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SEC Filings

10-Q
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form 10-Q on 11/03/2016
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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in millions, except per share amounts and where indicated)


15.    Earnings (Loss) Per Share

Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to Charter shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share considers the impact of potentially dilutive securities using the treasury stock and if-converted methods and is based on the weighted average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options, restricted stock, restricted stock units, equity awards with market conditions and Charter Holdings convertible preferred units and common units. Weighted average number of shares outstanding for all periods presented has been recast to reflect the application of the Parent Merger Exchange Ratio. Basic loss per common share equals diluted loss per common share for the nine months ended September 30, 2015 because the Company incurred a net loss during that period. The following is the computation of diluted earnings per common share for the three months ended September 30, 2016 and 2015 and nine months ended September 30, 2016.

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
Numerator:
 
 
 
 
 
Net income attributable to Charter shareholders
$
189

 
$
54

 
$
3,068

Effect of dilutive securities:
 
 
 
 
 
Charter Holdings common units

 

 
53

Charter Holdings convertible preferred units

 

 
55

Net income attributable to Charter shareholders after assumed conversions
$
189

 
$
54

 
$
3,176

 
 
 
 
 
 
Denominator:
 
 
 
 
 
Weighted average common shares outstanding, basic
271,263,259

 
101,205,400

 
185,706,106

Effect of dilutive securities:
 
 
 
 
 
Assumed exercise or issuance of shares relating to stock plans
4,109,943

 
1,276,524

 
2,736,562

Weighted average Charter Holdings common units

 

 
15,384,794

Weighted average Charter Holdings convertible preferred units

 

 
4,632,686

Weighted average common shares outstanding, diluted
275,373,202

 
102,481,924

 
208,460,148

 
 
 
 
 
 
Basic earnings per common share attributable to Charter shareholders
$
0.70

 
$
0.54

 
$
16.52

Diluted earnings per common share attributable to Charter shareholders
$
0.69

 
$
0.53

 
$
15.23


16.     Related Party Transactions

On May 23, 2015, in connection with the execution of the Merger Agreement and the amendment of the Contribution Agreement, Charter entered into the Amended and Restated Stockholders Agreement with Liberty Broadband, A/N and Legacy Charter (the “Stockholders Agreement”). As of the closing of the Merger Agreement and the Contribution Agreement on May 18, 2016, the Stockholders Agreement replaced Legacy Charter’s existing stockholders agreement with Liberty Broadband, dated September 29, 2014, and superseded the amended and restated stockholders agreement among Legacy Charter, Charter, Liberty Broadband and A/N, dated March 31, 2015.

Under the terms of the Stockholders Agreement, the number of Charter’s directors is fixed at 13, and includes its chief executive officer. Upon the closing of the Bright House Transaction, two designees selected by A/N became members of the board of directors of Charter and three designees selected by Liberty Broadband continued as members of the board of directors of Charter. The remaining eight directors are not affiliated with either A/N or Liberty Broadband. Each of A/N and Liberty Broadband is entitled


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