 16,887 | (20.51) | % | (36,748) | (30.99) | % | |||||||||||||||||
| Other, net | 12,134 | (0.61) | % | 4,907 | (5.97) | % | 901 | 0.76 | % | |||||||||||||||||
| Changes in unrecognized tax benefits | 9,515 | (0.49) | % | 63,942 | (77.65) | % | (14,310) | (12.07) | % | |||||||||||||||||
| Income tax expense (benefit) | $ | (96,908) | 5.02 | % | $ | (4,071) | 4.94 | % | $ | 39,528 | 33.34 | % | ||||||||||||||
(a)Taxes to the State of New York made up the majority (greater than 50%) of the tax effect of this category for the years ended December 31, 2025 and 2024. Taxes to the states of Arkansas and California made up the majority (greater than 50%) of the tax effect of this category for the year ended December 31, 2023.
| CSC Holdings | ||||||||||||||||||||||||||
| Years Ended December 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | |||||||||||||||||||||
| Federal tax expense (benefit) at statutory rate | $ | (408,567) | 21.00 | % | $ | (17,995) | 21.00 | % | $ | 24,899 | 21.00 | % | ||||||||||||||
| State income taxes, net of federal impact (a) | (46,164) | 2.37 | % | (79,077) | 92.28 | % | 30,378 | 25.62 | % | |||||||||||||||||
| Foreign tax effects: | ||||||||||||||||||||||||||
| Israel: | ||||||||||||||||||||||||||
| NOLs net of changes in the valuation allowance | 12,167 | (0.63) | % | 8,444 | (9.85) | % | 6,806 | 5.74 | % | |||||||||||||||||
| Other Foreign Jurisdictions | 98 | (0.01) | % | (214) | 0.25 | % | (131) | (0.11) | % | |||||||||||||||||
| Effect of Cross-Border Tax Laws | (12,235) | 0.63 | % | (8,363) | 9.76 | % | (6,097) | (5.14) | % | |||||||||||||||||
| Tax credits | (5,837) | 0.30 | % | (3,882) | 4.53 | % | (3,529) | (2.98) | % | |||||||||||||||||
| Nontaxable or Nondeductible Items: | ||||||||||||||||||||||||||
| Excess tax deficiencies related to share-based compensation | 2,030 | (0.10) | % | 12,353 | (14.42) | % | 11,696 | 9.86 | % | |||||||||||||||||
| Impairment | 338,375 | (17.39) | % | — | — | % | 34,241 | 28.88 | % | |||||||||||||||||
| Minority interest | (7,394) | 0.38 | % | (5,274) | 6.15 | % | (5,529) | (4.66) | % | |||||||||||||||||
| Business dispositions | 5,694 | (0.29) | % | 16,887 | (19.71) | % | (36,748) | (30.99) | % | |||||||||||||||||
| Other, net | 12,143 | (0.62) | % | 4,907 | (5.72) | % | 901 | 0.76 | % | |||||||||||||||||
| Changes in unrecognized tax benefits | 9,515 | (0.49) | % | 63,942 | (74.62) | % | (14,310) | (12.07) | % | |||||||||||||||||
| Income tax expense (benefit) | $ | (100,175) | 5.15 | % | $ | (8,272) | 9.65 | % | $ | 42,577 | 35.91 | % | ||||||||||||||
(a)Taxes to the State of New York made up the majority (greater than 50%) of the tax effect of this category for the years ended December 31, 2025 and 2024. Taxes to the states of Arkansas and California made up the majority (greater than 50%) of the tax effect of this category for the year ended December 31, 2023.
In 2025, we recorded a non-cash impairment charge of $1,611,308 related to our indefinite-lived cable franchise rights. The impairment charge was not recognized for tax purposes.
Also in 2025, we completed the transfer of i24 NEWS which resulted in a $10,157 tax loss. The deferred tax asset for the cumulative net operating losses and the associated valuation allowances for Israel and Luxembourg have been reversed.
In 2024, we decided to exit the commitment we made in May 2021 of investing $600,000 in capital gains generated from the 49.99% sale of Lightpath in 2020, into Qualified Opportunity Zones (“QOZ”) over the next 5 years, which allowed for tax deferral recognition until 2026. The tax expense impact of this exit is approximately $1,269 for the year ended December 31, 2024.
Also during 2024, we increased our unrecognized tax benefit (“UTB”) reserve liability for tax years 2023 and 2024 relating to the qualified emerging technology company (“QETC”) position taken in 2022, as well as for the state impact on the QOZ exit discussed above.
Due to the sale of our Cheddar News business in December 2023 to an unrelated third party, we recognized a capital loss resulting in an income tax benefit for the year ended December 31, 2023. In addition, our income tax expense for the year ended December 31, 2023 was impacted by the non-deductibility of the impairment of goodwill related to our News and Advertising business.
The tax effects of temporary differences which give rise to significant portions of deferred tax assets or liabilities and the corresponding valuation allowance are as follows:
| Optimum Communications | CSC Holdings | ||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Noncurrent | |||||||||||||||||||||||
| NOLs, capital loss, and tax credit carry forwards | $ | 106,672 | $ | 129,444 | $ | 86,332 | $ | 109,103 | |||||||||||||||
| Nondeductible interest | 1,004,828 | 781,826 | 1,004,828 | 781,826 | |||||||||||||||||||
| Other nondeductible accruals | 185,439 | 160,090 | 183,628 | 160,090 | |||||||||||||||||||
| Other | 6,654 | 42,388 | 6,654 | 42,388 | |||||||||||||||||||
| Deferred tax assets | 1,303,593 | 1,113,748 | 1,281,442 | 1,093,407 | |||||||||||||||||||
| Less: Valuation allowance | (44,592) | (93,005) | (24,252) | (72,664) | |||||||||||||||||||
| Net deferred tax assets, noncurrent | 1,259,001 | 1,020,743 | 1,257,190 | 1,020,743 | |||||||||||||||||||
| Deferred tax liabilities: | |||||||||||||||||||||||
| Fixed assets and intangibles | (5,231,880) | (5,208,559) | (5,231,880) | (5,208,559) | |||||||||||||||||||
| Partnership investments | (183,040) | (185,473) | (183,040) | (185,473) | |||||||||||||||||||
| Other | (76,712) | (82,272) | (76,712) | (82,272) | |||||||||||||||||||
| Deferred tax liability, noncurrent | (5,491,632) | (5,476,304) | (5,491,632) | (5,476,304) | |||||||||||||||||||
| Total net deferred tax liabilities | $ | (4,232,631) | $ | (4,455,561) | $ | (4,234,442) | $ | (4,455,561) | |||||||||||||||
Due to the exit of the QOZ commitment in 2024 discussed above, taxes payable (recorded in other current liabilities) and the UTB reserve increased by $93,624 and $12,920, respectively, while the deferred tax liability decreased by $105,278, on our consolidated balance sheet at December 31, 2024.
In the fourth quarter of 2024, we carried back the net capital loss of $98,207 due to the sale of the Cheddar News business in December 2023 against the taxable capital gain generated in connection with the 49.99% sale of Lightpath in 2020.
Deferred tax assets have resulted primarily from our future deductible temporary differences and NOLs. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating the need for a valuation allowance, management takes into account various factors, including the expected level of future taxable income, available tax planning strategies and reversals of existing taxable temporary differences. If such estimates and related assumptions change in the future, we may be required to record additional valuation allowances against its deferred tax assets, resulting in additional income tax expense in our consolidated statements of operations. Management evaluates the realizability of the deferred tax assets and the need for additional valuation allowances quarterly. Due to the significant deferred tax liabilities associated with our fixed assets and intangibles, primarily due to the change in the 2017 TCJA and the 2025 OBBBA, allowing 100% bonus depreciation on qualifying assets, the future taxable income that will result from the reversal of existing taxable temporary differences for which deferred tax liabilities are recognized is sufficient to conclude it is more likely than not that we will realize all of its gross deferred tax assets, except those deferred tax assets against which a valuation allowance has been recorded which relate to certain state NOLs. The valuation allowance recorded against the foreign NOLs of Israel and Luxembourg were reversed in 2025 as a result of the transfer of i24 NEWS to an entity under common control.
In addition to the changes from the OBBBA mentioned above, the OBBBA also permanently increases the deductibility of interest expense based on an EBITDA versus EBIT standard, and permanently eliminates the requirement to capitalize and amortize U.S.-based research and experimental expenditures over five years (making these expenditures fully deductible in the period incurred), resulting in reductions to the deferred tax assets.
Income taxes paid for the years ended December 31, 2025, 2024, and 2023 were as follows:
| Optimum Communications | CSC Holdings | ||||||||||||||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Federal | $ | 139,552 | $ | 230,282 | $ | 157,000 | $ | 139,552 | $ | 230,282 | $ | 157,000 | |||||||||||||||||||||||
| State: | |||||||||||||||||||||||||||||||||||
| New Jersey | 8,402 | 3,332 | 15,511 | 8,402 | 3,332 | 15,511 | |||||||||||||||||||||||||||||
| Other | 11,281 | 21,739 | 27,784 | 11,281 | 21,739 | 27,784 | |||||||||||||||||||||||||||||
| Total income taxes paid | $ | 159,235 | $ | 255,353 | $ | 200,295 | $ | 159,235 | $ | 255,353 | $ | 200,295 | |||||||||||||||||||||||
In the normal course of business, we engage in transactions in which the income tax consequences may be uncertain. Our income tax returns are filed based on interpretation of tax laws and regulations. Such income tax returns are subject to examination by taxing authorities. For financial statement purposes, we only recognize tax positions that it believes are more likely than not of being sustained. There is considerable judgment involved in determining whether positions taken or expected to be taken on the tax return are more likely than not of being sustained. Changes in the liabilities for uncertain tax positions are recognized in the interim period in which the positions are effectively settled or there is a change in factual circumstances.
The following is the activity relating to our UTB reserve liability:
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of year | $ | 114,365 | $ | 53,010 | $ | 70,593 | |||||||||||
| Increases (decreases) from prior period positions | 6,576 | 46,762 | (18,714) | ||||||||||||||
| Increases from current period positions | 15,981 | 15,117 | 1,131 | ||||||||||||||
| Decreases relating to settlements with tax authorities | — | (524) | — | ||||||||||||||
| Reductions from lapse of applicable statute of limitations | (19,191) | — | — | ||||||||||||||
| Balance at end of year | $ | 117,731 | $ | 114,365 | $ | 53,010 | |||||||||||
Interest and penalties related to UTBs are included in our provision for income taxes. We recognized a net expense for interest and penalties of $9,041, $17,862, and $1,475 during the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025 and 2024, accrued interest and penalties associated with UTBs were $45,167 and $36,126, respectively. The increase in interest and penalties for the years ended December 31, 2025 and 2024 was primarily due to the interest accruals on our QETC and Investment Tax Credits positions. If we were to prevail on all uncertain positions, the net effect would result in an income tax benefit of $93,727.
Optimum Communications and/or its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state, local and foreign jurisdictions. The most significant jurisdictions in which we are required to file state and local income tax returns include the states of New York, New Jersey, Connecticut, and the City of New York. We are currently under audit by the Internal Revenue Service for tax years 2020 and 2021 and multiple states for various open tax years 2015 and forward.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 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.