SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 10, 2020
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
| (Commission File Number) | (I.R.S. Employer Identification Number) | |||||||
(Address of principal executive offices including zip code)
(203 905-7801
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 7.01. REGULATION FD DISCLOSURE.
Charter intends to apply to participate in the Rural Digital Opportunity Fund (“RDOF”) auction to further extend its broadband services in states where Charter currently operates. The Federal Communications Commission (the “FCC”) released an order adopting RDOF with a reverse auction framework to connect unserved areas by census block group. Phase I of RDOF will include $16 billion of funding nationwide. The reverse auction process will result in awards of RDOF funds by census block group to the provider bidding for the lowest amount of RDOF funds when taking into account the speed, usage and latency performance of the service tier to be offered in the particular census block group. The winning bidder must build-out its network to the census block group during the course of up to eight years.
The RDOF auction process will commence with a short form application required to be filed by July 15, 2020. The July 15 deadline for short-form applications will commence a quiet period during which Charter will not make any comments regarding RDOF. The quiet period will end on the deadline for winning bidders to file their long form applications with the FCC, occurring after the end of the auction and estimated to be sometime in early 2021.
If Charter is successful in the RDOF auction, the company’s build-out could include a multi-million passings build and an associated multi-billion dollar investment over an eight-year period after 2020, extending Charter’s network to rural, unserved or underserved areas. Charter expects that these potential significant investments will generate long-term infrastructure-style returns for Charter shareholders by further taking advantage of the efficiencies of the scale and quality of our network and construction capabilities while offering our high quality products and services to more homes and businesses. Charter expects its free cash flow from operations will adequately fund the multi-year project should it proceed. In the past five years alone, Charter has invested nearly $40 billion in technology and infrastructure, including building out its network in just the last two years to more than 1.5 million new homes and businesses, approximately 30% of which were in rural areas.
Charter expects newly-served homes would be enabled to engage in distance learning, remote work, telemedicine and other bandwidth-heavy applications that require high speed broadband connectivity. Newly-served rural areas would also benefit from Charter’s high-value Spectrum pricing and packaging structure including its Spectrum Voice and Spectrum Mobile offerings, as well as its comprehensive selection of Spectrum TV products. Charter will also continue to apply its customer friendly policies in newly-served regions combined with high-quality service provided by U.S.-based, insourced employees.
We cannot provide any assurances as to the ultimate extent or timing of any rural infrastructure build initiative which will depend upon, among other things, our success in the RDOF auction process, ongoing federal, state and local regulatory environment and cooperation, the continued availability of accelerated depreciation and interest deductibility for tax purposes and the identification of projects based on these and other factors that meet our infrastructure return on investment requirements.
We undertake no obligation to update this forward looking disclosure, and we will not be updating this disclosure until after the quiet period associated with RDOF ends.
The information contained in this Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Further, such information shall not be deemed incorporated by reference into any reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
| Exhibit | Description | ||||||||||
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL | ||||||||||
Cautionary Statement Regarding Forward-Looking Statements
This current report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), regarding, among other things, our plans, strategies and prospects, both business and financial. Although we believe that our plans, intentions and expectations as reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions, including, without limitation, the factors described under "Risk Factors" from time to time in our filings with the Securities and Exchange Commission ("SEC"). Many of the forward-looking statements contained in this current report may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," "aim," "on track," "target," "opportunity," “tentative,” "positioning," "designed," "create," "predict," "project," "initiatives," "seek," "would," "could," "continue," "ongoing," "upside," "increases," "focused on" and "potential," among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this current report are set forth in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:
•the impact of the COVID-19 pandemic on the economy, our customers, our vendors, local, state and federal governmental responses to the pandemic and our businesses generally;
•our ability to sustain and grow revenues and cash flow from operations by offering Internet, video, voice, mobile, advertising and other services to residential and commercial customers, to adequately meet the customer experience demands in our service areas and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition, the need for innovation and the related capital expenditures;
•the impact of competition from other market participants, including but not limited to incumbent telephone companies, direct broadcast satellite ("DBS") operators, wireless broadband and telephone providers, digital subscriber line (“DSL”) providers, fiber to the home providers and providers of video content over broadband Internet connections;
•our ability to obtain programming at reasonable prices or to raise prices to offset, in whole or in part, the effects of higher programming costs (including retransmission consents);
•our ability to develop and deploy new products and technologies including mobile products and any other consumer services and service platforms;
•any events that disrupt our networks, information systems or properties and impair our operating activities or our reputation;
•the effects of governmental regulation on our business including costs, disruptions and possible limitations on operating flexibility related to, and our ability to comply with, regulatory conditions applicable to us as a result of the Time Warner Cable Inc. and Bright House Networks, LLC transactions;
•general business conditions, economic uncertainty or downturn, including the impacts of the COVID-19 pandemic to unemployment levels and the level of activity in the housing sector;
•the ability to retain and hire key personnel;
•the availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets; and
•our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default of our other obligations under cross-default provisions.
All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this current report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, each of Charter Communications, Inc., CCO Holdings, LLC and CCO Holdings Capital Corp. has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
| CHARTER COMMUNICATIONS, INC., | |||||||||||
| Registrant | |||||||||||
| By: | /s/ Kevin D. Howard | ||||||||||
| Kevin D. Howard | |||||||||||
| Date: July 10, 2020 | Executive Vice President, Chief Accounting Officer and Controller | ||||||||||
| CCO Holdings, LLC | |||||||||||
| Registrant | |||||||||||
| By: | /s/ Kevin D. Howard | ||||||||||
| Kevin D. Howard | |||||||||||
| Date: July 10, 2020 | Executive Vice President, Chief Accounting Officer and Controller | ||||||||||
| CCO Holdings Capital Corp. | |||||||||||
| Registrant | |||||||||||
| By: | /s/ Kevin D. Howard | ||||||||||
| Kevin D. Howard | |||||||||||
| Date: July 10, 2020 | Executive Vice President, Chief Accounting Officer and Controller | ||||||||||