Charter 2012 Annual Report Download - page 96

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2012, 2011 AND 2010
(dollars in millions, except share or per share data or where indicated)
F- 21
8. Preferred Stock
On November 30, 2009, 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. The 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. The Preferred Stock was recorded at fair value with gains or losses recorded in other income
(expense), net.
9. Treasury Stock
On March 22, 2011, the Company purchased, in a private transaction, 4.5 million shares of Charter’s Class A common stock from
funds advised by Franklin Advisers, Inc. The price paid was $46.10 per share for a total of $207 million. The transaction was
funded from existing cash on hand and available liquidity.
Under a repurchase program authorized by Charter’s board of directors in August 2011, 4.1 million shares of Charter’s Class A
common stock and warrants to purchase Charter’s Class A common stock were purchased during the course of 2011 for a total of
approximately $200 million. The average price per share paid was $48.48.
In December 2011, the Company purchased, in a private transaction with a shareholder, 750,000 shares at $55.18 for a total of
$41 million. The Company received 700,668 of the shares prior to December 31, 2011, with 49,332 shares received in January
2012. In December 2011, the Company also entered into stock repurchase agreements for approximately 3.0 million shares of
Charter's Class A common stock from funds advised by Oaktree Capital Management and approximately 2.2 million shares of
Charter's Class A common stock from funds advised by Apollo Management Holdings. The price paid was $54.35 per share for
a total of $163 million for the shares purchased from Oaktree Capital Management and $117 million for the shares purchased from
Apollo Management Holdings.
During the years ended December 31, 2012, 2011 and 2010, the Company withheld 129,417, 141,175 and 176,475 shares,
respectively, of its common stock in payment of $9 million, $7 million and $6 million, respectively, tax withholding owed by
employees upon vesting of restricted shares.
In December 2011, Charter's board of directors approved the retirement of treasury stock and 14.8 million shares of treasury stock
were retired as of December 31, 2011. The remaining 49,332 shares received in January 2012 were retired in January 2012.
In December 2012, Charter's board of directors approved the retirement of treasury stock and 129,417 shares of treasury stock
were retired as of December 31, 2012.
These transactions were funded from existing cash on hand and available liquidity. The Company accounted for treasury stock
using the cost method and the treasury shares upon repurchase were reflected on the Company’s consolidated balance sheets as a
component of total shareholders’ equity. Upon retirement, these treasury shares were allocated between additional paid-in capital
and accumulated deficit based on the cost of original issue included in additional paid-in capital.
10. Common Stock
Charter’s Class A common stock and Class B common stock are 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, Paul G. Allen ("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.