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SEC Filings

10-Q
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 10-Q on 10/26/2017
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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)


Financial instruments accounted for at fair value on a recurring basis are presented in the table below.

 
September 30, 2017
 
December 31, 2016
 
Level 1
 
Level 2
 
Level 1
 
Level 2
Assets
 
 
 
 
 
 
 
Money market funds
$
1,502

 
$

 
$
1,205

 
$

 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Interest rate derivative instruments
$

 
$
1

 
$

 
$
5

Cross-currency derivative instruments
$

 
$
125

 
$

 
$
251


A summary of the carrying value and fair value of debt as of September 30, 2017 and December 31, 2016 is as follows:

 
 
September 30, 2017
 
December 31, 2016
 
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Senior notes and debentures
 
$
59,451

 
$
62,657

 
$
52,933

 
$
55,203

Credit facilities
 
$
8,681

 
$
8,788

 
$
8,814

 
$
8,943


The estimated fair value of the Company’s senior notes and debentures as of September 30, 2017 and December 31, 2016 is based on quoted market prices in active markets and is classified within Level 1 of the valuation hierarchy, while the estimated fair value of the Company’s credit facilities is based on quoted market prices in inactive markets and is classified within Level 2.

Nonfinancial Assets and Liabilities

The Company’s nonfinancial assets such as equity-method investments, franchises, property, plant, and equipment, and other intangible assets are not measured at fair value on a recurring basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist.  No material impairments were recorded during the three and nine months ended September 30, 2017 and 2016. Upon closing of the Transactions, all of Legacy TWC and Legacy Bright House nonfinancial assets and liabilities were recorded at fair values. See Note 2.

10.     Operating Costs and Expenses

Operating costs and expenses, exclusive of items shown separately in the consolidated statements of operations, consist of the following for the periods presented:

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Programming
$
2,699

 
$
2,404

 
$
7,952

 
$
4,648

Regulatory, connectivity and produced content
523

 
515

 
1,553

 
944

Costs to service customers
1,943

 
2,016

 
5,798

 
3,663

Marketing
629

 
596

 
1,812

 
1,143

Transition costs
23

 
32

 
104

 
78

Other
886

 
919

 
2,638

 
1,681

 
$
6,703

 
$
6,482

 
$
19,857

 
$
12,157


Programming costs consist primarily of costs paid to programmers for basic, premium, digital, video on demand, and pay-per-view programming. Regulatory, connectivity and produced content costs represent payments to franchise and regulatory authorities, costs directly related to providing video, Internet and voice services as well as payments for sports, local and news content produced


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