Charter Communications, Inc. · NASDAQ:CHTR
Charter Communications — Merger or Acquisition (November 2014)
16 slides from Charter Communications's merger presentation, Nov 19, 2014
Slide 1: Liberty Broadband Investor Meeting
Liberty Broadband Investor Meeting November 19, 2014 Filed by Charter Communications Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Charter Communications Inc. Commission File No. 001-3366
Slide 2: Forward-looking statements
1 This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, our plans, strategies a
Slide 3: Additional information and participants in solicitation
2 This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed transaction between Comcast Corporation (“Comcast”) and Charter Communications, Inc. (“Charter”), Charter will fi
Slide 4: Tom Rutledge, President and CEO
Tom Rutledge President and CEO
Slide 5: Overview
4 Overview • New operating team and strategy • Competitive product set, new pricing & packaging • Restructured field ops, customer care, and net ops to focus on service/quality • Plant maintenance/repair, all-digital, Charter Spectrum, new product development • Customer growth accelerating, driving
Slide 6: Our Highly Competitive Product Offering
5 • Over 200 HD channels; “Charter TV is HD” • 100% All digital • VOD on every outlet and every screen – inside and outside the home • Minimum 60Mbps service • Internet modem included • The fastest WiFi • Fully featured voice at $19.99 following promotional period, including all taxes and fees • Unl
Slide 7: Since 2011, We Have Transformed Our Plant & Customer Base
6 Since 2011, We Have Transformed Our Plant & Customer Base… THEN(1) NOW(2) Triple play sell-in of total video sales 27% 60% % of Customers in New Pricing & Packaging(3) 0% 85% HD Channels <70 200+ % of Systems All-Digital(4) 0% 95% LTM Expanded Basic Video Customer Growth -5% 2%(5) % of Internet Cu
Slide 8: And Our Products & Service Offering
7 All copyrights and trademarks are the property of their respective owners. Cloud-Based UI Powering Mobile Devices (Now) Cloud-Based UI Powering Set Tops (Next) Recent & Upcoming Product Developments • Charter TV App • World Box • Spectrum Guide • New service delivery platform … And Our Products &
Slide 9: Accelerating Customer & Financial Growth
8 Accelerating Customer & Financial Growth Note: All results pro forma for certain acquisitions as if they occurred on January 1, 2011. Customer Relationship & PSU Net Additions(1) Expanded Basic Video Net Additions(1) Revenue Growth(2) Adjusted EBITDA(2,3) Growth 1) 2014 customer relationship, PSU
Slide 10: Transactions With Comcast: Summary
9 Transactions With Comcast: Summary 1) Ownership to be greatest percentage that results in Comcast stockholders, as of immediately prior to TWC merger, holding at least 50.75% of GreatLand immediately after Charter acquisition of GreatLand equity 2) Based on audited carveout and Pro Forma 2014 EBIT
Slide 11: Pro Forma Charter and GreatLand: Scale and Footprint
10 Pro Forma Charter and GreatLand: Scale and Footprint Video Customers (in Millions)1 Existing Charter 4.3 - Charter Swaps ~1.6 + Former TWC Assets ~3.0 = New Charter ~5.7 + GreatLand ~2.5 = New Charter Owned/Serviced ~8.2 Charter will • Acquire systems primarily in Ohio, Kentucky, Wisconsin, India
Slide 12: Benefits of Transactions for Charter
11 Benefits of Transactions for Charter • Services agreement enhances local service capabilities; reimbursement at cost • Service fee to Charter of 4.25% of GreatLand revenue • Charter representation on GreatLand Board Ownership in GreatLand Drives Operational & Financial Benefits • Enterprise Value
Slide 13: New Charter Will Be Well Positioned
12 New Charter Will Be Well Positioned • New and “legacy” assets will benefit from Charter’s proven operating strategy • Continued upside growth within remaining Charter systems, combined with similar expected growth opportunity in newly acquired former TWC systems Penetration and Operating Growth U
Slide 14: Non-GAAP measures
13 The Company uses certain measures that are not defined by Generally Accepted Accounting Principles (“GAAP”) to evaluate various aspects of its business. Adjusted EBITDA, pro forma adjusted EBITDA, adjusted EBITDA less capital expenditures, and free cash flow are non-GAAP financial measures and sh
Slide 15: GAAP Reconciliations
14 GAAP Reconciliations 2014 2013 Actual Pro Forma (1) Net loss (96)$ (306)$ Plus: Interest expense, net 849 891 Income tax expense 184 233 Depreciation and amortization 2,068 1,915 Stock compensation expense 52 50 Loss on extinguishment of debt - 104 (Gain) loss on derviative instruments, net 1 (9)
Slide 16: GAAP Reconciliations
15 GAAP Reconciliations 2013 2012 2011 Pro Forma (1) Pro Forma (1) Pro Forma (1) Net loss (194)$ (392)$ (223)$ Plus: Interest expense, net 873 960 963 Income tax expense 154 298 299 Depreciation and amortization 1,908 1,877 1,598 Stock compensation expense 48 50 35 Loss on extinguishment of debt 123
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