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SEC Filings

10-Q
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 10-Q on 08/09/2016
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However, without regard to leverage, during any calendar year or any portion thereof during which the borrower is a flow-through entity for tax purposes, and so long as no event of default exists, the borrower may make distributions to the equity interests of the borrower in an amount sufficient to make permitted tax payments.

In addition to the limitation on distributions under the various indentures discussed above, distributions by our subsidiaries may be limited by applicable law, including the Delaware Limited Liability Company Act, under which our subsidiaries may only make distributions if they have “surplus” as defined in the act.

Historical Operating, Investing, and Financing Activities

Cash and Cash Equivalents. We held $555 million and $5 million in cash and cash equivalents as of June 30, 2016 and December 31, 2015, respectively. We also held $22.3 billion in restricted cash and cash equivalents as of December 31, 2015 representing proceeds of debt raised to fund the cash portion of the TWC Transaction consideration that were held in escrow until consummation of the TWC Transaction.

Operating Activities. Net cash provided by operating activities increased $955 million during the six months ended June 30, 2016 compared to the six months ended June 30, 2015, primarily due to an increase in Adjusted EBITDA of $1.5 billion offset by an increase in cash paid for interest, net of $435 million.

Investing Activities. Net cash used in investing activities was $8.1 billion and cash provided by investing activities was $6.2 billion for the six months ended June 30, 2016 and 2015, respectively. The increase in cash used was primarily due to the acquisitions of TWC and Bright House in 2016 as compared to the repayment in 2015 of $7.1 billion of net proceeds held in escrow upon the termination of the proposed transactions with Comcast as well as an increase in capital expenditures due to the Transactions.  

Financing Activities. Net cash provided by financing activities was $6.6 billion and cash used in financing activities was $7.3 billion for the six months ended June 30, 2016 and 2015, respectively. The increase in cash provided was primarily due to the issuance of $5 billion of equity to Liberty Broadband to fund a portion of the acquisition of TWC and Bright House in 2016 as compared to the repayment in 2015 of $7.1 billion of net proceeds held in escrow upon the termination of the proposed transactions with Comcast.

Capital Expenditures

We have significant ongoing capital expenditure requirements.  Capital expenditures were $1.3 billion and $432 million for the three months ended June 30, 2016 and 2015, respectively, and $1.7 billion and $783 million for the six months ended June 30, 2016 and 2015, respectively.  The increase was driven by the Transactions. On a pro forma basis, assuming the Transactions occurred as of January 1, 2015, the increase was driven by higher product development investments, transition capital expenditures incurred in connection with the Transactions and support capital investments versus the prior year. See the table below for more details.
 
The actual amount of our capital expenditures in 2016 will depend on a number of factors, including the pace of transition planning to service a larger customer base as a result of the Transactions and growth rates of both our residential and commercial businesses.

Our capital expenditures are funded primarily from cash flows from operating activities and borrowings on our credit facility. In addition, our accrued liabilities related to capital expenditures increased by $138 million and decreased by $17 million for the six months ended June 30, 2016 and 2015, respectively.



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