Charter 2005 Annual Report Download - page 17

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
Charter Communications Holding Company, LLC. Charter Holdco, a held by Vulcan Cable III Inc. and CII are controlled by
Delaware limited liability company formed on May 25, 1999, is Mr. Allen and are exchangeable on a one-for-one basis at any
the direct 100% parent of CCHC, LLC. The common member- time for shares of high vote Class B common stock of Charter,
ship units of Charter Holdco are owned approximately 55% by which are in turn convertible into Class A common stock of
Charter, 30% by Vulcan Cable III Inc. and 15% by CII. All of Charter. Charter controls 100% of the voting power of Charter
the outstanding common membership units in Charter Holdco Holdco and is its sole manager.
The following table sets forth the information as of December 31, 2005 with respect to the common units of Charter Holdco on an
actual outstanding and ‘‘fully diluted’’ basis.
Charter Communications Holding Company, LLC
Fully Diluted Units Outstanding (assuming
exchange or conversion of all exchangeable and
Actual Units Outstanding convertible securities)
Number of Percentage Number Percentage
Common of Common of Fully of Fully
Units Units Voting Diluted Common Diluted Common
Outstanding Outstanding Percentage Units Outstanding Units Outstanding
Common Units Outstanding
Charter Communications, Inc. 416,254,671 55.10% 100% 416,254,671 35.68%
Vulcan Cable III Inc.(a) 116,313,173 15.40% — 116,313,173 9.97%
Charter Investment, Inc.(b) 222,818,858 29.50% — 222,818,858 19.10%
Total Common Units Outstanding 755,386,702 100% 100%
Units Issuable on Exchange of 14% Exchangeable Accreting
Note(c)
14% Exchangeable Accreting Note 24,662,333 2.11%
Units Issuable on Conversion of Mirror Convertible Securities
held by Charter Communications, Inc.
Mirror Convertible Preferred units(d) 148,575 0.01%
Mirror Convertible Debt:
4.75% Convertible Senior Notes(d) 758,971 0.06%
5.875% Convertible Senior Notes(d) 356,404,924 30.55%
Mirror Employee, Director and Consultant Stock
Options(d) 29,416,012 2.52%
Fully Diluted Common Units Outstanding 1,166,777,517 100.00%
(a) Includes 106,715,233 non-voting Class A common units and 9,597,940 non-voting Class C common units.
(b) Includes 217,585,246 non-voting Class A common units and 5,233,612 non-voting Class C common units.
(c) As a result of the settlement of the CC VIII dispute, Mr. Allen, through his wholly owned subsidiary CII, received the CCHC note that as of December 31, 2005 is
exchangeable for 24,662,333 Charter Holdco units. The CCHC note has a 15-year maturity. The CCHC note has an initial accreted value of $48 million accreting at 14%
compounded quarterly, except that from and after February 28, 2009, CCHC may pay any increase in the accreted value of the CCHC note in cash and the accreted
value of the CCHC note will not increase to the extent such amount is paid in cash. The CCHC note is exchangeable at CII’s option, at any time, for Charter Holdco
Class A Common units at a rate equal to the then accreted value, divided by $2.00. See ‘‘Item 13. Certain Relationships and Related Transactions — Transactions Arising
Out of Our Organizational Structure and Mr. Allen’s Investment in Charter Communications, Inc. and Its Subsidiaries — Equity Put Rights — CC VIII.’’
(d) Certain provisions of Charter’s certificate of incorporation and Charter Holdco’s limited liability company agreement effectively require that Charter’s investment in
Charter Holdco replicate, on a ‘‘mirror’’ basis, Charter’s outstanding equity and debt structure. As a result, in addition to its equity interest in common units of Charter
Holdco, Charter also holds 100% of the 4.75% and 5.875% mirror convertible notes of Charter Holdco that automatically convert into common membership units upon
the conversion of any Charter 4.75% and 5.875% convertible senior notes and 100% of the mirror preferred membership units of Charter Holdco that automatically
convert into common membership units upon the conversion of the Series A convertible redeemable preferred stock of Charter. The table reflects the common equity
issuable on exercise or conversion of these mirror securities.
CCHC, LLC. CCHC, LLC, a Delaware limited liability company quarterly, except that from and after February 28, 2009, CCHC
formed on October 25, 2005, is the issuer of an exchangeable may pay any increase in the accreted value of the CCHC in
accreting note. In October 2005, Charter, acting through a cash and the accreted value of the CCHC note will not increase
Special Committee of Charter’s Board of Directors, and to the extent such amount is paid in cash. The CCHC note is
Mr. Allen, settled a dispute that had arisen between the parties exchangeable at CII’s option, at any time, for Charter Holdco
with regard to the ownership of CC VIII. As part of that Class A Common units at a rate equal to the then accreted
settlement, CCHC issued the CCHC note to CII. The CCHC value, divided by $2.00. CCHC owns 70% of the preferred
note has a 15-year maturity. The CCHC note has an initial membership interests in CC VIII, LLC. See ‘‘— Preferred Equity
accreted value of $48 million accreting at 14% compounded in CC VIII, LLC’’ below.
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