Cable One, Inc. (Exact Name of Registrant As Specified in Its Charter)
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Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36863 Cable One, Inc. (Exact name of registrant as specified in its charter) 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) (602) 364-6000 (Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange on Which Title of Each Class Trading Symbol(s) Registered Common Stock, par value $0.01 CABO New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑ 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐ Table of Contents 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. Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑ The aggregate market value of the registrant’s common stock held by non-affiliates as of June 30, 2020 was approximately $8.0 billion, based on the closing price for the registrant’s common stock on June 30, 2020. For purposes of this computation only, all executive officers, directors and 10% beneficial owners of the registrant as of June 30, 2020 are deemed to be affiliates of the registrant. Such determination should not be deemed to be an admission that such executive officers, directors, or 10% beneficial owners are, in fact, affiliates of the registrant. There were 6,034,653 shares of the registrant’s common stock outstanding as of February 19, 2021. Documents Incorporated by Reference Portions of the registrant’s Definitive Proxy Statement relating to its 2021 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the registrant’s fiscal year ended December 31, 2020, are incorporated by reference in Part III of this Form 10-K. Table of Contents TABLE OF CONTENTS PART I Item 1. Business 3 Item 1A. Risk Factors 21 Item 1B. Unresolved Staff Comments 33 Item 2. Properties 34 Item 3. Legal Proceedings 34 Item 4. Mine Safety Disclosures 34 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 35 Item 6. Selected Financial Data - Not applicable due to early adoption of amendment to Regulation S-K 37 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 52 Item 8. Financial Statements and Supplementary Data 53 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 53 Item 9A. Controls and Procedures 53 Item 9B. Other Information 53 PART III Item 10. Directors, Executive Officers and Corporate Governance 54 Item 11. Executive Compensation 54 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 54 Item 13. Certain Relationships and Related Transactions, and Director Independence 54 Item 14. Principal Accountant Fees and Services 54 PART IV Item 15. Exhibits and Financial Statement Schedules 55 Item 16. Form 10-K Summary 58 Signatures S-1 Index to Consolidated Financial Statements F-1 1 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 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 our industry, business, strategy, acquisitions and strategic investments, dividend policy, financial results and financial condition as well as anticipated impacts from, and our responses to, the COVID-19 pandemic. 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 following factors: ● the duration and severity of the COVID-19 pandemic and its effects on our business, financial condition, results of operations and cash flows; ● 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 products; ● increases in programming costs and retransmission fees; ● our ability to obtain hardware, software and operational support from vendors; ● uncertainties as to the timing of our acquisition of the equity interests in Hargray Acquisition Holdings, LLC (“Hargray”) that we do not already own (the “Hargray Acquisition”), and the risk that the Hargray Acquisition may not be completed in a timely manner or at all, including failure to receive any required regulatory approvals (or any conditions, limitations or restrictions placed in connection with such approvals); ● risks that we may fail to realize the benefits anticipated as a result of the Hargray Acquisition; ● business uncertainties that we and Hargray will be subject to while the Hargray Acquisition is pending that could adversely affect our and their businesses; ● risks relating to existing or future acquisitions and strategic investments by us; ● risks that the implementation of our new enterprise resource planning (“ERP”) system disrupts business operations; ● the integrity and security of our network and information systems; ● the impact of possible security breaches and other disruptions, including cyber-attacks; ● our failure to obtain necessary intellectual and proprietary rights to operate our business and the risk of intellectual property claims and litigation against us; ● legislative or regulatory efforts to impose network neutrality (“net neutrality”) and other new requirements on our data services; ● additional regulation of our video and voice services; ● our ability to renew cable system franchises; ● increases in pole attachment costs; ● changes in local governmental franchising authority and broadcast carriage regulations; ● the potential adverse effect of our level of indebtedness on our business, financial condition or results of operations and cash flows; ● the restrictions the terms of our indebtedness place on our business and corporate actions; ● the possibility that interest rates will rise, causing our obligations to service our variable rate indebtedness to increase significantly; ● our ability to continue to pay dividends; ● provisions in our charter, by-laws and Delaware law that could discourage takeovers and limit the judicial forum for certain disputes; ● adverse economic conditions; ● fluctuations in our stock