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SEC Filings

8-K
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 8-K on 04/28/2016
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Operating Costs and Expenses

First quarter total operating costs and expenses increased by $85 million, or 5.4%, compared to the year-ago period, reflecting increases in programming costs, marketing costs and other expenses.

First quarter programming expense increased by $37 million, or 5.5%, as compared to the first quarter of 2015, reflecting contractual programming increases, a higher number of expanded basic package customers and the introduction of new networks to Charter's video offering, partly offset by a favorable settlement with a programmer in the first quarter of 2016. Excluding this programming expense benefit and the impact of video customer growth over the last twelve months, first quarter 2016 programming expense would have increased 6.0% year-over-year.
 
Costs to service customers remained virtually unchanged year-over-year despite year-over-year residential and SMB customer relationship growth of 5.9%, given improved service metrics. Other expenses grew by $34 million, or 17.6%, as compared to the first quarter of 2015, reflecting higher corporate and administrative labor costs, including the insourcing of IT and software development resources, property taxes and insurance costs, enterprise sales and labor costs, advertising sales costs and a non-recurring expense associated with Charter's incentive bonus plan. Excluding this non-recurring expense, first quarter 2016 other expenses would have grown 13.4% versus the prior-year period.

Adjusted EBITDA

First quarter Adjusted EBITDA of $883 million grew by 10.4% year-over-year, reflecting revenue growth and operating costs and expenses growth of 7.1% and 5.4%, respectively. Excluding transition related
expenses, first quarter Adjusted EBITDA grew by 10.2% year-over-year.

Net Loss

Net loss totaled $188 million in the first quarter of 2016, compared to $81 million in the first quarter of 2015. The year-over-year increase in net loss was primarily related to a $165 million increase in interest expense, driven by the financing of Charter's pending transactions with Time Warner Cable Inc. ("TWC") and Bright House Networks, LLC ("Bright House"), offset by higher income from operations and lower income tax expense. Basic and diluted loss per common share was $1.68 in the first quarter of 2016 compared to $0.73 during the same period last year. The increase in loss per common share was primarily the result of the factors described above, partially offset by a 0.6% increase in weighted average shares outstanding versus the prior-year period.

Capital Expenditures

Property, plant and equipment expenditures totaled $429 million in the first quarter of 2016, compared to $351 million during the first quarter of 2015. The year-over-year increase in capital expenditures resulted from higher product development investments, transition capital expenditures related to Charter's planned and pending acquisitions and the timing of support capital investments versus the prior-year, partially offset by a decline in customer premise equipment ("CPE") spending. Transition-related capital expenditures accounted for $53 million of capital expenditures in the first quarter of 2016 versus $14 million in the first quarter of 2015. Excluding transition-related expenditures, first quarter 2016 property, plant and equipment expenditures totaled $376 million compared to $337 million during the same period last year.

Cash Flow

During the first quarter of 2016, net cash flows from operating activities totaled $424 million, compared to $528 million in the first quarter of 2015. The year-over-year decline in net cash flow from operating activities was primarily due to higher cash interest paid in the first quarter of 2016 versus the first quarter of 2015, driven by the financing of Charter's pending transactions with TWC and Bright House, partly offset by an

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