Print Page  Close Window

SEC Filings

10-Q
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 10-Q on 10/26/2017
Entire Document
 


Free Cash Flow

Free cash flow decreased $407 million and increased $1.4 billion during the three and nine months ended September 30, 2017, respectively, compared to the corresponding prior periods in 2016 due to the following (dollars in millions).

 
Three months ended
September 30, 2017
compared to
three months ended
September 30, 2016
Increase / (Decrease)
 
Nine months ended
September 30, 2017
compared to
nine months ended
September 30, 2016
Increase / (Decrease)
Increase in Adjusted EBITDA
$
183

 
$
4,581

Decrease in merger and restructuring costs
87

 
323

Increase in capital expenditures
(645
)
 
(2,659
)
Decrease (increase) in cash paid for interest, net
61

 
(606
)
Changes in working capital, excluding change in accrued interest
(123
)
 
(237
)
Other, net
30

 
10

 
$
(407
)
 
$
1,412


Limitations on Distributions

Distributions by our subsidiaries to a parent company for payment of principal on parent company notes are restricted under indentures and credit facilities governing our indebtedness, unless there is no default under the applicable indenture and credit facilities, and unless each applicable subsidiary’s leverage ratio test is met at the time of such distribution. As of September 30, 2017, there was no default under any of these indentures or credit facilities, and each subsidiary met its applicable leverage ratio tests based on September 30, 2017 financial results. Such distributions would be restricted, however, if any such subsidiary fails to meet these tests at the time of the contemplated distribution. There can be no assurance that they will satisfy these tests at the time of the contemplated distribution. Distributions by Charter Operating for payment of principal on parent company notes are further restricted by the covenants in its credit facilities.

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 $2.2 billion and $1.5 billion in cash and cash equivalents as of September 30, 2017 and December 31, 2016, respectively.

Operating Activities. Net cash provided by operating activities increased $3.9 billion during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily due to an increase in Adjusted EBITDA of $4.6 billion offset by an increase in cash paid for interest, net of $606 million as a result of the Transactions.

Investing Activities. Net cash used in investing activities was $5.9 billion and $9.9 billion for the nine months ended September 30, 2017 and 2016, respectively. The decrease in cash used was primarily due to the acquisition of Legacy TWC and Legacy Bright House in 2016 offset by an increase in capital expenditures as a result of the Transactions.

Financing Activities. Net cash used in financing activities was $2.2 billion for the nine months ended September 30, 2017 and net cash provided by financing activities was $6.3 billion for the nine months ended September 30, 2016. The decrease in cash provided was primarily due to a decrease in equity issued for the acquisition of Legacy TWC and Legacy Bright House in 2016 and an increase in the purchase of treasury stock and noncontrolling interest in 2017 offset by an increase in borrowings of long-term debt exceeding repayments.



49