Charter 2004 Annual Report Download - page 91

CHARTER COMMUNICATIONS, INC. 2004 FORM 10-K
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The following sets forth certain transactions in which we are A number of our debt instruments and those of our
involved and in which the directors, executive officers and subsidiaries require delivery of fairness opinions for transactions
affiliates of Charter have or may have a material interest. The with Mr. Allen or his affiliates involving more than $50 million.
transactions fall generally into three broad categories: Such fairness opinions have been obtained whenever required.
All of our transactions with Mr. Allen or his affiliates have been
(Transactions in which Mr. Allen has an interest that arise considered for approval either by the board of directors of
directly out of Mr. Allen’s investment in Charter and Charter Charter or a committee of the board of directors and, in
Holdco. A large number of the transactions described below compliance with corporate governance requirements, all related
arise out of Mr. Allen’s direct and indirect (through Charter party transactions are considered by Charter’s Audit Committee
Investment, Inc., or the Vulcan entities, each of which comprised entirely of independent directors. All of our transac-
Mr. Allen controls) investment in Charter and its subsidiar- tions with Mr. Allen or his affiliates have been deemed by the
ies, as well as commitments made as consideration for the board of directors or a committee of the board of directors to
investments themselves. be in our best interest. Except where noted below, we do not
(Transactions with third party providers of products, services and believe that these transactions present any unusual risks for us
content in which Mr. Allen has or had a material interest. that would not be present in any similar commercial transaction.
Mr. Allen has had numerous investments in the areas of The chart below summarizes certain information with
technology and media. We have a number of commercial respect to these transactions. Additional information regarding
relationships with third parties in which Mr. Allen has or these transactions is provided following the chart.
had an interest.
(Other Miscellaneous Transactions. We have a limited number
of transactions in which certain of the officers, directors and
principal shareholders of Charter and its subsidiaries, other
than Mr. Allen, have an interest.
Interested
Transaction Related Party Description of Transaction
Intercompany Management Paul G. Allen Subsidiaries of Charter Holdco paid Charter approximately $90 million for
Arrangements management services rendered in 2004.
Mutual Services Agreement Paul G. Allen Charter paid Charter Holdco $74 million for services rendered in 2004.
Previous Management Paul G. Allen No fees were paid in 2004, although total management fees accrued and
Agreement payable to Charter Investment, Inc., exclusive of interest, were
approximately $14 million at December 31, 2004.
Channel Access Agreement Paul G. Allen At Vulcan Ventures’ request, we will provide Vulcan Ventures with
W. Lance Conn exclusive rights for carriage on eight of our digital cable channels as partial
Jo Allen Patton consideration for a 1999 capital contribution of approximately $1.3 billion.
Equity Put Rights Paul G. Allen Certain sellers of cable systems that we acquired were granted, or
previously had the right, as described below, to put to Paul Allen equity in
Charter and CC VIII, LLC issued to such sellers in connection with such
acquisitions.
Mirror Securities Paul G. Allen To comply with the organizational documents of Charter and Charter
W. Lance Conn Holdco, Charter Holdco issued certain mirror securities to Charter,
Jo Allen Patton redeemed certain other mirror securities, and paid interest and dividends
on outstanding mirror notes and preferred units.
TechTV Carriage Paul G. Allen We recorded approximately $5 million from TechTV under the affiliation
Agreement W. Lance Conn agreement in 2004 related to launch incentives as a reduction of
Jo Allen Patton programming expense and paid TechTV approximately $2 million.
William D. Savoy
Larry W. Wangberg
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