Charter 2015 Annual Report Download - page 49

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The TWC Transaction is not conditioned upon completion of the Bright House Transaction or the issuance of shares to A/N. The
TWC Transaction and the Bright House Transaction is subject to separate conditions, and the TWC Transaction may be completed
whether or not the Bright House Transaction is ultimately consummated.
The market price of New Charter Class A common stock after the TWC Transaction (and, if completed, the Bright House
Transaction) may be affected by factors different from those affecting shares of Charter or TWC common stock currently.
Upon completion of the TWC Transaction, holders of Charter Class A common stock will become holders of shares of New Charter
Class A common stock. The businesses of Charter differ from those of TWC in important respects, including the following:
• Differences in product penetration and mix, including different approaches to pricing and packaging;
• Differences in the geographic operating areas served by Charter, TWC and Bright House as well as different presences
in those areas, different structures and different competitive factors in those areas;
• Differences in the technology platforms and physical plant and property used to deliver the companies’ respective products
and services, including that Charter’s platform has generally been converted to all digital;
• Differences in the companies’ corporate and organizational structure;
• TWC engages in telecom and Internet infrastructure businesses, including through its subsidiary DukeNet
Communications;
• TWC engages in information technology ("IT") and cloud businesses, including through its NaviSite subsidiary,
outsourced IT solutions and cloud services;
• TWC operates and distributes regional sports networks and local sports, news and lifestyle channels; and
• Differences in the potential tax treatment of historical transactions of both Charter and TWC.
Accordingly, the results of operations, including capital expenditures, of New Charter after the TWC Transaction (and, if completed,
the Bright House Transaction), as well as the market price of New Charter Class A common stock, may be affected by factors
different from those currently affecting the results of operations, including capital expenditures, of Charter and TWC currently.
The shares of New Charter Class A common stock to be received by TWC and Charter stockholders as a result of the TWC
Transaction will have different rights from shares of TWC common stock and Charter Class A common stock previously held
by such stockholders.
Following completion of the TWC Transaction, TWC and Charter stockholders will no longer be stockholders of TWC and Charter,
respectively, but will instead be stockholders of New Charter. There are important differences between the rights of TWC and
Charter stockholders and the rights of New Charter stockholders.
Litigation has been filed against Charter, TWC, the TWC board of directors and the merger subsidiaries. An adverse ruling in
such lawsuit may result in the payment of damages following completion of the TWC Transaction.
Litigation has been filed against Charter, Charter's board of directors, TWC, the TWC board of directors and the merger subsidiaries
in connection with the TWC Transaction, which could result in substantial costs to Charter, TWC, and/or New Charter. See “Part
I, Item 3. Legal Proceedings” for more information.
Risks Related to the Bright House Transaction and Liberty Transactions
Liberty Broadband currently has governance rights that give it influence over corporate transactions and other matters. In
connection with the Bright House Transaction, Liberty Broadband’s governance rights will be modified and A/N will receive
governance rights pursuant to the Bright House/Liberty stockholders agreement and amendments to New Charter’s or Charter’s
governing documents, as applicable, and Liberty Broadband and A/N will have influence over corporate transactions and other
matters.
Liberty Broadband currently owns a significant amount of Charter Class A common stock and is entitled to certain governance
rights with respect to Charter. Members of the Charter board of directors include directors who are also officers and directors of
Liberty Broadband. Dr. John Malone is the Chairman of Liberty Broadband, and Mr. Greg Maffei is the president and chief
executive officer of Liberty Broadband. As of December 31, 2015, Liberty Broadband beneficially held approximately 25.65%
of Charter Class A common stock. Pursuant to the stockholders agreement between Liberty Broadband and Charter dated March
19, 2013, as amended on October 14, 2014, Liberty Broadband has the right to designate up to four directors as nominees for
Charter’s board of directors through Charter’s 2015 annual meeting of stockholders with one designated director to be appointed
to each of the audit committee, the nominating and corporate governance committee and the compensation and benefits committee.