Charter 2010 Annual Report Download - page 105

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F-0 F-PB
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010, 2009, AND 2008
(dollars in millions, except share or per share data or where indicated)
such distribution. As of December 31, 2010, there was no default
under any of these indentures or credit facilities. Distributions by
Charter Operating for payment of principal on parent company
notes are further restricted by the covenants in its credit facilities.
Distributions by CCO Holdings, and Charter Operating to a parent
company for payment of parent company interest are permitted if
there is no default under the aforementioned indentures and CCO
Holdings and Charter Operating credit facilities.
In addition to the limitation on distributions under the various
indentures discussed above, distributions by the Company’s
subsidiaries may only be made if they have “surplus” as defined in the
Delaware Limited Liability Company Act.
Liquidity and Future Principal Payments
e Company continues to have significant amounts of debt,
and its business requires significant cash to fund principal and
interest payments on its debt, capital expenditures and ongoing
operations. As set forth below, the Company has significant future
principal payments beginning in 2012 and beyond. e Company
continues to monitor the capital markets, and it expects to undertake
refinancing transactions and utilize free cash flow and cash on hand
to further extend or reduce the maturities of its principal obligations.
e timing and terms of any refinancing transactions will be subject
to market conditions.
Based upon outstanding indebtedness as of December 31, 2010,
the amortization of term loans, and the maturity dates for all senior
and subordinated notes, total future principal payments on the total
borrowings under all debt agreements as of December 31, 2010, are
as follows:
Year Amount
2011 $ 58
2012 1,158
2013 337
2014 3,531
2015 30
ereafter 7,202
$ 12,316
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On the Effective Date, Charter issued approximately 5.5 million
shares of 15% Pay-In-Kind Preferred Stock having an aggregate
liquidation preference of $138 million to holders of Charter
convertible notes (the “Preferred Stock”). Pursuant to the terms of
the Preferred Stock, the Company was required to pay a dividend
at an annual rate equal to 15% on the liquidation preference of
the Preferred Stock. e liquidation preference of the Preferred
Stock was $25 per share. On April 16, 2010, Charter redeemed all
of the shares of the Preferred Stock for a redemption payment of
$25.948 per share or a total redemption payment for all shares of
approximately $143 million.
e Preferred Stock was included in other long-term liabilities on
the Company’s consolidated balance sheets at fair value of $148
million as of December 31, 2009 (Successor). e Preferred Stock
was recorded at fair value with gains or losses recorded in other income
(expense), net.

On February 8, 2010, Mr. Allen exercised his remaining right to
exchange Charter Holdco units for shares of Class A common stock
after which Charter Holdco became 100% owned by Charter.
Noncontrolling interest on the Company’s condensed consolidated
balance sheets at December 31, 2009 represented the fair value of
Mr. Allen’s .19% interest of Charter Holdco plus the allocation of
income for the month ended December 31, 2009.
On January 1, 2009, Charter adopted new accounting guidance
regarding consolidations and noncontrolling interests, which requires
losses to be allocated to noncontrolling interest even when such amounts
are deficits. As such, losses are allocated between Charter and the
noncontrolling interest. Net income and basic and diluted earnings
per common share would have been $10.1 billion and $26.68 and
$11.20, respectively, for the eleven months ended November 30,
2009 if such new accounting guidance had not been adopted.