Charter 2005 Annual Report Download - page 101

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The following sets forth certain transactions in which we are principal shareholders of Charter and its subsidiaries, other
involved and in which the directors, executive officers and than Mr. Allen, have an interest.
affiliates of Charter have or may have a material interest. The A number of our debt instruments and those of our
transactions fall generally into three broad categories: subsidiaries require delivery of fairness opinions for transactions
(Transactions in which Mr. Allen has an interest that arise with Mr. Allen or his affiliates involving more than $50 million.
directly out of Mr. Allen’s investment in Charter and Charter Such fairness opinions have been obtained whenever required.
Holdco. A large number of the transactions described below All of our transactions with Mr. Allen or his affiliates have been
arise out of Mr. Allen’s direct and indirect (through CII, or considered for approval either by the board of directors of
the Vulcan entities, each of which Mr. Allen controls) Charter or a committee of the board of directors. All of our
investment in Charter and its subsidiaries, as well as transactions with Mr. Allen or his affiliates have been deemed
commitments made as consideration for the investments by the board of directors or a committee of the board of
themselves. directors to be in our best interest. Related party transactions
are approved by our Audit Committee or another independent
(Transactions with third party providers of products, services and body of the board of directors in compliance with the listing
content in which Mr. Allen has or had a material interest. requirements applicable to NASDAQ National Market listed
Mr. Allen has had numerous investments in the areas of companies. Except where noted below, we do not believe that
technology and media. We have a number of commercial these transactions present any unusual risks for us that would
relationships with third parties in which Mr. Allen has or not be present in any similar commercial transaction.
had an interest.
(Other Miscellaneous Transactions. We have a limited number
of transactions in which certain of the officers, directors and
The chart below summarizes certain information with respect to these transactions. Additional information regarding these
transactions is provided following the chart.
Interested
Transaction Related Party Description of Transaction
Intercompany Management Paul G. Allen Subsidiaries of Charter Holdco paid Charter approximately $128 million for
Arrangements management services rendered in 2005.
Mutual Services Agreement Paul G. Allen Charter paid Charter Holdco $89 million for services rendered in 2005.
Previous Management Paul G. Allen No fees were paid in 2005, although total management fees accrued and payable to
Agreement CII, exclusive of interest, were approximately $14 million at December 31, 2005.
Channel Access Agreement Paul G. Allen W. Lance At Vulcan Ventures’ request, we will provide Vulcan Ventures with exclusive rights
Conn Jo Allen Patton for carriage on eight of our digital cable channels as partial 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 W. Lance To comply with the organizational documents of Charter and Charter Holdco,
Conn Jo Allen Patton Charter Holdco issued certain mirror securities to Charter, redeemed certain other
mirror securities, and paid interest and dividends on outstanding mirror notes and
preferred units.
TechTV Carriage Agreement Paul G. Allen W. Lance We recorded approximately $1 million from TechTV under the affiliation
Conn Jo Allen Patton agreement in 2005 related to launch incentives as a reduction of programming
Larry W. Wangberg expense.
Oxygen Media Corporation Paul G. Allen We paid Oxygen Media approximately $9 million under a carriage agreement in
Carriage Agreement W. Lance Conn exchange for programming in 2005. We recorded approximately $0.1 million in
Jo Allen Patton 2005 from Oxygen Media related to launch incentives as a reduction of
programming expense. We received 1 million shares of Oxygen Preferred Stock
with a liquidation preference of $33.10 per share in March 2005. We recognized
approximately $2 million as a reduction of programming expense in 2005, in
recognition of the guaranteed value of the investment.
Portland Trail Blazers Carriage Paul G. Allen We paid approximately $116,500 for rights to carry the cable broadcast of certain
Agreement Trail Blazers basketball games in 2005.
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