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SEC Filings

8-K
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 8-K on 04/07/2016
Entire Document
 

(h)
Adjustment to noncontrolling interest reflects the following adjustments (in millions).

Issuance of Charter Holdings common units to A/N
$
6,890

Issuance of Charter Holdings convertible preferred units to A/N
2,500

 
$
9,390


Charter Holdings will issue approximately 34.3 million common units, subject to application of the Parent Merger Exchange Ratio, that are exchangeable into New Charter Class A common stock on a one-for-one basis, which are valued at approximately $6.9 billion for pro forma purposes, based on Charter Class A common stock closing stock price on March 18, 2016 of $201.00. These units are recorded in noncontrolling interest as permanent equity on the unaudited pro forma consolidated balance sheet. The actual value of the Charter Holdings common units for accounting purposes will be based on the closing price of Charter Class A common stock on the date of closing of the BHN transactions and will be different from the assumed value presented in the unaudited pro forma financial statements.

Charter Holdings will issue convertible preferred units convertible into approximately10.3 million Charter Holdings common units, subject to application of the Parent Merger Exchange Ratio, that are valued for pro forma purposes based on their $2.5 billion aggregate liquidation preference. These units are recorded in noncontrolling interest as permanent equity on the unaudited pro forma consolidated balance sheet. The preferred units are convertible into Charter Holdings common units based on a conversion feature as defined in the BHN contribution agreement and further exchangeable into New Charter Class A common stock on a one-for-one basis. The actual value of the Charter Holdings preferred units for accounting purposes will be recorded at fair value at the date of closing and will be different from the assumed value presented in the unaudited pro forma financial statements.

(i)
Pro forma adjustment to controlling interest of shareholders’ equity reflects the following (in millions).

Elimination of Bright House’s historical shareholders’ equity and accumulated other comprehensive loss
$
(2,024
)
Issuance of New Charter Class A common stock to Liberty
700

Advisor fees and other expenses directly related to the BHN transactions
(30
)
 
$
(1,354
)

Advisor fees and other expenses directly related to the BHN transactions of $30 million are not reflected in the unaudited pro forma statements of operations and consist primarily of investment banking fees and legal fees.

Note 3. TWC Transactions Pro Forma Statement of Operations Adjustments

(a)
Adjustment to revenues and operating costs and expenses reflect the following adjustments for the year ended December 31, 2015 (in millions).

 
Year Ended December 31, 2015
Reclassification to conform to Charter’s financial statement classification for processing fees revenue
$
219

Elimination of revenue/expense between Charter and TWC
(67
)
Adjustment to both revenues and operating costs and expenses
152

 
 
Incremental replacement stock award compensation expense
145

Elimination of amortization of actuarial gains (losses) and prior service credits for TWC’s pension plans
(41
)
Total adjustment to operating costs and expenses
$
256


TWC presents processing fees as a reduction to bad debt expense within operating costs and expenses in the statement of operations. Charter reports such fees as other revenue. As such, a pro forma reclassification was made to conform to Charter’s financial statement classification for processing fee revenues.


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