Charter 2015 Annual Report Download - page 85

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Restrictions on the Sale of Assets; Mergers
CCO Holdings is generally not permitted to sell all or substantially all of its assets or merge with or into other companies unless
its leverage ratio after any such transaction would be no greater than its leverage ratio immediately prior to the transaction, or
unless after giving effect to the transaction, leverage would be below 6.0 to 1.0, no default exists, and the surviving entity is a
U.S. entity that assumes the applicable notes.
CCO Holdings and its restricted subsidiaries may generally not otherwise sell assets or, in the case of restricted subsidiaries, issue
equity interests, in excess of $100 million unless they receive consideration at least equal to the fair market value of the assets or
equity interests, consisting of at least 75% in cash, assumption of liabilities, securities converted into cash within 60 days, or
productive assets. CCO Holdings and its restricted subsidiaries are then required within 365 days after any asset sale either to use
or commit to use the net cash proceeds over a specified threshold to acquire assets used or useful in their businesses or use the net
cash proceeds to repay specified debt, or to offer to repurchase the issuer’s notes with any remaining proceeds.
Prohibitions on Restricting Dividends
CCO Holdings' restricted subsidiaries may generally not enter into arrangements involving restrictions on their ability to make
dividends or distributions or transfer assets to CCO Holdings unless those restrictions with respect to financing arrangements are
on terms that are no more restrictive than those governing the credit facilities existing when they entered into the applicable
indentures or are not materially more restrictive than customary terms in comparable financings and will not materially impair
CCO Holdings' ability to make payments on the notes.
Affiliate Transactions
The CCO Holdings Indentures and CCOH Safari Indentures also restrict the ability of CCO Holdings and its restricted subsidiaries
to enter into certain transactions with affiliates involving consideration in excess of $25 million without a determination by the
board of directors that the transaction complies with this covenant, or transactions with affiliates involving over $100 million
without receiving an opinion as to the fairness to the holders of such transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing.
Cross Acceleration
The CCO Holdings Indentures and CCOH Safari Indentures include various events of default, including cross acceleration
provisions. Under these provisions, a failure by CCO Holdings or any of its restricted subsidiaries to pay at the final maturity
thereof the principal amount of other indebtedness having a principal amount of $100 million or more (or any other default under
any such indebtedness resulting in its acceleration) would result in an event of default under the indenture governing the applicable
notes. As a result, an event of default related to the failure to repay principal at maturity or the acceleration of the indebtedness
under the notes issued under the CCO Holdings Indentures or the CCOH Safari Indentures or the Charter Operating or CCO Safari
III credit facilities could cause cross-defaults under all outstanding indentures.
Recently Issued Accounting Standards
See Note 20 to the accompanying consolidated financial statements contained in “Part II. Item 8. Financial Statements and
Supplementary Data” for a discussion of recently issued accounting standards.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to various market risks, including fluctuations in interest rates. We use interest rate derivative instruments to
manage our interest costs and reduce our exposure to increases in floating interest rates. We manage our exposure to fluctuations
in interest rates by maintaining a mix of fixed and variable rate debt. Using interest rate derivative instruments, we agree to
exchange, at specified intervals through 2017, the difference between fixed and variable interest amounts calculated by reference
to agreed-upon notional principal amounts. For more information, see Note 11 to the accompanying consolidated financial
statements contained in “Part II. Item 8. Financial Statements and Supplementary Data.”
As of December 31, 2015 and 2014, the principal amount of our debt was approximately $35.9 billion and $21.1 billion, respectively.
As of December 31, 2015, this included $21.8 billion of debt which proceeds are currently held in escrow pending consummation
of the TWC Transaction. As of December 31, 2014, this included $7.0 billion of debt that was fully repaid in April 2015 upon
receiving the Termination Notice of the Comcast Transactions. As of December 31, 2015 and 2014, the weighted average interest
rate on the credit facility debt, including the effects of our interest rate swap agreements, was approximately 3.3% and 3.8%,