Charter 2011 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2011 Charter annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 141

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141

59
Restrictions on Distributions
Generally, under the various indentures each of the note issuers and their respective restricted subsidiaries are permitted to pay
dividends on or repurchase equity interests, or make other specified restricted payments, only if the applicable issuer can incur
$1.00 of new debt under the applicable leverage ratio test after giving effect to the transaction and if no default exists or would
exist as a consequence of such incurrence. If those conditions are met, restricted payments may be made in a total amount of up
to the following amounts for the applicable issuer as indicated below:
• CCH II: the sum of 100% of CCH II’s Consolidated EBITDA, as defined, minus 1.3 times its Consolidated Interest
Expense, as defined, cumulatively from October 1, 2009 plus 100% of new cash and appraised non-cash equity proceeds
received by CCH II and not allocated to certain investments, cumulatively from November 30, 2009;
• CCO Holdings: the sum of 100% of CCO Holdings’ Consolidated EBITDA, as defined, minus 1.3 times its Consolidated
Interest Expense, as defined, cumulatively from April 1, 2010, plus 100% of new cash and appraised non-cash equity
proceeds received by CCO Holdings and not allocated to certain investments, cumulatively from the issue date, plus $2
billion.
In addition, each of the note issuers may make distributions or restricted payments, so long as no default exists or would be caused
by transactions among other distributions or restricted payments:
• to repurchase management equity interests in amounts not to exceed $10 million per fiscal year;
• regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests
in the applicable issuer or its restricted subsidiaries; or
• to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using
concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests.
CCO Holdings may make distributions or restricted payments even if the applicable leverage test referred to above is not met to
enable any parent to pay interest on, or to purchase, redeem, repay or prepay certain of their indebtedness.
Restrictions on Investments
Each of the note issuers and their respective restricted subsidiaries may not make investments except (i) permitted investments or
(ii) if, after giving effect to the transaction, their leverage would be above the applicable leverage ratio.
Permitted investments include, among others:
• investments in and generally among restricted subsidiaries or by restricted subsidiaries in the applicable issuer;
• For CCH II:
• investments aggregating up to $650 million at any time outstanding;
• investments aggregating up to 100% of new cash equity proceeds received by CCH II since November 30, 2009 to
the extent the proceeds have not been allocated to the restricted payments covenant;
• For CCO Holdings:
• investments aggregating up to $750 million at any time outstanding.
• investments aggregating up to 100% of new cash equity proceeds received by CCO Holdings since the issue date to
the extent the proceeds have not been allocated to the restricted payments covenant.
Restrictions on Liens
The restrictions on liens for each of the note issuers only applies to liens on assets of the issuers themselves and does not restrict
liens on assets of subsidiaries. Permitted liens include liens securing indebtedness and other obligations under credit facilities,
liens securing the purchase price of financed new assets, liens securing indebtedness of up to $50 million (in the case of CCO
Holdings notes, the greater of $50 million and 1.0% of consolidated net tangible assets) and other specified liens.
Restrictions on the Sale of Assets; Mergers
The note issuers are generally not permitted to sell all or substantially all of their assets or merge with or into other companies
unless their leverage ratio after any such transaction would be no greater than their leverage ratio immediately prior to the transaction,
or unless after giving effect to the transaction, leverage would be below the applicable leverage ratio for the applicable issuer, no
default exists, and the surviving entity is a U.S. entity that assumes the applicable notes.