Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:

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PART I: FINANCIAL INFORMATION

~~Item~~ITEM 1. ~~Consolidated~~ ~~Financial Statements~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CABLE ONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except par value and share data)	June 30, 2017			December 31, 2016
	(Unaudited)
(in thousands, except par value and share data)							March 31, 2018			December 31, 2017
Assets
Current Assets:
Cash and cash equivalents	$	89,793		$	138,040		$	185,493		$	161,752
Accounts receivable, net		45,812			32,526			25,477			29,930
Income tax receivable		16,539			4,547
Prepaid assets		13,256			10,824
Income taxes receivable								16,782			21,331
Prepaid and other current assets								19,474			10,898
Total Current Assets		165,400			185,937			247,226			223,911
Property, plant and equipment, net		803,383			619,621			820,009			831,892
Intangibles, net		971,673			497,480			962,933			965,745
Goodwill		178,374			84,928			172,129			172,129
Other assets		5,664			9,305			11,489			10,955
Total Assets	$	2,124,494		$	1,397,271		$	2,213,786		$	2,204,632

Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities	$	86,601		$	82,703		$	98,379		$	117,855
Deferred revenue		36,795			22,190			17,780			15,008
Long-term debt - current portion		11,250			6,250
Current portion of long-term debt								15,938			14,375
Total Current Liabilities		134,646			111,143			132,097			147,238
Long-term debt		1,167,458			530,886			1,157,273			1,160,682
Deferred income taxes		294,850			276,297			212,864			207,154
Accrued compensation and other liabilities		24,392			24,434
Other liabilities								11,642			13,111
Total Liabilities		1,621,346			942,760			1,513,876			1,528,185

Commitments and contingencies (see Note 12)
Commitments and contingencies (refer to note 14)

Stockholders' Equity
Preferred stock ($0.01 par value; 4,000,000 shares authorized; none issued or outstanding)		-			-			-			-
Common stock ($0.01 par value; 40,000,000 shares authorized; 5,887,899 shares issued; and 5,725,095 and 5,708,223 shares outstanding as of June 30, 2017 and December 31, 2016, respectively)		59			59
Common stock ($0.01 par value; 40,000,000 shares authorized; 5,887,899 shares issued; and 5,732,441 and 5,731,442 shares outstanding as of March 31, 2018 and December 31, 2017, respectively)								59			59
Additional paid-in capital		22,514			17,669			30,750			28,412
Retained earnings		556,401			511,776			759,004			728,386
Accumulated other comprehensive loss		(442	)		(446	)		(351	)		(352	)
Treasury stock, at cost (162,804 and 179,676 shares held as of June 30, 2017 and December 31, 2016, respectively)		(75,384	)		(74,547	)
Treasury stock, at cost (155,458 and 156,457 shares held as of March 31, 2018 and December 31, 2017, respectively)								(89,552	)		(80,058	)
Total Stockholders' Equity		503,148			454,511			699,910			676,447
Total Liabilities and Stockholders' Equity	$	2,124,494		$	1,397,271		$	2,213,786		$	2,204,632

See accompanying notes to ~~unaudited Consolidated Financial Statements.~~condensed consolidated financial statements.

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CABLE ONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Six Months Ended						Three Months Ended
	June 30,						June 30,						March 31,
(in thousands, except per share and share data)	2017			2016			2017			2016
(in thousands, except per share and share data)													2018			2017
Revenues	$	241,042		$	204,557		$	448,469		$	407,362		$	265,761		$	207,434
Costs and expenses
Operating (excluding depreciation and amortization)		83,849			75,672			152,932			152,100			94,739			69,083
Selling, general and administrative		51,194			43,482			96,927			87,375			50,949			46,385
Depreciation and amortization		46,890			34,689			85,295			69,382			48,778			39,536
(Gain) loss on disposal of assets		462			157			(5,686	)		565
Total operating costs and expenses		182,395			154,000			329,468			309,422
(Gain) loss on disposal of assets, net														6,634			(6,146	)
Total costs and expenses														201,100			148,858
Income from operations		58,647			50,557			119,001			97,940			64,661			58,576
Interest expense		(11,782	)		(7,549	)		(19,389	)		(15,104	)		(14,723	)		(7,606	)
Other income (expense), net		(322	)		183			(35	)		693			617			287
Income before income taxes		46,543			43,191			99,577			83,529			50,555			51,257
Provision for income taxes		17,967			16,558			37,787			29,852
Income tax provision														9,902			19,144
Net income	$	28,576		$	26,633		$	61,790		$	53,677		$	40,653		$	32,113

Other comprehensive gain (loss), net of tax		2			(28	)		4			(55	)
Comprehensive income	$	28,578		$	26,605		$	61,794		$	53,622

Net income per common share:
Basic	$	5.03		$	4.64		$	10.88		$	9.30		$	7.13		$	5.66
Diluted	$	4.97		$	4.62		$	10.76		$	9.27		$	7.08		$	5.60
Weighted average common shares outstanding:
Basic		5,678,394			5,743,465			5,677,411			5,769,859			5,702,539			5,671,838
Diluted		5,745,617			5,766,312			5,740,837			5,788,385			5,742,648			5,730,901

Other comprehensive gain (loss), net of tax													$	1		$	2
Comprehensive income													$	40,654		$	32,115

Dividends declared per common share													$	1.75		$	1.50

See accompanying notes to ~~unaudited Consolidated Financial Statements.~~condensed consolidated financial statements.

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CABLE ONE, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

						Additional					Treasury			Accumulated Other			Total								Additional					Treasury			Accumulated Other			Total
	Common Stock					Paid-In		Retained			Stock,			Comprehensive			Stockholders’			Common Stock					Paid-In		Retained			Stock,			Comprehensive			Stockholders’
(in thousands, except share data)	Shares			Amount		Capital		Earnings			at cost			Loss			Equity			Shares			Amount		Capital		Earnings			at cost			Loss			Equity
Balance at December 31, 2016		5,708,223		$	59	$	17,669	$	511,776		$	(74,547	)	$	(446	)	$	454,511
Balance at December 31, 2017																					5,731,442		$	59	$	28,412	$	728,386		$	(80,058	)	$	(352	)	$	676,447
Net income		-			-		-		61,790			-			-			61,790			-			-		-		40,653			-			-			40,653
Changes in pension, net of tax		-			-		-		-			-			4			4			-			-		-		-			-			1			1
Equity-based compensation		-			-		4,845		-			-			-			4,845			-			-		2,338		-			-			-			2,338
Issuance of restricted stock awards, net of forfeitures		18,238			-		-		-			-			-			-
Issuance of equity awards, net of forfeitures																					14,077			-		-		-			-			-			-
Repurchases of common stock		(700	)		-		-		-			(399	)		-			(399	)		(3,311	)		-		-		-			(2,295	)		-			(2,295	)
Withholding tax for equity awards		(666	)		-		-		-			(438	)		-			(438	)		(9,767	)		-		-		-			(7,199	)		-			(7,199	)
Dividends paid to stockholders		-			-		-		(17,165	)		-			-			(17,165	)		-			-		-		(10,035	)		-			-			(10,035	)
Balance at June 30, 2017		5,725,095		$	59	$	22,514	$	556,401		$	(75,384	)	$	(442	)	$	503,148
Balance at March 31, 2018																					5,732,441		$	59	$	30,750	$	759,004		$	(89,552	)	$	(351	)	$	699,910

See accompanying notes to ~~unaudited Consolidated Financial Statements.~~condensed consolidated financial statements.

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CABLE ONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,						Three Months Ended March 31,
(in thousands)	2017			2016			2018			2017
Cash flows from operating activities:
Net income	$	61,790		$	53,677		$	40,653		$	32,113
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		85,295			69,382			48,778			39,536
Amortization of debt issuance costs		1,191			809
Amortization of debt issuance cost								970			400
Equity-based compensation		4,845			6,466			2,338			2,427
Write-off of debt issuance costs		613			-
Deferred income taxes		7,832			(3,330	)
(Gain) loss on disposal of assets		(5,686	)		565
Change in deferred income taxes								5,710			(203	)
(Gain) loss on disposal of assets, net								6,634			(6,146	)
Changes in operating assets and liabilities:
Accounts receivable, net		1,741			3,612			4,453			2,009
Income tax receivable		(11,992	)		-
Prepaid assets		(1,248	)		(1,388	)
Income taxes receivable								4,549			4,547
Prepaid and other current assets								(8,576	)		(3,336	)
Accounts payable and accrued liabilities		(14,073	)		(4,974	)		(11,663	)		(7,977	)
Deferred revenue		89			(160	)		2,772			527
Income taxes payable		-			(23	)		-			14,758
Other assets and liabilities, net		462			944			(1,926	)		(395	)
Net cash provided by operating activities		130,859			125,580			94,692			78,260

Cash flows from investing activities:
Purchase of business, net of cash acquired		(728,783	)		-
Capital expenditures		(76,430	)		(65,023	)		(41,019	)		(35,917	)
Change in accrued expenses related to capital expenditures		(1,505	)		(10,958	)		(4,826	)		(1,143	)
Proceeds from sales of property, plant and equipment		10,912			459			226			10,075
Net cash used in investing activities		(795,806	)		(75,522	)		(45,619	)		(26,985	)

Cash flows from financing activities:
Proceeds from issuance of long-term debt		750,000			-
Payment of debt issuance costs		(15,224	)		-
Payments on long-term debt		(95,008	)		(1,258	)		(2,816	)		(1,254	)
Repurchases of common stock		(399	)		(46,511	)		(2,295	)		(399	)
Payment of withholding tax for equity awards		(438	)		-			(7,199	)		(331	)
Dividends paid to stockholders		(17,165	)		(17,303	)		(10,035	)		(8,579	)
Cash overdraft		(5,066	)		(1,444	)
Net cash provided by (used in) financing activities		616,700			(66,516	)
Change in cash overdraft								(2,987	)		(5,285	)
Net cash used in financing activities								(25,332	)		(15,848	)

Change in cash and cash equivalents		(48,247	)		(16,458	)		23,741			35,427
Cash and cash equivalents, beginning of period		138,040			119,199			161,752			138,040
Cash and cash equivalents, end of period	$	89,793		$	102,741		$	185,493		$	173,467

Supplemental cash flow disclosures:
Cash paid for interest	$	14,031		$	14,248
Cash paid for income taxes	$	41,947		$	32,615
Cash paid for interest, net of capitalized interest							$	7,072		$	743
Cash paid for income taxes, net of refunds							$	35		$	42

See accompanying notes to ~~unaudited Consolidated Financial Statements.~~condensed consolidated financial statements.

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CABLE ONE, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

1.	~~DESCRIPTION OF BUSINESS~~ ~~AND BASIS OF PRESENTATION~~

Description of Business. Cable One, Inc. (“Cable One” ~~or the “Company”~~) owns and operates cable systems that provide data, video and voice services to residential and commercial subscribers in 21 Western, Midwestern and Southern states of the United ~~States of America. Prior to July 1, 2015, Cable One operated as a wholly owned subsidiary of Graham Holdings Company (“GHC”).~~States. As of ~~June 30, 2017,~~ March 31, 2018, Cable One provided service to ~~640,337~~651,550 data customers, ~~384,004~~350,874 video customers and ~~138,286~~131,920 voice customers.

On May 1, 2017, Cable One completed the acquisition of all of the outstanding equity interests of RBI Holding LLC (“NewWave”) ~~and NewWave~~, which became a wholly owned subsidiary of Cable One. ~~Cable One paid a purchase price of $741.0 million in cash on a debt-free basis and subject~~Refer to ~~customary post-closing adjustments. See Note 2~~note 4 for details on ~~this transaction.~~the transaction and note 8 for details on the related financing.

Unless otherwise stated or the context otherwise indicates, all references in this Quarterly Report on Form ~~10-Q~~10-Q to “Cable One,” “us,” “our,” “we” or the “Company” refer to Cable One, Inc. and its wholly owned subsidiaries.

Basis of Presentation. The condensed consolidated financial statements and accompanying ~~Consolidated Financial Statements~~notes thereto have been prepared in accordance with: (i) generally accepted accounting principles in the United States (“GAAP”) for interim financial information; and (ii) the guidance of Rule ~~10-01~~10-01 of Regulation ~~S-X~~S-X under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for financial statements required to be filed with the Securities and Exchange Commission (the “SEC”). As permitted under such ~~rule,~~guidance, certain notes and other financial information normally required by GAAP have been omitted. Management believes the ~~accompanying Consolidated Financial Statements~~condensed consolidated financial statements reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position, results of operations and cash flows as of and for the periods presented herein. These ~~Consolidated Financial Statements~~condensed consolidated financial statements are unaudited and should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form ~~10-K~~10-K for the fiscal year ended December 31, ~~2016.~~2017 filed with the SEC on March 1, 2018 (the “2017 Form 10-K”). The ~~Company’s interim results of operations may not be indicative of its future results.~~

~~The~~ December 31, ~~2016~~ 2017 year-end balance sheet data was derived from the Company’s audited consolidated financial statements, but does not include all disclosures required by GAAP. The Company’s interim results of operations may not be indicative of its future results.

~~Certain reclassifications have been made to prior period amounts to conform to the current period presentation.~~

Principles of Consolidation. The ~~accompanying Consolidated Financial Statements~~condensed consolidated financial statements include the accounts of the Company, including its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Segment Reporting. Accounting Standard Codification (“ASC”) 280 - Segment Reporting requires the disclosure of factors used to identify an ~~enterprise’s~~entity’s reportable segments. The Company’s operations are organized and managed on the basis of cable systems within its geographic regions. Each cable system derives revenues from the delivery of similar products and services to a customer base that is also similar. Each cable system deploys similar technology to deliver the Company’s products and services, operates within a similar regulatory environment, has similar economic characteristics and is managed by the Company’s chief operating decision maker as part of an aggregate of all cable systems. Management evaluated the criteria for aggregation under ASC 280 and believes that the Company meets each of the respective criteria set forth therein. Accordingly, management has identified one reportable segment.

Use of Estimates. The preparation of the ~~Consolidated Financial Statements~~condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported herein. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates and underlying assumptions.

~~Change~~Revenue Recognition. The Company recognizes revenue in ~~Accounting Estimate.~~ Asaccordance with ASC 606 - Revenue from Contracts with Customers. Residential revenues are generated through subscriptions for data, video and voice services, which are sold individually and through bundles, typically at a ~~result of additional information available~~discounted rate on month to month terms, without penalty for cancellations. If a customer has bundled subscriptions, the sales price is allocated amongst the product lines based on the relative standalone selling prices charged to customers with unbundled service agreements. Business revenues are generated through subscriptions for data, video and voice services which are also sold individually and through bundles with varying contract terms ranging from ~~new systems and processes, the Company changed its accounting estimate related~~one month to the capitalization of certain internal labor and related costs associated with construction and customer installation activities beginning in the first quarter of 2017. Capitalized labor costs increased $5.1 million in the second quarter of 2017 compared to the second quarter of 2016 and $11.0 million for the six months ended June 30, 2017 compared to the year ago period as a result of the change in estimate.several years.

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The Company generally receives an allocation of scheduled advertising time as part of its distribution agreement with cable networks, which the Company sells to local, regional and national advertisers with terms that are generally less than one year. In most cases, the available advertising time is sold by the Company’s internal sales force. Since the Company is acting as principal in these arrangements, the advertising that is sold is reported as revenue on a gross basis. In cases where advertising time is sold by agencies, the Company is not acting as a principal and the advertising sold is reported net of agency fees. Advertising revenues are recognized when the commercials are aired.

The unit of account for ASC 606 is a performance obligation, which is a requirement within a contract to transfer a distinct good or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, performance is satisfied. Our residential and business portfolio may include a single performance obligation or multiple performance obligations that are delivered in a similar pattern of transfer. Customers are billed for various services to which they subscribe based upon published or contracted rates for each service. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation based on the published or contracted rate. These performance obligations are generally satisfied over time as customers simultaneously receive and consume the benefits of the Company’s defined performance obligations. Advertising revenues are recognized at a point in time when the underlying performance obligation is complete.

The Company also incurs incremental internal costs to acquire residential and business customers, such as commission costs, and third-party costs to service specific contracts. These costs are capitalized as contract assets and amortized over the applicable period. For commissions, the amortization period is the average customer tenure, which was approximately five years for both residential and business customers. All other costs are amortized over the contract period.

Recently Adopted ~~and Issued~~ Accounting Pronouncements. In May 2017, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. ~~2017-09,~~2017-09, Compensation – Stock Compensation (Topic ~~718)~~718): Scope of Modification Accounting. ASU ~~2017-09~~2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in accordance with Topic 718. The ASU iswas effective ~~for all entities for interim and annual reporting periods beginning after December 15, 2017, with early~~January 1, 2018. The adoption ~~permitted. The Company is evaluating the impact~~ of ~~adopting~~ this guidance did not have a material impact on ~~its Consolidated Financial Statements.~~the Company’s consolidated financial statements, but may have an impact in the future.

In January 2017, the FASB issued ASU No. ~~2017-04,~~2017-04, Intangibles - Goodwill and Other (Topic ~~350)~~350): Simplifying the Test for Goodwill Impairment. ASU ~~2017-04~~2017-04 removes Step 2two of the ~~current~~previous goodwill impairment test under ASC 350 and replaces it with a simplified model. Under the simplified model, a goodwill impairment will be calculated as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill. The amount of any impairment under the simplified model may differ from what would have been recognized under the ~~two-step~~previous two-step test. The ASU is effective for annual and any interim impairment tests performed for periods beginning after December 15, 2019, with early adoption permitted. The ~~provisions~~Company elected to early adopt the standard on January 1, 2018. The adoption of ~~ASU 2017-04 would~~ this guidance did not have ~~affected our last goodwill impairment assessment,~~a material impact on the Company’s consolidated financial statements, but ~~no assurance can be provided that the simplified testing methodology will not affect our goodwill impairment assessment~~may have an impact in the future.

In January 2017, the FASB issued ASU No. ~~2017-01,~~2017-01, Business Combinations (Topic ~~805)~~805): Clarifying the Definition of a Business. The purpose of the amendment is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ~~For public entities, the amendments in~~The ASU ~~2017-01 are~~was effective ~~for interim and annual reporting periods beginning after December 15, 2017.~~ January 1, 2018. The ~~Company is evaluating the impact~~adoption of ~~adopting~~ this guidance did not have an impact on ~~any future transactions.~~the Company’s consolidated financial statements as no asset acquisitions or business combinations have occurred since the effective date, but may have an impact in the future.

In August 2016, the FASB issued ASU No. ~~2016-15,~~2016-15, Statement of Cash Flows (Topic ~~230)~~230): Classification of Certain Cash Receipts and Cash Payments. The guidance clarifies the way in which certain cash receipts and cash payments should be classified onwithin the ~~statement~~consolidated statements of cash flows and also how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU ~~2016-15 is~~2016-15 was effective ~~for the first quarter~~January 1, 2018. The adoption of ~~2018, with early adoption permitted. The Company is evaluating the impact of adopting~~ this guidance did not have a material impact on ~~its Consolidated Financial Statements.~~the classification of any cash flows within the Company’s consolidated statements of cash flows, but may have an impact in the future.

In ~~March 2016,~~ May 2014, the FASB issued ASU No. ~~2016-09,~~ ~~Compensation~~ 2014- ~~Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification of related matters in the statement of cash flows. ASU 2016-09 was effective beginning in the first quarter of 2017. The Company will prospectively record a deferred tax benefit or expense associated with the difference between book and tax for equity-based compensation expense, which is expected to result in increased volatility to the Company’s income tax expense. The Company also established an accounting policy election to assume zero forfeitures for stock award grants and account for forfeitures when they occur which prospectively impacts stock compensation expense. Other aspects of the adoption of ASU 2016-09 did not have a material impact to the Company’s Consolidated Financial Statements.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842)~~. ASU 2016-02 requires lessees to record most of their leases on the balance sheet, which will be recognized as a right-of-use asset and a lease liability. The Company will be required to classify each separate lease component as an operating or finance lease at the lease commencement date. Initial measurement of the right-of-use asset and lease liability is the same for operating and finance leases, however, expense recognition and amortization of the right-of-use asset differs. Operating leases will reflect lease expense on a straight-line basis similar to current operating leases. The straight-line expense will reflect the interest expense on the lease liability (effective interest method) and amortization of the right-of-use asset, which will be presented as a single line item in the operating expense section of the income statement. Finance leases will reflect a front-loaded expense pattern similar to the pattern for current capital leases. ASU 2016-02 is effective for the first quarter of 2019, with early adoption permitted. The Company is evaluating the impact of adopting this guidance~~on its Consolidated Financial Statements.~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~09, Revenue from Contracts with Customers (Topic ~~606)~~606). ASU ~~2014-09~~2014-09 provides new guidance related to how an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard ~~also expands the required disclosures~~provides a single principles-based, five step model to ~~include the disaggregation of revenue from~~be applied to all contracts with ~~customers into categories that depict how~~customers: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when each performance obligation is satisfied. The updated guidance also requires additional disclosures regarding the nature, timing and any uncertainty regarding potential revenue recognition.

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We adopted the updated guidance on January 1, 2018 on a full retrospective basis, which required us to reflect the impact of the updated guidance for all periods presented. Upon adoption, we also implemented changes in our presentation of certain revenues and expenses, which resulted in the deferral of all business installation revenues and residential and business commission expenses over a period of time instead of immediate recognition. The adoption of the new standard did not have a material impact on our consolidated results of operations or financial position for any period presented. Refer to note 3 for further details of the impact on the Company’s 2017 condensed consolidated financial statements and the requisite disclosures regarding the nature, timing and any uncertainty regarding potential revenue ~~and cash flows are affected by economic factors. During~~recognition.

Recently Issued But Not Yet Adopted Accounting Pronouncements. In February 2016, the FASB issued ~~additional interpretive guidance relating~~ASU No.2016-02,Leases (Topic 842). ASU 2016-02 requires lessees to record most of their leases on the ~~standard which covered~~balance sheet as a right-of-use asset and a corresponding lease liability. The Company will be required to classify each separate lease component as an operating or finance lease at the ~~topics~~lease commencement date. Initial measurement of ~~principal versus agent considerations~~the right-of-use asset and ~~identifying performance obligations~~lease liability is the same for both operating and ~~licensing. The standard~~finance leases, however, expense recognition and amortization of the right-of-use asset differs. Operating leases will reflect lease expense on a straight-line basis similar to current operating leases while finance leases will reflect a front-loaded expense pattern similar to current capital leases. ASU 2016-02 is effective for the ~~Company in the~~ first quarter of ~~2018.~~2019, with early adoption permitted. The two permitted transition methods under the standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The Company is currently in the process of evaluating which method of transition will be utilized. Further, the Company is currently conducting an assessment to prepare for implementationadoption of this ~~guidance. To date, this assessment has included using workshops and questionnaires to identify revenue streams, analyzing contracts and assessing other areas that may~~update will result in ~~different accounting treatment under this topic, including installation~~an increase to the Company’s asset and ~~commission structure. The Company has reached a preliminary conclusion that~~liability balances due to new and existing operating leases being recorded on the majority of its residential customer revenue is not under an extended contract and will be evaluated on a month-to-month basis, and as such, does not anticipate significant changes related to revenue recognition for such customers. Revenue related to business contracts, installation and other up-front charges, costs to obtain contracts and other topics are still being evaluated.balance sheet. The Company continues to evaluate the impact of adopting this guidanceon its consolidated financial statements.

2.	REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

As previously disclosed in note 2 to the ~~standard~~Company’s consolidated financial statements included in the 2017 Form 10-K, the Company changed its accounting for the capitalization of certain internal labor and related costs associated with construction and customer installation activities commencing in the first quarter of 2017. The Company initially classified the entire change as a change in accounting estimate. During the fourth quarter of 2017, the Company determined that a portion of what had previously been reflected as a change in estimate should have been categorized as a change in accounting principle, a portion was determined to be the correction of an error and a portion remained a change in estimate. The changes determined to be a change in estimate or change in accounting principle were applied prospectively for all of 2017. The Company estimates that the change in principle resulted in a decrease in operating expenses (excluding depreciation and amortization) of approximately $3.8 million and $3.9 million, a decrease in selling, general and administrative expenses of approximately $0.1 million and $0.1 million and an increase in depreciation and amortization expense of $0.2 million and $0.7 million for the three months ended March 31, 2017 and March 31, 2018, respectively, compared to the results under the prior principle. Although the Company determined the error to be immaterial to its previously issued financial statements, the cumulative effect of the error would have been material if corrected in 2017. Therefore, as disclosed in the 2017 Form 10-K, the Company revised its historical financial statements to properly reflect the impact of the labor capitalization, including the related impact to depreciation expense and income taxes. In connection with this revision, the Company also corrected for other previously identified immaterial errors. The financial statements for the three months ended March 31, 2017 included in this Quarterly Report on ~~related disclosures as well as~~Form 10-Q have been similarly revised to reflect the ~~acquired NewWave operations.~~correction of these errors and should be read in conjunction with note 2 and note 17 in the 2017 Form 10-K.

The following tables present the effect of the revision on the condensed consolidated financial statements for the three months ended March 31, 2017 (in thousands, except per share data):

Three Months Ended March 31, 2017

As Reported

Adjustment

As Revised

Condensed Consolidated Statement of Operations and Comprehensive Income Information

Selling, general and administrative

45,733

523

46,256

Depreciation and amortization

38,404

1,132

39,536

Total costs and expenses

147,074

1,655

148,729

Income from operations

60,353

(1,655

)

58,698

Income before income taxes

53,034

(1,655

)

51,379

Income tax provision

19,819

(629

)

19,190

Net income

33,215

(1,026

)

32,189

Comprehensive income

33,217

(1,026

)

32,191

Net income per common share:

Basic

5.86

(0.18

)

5.68

Diluted

5.80

(0.18

)

5.62

Condensed Consolidated Statement of Cash Flows Information

Net income

33,215

(1,026

)

32,189

Depreciation and amortization

38,404

1,132

39,536

Accounts receivable, net

6,034

523

6,557

Change in deferred income taxes

472

(629

)

(157

)

Net cash provided by operating activities

78,260

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~~Acquired intangible assets consist of~~No measurement period adjustments were recorded during the ~~following (dollars in thousands):~~three months ended March 31, 2018.

~~The total weighted average amortization period for the acquired intangibles is 13.9 years.~~

The acquisition produced $93.4 million of goodwill, increasing the Company’s goodwill balance to $178.4 million at June 30, 2017. Goodwill represents the excess of the purchase price consideration over the fair value of the underlying net assets acquired and largely results from expected future synergies from combining operations as well as an assembled workforce, which does not qualify for separate recognition. As an indefinite-lived asset, goodwill is not amortized but rather is subject to impairment testing on at least an annual basis. Goodwill arising from the NewWave acquisition is deductible for tax purposes.

For the period from May 1, 2017 to June 30, 2017, the Company recognized revenue of $32.2 million and net income of $2.1 million relating to NewWave, which included charges for the amortization of acquired intangible assets of $2.1 million.

The following unaudited pro forma combined results of operations for the three and six months ended June 30, 2017 and 2016 have been prepared as if the acquisition of NewWave had occurred on January 1, 2016 and include adjustments for depreciation expense, amortization of intangibles, interest expense from financing, non-recurring acquisition-related transaction fees and the related aggregate impact on the provision for income taxes (in thousands, except per share data):

The unaudited pro forma combined results of operations is provided for informational purposes only and is not necessarily indicative of or intended to represent the results that would have been achieved had the NewWave acquisition been consummated as of January 1, 2016 or the results that may be achieved in the future.

~~The amount of franchise~~Fees imposed on the Company by various governmental authorities are passed through monthly to the Company’s customers and are periodically remitted to authorities. These fees ~~recorded~~were $4.1 million and $3.5 million for the three months ended March 31, 2018 and 2017, respectively, and were reported in residential data, video and voice revenues on a gross basis with a corresponding operating expense because the Company is acting as a principal.

Other is comprised primarily of customer late charges, activation fees and reconnect fees.

A significant portion of our revenue is derived from customers who may cancel their subscriptions at any time without penalty. As such, the amount of revenue related to unsatisfied performance obligations is not necessarily indicative of the future revenue to be recognized from our existing customers. Revenue from customers with a contractually specified term and non-cancelable service period will be recognized over the term of the underlying contract, which generally ranges from one to five years.

Contract Liabilities. Timing of revenue recognition may differ from the timing of invoicing to customers. Residential and business services customers are invoiced for subscription services in advance of the service period. Deferred revenue liabilities, or contract liabilities, are recorded when the Company collects payments in advance of performing the services.

Current deferred revenue liabilities consisting primarily of refundable customer prepayments were $17.8 million and $15.0 million as of March 31, 2018 and December 31, 2017. Long-term deferred revenue liabilities consisting primarily of installation charges or up-front fees from business services customers, were $2.2 million and $3.1 million as of March 31, 2018 and December 31, 2017, respectively, and were included in other liabilities in the condensed consolidated balance sheet.

Contract Costs. The Company recognizes an asset for incremental costs of obtaining a contract with a customer. Accordingly, deferred commissions paid to obtain residential ~~video revenues above was $4.0~~customers are recognized using a portfolio approach over a calculated average customer life. Deferred commissions were included in prepaid and other current assets and other assets in the condensed consolidated balance sheet and totaled $7.7 million and ~~$3.6~~$7.5 million as of March 31, 2018 and December 31, 2017, respectively. Approximately $2.8 million of currently deferred commissions are expected to be amortized to selling, general and administrative expenses over the next 12 months.

Significant Judgments. The Company often provides multiple services to a customer. Provision of customer premise equipment, installation services, and additional service tiers may have a significant level of integration and interdependency with the subscription of data, video, voice, or connectivity services provided. Judgment is required to determine whether provision of customer premise equipment, installation services, and additional service tiers are considered distinct and accounted for separately, or not distinct and accounted for together with the subscription services.

The transaction price for a bundle of residential services is frequently less than the sum of the standalone selling prices of each individual service. The Company allocates these bundled services amongst the services to which the discount relates based on the relative standalone selling prices of those services. Standalone selling prices of the Company’s residential data and video services are directly observable, while standalone selling prices for the Company’s residential voice services are estimated using the adjusted market assessment approach which relies upon information from peers and competitors who sell residential voice services individually.

The Company also incurs incremental internal costs to acquire residential and business customers, such as commission costs, and third party costs to service specific contracts. These costs are capitalized as contract assets and amortized over the applicable period. For commissions, the amortization period is the average customer tenure. Amortized commission expense was $0.8 million and $0.7 million for the three months ended ~~June 30, 2017~~ March 31, 2018 and ~~2016,~~2017, respectively, and ~~$7.5 million~~was included in selling, general and ~~$7.2 million for~~administrative expenses within the ~~six months ended June 30, 2017~~condensed consolidated statements of operations and ~~2016, respectively.~~

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Depreciation expense was ~~$44.8~~$46.0 million and ~~$34.7~~$39.5 million for the three months ended ~~June 30, 2017~~ March 31, 2018 and ~~2016, respectively, and $83.2 million and $69.3 million for the six months ended June 30,~~ 2017, ~~and 2016,~~ respectively.

The Company's previous headquarters building and adjoining property were held for sale at December 31, 2016. In January 2017, the Company sold a portion of this property for ~~$10.1~~$10.1 million in gross proceeds and recognized a related gain of ~~$6.6~~$6.6 million. The remaining property’s carrying value of ~~$4.6~~$4.6 million is included in ~~Other~~other assets in the ~~Consolidated Balance Sheet~~condensed consolidated balance sheets as assets held for sale at ~~June 30,~~both March 31, 2018 and December 31, 2017.

Amortization expense was $2.8 million and less than $0.1 million for the three months ended March 31, 2018 and 2017, respectively.

As of March 31, 2018, the future amortization of intangible assets was as follows (in thousands):

Actual amortization expense in future periods may differ from these estimates as a result of new intangible asset acquisitions or divestitures, changes in useful lives, impairments or other relevant factors.

~~Senior Unsecured~~ Notes. On June 17, 2015, the Company issued ~~$450~~$450 million aggregate principal amount of 5.75% senior unsecured notes due 2022 (the “Notes”). The Notes mature on June 15, 2022 and interest is payable on June 15^th15th and December 15^th15th of each year.

The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws. The Notes were offered in the United States only to persons reasonably believed to be qualified institutional buyers in reliance on the exemption from registration set forth in Rule 144A under the Securities Act and outside the United States to non-U.S. persons in reliance on the exemption from registration set forth in Regulation S under the Securities Act.

The Notes were issued pursuant to an indenture ~~(the “Indenture”)~~ dated as of June 17, ~~2015.~~2015 (the “Indenture”). The Indenture provides for early redemption of the Notes, at the option of the Company, at the prices and subject to the terms specified in the Indenture. The Indenture includes certain covenants relating to debt incurrence, liens, restricted payments, asset sales and transactions with affiliates, changes in control and mergers or sales of all or substantially all of the Company’s assets. The Indenture also provides for customary events of default (subject, in certain cases, to customary grace periods).

Senior Credit Facilities. On June 30, 2015, the Company entered into a Credit Agreement (the “Credit Agreement”) among the Company, as borrower, the lenders party thereto, JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, and the other agents party thereto. The Credit Agreement provided for a ~~five-year~~five-year revolving credit facility in an aggregate principal amount of ~~$200~~$200 million (the “Revolving Credit Facility”) and a ~~five-year~~five-year term loan facility in an aggregate principal amount of ~~$100~~$100 million (the “Term Loan Facility” ~~and, together with the Revolving Credit Facility, the “Original Credit Facilities”~~). Concurrently with its entry into the Credit Agreement, the Company borrowed the full amount of the Term Loan ~~Facility (the “Term Loan”).~~

Borrowings under the Original Credit Facilities bore interest, at the Company’s option, at a rate per annum determined by reference to either the London Interbank Offered Rate (“LIBOR”) or an adjusted base rate, in each case plus an applicable interest rate margin. The applicable interest rate margin with respect to LIBOR borrowings was a rate per annum between 1.50% and 2.25% and the applicable interest rate margin with respect to adjusted base rate borrowings was a rate per annum between 0.50% and 1.25%, in each case determined on a quarterly basis by reference to a pricing grid based upon the Company’s total net leverage ratio. In addition, the Company is required to pay commitment fees on any unused portion of the Revolving Credit Facility at a rate between 0.25% per annum and 0.40% per annum, determined by reference to the pricing grid.

Facility. The Revolving Credit Facility also gives the Company the ability to issue letters of credit, which reduce the amount available for borrowing under the Revolving Credit Facility. Letter of credit issuances under the Revolving Credit Facility of $2.8 million at June 30, 2017 were held for the benefit of certain general and liability insurance matters and bore interest at a rate of 1.625% per annum. The Company had $197.2 million available for borrowing under the Revolving Credit Facility at June 30, 2017.

On May 1, 2017, the Company ~~entered into a Restatement Agreement (the “Restatement Agreement”) with JPMorgan, as administrative agent,~~ and the lenders ~~party thereto, pursuant to which the Company~~ amended and restated the Credit Agreement ~~(as so amended and restated, the~~(the “Amended and Restated Credit Agreement”) and incurred ~~$750~~$750 million of senior secured loans (the “New Loans”) which were used, together with cash on hand, to ~~(i)~~ finance the ~~transactions contemplated by the Merger Agreement, (ii)~~NewWave acquisition, repay in full the Term Loan Facility and ~~(iii)~~ pay related fees and expenses.

The New Loans consist of ~~(a)~~ a ~~five-year incremental~~five-year term “A” loan in an aggregate principal amount of ~~$250~~$250 million (the “Term Loan A”) and ~~(b)~~ a ~~seven-year incremental~~seven-year term “B” loan in an aggregate principal amount of ~~$500~~$500 million (the “Term Loan B” and, together with the Term Loan A and the Revolving Credit Facility, the “Senior Credit Facilities”)~~, which~~. The obligations under the Amended and Restated Credit Agreement are guaranteed by the Company’s wholly owned domestic subsidiaries and are secured, subject to certain exceptions, by substantially all assets of the Company and the guarantors.

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The interest margins applicable to the ~~New Loans under the Amended and Restated~~Senior Credit ~~Agreement~~Facilities are, at the Company’s option, equal to either ~~LIBOR~~the London Interbank Offered Rate (“LIBOR”) or a base rate, plus an applicable margin equal to, ~~(x)~~(i) with respect to the Term Loan A, ~~2.25%~~and the Revolving Credit Facility, 1.50% to ~~1.50%~~2.25% for LIBOR loans and ~~1.25%~~0.50% to ~~0.50%~~1.25% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on the Company’s total net leverage ratio and ~~(y)~~(ii) with respect to the Term Loan B, (x) for any day on or prior to April 22, 2018, 2.25% for LIBOR loans and 1.25% for base rate loans and (y) for any date after April 22, 2018, 1.75% for LIBOR loans and 0.75% for base rate loans. The Term Loan A may be prepaid at any time without premium and amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 2.5% per annum for the first year after funding, 5.0% per annum for the second year after funding, 7.5% per annum for the third year after funding and 10.0% per annum for the fourth and fifth years after funding, with the outstanding balance due upon maturity. The Term Loan B amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 1.0% per annum, with the outstanding balance due upon maturity. The Term Loan B is subject to a 1.0% prepayment ~~penalty~~premium if prepaid in connection with a “Repricing Transaction” (as defined in the Amended and Restated Credit Agreement) within six months of ~~funding,~~the effective date of the Repricing Amendment (as defined below), benefits from certain “most favored nation” pricing protections and is not subject to the financial maintenance covenants under the Amended and Restated Credit Agreement. Other than as set forth above, the New Loans are subject to terms substantially similar to those under the Credit Agreement.

~~As of June 30, 2017, outstanding borrowings under the Term Loan A and Term Loan B were $250 million and $500 million, and bore interest at a rate of 2.93% per annum and 3.43% per annum, respectively.~~

In connection with the New Loans, the Company incurred $15.2 million in debt issuance costs, of which $0.6 million was written off during the quarter ended June 30, 2017. Unamortized debt issuance costs totaled $21.6 million and $8.1 million at June 30, 2017 and December 31, 2016, respectively.

The Company may, subject to ~~the~~certain specified terms and ~~conditions of the Amended and Restated Credit Agreement,~~provisions, obtain additional credit facilities of up to ~~$425~~$425 million under the Amended and Restated Credit Agreement plus an unlimited amount so long as, on a pro forma basis, the Company’s First Lien Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) is no greater than 1.80 to 1.00. The Amended and Restated Credit Agreement contains customary representations, warranties and affirmative and negative covenants ~~including limitations on indebtedness, liens, restricted payments, prepayments~~as well as customary events of certain indebtedness, investments, dispositions of assets, restrictions on subsidiary distributions and negative pledge clauses, fundamental changes, transactions with affiliates and amendments to organizational documents.default. The Amended and Restated Credit Agreement also requires the Company to maintain specified ratios of total net ~~leverage~~indebtedness and first lien net ~~leverage~~indebtedness to consolidated operating cash flow. The Amended and Restated Credit Agreement also contains customary events of default, including non-payment of principal, interest, fees or other amounts, material inaccuracy of any representation or warranty, failureRefer to ~~observe or perform any covenant, default~~note 8 to the Company’s consolidated financial statements included in ~~respect of other material debt of~~ the Company and of its restricted subsidiaries, bankruptcy or insolvency, the entry against the Company or any of its restricted subsidiaries of a material judgment, the occurrence of certain ERISA events, impairment of the loan documentation and the occurrence of a change of control. 2017 Form 10-K for additional information.

The Company was in compliance with all debt covenants as of ~~June 30, 2017.~~ March 31, 2018.

As of ~~June 30,~~ March 31, 2018, outstanding borrowings under the Term Loan A and Term Loan B were $245.3 million and $496.3 million, and bore interest at a rate of 4.06% per annum and 4.56% per annum, respectively. Letter of credit issuances under the Revolving Credit Facility totaled $3.1 million and the Company had $196.9 million available for borrowing under the Revolving Credit Facility at March 31, 2018.

The Company recorded $1.0 million and $0.4 million of debt issuance cost amortization for the three months ended March 31, 2018 and 2017, respectively. These amounts were reflected in interest expense in the condensed consolidated statements of operations and comprehensive income.

As of March 31, 2018, the future maturities of long-term debt were as follows (in thousands):

On April 23, 2018, the Company amended the Amended and Restated Credit Agreement. Debt issuance costs incurred for the repricing in connection with this amendment totaled $2.0 million. Refer to note 15 for further discussion of this amendment.

Money market investments are included in ~~Cash~~cash and cash equivalents in the ~~Consolidated Balance Sheets.~~condensed consolidated balance sheets. Commercial paper investments with original maturities of 90 days or less are also included in ~~Cash~~cash and cash equivalents. These investments are primarily held in U.S. Treasury securities and registered money market funds. These investments were valued using a market approach based on the quoted market prices of the money market investments (Level 1)1) or inputs that include quoted market prices for investments similar to the commercial paper (Level 2)2). The fair value of the Notes was estimated based on market prices in active markets (Level 2)2). The fair value of the ~~New Loans was estimated~~Senior Credit Facilities is equal to the carrying value.

The Company’s deferred compensation liabilities were $17.6 million and $20.2 million at March 31, 2018 and December 31, 2017, respectively. The current portions of these liabilities are included within accounts payable and accrued liabilities and the noncurrent portions are included within other liabilities in the condensed consolidated balance sheets. These liabilities represent the market value of participants’ balances in a notional investment account that is comprised primarily of mutual funds, which is based on ~~discounting~~observable market prices. However, since the ~~remaining principal~~deferred compensation obligations are not exchanged in an active market, they are classified as Level 2 in the fair value hierarchy.

The carrying amounts of accounts receivable, accounts payable and ~~interest payments using~~other current ~~market rates for similar debt (Level 2).~~ assets and liabilities approximate fair value because of the short-term nature of these instruments.

Nonfinancial Assets and Liabilities. The Company’s nonfinancial assets such as property, plant and equipment, intangible assets and goodwill are not measured at fair value on a recurring basis. However, such assets are subject to fair value adjustments when there is evidence that impairment may exist. No material impairments were recorded during the three months ended March 31, 2018 and 2017.

The grant date fair value of the Company’s SARs ~~was~~is measured ~~based on~~using the Black-Scholes valuation model. The weighted average inputs used in the model for grants awarded during the ~~six~~three months ended ~~June 30, 2017~~ March 31, 2018 were as follows:

~~Compensation expense associated with SARs is recognized on a straight-line basis over the vesting period.~~ Equity-based compensation expense for SARs was ~~$0.8~~$0.9 million and ~~$1.5~~$0.7 million for the three ~~and six~~ months ended ~~June 30, 2017, respectively.~~ March 31, 2018. At ~~June 30, 2017,~~ March 31, 2018, there was ~~$8.9~~$7.9 million of unrecognized compensation expense related to SARs, which is expected to be recognized over a weighted average period of ~~1.4~~1.3 years.

~~Compensation Expense~~. Total equity-based compensation expense recognized was $2.4 million and $3.4 million for the three months ended June 30, 2017 and 2016, respectively, and $4.8 million and $6.5 million for the six months ended June 30, 2017 and 2016, respectively, and was included in Selling, general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Income. The Company has recorded an income tax benefit of $3.7 ~~million related to equity-based awards granted through June 30, 2017. The deferred tax asset related to all outstanding equity-based awards was $6.3 million as of June 30, 2017.~~

the accounting under ASC 740 was complete as well as provisional amounts for those specific income tax effects of the 2017 Federal tax reform legislation for which the accounting under ASC 740 was incomplete but a reasonable estimate could be determined. The Company has recognized the provisional tax impacts related to acceleration of depreciation and the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements included in the 2017 Form 10-K. The ultimate impact may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued and actions the Company may take as a result of the 2017 Federal tax reform legislation. The accounting is expected to be complete when the Company’s 2017 Federal corporate income tax return is filed later in 2018.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS

~~GHC Agreements.~~ ~~On June 16, 2015, Cable One entered into several agreements with GHC~~Cautionary Statement Regarding Forward-Looking Statements

This document contains “forward-looking statements” that ~~set forth~~involve risks and uncertainties. These statements can be identified by the ~~principal actions taken~~fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions and projections about the cable industry and our business and financial results. Forward-looking statements often include words such as “will,” “should,” “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating or financial performance. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf. Important factors that could cause our actual results to differ materially from those in our forward-looking statements include government regulation, economic, strategic, political and social conditions and the ~~spin-off and that govern the relationship~~following factors:

Any forward-looking statements made by us in this document speak only as of the ~~parties following the spin-off, including~~date on which they are made. We are under no obligation, and expressly disclaim any obligation, to update or alter our forward-looking statements, whether as a Separation and Distribution Agreement, a Tax Matters Agreement and an Employee Matters Agreement. The aggregate costs and reimbursements paid to GHC totaled $0.1 million and $0.3 million for the three and six months ended June 30, 2017, respectively.result of new information, subsequent events or otherwise.

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~~Item 2.~~ ~~Management’s~~ ~~Discussion and Analysis of Financial Condition and Results of Operations~~

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our ~~unaudited Consolidated Financial Statements~~condensed consolidated financial statements and ~~related~~accompanying notes included in this Quarterly Report on Form 10-Q and the audited ~~Consolidated Financial Statements~~consolidated financial statements and notes thereto as of and for the year ended December 31, ~~2016~~2017 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our ~~Annual Report on~~2017 Form ~~10-K filed with the SEC on March 1, 2017.~~10-K. Our results of operations for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 may not be indicative of our future results.

Overview

~~Our Business~~

We are a fully integrated provider of data, video and voice services in 21 Western, Midwestern and Southern states. We provide these broadband services to residential and business customers in more than 750 communities. The markets we serve are primarily non-metropolitan, secondary markets, with 77% of our customers located in seven states: Arizona, Idaho, Illinois, Mississippi, Missouri, Oklahoma and Texas. Our biggest customer concentrations are in the Mississippi Gulf Coast region and in the greater Boise, Idaho region. We are among the ~~seventh-largest~~10 largest cable system ~~operator~~operators in the United States based on customers and revenues in ~~2016,~~2017, providing service to ~~805,483~~801,136 residential and business customers out of approximately 2.1 million homes passed as of ~~June 30, 2017.~~March 31, 2018. Of these customers, ~~640,337~~651,550 subscribed to data services, ~~384,004~~350,874 subscribed to video services and ~~138,286~~131,920 subscribed to voice services.

We generate substantially all of our revenues through five primary products. Ranked by share of our total revenues through the first ~~six~~three months of ~~2017,~~2018, they are residential data ~~(43.1%~~(44.6%), residential video ~~(35.1%~~(33.4%), business services (data, voice and video ~~and voice~~ – ~~13.3%~~14.2%), residential voice ~~(4.7%~~(4.0%) and advertising sales ~~(2.6%~~(2.0%). The profit margins, growth rates and capital intensity of our five primary products vary significantly due to differences in competition, product maturity and relative costs.

On May 1, 2017, we completed the acquisition of all of the outstanding equity interests of ~~NewWave, and NewWave became a wholly owned subsidiary of ours.~~NewWave. We paid a purchase price of ~~$741.0~~$740.2 million in cash on a debt-free basis, ~~and~~ subject to customary post-closing adjustments. ~~See Note 2 of the Notes to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for details on this transaction.~~ Our results of operations for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 include ~~two months~~the impact of NewWave operations ~~following~~while our comparable results for 2017 do not, as the ~~completion~~acquisition was not completed until the second quarter of ~~the acquisition.~~2017.

Prior to 2012, we were focused on growing revenues through subscriber retention and growth in overall primary service units (“PSUs”). Accordingly, our strategies consisted of, among others, offering promotional discounts to new and existing subscribers adding new services and to subscribers purchasing more than one service offering. Since 2012, we have adapted our strategy to face the industry-wide trends of declining profitability of residential video services and declining revenues from residential voice services. We believe the declining profitability of residential video services is primarily due to ~~competition from other content providers and~~ increasing programming costs and retransmission fees and competition from other content providers and the declining revenues from residential voice services is primarily due to the increasing use of wireless voice services in addition to, or instead of, ~~landline~~residential voice service. Beginning in 2013, we shifted our focus away from maximizing customer PSUs and towards growing and maintaining our higher margin businesses, namely residential data and business services. Separately, we have also focused on retaining customers with a high expected lifetime value (“LTV”), who are less attracted by discounting, require less support and churn less. This strategy focuses on increasing Adjusted EBITDA, Adjusted EBITDA less capital expenditures and margins ~~(see~~(refer to the section entitled “Use of Adjusted EBITDA” for the definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, which is the most directly comparable GAAP measure).

The trends described above have impacted our four largest product lines in the following ways:

●

Residential data. We experienced growth in the number of, and revenues from, our residential data customers every year since 2013. We expect this growth to continue due to projected increases in the number of potential customers for us to serve, as there are still a number of households in our markets that do not subscribe to data services from any provider. We expect to capture a portion of these customers and anticipate capturing additional market share from existing data subscribers due to our ~~recent~~continued upgrades in broadband capacity, ~~and~~ our ability to offer higher access speeds than many of our ~~competitors.~~ competitors and our Wi-Fi support service.

~~Table of Contents~~

●

Residential video. Residential video service is a competitive and highly penetrated business. As we focus on the higher-margin businesses of residential data and business services, we are de-emphasizing our residential video business and, as a result, expect residential video revenues to continue to decline in the future.

●

Residential voice. We have experienced declines in residential voice customers as a result of homes in the United States deciding to terminate their ~~landline~~residential voice service and exclusively use wireless voice service. We believe this trend will continue because of competition from wireless voice ~~service.~~service providers. Revenues from residential voice customers have declined over recent years, and we expect this decline will continue.

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●

Business services. We have experienced significant growth in business data and voice customers and revenues and expect this growth to continue. We attribute this growth to our strategic focus shift on increasing sales to business ~~customers. More~~customers and our recently ~~we have~~ expanded ~~our~~ efforts to attract enterprise business customers. Margins in products sold to business customers have remained attractive, and we expect this trend to continue.

We continue to experience increased competition, particularly from telephone companies, cable and municipal overbuilders, over-the-top (“OTT”) video providers and direct broadcast satellite (“DBS”) television providers. Because of the levels of competition we face, we believe it is important to make investments in our infrastructure. We made elevated levels of capital investments between 2012 and ~~2015~~2017 to increase our cable plant capacities and reliability, launch all-digital video services, which has freed up approximately ~~three-fourths~~half of average plant bandwidth for data services, and increase data capacity by moving from four-channel bonding to 32-channel bonding. We expect to continue devoting financial resources to infrastructure improvements, including in the new markets we acquired in the NewWave transaction, because we believe these investments are necessary to remain competitive. We expect to spend up to $50 million in 2018 and 2019, in addition to the $10 million spent in 2017, to enhance the acquired NewWave systems by rebuilding low capacity markets, launching all-digital video services, implementing 32-channel bonding to enable a 1 gigabit-per-second (“Gbps”) download speed product launch, converting back office functions such as billing, accounting and service provisioning and migrating products to legacy Cable One platforms.

Our goals are to continue to grow residential data and business services and to maintain profit margins to deliver strong Adjusted EBITDA. To achieve these goals, we intend to continue our industrial engineering-driven cost management, remain focused on customers with high LTV and follow through with further planned investments in broadband plant upgrades and new data services offerings for residential and business customers.

Our business is subject to extensive governmental regulation. Such regulation has led to increases in our operational and administrative expenses. In addition, we could be significantly impacted by changes to the existing regulatory framework, whether triggered by legislative, administrative or judicial rulings. In 2015, the FCC used its Title II authority to regulate broadband internet access services through the Open Internet Order (the “Order”)~~. According to the Order, the FCC will forbear from systematic rate regulation of internet access service at the subscriber level,~~, which ~~we believe will permit us to continue to manage data usage efficiently by establishing appropriate rates. However, the Order also imposes~~imposed on all providers of broadband internet access service, including us, obligations that limit the ways certain types of traffic can be ~~managed. In June 2016,~~managed and prescribes certain additional disclosure requirements. The Order was upheld in the ~~U.S. Court of Appeals for~~courts, but in September 2017, several parties, including the ~~D.C. Circuit upheld the Order in its entirety. On May 1, 2017, the U.S. Court of Appeals for the D.C. Circuit denied a petition for an~~ ~~en banc~~ ~~rehearing of the June 2016 decision upholding the Order. Parties have been granted until September 28, 2017 to file~~American Cable Association and NCTA – The Internet & Television Association (the “NCTA”), filed petitions for certiorari with the U.S. Supreme Court. InResponses to the petitions were due May 4, 2018. However, in December 2017, the FCC ~~issued a Notice~~rescinded the majority of ~~Proposed Rulemaking to revise~~ the ~~Open Internet~~open internet rules previously adopted in the Order, with the exception of the disclosure requirements. Several parties have challenged the FCC’s new rules in Federal courts, and ~~the FCC is seeking comment on its proposals with reply comments due by August 16, 2017.~~those appeals are pending. Congress and numerous states also ~~has~~have proposed legislation regarding net neutrality. Several states have adopted legislation that requires entities providing broadband internet access service in the ~~Open Internet rules.~~state to comply with net neutrality requirements or prohibits state and local government agencies from contracting with internet service providers that engage in certain network management activities based on paid prioritization, content blocking or other discrimination. We cannot predict whether or when future changes to the regulatory framework will occur at the FCC, in Congress, at the state level or in the courts. We also cannot predict whether or to what extent the rules as revised by the FCC, Congress, the states or the courts may affect our operations or impose costs on our business.

Results of Operations

~~PSUs~~Revision of Previously Issued Financial Statements and Adoption of Revenue Recognition Standard

In conjunction with the error correction in the fourth quarter of 2017 associated with our historical accounting for certain categories of internal labor and related costs, we revised our historical financial statements to properly reflect the impact of the labor capitalization, including the related impact to depreciation expense and income taxes. As a result, the financial statements for the three months ended March 31, 2017 have been revised to reflect the error correction. Refer to note 2 to the condensed consolidated financial statements for additional details.

Further, we adopted the revenue recognition standard, ASC 606 - Revenue from Contracts with Customers, effective January 1, 2018, using the full retrospective method. The adoption resulted in the deferral of all business installation revenues and all residential and business commission expenses over a period of time, instead of immediate recognition. The financial statements for the three months ended March 31, 2017 have been recasted to reflect the impact of the revenue recognition standard adoption. Refer to note 3 to the condensed consolidated financial statements for additional details.

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PSU and Customer Counts ~~by Primary Products~~

~~As of June 30, 2017,~~During the 12 months ended March 31, 2018, our total PSUs increased ~~194,396 year-over-year,~~190,462, or 20.2%, compared to our total PSUs as of March 31, 2017, with increases in residential data, video and voice PSUs of ~~119,446, 41,834,~~114,623, 40,309, and ~~10,713,~~11,867, respectively, and an increase in business PSUs of ~~22,403.~~23,663. Our total customer relationships increased ~~145,540,~~140,168, or ~~22.1%~~21.2%, year-over-year. The year-over-year increases were primarily attributable to new customers acquired as a result of the NewWave ~~acquisition during the second quarter of 2017 and continued organic growth in our primary focus product lines of residential data and business services.~~acquisition.

~~Table of Contents~~

The following table provides an overview of selected customer data for ~~our cable systems for~~ the time periods specified:

	As of June 30,				Annual Net Gain/(Loss)				As of March 31,				Annual Net Gain/(Loss)
	2017		2016		Change		% Change		2018		2017		Change		% Change
Residential data PSUs		585,049		465,603		119,446		25.7		592,062		477,439		114,623		24.0
Residential video PSUs ⁽¹⁾		366,816		324,982		41,834		12.9
Residential video PSUs ⁽¹⁾										334,035		293,726		40,309		13.7
Residential voice PSUs		114,519		103,806		10,713		10.3		106,608		94,741		11,867		12.5
Total residential PSUs		1,066,384		894,391		171,993		19.2		1,032,705		865,906		166,799		19.3

Business data PSUs ⁽²⁾		55,288		42,714		12,574		29.4
Business data PSUs ⁽²⁾										59,488		45,888		13,600		29.6
Business video PSUs		17,188		13,992		3,196		22.8		16,839		13,461		3,378		25.1
Business voice PSUs ⁽³⁾		23,767		17,134		6,633		38.7
Business voice PSUs ⁽³⁾										25,312		18,627		6,685		35.9
Total business PSUs		96,243		73,840		22,403		30.3		101,639		77,976		23,663		30.3

Total PSUs		1,162,627		968,231		194,396		20.1		1,134,344		943,882		190,462		20.2

Total residential customer relationships		741,225		610,293		130,932		21.5		733,576		608,515		125,061		20.6
Total business customer relationships		64,258		49,650		14,608		29.4		67,560		52,453		15,107		28.8
Total customer relationships		805,483		659,943		145,540		22.1		801,136		660,968		140,168		21.2


⁽¹⁾	Residential video PSUs include all basic residential customers who receive video services and may have one or more digital set-top boxes or cable cards deployed. Residential bulk multi-dwelling accounts are included in our video PSUs at the individual unit level.
⁽²⁾	Business data PSUs include commercial accounts that receive data service via a cable modem and commercial accounts that receive broadband service optically via fiber connections.
⁽³⁾	Business voice customers who have multiple voice lines are only counted once in the PSU total.

The following table provides an overview of selected customer data for our legacy Cable One cable systems excluding the impact of PSUs and customers ~~attained as a result of the~~from legacy NewWave ~~acquisition~~cable systems for the time periods specified:

	As of June 30,				Annual Net Gain/(Loss)						As of March 31,				Annual Net Gain/(Loss)
	2017		2016		Change			% Change			2018		2017		Change			% Change
Residential data PSUs		474,815		465,603		9,212			2.0			482,251		477,439		4,812			1.0
Residential video PSUs ⁽¹⁾		284,695		324,982		(40,287	)		(12.4	)
Residential video PSUs ⁽¹⁾												260,686		293,726		(33,040	)		(11.2	)
Residential voice PSUs		92,100		103,806		(11,706	)		(11.3	)		85,644		94,741		(9,097	)		(9.6	)
Total residential PSUs		851,610		894,391		(42,781	)		(4.8	)		828,581		865,906		(37,325	)		(4.3	)

Business data PSUs ⁽²⁾		46,909		42,714		4,195			9.8
Business data PSUs ⁽²⁾												49,976		45,888		4,088			8.9
Business video PSUs		13,295		13,992		(697	)		(5.0	)		12,756		13,461		(705	)		(5.2	)
Business voice PSUs ⁽³⁾		19,156		17,134		2,022			11.8
Business voice PSUs ⁽³⁾												20,351		18,627		1,724			9.3
Total business PSUs		79,360		73,840		5,520			7.5			83,083		77,976		5,107			6.5

Total PSUs		930,970		968,231		(37,261	)		(3.8	)		911,664		943,882		(32,218	)		(3.4	)

Total residential customer relationships		601,883		610,293		(8,410	)		(1.4	)		599,006		608,515		(9,509	)		(1.6	)
Total business customer relationships		53,426		49,650		3,776			7.6			56,313		52,453		3,860			7.4
Total customer relationships		655,309		659,943		(4,634	)		(0.7	)		655,319		660,968		(5,649	)		(0.9	)


⁽¹⁾	Residential video PSUs include all basic residential customers who receive video services and may have one or more digital set-top boxes or cable cards deployed. Residential bulk multi-dwelling accounts are included in our video PSUs at the individual unit level.
⁽²⁾	Business data PSUs include commercial accounts that receive data service via a cable modem and commercial accounts that receive broadband service optically via fiber connections.
⁽³⁾	Business voice customers who have multiple voice lines are only counted once in the PSU total.

Table of Contents

In recent years, our customer mix has shifted, causing subscribers to move from triple-play packages combining data, video and voice services to single and double-play packages. This is largely because some residential video customers have defected to DBS services and OTT offerings in lieu of video and more households have discontinued ~~landline~~residential voice service. In addition, we have focused on selling data-only packages to new customers rather than on cross-selling video to these customers.

~~Table of Contents~~

Co~~mparison~~Comparison of Three Months Ended ~~June 30, 2017~~March 31, 2018 to Three Months Ended ~~June 30, 2016~~March 31, 2017

Revenues

Revenues increased ~~$36.5~~$58.3 million, or ~~17.8%~~28.1%, due primarily to increases in residential data, residential video and business services revenues of ~~$17.1~~$28.3 million, ~~$10.9~~$16.3 million and ~~$8.1~~$10.7 million, respectively. The increase was the result of the NewWave operations ~~since May 1, 2017~~ and organic growth in our higher margin product lines of residential data and business services.

Revenues by service offering were as follows for the three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):

	Three Months Ended June 30,														Three Months Ended March 31,
	2017				2016				2017 vs. 2016						2018				2017				2018 vs. 2017
			% of				% of		$			%					% of				% of		$			%
	Revenues		Revenues		Revenues		Revenues		Change			Change			Revenues		Revenues		Revenues		Revenues		Change			Change
Residential data	$	103,155		42.8	$	86,031		42.1	$	17,124			19.9		$	118,487		44.6	$	90,201		43.5	$	28,286			31.4
Residential video		84,873		35.2		74,016		36.2		10,857			14.7			88,757		33.4		72,454		34.9		16,303			22.5
Residential voice		11,417		4.7		10,944		5.4		473			4.3			10,671		4.0		9,867		4.8		804			8.1
Business services		32,543		13.5		24,491		12.0		8,052			32.9			37,691		14.2		26,968		13.0		10,723			39.8
Advertising sales		5,970		2.5		6,616		3.2		(646	)		(9.8	)		5,241		2.0		5,622		2.7		(381	)		(6.8	)
Other		3,084		1.3		2,459		1.1		625			25.4			4,914		1.8		2,322		1.1		2,592			111.6
Total revenues	$	241,042		100.0	$	204,557		100.0	$	36,485			17.8		$	265,761		100.0	$	207,434		100.0	$	58,327			28.1

Average monthly revenue per unit for the indicated service offerings were as follows for the three months ended ~~June 30, 2017~~March 31, 2018 and ~~2016:~~2017:

	Three Months Ended June 30,				2017 vs. 2016				Three Months Ended March 31,				2018 vs. 2017
	2017		2016		$ Change		% Change		2018		2017		$ Change			% Change
Residential data ⁽¹⁾	$	62.52	$	61.49	$	1.03		1.7	$	67.12	$	63.53	$	3.59			5.7
Residential video ⁽¹⁾	$	82.11	$	74.59	$	7.52		10.1	$	86.92	$	80.47	$	6.45			8.0
Residential voice ⁽¹⁾	$	35.09	$	34.55	$	0.54		1.6	$	32.84	$	34.18	$	(1.34	)		(3.9	)
Business services ⁽²⁾	$	180.38	$	166.61	$	13.77		8.3	$	187.40	$	172.87	$	14.53			8.4


⁽¹⁾	Average monthly revenue per unit values represent the applicable quarterly residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each period, ~~except that for any new PSUs added as a result of an acquisition occurring during the reporting period, the associated average~~divided by three.
⁽²⁾	Average monthly revenue per unit values represent ~~the applicable residential service revenues divided by the corresponding weighted average of the number of PSUs during such period.~~
⁽²⁾	~~Average monthly per unit values represent~~quarterly business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, except that for any new business customer relationships added as a result of an acquisition occurring during the reporting period, the associated average monthly per unit values represent business services revenues divided by ~~the weighted average of the number of business customer relationships during such period.~~three.

Revenues by service offering, excluding the impact of revenues related to legacy NewWave cable systems, were as follows for the three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):

	Three Months Ended June 30,														Three Months Ended March 31,
	2017				2016				2017 vs. 2016						2018				2017				2018 vs. 2017
			% of				% of		$			%					% of				% of		$			%
	Revenues		Revenues		Revenues		Revenues		Change			Change			Revenues		Revenues		Revenues		Revenues		Change			Change
Residential data	$	92,413		44.2	$	86,031		42.1	$	6,382			7.4		$	99,835		46.0	$	90,201		43.5	$	9,634			10.7
Residential video		70,840		33.9		74,016		36.2		(3,176	)		(4.3	)		69,457		32.0		72,454		34.9		(2,997	)		(4.1	)
Residential voice		9,803		4.7		10,944		5.4		(1,141	)		(10.4	)		8,993		4.1		9,867		4.8		(874	)		(8.9	)
Business services		27,901		13.4		24,491		12.0		3,410			13.9			30,283		13.9		26,968		13.0		3,315			12.3
Advertising sales		5,699		2.7		6,616		3.2		(917	)		(13.9	)		4,907		2.3		5,622		2.7		(715	)		(12.7	)
Other		2,200		1.1		2,459		1.1		(259	)		(10.5	)		3,674		1.7		2,322		1.1		1,352			58.2
Total revenues	$	208,856		100.0	$	204,557		100.0	$	4,299			2.1		$	217,149		100.0	$	207,434		100.0	$	9,715			4.7

2022

Table of Contents

Average monthly revenue per unit, excluding the impact of revenues and customers ~~attained as a result of the~~related to legacy NewWave ~~acquisition in the second quarter of 2017~~cable systems, were as follows for the three months ended ~~June 30, 2017~~March 31, 2018 and ~~2016:~~2017:

	Three Months Ended June 30,				2017 vs. 2016				Three Months Ended March 31,				2018 vs. 2017
	2017		2016		$ Change		% Change		2018		2017		$ Change		% Change
Residential data ⁽¹⁾	$	64.70	$	61.49	$	3.21		5.2	$	69.45	$	63.53	$	5.92		9.3
Residential video ⁽¹⁾	$	81.65	$	74.59	$	7.06		9.5	$	87.25	$	80.47	$	6.78		8.4
Residential voice ⁽¹⁾	$	34.98	$	34.55	$	0.43		1.2	$	34.44	$	34.18	$	0.26		0.8
Business services ⁽²⁾	$	175.69	$	166.61	$	9.08		5.4	$	180.79	$	172.87	$	7.92		4.6


⁽¹⁾	Average monthly revenue per unit values represent the applicable quarterly residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each ~~period.~~period, divided by three.
⁽²⁾	Average monthly revenue per unit values represent quarterly business services revenues divided by the average of the number of business customer relationships at the beginning and end of each ~~period.~~period, divided by three.

Residential data service revenues increased ~~$17.1~~$28.3 million, or ~~19.9%~~31.4%, due primarily to an increase in residential data customers of ~~25.7%~~24.0% year-over-year as a result of the NewWave operations ~~during the second quarter of 2017~~ and organic subscriber growth, a modem rental rate adjustment in the first quarter of 2018, a reduction in package discounting and increased subscriptions to premium ~~tiers by residential customers.~~tiers.

Residential video service revenues increased ~~$10.9~~$16.3 million, or ~~14.7%~~22.5%, due primarily to an increase in residential video customers of ~~12.9%~~13.7% as a result of the NewWave operations ~~during the second quarter of 2017~~ and a ~~rate adjustment~~broadcast television surcharge increase in the first quarter of ~~2017.~~2018.

Residential voice service revenues increased ~~$0.5~~$0.8 million, or ~~4.3%~~8.1%, due primarily to an increase in residential voice customers of ~~10.3%~~12.5% as a result of the NewWave ~~operations during the second quarter of 2017.~~operations.

Business services revenues increased ~~$8.1~~$10.7 million, or ~~32.9%~~39.8%, due primarily to the NewWave operations, ~~during the second quarter of 2017,~~ growth in our business data and voice services to small and medium-sized businesses and enterprise customers and a rate adjustment for business video customers in the first quarter of ~~2017.~~2018. Total business customer relationships increased ~~29.4%~~28.8% year-over-year. Overall, business services comprised ~~13.5%~~14.2% of our total revenues for the ~~second~~first quarter of ~~2017~~2018 compared to ~~12.0%~~13.0% of our total revenues for the ~~second~~first quarter of ~~2016.~~2017.

Advertising sales revenues decreased ~~$0.6~~$0.4 million, or ~~9.8%~~6.8%, due primarily ~~as a result of~~to fewer legacy Cable One video customers to be reached by advertising spots.

~~Other revenues increased $0.6 million, or 25.4%, in the second quarter of 2017.~~

~~Operating~~ Costs and Expenses

Operating expenses (excluding depreciation and amortization) were ~~$83.9~~$94.7 million in the ~~second~~first quarter of ~~2017~~2018 and increased ~~$8.2~~$25.7 million, or ~~10.8%~~37.1%, compared to the ~~second~~first quarter of ~~2016.~~2017. Operating expenses as a percentage of revenues were ~~34.8%~~35.6% for the ~~second~~first quarter of ~~2017~~2018 compared to ~~37.0%~~33.3% for the ~~year ago~~year-ago quarter. Additional operating expenses attributable to the NewWave operations were ~~$15.9~~$24.3 million for the ~~second~~first quarter of 2018. The remaining increase was due primarily to higher repairs and maintenance costs of $0.8 million, group insurance costs of $0.3 million and contract labor costs of $0.3 million. Excluding the impact of the NewWave operations, operating expenses would have been $70.4 million in the first quarter of 2018, an increase of $1.4 million, or 2.0%, compared to the first quarter of 2017. ~~This increase was partially offset by~~Operating expenses as a ~~$3.9 million decrease in labor costs associated with our change in accounting estimate for capitalized labor costs discussed in Note 1~~percentage of revenues, excluding the impact of the ~~Notes~~NewWave operations, would have been 32.4% in the first quarter of 2018 compared to ~~our Consolidated Financial Statements, a $1.6 million decrease~~33.3% in ~~programming costs resulting from fewer video subscribers, and a decrease in backbone and internet connectivity fees.~~the first quarter of 2017.

Selling, general and administrative expenses were $51.0 million for the first quarter of 2018 and increased ~~$7.7~~$4.6 million, or ~~17.7%~~9.8%, compared to ~~$51.2 million.~~the first quarter of 2017. Selling, general and administrative expenses as a percentage of revenues were ~~21.2%~~19.2% and ~~21.3%~~22.4% for ~~second~~the first quarter of ~~2017~~2018 and ~~2016,~~2017, respectively. Additional selling, general and administrative expenses attributable to the NewWave operations were ~~$5.0~~$6.4 million for the ~~second~~first quarter of ~~2017. The remaining increase was~~2018. Excluding incremental expenses associated with the NewWave operations, selling, general and administrative expenses would have decreased $1.9 million, or 4.0%, to $44.5 million due to ~~higher~~$1.5 million of acquisition-related ~~expenses~~costs and $1.3 million of ~~$2.8 million and~~ severance costs incurred in the first quarter of ~~$1.3 million,~~2017 that did not recur in 2018, partially offset by a ~~$1.2~~$0.9 million ~~decrease~~increase in ~~labor costs~~group insurance costs. Selling, general and administrative expenses as a percentage of revenues, excluding the impact of the NewWave operations, would have been 20.5% in the ~~second~~first quarter of ~~2017 associated with our aforementioned change~~2018 compared to 22.4% in ~~accounting estimate for capitalized labor costs.~~the first quarter of 2017.

Table of Contents

Depreciation and amortization expense was $48.8 million for the first quarter of 2018 and increased ~~$12.2~~$9.2 million, or ~~35.2%~~23.4%, ~~including $7.9 million attributable~~compared to the ~~NewWave operations.~~first quarter of 2017. The increase was due primarily to new assets placed in service since the ~~second~~first quarter of ~~2016,~~2017, including property, plant and equipment and ~~amortized~~finite-lived intangible assets acquired as part of the NewWave acquisition, partially offset by assets that became fully depreciated since the ~~second~~first quarter of ~~2016.~~2017. Depreciation and amortization expense related to the NewWave operations was $12.5 million for the first quarter of 2018. As a percentage of revenues, depreciation and amortization expense was ~~19.5%~~18.4% for the ~~second~~first quarter of 2018 compared to 19.1% for the first quarter of 2017.

We recognized a $6.6 million net loss on disposal of assets during the first quarter of 2018. In the first quarter of 2017, ~~compared~~we recognized a $6.1 million net gain on disposal of assets, which primarily related to ~~17.0% for~~ the ~~second quarter~~sale of ~~2016.~~a non-operating property.

~~Table of Contents~~

Interest Expense

Interest expense increased ~~$4.2~~$7.1 million, or ~~56.1%~~93.6%, to $14.7 million due primarily to additional outstanding debt that was incurred ~~during~~in the second quarter of 2017 to finance the NewWave acquisition.

~~Other~~ Income ~~(Expense)~~Tax Provision

Other expense of $0.3 million in the second quarter of 2017 was primarily attributable to the write-off of $0.6 million of debt issuance costs related to the additional debt incurred to finance the NewWave acquisition, partially offset by interest income. OtherThe income ~~of $0.2 million in the second quarter of 2016 consisted of interest income.~~

~~Provision for Income Taxes~~

~~Provision for income taxes increased $1.4~~tax provision decreased $9.2 million, or ~~8.5%, due primarily to an increase in income before taxes of $3.4 million.~~48.3%. Our effective tax rate was ~~38.6%~~19.6% and ~~38.3%~~37.3% for the ~~three months ended June 30, 2017 and 2016, respectively.~~

~~Net Income~~

~~As a result of the factors described above, our net income was $28.6 million for the second~~first quarter of 2018 and 2017, ~~compared to $26.6 million for~~respectively. The decrease in the ~~second quarter of 2016, an increase of 7.3%.~~

Co~~mparison of Six Months Ended June 30, 2017 to Six Months Ended June 30, 2016~~

~~Revenues~~

~~Revenues increased $41.1 million, or 10.1%,~~effective tax rate was due primarily to ~~increases~~a reduction in ~~residential data, residential video and business services revenues of $23.9 million, $8.5 million and $11.2 million, respectively. The increase was~~ the result of the NewWave operations since May 1, 2017 and organic growth in our higher margin product lines of residential data and business services, partially offset by decreases in residential voice and advertising revenues of $1.0 million and $2.0 million, respectively.

Revenues by service offering were as follows for the six months ended June 30, 2017 and 2016, together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):

Six Months Ended June 30,

2017

2016

2017 vs. 2016

% of

% of
$
%

Revenues

Revenues

Revenues

Revenues

Change

Change

Residential data
$ 193,356 43.1 $ 169,470 41.6 $ 23,886 14.1
Residential video
157,328 35.1 148,869 36.5 8,459 5.7
Residential voice
21,284 4.7 22,258 5.5 (974
)
(4.4
)
Business services
59,505 13.3 48,318 11.9 11,187 23.2
Advertising sales
11,592 2.6 13,619 3.3 (2,027
)
(14.9
)
Other
5,404 1.2 4,828 1.2 576 11.9
Total revenues
$ 448,469 100.0 $ 407,362 100.0 $ 41,107 10.1

~~Average monthly revenue per unit for the indicated service offerings were as follows for the six months ended June 30, 2017 and 2016:~~

Six Months Ended June 30,

2017 vs. 2016

2017

2016

$ Change

% Change

Residential data ⁽¹⁾
$ 63.33 $ 60.97 $ 2.36 3.9
Residential video ⁽¹⁾
$ 81.10 $ 73.53 $ 7.57 10.3
Residential voice ⁽¹⁾
$ 34.63 $ 34.53 $ 0.10 0.3
Business services ⁽²⁾
$ 176.87 $ 165.98 $ 10.89 6.6


⁽¹⁾	Average monthly per unit values represent the applicable residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each period, except that for any new PSUs added as a result of an acquisition occurring during the reporting period, the associated average monthly per unit values represent the applicable residential service revenues divided by the corresponding weighted average of the number of PSUs during such period.
⁽²⁾	Average monthly per unit values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period, except that for any new business customer relationships added as a result of an acquisition occurring during the reporting period, the associated average monthly per unit values represent business services revenues divided by the weighted average of the number of business customer relationships during such period.

~~Table of Contents~~

~~Revenues by service offering, excluding the impact of revenues related~~Federal corporate income tax rate from 35% to ~~NewWave, were as follows for the six months ended June 30, 2017 and 2016, together with the percentages of total revenues that each item represented for the periods presented (dollars in thousands):~~

Six Months Ended June 30,

2017

2016

2017 vs. 2016

% of

% of
$
%

Revenues

Revenues

Revenues

Revenues

Change

Change

Residential data
$ 182,614 43.9 $ 169,470 41.6 $ 13,144 7.8
Residential video
143,295 34.4 148,869 36.5 (5,574
)
(3.7
)
Residential voice
19,670 4.7 22,258 5.5 (2,588
)
(11.6
)
Business services
54,863 13.2 48,318 11.9 6,545 13.5
Advertising sales
11,321 2.7 13,619 3.3 (2,298
)
(16.9
)
Other
4,520 1.1 4,828 1.2 (308
)
(6.4
)
Total revenues
$ 416,283 100.0 $ 407,362 100.0 $ 8,921 2.2

~~Average monthly revenue per unit, excluding the impact of revenues and customers attained~~21% as a result of the ~~NewWave acquisition in the second quarter of~~ 2017 ~~were as follows for the six months ended June 30, 2017~~Federal tax reform legislation and ~~2016:~~

Six Months Ended June 30,

2017 vs. 2016

2017

2016

$ Change

% Change

Residential data ⁽¹⁾
$ 64.49 $ 60.97 $ 3.52 5.8
Residential video ⁽¹⁾
$ 80.79 $ 73.53 $ 7.26 9.9
Residential voice ⁽¹⁾
$ 34.54 $ 34.53 $ 0.01 -
Business services ⁽²⁾
$ 174.25 $ 165.98 $ 8.27 5.0


⁽¹⁾	~~Average monthly per unit values represent the applicable residential service revenues divided by the corresponding average of the number of PSUs at the beginning and end of each period.~~
⁽²⁾	~~Average monthly per unit values represent business services revenues divided by the average of the number of business customer relationships at the beginning and end of each period.~~

Residential data service revenues increased $23.9 million, or 14.1%, due primarily to an increase in residential data customers of 25.7% year-over-year as a result of the NewWave operations during the second quarter of 2017 and organic subscriber growth, a reduction in package discounting and increased subscriptions to premium tiers by residential customers.

Residential video service revenues increased $8.5 million, or 5.7%, due primarily to an increase in residential video customers of 12.9% as a result of the NewWave operations during the second quarter of 2017 and a rate adjustment in the first quarter of 2017.

Residential voice service revenues decreased $1.0 million, or 4.4%, due primarily to a decrease in legacy Cable One voice customers, partially offset by increased customers as a result of the NewWave operations during the second quarter of 2017.

Business services revenues increased $11.2 million, or 23.2%, due primarily to the NewWave operations during the second quarter of 2017, growth in our business data and voice services to small and medium-sized businesses and enterprise customers and a rate adjustment for business video customers in the first quarter of 2017. Total business customer relationships increased 29.4% year-over-year. Overall, business services comprised 13.3% of our total revenues for the six months ended June 30, 2017 compared to 11.9% of our total revenues for the six months ended June 30, 2016.

~~Advertising sales revenues decreased $2.0 million, or 14.9%, primarily as a result of fewer video customers to be reached by advertising spots.~~

~~Other revenues increased $0.6 million, or 11.9%.~~

~~Table of Contents~~

~~Operating Costs and Expenses~~

Operating expenses (excluding depreciation and amortization) were $152.9 million for the six months ended June 30, 2017 and increased $0.8 million, or 0.5%, compared to the year ago period. Operating expenses as a percentage of revenues were 34.1% for the first half of 2017 compared to 37.3% for the first half of 2016. Additional operating expenses attributable to the NewWave operations were $15.9 million for the first half of 2017. This increase was partially offset by an $8.6 million decrease in labor costs associated with our aforementioned change in accounting estimate for capitalized labor costs, a $2.8 million decrease in programming costs resulting from fewer video subscribers, a $1.6 million decrease in backbone and internet connectivity fees, and lower group insurance and repairs and maintenance costs.

Selling, general and administrative expenses increased $9.5 million, or 10.9%, to $96.9 million. Selling, general and administrative expenses as a percentage of revenues were 21.6% and 21.4% for the six months ended June 30, 2017 and 2016, respectively. Additional selling, general and administrative expenses attributable to the NewWave operations were $5.0 million for the first half of 2017. The remaining increase was due to increases in legacy Cable One acquisition-related expenses of $4.1 million and severance costs of $2.6 million, partially offset by a $2.4 ~~million decrease in labor costs associated with our aforementioned change in accounting estimate for capitalized labor costs.~~

Depreciation and amortization increased $15.9 million, or 22.9%, including $7.9 million attributable to the NewWave operations. The increase was due primarily to new assets placed in service since the second quarter of 2016, including property, plant and equipment and amortized intangible assets acquired as part of the NewWave acquisition, partially offset by assets that became fully depreciated since the second quarter of 2016. As a percentage of revenues, depreciation and amortization expense was 19.0% for the six months ended June 30, 2017 compared to 17.0% for the six months ended June 30, 2016.

We recognized a net gain on disposal of assets of $5.7 million in the first half of 2017, primarily related to the sale of a portion of a non-operating property that included our previous headquarters building. In the first half of 2016, we recognized a net loss of $0.6 million on disposals of assets.

~~Interest Expense~~

~~Interest expense increased $4.3 million, or 28.4%, due primarily to additional debt incurred during the second quarter of 2017 to finance the NewWave acquisition.~~

~~Other Income (Expense)~~

Other expense of less than $0.1 million for the six months ended June 30, 2017 was primarily attributable to the write-off of $0.6 million of debt issuance costs related to the additional debt incurred to finance the NewWave acquisition, largely offset by interest income. Other income of $0.7 million for the comparable year ago period consisted of interest income and certain tax credits.

~~Provision for Income Taxes~~

Provision for income taxes increased $7.9 million, or 26.6%, due primarily to an increase in income before taxes of $16.0 million. Our effective tax rate was 37.9% and 35.7% for the six months ended June 30, 2017 and 2016, respectively. The increase in the effective tax rate primarily relates to $2.2 million of income tax benefits ~~from certain spin-off and state tax items recognized in~~attributable to equity-based compensation awards recorded during the first quarter of ~~2016, which did not recur.~~2018.

~~Net Income~~

~~As a result of the factors described above, our net income was $61.8 million for the six months ended June 30, 2017 compared to $53.7 million for the six months ended June 30, 2016.~~

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, ~~and~~ not as superior to, or as a substitute for, net income reported in accordance with GAAP. ~~This term, as defined by us, may not be comparable to similarly titled measures used by other companies.~~ Adjusted EBITDA is reconciled to net income below.

Adjusted EBITDA is defined as net income plus interest expense, ~~provision for~~ income ~~taxes,~~tax provision, depreciation and amortization, equity-based compensation, ~~expense,~~ severance expense, (gain) loss on deferred compensation, acquisition-related costs, (gain) loss on disposal of assets, billing system conversion costs, other (income) expense, ~~net,~~ and other unusual operating expenses, as provided in the table below. As such, it 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 ~~metrics.~~measures.

~~Table of Contents~~

We use Adjusted EBITDA to assess our performance. In addition, Adjusted EBITDA generally correlates to the measure used in the leverage ratio calculation under our outstanding ~~Notes and~~ Senior Credit Facilities and Notes to determine compliance with the covenants contained in the ~~Notes and~~ Senior Credit ~~Facilities. For~~Facilities and ability to take certain actions under the ~~purpose of calculating compliance with leverage covenants, we use a measure similar to Adjusted EBITDA, as presented.~~Indenture governing the Notes. Adjusted EBITDA is also a significant performance measure used by us in our annual incentive compensation program. 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.

	Three Months Ended June 30,					2017 vs. 2016						Three Months Ended March 31,						2018 vs. 2017
(dollars in thousands)	2017		2016			$ Change			% Change			2018			2017			$ Change			% Change
Net income ⁽¹⁾	$	28,576	$	26,633		$	1,943			7.3		$	40,653		$	32,113		$	8,540			26.6

Plus: Interest expense		11,782		7,549			4,233			56.1			14,723			7,606			7,117			93.6
Provision for income taxes		17,967		16,558			1,409			8.5
Income tax provision													9,902			19,144			(9,242	)		(48.3	)
Depreciation and amortization		46,890		34,689			12,201			35.2			48,778			39,536			9,242			23.4
Equity-based compensation expense		2,418		3,420			(1,002	)		(29.3	)
Equity-based compensation													2,338			2,427			(89	)		(3.7	)
Severance expense		1,345		-			1,345			NM			-			1,254			(1,254	)		(100.0	)
(Gain) loss on deferred compensation		339		100			239			239.0			(84	)		90			(174	)		(193.3	)
Acquisition-related costs		3,242		445			2,797			NM			-			1,482			(1,482	)		(100.0	)
(Gain) loss on disposal of assets		462		157			305			194.3
(Gain) loss on disposal of assets, net													6,634			(6,146	)		12,780			(207.9	)
Billing system conversion costs													840			-			840			NM
Other (income) expense, net		322		(183	)		505			NM			(617	)		(287	)		(330	)		115.0

Adjusted EBITDA ⁽¹⁾	$	113,343	$	89,368		$	23,975			26.8		$	123,167		$	97,219		$	25,948			26.7

Six Months Ended June 30,

2017 vs. 2016

(dollars in thousands)

2017

2016

$ Change

% Change

Net income ⁽¹⁾
$ 61,790 $ 53,677 $ 8,113 15.1

Plus: Interest expense
19,389 15,104 4,285 28.4
Provision for income taxes
37,787 29,852 7,935 26.6
Depreciation and amortization
85,295 69,382 15,913 22.9
Equity-based compensation expense
4,845 6,466 (1,621
)
(25.1
)
Severance expense
2,599 - 2,599 NM
(Gain) loss on deferred compensation
429 (120
)
549 NM
Acquisition-related costs
4,723 544 4,179 NM
(Gain) loss on disposal of assets
(5,686
)
565 (6,251
)
NM
Other (income) expense, net
35 (693
)
728 (105.1
)

Adjusted EBITDA ⁽¹⁾
$ 211,206 $ 174,777 $ 36,429 20.8


NM = Not meaningful.
⁽¹⁾⁽¹⁾ Net income and Adjusted EBITDA ~~include two months of NewWave operations and the favorable impact of a reduction in expense of $5.1 million and $11.0 million~~ for the three ~~and six~~ months ended ~~June 30, 2017, respectively, due to a change in accounting estimate related to capitalized labor costs.~~March 31, 2018 include NewWave operations. Without the contribution from NewWave operations, net income would have ~~been $26.5 million and $59.7~~increased 17.7% to $37.8 million and Adjusted EBITDA ~~growth~~ would have ~~been 14.2% and 14.4%~~increased 7.4% to $104.4 million for the three ~~and six~~ months ended ~~June 30, 2017, respectively. Excluding both~~March 31, 2018 compared to the NewWave impact and the change in estimate related to capitalized labor, net income would have been $23.4 million and $52.9 million and Adjusted EBITDA growth would have been 8.4% and 8.1% for the three and six months ended June 30, 2017, respectively.prior year period.

We believe Adjusted EBITDA is useful to investors in evaluating ~~the~~our operating ~~performance of our company.~~performance. Adjusted EBITDA and similar measures with similar titles are ~~commonly~~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 ~~similar~~similarly titled measures reported by other companies.

~~Table of Contents~~

Financial Condition: Liquidity and Capital Resources

Liquidity

Our primary funding requirements are for our ongoing operations, planned capital expenditures, payments of quarterly dividends and share repurchases. We believe that existing cash balances, our Senior Credit Facilities ~~as amended,~~ and operating cash flows will provide adequate support for these funding requirements over the next 12 months. However, our ability to fund operations, make planned capital expenditures, pay quarterly dividends 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. As a result of the 2017 Federal tax reform legislation, we expect to realize approximately $38 million to $42 million of cash tax savings during 2018.

During the first quarter of 2018, our cash and cash equivalents increased $23.7 million. At March 31, 2018, we had $185.5 million of cash on hand compared to $161.8 million at December 31, 2017. Our working capital was $115.1 million and $76.7 million at March 31, 2018 and December 31, 2017, respectively.

The following table shows a summary of our cash flows for the periods indicated (dollars in thousands):

	Six Months Ended June 30,						2017 vs. 2016						Three Months Ended March 31,						2018 vs. 2017
	2017			2016			$ Change			% Change			2018			2017			$ Change			% Change
Net cash provided by operating activities	$	130,859		$	125,580		$	5,279			4.2		$	94,692		$	78,260		$	16,432			21.0
Net cash used in investing activities		(795,806	)		(75,522	)		(720,284	)		NM			(45,619	)		(26,985	)		(18,634	)		69.1
Net cash provided by (used in) financing activities		616,700			(66,516	)		683,216			NM
Net cash used in financing activities														(25,332	)		(15,848	)		(9,484	)		59.8
Change in cash and cash equivalents		(48,247	)		(16,458	)		(31,789	)		193.2			23,741			35,427			(11,686	)		(33.0	)
Cash and cash equivalents, beginning of period		138,040			119,199			18,841			NM			161,752			138,040			23,712			17.1
Cash and cash equivalents, end of period	$	89,793		$	102,741		$	(12,948	)		(12.6	)	$	185,493		$	173,467		$	12,026			6.9

~~__________~~

NM = Not meaningful.

During the first half of 2017, our cash and cash equivalents decreased $48.2 million. At June 30, 2017, we had $89.8 million of cash on hand compared to $138.0 million at December 31, 2016. Our working capital was $30.8 million and $74.8 million at June 30, 2017 and December 31, 2016, respectively.

Net cash provided by operating activities was ~~$130.9~~$94.7 million and ~~$125.6~~$78.3 million for the first ~~half~~quarter of ~~2017~~2018 and ~~2016,~~2017, respectively. The year-over-year ~~change in operating cash flow~~increase of $16.4 million was primarily attributable to ~~higher net income adjusted for depreciation and amortization, equity-based compensation, deferred taxes and gain on disposal~~an increase in Adjusted EBITDA of ~~assets,~~$25.9 million, partially offset by ~~changes~~an unfavorable change in ~~operating assets and liabilities. The change in~~net operating assets and liabilities ~~was due primarily to~~and a $6.5 million increase in cash paid for interest. The unfavorable change in net operating assets and liabilities primarily reflects changes to income taxes ~~receivable and accounts~~ payable and ~~accrued liabilities~~prepaid and other assets as a result of the timing of payments compared to the first ~~half~~quarter of ~~2016.~~2017.

Net cash used in investing activities was ~~$795.8~~$45.6 million and ~~$75.5~~$27.0 million for the first ~~half~~quarter of ~~2017~~2018 and ~~2016,~~2017, respectively. The increase of $18.6 million from the prior year period was due primarily to ~~the NewWave acquisition during the second quarter of 2017 and increased~~an $8.8 million increase in cash paid for capital expenditures, ~~partially offset by~~of which $6.7 million related to NewWave operations, and $10.1 million inof sales proceeds received ~~for~~from the sale of a non-operating property in ~~the first quarter~~2017 that did not recur in 2018.

Table of ~~2017.~~

Contents

Net ~~cash provided by financing activities was $616.7 million in the first half of 2017 compared to net~~ cash used in financing activities ~~of $66.5~~was $25.3 million for the first ~~half of 2016. The change was primarily attributable to new debt incurred in connection with the NewWave acquisition during the second~~ quarter of ~~2017,~~2018 compared to $15.8 million for the first quarter of 2017. The $9.5 million increase from the prior year period was due primarily to a $6.9 million increase in withholding tax payments for equity award vesting and exercise activities, a $1.9 million increase in share repurchases, a $1.6 million increase in debt principal repayments and a $1.5 million increase in dividend payments, partially offset by a decrease in the ~~payment of debt issuance costs, repayment of the Term Loan and a reduction~~change in ~~share repurchases compared~~cash overdrafts due to the ~~comparable prior year period.~~timing of payments.

On July 1, 2015, the Board authorized up to $250 million of share repurchases (subject to a total cap of 600,000 shares of our common stock). Purchases under the share repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases are based on a number of factors, including share price and business and market conditions. Since the inception of the share repurchase program through the end of the ~~second~~first quarter of ~~2017,~~2018, we have repurchased ~~165,633~~169,144 shares at an aggregate cost of ~~$73.1~~$75.6 million. ~~During the~~In first ~~half~~quarter of ~~2017,~~2018, we repurchased ~~700~~3,311 shares at an aggregate cost of ~~$0.4 million, of which all occurred during the first quarter. Additionally, we~~$2.3 million.

We currently expect to continue to pay quarterly cash dividends on shares of our common stock, subject to approval of the Board. During the ~~second~~first quarter of ~~2017,~~2018, the Board approved a quarterly dividend of ~~$1.50~~$1.75 per share of common stock, which was paid on ~~June 2, 2017.~~March 9, 2018.

~~Table of Contents~~

Financing Activity

On June 17, 2015, we issued $450 million aggregate principal amount of 5.75% senior unsecured notes due 2022. The Notes mature on June 15, 2022 and interest is payable on June 15^th15th and December 15^th15th of each year. The Notes are jointly and severally guaranteed on a senior unsecured basis (the ~~“Guarantees”~~“Notes Guarantees”) by each of our ~~existing and future domestic~~ subsidiaries that guarantee the Senior Credit Facilities (the ~~“Guarantors”~~“Notes Guarantors”). In addition, if one of our subsidiaries becomes a guarantor in respect of the Senior Credit Facilities or certain other indebtedness, it is required to provide (subject to customary exceptions) a Notes Guarantee. The Notes are unsecured and senior obligations of the Company. The Notes Guarantees are unsecured and senior obligations of the Notes Guarantors. ~~At our option,~~

The Notes were issued pursuant to the ~~Notes may be redeemed in whole or in part, at any time prior to June 15, 2018, at a price equal to 100% of the aggregate principal amount~~Indenture. The Indenture provides for early redemption of the Notes, ~~plus accrued and unpaid interest, if any, to (but excluding) the redemption date plus a “make-whole” premium. We may also redeem the Notes, in whole or in part,~~ at ~~any time on or after June 15, 2018,~~our option, at the ~~redemption~~ prices and subject to the terms specified in the Indenture, plus accrued and unpaid interest, if any, to (but excluding) the redemption date. Additionally, at any time prior to June 15, 2018, we may redeem up to 35% of the aggregate principal amount of the Notes with the net cash proceeds from certain equity offerings at a price equal to 105.75% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to (but excluding) the redemption date.Indenture. The Indenture includes certain covenants relating to debt incurrence, liens, restricted payments, ~~assets~~asset sales and transactions with affiliates, changes in control and mergers or sales of all or substantially all of our assets. The Indenture also provides for customary events of default (subject, in certain cases, to customary grace periods).

On June 30, 2015, we entered into the Credit Agreement ~~among the Company, as borrower,~~with the lenders party thereto, JPMorgan, as administrative agent, and the other agents party thereto. The Credit Agreement provided for a five-year Revolving Credit Facility in an aggregate principal amount of $200 million and a five-year Term Loan Facility in an aggregate principal amount of $100 million. Concurrently with ~~our~~the entry into the Credit Agreement, we borrowed the full amount of the Term Loan Facility. The obligations under the Original Credit Facilities were obligations of the Company and were guaranteed by our subsidiary, Cable One VoIP LLC (“Cable One VoIP”). The obligations under the Original Credit Facilities were secured, subject to certain exceptions, by substantially all of the assets of the Company and Cable One VoIP.

Borrowings under the Original Credit Facilities bore interest, at our option, at a rate per annum determined by reference to either LIBOR or an adjusted base rate, in each case plus an applicable interest rate margin. The applicable interest rate margin with respect to LIBOR borrowings was a rate per annum between 1.50% and 2.25% and the applicable interest rate margin with respect to adjusted base rate borrowings was a rate per annum between 0.50% and 1.25%, in each case determined on a quarterly basis by reference to a pricing grid based upon our total net leverage ratio. In addition, we are required to pay commitment fees on any unused portion of the Revolving Credit Facility at a rate between 0.25% per annum and 0.40% per annum, determined by reference to the pricing grid.

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. Letter of credit issuances under the Revolving Credit Facility of $2.8 million at June 30, 2017 were held for the benefit of certain general and liability insurance matters and bore interest at a rate of 1.625% per annum. We had $197.2 million available for borrowing under the Revolving Credit Facility at June 30, 2017.

On May 1, 2017, we entered into the ~~Restatement Agreement with JPMorgan, as administrative agent,~~Amended and ~~the lenders party thereto, pursuant to which we amended and restated the~~Restated Credit Agreement and incurred $750 million of New Loans which were used, together with cash on hand, to ~~(i)~~ finance the ~~transactions contemplated by the Merger Agreement, (ii)~~NewWave acquisition, repay in full the Term Loan Facility and ~~(iii)~~ pay related fees and expenses.

The New Loans consist of ~~(a) a~~the five-year Term Loan A in an aggregate principal amount of $250 million and ~~(b) a~~the seven-year Term Loan B in an aggregate principal amount of $500 ~~million, which~~million. The obligations under the Amended and Restated Credit Agreement are guaranteed by our wholly owned domestic subsidiaries and are secured, subject to certain exceptions, by substantially all assets of ~~our company~~the Company and the guarantors.

On April 23, 2018, we entered into the Repricing Amendment to the Amended and Restated Credit Agreement to, among other things, (i) decrease the applicable margin for the Term Loan B to 1.75% for LIBOR borrowings and 0.75% for base rate borrowings, (ii) reset the period during which a prepayment premium in respect of the Term Loan B may be required for a Repricing Transaction until six months after the effective date of the Repricing Amendment and (iii) reset the period during which the Term Loan B benefits from certain “most favored nation” pricing protections until 12 months after the effective date of the Repricing Amendment. Other than as set forth above, all other material terms and provisions of the Senior Credit Facilities remain substantially the same. Excluding the costs of the transaction, the interest rate reduction is expected to save the Company approximately $2.5 million annually in interest costs. Debt issuance costs incurred for the repricing totaled $2.0 million.

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The interest margins applicable to the ~~New Loans under the Amended and Restated~~Senior Credit ~~Agreement~~Facilities are, at our option, equal to either LIBOR or a base rate, plus an applicable margin equal to, ~~(x)~~(i) with respect to the Term Loan A ~~2.25%~~and the Revolving Credit Facility, 1.50% to ~~1.50%~~2.25% for LIBOR loans and ~~1.25%~~0.50% to ~~0.50%~~1.25% for base rate loans, determined on a quarterly basis by reference to a pricing grid based on our total net leverage ratio and ~~(y)~~(ii) with respect to the Term Loan B, (x) for any day on or prior to April 22, 2018, 2.25% for LIBOR loans and 1.25% for base rate loans and (y) for any date after April 22, 2018, 1.75% for LIBOR loans and 0.75% for base rate loans. The Term Loan A may be prepaid at any time without premium and amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 2.5% per annum for the first year after funding, 5.0% per annum for the second year after funding, 7.5% per annum for the third year after funding and 10.0% per annum for the fourth and fifth years after funding, with the outstanding balance due upon maturity. The Term Loan B amortizes quarterly at a rate (expressed as a percentage of the original principal amount) of 1.0% per annum, with the outstanding balance due upon maturity. The Term Loan B is subject to a 1.0% prepayment ~~penalty~~premium if prepaid in connection with a Repricing Transaction within six months of ~~funding,~~the effective date of the Repricing Amendment, benefits from certain “most favored nation” pricing protections and is not subject to the financial maintenance covenants under the Amended and Restated Credit Agreement. Other than as set forth above, the New Loans are subject to terms substantially similar to those under the Credit Agreement.

~~Table~~

We may, subject to certain specified terms and provisions, obtain additional credit facilities of ~~Contents~~

up to $425 million under the Amended and Restated Credit Agreement plus an unlimited amount so long as, on a pro forma basis, our First Lien Net Leverage Ratio (as defined in the Amended and Restated Credit Agreement) is no greater than 1.80 to 1.00. The Amended and Restated Credit Agreement contains customary representations, warranties and affirmative and negative covenants as well as customary events of default. The Amended and Restated Credit Agreement also requires us to maintain specified ratios of total net indebtedness and first lien net indebtedness to consolidated operating cash flow. Refer to note 8 to the consolidated financial statements included in our 2017 Form 10-K for additional information.

We were in compliance with all debt covenants as of March 31, 2018.

As of ~~June 30, 2017,~~March 31, 2018, outstanding borrowings under the Term Loan A and Term Loan B were ~~$250~~$245.3 million and ~~$500~~$496.3 million, and bore interest at a rate of ~~2.93%~~4.06% per annum and ~~3.43%~~4.56% per annum, respectively. Letter of credit issuances under the Revolving Credit Facility totaled $3.1 million and we had $196.9 million available for borrowing under the Revolving Credit Facility at March 31, 2018.

In connection with the New Loans, we incurred $15.2 million in debt issuance costs, of which $0.6 million was written off during the quarter ended June 30, 2017. Unamortized debt issuance costs totaled $21.6 million and $8.1 million at June 30, 2017 and December 31, 2016, respectively.

Capital Expenditures

We have significant ongoing capital expenditure requirements. In addition, we expect to spend up to $50 million in 2018 and 2019, in addition to the $10 million spent in 2017, to enhance the acquired NewWave systems by rebuilding low capacity markets, launching all-digital video services, implementing 32-channel bonding to enable a 1 Gbps download speed product launch, converting back office functions such as billing, accounting and service provisioning and migrating products to legacy Cable One platforms. Capital expenditures are funded primarily by cash on hand and cash flows from operating activities.

We have adopted capital expenditure disclosure guidance as supported by the ~~Internet & Television Association (“NCTA”).~~NCTA. These disclosures are not required under GAAP, nor do they impact our accounting for capital expenditures under GAAP. The amounts of capital expenditures reported in this Quarterly Report on Form 10-Q are calculated in accordance with NCTA disclosure guidelines, which include assets acquired during the relevant periods.

The following table presents our major capital expenditure categories in accordance with NCTA disclosure guidelines for the ~~six~~three months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ (in thousands):

	Six Months Ended June 30,				Three Months Ended March 31,
	2017		2016		2018		2017
Customer premise equipment	$	13,941	$	12,248	$	12,000	$	6,161
Commercial		4,347		2,909		1,593		1,637
Scalable infrastructure		16,872		25,163		9,759		7,416
Line extensions		6,149		4,004		3,501		2,338
Upgrade/rebuild		10,239		6,459		4,474		5,493
Support capital		24,882		14,240		9,692		12,872
Total	$	76,430	$	65,023	$	41,019	$	35,917

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Contractual Obligations and Contingent Commitments

The following is a summary of our outstanding contractual obligations ~~remaining~~ as of ~~June 30, 2017~~March 31, 2018 (in thousands):

Years ending December 31,	Programming Purchase Commitments		Operating Leases		Total Debt, including Capital Leases		Other Purchase Obligations⁽¹⁾		Total
2017 (remaining months)	$	108,744	$	1,116	$	5,633	$	12,611	$	128,104
2018		180,550		1,761		14,392		19,204		215,907
Year ending December 31,											Programming Purchase Commitments ⁽¹⁾		Operating Lease Payments		Debt Payments ⁽²⁾		Other Purchase Obligations ⁽³⁾		Total
2018 (remaining nine months)											$	167,736	$	1,363	$	11,575	$	18,226	$	198,900
2019		131,217		1,218		20,642		12,812		165,889		167,707		1,392		20,642		15,947		205,688
2020		62,401		827		26,892		6,878		96,998		100,976		984		26,892		10,636		139,488
2021		29,353		550		30,017		5,009		64,929		32,739		720		30,017		5,823		69,299
2022												410		334		180,017		1,042		181,803
Thereafter		11		1,004		1,102,700		4,237		1,107,952		-		422		922,683		4,096		927,201
Total	$	512,276	$	6,476	$	1,200,276	$	60,751	$	1,779,779	$	469,568	$	5,215	$	1,191,826	$	55,770	$	1,722,379

⁽¹⁾		Programming purchase commitments represent contracts that we have with cable television networks and broadcast stations to provide programming services to our subscribers. The amounts included represent estimates of the future programming costs for these purchase commitments based on tier placement as of March 31, 2018 and the estimated subscriber numbers applied to the per-subscriber rates contained in these contracts. Actual amounts due under such contracts may differ from the amounts above based on the actual subscriber numbers and tier placements. In addition, programming purchases sometimes occur pursuant to non-binding commitments, which are not reflected in the amounts shown.
⁽¹⁾⁽²⁾	~~Includes~~Debt payments include principal repayment obligations as defined by the agreements described in the Financing Activity section and for capital lease payment obligations.
⁽³⁾	Other purchase obligations includes purchase obligations related to capital projects and other legally binding commitments. Other purchase orders made in the ordinary course of business are excluded from the ~~table above.~~amounts shown. Any amounts for which we are liable under purchase orders are reflected in our ~~Consolidated Balance Sheet~~condensed consolidated balance sheet within ~~Accounts~~accounts payable and accrued liabilities.

Programming and content purchases represent contracts that we have with cable television networks and broadcast stations to provide programming services to our subscribers. The amounts included above represent estimates ofWe incur the future programming costs for these contract requirements and commitments based on tier placement as of June 30, 2017 and estimated subscriber numbers applied to the per-subscriber rates contained in these contracts. Actual amounts due under such contracts may differ from the amounts above based on the actual subscriber numbers and tier placements. In addition, programming purchases sometimes occur pursuant to non-binding commitments, which are not reflected in the summary above.

~~Table of Contents~~

~~Total debt relates to principal repayment obligations as defined by the agreements described in the “Financing Activity” section above and for capital leases.~~

~~The~~ following ~~items are not included as contractual obligations due to various factors discussed below. However, we incur these~~ costs as part of our ~~operations:~~operations, however, they are not included within the contractual obligations table above for the reasons discussed below:

●

We rent space on utility poles ~~used~~ in order to provide our ~~operations.~~services to certain subscribers. Generally, pole rentals are cancellable on short notice, but we anticipate that such rentals will recur. Rent expense for pole attachments was ~~$1.9~~$2.2 million and ~~$1.4~~$1.5 million for the three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and $3.5 million and $2.9 million for the six months ended June 30, 2017 and 2016,~~ respectively.

●

We pay fees to franchise ~~fees~~authorities under multi-year franchise agreements based on a percentage of revenues generated from video service ~~per~~each year. Franchise fees and other franchise-related costs included in both revenues and operating expenses within the ~~Consolidated Statements~~condensed consolidated statements of ~~Operations~~operations and ~~Comprehensive Income~~comprehensive income were ~~$4.0~~$4.1 million and ~~$3.6~~$3.5 million for the three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and $7.5 million and $7.2 million for the six months ended June 30, 2017 and 2016,~~ respectively.

●

We have cable franchise agreements requiring the construction of cable plant and the provision of services to customers within the franchise areas. In connection with these obligations under existing franchise agreements, we obtain surety bonds or letters of credit guaranteeing performance to municipalities and public utilities and payment of insurance premiums. Such surety bonds and letters of credit as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 totaled ~~$8.8~~$12.1 million and ~~$5.1~~$12.0 million, respectively. Payments under these arrangements are required only in the remote event of nonperformance. We do not expect that these contingent commitments will result in any amounts being paid.

Off-Balance Sheet Arrangements

With the exception of ~~surety bonds~~the items discussed within the preceding “Contractual Obligations and ~~letters of credit noted above,~~Contingent Commitments” section, we do not have any ~~off-balance-sheet~~off-balance sheet arrangements or financing ~~activities~~arrangements with special-purpose entities.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, assumptions and judgments that affect the amounts reported in the 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.

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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 for~~With the ~~change in~~exception of changes to our revenue recognition accounting ~~estimate regarding labor capitalization as~~policy due to the adoption of the new revenue recognition standard effective January 1, 2018 discussed in ~~Note~~note 1 of the ~~Notes~~notes to our ~~Consolidated Financial Statements included in~~condensed consolidated financial statements within this Quarterly Report on Form 10-Q, there have been no material changes to ~~the~~our critical accounting ~~policies~~policy and ~~estimates~~estimate disclosures included in our ~~Annual Report on~~2017 Form ~~10-K filed with the SEC on March 1, 2017.~~

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~~Cautionary Statement Regarding Forward-Looking Statements~~10-K.

This document contains “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions and projections about the cable industry and our business and financial results. Forward-looking statements often include words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating or financial performance. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. Our actual results may vary materially from those expressed or implied in our forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by us or on our behalf. Important factors that could cause our actual results to differ materially from those in our forward-looking statements include government regulation, economic, strategic, political and social conditions and the following factors:

●

~~the effect of our acquisition of NewWave on our ability to retain and hire key personnel and to maintain relationships with customers, suppliers and other business partners;~~

●

~~the potential diversion of senior management’s attention from our ongoing operations due to the acquisition of NewWave;~~

●

~~uncertainties as to our ability and the amount of time necessary to realize the expected synergies and other benefits of the NewWave transaction;~~

●

~~our ability to integrate NewWave’s operations into our own in an efficient and effective manner;~~

●

~~rising levels of competition from historical and new entrants in our markets;~~

●

~~recent and future changes in technology;~~

●

~~our ability to continue to grow our business services product;~~

●

~~increases in programming costs and retransmission fees;~~

●

~~our ability to obtain support from vendors;~~

●

~~the effects of any significant acquisitions by us;~~

●

~~adverse economic conditions;~~

●

~~the integrity and security of our network and information systems;~~

●

~~legislative and regulatory efforts to impose new legal requirements on our data services;~~

●

~~changing and additional regulation of our data, video and voice services;~~

●

~~our ability to renew cable system franchises;~~

●

~~increases in pole attachment costs;~~

●

~~the failure to meet earnings expectations;~~

●

~~the adequacy of our risk management framework;~~

●

~~changes in tax and other laws and regulations;~~

●

~~changes in GAAP or other applicable accounting policies; and~~

●

~~the other risks and uncertainties detailed in the section titled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 1, 2017.~~

Any forward-looking statements made by us in this document speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.

~~Item~~ITEM 3. ~~Quantitative~~ ~~and Qualitative Disclosures About Market Risk~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the potential ~~gain/~~gain or loss arising from changes in market rates and prices, such as interest rates. There have been no ~~significant~~material changes to our market risk disclosures included in ~~our Annual Report on~~the 2017 Form ~~10-K filed with the SEC on March 1, 2017.~~10-K.

~~Item~~ITEM 4. ~~Controls~~ ~~and Procedures~~CONTROLS AND PROCEDURES

Disclosure Controls and ~~Procedures~~Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act and were effective in ensuring that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

As a result of the NewWave acquisition on May 1, 2017, ~~we have implemented~~the Company has incorporated internal controls over ~~financial reporting~~significant processes specific to ~~include consolidation~~the acquisition and to post-acquisition activities necessary for the integration of ~~NewWave and~~the combined company, including controls associated with acquisition-related accounting and ~~disclosures.~~related disclosures as well as the adoption of common financial reporting and internal control practices for the combined company. The NewWave operations utilize ~~separate information~~a different billing system and ~~accounting systems~~processes, for which the Company has designed and ~~processes. Our management is~~implemented new internal controls effective in the ~~process~~first quarter of ~~reviewing and evaluating the design and operating effectiveness of internal control over financial reporting relating~~2018.

Further, due to the ~~NewWave operations.~~

~~Table~~adoption of ~~Contents~~

the new revenue recognition standard effective January 1, 2018, the Company has designed and implemented additional internal controls over significant processes specific to the initial transition to the standard and to the ongoing recording, processing and reporting requirements underlying the new revenue recognition requirements.

Except as disclosed above, there has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended ~~June 30, 2017~~March 31, 2018 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II: OTHER INFORMATION

~~Item~~ITEM 1. ~~Legal~~ ~~Proceedings~~LEGAL PROCEEDINGS

None.

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~~Item~~ITEM 1A. ~~Risk~~ ~~Factors~~RISK FACTORS

There have been no material changes to our risk factors as previously disclosed in our ~~Annual Report on~~2017 Form ~~10-K filed with the SEC on March 1, 2017.~~10-K.

~~Item~~ITEM 2. ~~Unregistered~~ ~~Sales of Equity Securities and Use of Proceeds~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth certain information relating to the purchases of our common stock by us and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) under the Exchange Act during the three months ended ~~June 30, 2017~~March 31, 2018 (dollars in thousands, except per share data):

Period

Total Number of
Shares Purchased

Average Price
Paid Per Share

Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs ⁽¹⁾

Maximum Dollar
Value of Shares that
May Yet Be
Purchased Under the
Plans or Programs

April 1 to 30, 2017
- $ - - $ 176,865
May 1 to 31, 2017
- $ - - $ 176,865
June 1 to 30, 2017 ⁽²⁾
149 $ 715.26 - $ 176,865
Total
149 $ 715.26 -

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 to 31, 2018 ⁽²⁾		8,442	$	706.20		-	$	176,728
February 1 to 28, 2018 ⁽²⁾		152	$	706.03		-	$	176,728
March 1 to 31, 2018 ⁽³⁾		4,484	$	694.02		3,311	$	174,433
Total		13,078	$	699.47		3,311	$	174,433


⁽¹⁾	On July 1, 2015, the Board authorized up to $250 million of share repurchases (subject to a total cap of 600,000 shares of ~~Company~~ common stock), which was announced on August 7, 2015. Purchases under the share repurchase program may be made from time to time on the open market and in privately negotiated transactions. The size and timing of these purchases is based on a number of factors, including share price and business and market conditions.
⁽²⁾	Represents shares withheld from employees to satisfy estimated tax withholding obligations in connection with the vesting of restricted shares ~~and~~and/or exercises of SARs under the 2015 Plan. The average price paid per share for the common stock withheld was based on the closing price of our common stock on the applicable vesting or exercise date.
⁽³⁾	Includes 1,173 shares withheld from employees to satisfy estimated tax withholding obligations in connection with exercises of SARs under the 2015 Plan. The average price paid per share for the common stock withheld was based on the closing price of our common stock on the applicable exercise date.

~~Item~~ITEM 3. ~~Defaults~~ ~~Upon Senior Securities~~DEFAULTS UPON SENIOR SECURITIES

None.

~~Item~~ITEM 4. MINE SAFETY DISCLOSURES~~Mine~~ ~~Safety Disclosures~~

Not applicable.

~~Item~~ITEM 5. ~~Other~~ ~~Information~~OTHER INFORMATION

Not applicable.

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~~Item~~ITEM 6. EXHIBITS~~Exhibits~~

Exhibit

Number

Description

~~4.1~~10.1

~~First Supplemental Indenture, dated as~~Form of ~~May 1, 2017, among Avenue Broadband Communications LLC, Telecommunications Management, LLC, Ultra Communications Group, LLC, and The Bank of New York Mellon Trust Company, N.A., as trustee~~Stock Appreciation Right Award Agreement for grants beginning in 2018 (incorporated herein by reference to Exhibit ~~4.1~~10.17 to the ~~Current~~Annual Report on Form ~~8-K~~10-K of Cable One, Inc. filed on ~~May 4, 2017)~~March 1, 2018).

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10.2	Form of Restricted Stock Award Agreement for performance-based restricted stock grants beginning in 2018 (incorporated herein by reference to Exhibit 10.18 to the Annual Report on Form 10-K of Cable One, Inc. filed on March 1, 2018).

~~10.1~~10.3	~~Restatement~~Form of Restricted Stock Award Agreement for time-based restricted stock grants beginning in 2018 (incorporated herein by reference to Exhibit 10.19 to the Annual Report on Form 10-K of Cable One, Inc. filed on March 1, 2018).

10.4	Form of Non-Employee Director Restricted Stock Unit Award Agreement for grants in lieu of annual cash fees beginning in 2018 (incorporated herein by reference to Exhibit 10.20 to the Annual Report on Form 10-K of Cable One, Inc. filed on March 1, 2018).

10.5	Amendment No. 1, dated as of ~~May 1, 2017,~~April 23, 2018, to the Credit Agreement among Cable One, Inc., ~~Cable One VoIP, LLC,~~the lenders or other financial institutions party thereto, and JPMorgan Chase Bank, N.A., as administrative agent ~~and the lenders party thereto~~ (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K of Cable One, Inc. filed on ~~May 4, 2017).~~

~~10.2~~	~~Amended and Restated Cable One, Inc. 2015 Omnibus Incentive Compensation Plan (incorporated herein by reference to Annex B to the 2017 Proxy Statement of Cable One, Inc. filed on March 28, 2017).~~

~~10.3~~	~~Form of Non-Employee Director Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K of Cable One, Inc. filed on May 4, 2017)~~April 23, 2018).

31.1	Principal Executive Officer Certification required by Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2	Principal Financial Officer Certification required by Rules 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

101.INS	XBRL Instance Document.*

101.SCH	XBRL Taxonomy Extension Schema Document.*

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*

~~__________~~

* Filed herewith.

** Furnished herewith.

3231

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Cable One, Inc. (Registrant)

By:	/s/ Julia M. Laulis
	Name:	Julia M. Laulis
	Title:	Chair of the Board, President and Chief Executive Officer

Date: ~~August 8, 2017~~May 9, 2018

By:

/s/ Kevin P. Coyle

Name:

Kevin P. Coyle

Title:

Senior Vice President and

Chief Financial Officer

Date: ~~August 8, 2017~~May 9, 2018

Delaware		13-3060083
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

210 E. Earll Drive, Phoenix, Arizona		85012
(Address of Principal Executive Offices)		(Zip Code)

Large accelerated filer	☑	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐
(Do not check if a smaller reporting company)
		Emerging growth company	☐

Description of Class	Shares Outstanding as of ~~August~~May 4, ~~2017~~2018
Common ~~Stock,~~stock, par value $0.01	~~5,725,853~~ 5,727,206

		~~Page~~
PART I.	I: FINANCIAL INFORMATION	1

Item 1.	Condensed Consolidated Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1718

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3029

Item 4.	Controls and Procedures	29

PART II: OTHER INFORMATION	29

Item 1. Legal Proceedings	29

Item 1A. Risk Factors	30

~~PART II.~~	~~OTHER INFORMATION~~	31

~~Item 1.~~	~~Legal Proceedings~~	31
~~Item 1A.~~	~~Risk Factors~~	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3130

Item 3.	Defaults Upon Senior Securities	3130

Item 4.	Mine Safety Disclosures	3130

Item 5.	Other Information	3130

Item 6.	Exhibits	3230

	~~Signatures~~SIGNATURES	3332

	Provisional Allocation		Purchase Price Allocation
Assets
Assets Acquired
Cash and cash equivalents	$	12,220	$	12,220
Accounts receivable		15,027		15,027
Prepaid assets		1,184		2,286
Property, plant and equipment		192,234		192,234
Intangibles		476,300		476,300
Other assets		370		1,184
Total		697,335
Total Assets Acquired				699,251

Liabilities
Liabilities Assumed
Accounts payable and accrued liabilities		24,542		25,125
Deferred revenue		14,516		14,516
Deferred income taxes		10,720		6,644
Total		49,778
Total Liabilities Assumed				46,285

Net assets acquired		647,557
Net Assets Acquired				652,966
Purchase price consideration		741,003		740,166
Goodwill recognized	$	93,446
Goodwill Recognized			$	87,200


	Three Months Ended March 31, 2017
	As Reported/ Revised ⁽¹⁾			ASC 606 Adjustment			As Recasted
Condensed Consolidated Statement of Operations and Comprehensive Income Information
Revenues	$	207,427		$	7		$	207,434
Costs and expenses
Selling, general and administrative		46,256			129			46,385
Total costs and expenses		148,729			129			148,858
Income from operations		58,698			(122	)		58,576
Income before income taxes		51,379			(122	)		51,257
Income tax provision		19,190			(46	)		19,144
Net income	$	32,189		$	(76	)	$	32,113

Net income per common share:
Basic	$	5.68		$	(0.02	)	$	5.66
Diluted	$	5.62		$	(0.02	)	$	5.60

Comprehensive income	$	32,191		$	(76	)	$	32,115

Condensed Consolidated Statement of Cash Flows Information
Net income	$	32,189		$	(76	)	$	32,113
Change in deferred income taxes		(157	)		(46	)		(203	)
Deferred revenue		425			102			527
Other assets and liabilities, net		(415	)		20			(395	)
Net cash provided by operating activities	$	78,260		$	-		$	78,260

	Provisional Estimated Fair Value		Provisional Estimated Weighted Average Useful Life (in years)
Franchise agreements	$	320,000	Indefinite
Customer relationships	$	155,000		14
Trademark and trade name	$	1,300		1

	June 30, 2017			December 31, 2016			March 31, 2018			December 31, 2017
Cable distribution systems	$	1,243,192		$	1,048,790		$	1,347,100		$	1,329,451
Customer premise equipment		201,360			181,852			200,859			200,175
Other equipment and fixtures		380,871			359,957			382,017			378,968
Buildings and leasehold improvements		94,426			88,592			95,985			95,314
Capitalized software		87,752			83,815			94,852			89,773
Construction in progress		53,335			64,822			60,293			67,564
Land		11,591			9,612			11,565			11,585
Total property, plant and equipment		2,072,527			1,837,440
Less accumulated depreciation		(1,269,144	)		(1,217,819	)
Property, plant and equipment, gross								2,192,671			2,172,830
Less: Accumulated depreciation								(1,372,662	)		(1,340,938	)
Property, plant and equipment, net	$	803,383		$	619,621		$	820,009		$	831,892

					June 30, 2017										March 31, 2018
	Useful				Gross				Net		Useful				Gross				Net
	Life				Carrying		Accumulated		Carrying		Life				Carrying		Accumulated		Carrying
	Range (years)				Amount		Amortization		Amount		Range (years)				Amount		Amortization		Amount
Amortized Intangible Assets
Finite-Lived Intangible Assets
Cable franchise renewals and access rights		1	-	25	$	4,138	$	3,840	$	298		1	-	25	$	3,828	$	3,643	$	185
Customer relationships			14		$	155,000	$	1,845	$	153,155			14		$	160,000	$	10,476	$	149,524
NewWave trademark and trade name			1		$	1,300	$	217	$	1,083
Indefinite-Lived Intangible Assets (Excluding Goodwill)
Trademarks and trade names													2.7		$	1,300	$	447	$	853
Indefinite-Lived Intangible Assets
Franchise agreements					$	817,137									$	812,371

Year Ending December 31,	Amount
2018 (remaining nine months)	$	8,984
2019		11,994
2020		11,477
2021		11,448
2022		11,437
Thereafter		95,222
Total	$	150,562

	June 30, 2017			December 31, 2016			March 31, 2018			December 31, 2017
Notes	$	450,000		$	450,000		$	450,000		$	450,000
Senior Credit Facilities		750,000			95,000			741,563			744,375
Capital lease obligation		276			284			263			267
Total debt		1,200,276			545,284			1,191,826			1,194,642
Less unamortized debt issuance costs		(21,568	)		(8,148	)		(18,615	)		(19,585	)
Less current portion of long-term debt		(11,250	)		(6,250	)
Total Long-term debt	$	1,167,458		$	530,886
Less current portion								(15,938	)		(14,375	)
Total long-term debt							$	1,157,273		$	1,160,682

Years Ending December 31,	Amount
2017 (remaining months)	$	5,633
2018		14,392
Year Ending December 31,			Amount
2018 (remaining nine months)			$	11,575
2019		20,642		20,642
2020		26,892		26,892
2021		30,017		30,017
2022				180,017
Thereafter		1,102,700		922,683
Total	$	1,200,276	$	1,191,826

				Weighted Average
				Grant Date
	Restricted			Fair Value
	Stock			Per Share
Outstanding as of December 31, 2016		38,425		$	402.21
Granted		15,660		$	624.42
Granted due to performance achievement		5,006		$	433.66
Forfeited		(3,992	)	$	418.58
Vested		(1,693	)	$	436.29
Outstanding as of June 30, 2017		53,406		$	466.62

Vested and unissued as of June 30, 2017		3,175		$	436.06

				Weighted Average
				Grant Date
	Restricted			Fair Value
	Stock			Per Share
Outstanding as of December 31, 2017		51,290		$	472.89
Granted		11,039		$	707.20
Forfeited		(818	)	$	595.99
Vested		(24,171	)	$	391.19
Outstanding as of March 31, 2018		37,340		$	592.42

Vested and unissued as of March 31, 2018		3,185		$	436.93

	Stock Appreciation Rights			Weighted Average Exercise Price		Weighted Average Fair Value		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Term (in years)		Stock Appreciation Rights			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Term (in years)
Outstanding as of December 31, 2016		136,000		$	426.80	$	88.07	$	26,510		8.7
Outstanding as of December 31, 2017													102,458		$	477.62	$	100.91	$	23,173		8.1
Granted		21,572		$	620.64	$	138.01	$	-		9.5		12,500		$	707.17	$	169.54	$	-		9.8
Exercised		(6,775	)	$	422.31	$	87.22						(11,157	)	$	432.23	$	89.73
Forfeited		(8,700	)	$	422.31	$	87.22						(2,249	)	$	422.31	$	87.22
Outstanding as of June 30, 2017		142,097		$	456.72	$	95.74	$	36,118		8.4
Outstanding as of March 31, 2018													101,552		$	512.09	$	110.89	$	18,116		8.1

Vested and exercisable as of June 30, 2017		24,150		$	422.81	$	87.33	$	6,957		8.2
Vested and exercisable as of March 31, 2018													15,795		$	482.94	$	102.51	$	3,225		7.8

	~~2017~~2018
Expected volatility		~~20.90~~22.53	%
Risk-free interest rate		~~2.14~~2.31	%
Expected term (in years)		6.25
Expected dividend yield		~~0.96~~0.98	%


⁽¹⁾⁽¹⁾	~~SARs outstanding that~~Equity-based awards whose impact is considered to be anti-dilutive under the treasury stock method were ~~not included in~~excluded from the diluted net income per share ~~calculation because the effect would have been~~calculation. The excluded number of anti-dilutive ~~were 2,477~~equity-based awards totaled 5,355 and ~~12,098~~443 for the three months ended ~~June 30, 2017~~ March 31, 2018 and ~~2016, respectively, and 1,438 and 6,830 for the six months ended June 30,~~ 2017, ~~and 2016,~~ respectively.

	Six Months Ended June 30,
	2017				2016				2017 vs. 2016
			% of				% of		$			%
	Revenues		Revenues		Revenues		Revenues		Change			Change
Residential data	$	193,356		43.1	$	169,470		41.6	$	23,886			14.1
Residential video		157,328		35.1		148,869		36.5		8,459			5.7
Residential voice		21,284		4.7		22,258		5.5		(974	)		(4.4	)
Business services		59,505		13.3		48,318		11.9		11,187			23.2
Advertising sales		11,592		2.6		13,619		3.3		(2,027	)		(14.9	)
Other		5,404		1.2		4,828		1.2		576			11.9
Total revenues	$	448,469		100.0	$	407,362		100.0	$	41,107			10.1

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 to 30, 2017		-	$	-		-	$	176,865
May 1 to 31, 2017		-	$	-		-	$	176,865
June 1 to 30, 2017 ⁽²⁾		149	$	715.26		-	$	176,865
Total		149	$	715.26		-