Charter 2013 Annual Report Download - page 103

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013, 2012 AND 2011
(dollars in millions, except share or per share data or where indicated)
F- 21
The events of default under the Charter Operating credit facilities include, among other things:
• the failure to make payments when due or within the applicable grace period;
• the failure to comply with specified covenants including the covenant to maintain the consolidated leverage ratio at or
below 5.0 to 1.0 and the consolidated first lien leverage ratio at or below 4.0 to 1.0;
• the failure to pay or the occurrence of events that cause or permit the acceleration of other indebtedness owing by CCO
Holdings, Charter Operating, or Charter Operating’s subsidiaries in aggregate principal amounts in excess of $100 million;
and
• similar to provisions contained in the CCO Holdings notes and credit facility, the consummation of any change of control
transaction resulting in any person or group having power, directly or indirectly, to vote more than 50% of the ordinary
voting power for the management of Charter Operating on a fully diluted basis and the occurrence of a ratings event
including a downgrade in the corporate family rating during a ratings decline period.
Limitations on Distributions
Distributions by the Company’s subsidiaries to a parent company for payment of principal on parent company notes are restricted
under the indentures and credit facilities discussed above, unless there is no default under the applicable indenture and credit
facilities, and unless each applicable subsidiary’s leverage ratio test is met at the time of such distribution. As of December 31,
2013, 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.
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
The 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 2014 and beyond. The 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. The timing and terms of any refinancing transactions will be subject to market conditions.
Based upon outstanding indebtedness as of December 31, 2013, 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,
2013, are as follows:
Year Amount
2014 $ 414
2015 65
2016 93
2017 1,102
2018 673
Thereafter 11,901
$ 14,248
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.