DB CHTR

This document is being provided for the exclusive use of ASHISH KOCHAR at THREADNEEDLE ASSET MANAGEMENT LTD
Deutsche Bank
Markets Research
Rating
Company
Buy
Charter
Date
11 May 2016
Forecast Change
North America
United States
TMT
Reuters
CHTR.OQ
Bloomberg
CHTR US
Exchange Ticker
NMS
CHTR
Cable & Satellite
Analyzing Top Investor Questions on

Charter
Maintaining Buy Rating, Raising PT To $260 (20% Upside)
Weve updated our pro forma model for 1Q results and a thorough review of
our assumptions. Our 2016-2021 EBITDA forecast increased each year. We
also raised our capex forecast, which largely offset the EBITDA increase
through 2018. However, our 2019-2021 OpFCF forecast is now materially
higher given our higher revenue and margin assumptions. We find CHTR to be
an attractive multi-year FCF growth story combined with a levered capital
structure, a combination that should generate a mid-teens annual compounded
return on the share price through 2021 off of our $260 PT.
The final hurdle to closing the deal should be cleared on Thursday with the CA
PUC expected to approve the merger. Closing should follow shortly thereafter.
Our Forecast vs The S-4 Projections and Consensus
This report centers around what weve found to be the top questions investors
have been asking, and what we observe to be the key fundamental variables in
the companys outlook. Readers will find that our revenue forecast is pretty
close to the S-4 projections through 2018, with the S-4 outlook materially
higher in 2019. However, our margin assumptions are more conservative than
the S-4 through 2019, but ultimately do approach 40% in 2021 (in line with the
S-4). We are essentially assuming a longer time horizon to reach
managements margin targets. We are assuming capex will be higher than the
S-4 in every year of the forecast, but that capital intensity will decline in every
year. Our EBITDA forecast is 0.6% below 2016 consensus and 2.3% below
2017 consensus, in line with 2018, and 3.5% higher than 2019 consensus. We
note that the consensus averages are based on a wide range of estimates.
Price at 11 May 2016 (USD)
217.22
Price target
260.00
52-week range
217.22 - 159.53
Bryan Kraft
Clay Griffin, CFA
Research Analyst
Research Associate
(+1) 212 250-0117 (+1) 212 250-7654
bryan.kraft@db.com clay.griffin@db.com
Key changes
230.00 to 260.00
Price target
13.0%
Source: Deutsche Bank
Price/price relative
240
200
160
120
80
5/13
11/13
5/14
11/14
5/15
11/15
Charter
S&P 500 INDEX (Rebased)
Performance (%)
1m
3m
12m
Absolute
8.4
36.2
21.5
S&P 500 INDEX
1.1
12.9
-1.9
The Key Questions/Points We Discuss In This Report Are:

1. Can EBITDA margin really approach 40% and whats the evidence?
2. Will capital intensity decline materially and why?
3. Will the repricing and repackaging of TWCs services materially impair
ARPU growth?
4. Will new streamed pay TV bundles (e.g. Hulu, Sling, Sony Vue,
DIRECTV Now) take pay TV market share from Charter?
5. Updated Pro Forma Valuation
Valuation & Risks
We value CHTR using our economic returns model, a market-based DCF model
utilizing a 10.1% WACC (15% cost of equity) and incorporating our pro forma
estimates for unlevered free cash flow. Risks include: (1) Increased regulation,
(2) Faster than anticipated decline in video subscribers, (3) Increased pace of
fiber-to-the-premises deployment by competitors driving subscriber losses,
lower pricing, and higher investment levels; (4) Wireless becoming a substitute
for cables broadband internet access services; and (5) credit market
dysfunction and/or rapidly rising interest rates.
________________________________________________________________________________________________________________
Deutsche Bank Securities Inc.
Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should
be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST
CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 057/04/2016.
11 May 2016
Cable & Satellite
Charter
Are 40% EBITDA Margins Realistic For Charter?

Weve assumed merger-related expense synergies reaching $1B in 2019,
representing about 200 bps of margin expansion. This grows to $1.1B in 2021.
Weve assumed that incremental in-sourced labor costs reduce partially offset
the expense synergies in 2017-2019 as call centers and field operations are
brought in-house over a three-year period (similar to the legacy Charter
timeline). After 2019, these costs fully scale.
Pro Forma CHTR (before synergies) had an estimated 35.3% margin in 2015.
Our synergy estimates represent 200 bps of margin expansion long-term.
We estimate EBITDA margin will reach 38.2% in 2019 and 39.6% in 2021.
We believe there will be underlying margin improvement, in addition to the
cost synergies, from running the business more efficiently, leveraging fixed
costs, a mix shift toward broadband and business services, and increased
scale (both in market and at the corporate level).
While Comcast will still be 25% larger than Charter (based on 2016E cable
revenue), Comcast enjoys an estimated 39% Cable segment margin when
adjusted to include 75% of Comcasts Corporate segment loss (which is
necessary to fairly compare Comcast Cable to Charters margins since
Charters include all corporate overhead costs).
We are forecasting Pro Forma Charters annual EBITDA per Home Passed to
increase from $275 in 2015 to $418 in 2021. Note that Comcast generated
$342 in EBITDA per home passed in 2015, which we forecast to increase to
$427 in 2021.
Figure 1: Synergy Estimates by Year (Incl. Incremental In-Sourcing Costs)

1,400
1,200
828
1,000
1,066
1,134
539
800
458
Net In-Sourcing Costs
600
Other
400
Programming
212
Net Synergy
200
(200)
(400)
2016
2017
2018
2019
2020
2021
Page 2
11 May 2016
Cable & Satellite
Charter
Figure 2: Incremental In-Sourcing Costs '16-21
2020
2021
(50)
(100)
(150)
(200)
(175)
(180)
(250)
(300)
(300)
(350)
2016
2017
2018
2019
Figure 3: PF CHTR and CMCSA Adj. Cable Margin Converge In 2020

40.0%
39.0%
38.0%
37.0%
PF CHTR EBITDA Margins
36.0%
Adj CMCSA Cable EBITDA

Margin
35.0%
34.0%
33.0%
2014 2015 2016 2017 2018 2019 2020 2021
Page 3
11 May 2016
Cable & Satellite
Charter
Figure 4: The Revenue Mix Shifts Away From Lower Margin Video
Residential Video
100%
90%
Residential Data + Voice + Other
Business Services
12%
13%
14%
15%
16%
17%
18%
19%
43%
43%
45%
44%
44%
44%
44%
44%
45%
43%
41%
41%
40%
39%
38%
37%
2014
2015
2016
2017
2018
2019
2020
2021
80%
70%
60%
50%
40%
30%
20%
10%
0%
Figure 5: CHTRs In-Region Scale Improves Dramatically With The Merger
% of CHTR Video Subs from Markets where Cable Share is:

< = 10%
10-30%
30-50%
50-70%
70+%
31.8%
8.7%
72.1%
12.7%
34.4%
7.2%
3.8%
14.1%
12.5%
2.7%
CHTR
PF CHTR
Page 4
11 May 2016
Cable & Satellite
Charter
Figure 6: Charter Narrows The Gap On Annual EBITDA per Home Passed
$450.0
$416.4
$388.5
$400.0
$350.0
$331.0
$341.8
$354.4
$427.0
$400.1
$417.7
$368.2
$395.4
$364.2
PF CHTR
$334.9
$300.0
CMCSA Cable
$308.8
$292.3
$250.0
$268.5
$274.9
2014
2015
$200.0
2016
2017
2018
2019
2020
2021
Will Capital Intensity Decline Materially?

TWC is already 50% complete with its all-digital conversion, with 25% of its
other markets started. We dont think TWCs capex has to increase materially
in 2017/2018 to complete the all-digital conversion during 2018.
Comcasts capex/sales (including investment in intangibles) is elevated right
now because the company is in a capital-intensive STB refresh cycle (i.e. X1).
CHTR has completed its STB cycle and TWC will complete its STB cycle in
2018. CHTR has seen a reduction in capital intensity as a result, and we expect
a similar trend for TWC and Comcast.
We assume relatively similar capex/sales for Comcast and Pro Forma Charter
long-term, although CHTR is slightly lower because it tends toward less
investment into the pay TV business and, part of its capital investment and
development costs are housed in the Arris/Active Video JV.
Figure 7: Pro Forma Capex Forecast
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
8,000
6.81
6.92
7,000
6,000
5,000
7.07
7.29
6.86 6.63
6.85
7.02
5.41 5.60
Capex Synergies
BHN
4,000
CHTR
TWC
3,000
Total
2,000
1,000
(1,000)
(25)
(100) (200)
(300) (300) (300)
Page 5
11 May 2016
Cable & Satellite
Charter
Figure 8: Forecasted Capex/Sales
25.0%
20.0%
15.0%
PF CHTR
10.0%
CMCSA
5.0%
Figure 9: DB Capex vs. CHTR S-4 Projections

8,200
7.29
7,200
6.92
6.86
6.48
6.63
5.83
6,200
5,200
DB PF CHTR CapEx Estimate
4,200
CHTR's S-4 Projection
3,200
2,200
1,200
200
2017
2018
2019
Will The Repricing and Repackaging of TWCs Services

Materially Impair ARPU Growth?
TWCs residential ARPU is lower than CHTRs today, which means that CHTR
management has the ability to grow ARPU as the new pricing and packaging
is rolled out across the legacy TWC footprint. This will require proper training
and scripts for call center employees, and careful management and monitoring
of the sales and upsell processes. However, we believe that CHTR
management has proven itself to be very effective and experienced in this
area, which makes us think they will be successful.
Managements goal is to persuade TWC customers, on average, to pay more
than they are paying today for a better package of services. In other words,
Page 6
11 May 2016
Cable & Satellite
Charter
offer more value for the money to the consumer, but earn more revenue at the
same time.
We do assume somewhat muted ARPU growth in 2017 as the new pricing is
initially rolled out to the areas that have been converted to all-digital (~50%+ of
the footprint).
Price increases are a variable that we dont have visibility into at this point in
time. However, CHTR can raise prices on legacy pricing packages to drive
ARPU growth next year.
Figure 10: Residential ARPUs per Customer Relationship Converge Over Time
$120.0
$118.3
$116.6
$118.0
$115.5
$116.0
$114.3
$112.0
$110.5 $110.9
$113.9
$110.0
$104.0
TWC
$111.3
$108.0
$106.0
$116.2 $117.7
$113.0
$114.0
CHTR
$108.9
$106.7
$107.7
$102.0
$100.0
2015
2016
2017
2018
2019
2020
2021
Figure 11: Our Residential ARPU Growth Assumptions Are Reasonable
3.0%
2.5%
2.0%
TWC
1.5%
CHTR
1.0%
0.5%
2015
2016
2017
2018
2019
2020
2021
Page 7
11 May 2016
Cable & Satellite
Charter
Will New Streamed Pay TV Bundles Take Pay TV Share?

Probably, But The Video Subscriber Outlook Matters Less
With Each Passing Year.
The future of the pay TV distribution business, in our view, is making money on
something else. For cable its broadband, for Hulus owners its affiliate fees
and advertising, for Sony its game consoles, and for Apple its hardware.
Cable companies are becoming economically less dependent on video every
year as the direct profit contribution from video declines. By 2020, if not
sooner, we estimate that the unbundled broadband price premiums charged
by cable today ($8/month in Charters case) will be about equal to the direct
variable OpFCF contribution from video. These unbundled price premiums are
likely to increase, pulling forward that breakeven point.
Figure 12: DB Estimate For Unit Video Contribution To Operating Free Cash Flow
Cable Video Subscriber Economics

2014
2015
2016
2017
2018
2019
2020
$7 8 .5 0
$8 1 .2 5
3.5%
$8 4 .0 9
3.5%
$8 7 .0 3
3.5%
$9 0 .0 8
3.5%
$9 3 .2 3
3.5%
$9 6 .5 0
3.5%
Variable Costs :
Sales Commission
Installation
CPE/Box
Pro gramming Co sts
Franchise Fees, etc.
Customer Care
Service Truck Rolls
Bad Debt Expense
Total Costs
% of Revenue
$1.25
$2.50
$5.83
$3 9 .0 0
$3.61
$2.80
$2.50
$0.96
$58.45
74%
$1.28
$2.56
$5.37
$4 2 .8 0
$3.74
$2.87
$2.56
$0.99
$62.17
77%
$1.31
$2.63
$4.94
$4 6 .9 8
$3.87
$2.94
$2.63
$1.03
$66.31
79%
$1.35
$2.69
$4.54
$5 1 .5 6
$4.00
$3.01
$2.69
$1.06
$70.91
81%
$1.38
$2.76
$4.18
$5 6 .5 8
$4.14
$3.09
$2.76
$1.10
$75.99
84%
$1.41
$1.45
$2.83
$2.90
$3.84
$3.54
$6 2 .1 0 $6 8 .1 5
$4.29
$4.44
$3.16
$3.24
$2.83
$2.90
$1.14
$1.18
$81.61
$87.80
88%
91%
Op FCF Co ntributio n
% M argin
$2 0 .0 5
2 5 .5 %
$1 9 .0 8
2 3 .5 %
$1 7 .7 8
2 1 .1 %
$1 6 .1 3
1 8 .5 %
$1 4 .0 9
1 5 .6 %
$1 1 .6 3
1 2 .5 %
Video ARPU
% Growth
$8 .7 0
9 .0 %
Page 8
11 May 2016
Cable & Satellite
Charter
Figure 13: Gross Profit Pools (2011-2021) TWC, CHTR, CMCSA, CVC
$100B
$80B
$60B
$6B
$7B
$8B
$9B
$10B
$11B
$3B
$4B
$5B
$17B
$19B
$21B
$23B
$25B
$27B
$30B
$32B
$15B
$35B
$22B
$21B
$21B
$19B
$19B
$18B
$18B
$17B
$17B
$16B
($23B)
($25B)
($25B)
($25B)
($27B)
($28B)
($28B)
($29B)
($30B)
($31B)
2012
2013
2014
2015
2016
2017
2018
2019
2020
$2B
$40B
$20B
($20B)
2011
($40B)
Video
HSD
Voice
Business Svcs
Advertising & Other
Shared/Unallocated Opex
Page 9
2016
2017
2018
2019
2020
2021
2016
2017
2018
2019
2020
2021
8
1,494
753
(88)
1,425
649
(112)
1,325
512
(112)
1,255
400
(112)
1,180
315
(112)
1,100
255
(31)
(26)
(145)
(27)
(25)
(49)
(2)
(35)
(48)
(2)
(30)
(25)
(2)
(55)
(25)
(2)
(110)
(25)
Total Revenue
39,817.3
42,234.4
6.1%
45,439.0
7.6%
48,574.2
6.9%
51,977.6
7.0%
55,216.6
6.2%
189
228
594
1,172
1,528
1,916
Adj. OIBDA
Growth %
Margin %
14,138.6
16,845.7
11.1%
37.1%
18,585.3
10.3%
38.3%
20,460.7
10.1%
39.4%
21,854.7
6.8%
39.6%
175
101
334
956
1,503
1,829
35.5%
15,156.4
7.2%
35.9%
27 bps
5 bps
25 bps
107 bps
179 bps
201 bps
Capex
% of Revenues
7,065.5
17.7%
7,289.6
17.3%
6,859.9
15.1%
6,630.0
13.6%
6,854.6
13.2%
180
37 bps
396
85 bps
460
83 bps
493
70 bps
637
86 bps
742
94 bps
OpFCF
Growth %
Margin %
7,073.1
9,985.8
26.9%
22.0%
11,955.3
19.7%
24.6%
13,606.1
13.8%
26.2%
(5.0)
(295.1)
(126.5)
463.2
866.7
1,086.4
17.8%
7,866.8
11.2%
18.6%
7,024.0
12.7%
16.0%
14,830.7
9.0%
26.9%
Revenue
TWC
CHTR
BHN
Adj.
Total
25,337.2
10,400.2
4,079.9
39,817.3
26,818.6
11,131.9
4,283.9
42,234.4
28,968.5
11,929.6
4,541.0
45,439.0
31,089.7
12,671.0
4,813.4
48,574.2
33,347.5
13,527.9
5,102.2
51,977.6
35,448.7
14,359.6
5,408.3
55,216.6 #
111.5
(15.8)
92.9
188.6
84.8
5.4
137.5
227.6
362.9
23.7
207.9
594.5
812.3
52.9
307.0
1,172.2
1,054.7
80.6
393.0
1,528.3
1,302.2
103.2
510.8
1,916.2
Adj. EBITDA
TWC
CHTR
BHN
Adj.
Total
8,811.2
3,746.7
1,468.8
212.0
14,238.6
9,272.3
4,059.0
1,542.2
458.0
15,331.4
10,346.8
4,402.3
1,657.4
539.0
16,945.7
11,337.4
4,689.4
1,781.0
827.6
18,635.3
12,440.3
5,066.3
1,887.8
1,066.3
20,460.7
13,314.2
5,405.1
2,001.1
1,134.2
21,854.7
123.7
16.0
33.5
102.0
275.2
136.9
55.5
49.5
34.0
275.9
370.2
65.2
97.5
(99.4)
433.5
771.9
83.3
158.7
(7.7)
1,006.1
1,010.2
104.4
192.5
196.3
1,503.4
1,240.7
119.2
238.0
230.7
1,828.6
(4.4)
170.7
13.9
180.3
213.8
140.8
41.3
396.0
255.4
152.8
51.8
460.0
261.0
166.3
65.5
492.9
379.3
180.8
76.6
636.7
504.2
122.7
115.4
742.3
128.1
(154.7)
19.5
102.0
95.0
(77.0)
(85.3)
8.1
34.0
(120.1)
114.8
(87.6)
45.7
(99.4)
(26.5)
510.8
(83.0)
93.1
(7.7)
513.2
630.9
(76.4)
115.9
196.3
866.7
736.5
(3.5)
122.6
230.7
1,086.4
Net Adds
Video
Data
Voice
Capex
TWC
CHTR
BHN
Adj.
Total
4,536.2
1,942.2
612.0
(25.0)
7,065.5
4,825.4
1,921.6
642.6
(100.0)
7,289.6
OpFCF
TWC
CHTR
BHN
Adj.
Total
4,274.9
1,804.4
856.8
237.0
7,173.1
4,446.8
2,137.4
899.6
558.0
8,041.8
4,403.2
1,998.2
658.4
(200.0)
6,859.9
5,943.6
2,404.1
999.0
739.0
10,085.8
4,197.1
2,059.0
673.9
(300.0)
6,630.0
7,140.3
2,630.3
1,107.1
1,127.6
12,005.3
4,335.2
2,130.6
688.8
(300.0)
6,854.6
8,105.1
2,935.7
1,199.0
1,366.3
13,606.1
4,431.1
2,189.8
703.1
(300.0)
7,024.0
8,883.1
3,215.3
1,298.0
1,434.2
14,830.7
11 May 2016
PF CHTR
Variance Table
Cable & Satellite
Charter
Page 10
Figure 14: PF CHTR Estimates vs. Prior
12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021

2015
2016
2017
2018
2019
2020
2021
Revenue
TWC
CHTR
BHN
Total
PF Adjustments/Synergies
PF CHTR Revenue
y/y Revenue Growth
TWC
CHTR
BHN
PF CHTR
Adj. EBITDA
TWC
CHTR
BHN
Total
PF Adjustments
Programming Synergies
Other Synergies
Net Insourcing Costs
Integration Cost Assumptions
PF CHTR Adj. EBITDA
Recurring PF EBITDA
EBITDA % Margin
TWC
CHTR
BHN
PF CHTR including Synergies
PF CHTR (Ex-Integration Costs)
y/y EBITDA Growth
TWC
CHTR
BHN
PF CHTR
PF CHTR (Ex-Integration Costs)
23,697
9,754
3,923
37,374
42.0
37,416
25,337
10,400
4,080
39,817
26,819
11,132
4,284
42,234
28,969
11,930
4,541
45,439
31,090
12,671
4,813
48,574
33,348
13,528
5,102
51,978
35,449
14,360
5,408
55,217
39,817
42,234
45,439
48,574
51,978
55,217
3.9%
7.1%
5.9%
4.9%
6.9%
6.6%
4.0%
6.4%
5.8%
7.0%
5.0%
6.1%
8.0%
7.2%
6.0%
7.6%
7.3%
6.2%
6.0%
6.9%
7.3%
6.8%
6.0%
7.0%
6.3%
6.1%
6.0%
6.2%
8,138
3,478
1,412
13,028
187
8,811
3,747
1,469
14,027
182
30
9,272
4,059
1,542
14,873
10,347
4,402
1,657
16,407
11,337
4,689
1,781
17,808
12,440
5,066
1,888
19,394
13,314
5,405
2,001
20,720
419
420
(300)
(100)
16,846
16,946
453
550
(175)
(50)
18,585
18,635
489
578
528
606
20,461
20,461
21,855
21,855
13,215
13,215
(100)
14,139
14,239
388
250
(180)
(175)
15,156
15,331
34.3%
35.7%
36.0%
35.3%
35.3%
34.8%
36.0%
36.0%
35.5%
35.8%
34.6%
36.5%
36.0%
35.9%
36.3%
35.7%
36.9%
36.5%
37.1%
37.3%
36.5%
37.0%
37.0%
38.3%
38.4%
37.3%
37.5%
37.0%
39.4%
39.4%
37.6%
37.6%
37.0%
39.6%
39.6%
-1.1%
8.6%
17.6%
3.3%
8.3%
7.7%
4.0%
7.0%
7.7%
5.2%
8.3%
5.0%
7.2%
7.7%
11.6%
8.5%
7.5%
11.1%
10.5%
9.6%
6.5%
7.5%
10.3%
10.0%
9.7%
8.0%
6.0%
10.1%
9.8%
7.0%
6.7%
6.0%
6.8%
6.8%
11 May 2016
Pro Forma Charter

Model Drivers
Cable & Satellite
Charter
Figure 15: PF CHTR Model Summary
Page 11
12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021

2015
2016
2017
2018
2019
2020
2021
Operating Expenses
Operating Expenses (Total)
24,201
% Growth
Operating Expenses (Ex-Integration Costs)
24,201
% Growth
Programming Expenses
8,370
% Growth
8.9%
Operating Expenses (Ex-Programming & Integration) 15,831
% Growth
25,679
6.1%
25,579
5.7%
8,918
6.5%
16,661
5.2%
27,078
5.4%
26,903
5.2%
9,511
6.7%
17,392
4.4%
28,593
5.6%
28,493
5.9%
10,289
8.2%
18,204
4.7%
29,989
4.9%
29,939
5.1%
11,105
7.9%
18,834
3.5%
31,517
5.1%
31,517
5.3%
11,950
7.6%
19,567
3.9%
33,362
5.9%
33,362
5.9%
12,831
7.4%
20,531
4.9%
6,811
4,536
1,942
612
7,090
(25)
7,065
4,825
1,922
643
7,390
(100)
7,290
4,403
1,998
658
7,060
(200)
6,860
4,197
2,059
674
6,930
(300)
6,630
4,335
2,131
689
7,155
(300)
6,855
4,431
2,190
703
7,324
(300)
7,024
Capex % of Revenue
TWC
CHTR
BHN
PF CHTR Capex
18.8%
18.9%
13.4%
18.2%
17.9%
18.7%
15.0%
17.7%
18.0%
17.3%
15.0%
17.3%
15.2%
16.8%
14.5%
15.1%
13.5%
16.3%
14.0%
13.6%
13.0%
15.8%
13.5%
13.2%
12.5%
15.3%
13.0%
12.7%
OpFCF
TWC
CHTR
BHN
PF CHTR OpFCF
3,692
1,638
887
6,404
4,275
1,804
857
7,073
4,447
2,137
900
7,867
5,944
2,404
999
9,986
7,140
2,630
1,107
11,955
8,105
2,936
1,199
13,606
8,883
3,215
1,298
14,831
y/y OpFCF Growth

TWC
CHTR
BHN
PF CHTR
-10.6%
66.6%
47.6%
8.9%
15.8%
10.2%
-3.4%
10.4%
4.0%
18.5%
5.0%
11.2%
33.7%
12.5%
11.0%
26.9%
20.1%
9.4%
10.8%
19.7%
13.5%
11.6%
8.3%
13.8%
9.6%
9.5%
8.3%
9.0%
CapEx
TWC
CHTR
BHN
Total
PF Adjustments
PF CHTR Capex
4,446
1,840
525
6,811
11 May 2016
Pro Forma Charter

Model Drivers
Cable & Satellite
Charter
Page 12
Figure 16: PF CHTR Model Summary (cont.)
Assumes a 2Q Close
3/31/2016
1Q16
6/30/2016
2Q16
9/30/2016
3Q16
12/31/2016 12/31/2016
4Q16
2016
3/31/2017
1Q17
6/30/2017
2Q17
9/30/2017 12/31/2017
3Q17
4Q17
12/31/2017
2017
12/31/2018
2018
12/31/2019
2019
12/31/2020
2020
12/31/2021
2021
Debt Schedule
PF Gross Debt
PF Cash
PF Net Debt
61,600
2,300
59,300
61,600
3,250
58,350
61,600
4,491
57,109
61,600
4,491
57,109
61,600
4,237
57,363
59,600
1,992
57,608
59,600
1,756
57,844
58,600
759
57,841
58,600
759
57,841
57,952
500
57,452
59,016
500
58,516
63,058
500
62,558
66,448
500
65,948
3,433
4.3x
3,451
4.2x
3,720
3.8x
14,139
4.0x
3,667
3.9x
3,705
3.9x
3,768
3.8x
4,016
3.6x
15,156
3.8x
16,846
3.4x
18,585
3.1x
20,461
3.1x
21,855
3.0x
1,805
35.0%
1,173
1,618
1,788
35.0%
1,162
1,645
1,780
35.0%
1,157
1,671
2,021
35.0%
1,314
1,698
7,395
4,807
6,632
1,938
35.0%
1,260
1,728
1,949
35.0%
1,267
1,756
1,985
35.0%
1,290
1,783
2,186
35.0%
1,421
1,830
8,059
35.0%
5,238
7,097
9,644
35.0%
6,269
7,201
11,271
35.0%
7,326
7,315
13,025
35.0%
8,466
7,436
14,282
35.0%
9,283
7,573
2,048
743
1,878
929
1,574
1,254
1,566
1,447
4,373
1,777
1,211
1,802
1,221
1,853
1,220
1,858
1,394
7,290
5,046
15.4%
6,860
6,610
31.0%
6,630
8,011
21.2%
6,855
9,047
12.9%
7,024
9,832
8.7%
6.00%
890
578
6.00%
875
569
6.00%
857
557
6.00%
860
559
6.00%
864
562
6.00%
868
564
3,449
2,242
6.00%
3,447
2,241
6.00%
3,511
2,282
6.00%
3,753
2,440
6.00%
3,957
2,572
4,370
55.8%
13.90 $
66.2%
5,728
31.1%
19.69 $
41.6%
6,608
15.3%
25.10 $
27.4%
7,260
9.9%
30.87
23.0%
Adj. EBITDA
Net Debt/Adj EBITDA
Adj. EBIT
Normalized Tax Rate
(1-T)* EBIT
D&A
Delta NWC
CapEx
Unlevered Free Cash Flow (Fully Taxed)
% Growth
Interest Rate
Interest Expense
(1-T) * Interest Expense
Levered Free Cash Flow (Fully Taxed)
% Growth
FCF per Share (Fully Taxed)
% Growth
676
$
Tax Utilization / Other Operating Cash Item
1.95
878
$
654
2.54
1.91
662
$
1.96
659
$
1.98
830
$
2.53
2,804
$
8.37
312
401
379
381
392
461
1,614
2,169
1,358
500
500
2,000
1,000
3,000
2,000
1,352
4,650
5,714
2,950
6,992
2,950
6,340
Mandatory Debt Paydowns

Debt Additions
Min Cash
500
Levered FCF/Share (Untaxed)
Levered Free Cash + Tax Savings
Pref. Dividends
Mandatory Debt Paydowns
Stock Buybacks
Funding Available / Required
Assumed Share Repurchase Price

Growth
Gross $ allocated to share
Net Share reduction
PF Shares
Avg. Shares
2.86 $
988
37.5
2,750
$189
345.9
345.9
345.9
345.9
3.70
1,279
37.5
3,991
$189
$189
345.9
345.9
345.9
345.9
345.9
345.9
3.01
1,033
37.5
1,250
3,737
$227
20.0%
1,250
(5.5)
340.4
343.1
3.09
1,043
37.5
2,000
1,250
1,492
$236
4.0%
1,250
(5.3)
335.1
337.7
3.16
1,051
37.5
1,250
1,256
$245
4.0%
1,250
(5.1)
330.0
332.5
3.94
1,291
37.5
1,000
1,250
259
$255
4.0%
1,250
(4.9)
325.1
327.5
13.18
4,418
150
3,000
5,000
259
$240.8
5,000
(20.8)
325.1
335.2
20.81 $
6,539
150.0
2,000
6,000
(1,352)
24.36 $
7,086
150.0
4,650
8,000
(5,714)
27.00 $
7,108
150.0
2,950
11,000
(6,992)
32.99
7,760
150.0
2,950
11,000
(6,340)
$276.9
15.0%
$318.4
15.0%
$366.2
15.0%
$421.1
15.0%
6,000
(21.7)
303.4
314.3
8,000
(25.1)
278.3
290.9
11,000
(30.0)
248.3
263.3
11,000
(26.1)
222.1
235.2
11 May 2016
Pro Forma Charter

Debt Schedule & FCF
Cable & Satellite
Charter
Figure 17: PF CHTR Model Summary (cont.)
Page 13
12/31/2012
2012
Subscriber Metrics (EOP)
Homes Passed
Customer Relationships
Video
Data
Voice
12,741
5,389
4,463
4,269
2,189
Net Adds
Video
Data
Voice
12/31/2013 ######### 3/31/2015 6/30/2015 9/30/2015 ######### ######### 3/31/2016 6/30/2016 9/30/2016 ######### ######### ######### #########
2013
2014
1Q15
2Q15
3Q15
4Q15
2015
1Q16
2Q16
3Q16
4Q16
2016
2017
2018
12,799
5,561
4,342
4,640
2,418
12,871
6,227
4,293
5,072
2,619
12,901
6,325
4,288
5,208
2,669
12,959
6,377
4,258
5,294
2,714
13,008
6,491
4,274
5,441
2,762
12,783
6,704
4,430
5,572
2,816
12,783
6,704
4,430
5,572
2,816
12,854
6,824
4,445
5,727
2,864
12,891
6,881
4,429
5,812
2,905
12,940
6,993
4,443
5,947
2,946
12,975
7,095
4,472
6,077
3,001
12,975
7,095
4,472
6,077
3,001
13,234
7,463
4,474
6,562
3,170
13,499
7,833
4,462
6,997
3,327
547
(121)
371
229
666
(49)
432
201
98
(5)
136
50
52
(30)
86
45
114
16
147
48
213
156
131
54
477
137
500
197
120
15
155
48
57
(16)
85
41
112
14
135
41
102
29
130
55
391
42
505
185
368
2
485
169
370
(12)
435
157
42.2%
33.5%
32.6%
17.6%
45.1%
34.4%
35.3%
19.1%
46.7%
33.7%
38.2%
20.2%
47.3%
33.6%
39.1%
20.5%
47.4%
33.2%
39.5%
20.7%
47.9%
33.2%
40.4%
20.9%
49.2%
33.8%
41.8%
21.5%
49.2%
33.8%
41.8%
21.5%
49.7%
33.7%
42.6%
21.7%
49.9%
33.4%
42.7%
21.7%
50.4%
33.4%
43.3%
21.8%
50.9%
33.5%
44.0%
22.4%
50.9%
33.5%
44.0%
22.4%
52.2%
32.7%
46.1%
22.9%
53.4%
31.9%
48.0%
23.4%
Revenue
Residential
Business
Advertising
Other
Total Revenue
6,782
701
349
185
8,017
7,098
840
297
184
8,419
7,594
993
341
180
9,108
1,980
269
66
47
2,362
2,026
278
79
47
2,430
2,040
286
77
47
2,450
2,083
294
87
48
2,512
8,129
1,127
309
189
9,754
2,109
301
72
48
2,530
2,128
311
84
48
2,572
2,145
323
89
48
2,606
2,199
335
109
49
2,692
8,582
1,270
354
194
10,400
9,150
1,464
320
198
11,132
9,679
1,691
358
202
11,930
Growth %
Residential
Business
Advertising
Other
Total Revenue
9.0%
28.6%
19.5%
13.5%
11.0%
4.7%
19.8%
-14.9%
-0.5%
5.0%
7.0%
18.2%
14.8%
-2.2%
8.2%
6.7%
15.0%
-2.9%
6.8%
7.3%
7.0%
13.9%
0.0%
9.3%
7.6%
7.3%
13.0%
-11.5%
4.4%
7.1%
7.2%
12.2%
-18.7%
0.0%
6.4%
7.0%
13.5%
-9.4%
5.0%
7.1%
6.5%
11.9%
9.1%
2.1%
7.1%
5.0%
12.0%
6.0%
3.0%
5.8%
5.2%
12.9%
16.0%
3.0%
6.4%
5.6%
14.0%
25.0%
3.0%
7.2%
5.6%
12.7%
14.5%
2.8%
6.6%
6.6%
15.2%
-9.6%
2.0%
7.0%
5.8%
15.5%
12.0%
2.0%
7.2%
Penetration
Video
Data
Voice
11 May 2016
Charter Communications, Inc.

Model Summary
Cable & Satellite
Charter
Page 14
Figure 18: Stand-alone CHTR Model Summary
12/31/2012
2012
ARPUs
Video
Data
Voice
Residential ARPU
Total Subscription ARPU per Customer
$74.98
$42.46
$37.14
$106.52
$109.57
12/31/2013 ######### 3/31/2015 6/30/2015 9/30/2015 ######### ######### 3/31/2016 6/30/2016 9/30/2016 ######### ######### ######### #########
2013
2014
1Q15
2Q15
3Q15
4Q15
2015
1Q16
2Q16
3Q16
4Q16
2016
2017
2018
$81.94
$44.47
$25.60
$107.64
$113.15
$84.89
$46.68
$20.33
$107.53
$114.95
$87.16
$49.30
$18.16
$109.45
$117.27
$89.06
$50.07
$18.02
$110.91
$118.78
$88.86
$50.33
$17.77
$110.48
$118.38
$90.31
$50.36
$17.48
$111.22
$119.07
$88.85
$50.02
$17.85
$110.52
$118.38
$90.13
$50.59
$17.21
$110.95
$118.77
$90.18
$50.78
$17.12
$110.71
$118.67
$90.20
$50.98
$16.97
$110.43
$118.60
$92.34
$51.24
$16.61
$111.66
$119.93
$90.71
$50.90
$16.97
$110.94
$119.00
$93.54
$52.94
$16.12
$112.98
$121.66
$96.58
$54.79
$15.48
$114.27
$123.88
9.3%
4.7%
-31.1%
1.0%
3.3%
3.6%
5.0%
-20.6%
-0.1%
1.6%
5.7%
7.3%
-16.5%
3.0%
3.8%
5.4%
7.4%
-12.7%
3.1%
3.3%
4.3%
7.3%
-10.2%
2.7%
2.7%
3.3%
6.7%
-8.9%
2.3%
2.2%
4.7%
7.2%
-12.2%
2.8%
3.0%
3.4%
2.6%
-5.2%
1.4%
1.3%
1.3%
1.4%
-5.0%
-0.2%
-0.1%
1.5%
1.3%
-4.5%
0.0%
0.2%
2.3%
1.8%
-5.0%
0.4%
0.7%
2.1%
1.8%
-4.9%
0.4%
0.5%
3.1%
4.0%
-5.0%
1.8%
2.2%
3.3%
3.5%
-4.0%
1.1%
1.8%
2,091
11.3%
$40.08
2,214
5.9%
$43.43
8.4%
2,459
11.1%
$46.98
8.2%
666
9.9%
$51.42
12.1%
671
10.5%
$52.06
12.6%
667
7.4%
$51.86
8.7%
674
7.8%
$52.16
8.3%
2,678
8.9%
$51.87
10.4%
703
5.6%
$54.16
5.3%
718
7.0%
$55.39
6.4%
725
8.6%
$55.95
7.9%
735
9.1%
$56.54
8.4%
2,881
7.6%
$55.51
7.0%
3,134
8.8%
$60.17
8.4%
3,411
8.9%
$65.85
9.4%
Adj. OIBDA
Growth %
Margin %
2,864
6.9%
35.7%
2,948
2.9%
35.0%
3,204
8.7%
35.2%
821
7.0%
34.8%
865
8.8%
35.6%
862
9.7%
35.2%
930
8.6%
37.0%
3,478
8.6%
35.7%
904
10.1%
35.7%
919
6.2%
35.7%
920
6.7%
35.3%
1,004
8.0%
37.3%
3,747
7.7%
36.0%
4,059
8.3%
36.5%
4,402
8.5%
36.9%
Capex
Growth %
% of Revenue
1,816
1,854
2.1%
22.0%
2,221
19.8%
24.4%
351
-34.9%
14.9%
432
-24.2%
17.8%
509
-10.5%
20.8%
548
0.9%
21.8%
1,840
-17.2%
18.9%
552
57.2%
21.8%
450
4.2%
17.5%
469
-7.8%
18.0%
471
-14.0%
17.5%
1,942
5.6%
18.7%
1,922
-1.1%
17.3%
1,998
4.0%
16.8%
1,048
1,094
4.4%
983
-10.1%
470
106.1%
433
92.4%
353
62.7%
382
22.0%
1,638
66.6%
352
-25.1%
469
8.3%
451
27.7%
533
39.5%
1,804
10.2%
2,137
18.5%
2,404
12.5%
960
873
911
289
229
353
435
1,306
454
469
469
469
1,860
1,916
1,981
1,877
72
1,908
124
2,102
98
514
25
528
(63)
538
206
545
153
2,125
321
539
6
544
(271)
549
97
554
56
2,185
(111)
2,264
87
2,235
84
846
883
4.4%
695
-21.3%
388
148.0%
252
33.7%
446
363.4%
400
57.4%
1,485
113.6%
353
-8.9%
67
-73.5%
418
-6.3%
432
7.8%
1,269
-14.6%
1,597
25.8%
1,730
8.4%
222
0.0%
$2.22
316
42.4%
$3.10
39.2%
103
-67.3%
$0.95
-69.3%
200
942.8%
$1.79
894.1%
103
98.3%
$0.92
91.5%
216
-581.4%
$1.91
-562.1%
118
52.9%
$1.05
50.4%
637
517.1%
$5.69
497.8%
58
-70.9%
$0.52
-71.1%
(238)
-330.4%
($2.11)
-329.0%
113
-47.8%
$1.01
-46.8%
127
8.1%
$1.17
11.2%
60
-90.5%
$0.54
-90.5%
351
482.5%
$3.39
526.3%
442
26.1%
$4.59
35.3%
ARPU Growth%
Video
Data
Voice
Residential ARPU
Total Subscription ARPU per Customer
Programming Expense
Growth %
Per Sub per Month
Growth %
Operating Free Cash Flow

Growth %
Interest Expense
D&A
Net Change in Working Capital
Unlevered Free Cash Flow (Tax Normalized)

Growth %
Levered Free Cash Flow (Tax Normalized)
Growth %
Per WAVG Dil. Share
Growth %
22.7%
11 May 2016
Charter Communications, Inc.

Model Summary
Cable & Satellite
Charter
Figure 19: Stand-alone CHTR Model Summary (cont.)
Page 15
2017
134,852
5,046
3.8%
2018
150,347
6,610
4.6%
2019
164,218
8,011
5.1%
2020
174,490
9,047
5.3%
12/31/2021
2021
182,264
9,832
5.5%
WACC
Value from Growth
Return from Growth
10.1%
6,668
5.1%
10.1%
15,495
10.9%
10.1%
13,872
8.8%
10.1%
10,271
6.1%
10.1%
7,774
4.4%
Total Value Created
11,714
22,105
21,882
19,319
17,606
8.9%
15.5%
13.9%
11.4%
9.9%
134,852
759
3,873
58,600
80,885
335.2
$241
150,347
500
2,053
57,952
94,948
314.3
$302
25.2%
164,218
500
880
59,016
106,582
290.9
$366
21.3%
174,490
500
459
63,058
112,390
263.3
$427
16.5%
182,264
500
66,448
116,316
235.2
$495
15.8%
Consolidated Enterprise Value (Core)

Unlevered Free Cash Flow
Unlevered FCF Yield
2016
128,184
4,373
Total Economic Return

Consolidated Enterprise Value
Plus: Cash & Equivalents
Plus: Non-Consolidated Assets
Plus: Tax Assets
Less: Debt
Less: Minority Interest
Equity Value
Shares Outstanding (Diluted)
Value per Share
Equity Return
128,184
Current Price as of 05/10/16

Mean Geometric Return Over Period
$216.49
15.8%
5,437
260
11 May 2016
Pro Forma Charter

Economic Returns Model
Cable & Satellite
Charter
Page 16
Figure 20: PF CHTR Economic Returns
12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021

2016
2017
2018
2019
2020
2021
Share Price
Growth
Avg. Shares
Market Capitalization
Net Debt
Estimated NPV of Tax Assets
Adjusted Enterprise Value
216 $
346
74,884
57,109
5,034
126,959
Tax Normalized
Unlevered Free Cash Flow
Yield
EBITDA
EV/EBITDA
14,139
9.0x
Levered FCF (Fully Taxed)

Levered FCF Yield
Price/FCF
OpFCF
EV/OpFCF
7,073
17.9x
260 $
299 $
344 $
395 $
455
20.1%
15.0%
15.0%
15.0%
15.0%
335
314
291
263
235
87,163
93,963
100,013
104,109
106,956
57,841
57,452
58,516
62,558
65,948
3,873
2,053
880
459
141,130
149,363
157,649
166,208
172,903
5,046
3.6%
6,610
4.4%
8,011
5.1%
9,047
5.4%
9,832
5.7%
15,156
9.3x
16,846
8.9x
18,585
8.5x
20,461
8.1x
21,855
7.9x
2,804
3.4%
29.7x
4,370
4.8%
21.0x
5,728
5.8%
17.3x
6,608
6.4%
15.7x
7,260
6.8%
14.7x
7,867
17.9x
9,986
15.0x
11,955
13.2x
13,606
12.2x
14,831
11.7x
11 May 2016
Pro Forma Charter

Valuation
Cable & Satellite
Charter
Figure 21: PF CHTR Valuation Multiples
Page 17
STRZA
BUY
$27.48
$47
71.0%
$46.59
$20.33
CMCSA
HOLD
$62.07
$69
11.2%
$64.99
$50.01
PF CHTR
BUY
$217.22
$260
19.7%
$218.73
$156.13
TWC
BUY
$216.57
$240
10.8%
$217.15
$152.81
CHTR
BUY
$217.22
$260
19.7%
$218.73
$156.13
Cable / Sat
CVC
HOLD
$34.60
$34.9
0.9%
$34.70
$19.75
DISH
BUY
$47.46
$100
110.7%
$76.29
$38.85
7.4x
6.6x
6.5x
9.7x
8.9x
8.1x
8.9x
6.4x
5.8x
7.8x
7.0x
6.3x
9.2x
8.0x
6.9x
9.6x
8.7x
7.6x
9.6x
8.9x
8.1x
9.7x
9.7x
9.6x
NM
NM
NM
13.1x
11.4x
10.1x
6.5%
7.1%
7.7%
10.0%
9.3%
9.3%
4.2%
6.7%
7.3%
7.3%
11.2%
10.7%
5.2%
6.0%
7.0%
3.4%
4.1%
5.6%
2.9%
3.2%
4.6%
3.5%
4.4%
4.9%
2.6%
3.3%
3.1%
NM
NM
NM
4.9%
5.5%
5.9%
9.5x
8.4x
7.9x
10.1x
9.2x
8.4x
7.6x
6.9x
6.8x
10.2x
9.5x
8.6x
9.1x
6.5x
5.9x
13.1x
11.4x
9.9x
18.2x
15.2x
11.6x
19.8x
18.1x
13.2x
19.9x
16.9x
14.8x
18.9x
18.3x
18.2x
NM
NM
NM
14.8x
12.7x
11.3x
23.8x
24.3x
17.5x
18.9x
13.0x
11.7x
13.1x
11.5x
10.2x
6.6x
7.9x
8.0x
22.8x
12.3x
11.0x
11.1x
7.5x
7.9x
17.2x
14.7x
12.2x
23.0x
13.7x
29.0x
25.0x
17.9x
371.6x
56.5x
41.3x
97.0x
40.5x
43.5x
NM
NM
NM
19.0x
15.9x
14.4x
17.7x
16.5x
14.4x
18.3x
15.5x
13.8x
13.9x
12.4x
10.9x
8.3x
8.1x
8.0x
13.8x
12.6x
11.0x
12.1x
9.0x
8.2x
17.9x
16.1x
14.0x
29.8x
28.5x
22.6x
NM
NM
302.8x
55.6x
49.6x
47.6x
17.0x
17.6x
18.5x
27.8x
23.0x
19.1x
EV/EBITDA
2016
2017
2018
10.8x
10.0x
8.9x
9.1x
8.0x
7.5x
9.5x
8.7x
8.0x
Unlevered Free Cash Flow Yield

2016
2017
2018
4.1%
3.9%
5.3%
5.3%
7.0%
7.4%
EV / (EBITDA - Capex)
2016
2017
2018
15.4x
14.1x
11.6x
P / FCF
2016
2017
2018
P/E
2016
2017
2018
Rating
Current Price as of 05/11/16
DB Price Target
Implied Upside / Downside
52 Wk High
52 Wk Low
LBRDA
BUY
$59.77
$68
13.8%
$60.19
$42.03
SIRI
HOLD
$3.93
$4.25
8.1%
$4.20
$3.29
LMCA
BUY
$18.58
$44
N/A
11 May 2016
CBS
BUY
$55.81
$65
16.5%
$62.97
$38.51
FOXA
BUY
$29.41
$37
25.8%
$34.83
$22.66
Cable & Satellite
Media
TWX
VIAB
BUY
HOLD
$74.14
$40.47
$93
$36
25.4%
-11.0%
$91.34
$69.17
$55.53
$30.11
DIS
HOLD
$102.29
$113
10.5%
$122.08
$86.25
Charter
Page 18
Figure 22: Comp Table
11 May 2016
Cable & Satellite
Charter
Appendix 1
Important Disclosures
Additional information available upon request
Disclosure checklist
Company
Ticker
Recent price*
Disclosure
Charter
CHTR.OQ
217.22 (USD) 11 May 16
1,2,7,8
*Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from local exchanges via Reuters, Bloomberg and other vendors . Other
information is sourced from Deutsche Bank, subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other than the
primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at
http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr.
Important Disclosures Required by U.S. Regulators

Disclosures marked with an asterisk may also be required by at least one jurisdiction in addition to the United States.
See Important Disclosures Required by Non-US Regulators and Explanatory Notes.
1.
Within the past year, Deutsche Bank and/or its affiliate(s) has managed or co-managed a public or private offering
for this company, for which it received fees.
2.
Deutsche Bank and/or its affiliate(s) makes a market in securities issued by this company.
7.
Deutsche Bank and/or its affiliate(s) has received compensation from this company for the provision of investment
banking or financial advisory services within the past year.
8.
Deutsche Bank and/or its affiliate(s) expects to receive, or intends to seek, compensation for investment banking
services from this company in the next three months.
Important Disclosures Required by Non-U.S. Regulators

Please also refer to disclosures in the Important Disclosures Required by US Regulators and the Explanatory Notes.
1.
Within the past year, Deutsche Bank and/or its affiliate(s) has managed or co-managed a public or private offering
for this company, for which it received fees.
2.
Deutsche Bank and/or its affiliate(s) makes a market in securities issued by this company.
7.
Deutsche Bank and/or its affiliate(s) has received compensation from this company for the provision of investment
banking or financial advisory services within the past year.
For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this
research, please see the most recently published company report or visit our global disclosure look-up page on our
website at http://gm.db.com/ger/disclosure/Disclosure.eqsr?ricCode=CHTR.OQ
Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the
subject issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive
any compensation for providing a specific recommendation or view in this report. Bryan Kraft
Page 19
11 May 2016
Cable & Satellite
Charter
Historical recommendations and target price: Charter (CHTR.OQ)

(as of 5/11/2016)
250.00
Previous Recommendations
Security Price
200.00
150.00
Strong Buy
Buy
Market Perform
Underperform
Not Rated
Suspended Rating
Current Recommendations
Buy
Hold
Sell
Not Rated
Suspended Rating
100.00
50.00
*New Recommendation Structure

as of September 9,2002
0.00
May 13 Aug 13 Nov 13 Feb 14 May 14 Aug 14 Nov 14 Feb 15 May 15 Aug 15 Nov 15 Feb 16
Date
1.
07/29/2013:
Hold, Target Price Change USD111.00
4.
07/13/2015:
Upgrade to Buy, Target Price Change USD225.00
2.
11/06/2013:
Hold, Target Price Change USD120.00
5.
08/05/2015:
Buy, Target Price Change USD230.00
3.
05/07/2014:
No Recommendation, Target Price Change USD0.00
Equity rating key

Buy: Based on a current 12- month view of total
share-holder return (TSR = percentage change in
share price from current price to projected target price
plus pro-jected dividend yield ) , we recommend that
investors buy the stock.
Sell: Based on a current 12-month view of total shareholder return, we recommend that investors sell the
stock
Hold: We take a neutral view on the stock 12-months
out and, based on this time horizon, do not
recommend either a Buy or Sell.
Equity rating dispersion and banking relationships

500
450
400
350
300
250
200
150
100
50
0
50 %
47 %
52 %
43 %
3 % 19 %
Buy
Hold
Companies Covered
Sell
Cos. w/ Banking Relationship
North American Universe
Newly issued research recommendations and target

prices supersede previously published research.
Regulatory Disclosures
1.Important Additional Conflict Disclosures
Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the
"Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.
2.Short-Term Trade Ideas

Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are
consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the
SOLAR link at http://gm.db.com.
Page 20
11 May 2016
Cable & Satellite
Charter
Additional Information
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"Deutsche Bank"). Though the information herein is believed to be reliable and has been obtained from public sources
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movements.
Page 21
11 May 2016
Cable & Satellite
Charter
Derivative transactions involve numerous risks including, among others, market, counterparty default and illiquidity risk.
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Page 22
11 May 2016
Cable & Satellite
Charter
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DB CHTR

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This document is being provided for the exclusive use of ASHISH KOCHAR at THREADNEEDLE ASSET MANAGEMENT LTD

Cable & Satellite

Analyzing Top Investor Questions on

Price at 11 May 2016 (USD)

Clay Griffin, CFA

Source: Deutsche Bank

S&P 500 INDEX

Source: Deutsche Bank

The Key Questions/Points We Discuss In This Report Are:

Are 40% EBITDA Margins Realistic For Charter?

Figure 1: Synergy Estimates by Year (Incl. Incremental In-Sourcing Costs)

Source: Deutsche Bank

Deutsche Bank Securities Inc.

Figure 2: Incremental In-Sourcing Costs '16-21

Source: Deutsche Bank

Figure 3: PF CHTR and CMCSA Adj. Cable Margin Converge In 2020

PF CHTR EBITDA Margins

Adj CMCSA Cable EBITDA

Deutsche Bank Securities Inc.

Residential Data + Voice + Other

Source: Deutsche Bank

Figure 5: CHTRs In-Region Scale Improves Dramatically With The Merger

% of CHTR Video Subs from Markets where Cable Share is:

Source: Deutsche Bank

Deutsche Bank Securities Inc.

Source: Deutsche Bank

Will Capital Intensity Decline Materially?

(300) (300) (300)

Source: Deutsche Bank

Deutsche Bank Securities Inc.

Figure 8: Forecasted Capex/Sales

Source: Deutsche Bank

Figure 9: DB Capex vs. CHTR S-4 Projections

DB PF CHTR CapEx Estimate

CHTR's S-4 Projection

Source: Deutsche Bank

Will The Repricing and Repackaging of TWCs Services

Deutsche Bank Securities Inc.

Source: Deutsche Bank

Figure 11: Our Residential ARPU Growth Assumptions Are Reasonable

Source: Deutsche Bank

Deutsche Bank Securities Inc.

Will New Streamed Pay TV Bundles Take Pay TV Share?

Cable Video Subscriber Economics

Source: Deutsche Bank

Deutsche Bank Securities Inc.

Advertising & Other

Source: Deutsche Bank

Deutsche Bank Securities Inc.

Deutsche Bank Securities Inc.

Source: Deutsche Bank

Cable & Satellite

Figure 14: PF CHTR Estimates vs. Prior

12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021

Pro Forma Charter

Cable & Satellite

Deutsche Bank Securities Inc.

Figure 15: PF CHTR Model Summary

12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021

y/y OpFCF Growth

Deutsche Bank Securities Inc.

Source: Deutsche Bank

Pro Forma Charter