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SEC Filings

PREM14A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form PREM14A on 06/26/2015
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Table of Contents

New Charter, giving effect to the TWC transactions, but not the BHN transactions:

 

     2015      2016      2017      2018      2019  

Revenue

   $ 33,547       $ 35,499       $ 37,925       $ 41,034       $ 44,240   

Adjusted EBITDA1

     11,901         13,029         14,289         15,926         17,461   

Capital Expenditures

     5,888         5,778         6,201         5,834         5,239   

Charter, giving effect to the BHN transactions, but not the TWC transactions:

 

     2015      2016      2017      2018      2019  

Revenue

   $ 13,716       $ 14,734       $ 15,866       $ 17,222       $ 18,582   

Adjusted EBITDA1

     4,909         5,333         5,815         6,430         7,029   

Capital Expenditures

     2,352         2,420         2,470         2,376         2,317   

 

1 Adjusted EBITDA is defined as net income (loss) plus net interest expense, income taxes, depreciation and amortization, stock compensation expense (gain) loss on extinguishment of debt, loss on derivative instruments, net and other operating (income) expenses, such as merger and acquisition costs, special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of Charter’s and New Charter’s businesses as well as other non-cash or nonrecurring items, and is unaffected by the expected New Charter capital structure or investment activities.

Debt Financing for the Mergers and BHN Transactions

Charter expects to finance part of the consideration for the TWC transactions and BHN transactions with additional indebtedness of approximately $24 billion. This additional indebtedness is expected to be in the form of new senior secured bank loans, senior secured notes and unsecured indebtedness, subject to market conditions. This amount assumes that all TWC stockholders (other than Liberty Broadband and Liberty Interactive) elect, in accordance with the merger agreement, to receive $100 cash and the equivalent of 0.5409 shares of Charter Class A common stock for each share of TWC common stock. Charter has committed financing for approximately $4.3 billion of additional indebtedness, which would be substantially incurred through the issuance of unsecured notes by Charter Communications Operating Holdings, LLC, a subsidiary of Charter (“CCOH”), if all TWC stockholders (other than Liberty Broadband and Liberty Interactive) elect, in accordance with the merger agreement, to receive $115 cash and the equivalent of 0.4562 shares of Charter Class A common stock for each share of TWC common stock.

New Bank Loans

The new senior secured bank loans are expected to be incurred by Charter’s subsidiary Charter Communications Operating, LLC (“CCO”) and be guaranteed by its holding company CCOH and CCO’s subsidiaries including, after giving effect to the TWC transactions and BHN transactions, the subsidiaries of CCO holding the operating assets of TWC and Bright House. In addition, the loans are expected to be secured by a perfected first priority security interest in substantially all of the assets of CCO and the guarantors, subject to certain customary exceptions. The liens will be (i) pari passu with the liens on the collateral securing any CCO senior secured notes described below and any permitted refinancing thereof and (ii) pari passu with the liens on the collateral on Charter’s existing credit facilities and any permitted refinancings thereof. The pari passu ranking of the security interests will be set forth in a customary intercreditor agreement.

New Senior Secured Notes

The new senior secured notes are expected to be issued by CCO and be guaranteed by CCOH and CCO’s subsidiaries including, after giving effect to the TWC transactions and the BHN transactions, the subsidiaries of CCO holding the operating assets of TWC and Bright House. In addition, the senior secured notes are expected to be secured by a perfected first priority security interest in all of the collateral securing the new bank loans. The liens will be (i) pari passu with the liens on the collateral securing the new bank loans described above and any

 

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