Time Warner Cable Transaction Overview
Consideration and Valuation
Cash $100.00 + 0.5409 Equivalent New Charter Shares1) $95.71 Offer
per TWC Share $195.71 Total Equity Value2) $56.7B + Net Debt $22.7B - Est. Equity Investments $0.7B TWC Enterprise Value $78.7B - Est. Present Value of Tax Assets $1.6B TWC Adjusted Enterprise Value $77.0B
Highlights EV/2015 TWC estimated Adj. EBITDA = 9.1x, 8.3x adjusted for synergies and tax benefits3)
Accretive to Charter shareholders and TWC shareholders receive 18% premium4)
to own 44% of New Charter, with balance owned by legacy Charter shareholders and Advance/Newhouse
Election option for TWC stockholders to receive $115 of cash and
New Charter shares equivalent to 0.4562 shares of Charter
Liberty Broadband and Liberty Interactive Corporation (LIC) to exchange TWC stock for New
Charter stock; Liberty Broadband to invest
$4.3 billion in TWC transaction and $700 million in BHN transaction in exchange for New Charter shares
Pro forma entity to be levered at 4.5x 2015 estimated pro forma adjusted EBITDA5,6) 1) Value based on $176.95 Charter closing price as of May 20, 2015.
2) Value based on 289.6 million fully diluted TWC shares. 3) 2015 TWC adjusted EBITDA estimated at $8.3 billion based on Bloomberg consensus as of May 22, 2015 and is adjusted for
$150 million of estimated TWC equity based compensation. Adjusted for $800 million of annual run rate synergies and the net present value of tax benefits. 4) Based on $176.95 Charter and $166.55 TWC closing prices as of May 20, 2015. 5) Assumes that
Time Warner Cable shares outstanding, excluding shares held by Liberty and LIC are exchanged for $100 in cash and 0.5409 equivalent New Charter shares.
$61.5 billion of pro forma debt. Assumes total pro forma entity adjusted EBITDA of $13.8 billion, including 2015 Charter estimated adjusted EBITDA of $3.4 billion and 2015 TWC adjusted EBITDA of $8.4 billion. Bright House 2015 adjusted EBITDA
estimated at $1.4 billion. Total pro forma entity adjusted EBITDA also adjusted for $500 million of leverageable first year synergies.
13 Charter COMMUNICATIONS
Time Warner Cable ® bright house ® NETWORKS