Charter 2011 Annual Report Download - page 107

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011, 2010 AND 2009
(dollars in millions, except share or per share data or where indicated)
F- 23
paid-in capital and accumulated deficit based on the cost of original issue included in additional paid-in capital.
10. Noncontrolling Interest
Noncontrolling interest of $1.3 billion recognized during the eleven months ended November 30, 2009 represented the portion of
Charter Holdco losses allocated to Mr. Allen. As of November 30, 2009, through his ownership in CII, Mr. Allen had a 45%
common equity interest in Charter Holdco.
On December 28, 2009, CII exchanged 81% of its interest in Charter Holdco, and on February 8, 2010 the remaining interest was
exchanged after which Charter Holdco became 100% owned by Charter. See Note 18.
11. Common Stock
All of the issued and outstanding shares of Predecessor common stock, par value $0.001 per share, and any other outstanding
equity securities of Predecessor, including all options and restricted stock, were canceled on the Effective Date, and Successor
issued 109.7 million shares of new Charter Class A common stock, par value $0.001 per share and 2.2 million shares of new
Charter Class B common stock, par value 0.001 per share.
Charter’s Class A common stock and Class B common stock were identical except with respect to certain voting, transfer and
conversion rights. Holders of Class A common stock are entitled to one vote per share and the holder of Class B common stock
was entitled to votes equaling 35% of the voting interests in Charter on a fully diluted basis. Charter Holdco membership units
were exchangeable on a one-for-one basis for shares of Class A common stock.
As of December 31, 2010, Mr. Allen held all 2,241,299 shares of Class B common stock of Charter. Pursuant to the terms of the
Certificate of Incorporation of Charter, on January 18, 2011, the Disinterested Members of the Board of Directors of Charter
caused a conversion of the shares of Class B common stock into shares of Class A common stock on a one-for-one basis.
On the Effective Date, holders of notes issued by CCH I Holdings, LLC (“CIH”) and Charter Holdings received 6.4 million and
1.3 million warrants, respectively, to purchase shares of new Charter Class A common stock with an exercise price of $46.86 and
$51.28 per share, respectively, that expire five years from the date of issuance, and Charter Investment, Inc. (“CII”), an entity
controlled by Mr. Allen, received 4.7 million warrants to purchase shares of new Charter Class A common stock with an exercise
price of $19.80 per share that expire seven years from the date of issuance. The warrants were valued at approximately $90 million
using the Black-Scholes option-pricing model and are included in the accompanying balance sheets in total Charter shareholders’
equity.