Charter Communications touts $550 million of free cash flow in 2015, liquidity of $966 million

By Lisa Kerner

Charlotte, N.C., Feb. 4 – Charter Communications, Inc. had free cash flow of about $550 million for the year ended Dec. 31, compared to about $170 million for 2014, according to chief financial officer Christopher Winfrey.

The increase was attributed to lower capital expenditures and higher adjusted EBITDA, partially offset by higher cash interest payments.

Free cash flow for the fourth quarter was $80 million, compared to $89 million a year ago.

Winfrey made his comments during Charter’s fourth-quarter and full-year 2015 earnings conference call on Thursday.

Charter ended the year with total debt of about $36 billion and liquidity of $966 million.

The company also held $21.8 billion in proceeds from debt in escrow for its pending transactions with Time Warner Cable and Bright House. Charter raised $15.5 billion of senior secured notes in July and $2.5 billion of 5.75% senior secured notes due 2026 in November to fund the transactions.

Also on Thursday, Charter announced plans to price $1.5 billion of eight-year notes. Proceeds will be used to repurchase or redeem the 7% senior notes due 2019 and 7 3/8% senior notes due 2020 issued by subsidiaries CCO Holdings, LLC and CCO Holdings Capital Corp. Charter would also use the proceeds to pay down revolver draws and for general corporate purposes, including to fund some of the incremental cash proceeds to Time Warner stockholders, according to the company.

The St. Louis-based broadband communications company’s leverage ratio was 4.1 times at Dec. 31, at the low end of its target, Winfrey said. Charter expects its leverage to be 4.5 times at the close of the Time Warner and Bright House transactions.

Revenues increase

Revenues for the quarter were up 6.4% year over year at $2.5 billion, while full-year revenues increased 7.1%. Charter attributed the increase primarily to growth in Internet, video and commercial revenues.

Fourth-quarter adjusted EBITDA grew 7.5% to $908 million and adjusted EBITDA for the year was up 6.8%, according to the earnings release.

Capital expenditures were down for the year at $1.84 billion, from $2.22 billion.

Charter had a net loss for the quarter of $122 million, compared to $48 million in the prior-year period. The increase was driven by $231 million of interest expense related to the financing of Charter’s pending transactions with Time Warner and Bright House.

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