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CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 425 on 02/05/2016
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FEBRUARY 04, 2016 / 03:00PM GMT, CHTR - Q4 2015 Charter Communications Inc Earnings Call

Stefan Anninger - Charter Communications Inc - VP of IR

Operator, we'll take our next question, please.


Your next question comes from the line of Bryan Kraft with Deutsche Bank.

Bryan Kraft - Deutsche Bank - Analyst

Good morning. Two questions. First, you mentioned that you'll be hiring 20,000 people to in-source functions. Just wondering what the time period is, that you'll be ramping up these costs to hire and train these new people, before they fully hit the ground running? While at the same time, you've got the outsource labor still doing the day-to-day functions, and how long it takes to really work through that process?

And then the other question I had was for Chris. Chris -- and I apologize if I missed this in your prepared remarks. But can you help us understand better the $1.8 billion increase in the value of the tax loss carry-forwards since last year? Thank you.

Tom Rutledge - Charter Communications Inc - President and CEO

Bryan, the in-sourcing is a proportional analysis of what we've done at Charter over the last four years, and how that applies to the assets we're acquiring, given their scale. And in many ways, the level of outsourcing in Time Warner and Bright House is equivalent to what existed inside Charter. And the time -- you're right, there is a timeline issue there. And there is a moment where you have costs of outsourcing, while you're training new people. And you have capital intensity, while you're building new call centers, and buying trucks and tools and test equipment.

All of which we had to do at Charter, in order to get the operating model that we're currently enjoying running. And we'll have the same obligation, and the same challenges, as we go forward in the new Company. But it will result, ultimately, in a higher return on investment than we'd get otherwise.

Chris Winfrey - Charter Communications Inc - CFO

Also, the new Charter will have the transaction synergies to help fund and bridge those types of investments, going forward.

Tom Rutledge - Charter Communications Inc - President and CEO

And it's also fair to say the new assets have less issues, in terms of plant maintenance and other things of that nature, that were neglected at Charter, because of its bankruptcy, that had to be fixed before we could even begin to improve the customer service.

Chris Winfrey - Charter Communications Inc - CFO

So Bryan, on the tax assets, I did mention a few things in the prepared remarks. We had, overall, the tax assets, an increase. And one of the biggest drivers occurred inside of the third quarter. We had the collapse of the partnership, which produced some additional step-up in [day sys], pretty significant. And then over the course of the year, we had the regular depreciation and amortization, and the continued D&A of our excess tax basis.

We also, in a material way, utilized the bonus depreciation, which has now been extended, which isn't something that Charter had historically done a lot of. And we also had tax benefits inside the year, due to new tangible property regulations, generally, and some that applied to the cable industry specifically. And so, as a result of all those factors, we had overall increase in tax assets. And we had a shift of what was inside the overall tax basis into the loss carry-forward category.


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