Charter 2015 Annual Report Download - page 47

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Failure to complete the TWC Transaction and/or the Bright House Transaction could negatively impact the stock price and
the future business and financial results of Charter.
If the TWC Transaction and/or the Bright House Transaction is not completed for any reason, the ongoing business of Charter
may be adversely affected and, without realizing any of the benefits of having completed the TWC Transaction and/or the Bright
House Transaction, Charter would be subject to a number of risks, including the following:
• Charter may experience negative reactions from the financial markets, including negative impacts on its stock price;
• Charter may experience negative reactions from its customers, regulators and employees;
• Charter will be required to pay certain costs relating to the TWC Transaction, whether or not the TWC Transaction is
completed and Charter will be required to pay certain costs relating to the Bright House Transaction, whether or not the
Bright House Transaction is completed;
• the Merger Agreement places certain restrictions on the conduct of TWC’s and Charter’s businesses prior to completion
of the TWC Transaction; such restrictions, the waiver of which is subject to the consent of the other party (in certain
cases, not to be unreasonably withheld, conditioned or delayed), may prevent TWC and Charter from making certain
acquisitions, taking certain other specified actions or otherwise pursuing business opportunities during the pendency of
the TWC Transaction;
• the Contribution Agreement places certain restrictions on the conduct of Charter’s business prior to completion of the
Bright House Transaction; such restrictions, the waiver of which is subject to the consent of A/N (in certain cases, not to
be unreasonably withheld, conditioned or delayed), may prevent Charter from taking certain specified actions or otherwise
pursuing business opportunities during the pendency of the Bright House Transaction; and
• matters relating to the TWC Transaction (and with respect to Charter only, matters relating to the Bright House
contribution), including integration planning, will require substantial commitments of time and resources by Charter and
TWC management, which would otherwise have been devoted to day-to-day operations and other opportunities that may
have been beneficial to either Charter or TWC as an independent company.
If the TWC Transaction and/or the Bright House Transaction is not completed, the risks described above may materialize and they
may adversely affect Charter’s business, financial condition, financial results and stock price.
In addition, Charter and TWC could be subject to litigation related to any failure to complete the TWC Transaction and/or the
Bright House Transaction or related to any enforcement proceeding commenced against Charter or TWC to perform their respective
obligations under the Merger Agreement or against Charter to perform it obligations under the Contribution Agreement.
If the operating results of TWC and/or Bright House before or following the TWC Transaction and/or the Bright House
Transaction is less than Charter’s and/or New Charter’s expectations, or an increase in the capital expenditures to upgrade
and maintain those assets as well as to keep pace with technological developments are greater than expected, New Charter (or,
if only the Bright House Transaction is completed, Charter) may not achieve the expected level of financial results from the
TWC Transaction and/or the Bright House Transaction.
New Charter (or, if only the Bright House Transaction is completed, Charter) will derive a portion of its revenues and earnings
per share from the operation of TWC and/or Bright House following completion of the TWC Transaction and/or Bright House
Transaction. Therefore, any negative impact on these companies or the operating results derived from such companies could harm
the combined company’s operating results.
The businesses of Charter, TWC, Bright House and New Charter are characterized by rapid technological change and the
introduction of new products and services. New Charter (or, if only the Bright House Transaction is completed, Charter) intends
to make investments in the combined business following the completion of the TWC Transaction and/or the Bright House
Transaction and transition toward only using two-way all-digital set-top boxes. The increase in capital expenditures necessary for
the transition toward two-way set-top boxes in the business may negatively impact the expected financial results from the TWC
Transaction and/or Bright House Transaction. The combined company may not be able to fund the capital expenditures necessary
to keep pace with technological developments, execute the plans to do so, or anticipate the demand of its customers for products
and services requiring new technology or bandwidth. New Charter’s (or, if only the Bright House Transaction is completed,
Charter’s) inability to maintain, expand and upgrade its existing or combined businesses could materially adversely affect its
financial condition and results of operations.
The TWC Transaction and the Bright House Transaction will be accounted for as an acquisition by New Charter in accordance
with accounting principles generally accepted in the United States. Under the acquisition method of accounting, the assets and
liabilities of TWC and Bright House will be recorded, as of the date of completion of the TWC Transaction, the Bright House
Transaction and Liberty transactions, at their respective fair values and added to those of Charter. The reported financial condition