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TABLE OF CONTENTS
Item 17. Undertakings

Table of Contents

As filed with the Securities and Exchange Commission on July 24, 2014

REGISTRATION NO. 333-          


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



LIBERTY BROADBAND CORPORATION
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  6719
(Primary Standard Industrial
Classification code number)
  47-1211994
(I.R.S. Employer
Identification No.)

12300 Liberty Boulevard, Englewood, Colorado 80112, (720) 875-5700
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)


Richard N. Baer
Liberty Broadband Corporation
12300 Liberty Boulevard
Englewood, Colorado 80112
(720) 875-5700

(Name, address, including zip code, and telephone
number, including area code, of agent for service)

 

Copy to:
Renee L. Wilm
Baker Botts L.L.P.
30 Rockefeller Plaza
New York, New York 10112
(212) 408-2503

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective and all other conditions to the proposed transactions described herein have been satisfied or waived, as applicable.

            If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:    o

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.    o

            Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a smaller reporting company)
  Smaller reporting company o

CALCULATION OF REGISTRATION FEE

               
 
Title of Each Class of Securities
to be Registered

  Amount to be
Registered(1)

  Proposed Maximum
Offering Price Per
Unit

  Proposed Maximum
Aggregate Offering
Price(2)

  Amount of
Registration Fee(3)

 

Series A common stock, par value $.01 per share

  26,982,617   (2)   $4,808,766,939   $619,370
 

Series B common stock, par value $.01 per share

  2,468,518   (2)        
 

Series C common stock, par value $.01 per share

  76,052,297   (2)        
 

Subscription Rights to Purchase Shares of Series C Common Stock

      (4)   (4)

 

(1)
The number of shares of the Registrant's proposed Series A common stock, par value $.01 per share ("LBRDA"), being registered has been determined based upon the number of shares of Liberty Media Corporation's ("Liberty") existing Series A common stock, par value $.01 per share ("LMCA") (which is comprised of 104,459,439 LMCA shares outstanding as of June 30, 2014 and 3,471,030 LMCA shares issuable upon exercise or exchange of stock options and stock appreciation rights outstanding as of June 30, 2014) multiplied by 0.25, which is the number of shares of LBRDA that the Registrant intends to distribute to holders of LMCA for each share of LMCA held by them as of the record date. The actual number of LMCA shares offered may be less than the maximum number stated in the table. The number of shares of the Registrant's proposed Series B common stock, par value $.01 per share ("LBRDB"), being registered has been determined based upon the number of shares of Liberty's existing Series B common stock, par value $.01 per share ("LMCB") (which is comprised of 9,874,072 LMCB shares outstanding as of June 30, 2014) multiplied by 0.25, which is the number of shares of LBRDB that the Registrant intends to distribute to holders of LMCB for each share of LMCA held by them as of the record date. The actual number of LBRDB shares offered may be less than the maximum number stated in the table. The number of shares of the Registrant's proposed Series C common stock, par value $.01 per share ("LBRDK"), being registered has been determined based upon (i) the number of shares of the Registrant's existing Series C Liberty common stock, par value $.01 per share ("LMCK") (which is comprised of 228,667,022 LMCK shares estimated to have been outstanding as of June 30, 2014 and 6,942,060 LMCK shares issuable upon exercise or exchange of stock options and stock appreciation rights outstanding as of June 30, 2014, in each case, assuming that Liberty's dividend of Series C shares, the payment date for which was July 23, 2014, had been distributed as of June 30, 2014) multiplied by 0.25, which is the number of shares of LBRDK that the Registrant intends to distribute to holders of LMCK for each share of LMCK held by them as of the record date and (ii) the maximum number of shares of LBRDK estimated to be offered by the Registrant pursuant to the rights offering contemplated hereby, which number has been determined based on the number of shares of LBRDA, LBRDB and LBRDK proposed to be distributed on the record date multiplied by 0.20, which is the number of subscription rights that the Registrant intends to distribute for each share of the Registrant's common stock distributable on the record date. The actual number of LBRDK shares offered in the rights offering may be less than the maximum number stated in the table.

(2)
Calculated in accordance with Rule 457(a) and 457(c) under the Securities Act, using the average of the high and low trading prices of LMCA and LMCB on the Nasdaq Global Select Market on July 17, 2014 (which were $140.42 and $140.80, respectively), as adjusted to reflect the pending dividend of LMCK shares to the holders of LMCA and LMCB. LMCK shares were distributed on July 23, 2014 on the basis of two LMCK shares for each LMCA and each LMCB held as of the record date for the dividend, which was July 7, 2014. Accordingly, the Registrant has estimated the post-dividend closing prices of LMCA and LMCB by dividing the actual trading prices thereof by 3. The Registrant has also assumed, for purposes of the filing fee calculation, that the LMCK shares will trade at a price comparable to the LMCA price. The Registrant believes these estimated trading prices approximate the estimated trading prices for the LBRDA, LBRDB and LBDRK immediately following the transaction being registered hereby.

(3)
Calculated on the basis of $128.80 per million of the proposed maximum aggregate offering price.

(4)
Pursuant to Rule 457(g), no separate registration fee is payable with respect to the rights being offered hereby since the rights are being registered in the same registration statement as the securities to be offered pursuant thereto.

            The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   


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Information in this prospectus is not complete and may be changed. We may not sell the securities offered by this prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer or solicitation is not permitted.

Subject to completion, dated July 24, 2014

PROSPECTUS

LIBERTY BROADBAND CORPORATION

12300 Liberty Boulevard
Englewood, Colorado 80112

Series A Common Stock

Series B Common Stock

Series C Common Stock

Subscription Rights to Purchase Shares of Series C Common Stock

           Liberty Broadband Corporation (Broadband, which is also referred to in this prospectus as we, our, or the company) is currently a subsidiary of Liberty Media Corporation (Liberty). Broadband's businesses, assets and liabilities will initially consist of Liberty's 26% ownership interest in, and warrants to purchase additional shares of, Charter Communications, Inc. (Charter), Liberty's 100% ownership interest in TruePosition, Inc. (TruePosition), a minority equity investment in Time Warner Cable Inc. (TWC), certain deferred tax liabilities, liabilities related to a TWC call option and $300 million in indebtedness. Liberty has determined to spin off our company (the Spin-Off) by distributing (the distribution) to the holders of its common stock, as a dividend, all of our common stock and subscription rights to purchase shares of our Series C common stock (each as described in more detail below). We are sending this prospectus to you in connection with the distribution. Liberty will retain the remainder of its businesses, assets and liabilities not held by us at the time of the Spin-Off, including its subsidiaries Sirius XM Holdings, Inc. (Sirius XM) and Atlanta National League Baseball Club, Inc. (ANLBC) and its interest in Live Nation Entertainment, Inc. (Live Nation).

           If all conditions to the Spin-Off are satisfied or waived by the board of directors of Liberty in its sole discretion, at 5:00 p.m., New York City time, on a date to be determined by the board of directors of Liberty (such date and time, the distribution date):

           For information regarding the security ownership of certain beneficial owners and management, including John C. Malone, who is expected to beneficially own shares of our common stock representing approximately 47.3% of Broadband's voting power, following the Spin-Off, see "Security Ownership of Certain Beneficial Owners and Management."

           Each whole Series C Right will entitle the holder thereof to acquire one share of our Series C common stock at a subscription price to be determined following the distribution, as described in more detail below. This offering (the rights offering) will commence once the subscription price for the Series C Rights has been determined and will remain open for 20 trading days. The actual number of shares to be offered in the rights offering will depend on the number of outstanding shares of Liberty common stock on the record date for the distribution. We refer to the distribution and the rights offering collectively as the Transaction.

           Cash will be issued in lieu of fractional shares of the Broadband common stock, and fractional Series C Rights will be rounded up to the nearest whole right. Based on the numbers of shares of LMCA, LMCB and LMCK common stock outstanding as of [    •    ], 2014, we expect to distribute approximately [    •    ] million shares of our Series A common stock, [    •    ] million shares of our Series B common stock, and [    •    ] million shares of our Series C common stock to holders of existing shares of LMCA, LMCB and LMCK, respectively, and approximately [    •    ] million Series C Rights in the distribution.

           In the rights offering, each Series C Right will entitle the holder to a basic subscription privilege and an oversubscription privilege. Under the basic subscription privilege, each whole Series C Right entitles its holder to purchase one share of our Series C common stock at a subscription price equal to a 20% discount to the 20 trading day volume weighted average trading price of our Series C common stock beginning on the first day on which our Series C common stock begins trading "regular way" on the Nasdaq Global Select Market following the distribution (the subscription price). Under the oversubscription privilege, each rightsholder which exercises its basic subscription privilege, in full, will have the right to subscribe, at the subscription price, for up to that number of shares of our Series C common stock which are not purchased by rightsholders under their basic subscription privilege. If a rightsholder delivers an oversubscription request for shares of our Series C common stock and we receive oversubscription requests for more shares of our Series C common stock than we have available for oversubscription, the rightsholder will receive its pro rata portion of the available shares of our Series C common stock based on the number of shares it purchased under its basic subscription privilege or, if less, the number of shares for which it oversubscribed. All exercises of Series C Rights are irrevocable even if our board determines, in its sole discretion, to extend the expiration time. The rights offering will expire at 5:00 p.m., New York City time, on the 20th trading day following the commencement of the rights offering, unless we extend it, with the length of such extension to be determined by our board of directors in its sole discretion. However, we may not extend the expiration time of the rights offering for more than 25 trading days past the original 20 trading day subscription period.

           No vote of Liberty's or Broadband's stockholders is required or is being sought to authorize or effectuate the Transaction. No action is required of you to receive your shares of our common stock or the Series C Rights.

           There is no current trading market for our common stock. We expect to list our Series A common stock and Series C common stock on the Nasdaq Global Select Market under the symbols "LBRDA" and "LBRDK," respectively. Although no assurance can be given, we currently expect that our Series B common stock will trade on the OTC Bulletin Board under the symbol "LBRDB." We expect to list the Series C Rights on the Nasdaq Global Select Market under the symbol "[LBRKR]"; however, the Series C Rights will not be tradeable until after the subscription price is determined and announced.

           In reviewing this prospectus, you should carefully consider the matters described under the caption "Risk Factors" beginning on page 14.

           Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or has passed upon the adequacy or accuracy of this prospectus as truthful or complete. Any representation to the contrary is a criminal offense.

           WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.

The date of this prospectus is [    •    ], 2014.


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TABLE OF CONTENTS

SUMMARY

    1  

Our Company

   
1
 

Recent Developments

    2  

The Spin-Off

    3  

The Rights Offering

    9  

RISK FACTORS

   
14
 

Factors Relating to Our Corporate History and Structure

   
14
 

Factors Relating to Charter

    17  

Factors Relating to the Comcast Transactions

    31  

Factors Relating to TruePosition

    37  

Factors Relating to the Spin-Off

    41  

Factors Relating to the Rights Offering

    45  

Factors Relating to our Common Stock and the Securities Market

    46  

CAUTIONARY STATEMENTS CONCERNING FORWARD LOOKING STATEMENTS

   
49
 

THE SPIN-OFF

   
51
 

Background for the Spin-Off

   
51
 

Reasons for the Spin-Off

    51  

Interests of Certain Persons

    53  

Conditions to the Spin-Off

    53  

Manner of Effecting the Spin-Off

    54  

Effect of the Spin-Off on Outstanding Liberty Awards

    55  

Conduct of the Business of Broadband if the Spin-Off is Not Completed

    56  

Amount and Source of Funds and Financing of the Transaction; Expenses

    56  

Accounting Treatment

    57  

No Appraisal Rights

    57  

Results of the Spin-Off

    57  

Listing and Trading of our Common Stock

    57  

Stock Transfer Agent and Registrar

    57  

Trading Prior to the Record Date

    57  

Reasons for Furnishing this Prospectus

    58  

THE RIGHTS OFFERING

   
59
 

General

   
59
 

Reasons for the Rights Offering

    59  

Determination of Subscription Prices

    59  

No Fractional Series C Rights

    59  

Commencement of the Rights Offering

    60  

Expiration Time

    60  

Subscription Privileges

    60  

Exercising Your Series C Rights

    62  

Delivery of Subscription Materials and Payment

    63  

Revocation of Exercised Series C Rights

    65  

Subscription Agent

    65  

Information Agent

    65  

Method of Transferring and Selling Series C Rights

    65  

Treatment of Stock Options and Other Awards

    67  

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No Recommendations to Rightsholders

    67  

Termination

    68  

Foreign Stockholders

    68  

Regulatory Limitation

    68  

Issuance of Our Series C Common Stock

    68  

Shares of Our Series C Common Stock Outstanding Following the Rights Offering

    69  

Compliance with State Regulations Pertaining to the Rights Offering

    69  

USE OF PROCEEDS FROM THE RIGHTS OFFERING

   
70
 

PLAN OF DISTRIBUTION FOR THE RIGHTS OFFERING

   
70
 

MATERIAL U.S. INCOME TAX CONSEQUENCES OF THE TRANSACTION

   
71
 

U.S. Federal Income Tax Treatment of the Spin-Off

   
71
 

Ownership of Series C Rights

    73  

Information Reporting and Backup Withholding

    74  

Net Investment Income

    74  

CAPITALIZATION

   
75
 

SELECTED FINANCIAL DATA

   
76
 

DESCRIPTION OF OUR BUSINESS

   
78
 

Overview

   
78
 

Charter Communications, Inc. 

    78  

TruePosition, Inc. 

    87  

Geographic Areas

    88  

Regulatory Matters

    88  

Competition

    93  

Properties

    97  

Employees

    97  

Legal Proceedings

    98  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
100
 

DESCRIPTION OF OUR INDEBTEDNESS

   
113
 

MANAGEMENT

   
114
 

Directors

   
114
 

Executive Officers

    115  

Directors and Executive Officers

    115  

Director Independence

    116  

Board Composition

    116  

Committees of the Board

    116  

Compensation Committee Interlocks and Insider Participation

    116  

EXECUTIVE COMPENSATION

   
117
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   
120
 

Security Ownership of Certain Beneficial Owners

   
120
 

Security Ownership of Management

    122  

Change of Control

    124  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

   
125
 

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Relationships Between Broadband and Liberty

    126  

DESCRIPTION OF OUR CAPITAL STOCK

   
132
 

Authorized Capital Stock

   
132
 

Our Common Stock

    132  

Dividend Policy

    134  

Other Provisions of our Certificate of Incorporation and Bylaws

    135  

Section 203 of the Delaware General Corporation Law

    137  

Transfer Agent and Registrar

    138  

LEGAL MATTERS

   
139
 

EXPERTS

   
140
 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   
141
 

WHERE YOU CAN FIND MORE INFORMATION

   
142
 

FINANCIAL STATEMENTS

   
F-1
 

        This prospectus describes the businesses and assets of our company as though they were our businesses and assets for all historical periods described. However, our company is a newly formed entity that will not have conducted any operations prior to the Spin-Off and instead will have had such businesses and assets transferred to it in connection with the Spin-Off. References in this prospectus to the historical assets, liabilities, businesses or activities of our businesses or the businesses in which we have interests are intended to refer to the historical assets, liabilities, businesses or activities as they were conducted or held by Liberty prior to the Spin-Off. Following the Spin-Off, we will be an independent publicly traded company, and Liberty will have no continuing stock ownership in our company. The historical combined financial information of our company as part of Liberty contained in this prospectus is not necessarily indicative of our future financial position, future results of operations or future cash flows, nor does it reflect what the financial position, results of operations or cash flows of our company would have been had we been operated as a stand-alone company during the periods presented.

        You should not assume that the information contained in this prospectus is accurate as of any date other than the date set forth on the cover page of this prospectus. Changes to the information contained herein may occur after that date and we do not undertake any obligation to update the information unless required to do so by law.

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SUMMARY

        The following is a summary of material information discussed in this prospectus. It is included for convenience only and should not be considered complete. You should carefully review this entire prospectus, including the risk factors, to better understand the Transaction and our business and financial position.


Our Company

        Broadband is currently a wholly owned subsidiary of Liberty. Immediately following the Spin-Off, our principal businesses, assets and liabilities will consist of Liberty's 26% ownership interest in, and warrants to purchase additional shares of, Charter, Liberty's 100% ownership interest in TruePosition, a minority equity investment in TWC, certain deferred tax liabilities, liabilities related to a TWC call option and $300 million in indebtedness (collectively referred to as the Broadband Assets and Liabilities). Following the Spin-Off, we will be an independent publicly traded company, and Liberty will not retain any ownership interest in us. In connection with the Spin-Off, we expect to enter into certain agreements, including the reorganization agreement and the tax sharing agreement, with Liberty, pursuant to which, among other things, we and Liberty will indemnify each other against certain liabilities that may arise from our respective businesses. See "Certain Relationships and Related Party Transactions—Relationships Between Broadband and Liberty."

        Charter is one of the largest providers of cable services in the United States, offering a variety of entertainment, information and communications solutions to residential and commercial customers. Its infrastructure consists of a hybrid of fiber and coaxial cable plant with approximately 12.8 million estimated passings, with 97% at 550 megahertz (MHz) or greater and 98% of plant miles two-way active. A national Internet Protocol (IP) infrastructure interconnects Charter markets. Through Charter Business®, Charter provides scalable, tailored broadband communications solutions to business and carrier organizations, such as video entertainment services, Internet access, business telephone services, data networking and fiber connectivity to cellular towers and office buildings. As of December 31, 2013, Charter served approximately 567,000 commercial primary service units, primarily small- and medium-sized commercial customers. Charter's advertising sales division, Charter Media®, provides local, regional and national businesses with the opportunity to advertise in individual markets on cable television networks.

        TruePosition was incorporated on November 24, 1992. TruePosition develops and markets technology for locating wireless phones and other wireless devices on a cellular network, enabling wireless carriers and government agencies to provide public safety E-9-1-1 services domestically and services in support of national security and law enforcement worldwide. "E-9-1-1" or "Enhanced 9-1-1" refers to a Federal Communications Commission (FCC) mandate requiring wireless carriers to implement wireless location capability. TruePosition's location system is a passive network overlay system designed to enable mobile wireless service providers to determine the location of all network wireless devices, including cellular and Personal Communications Service (PCS) telephones. Using its patented Uplink Time Difference of Arrival (U-TDOA) and other technologies, TruePosition's location system calculates the latitude and longitude of a designated wireless telephone or transmitter and forwards the information in real time to application software. TruePosition's current offerings cover major wireless air interfaces including Code Division Multiple Access (CDMA), Global System for Mobile Communications (GSM) and Universal Mobile Telecommunications System (UMTS). TruePosition's Long Term Evolution (LTE) offering is under development.

 

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        On February 14, 2014, TruePosition completed the acquisition of Skyhook Wireless, Inc. (Skyhook). Skyhook is a provider of hybrid wireless positioning technology and contextual location intelligence worldwide. Skyhook is a global location network with more than 1 billion observed access points and over 13 million venues. The large amount of data collected by Skyhook powers all of its products, providing a location for any mobile app or device and delivering it with context. Skyhook utilizes demographics to create a way for companies and agencies to gather increased and contextual data on consumers' mobile behavior, improving mobile customer experience, and allowing advertisers to reach their audiences in new and relevant ways.

        When we refer to "our business" in this prospectus, we are referring to the businesses of our equity affiliate Charter and our wholly-owned subsidiary TruePosition and their respective subsidiaries following the Spin-Off.

        Our principal executive offices are located at 12300 Liberty Blvd., Englewood, Colorado 80112. Our main telephone number is (720) 875-5700.


Recent Developments

        On April 25, 2014, Charter and Comcast Corporation (Comcast) entered into a binding agreement (the Comcast Agreement), which contemplates three transactions: (1) a contribution and spin-off transaction, (2) the exchange of certain cable systems and (3) a purchase by Charter of certain cable systems (collectively, the Comcast Transactions). Comcast has disclosed that the Comcast Transactions are expected to be executed substantially contemporaneously with each other and will be consummated as promptly as practicable following the merger of a subsidiary of Comcast with TWC pursuant to the Agreement and Plan of Merger dated as of February 12, 2014, by and among Comcast, TWC and Tango Acquisition Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Comcast, as previously announced by Comcast and TWC.

        Also, as disclosed by Comcast and Charter, in connection with the Comcast Transactions, a wholly owned subsidiary of Charter (New Charter) will convert into a corporation and thereafter, a newly formed, wholly owned subsidiary of New Charter will merge with and into Charter with the effect that all shares of Charter will be converted into shares of New Charter and New Charter will survive as the publicly-traded parent company of Charter. Another newly formed, wholly owned subsidiary of New Charter will merge with and into a former wholly owned subsidiary of Comcast (SpinCo) which will hold and operate certain systems currently owned by Comcast and which will be spun-off (the Comcast Spin-Off) as described in clause (1) of the definition of Comcast Transactions above, with SpinCo surviving (the Merger). In the Merger, (i) New Charter will acquire certain SpinCo shares, and (ii) in exchange for such SpinCo shares, the SpinCo shareholders will receive New Charter shares (the Stock Issuance).

        On April 25, 2014, concurrently with the execution of the Comcast Agreement, Comcast entered into a voting agreement (the Voting Agreement) with Liberty. Pursuant to the Voting Agreement, Liberty agreed, among other things, to vote all of its shares of Charter common stock in favor of the Stock Issuance and any other matters for which the approval of Charter's stockholders is reasonably necessary to consummate the transactions contemplated by the Comcast Agreement, and against any actions that would reasonably be expected to prevent or delay the consummation of the transactions contemplated by the Comcast Agreement.

        Liberty agreed, subject to certain exceptions, not to transfer its shares of Charter common stock during the term of the Voting Agreement. Liberty further agreed that, subject to certain exceptions, neither it nor certain related entities will knowingly acquire ownership of any SpinCo stock until the second anniversary of the Merger.

 

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        In connection with the execution of the Voting Agreement, Liberty received a letter from Charter (the Charter Side Letter) clarifying certain issues under the stockholders agreement entered into between Liberty and Charter in March 2013 (which is being assigned to us in the Spin-Off (the Charter Stockholders Agreement)), including, among other things, that following the merger of Charter with a subsidiary of New Charter, New Charter will be substituted for Charter for all purposes under the Charter Stockholders Agreement, and that the term Company Common Stock, as defined and used in the Charter Stockholders Agreement, will thereafter refer to the common stock of New Charter and acknowledging that Liberty's execution, delivery and performance of its obligations under the Voting Agreement will not result in a breach, violation or default in respect of its obligations under the Charter Stockholders Agreement.

        If the Comcast Transactions are consummated, our equity interests in Charter would be converted into equity interests in New Charter. In addition, the completion of the Comcast Transactions will result in the combined Comcast-TWC entity divesting approximately 3.9 million customers and Charter acquiring 1.4 million existing TWC customers, increasing Charter's current video customer base from 4.4 million to approximately 5.7 million, and making Charter the second largest cable operator in the United States.


The Spin-Off

        The following is a brief summary of the terms of the Spin-Off. Please see "The Spin-Off" for a more detailed description of the matters described below.

Q:
What is the Spin-Off?

A:
In the Spin-Off, Liberty will distribute to the holders of its Series A common stock, Series B common stock and Series C common stock, as a dividend, all the shares of our common stock and all of our subscription rights to purchase shares of our Series C common stock described below under the heading "—The Rights Offering." Following the Spin-Off, we will be a separate company from Liberty, and Liberty will not have any ownership interest in us. You are not required to pay any consideration or give up any portion of your Series A Liberty common stock, Series B Liberty common stock or Series C Liberty common stock to receive shares of our common stock or Series C Rights in the distribution.

Q:
Can Liberty decide not to complete the Spin-Off?

A:
Yes. Liberty's board of directors has reserved the right, in its sole discretion, to amend, modify or abandon the Spin-Off and related transactions at any time prior to the distribution date. In addition, the Spin-Off is subject to the satisfaction of certain conditions, some of which may be waived by the Liberty board of directors in its sole discretion. See "The Spin-Off—Conditions to the Spin-Off." In the event the Liberty board of directors amends, modifies or abandons the Spin-Off, Liberty intends to promptly issue a press release and file a Current Report on Form 8-K to report such event.

Q:
What will I receive in the Spin-Off?

A:
Holders of LMCA will receive a dividend of one-fourth of a share of our Series A common stock for each whole share of LMCA held by them on the record date and one Series C Right for every five shares of our Series A common stock received in the distribution, holders of LMCB will receive a dividend of one-fourth of a share of our Series B common stock for each whole share of LMCB held by them on the record date and one Series C Right for every five shares our Series B common stock received in the distribution and holders of LMCK will receive a dividend of one-fourth of a share of our Series C common stock for each whole share of LMCK held by them

 

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Q:
Is the completion of the Spin-Off subject to any conditions?

A:
The completion of the Spin-Off and related transactions are subject to the satisfaction (as determined by the Liberty board of directors in its sole discretion) of the following conditions, certain of which may be waived by the Liberty board of directors in its sole discretion:

Liberty's receipt of the opinion of Skadden, Arps, Slate, Meagher & Flom LLP (Skadden Arps) to the effect that the Spin-Off will qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Internal Revenue Code of 1986, as amended (the Code) and that for U.S. federal income tax purposes, (i) no gain or loss will be recognized by Liberty upon the distribution of our common stock and Series C Rights in the Spin-Off, and (ii) no gain or loss will be recognized by, and no amount will be included in the income of, holders of Liberty common stock upon the receipt of shares of our common stock and Series C Rights in the Spin-Off (except with respect to the receipt of cash in lieu of fractional shares of our common stock);

the effectiveness under the Securities Act of 1933, as amended (the Securities Act), of the Registration Statement on Form S-1, of which this prospectus forms a part, and the effectiveness of the registration of the Broadband common stock under Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act);

the approval of the Nasdaq Stock Market LLC (Nasdaq) for the listing of our Series A common stock and Series C common stock;

the entry into certain credit arrangements by our company or one or more of our subsidiaries which would provide for borrowings up to an aggregate principal amount of $320 million; and

any material regulatory or contractual consents or approvals that the Liberty board determines to obtain shall have been obtained.
Q:
What is being distributed in the Spin-Off?

A:
Approximately [    •    ] shares of our Series A common stock, [    •    ] shares of our Series B common stock, [    •    ] shares of our Series C common stock and [    •    ] Series C Rights will be distributed in the Spin-Off, based on the number of shares of LMCA, LMCB and LMCK outstanding on [    •    ], 2014. See "—The Rights Offering" for information regarding the Series C Rights to be distributed in the distribution. The shares of our common stock to be distributed by Liberty will constitute all the issued and outstanding shares of our common stock immediately after the distribution. The exact number of shares to be distributed in the Spin-Off will not be known until the record date.

 

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Q:
When will the Spin-Off be effective?

A:
Liberty intends to effect the Spin-Off at 5:00 p.m., New York City time, on the distribution date. At such time, holders of Liberty common stock as of the record date will receive their shares of Broadband common stock and Series C Rights. Following the record date and prior to the distribution date, Liberty will cause 100% of our common stock and all Series C Rights to be placed in a reserve account with Computershare Trust Company, N.A. (Computershare), as distribution agent for the Spin-Off, with instructions to distribute such shares and Series C Rights on the distribution date.

Q:
When will Liberty announce the record and distribution dates for the Spin-Off?

A:
If all conditions to the Spin-Off are satisfied (or, as determined by the Liberty board in its sole discretion, to be waived) Liberty will announce the record date and distribution date for the Spin-Off by press release. See "The Spin-Off—Conditions to the Spin-Off." Each holder of record of shares of Liberty common stock as of 5:00 p.m., New York City time, on the record date will be entitled to receive shares of our common stock and Series C Rights on the distribution date.

Q:
What transactions are occurring in connection with the Spin-Off other than those involved in the internal restructuring?

A:
In connection with the Spin-Off, Broadband intends to enter into a $320 million credit arrangement (the Credit Arrangement) pursuant to which Broadband will borrow $300 million prior to the completion of the Spin-Off and will have $20 million available to be drawn following the Spin-Off. See "Description of Certain Indebtedness—Credit Arrangement." Pursuant to the internal restructuring, and prior to the Spin-Off, Broadband will distribute $300 million in cash to Liberty. Liberty intends to use all of the distributed proceeds received from Broadband to repay indebtedness or to repurchase shares of Liberty common stock under its share repurchase program, pursuant to a special authorization by Liberty's board of directors, within twelve months following the completion of the Spin-Off.
Q:
What will the relationship be between Broadband and Liberty after the Spin-Off?

A:
Following the Spin-Off, our company and Liberty will operate independently, and neither will have any ownership interest in the other. In connection with the Spin-Off, however, we and Liberty (or certain of its subsidiaries) are entering into certain agreements in order to govern the ongoing relationships between our company and Liberty after the Spin-Off and to provide for an orderly transition.

 

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Q:
What are the reasons for the Spin-Off?

A:
The Liberty board of directors believes that the Liberty common stock is trading at a meaningful discount to the underlying value of Liberty's businesses and assets and has considered various restructuring alternatives, including the proposed tracking stock structure announced earlier this year, with a view to reducing this discount. By separating our assets and businesses from Liberty's other businesses, Liberty believes that the Spin-Off, as compared to the earlier proposed tracking stock structure, will better achieve Liberty's business objectives in reducing the complexity discount associated with its common stock, and Liberty believes that the Spin-Off will result in a higher aggregate trading value for our common stock and the Liberty common stock, as compared to the trading price of the Liberty common stock without the Spin-Off. Following the Spin-Off, Liberty expects that there will be greater transparency for investors with respect to our dominant business, Charter, and with respect to Liberty's dominant business, Sirius XM, which should result in greater focus and attention by the investment community on each of these businesses. The Spin-Off is also expected to enhance our ability and Liberty's ability to issue equity for strategic acquisitions and other business combinations by creating a more efficiently priced equity security in our common stock and Liberty's common stock, respectively, permit our company to raise capital, including through the rights offering, on more attractive terms than would be available in the absence of the Spin-Off, and enable us and Liberty to more effectively tailor equity incentives for our management and employees with less dilution to public stockholders.
Q:
What do I have to do to participate in the distribution?

A:
Nothing. Holders of Liberty common stock on the record date for the Spin-Off are not required to pay any cash or deliver any other consideration, or give up any shares of Liberty common stock, to receive the shares of our common stock and Series C Rights distributable to them in the distribution.

 

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Q:
Will I receive physical certificates representing shares of Broadband common stock following the distribution?

A:
No. In the distribution, no physical certificates representing shares of Broadband common stock will be delivered to stockholders. Instead, Broadband, with the assistance of Computershare, the distribution agent, will electronically distribute shares of Broadband common stock in book-entry form to you or your bank or brokerage firm on your behalf. If you are a record holder of Liberty common stock on the record date, Computershare will mail you a book-entry account statement that reflects your shares of Broadband common stock. If you are a beneficial owner of Liberty common stock (but not a record holder) on the record date, your bank or brokerage firm will credit your account with the shares of Broadband common stock that you are entitled to receive.

Q:
Will the number of shares of Liberty common stock I own change as a result of the Spin-Off?

A:
No. The number of shares of any series of Liberty common stock that you own will not change as a result of the Spin-Off.

Q:
What are the material U.S. federal income tax consequences of the Spin-Off?

A:
The Spin-Off is conditioned upon the receipt by Liberty of the opinion of Skadden Arps to the effect that the Spin-Off will qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Code and that for U.S. federal income tax purposes, (i) no gain or loss will be recognized by Liberty upon the distribution of our common stock and Series C Rights in the Spin-Off, and (ii) no gain or loss will be recognized by, and no amount will be included in the income of, holders of Liberty common stock upon the receipt of shares of our common stock and Series C Rights in the Spin-Off (except with respect to the receipt of cash in lieu of fractional shares of our common stock). The receipt of the opinion, as well as certain other conditions to the Spin-Off, may not be waived by the Liberty board of directors. We expect to receive the opinion of Skadden Arps on or prior to the distribution date.
Q:
Does Broadband intend to pay cash dividends?

A:
No. We currently intend to retain future earnings, if any, to finance the expansion of our businesses. As a result, we do not expect to pay any cash dividends in the foreseeable future. All decisions regarding the payment of dividends by our company will be made by our board of directors, from time to time, in accordance with applicable law.

Q:
Where will Broadband common stock trade?

A:
Currently, there is no public market for our common stock. Subject to the consummation of the Spin-Off, we expect to list our Series A common stock and our Series C common stock on the Nasdaq Global Select Market under the symbols "LBRDA" and "LBRDK," respectively. Although no assurance can be given, we currently expect that our Series B common stock will trade on the OTC Bulletin Board under the symbol "LBRDB."

 

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Q:
What costs and risks were considered by the board of directors of Liberty in determining whether to effect the Spin-Off?

A:
Liberty's board considered a number of costs and risks associated with the Spin-Off, including:

After the Spin-Off, the Liberty common stock and Broadband common stock will have smaller market capitalizations than the current market capitalization of the Liberty common stock, and their stock prices may be more volatile than the Liberty common stock price was prior to the Spin-Off. The board also considered the possibility that the combined market values of the separate stocks may be lower than the market value of the Liberty common stock prior to the Spin-Off.

The risk of being unable to achieve the benefits expected from the Spin-Off.

The leverage to be incurred by Broadband as a result of the Credit Arrangement.

The loss of synergies from operating as one company, particularly in administrative and support functions.

The potential disruption of the businesses of Liberty, as its management and employees devote time and resources to completing the Spin-Off.

The substantial costs of effecting the Spin-Off and continued compliance with legal and other requirements applicable to two separate public reporting companies.

The potential tax liabilities that could arise from the Spin-Off, including the possibility that the Internal Revenue Service (IRS) could successfully assert that the Spin-Off is taxable to holders of Liberty common stock and/or to Liberty. In the event such tax liabilities were to arise, Broadband's potential indemnity obligation to Liberty is not subject to a cap.

Liberty's board concluded that the potential benefits of the Spin-Off outweighed its potential costs. Please see "The Spin-Off—Reasons for the Spin-Off" for more information regarding the costs and risks associated with the Spin-Off.

Q:
What will happen to the listing of Liberty common stock?

A:
The Series A, Series B and Series C Liberty common stock will continue to trade on the Nasdaq Global Select Market following the Spin-Off.

Q:
Will I have appraisal rights in connection with the Spin-Off?

A:
No. Holders of Liberty common stock are not entitled to appraisal rights in connection with the Spin-Off.

Q:
Who is the transfer agent for your common stock?

A:
Computershare Trust Company, N.A., 250 Royall Street, Canton, MA 02021, telephone: (866) 367-6355.

Q:
Who is the distribution agent for the Spin-Off?

A:
Computershare Trust Company, N.A., 250 Royall Street, Canton, MA 02021, telephone: (866) 367-6355.

 

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Q:
Whom can I contact for more information?

A:
If you have questions relating to the mechanics of the distribution, you should contact the distribution agent. Before the Spin-Off, if you have questions relating to the Spin-Off, you should contact the office of Investor Relations of Liberty, 12300 Liberty Blvd., Englewood, Colorado 80112, telephone: (720) 875-5400.

Pursuant to a services agreement to be entered into between our company and Liberty, Liberty will provide our company with investor relations assistance for a period following the Spin-Off. Accordingly, if you have questions relating to Broadband following the Spin-Off, you should contact the office of Investor Relations of Liberty, 12300 Liberty Blvd., Englewood, Colorado 80112, telephone: (720) 875-5400.


The Rights Offering

        The following is a brief summary of the terms of the rights offering. Please see "The Rights Offering" for a more detailed description of the matters described below.

Q:
What is a rights offering?

A:
A rights offering is a distribution of subscription rights on a pro rata basis to all stockholders of a company. Pursuant to the Spin-Off, Liberty is distributing to holders of its Series A, Series B and Series C common stock as of the record date for the distribution, one transferable subscription right issued by us to purchase one share of our Series C common stock (a Series C Right) for every five shares of our Series A, Series B and Series C common stock, as applicable, to be received by such holder in the distribution.

Q:
What are the Series C Rights?

A:
Each whole Series C Right entitles its holder to purchase one share of our Series C common stock from us, at a subscription price equal to a 20% discount to the 20-trading day volume weighted average trading price of our Series C common stock beginning on the first day on which our Series C common stock begins trading "regular way" (meaning once the common stock trades using a standard settlement cycle) on the Nasdaq Global Select Market following the distribution (the subscription price).

Q:
What is the basic subscription privilege?

A:
The basic subscription privilege entitles each holder of a whole Series C Right to purchase one share of our Series C common stock, for the subscription price.

Q:
What is the oversubscription privilege?

A:
The oversubscription privilege entitles each holder of a whole Series C Right, if the holder fully exercises its basic subscription privilege, to subscribe at the subscription price for up to that number of shares of our Series C common stock, as applicable, that are offered in the rights offering but are not purchased by the other rightsholders under their basic subscription privilege.

Q:
What are the limitations on the oversubscription privilege?

A:
We will be able to satisfy exercises of the oversubscription privilege only if rightsholders subscribe for less than all of the shares of our Series C common stock that may be purchased under the basic subscription privilege of the Series C Rights. If sufficient shares are available, we will honor the oversubscription requests in full. If oversubscription requests exceed the shares available, we will allocate the available shares pro rata among those who oversubscribed in proportion to the

 

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Q:
How will fractional Series C Rights be treated in the rights offering?

A:
We will not issue, or pay cash in lieu of, fractional rights. Instead, we will round up any fractional Series C Right to the nearest whole right.

Q:
Do the Series C Rights provide the holder with any right to subscribe for shares of Liberty common stock?

A:
No. Series C Rights only entitle the holders to subscribe for shares of our Series C common stock from us. Liberty will not distribute any rights to subscribe for shares of Series C Liberty common stock in the rights offering.

Q:
When will the rights offering commence and when will it expire?

A:
The rights offering will commence upon the determination of the subscription price, which we expect to occur promptly following the 20th "regular way" trading day after the distribution is completed. The rights offering will expire at 5:00 p.m., New York City time, on the 20th trading day following the commencement of the rights offering (such date and time, the expiration time), unless we extend it. We may extend the expiration time for any reason and for any length of time at the discretion of our board of directors. However, we may not extend the expiration time of the rights offering for more than 25 trading days past the original 20 trading day period. If we do not complete the rights offering by the 45th trading day of the subscription period, we will cause the subscription agent to return to each exercising holder the entirety of such holder's aggregate subscription price previously paid. We will announce by press release the determination of the subscription price, the commencement of the rights offering and the scheduled expiration time.

Q:
Are there any conditions to the consummation of the rights offering?

A:
The consummation of the rights offering is subject to the satisfaction or, where applicable, waiver of the conditions to the Spin-Off.

Q:
Can you terminate the rights offering?

A:
Yes. Even if the Spin-Off is effected, we may terminate the rights offering for any reason before the expiration time.

Q:
If you terminate the rights offering, will my subscription payment be refunded to me?

A:
Yes. If we terminate the rights offering, the subscription agent will return promptly all subscription payments received by it. We will not pay interest on, or deduct any amounts from, subscription payments if we terminate the rights offering.

Q:
If I purchase subscription rights in the market and you terminate the rights offering, will I be reimbursed the price I paid to purchase my rights?

A:
No. If you purchase Series C Rights in the market and we terminate the rights offering at any time, you will incur the loss of the entire price you paid to acquire your Series C Rights.

 

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Q:
Why are you conducting the rights offering and how will you use the proceeds received from the rights offering?

A:
We are conducting the rights offering to raise capital for general corporate purposes. The proceeds may be used, among other purposes, for investments in new business opportunities. We and Liberty determined the subscription price and the number of Series C Rights to distribute based on, among other things, the estimated market price of our Series C common stock following the distribution, discounts used in similar rights offerings, the general conditions of the securities markets and the amount of proceeds, after any deductions for expenses related to the rights offering, we wish to raise.

Q:
How many shares of your Series C common stock do you expect to be outstanding following the rights offering?

A:
Based on [    •    ] shares of Liberty Series A common stock, [    •    ] shares of Liberty Series B common stock and [    •    ] shares of Liberty Series C common stock outstanding as of [    •    ], 2014 (exclusive of securities convertible into or exercisable or exchangeable for shares of Liberty common stock), and assuming the rights offering is fully subscribed, we would have outstanding approximately [    •    ] shares of our Series C common stock immediately following the completion of the rights offering.

Q:
How might the rights offering affect the trading price of your Series C common stock?

A:
We cannot assure you as to how the rights offering will impact the trading price of our Series C common stock. Historically, due to the inclusion of a discounted subscription price and the resulting dilution, rights offerings have adversely impacted the trading price of the underlying shares, especially during the period the rights offering remains open. However, the market price typically rebounds once the rights offering is completed and the subscription proceeds have been received by the issuer.

Q:
How do I exercise my Series C Rights?

A:
Subscription materials, including rights certificates, will be made available to holders upon the commencement of the rights offering. Each holder who wishes to exercise the basic subscription privilege under its Series C Rights should properly complete and sign the applicable rights certificate and deliver the rights certificate together with payment of the subscription price for each share of our Series C common stock subscribed for to the subscription agent before the expiration time. Each holder who further wishes to exercise the oversubscription privilege under its rights must also include payment of the subscription price for each share of our Series C common stock subscribed for under the oversubscription privilege. We recommend that any rightsholder who uses the United States mail to effect delivery to the subscription agent use insured, registered mail with return receipt requested. Any holder who cannot deliver its rights certificate to the subscription agent before the expiration time may use the procedures for guaranteed delivery described under the heading "The Rights Offering—Delivery of Subscription Materials and Payment—Guaranteed Delivery Procedures." We will not pay interest on subscription payments. We have provided more detailed instructions on how to exercise the rights under the heading "The Rights Offering" beginning with the section entitled "—Exercising Your Series C Rights," in the rights certificates themselves and in the document entitled "Instructions for Use of Series C Rights Certificates" that accompanies this prospectus.

 

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Q:
How may I pay the subscription price?

A:
Your cash payment of the subscription price must be made by either check or bank draft drawn upon a U.S. bank or postal, telegraphic or express money order payable to the subscription agent.

Q:
What should I do if I want to participate in the rights offering but my shares of Liberty common stock will be held in the name of my broker or a custodian bank on the record date for the distribution?

A:
We will ask brokers, dealers and nominees holding shares of Liberty common stock on behalf of other persons to notify these persons of the rights offering. Any beneficial owner wishing to sell or exercise its Series C Rights will need to have its broker, dealer or nominee act on its behalf. Each beneficial owner should complete and return to its broker, dealer or nominee the form entitled "Beneficial Owner Election Form." This form will be available with the other subscription materials from brokers, dealers and nominees holding shares of Liberty's existing common stock on behalf of other persons on the record date for the distribution.

Q:
Will I receive subscription materials by mail if my address is outside the United States?

A:
No. We will not mail rights certificates to any person with an address outside the United States. Instead, the subscription agent will hold rights certificates for the account of all foreign holders. To exercise those Series C Rights, each such holder must notify the subscription agent on or before 11:00 a.m., New York City time, on the fifth day before the expiration date, and establish to the satisfaction of the subscription agent that it is permitted to exercise its Series C Rights under applicable law. The subscription agent will attempt to sell, if feasible, the Series C Rights held on behalf of any foreign holder who fails to notify the subscription agent and provide acceptable instructions to it by such time (and assuming no contrary instructions are received). The estimated proceeds, if any, of any such sale will be payable to the applicable foreign holder.

Q:
Will I be charged any fees if I exercise my rights?

A:
We will not charge a fee to holders for exercising their rights. However, any holder exercising its rights through a broker, dealer or nominee will be responsible for any fees charged by its broker, dealer or nominee.

Q:
May I transfer my Series C Rights if I do not want to purchase any shares?

A:
Yes. The Series C Rights being distributed to our stockholders are transferable, and we anticipate that they will begin trading on the Nasdaq Global Select Market under the symbol "[LBRKR]" following the determination of the subscription price and will cease trading at the close of market immediately prior to the expiration time. However, we cannot assure you that a trading market for the Series C Rights will develop.
Q:
How may I sell my Series C Rights?

A:
Any holder who wishes to sell its rights should contact its broker or dealer. Any holder who wishes to sell its rights may also seek to sell the rights through the subscription agent. Each holder will be responsible for all fees associated with the sale of its rights, whether the rights are sold through its own broker or dealer or the subscription agent. We cannot assure you that any person, including the subscription agent, will be able to sell any rights on your behalf.

 

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Q:
Am I required to subscribe in the rights offering?

A:
No. However, any stockholder who chooses not to exercise its rights will experience dilution to its equity interest in our company.

Q:
If I exercise rights in the rights offering, may I cancel or change my decision?

A:
No. All exercises of rights are irrevocable.

Q:
If I exercise my rights, when will I receive the shares for which I have subscribed?

A:
We will issue the shares of our Series C common stock for which subscriptions have been properly delivered to the subscription agent prior to the expiration time, as soon as practicable following the expiration time. We will not be able to calculate the number of shares of our Series C common stock to be issued to each exercising rightsholder until the third business day after the expiration time, which is the latest time by which rights certificates may be delivered to the subscription agent under the guaranteed delivery procedures described under "The Rights Offering—Delivery of Subscription Materials and Payment—Guaranteed Delivery Procedures." Shares of our Series C common stock that you purchase in the rights offering will be listed on the Nasdaq Global Select Market.

Q:
Have you or your board of directors made a recommendation as to whether I should exercise or sell my rights or how I should pay my subscription price?

A:
No. Neither we nor our board of directors has made any recommendation as to whether you should exercise or transfer your rights. You should decide whether to transfer your rights, subscribe for shares of our Series C common stock, or simply take no action with respect to your rights, based on your own assessment of your best interests.

Q:
What are the tax consequences of the rights offering to me?

A:
It is a non-waivable condition to the Transaction that Liberty receive the opinion of Skadden Arps to the effect that, among other things, no gain or loss will be recognized by, and no amount will be included in the income of, holders of Liberty common stock upon the receipt of Series C Rights in the Spin-Off. Stockholders who receive Series C Rights in the Spin-Off will not recognize taxable income in connection with the exercise of such Series C Rights. Any holder who sells its Series C Rights prior to exercise will generally recognize gain or loss upon such sale. For a more complete summary of the material U.S. federal income tax consequences of the Spin-Off and the rights offering to holders of Liberty common stock, please see the section entitled "Material U.S. Federal Income Tax Consequences of the Transaction."

Q:
What should I do if I have other questions?

A:
If you have questions or need assistance, please contact D.F. King & Co., Inc., the information agent for the rights offering, at: [1-888-628-9011].

 

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RISK FACTORS

        An investment in our common stock involves risks. You should consider carefully the risks described below together with all of the other information included in this prospectus in evaluating our company and our common stock. Any of the following risks, if realized, could have a material adverse effect on the value of our common stock. The risks described below and elsewhere in this prospectus are not the only ones that relate to our businesses, our capitalization or the Spin-Off. The risks described below are considered to be the most material. However, there may be other unknown or unpredictable economic, business, competitive, regulatory or other factors that also could have material adverse effects on our businesses. Past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. If any of the events below were to occur, our businesses, prospects, financial condition, results of operations and/or cash flows could be materially adversely affected. This prospectus contains forward-looking statements that contain risks and uncertainties. Please refer to the section entitled "Cautionary Statements Concerning Forward-Looking Statements" on page 48 of this prospectus in connection with your consideration of the risk factors and other important factors that may affect future results described below.

        For purposes of these risk factors, unless the context otherwise indicates, we have assumed that the Spin-Off has occurred.


Factors Relating to Our Corporate History and Structure

The combined financial information of Broadband included in this prospectus is not necessarily representative of Broadband's future financial position, future results of operations or future cash flows nor does it reflect what Broadband's financial position, results of operations or cash flows would have been as a stand-alone company during the periods presented.

        Because the historical combined financial information of Liberty included in this prospectus largely reflects the historical results of TruePosition and other businesses, assets and liabilities of Liberty, it is not representative of Broadband's future financial position, future results of operations or future cash flows, nor does it reflect what Broadband's financial position, results of operations or cash flows would have been as a stand-alone company, pursuing independent strategies, during the periods presented, especially in light of the fact that the future results of operations will be significantly affected by the results of Charter.

We are a holding company, and we could be unable to obtain cash in amounts sufficient to service our financial obligations or meet our other commitments.

        Our ability to meet our current and future financial obligations, including our debt service obligations under the Credit Arrangement, and other contractual commitments depends upon our ability to access cash. We are a holding company, and our sources of cash include our available cash balances, net cash from the operating activities of our wholly-owned subsidiary TruePosition, any dividends and interest we may receive from our investments, available funds under the Credit Arrangement (which immediately following the Spin-Off are expected to equal $20 million) and proceeds from any asset sales we may undertake in the future. The proceeds from the rights offering is expected to comprise our primary source of cash following the Spin-Off, and no assurance can be given that the rights offering will be successfully completed. Although we currently have no plans with respect to any asset sales, we may be required to monetize certain of our assets if the rights offering is not successfully completed. In addition, the ability of our only operating subsidiary to pay dividends or to make other payments or advances to us depends on its operating results and any statutory, regulatory or contractual restrictions to which it may be or may become subject.

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We do not have access to the cash that Charter generates from its operating activities.

        Charter generated approximately $577 million, $541 million, $2,158 million, $1,876 million and $1,737 million of cash from its operations during the three months ended March 31, 2014 and 2013 and the years ended December 31, 2013, 2012 and 2011, respectively. Charter uses the cash it generates from its operations primarily to fund its business operations and to service its debt and other financial obligations. We do not have access to the cash that Charter generates unless Charter declares a dividend on its capital stock payable in cash, repurchases any or all of its outstanding shares of capital stock for cash (subject to any contractual restrictions on our ability to participate in any such repurchase) or otherwise distributes or makes payments to its stockholders, including us. Historically, Charter has not paid any dividends on its capital stock or, with limited exceptions, otherwise distributed cash to its stockholders and instead has used all of its available cash in the expansion of its business and to service its debt obligations. Covenants in Charter's existing debt instruments also restrict the payment of dividends and cash distributions to stockholders. We expect that Charter will continue to apply its available cash to the expansion of its business.

Our company may have future capital needs and may not be able to obtain additional financing on acceptable terms.

        In connection with the Spin-Off, we will enter into the Credit Arrangement pursuant to which we will incur $300 million of indebtedness, and we expect to have borrowing capacity of up to $20 million (immediately following the Spin-Off). The terms of the Credit Arrangement may limit our company's ability to secure significant additional financing in the future on favorable terms, and our cash flow from operations may be insufficient to satisfy our financial obligations under indebtedness outstanding from time to time. Our ability to secure additional financing and satisfy our financial obligations will depend upon the operating performance of our subsidiary, TruePosition, the value of our investment in Charter , prevailing general economic and credit market conditions, including interest rate levels and the availability of credit generally, and financial, business and other factors, many of which are beyond our control. There can be no assurance that sufficient financing will be available on desirable terms or at all. If financing is not available when needed or is not available on favorable terms, we may be unable to take advantage of business or market opportunities as they arise, which could have a material adverse effect on our business and financial condition.

We have significant indebtedness, which could adversely affect our business and financial condition.

        In connection with the Spin-Off, we will enter into the Credit Arrangement pursuant to which we will incur $300 million of indebtedness. As a result of this significant indebtedness, our company may:

        In addition, it is possible that we may need to incur additional indebtedness in the future. If new debt is added to the current debt levels, the risks described above could intensify. For additional limitations on our company's ability to potentially service our direct debt obligations, see "We are a holding company, and we could be unable to obtain cash in amounts sufficient to service our financial

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obligations or meet our other commitments" and "We do not have access to the cash that Charter generates from its operating activities" above.

The agreements that govern our current and future indebtedness may contain various affirmative and restrictive covenants that will limit our discretion in the operation of our business.

        In connection with the Spin-Off, we will enter into the Credit Arrangement pursuant to which we will incur $300 million of indebtedness. We may also enter into certain other indebtedness arrangements in the future. The instruments governing such indebtedness, often contain covenants that, among other things, place certain limitations on our ability to incur more debt, exceed specified leverage ratios, pay dividends, make distributions, make investments, repurchase stock, create liens, enter into transactions with affiliates, merge or consolidate, and transfer or sell assets. Any failure to comply with such covenants could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business and financial condition.

We have no operating history as a separate company upon which you can evaluate our performance.

        We do not have an operating history as a separate public company. Accordingly, there can be no assurance that our business strategy will be successful on a long-term basis. We may not be able to grow our businesses as planned and may not be profitable.

We rely on Charter to provide us with the financial information that we use in accounting for our ownership interest in Charter as well as information regarding Charter that we include in our public filings.

        We account for our approximately 26% ownership interest in Charter using the equity method of accounting and, accordingly, in our financial statements we record our share of Charter's net income or loss. Within the meaning of U.S. accounting rules, we rely on Charter to provide us with financial information prepared in accordance with generally accepted accounting principles, which we use in the application of the equity method. We also rely on Charter to provide us with the information regarding their company that we include in our public filings. In addition, we cannot change the way in which Charter reports its financial results or require Charter to change its internal controls over financial reporting. No assurance can be given that Charter will provide us with the information necessary to enable us to complete our public filings on a timely basis or at all. Furthermore, any material misstatements or omissions in the information Charter provides to us or publicly files could have a material adverse effect on our financial statements and filing status under federal securities laws.

We may become subject to the Investment Company Act of 1940.

        We do not believe we are currently subject to regulation under the Investment Company Act of 1940, because our investment in Charter enables us to exercise significant influence over Charter. We have substantial involvement in the management and affairs of Charter, including through Liberty's board nominees (who will become our nominees upon the assignment to us of the Charter Stockholders Agreement). Liberty has nominated four of Charter's ten current directors, and, following the Spin-Off, we will assume Liberty's nomination right under the terms of the Charter Stockholders Agreement. If, however, our investment in Charter were deemed to become passive (such as in the event that our equity interest were significantly diluted, including in connection with the Comcast Transactions, and our nominees ceased to serve as directors of Charter), we could become subject to regulation under the Investment Company Act of 1940. In such event, we would be required to register as an investment company, which could result in significant registration and compliance costs, could require changes to our corporate governance structure and financial reporting, could restrict our activities going forward and could adversely impact our existing capital structure. For example, we would not be permitted to keep our dual class capital structure. Our restated charter includes a provision that would enable us, at the option of our board of directors, to automatically convert each

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outstanding share of our Series B common stock into one share of our Series A common stock at such time as we have outstanding less than 20% of the total number of shares of our Series B common stock issued in the Spin-Off. See "Description of Our Capital Stock—Our Common Stock—Conversion." In addition, if we were to become inadvertently subject to the Investment Company Act of 1940, any violation of this act could subject us to material adverse consequences, including potentially significant regulatory penalties and the possibility that our contracts would be deemed unenforceable. For more information about the Charter Stockholders Agreement, see "Certain Relationships and Related Party Transactions—Relationships Between Broadband and Charter—Charter Stockholders Agreement."


Factors Relating to Charter

        The following risks relate specifically to our equity affiliate Charter. If any of these risks were realized, they could have a material adverse effect on the value of our equity interests in Charter, which could negatively impact our stock price and our financial prospects.

Charter has a significant amount of debt and may incur significant additional debt, including secured debt, in the future, which could adversely affect its financial health and ability to react to changes in its business.

        Charter has a significant amount of debt and may (subject to applicable restrictions in each of our debt instruments) incur additional debt in the future. As of March 31, 2014, Charter's total principal amount of debt was approximately $14.2 billion.

        As a result of this significant indebtedness, Charter may:

        If current debt amounts increase, the related risks that Charter faces will intensify.

The agreements and instruments governing Charter's debt contain restrictions and limitations that could significantly affect Charter's ability to operate its business, as well as significantly affect its liquidity.

        Charter's credit facilities and the indentures governing its debt contain a number of significant covenants that could adversely affect Charter's ability to operate its business, liquidity and results of operations. These covenants restrict, among other things, Charter and its subsidiaries' ability to:

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        Additionally, the Charter Communications Operating, LLC (Charter Operating) credit facilities require Charter Operating to comply with a maximum total leverage covenant and a maximum first lien leverage covenant. The breach of any covenants or obligations in its indentures or credit facilities, not otherwise waived or amended, could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross defaults under other agreements governing Charter's long-term indebtedness. In addition, the secured lenders under the Charter Operating credit facilities and the secured lenders under the CCO Holdings, LLC (CCO Holdings) credit facility could foreclose on their collateral, which includes equity interests in Charter's subsidiaries, and exercise other rights of secured creditors.

Charter depends on generating sufficient cash flow to fund its debt obligations, capital expenditures, and ongoing operations.

        Charter is dependent on its cash on hand and cash flow from operations to fund its debt obligations, capital expenditures and ongoing operations.

        Charter's ability to service its debt and to fund its planned capital expenditures and ongoing operations will depend on its ability to continue to generate cash flow and its access (by dividend or otherwise) to additional liquidity sources at the applicable obligor. Charter's ability to continue to generate cash flow is dependent on many factors, including:

        Some of these factors are beyond Charter's control. If it is unable to generate sufficient cash flow or it is unable to access additional liquidity sources, Charter may not be able to service and repay its debt, operate its business, respond to competitive challenges, or fund its other liquidity and capital needs.

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Restrictions in Charter's subsidiaries' debt instruments and under applicable law limit their ability to provide funds to Charter and its subsidiaries that are debt issuers.

        Charter's primary assets are its equity interests in its subsidiaries. Charter's operating subsidiaries are separate and distinct legal entities and are not obligated to make funds available to their debt issuer holding companies for payments on our notes or other obligations in the form of loans, distributions, or otherwise. Charter Operating's ability to make distributions to Charter or CCO Holdings, its other primary debt issuer, to service debt obligations is subject to its compliance with the terms of its credit facilities, and restrictions under applicable law. Under the Delaware Limited Liability Company Act (the DLLCA), Charter's subsidiaries may only make distributions if the relevant entity has "surplus" as defined in the DLLCA. Under fraudulent transfer laws, Charter's subsidiaries may not pay dividends if the relevant entity is insolvent or is rendered insolvent thereby. The measures of insolvency for purposes of these fraudulent transfer laws vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, an entity would be considered insolvent if:

        While Charter believes that its relevant subsidiaries currently have surplus and are not insolvent, these subsidiaries may become insolvent in the future. Charter's direct or indirect subsidiaries include the borrowers under the CCO Holdings credit facility and the borrowers and guarantors under the Charter Operating credit facilities. CCO Holdings is also an obligor under its senior notes. As of March 31, 2014, Charter's total principal amount of debt was approximately $14.2 billion.

        In the event of bankruptcy, liquidation, or dissolution of one or more of its subsidiaries, that subsidiary's assets would first be applied to satisfy its own obligations, and following such payments, such subsidiary may not have sufficient assets remaining to make payments to its parent company as an equity holder or otherwise. In that event:

All of Charter's outstanding debt is subject to change of control provisions. It may not have the ability to raise the funds necessary to fulfill its obligations under its indebtedness following a change of control, which would place Charter in default under the applicable debt instruments.

        Charter may not have the ability to raise the funds necessary to fulfill its obligations under its notes and its credit facilities following a change of control. Under the indentures governing Charter's notes and the CCO Holdings credit facility, upon the occurrence of specified change of control events, CCO Holdings is required to offer to repurchase all of its outstanding notes and the debt under its credit facility. However, Charter may not have sufficient access to funds at the time of the change of control event to make the required repurchase of the applicable notes and the debt under the CCO

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Holdings credit facility, and Charter Operating is limited in its ability to make distributions or other payments to CCO Holdings to fund any required repurchase. In addition, a change of control under the Charter Operating credit facilities would result in a default under those credit facilities. Because such credit facilities are obligations of Charter Operating, the credit facilities would have to be repaid before Charter Operating's assets could be available to CCO Holdings to repurchase their notes. Any failure to make or complete a change of control offer would place CCO Holdings in default under its notes and credit facility. The failure of Charter's subsidiaries to make a change of control offer or repay the amounts accelerated under their notes and credit facilities would place them in default.

Charter operates in a very competitive business environment, which affects its ability to attract and retain customers and can adversely affect its business and operations.

        The industry in which Charter operates is highly competitive and has become more so in recent years. In some instances, Charter competes against companies with fewer regulatory burdens, better access to financing, greater personnel resources, greater resources for marketing, greater and more favorable brand name recognition, and long-established relationships with regulatory authorities and customers. Increasing consolidation in the cable industry and the repeal of certain ownership rules have provided additional benefits to certain of its competitors, either through access to financing, resources, or efficiencies of scale. For example, Comcast recently announced a proposed merger with TWC, which if consummated would create the largest broadband distributor in the U.S. with significant financial resources. Charter could also face additional competition from multi-channel video providers if they began distributing video over the Internet to customers residing outside their current territories.

        Charter's principal competitors for video services throughout its territory are direct broadcast satellite (DBS) providers. The two largest DBS providers are DirecTV and DISH Network. Competition from DBS, including intensive marketing efforts with aggressive pricing, exclusive programming and increased HD broadcasting has had an adverse impact on Charter's ability to retain customers. DBS companies have also expanded their activities in the multi-dwelling unit (MDU) market.

        Telephone companies, including two major telephone companies, AT&T Inc. (AT&T) and Verizon Communications, Inc. (Verizon), offer video and other services in competition with Charter, and it expects they will increasingly do so in the future. Upgraded portions of these networks carry two-way video, data services and provide digital voice services similar to Charter's. In the case of Verizon, high-speed data services (fiber optic service (FiOS)) offer speeds as high as or higher than Charter's. In addition, these companies continue to offer their traditional telephone services, as well as service bundles that include wireless voice services provided by affiliated companies. Based on its internal estimates, Charter believes that AT&T and Verizon are offering video services in areas serving approximately 30% and 4%, respectively, of its estimated passings and it has experienced customer losses in these areas. AT&T and Verizon have also launched campaigns to capture more of the MDU market. AT&T has publicly stated that it expects to roll out its video product beyond the territories currently served although it is unclear where and to what extent. When AT&T or Verizon have introduced or expanded their offering of video products in Charter's market areas, Charter has seen a decrease in its video revenue as AT&T and Verizon typically roll out aggressive marketing and discounting campaigns to launch their products. In addition, DirecTV and AT&T have recently announced a proposed merger, which if consummated would create a consolidated company with substantial scale and financial resources.

        With respect to Charter's Internet access services, Charter faces competition, including intensive marketing efforts and aggressive pricing, from telephone companies, primarily AT&T and Verizon, and other providers of DSL, fiber-to-the-node and fiber-to-the-home services. DSL service competes with its Internet service and is often offered at prices lower than its Internet services, although often at speeds lower than the speeds Charter offers. Fiber-to-the-node networks can provide faster Internet speeds than conventional DSL, but still cannot typically match Charter's Internet speeds. Fiber-to-the-home networks,

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however, can provide Internet speeds equal to or greater than Charter's current Internet speeds. In addition, in many of its markets, DSL providers have entered into co-marketing arrangements with DBS providers to offer service bundles combining video services provided by a DBS provider with DSL and traditional telephone and wireless services offered by the telephone companies and their affiliates. These service bundles offer customers similar pricing and convenience advantages as Charter's bundles.

        Continued growth in the residential voice business faces risks. The competitive landscape for residential and commercial telephone services is intense; Charter faces competition from providers of Internet telephone services, as well as incumbent telephone companies. Further, Charter faces increasing competition for residential voice services as more consumers in the United States are replacing traditional telephone service with wireless service. Charter expects to continue to price its voice product aggressively as part of its triple play strategy which could negatively impact its revenue from voice services to the extent it does not increase volume.

        The existence of more than one cable system operating in the same territory is referred to as an overbuild. Overbuilds could adversely affect Charter's growth, financial condition, and results of operations, by creating or increasing competition. Charter is aware of traditional overbuild situations impacting certain of its markets, however, it is unable to predict the extent to which additional overbuild situations may occur.

        In order to attract new customers, from time to time Charter makes promotional offers, including offers of temporarily reduced price or free service. These promotional programs result in significant advertising, programming and operating expenses, and also may require it to make capital expenditures to acquire and install customer premise equipment. Customers who subscribe to Charter's services as a result of these offerings may not remain customers following the end of the promotional period. A failure to retain customers could have a material adverse effect on Charter's business.

        Mergers, joint ventures, and alliances among franchised, wireless, or private cable operators, DBS providers, local exchange carriers, and others, may provide additional benefits to some of Charter's competitors, either through access to financing, resources, or efficiencies of scale, or the ability to provide multiple services in direct competition with Charter.

        In addition to the various competitive factors discussed above, Charter's business is subject to risks relating to increasing competition for the leisure and entertainment time of consumers. Its business competes with all other sources of entertainment and information delivery, including broadcast television, movies, live events, radio broadcasts, home video products, console games, print media, and the Internet. Further, due to consumer electronic innovations, content owners are allowing consumers to watch Internet-delivered content on televisions, personal computers, tablets, gaming boxes connected to televisions and mobile devices, some without charging a fee to access the content. Technological advancements, such as video-on-demand, new video formats, and Internet streaming and downloading, have increased the number of entertainment and information delivery choices available to consumers, and intensified the challenges posed by audience fragmentation. The increasing number of choices available to audiences could also negatively impact advertisers' willingness to purchase advertising from Charter, as well as the price they are willing to pay for advertising. If Charter does not respond appropriately to further increases in the leisure and entertainment choices available to consumers, its competitive position could deteriorate, and its financial results could suffer.

        Charter's services may not allow them to compete effectively. Additionally, as Charter expands its offerings to introduce new and enhanced services, it will be subject to competition from other providers of the services it offers. Competition may reduce its expected growth of future cash flows which may contribute to future impairments of Charter franchises and goodwill.

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Economic conditions in the United States may adversely impact the growth of Charter's business.

        Charter believes that continued competition and the prolonged recovery of economic conditions in the United States, including mixed recovery in the housing market and relatively high unemployment levels, have adversely affected consumer demand for its services, particularly basic video. It believes competition from wireless and economic factors have contributed to an increase in the number of homes that replace their traditional telephone service with wireless service thereby impacting the growth of its voice business. If these conditions do not improve, Charter believes its business and results of operations will be further adversely affected which may contribute to future impairments of its franchises and goodwill.

Charter's exposure to the credit risks of its customers, vendors and third parties could adversely affect its cash flow, results of operations and financial condition.

        Charter is exposed to risks associated with the potential financial instability of its customers, many of whom have been adversely affected by the general economic downturn. Declines in the housing market, including foreclosures, together with significant unemployment, may cause increased cancellations by its customers or lead to unfavorable changes in the mix of products purchased. These events have adversely affected, and may continue to adversely affect Charter's cash flow, results of operations and financial condition.

        In addition, Charter is susceptible to risks associated with the potential financial instability of the vendors and third parties on which it relies to provide products and services or to which it outsources certain functions. The same economic conditions that may affect Charter's customers, as well as volatility and disruption in the capital and credit markets, also could adversely affect vendors and third parties and lead to significant increases in prices, reduction in output or the bankruptcy of Charter's vendors or third parties upon which it relies. Any interruption in the services provided by its vendors or by third parties could adversely affect Charter's cash flow, results of operation and financial condition.

Charter faces risks inherent in its commercial business.

        Charter may encounter unforeseen difficulties as it increases the scale of its service offerings to businesses. Charter sells Internet access, data networking and fiber connectivity to cellular towers and office buildings, video and business voice services to businesses and have increased its focus on growing this business. In order to grow its commercial business, Charter expects to increase expenditures on technology, equipment and personnel focused on the commercial business. Commercial business customers often require service level agreements and generally have heightened customer expectations for reliability of services. If Charter's efforts to build the infrastructure to scale the commercial business are not successful, the growth of its commercial services business would be limited. Charter depends on interconnection and related services provided by certain third parties for the growth of its commercial business. As a result, its ability to implement changes as the services grow may be limited. If Charter is unable to meet these service level requirements or expectations, its commercial business could be adversely affected. Finally, Charter expects advances in communications technology, as well as changes in the marketplace and the regulatory and legislative environment. Consequently, Charter is unable to predict the effect that ongoing or future developments in these areas might have on its voice and commercial businesses and operations.

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Charter may not have the ability to reduce the high growth rates of, or pass on to its customers, its increasing programming costs, which would adversely affect its cash flow and operating margins.

        Programming has been, and is expected to continue to be, Charter's largest operating expense item. In recent years, the cable industry has experienced a rapid escalation in the cost of programming. Charter expects programming costs to continue to increase because of a variety of factors including amounts paid for retransmission consent, annual increases imposed by programmers with additional selling power as a result of media consolidation, additional programming, including new sports services and non-linear programming for on-line and OnDemand platforms. The inability to fully pass these programming cost increases on to its customers has had an adverse impact on Charter's cash flow and operating margins associated with the video product. Charter has programming contracts that have expired and others that will expire at or before the end of 2014. There can be no assurance that these agreements will be renewed on favorable or comparable terms. To the extent that Charter is unable to reach agreement with certain programmers on terms that it believes are reasonable, Charter may be forced to remove such programming channels from its line-up, which could result in a further loss of customers.

        Increased demands by owners of some broadcast stations for carriage of other services or payments to those broadcasters for retransmission consent are likely to further increase Charter's programming costs. Federal law allows commercial television broadcast stations to make an election between "must-carry" rights and an alternative "retransmission-consent" regime. When a station opts for the latter, cable operators are not allowed to carry the station's signal without the station's permission. In some cases, Charter carries stations under short-term arrangements while it attempts to negotiate new long-term retransmission agreements. If negotiations with these programmers prove unsuccessful, they could require Charter to cease carrying their signals, possibly for an indefinite period. Any loss of stations could make its video service less attractive to customers, which could result in less subscription and advertising revenue. In retransmission-consent negotiations, broadcasters often condition consent with respect to one station on carriage of one or more other stations or programming services in which they or their affiliates have an interest. Carriage of these other services, as well as increased fees for retransmission rights, may increase Charter's programming expenses and diminish the amount of capacity it has available to introduce new services, which could have an adverse effect on its business and financial results.

Charter's inability to respond to technological developments and meet customer demand for new products and services could limit its ability to compete effectively.

        Charter's business is characterized by rapid technological change and the introduction of new products and services, some of which are bandwidth-intensive. Charter may not be able to fund the capital expenditures necessary to keep pace with technological developments, execute the plans to do so, or anticipate the demand of its customers for products and services requiring new technology or bandwidth. The testing and implementation of its network-based user interface may ultimately be unsuccessful or more expensive than anticipated. The completion of Charter's plan to become all-digital in 2014 could be delayed or cost more than the anticipated $400 million in its 2014 plan. Charter's inability to maintain and expand its upgraded systems including through the completion of its all-digital plan and provide advanced services such as a state of the art user interface in a timely manner, or to anticipate the demands of the marketplace, could materially adversely affect its ability to attract and retain customers. Consequently, Charter's growth, financial condition and results of operations could suffer materially.

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Charter depends on third party service providers, suppliers and licensors; thus, if it is unable to procure the necessary services, equipment, software or licenses on reasonable terms and on a timely basis, its ability to offer services could be impaired, and Charter's growth, operations, business, financial results and financial condition could be materially adversely affected.

        Charter depends on third party service providers, suppliers and licensors to supply some of the services, hardware, software and operational support necessary to provide some of its services. Charter obtains these materials from a limited number of vendors, some of which do not have a long operating history or which may not be able to continue to supply the equipment and services it desires. Some of Charter's hardware, software and operational support vendors, and service providers represent its sole source of supply or have, either through contract or as a result of intellectual property rights, a position of some exclusivity. If demand exceeds these vendors' capacity or if these vendors experience operating or financial difficulties, or are otherwise unable to provide the equipment or services it needs in a timely manner, at its specifications and at reasonable prices, Charter's ability to provide some services might be materially adversely affected, or the need to procure or develop alternative sources of the affected materials or services might delay its ability to serve its customers. These events could materially and adversely affect Charter's ability to retain and attract customers, and have a material negative impact on its operations, business, financial results and financial condition. A limited number of vendors of key technologies can lead to less product innovation and higher costs. Charter's cable systems have historically been restricted to using one of two proprietary conditional access security systems, which it believes has limited the number of manufacturers producing set-top boxes for such systems. As an alternative, under a waiver granted to Charter by the FCC, Charter is currently developing a conditional access security system which may be downloaded into set-top boxes provided by a variety of manufacturers. Charter believes this new security system will make its systems more suitable for set-top boxes provided by additional suppliers; however, it may not be able to develop a conditional access security system, establish these relationships or be able to obtain favorable terms.

        Charter further depends on patent, copyright, trademark and trade secret laws and licenses to establish and maintain its intellectual property rights in technology and the products and services used in its operating activities. Any of its intellectual property rights could be challenged or invalidated, or such intellectual property rights may not be sufficient to permit Charter to continue to use certain intellectual property, which could result in discontinuance of certain product or service offerings or other competitive harm, it incurring substantial monetary liability or being enjoined preliminarily or permanently from further use of the intellectual property in question.

Various events could disrupt Charter's networks, information systems or properties and could impair its operating activities and negatively impact its reputation.

        Network and information systems technologies are critical to Charter's operating activities, as well as its customers' access to its services. Charter may be subject to information technology system failures and network disruptions. Malicious and abusive activities, such as the dissemination of computer viruses, worms, and other destructive or disruptive software, computer hackings, social engineering, process breakdowns, denial of service attacks and other malicious activities have become more common in industry overall. If directed at Charter or technologies upon which it depends, these activities could have adverse consequences on its network and its customers, including degradation of service, excessive call volume to call centers, and damage to its or its customers' equipment and data. Further, these activities could result in security breaches, such as misappropriation, misuse, leakage, falsification or accidental release or loss of information maintained in Charter's information technology systems and networks, and in its vendors' systems and networks, including customer, personnel and vendor data. System failures and network disruptions may also be caused by natural disasters, accidents, power disruptions or telecommunications failures. If a significant incident were to occur, it could damage Charter's reputation and credibility, lead to customer dissatisfaction and, ultimately, loss of customers

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or revenue, in addition to increased costs to service its customers and protect its network. These events also could result in large expenditures to repair or replace the damaged properties, networks or information systems or to protect them from similar events in the future. System redundancy may be ineffective or inadequate, and Charter's disaster recovery planning may not be sufficient for all eventualities. Any significant loss of Internet customers or revenue, or significant increase in costs of serving those customers, could adversely affect Charter's growth, financial condition and results of operations.

For tax purposes, Charter could experience a deemed ownership change in the future that could limit its ability to use its tax loss carryforwards.

        As of December 31, 2013, Charter had approximately $8.3 billion of federal tax net operating loss carryforwards resulting in a gross deferred tax asset of approximately $2.9 billion. Federal tax net operating loss carryforwards expire in the years 2021 through 2033. These losses resulted from the operations of Charter Communications Holding Company, LLC (Charter Holdco) and its subsidiaries. In addition, as of December 31, 2013, Charter had state tax net operating loss carryforwards resulting in a gross deferred tax asset (net of federal tax benefit) of approximately $276 million. State tax net operating loss carryforwards generally expire in the years 2014 through 2033. Due to uncertainties in projected future taxable income, valuation allowances have been established against the gross deferred tax assets for book accounting purposes, except for future taxable income that will result from the reversal of existing temporary differences for which deferred tax liabilities are recognized. Such tax loss carryforwards can accumulate and be used to offset its future taxable income.

        On March 27, 2009, Charter and certain affiliates filed voluntary petitions in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court), to reorganize under Chapter 11 of the United States Bankruptcy Code. The Chapter 11 cases were jointly administered under the caption In re Charter Communications, Inc., et al., Case No. 09-11435. On May 7, 2009, Charter filed a Joint Plan of Reorganization (the Plan) and a related disclosure statement with the Bankruptcy Court. The consummation of the Plan generated an "ownership change" as defined in Section 382 of the Code, and the sale of shares of 27% of the beneficial amount of Charter's common stock by Apollo Management, L.P. and certain related funds, Oaktree Opportunities Investments, L.P. and certain related funds and funds affiliated with Crestview Partners, L.P. to Liberty resulted in a second "ownership change" pursuant to Section 382. In general, an "ownership change" occurs whenever the percentage of the stock of a corporation owned, directly or indirectly, by "5-percent stockholders" (within the meaning of Section 382 of the Code) increases by more than 50 percentage points over the lowest percentage of the stock of such corporation owned, directly or indirectly, by such "5-percent stockholders" at any time over the preceding three years. As a result, Charter is subject to an annual limitation on the use of its loss carryforwards which existed at November 30, 2009 for the first "ownership change" and those that existed at May 1, 2013 for the second "ownership change." The limitation on its ability to use its loss carryforwards, in conjunction with the loss carryforward expiration provisions, could reduce Charter's ability to use a portion of its loss carryforwards to offset future taxable income, which could result in Charter being required to make material cash tax payments. Charter's ability to make such income tax payments, if any, will depend at such time on its liquidity or its ability to raise additional capital, and/or on receipt of payments or distributions from Charter Holdco and its subsidiaries.

        If Charter were to experience a third ownership change in the future (as a result of purchases and sales of stock by its "5-percent stockholders," new issuances or redemptions of its stock, certain acquisitions of its stock and issuances, redemptions, sales or other dispositions or acquisitions of interests in our "5-percent stockholders"), Charter's ability to use its loss carryforwards could become subject to further limitations. Charter's common stock is subject to certain transfer restrictions contained in its amended and restated certificate of incorporation. These restrictions, which are

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designed to minimize the likelihood of an ownership change occurring and thereby preserve its ability to utilize its loss carryforwards, are not currently operative but could become operative in the future if certain events occur and the restrictions are imposed by Charter's board of directors. However, there can be no assurance that its board of directors would choose to impose these restrictions or that such restrictions, if imposed, would prevent an ownership change from occurring.

If Charter is unable to retain key employees, its ability to manage its business could be adversely affected.

        Charter's operational results have depended, and its future results will depend, upon the retention and continued performance of its management team. Charter's ability to retain and hire new key employees for management positions could be impacted adversely by the competitive environment for management talent in the broadband communications industry. The loss of the services of key members of management and the inability or delay in hiring new key employees could adversely affect Charter's ability to manage its business and its future operational and financial results.

Charter's inability to successfully acquire and integrate other businesses, assets, products or technologies could harm its operating results.

        Charter actively evaluates acquisitions and strategic investments in businesses, products or technologies that it believes could complement or expand its business or otherwise offer growth or cost-saving opportunities. From time to time, Charter may enter into letters of intent with companies with which it is negotiating for potential acquisitions or investments, or as to which it is conducting due diligence. An investment in, or acquisition of, complementary businesses, products or technologies in the future could materially decrease the amount of Charter's available cash or require it to seek additional equity or debt financing. Charter may not be successful in negotiating the terms of any potential acquisition, conducting thorough due diligence, financing the acquisition or effectively integrating the acquired business, product or technology into its existing business and operations. Charter's due diligence may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired business, product or technology, including issues related to intellectual property, product quality or product architecture, regulatory compliance practices, revenue recognition or other accounting practices, or employee or customer issues.

        Additionally, in connection with any acquisitions Charter completes, it may not achieve the synergies or other benefits it expected to achieve, and Charter may incur write-downs, impairment charges or unforeseen liabilities that could negatively affect its operating results or financial position or could otherwise harm its business. Further, contemplating or completing an acquisition and integrating an acquired business, product or technology could divert management and employee time and resources from other matters.

Charter's business is subject to extensive governmental legislation and regulation, which could adversely affect its business.

        Regulation of the cable industry has increased cable operators' operational and administrative expenses and limited their revenues. Cable operators are subject to various laws and regulations including those covering the following:

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        Additionally, many aspects of these laws and regulations are currently the subject of judicial proceedings and administrative or legislative proposals. There are also ongoing efforts to amend or expand the federal, state, and local regulation of some of the services offered over Charter's cable systems, which may compound the regulatory risks it already faces, and proposals that might make it easier for its employees to unionize. Congress and various federal agencies are now considering adoption of significant new privacy restrictions, including new restrictions on the use of personal and profiling information for behavioral advertising. In response to recent global data breaches, malicious activity and cyber threats, as well as the general increasing concerns regarding the protection of consumers' personal information, Congress is considering the adoption of new data security and cybersecurity legislation that could result in additional network and information security requirements for Charter's business. In the event of a data breach or cyber attack, these new laws, as well as existing legal and regulatory obligations, could require significant expenditures to remedy any such breach or attack.

Charter's cable system franchises are subject to non-renewal or termination. The failure to renew a franchise in one or more key markets could adversely affect its business.

        Charter's cable systems generally operate pursuant to franchises, permits, and similar authorizations issued by a state or local governmental authority controlling the public rights-of-way. Many franchises establish comprehensive facilities and service requirements, as well as specific customer service standards and monetary penalties for non-compliance. In many cases, franchises are terminable if the franchisee fails to comply with significant provisions set forth in the franchise agreement governing system operations. Franchises are generally granted for fixed terms and must be periodically renewed. Franchising authorities may resist granting a renewal if either past performance or the prospective operating proposal is considered inadequate. Franchise authorities often demand concessions or other commitments as a condition to renewal. In some instances, local franchises have not been renewed at expiration, and Charter has operated and is operating under either temporary operating agreements or without a franchise while negotiating renewal terms with the local franchising authorities.

        The traditional cable franchising regime has undergone significant change as a result of various federal and state actions. Some state franchising laws do not allow Charter to immediately opt into favorable statewide franchising.

        There can be no assurance that Charter will be able to comply with all significant provisions of its franchise agreements and certain of its franchisers have from time to time alleged that Charter has not complied with these agreements. Additionally, although historically Charter has renewed its franchises without incurring significant costs, there can be no assurance that Charter will be able to renew, or to renew as favorably, its franchises in the future. A termination of or a sustained failure to renew a

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franchise in one or more key markets could adversely affect Charter's business in the affected geographic area.

Charter's cable system franchises are non-exclusive. Accordingly, local and state franchising authorities can grant additional franchises and create competition in market areas where none existed previously, resulting in overbuilds, which could adversely affect results of operations.

        Charter's cable system franchises are non-exclusive. Consequently, local and state franchising authorities can grant additional franchises to competitors in the same geographic area or operate their own cable systems. In some cases, local government entities and municipal utilities may legally compete with Charter without obtaining a franchise from the local franchising authority. As a result, competing operators may build systems in areas in which Charter holds franchises.

        The FCC has adopted rules that streamline entry for new competitors (particularly those affiliated with telephone companies) and reduce franchising burdens for these new entrants. At the same time, a substantial number of states have adopted new franchising laws, principally designed to streamline entry for new competitors, and often provide advantages for these new entrants that are not immediately available to existing operators. In many cases, state franchising laws will result in fewer franchise imposed requirements for Charter's competitors who are new entrants, until it is able to opt into the applicable state franchise.

Local franchise authorities have the ability to impose additional regulatory constraints on Charter's business, which could further increase its expenses.

        In addition to the franchise agreement, cable authorities in some jurisdictions have adopted cable regulatory ordinances that further regulate the operation of cable systems. This additional regulation increases the cost of operating Charter's business. Local franchising authorities may impose new and more restrictive requirements. Local franchising authorities who are certified to regulate rates in the communities where they operate generally have the power to reduce rates and order refunds on the rates charged for basic service and equipment.

Tax legislation and administrative initiatives or challenges to Charter's tax positions could adversely affect its results of operations and financial condition.

        Charter operates cable systems in locations throughout the United States and, as a result, is subject to the tax laws and regulations of federal, state and local governments. From time to time, various legislative and/or administrative initiatives may be proposed that could adversely affect Charter's tax positions. There can be no assurance that its effective tax rate or tax payments will not be adversely affected by these initiatives. As a result of state and local budget shortfalls due primarily to the recession as well as other considerations, certain states and localities have imposed or are considering imposing new or additional taxes or fees on Charter's services or changing the methodologies or base on which certain fees and taxes are computed. Such potential changes include additional taxes or fees on Charter's services which could impact its customers, combined reporting and other changes to general business taxes, central/unit-level assessment of property taxes and other matters that could increase Charter's income, franchise, sales, use and/or property tax liabilities. In addition, federal, state and local tax laws and regulations are extremely complex and subject to varying interpretations. There can be no assurance that Charter's tax positions will not be challenged by relevant tax authorities or that it would be successful in any such challenge.

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Further regulation of the cable industry could impair Charter's ability to raise rates to cover its increasing costs, resulting in increased losses.

        Currently, rate regulation of cable systems is strictly limited to the basic service tier and associated equipment and installation activities. However, the FCC and Congress continue to be concerned that cable rate increases are exceeding inflation. It is possible that either the FCC or Congress will further restrict the ability of cable system operators to implement rate increases for Charter's video services or even for its high-speed Internet and voice services. Should this occur, it would impede Charter's ability to raise its rates. If Charter is unable to raise its rates in response to increasing costs, its losses would increase.

        There has been legislative and regulatory interest in requiring cable operators to offer historically combined programming services on an à-la-carte basis. While any new regulation or legislation designed to enable cable operators to purchase programming on a wholesale basis could be beneficial to Charter, any such new regulation or legislation that limits how Charter sells programming could adversely affect its business.

Actions by pole owners might subject Charter to significantly increased pole attachment costs.

        Pole attachments are cable wires that are attached to utility poles. Cable system attachments to investor-owned public utility poles historically have been regulated at the federal or state level, generally resulting in favorable pole attachment rates for attachments used to provide cable service. In contrast, utility poles owned by municipalities or cooperatives are not subject to federal regulation and are generally exempt from state regulation. In 2011, the FCC amended its pole attachment rules to promote broadband deployment. The order overall strengthens the cable industry's ability to access investor-owned utility poles on reasonable rates, terms and conditions. It also allows for new penalties in certain cases involving unauthorized attachments that could result in additional costs for cable operators. Electric utilities sought review of the 2011 Order at both the FCC and the D.C. Circuit Court of Appeals, but the FCC and the court subsequently affirmed the new rules. Future regulatory changes in this area could impact the pole attachment rates Charter pays utility companies.

Increasing regulation of Charter's Internet service product could adversely affect its ability to provide new products and services.

        On January 14, 2014, the D.C. Circuit Court of Appeals, in Verizon v. FCC, struck down major portions of the FCC's 2010 "net neutrality" rules governing the operating practices of broadband Internet access providers like Charter. The FCC originally designed the rules to ensure an "open Internet" and included three key requirements for broadband providers: 1) a prohibition against blocking websites or other online applications; 2) a prohibition against unreasonable discrimination among Internet users or among different websites or other sources of information; and 3) a transparency requirement compelling the disclosure of network management policies. The Court struck down the first two requirements, concluding that they constitute "common carrier" restrictions that are not permissible given the FCC's earlier decision to classify Internet access as an "information service," rather than a "telecommunications service." The Court upheld the FCC's transparency requirement.

        On May 15, 2014, the FCC issued a Notice of Proposed Rulemaking (the Notice) regarding new open Internet rules in which the FCC proposes, among other things, to retain the definitions and scope of the 2010 rules, enhance the disclosure rule, and require broadband providers to comply with an enforceable legal standard of commercially reasonable practices. The Notice also seeks comment regarding whether certain practices, such as paid prioritization of content, application and service providers, should be prohibited. The reimposition of network neutrality restrictions could adversely affect the potential development of advantageous relationships with Internet content providers. Rules

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or statutes increasing the regulation of Charter's Internet services could limit its ability to efficiently manage its cable systems and respond to operational and competitive challenges.

Changes in channel carriage regulations could impose significant additional costs on Charter.

        Cable operators also face significant regulation of their video channel carriage. Charter can be required to devote substantial capacity to the carriage of programming that it might not carry voluntarily, including certain local broadcast signals; local public, educational and government access programming; and unaffiliated, commercial leased access programming (required channel capacity for use by persons unaffiliated with the cable operator who desire to distribute programming over a cable system). The FCC adopted revised commercial leased access rules (currently stayed while under appeal) which would dramatically reduce the rate Charter can charge for leasing this capacity and dramatically increase its administrative burdens. Legislation has been introduced in Congress in the past that, if adopted, could impact Charter's carriage of broadcast signals by simultaneously eliminating the cable industry's compulsory copyright license and the retransmission consent requirements governing cable's retransmission of broadcast signals. The FCC also continues to consider changes to the rules affecting the relationship between programmers and multichannel video distributors. Future regulatory changes could disrupt existing programming commitments, interfere with Charter's preferred use of limited channel capacity, increase its programming costs, and limit its ability to offer services that would maximize its revenue potential. It is possible that other legal restraints will be adopted limiting Charter's discretion over programming decisions.

Offering voice communications service may subject Charter to additional regulatory burdens, causing it to incur additional costs.

        Charter offers voice communications services over its broadband network and continues to develop and deploy voice over Internet protocol (VoIP) services. The FCC has ruled that competitive telephone companies that support VoIP services, such as those Charter offers its customers, are entitled to interconnect with incumbent providers of traditional telecommunications services, which ensures that Charter's VoIP services can compete in the market. The scope of these interconnection rights is being reviewed in a current FCC proceeding, which may affect Charter's ability to compete in the provision of voice services or result in additional costs. The FCC has also declared that certain VoIP services are not subject to traditional state public utility regulation. The full extent of the FCC preemption of state and local regulation of VoIP services is not yet clear. Charter may require certain additional authorizations to expand these services. Charter may not be able to obtain such authorizations in a timely manner, or conditions could be imposed upon such licenses or authorizations that may not be favorable to it. Telecommunications companies generally are subject to other significant regulation which could also be extended to VoIP providers. If additional telecommunications regulations are applied to Charter's VoIP service, it could cause it to incur additional costs. The FCC has already extended certain traditional telecommunications carrier requirements to VoIP providers, such as Universal Service Fund collection, Communications Assistance for Law Enforcement Act (CALEA) obligations, privacy, Customer Proprietary Network Information, number porting, disability and discontinuance of service requirements. In November 2011, the FCC released an order significantly changing the rules governing intercarrier compensation payments for the origination and termination of telephone traffic between carriers, including VoIP service providers like Charter. The Tenth Circuit Court of Appeals affirmed the order on May 23, 2014. The new rules will result in a substantial decrease in intercarrier compensation payments over a multi-year period, which will affect both the amounts that Charter pays to other carriers and the amounts that Charter receives from other carriers.

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Factors Relating to the Comcast Transactions

Completion of the Comcast Transactions is subject to many conditions and if these conditions are not satisfied or waived, the Comcast Transactions will not be completed.

        Charter's obligation and the obligation of Comcast to complete the Comcast Transactions are subject to satisfaction or waiver of a number of conditions, including, among others:

        There can be no assurance that the conditions to closing of the Comcast Transactions will be satisfied or waived or that the Comcast Transactions will be completed.

In order to complete the Comcast Transactions, Charter along with Comcast must make certain governmental filings and obtain certain governmental authorizations, and if such filings and authorizations are not made or granted or are granted with conditions to the parties, completion of the Comcast Transactions may be jeopardized or the anticipated benefits of the Comcast Transactions could be reduced.

        Completion of the Comcast Transactions is conditioned upon the expiration or early termination of the waiting periods relating to the Comcast Transactions under the Hart-Scott-Rodino Antitrust Improvement Act and the required governmental authorizations, including an order of the FCC, having been obtained and being in full force and effect. Although Charter and Comcast have agreed in the Comcast Agreement to use reasonable best efforts, subject to certain limitations, to make certain governmental filings or obtain the required governmental authorizations, as the case may be, there can be no assurance that the relevant waiting periods will expire or that the relevant authorizations will be obtained. In addition, the governmental authorities with or from which these authorizations are required have broad discretion in administering the governing regulations. As a condition to authorization of the Comcast Transactions or related transactions, these governmental authorities may impose requirements, limitations or costs or require divestitures or place restrictions on the conduct of

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Charter's business after completion of the Comcast Transactions. There can be no assurance that regulators will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying completion of the Comcast Transactions or imposing additional material costs on or materially limiting the revenues of the combined company following the Comcast Transactions, or otherwise adversely affect Comcast's business and results of operations after completion of the Comcast Transactions. In addition, there can be no assurance that these conditions, terms, obligations or restrictions will not result in the delay or abandonment of the Comcast Transactions.

Charter's business relationships may be subject to disruption due to uncertainty associated with the Comcast Transactions.

        Parties that Charter does business with may experience uncertainty associated with the Comcast Transactions, including with respect to current or future business relationships with Charter. Charter's business relationships may be subject to disruption as customers, distributors, suppliers, vendors and others may attempt to negotiate changes in existing business relationships or consider entering into business relationships with parties other than Charter. These disruptions could have an adverse effect on Charter's business, financial condition, results of operations or prospects, including an adverse effect on its ability to realize the anticipated benefits of the Comcast Transactions. The risk, and adverse effect, of such disruptions could be exacerbated by a delay in completion of the Comcast Transactions or termination of the Comcast Agreement.

Charter has relied on publicly available information on the systems being acquired by Charter and by SpinCo.

        Charter has relied on publicly available information regarding the systems being acquired by Charter and by SpinCo, and do not yet have full carveout or pro forma financial statements for such systems. The transaction terms accordingly provide for assumption by Charter and by SpinCo of only those liabilities that are primarily related to the systems acquired by each of them respectively, and for valuation terms that will depend on actual carveout 2014 EBITDA (as defined in the Comcast Agreement) produced by such systems, including true-up adjustment payments related to EBITDA and, in some cases, working capital. However, it is possible that significant liabilities, present, future or contingent, may be assumed by Charter or SpinCo that are not fully reflected in the valuation terms, and accordingly could have a material adverse effect on Charter and/or its investment in SpinCo. Similarly, it is possible that certain assets required to operate the systems acquired by SpinCo and Charter, such as licenses, technologies and/or employees, may not be transferred in the Comcast Transactions, requiring SpinCo and Charter to incur additional costs and invest additional resources to procure such assets and/or hire employees with expertise in the transferred business, which may adversely affect Charter's ability to realize the anticipated benefits of the Comcast Transactions.

The integration of the business acquired in the Comcast Transactions with the businesses Charter operated prior to the Comcast Transactions may not be successful or the anticipated benefits from the Comcast Transactions may not be realized.

        After consummation of the Comcast Transactions, Charter will have significantly more systems, assets, investments, businesses, subscribers and employees than it did prior to the Comcast Transactions. The process of integrating these assets with the businesses Charter operated prior to the Comcast Transactions will require it to expend significant capital and significantly expand the scope of its operations and financial systems. Charter's management will be required to devote a significant amount of time and attention to the process of integrating the operations of the acquired assets with Charter's pre-Comcast Transactions operations. There is a significant degree of difficulty and management involvement inherent in that process. These difficulties include:

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        Charter and Comcast have agreed to provide each other with transition services in connection with the transferred systems and relevant assets. Providing such services could divert management attention and result in additional costs. In addition, the inability to procure such services on reasonable terms or at all could negatively impact Charter's expected results of operations.

        There is no assurance that the assets acquired in the Comcast Transactions will be successfully or cost-effectively integrated into the businesses Charter operated prior to the Comcast Transactions. The process of integrating the acquired assets into Charter's pre-Comcast Transactions operations may cause an interruption of, or loss of momentum in, the activities of its business. If Charter's management is not able to effectively manage the integration process, or if any significant business activities are interrupted as a result of the integration process, Charter's business could suffer and its liquidity, results of operations and financial condition may be materially adversely impacted.

        Even if Charter is able to successfully integrate the new assets, it may not be possible to realize the benefits that are expected to result from the Comcast Transactions, or realize these benefits within the time frame that is expected. For example, the elimination of duplicative costs may not be possible or may take longer than anticipated, or the benefits from the Comcast Transactions may be offset by costs incurred or delays in integrating the companies. If Charter fails to realize the benefits it anticipates from the acquisition, its liquidity, results of operations or financial condition may be adversely affected.

Failure to complete the Comcast Transactions could negatively impact Charter's stock price and its future business and financial results.

        If the Comcast Transactions are not completed for any reason, including as a result of Charter's stockholders failing to approve the necessary proposals, its ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Comcast Transactions, Charter would be subject to a number of risks such as:

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        If the Comcast Transactions are not completed, the risks described above may materialize and they may adversely affect Charter's business, financial condition, financial results and stock price.

        In addition, Charter could be subject to litigation related to any failure to complete the Comcast Transactions or related to any enforcement proceeding commenced against Charter to perform its obligations under the Comcast Agreement.

After the Comcast Transactions are complete, Charter's stockholders will have a lower ownership and voting interest than they currently have.

        Based on the number of shares of Charter's common stock outstanding as of March 31, 2014, the trading price of its common stock as of April 25, 2014, assumptions around the 2014 EBITDA of SpinCo and the amount of SpinCo indebtedness at the time of completion of the Comcast Transactions, it is expected that, immediately after completion of the Comcast Transactions, persons who hold Charter stock as of immediately prior to the Comcast Transactions will own approximately 87% of the outstanding shares of common stock of New Charter. Consequently, former stockholders (including Broadband, if the Comcast Transactions close following the Spin-Off) will have less influence over Charter's management and policies than they currently have. In addition, any changes to the number of shares outstanding, trading price of Charter's common stock, EBITDA associated with SpinCo assets or the amount of SpinCo indebtedness at the time of completion of the Comcast Transactions will affect, and could significantly reduce, the number of outstanding shares of common stock of New Charter held by persons who hold Charter stock as of immediately prior to the closing. Similarly, if Charter exercises its option to increase the merger consideration to SpinCo holders as a result of insufficient debt tenders in the debt-for-debt exchange that are part of the Comcast Transactions, such option could significantly reduce the number of outstanding shares of common stock of New Charter held by persons who hold Charter stock as of immediately prior to the closing.

Charter may not be able to obtain financing for the acquisition of systems contemplated by the Comcast Transactions, or may be able to obtain such financing only on unfavorable terms.

        Charter plans to obtain financing commitments from several financial institutions to finance the acquisitions of systems contemplated by the Comcast Transactions. The terms of these commitments have not yet been determined, and if there are unfavorable developments in the credit markets or in Charter's business, such commitments may not be available, or may be available only on unfavorable terms. Even if obtained on reasonable terms, the commitments may be contingent upon conditions related to the conduct and results of Charter's business. If there are changes in the financial condition or results of operations of Charter's company prior to the completion of the Comcast Transactions, its financing sources may not provide the funding under the commitment. Even if funding is not received, Charter may still be obligated to consummate the acquisitions of systems contemplated by the Comcast Transactions. In that event Charter may need to rely on alternative sources of financing, which it may not be able to obtain on reasonable terms, and/or may need to rely on its cash reserves, which may divert funding from other needs of Charter. Additionally, the failure to obtain financing from Charter's financing sources may cause Charter to not be able to complete the Comcast Transactions and to be exposed to legal claims for specific performance or damages, any of which could have a material adverse effect on Charter.

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As a result of the planned financing of the Comcast Transactions, Charter's indebtedness following completion of the Comcast Transactions will be greater than its current indebtedness. This increased level of indebtedness could adversely affect Charter, including by decreasing its business flexibility, and increase interest expense.

        Charter will have increased indebtedness following completion of the Comcast Transactions in comparison to its recent historical basis, which would have the effect, among other things, of reducing its flexibility to respond to changing business and economic conditions and increasing its interest expense. In addition, the amount of cash required to service Charter's increased indebtedness levels following completion of the Comcast Transactions and thus the demands on its cash resources will be greater than the amount of cash flows required to service Charter's indebtedness prior to the Comcast Transactions. The increased levels of indebtedness following completion of the Comcast Transactions could also reduce funds available for Charter's investments in product development as well as capital expenditures, share repurchases and other activities and may create competitive disadvantages for Charter relative to other companies with lower debt levels.

        In addition, Charter's credit ratings impact the cost and availability of future borrowings and, accordingly, its cost of capital. Charter's ratings reflect each rating organization's opinion of its financial strength, operating performance and ability to meet its debt obligations.

Charter will incur significant transaction-related costs in connection with the Comcast Transactions.

        Charter expects to incur a number of non-recurring costs associated with the Comcast Transactions. The substantial majority of non-recurring expenses will be comprised of transaction costs related to the Comcast Transactions. Charter also will incur transaction fees and costs related to formulating and implementing integration plans, including facilities and systems consolidation costs and employment-related costs. Charter continues to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the Comcast Transactions and integration. Although Charter expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow Charter to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

Sales of New Charter common stock after the Comcast Transactions may negatively affect the market price of New Charter common stock.

        The shares of New Charter common stock to be issued in the Comcast Transactions to holders of SpinCo common stock will generally be eligible for immediate resale. The market price of New Charter common stock could decline as a result of sales of a large number of shares of New Charter common stock in the market after the consummation of the Comcast Transactions or even the perception that these sales could occur.

        Currently, Comcast stockholders may include index funds that have performance tied to the Standard & Poor's 500 Index or other stock indices, and institutional investors subject to various investing guidelines. Because New Charter may not be included in these indices following the consummation of the Comcast Transactions or may not meet the investing guidelines of some of these institutional investors, these index funds and institutional investors may decide to or may be required to sell the New Charter common stock that they receive in the Comcast Transactions. These sales, or the possibility that these sales may occur, may also make it more difficult for New Charter to obtain additional capital by selling equity securities in the future at a time and at a price that it deems appropriate.

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If the Contribution and the Comcast Spin-Off fail to qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the Code, including as a result of subsequent acquisitions of stock of SpinCo, Comcast may recognize a very substantial amount of taxable gain and SpinCo (and in certain circumstances, Charter) may be obligated to indemnify Comcast for these taxes.

        The completion of the Comcast Transactions is conditioned upon the receipt of opinions of counsel as to the tax-free nature of certain of the Comcast Transactions, including the Comcast Spin-Off. The opinions of counsel will be based on, among other things, current law and certain assumptions and representations as to factual matters made by Comcast, SpinCo and Charter. Any change in currently applicable law, which may be retroactive, or the failure of any representation to be true, correct and complete, could adversely affect the conclusions reached by counsel in the opinions. Moreover, the opinions will not be binding on the IRS or the courts, and the IRS or the courts may not agree with the conclusions reached in the opinions.

        Even if the Comcast Spin-Off otherwise qualifies as a tax-free spin-off for U.S. federal income tax purposes, the Comcast Spin-Off will be taxable to Comcast pursuant to Section 355(e) of the Code if 50% or more of the stock of either Comcast or SpinCo is acquired, directly or indirectly (taking into account the stock of SpinCo acquired by New Charter in the Merger and the stock of Comcast and SpinCo acquired by TWC stockholders in the transaction between Comcast and TWC and in the Comcast Spin-Off, respectively), as part of a plan or series of related transactions that includes the Comcast Spin-Off. Because SpinCo stockholders that are former Comcast stockholders (exclusive of former TWC stockholders) will own more than 50% of the common stock of SpinCo immediately after the Merger, the Merger, standing alone, is not expected to cause the Comcast Spin-Off to be taxable to Comcast under Section 355(e) of the Code. However, if the IRS were to determine that other acquisitions of SpinCo common stock or Comcast common stock, either before or after the Comcast Spin-Off, are part of a plan or series of related transactions that includes the Comcast Spin-Off, such determination could result in the recognition of gain by Comcast under Section 355(e) of the Code. If Section 355(e) of the Code were to apply to the Comcast Spin-Off, Comcast might recognize a very substantial amount of taxable gain.

        Under the tax sharing agreement that will be entered into by Comcast, SpinCo and, to a limited extent, New Charter, in certain circumstances, and subject to certain limitations, SpinCo will be required to indemnify Comcast against taxes on the Comcast Spin-Off that arise as a result of certain actions or failures to act by SpinCo or as a result of certain changes in ownership of the stock of SpinCo after the completion of the Comcast Transactions. SpinCo will be unable to take certain actions after the Comcast Transactions because such actions could adversely affect the tax-free status of the Comcast Spin-Off, and the impact of such restrictions could be significant. If SpinCo is required to indemnify Comcast in the event the Comcast Spin-Off is taxable, this indemnification obligation would be substantial and could have a material adverse effect on SpinCo.

        Moreover, under the tax sharing agreement to be entered into among Comcast, Spinco, and New Charter, in certain circumstances, and subject to certain limitations, New Charter will be required to indemnify Comcast against taxes on the Comcast Spin-Off that arise from New Charter taking any actions that would result in New Charter holding SpinCo shares in excess of the percentage of SpinCo shares acquired in the Merger during the two-year period following the Comcast Spin-Off. If New Charter is required to indemnify Comcast in the event the Comcast Spin-Off is taxable, this indemnification obligation would be substantial and could have a material adverse effect on New Charter.

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New Charter and SpinCo will be unable to take certain actions after the Comcast Transactions (potentially including certain desirable strategic transactions) because such actions could adversely affect the tax-free status of the Comcast Spin-Off, and the impact of such restrictions could be significant.

        The tax sharing agreement to be entered into among Comcast, SpinCo, and New Charter will prohibit SpinCo and New Charter from taking actions that could cause the Comcast Spin-Off to be taxable to Comcast.

        In particular, for two years after the completion of the Comcast Transactions, SpinCo and New Charter will not be permitted to take actions that would result in 50% or more of the stock of SpinCo being acquired, directly or indirectly (taking into account the stock of SpinCo acquired by New Charter in the merger and the stock of Comcast and SpinCo acquired by TWC stockholders in the transaction between Comcast and TWC and in the Comcast Spin-Off, respectively), as part of a plan or series of related transactions that includes the Comcast Spin-Off. These actions could include entering into certain merger or consolidation transactions, certain stock issuances and certain other desirable strategic transactions.


Factors Relating to TruePosition

There can be no assurance that the recent acquisition of Skyhook will be beneficial.

        On February 14, 2014, TruePosition completed the acquisition of Skyhook, a global location network with more than 1 billion geocoded access points. There can be no assurance that the Skyhook acquisition will achieve the desired benefits of the transaction, which include increasing TruePosition's competitive position and other potential synergies, or that Skyhook will continue to expand its customer base as anticipated, which is critical to Skyhook's revenue generation. In addition, TruePosition incurred significant transaction and acquisition-related fees and costs. If the Skyhook acquisition is not accretive to TruePosition's business and operations, it could materially adversely affect the financial condition of TruePosition.

TruePosition and its subsidiary Skyhook face competition from multiple sources.

        TruePosition faces competition from a second provider of Uplink Time Difference and Arrival (UTDOA), Commscope, and from the suppliers of other wireless location technologies and solutions, such as GPS, Observed Time Difference of Arrival (OTDOA) and Terrestrial Beacons, which provide similar location-based products and services to TruePosition. Skyhook faces competition from Google, Inc. (Google), HERE (a division of Nokia) and smaller regional or niche market competitors such as Locaid, as providers of location-based services and products. Certain of these competitors are substantially larger than TruePosition or Skyhook, as applicable, and have greater financial, technical, marketing and other resources. Thus, many of these large enterprises are in a better position to withstand any significant reduction in spending by customers in its markets, and often have broader product lines and market focus, have greater brand recognition and may not be as susceptible to downturns in a single market. These competitors may also be able to bundle their products together to meet the needs of a particular customer, may be able to respond more rapidly to new or emerging technologies or changes in customer requirements and may be capable of delivering more complete solutions than TruePosition or Skyhook is able to provide. If large enterprises that currently do not compete directly with TruePosition or Skyhook choose to enter its markets by acquisition or otherwise, competition would likely intensify. In addition, the growth of new location technologies currently in development may further increase competition to provide these new technologies. If TruePosition and Skyhook are not able to compete successfully for customers, the financial position of TruePosition may be materially adversely affected.

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The revenues of TruePosition and Skyhook each depend on a limited number of customers, and the loss of their more significant customers could adversely affect the business of TruePosition.

        TruePosition and its operating subsidiary Skyhook derive a significant amount of their respective revenues from a limited number of customers, and it is anticipated that these customers will continue to represent a significant portion of the revenues of TruePosition and Skyhook individually and in the aggregate. Because they depend on a limited number of customers, the loss of any one of these customers could have a material adverse effect on the operating results of TruePosition. Certain of these customers may fail to renew their contracts with TruePosition or Skyhook from time to time, creating additional risk with respect to the potential loss of revenue from these customers. For example, one of TruePosition's former largest clients, T-Mobile USA (T-Mobile), failed to renew its contract with TruePosition and ceased using TruePosition's services at the end of 2011, which resulted in a material reduction in TruePosition's revenue. The loss or reduction of business from one or a combination of these existing customers of True Position or Skyhook would materially adversely affect revenues, financial condition and results of operations of TruePosition.

The revenues of TruePosition and Skyhook each depend on the commercial deployment of wireless and other communications technologies and their ability to continue to drive customer demand for their products and services in a rapidly evolving and developing industry.

        TruePosition and Skyhook each develop, patent and commercialize products and services based on wireless and other communications technologies. They depend on their customers, licensees, operators of these wireless technologies and networks and other industries to use and timely deploy their products and services. TruePosition and Skyhook also depend on their customers and licensees to develop products and services with value-added features to drive sales as well as consumer demand for new wireless devices. As a result, TruePosition and Skyhook must stay abreast of rapidly evolving technological developments and offerings to remain competitive and increase the utility of their products and services, and they must be able to incorporate new technologies into their products and services in order to address the needs of their customers. The failure to successfully introduce new or enhanced products and services on a timely and cost-competitive basis that comply with evolving industry standards and regulations or the inability to continue to market existing products on a cost-competitive basis could have a material adverse effect on TruePosition's results of operations and financial condition.

        In addition, in order to successfully develop and market certain of TruePosition's or Skyhook's products and services, TruePosition or Skyhook may be required to enter into technology development or licensing agreements with third parties. TruePosition and Skyhook cannot provide assurances that they will be able to timely enter into any necessary technology development or licensing agreements on reasonable terms, or at all.

Changes to the regulatory environment in which TruePosition or Skyhook's customers operate may negatively impact their business.

        In the U.S., the FCC regulates wireless carriers, wireless services and E-9-1-1 requirements. FCC regulatory actions affecting wireless carriers and services and E-9-1-1 requirements may adversely affect TruePosition's wireless phone and device location technology and the positioning services offered by Skyhook. On February 20, 2014, the FCC adopted a Third Further Notice of Proposed Rulemaking in the E-9-1-1 Location Accuracy proceeding, which included proposed minimum accuracy requirements for calls originating indoors. The period for public comment on the proposed rules has expired, and action, if any, by the FCC is anticipated in late 2014 or early 2015. The proposed rules, if adopted, would be implemented over a multi-year period. Implementation of the proposed rules may be delayed if a party to the rulemaking proceeding challenges the rules in federal court.

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        A distinguishing characteristic of TruePosition's UTDOA technology is its ability to locate wireless devices indoors, where GPS signals may be compromised or blocked. Should the FCC promulgate the regulations as currently proposed, TruePosition will be actively competing for carrier contracts required to comply with those regulations. However, until the regulations are promulgated, due to the uncertainty surrounding these mandates, TruePosition may experience a decline in sales and revenue while many customers wait to invest in location-based technologies until the regulations are adopted. Even if TruePosition is able to produce and provide products and services compliant with these regulations, until these regulations are adopted and information regarding any compliant products and services offered by TruePosition's competitors becomes available, much uncertainty exists as to whether TruePosition will be able to successfully compete for carrier contracts.

        Other U.S. regulatory agencies also may seek to regulate aspects of the services provided by TruePosition and Skyhook. Further, to the extent TruePosition and Skyhook operate abroad, both businesses are subject to potential action by foreign regulatory agencies. TruePosition cannot anticipate how such additional regulation by the FCC, another U.S. Government agency, or any foreign regulator will affect its businesses.

The success of TruePosition and Skyhook depends on the integrity of their systems and infrastructures.

        TruePosition and Skyhook rely on their enterprise resource planning systems to support such critical business operations as processing sales orders and invoicing, purchasing and supply chain management, human resources and financial reporting. Portions of TruePosition's or Skyhook's IT infrastructure may experience interruptions of service or produce errors in connection with systemic failures, systems integration or migration work that takes place from time to time. TruePosition and Skyhook may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource-intensive. If TruePosition and Skyhook are unable to successfully implement major systems initiatives and maintain critical information systems, they could encounter difficulties that could have a material adverse impact on TruePosition's business.

        Furthermore, the businesses of TruePosition and Skyhook depend on delivering products and services to customers of consistently high quality and reliability. If the services offered by TruePosition or Skyhook were to fail or not to perform as expected, their services could be rendered ineffective, and any significant or systemic service failure could also result in a loss of customer confidence, as well as reputational damage, resulting in a material adverse impact on TruePosition's business.

Privacy concerns relating to the technology of TruePosition and Skyhook could damage their reputations and deter current and potential users from using their products and applications.

        Concerns about the practices of TruePosition and Skyhook with regard to the collection, use, disclosure, or security of personal information, user location information or other privacy related matters, even if unfounded, could damage their reputations and operating results. While TruePosition and Skyhook strive to comply with all applicable data protection laws and regulations, as well as their own posted privacy policies, any failure or perceived failure to comply may result in proceedings or actions against TruePosition or Skyhook by government entities or others, or could cause them to lose users and customers, which could potentially have an adverse effect on TruePosition's business.

        Regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning data protection. In addition, the interpretation and application of consumer and data protection laws in the U.S., Europe and elsewhere are often uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with the data practices of TruePosition and Skyhook. If so, in addition to the possibility of fines, this could result in an order requiring changes in the data practices of TruePosition and Skyhook, which could have an adverse

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effect on the business and results of operations of TruePosition. Complying with these various laws could result in the incurrence of substantial costs or require changes to business practices in a manner adverse to the business of TruePosition and Skyhook. See "—Changes to the regulatory environment in which TruePosition or Skyhook's customers operate may negatively impact their business."

Security breaches and other disruptions, including as a result of cyber attacks, could compromise the information collected and stored by TruePosition and Skyhook and expose them to liability, which would cause business and reputational damage.

        In the ordinary course of their respective businesses, each of TruePosition and Skyhook collect and store sensitive data, including intellectual property, their proprietary business information and that of their customers and suppliers, and potentially personally identifiable information of their users and employees, in their facilities and on their networks. The secure processing, maintenance and transmission of this information is important to their operations. Despite security measures in place at TruePosition and Skyhook, their information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error or other disruptions. Any such breach could compromise their networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, disruption of operations, reputational damage, and cause a loss of confidence, which could adversely affect TruePosition's business and revenues.

Actions taken by TruePosition and Skyhook to adequately protect their respective intellectual property rights, such as litigation to defend against alleged infringement of intellectual property rights or to enforce their intellectual property rights, could result in substantial costs, and their ability to compete could be harmed if they fail to take such actions or are unsuccessful in doing so.

        TruePosition and Skyhook rely primarily on a combination of patents, trademarks, trade secrets, employee and third-party nondisclosure agreements, licensing arrangements and other methods to protect their intellectual property in the United States and internationally. TruePosition and Skyhook have numerous patents issued, allowed and pending in the United States and/or in foreign jurisdictions which primarily relate to products and the technology used in connection with the products and services offered by TruePosition and Skyhook. TruePosition and Skyhook cannot be certain that the steps they have taken, or may take in the future, will prevent the misappropriation or unauthorized use of their proprietary information and technologies, particularly in foreign countries where international treaties, organizations and foreign laws may not protect their proprietary intellectual property rights as fully or as readily as United States laws or where the enforcement of such laws may be lacking or ineffective. Any pending patent applications and any future applications may not be approved, and any issued patents may not provide TruePosition or Skyhook with competitive advantages or may be challenged, invalidated, infringed, circumvented or misappropriated by third parties. Other companies, including some of TruePosition's and Skyhook's largest competitors, hold intellectual property rights in its industry and the intellectual property rights of others could inhibit TruePosition's and Skyhook's ability to introduce new products and services unless it secures necessary licenses on commercially reasonable terms. Furthermore, as the number of issued patents increases and as competition intensifies, the volume of intellectual property infringement claims and lawsuits may also increase. TruePosition and Skyhook may in the future become involved in lawsuits or other legal proceedings alleging patent infringement or other intellectual property rights violations by TruePosition or Skyhook or parties that they have agreed to indemnify for certain claims of infringement. Third parties may also claim that employees of TruePosition or Skyhook have misappropriated or divulged their former employers' trade secrets or confidential information. An unfavorable ruling in any such intellectual property related litigation could include significant damages, invalidation of a patent or family of patents, indemnification of customers, payment of lost profits, or, when it has been sought, injunctive relief.

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        In addition, TruePosition and Skyhook have been required and may be required in the future to initiate litigation in order to assert claims of infringement of their intellectual property, enforce patents issued or licensed to them, protect their trade secrets or know-how or to determine the scope and/or validity of a third party's patent or other proprietary rights. TruePosition and Skyhook also have been and may in the future be subject to lawsuits by third parties seeking to enforce their own intellectual property rights. Any such litigation, regardless of outcome, could subject TruePosition or Skyhook to significant costs or liabilities or require them to cease using proprietary third party technology and, consequently, could have a material adverse effect on the results of operations and financial condition of TruePosition. Any such litigation could also result in rulings impacting the validity or enforceability of TruePosition's or Skyhook's patents, which could result in new or increased competition that could have a material adverse effect on TruePosition's results of operations and financial condition. For example, Skyhook is currently involved in litigation with Google, in which Skyhook is alleging the infringement by Google of nine of Skyhook's patents involving location technology. See "Description of Our Business—Legal Proceedings—TruePosition." An unfavorable result in this litigation could adversely impact the competitive value of these nine Skyhook patents. If infringement claims are made against TruePosition or Skyhook or their products are found to infringe a third parties' patent or intellectual property, TruePosition, Skyhook or one of their indemnitees may have to seek a license to the third parties' patent or other intellectual property rights. However, TruePosition and Skyhook may not be able to obtain licenses at all or on terms acceptable to them particularly from their competitors. If they or one of their indemnitees is unable to obtain a license from a third party for technology that TruePosition or Skyhook use or that is used in one of their products, TruePosition or Skyhook could be subject to substantial liabilities or have to suspend or discontinue the manufacture and sale of one or more of their products. They may also have to make royalty or other payments, cross license their technology or make payments pursuant to third party indemnitees. See "Description of Our Business—Legal Proceedings—TruePosition" for additional information about pending litigation and indemnification claims.

        In addition, TruePosition maintains as its trade secrets certain data compilations and other information. Breach of one or more of these trade secrets could have a material adverse effect on TruePosition's results of operations and financial condition.


Factors Relating to the Spin-Off

The Spin-Off could result in a significant tax liability to Liberty and its stockholders.

        It is a condition to the Spin-Off that Liberty receive the opinion of Skadden Arps, in form and substance reasonably acceptable to Liberty, to the effect that, for U.S. federal income tax purposes, the Spin-Off will qualify as a tax-free transaction to Liberty and its stockholders under Section 355, Section 368(a)(1)(D) and related provisions of the Code (except with respect to the receipt of cash in lieu of fractional shares). The receipt of the opinion of Skadden Arps may not be waived by the Liberty board of directors.

        The opinion of Skadden Arps will be based upon certain assumptions, as well as statements, representations and certain undertakings made by officers of Liberty and Broadband and John C. Malone. These assumptions, statements, representations and undertakings are expected to relate to, among other things, Liberty's business reasons for engaging in the Spin-Off, the conduct of certain business activities by Liberty and Broadband, and the current plans and intentions of Liberty and Broadband to continue conducting those business activities and not to materially modify their ownership or capital structure following the Spin-Off. If any of those statements, representations or assumptions is incorrect or untrue in any material respect or any of those undertakings is not complied with, or if the facts upon which the opinion is based are materially different from the facts that prevail at the time of the Spin-Off, the conclusions reached in such opinion could be adversely affected.

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        Stockholders should note that Liberty does not intend to seek a ruling from the IRS as to the U.S. federal income tax treatment of the Spin-Off. The opinion of Skadden Arps will not be binding on the IRS or a court, and there can be no assurance that the IRS will not challenge the conclusions reached in the opinion or that a court would not sustain such a challenge.

        Even if the Spin-Off otherwise qualifies under Section 355, Section 368(a)(1)(D) and related provisions of the Code, the Spin-Off would result in a significant U.S. federal income tax liability to Liberty (but not to Liberty stockholders) under Section 355(e) of the Code if one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by vote or value) in the stock of Liberty or in the stock of Broadband (excluding, for this purpose, the acquisition of Broadband common stock by Liberty stockholders in the Spin-Off) as part of a plan or series of related transactions that includes the Spin-Off. Current tax law generally creates a presumption that any acquisition of the stock of Liberty or Broadband within two years before or after the Spin-Off is part of a plan that includes the Spin-Off, although the parties may be able to rebut that presumption under certain circumstances. The process for determining whether an acquisition is part of a plan under these rules is complex, inherently factual in nature and subject to a comprehensive analysis of the facts and circumstances of the particular case. Notwithstanding the opinion of Skadden Arps described above, Liberty or Broadband might inadvertently cause or permit a prohibited change in ownership of Liberty or Broadband, thereby triggering tax liability to Liberty, which could have a material adverse effect.

        If it is subsequently determined, for whatever reason, that the Spin-Off does not qualify for tax-free treatment, Liberty and/or its stockholders could incur significant tax liabilities determined in the manner described in "Material U.S. Federal Income Tax Consequences of the Transaction." As described further under "Certain Relationships and Related Party Transactions—Relationships between Broadband and Liberty—Tax Sharing Agreement," in certain circumstances, Broadband will be required to indemnify Liberty, its subsidiaries, and certain related persons for taxes and losses resulting from the Spin-Off

        For a more complete discussion of the opinion of Skadden Arps and the material U.S. federal income tax consequences of the Spin-Off to Liberty and its stockholders, please see "Material U.S. Federal Income Tax Consequences of the Transaction."

We may have a significant indemnity obligation to Liberty, which is not limited in amount or subject to any cap, if the Spin-Off is treated as a taxable transaction.

        Pursuant to the tax sharing agreement that we will enter into with Liberty in connection with the Spin-Off (the tax sharing agreement), subject to certain limited exceptions, we will be required to indemnify Liberty, its subsidiaries, and certain related persons for taxes and losses resulting from the failure of the Spin-Off to qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Code to the extent that such taxes and losses (i) result primarily from, individually or in the aggregate, the breach of certain covenants made by Broadband (applicable to actions or failures to act by Broadband and its subsidiaries following the completion of the Spin-Off), or (ii) result from the application of Section 355(e) of the Code to the Spin-Off as a result of the treatment of the Spin-Off as part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by either vote or value) in the stock of Broadband or any successor corporation.

        Our indemnification obligations to Liberty, its subsidiaries and certain related persons will not be limited in amount or subject to any cap. If we are required to indemnify Liberty, its subsidiaries or such related persons under the circumstances set forth in the tax sharing agreement, we may be subject to substantial liabilities, which could materially adversely affect our financial position.

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        For a more detailed discussion of the terms of the tax sharing agreement, please see "Certain Relationships and Related Party Transactions—Relationships between Broadband and Liberty—Tax Sharing Agreement."

We may determine to forgo certain transactions in order to avoid the risk of incurring significant tax-related liabilities.

        Under the tax sharing agreement, we will covenant not to take any action, or fail to take any action, following the Spin-Off, which action or failure to act is inconsistent with the Spin-Off qualifying for tax-free treatment under Section 355, Section 368(a)(1)(D) and related provisions of the Code. Further, the tax sharing agreement will require that we generally indemnify Liberty for any taxes or losses incurred by Liberty (or its subsidiaries) resulting from breaches of such covenants or resulting from the application of Section 355(e) of the Code to the Spin-Off as a result of the treatment of the Spin-Off as part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by either vote or value) in our stock. As a result, we might determine to forgo certain transactions that might have otherwise been advantageous in order to preserve the tax-free treatment of the Spin-Off.

        In particular, we might determine to continue to operate certain of our business operations for the foreseeable future even if a sale or discontinuance of such business might have otherwise been advantageous. Moreover, in light of the requirements of Section 355(e) of the Code, we might determine to forgo certain transactions, including share repurchases, stock issuances, certain asset dispositions and other strategic transactions, for some period of time following the Spin-Off. In addition, our indemnity obligation under the tax sharing agreement might discourage, delay or prevent our entering into a change of control transaction for some period of time following the Spin-Off.

We may incur material costs as a result of our separation from Liberty.

        We will incur costs and expenses not previously incurred as a result of our separation from Liberty. These increased costs and expenses may arise from various factors, including financial reporting, costs associated with complying with the federal securities laws (including compliance with the Sarbanes-Oxley Act of 2002), tax administration and human resources related functions. Although Liberty will continue to provide many of these services for us under the services agreement, we cannot assure you that the services agreement will continue or that these costs will not be material to our business.

Prior to the Spin-Off, we will not have been an independent company and we may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent company.

        Prior to the Spin-Off, our business was operated by Liberty as part of its broader corporate organization, rather than as an independent company. Liberty's senior management oversaw the strategic direction of our businesses and Liberty performed various corporate functions for us, including, but not limited to:

        Following the Spin-Off, neither Liberty nor any of its affiliates will have any obligation to provide these functions to us other than those services that will be provided by Liberty pursuant to the services

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agreement between us and Liberty. If, once our services agreement terminates, we do not have in place our own systems and business functions, we do not have agreements with other providers of these services or we are not able to make these changes cost effectively, we may not be able to operate our business effectively and our profitability may decline. If Liberty does not continue to perform effectively the services that are called for under its services agreement with us, we may not be able to operate our business effectively after the Spin-Off.

We may not realize the potential benefits from the Spin-Off in the near term or at all.

        In this prospectus, we have described anticipated strategic and financial benefits we expect to realize as a result of our separation from Liberty. See "The Spin-Off—Reasons for the Spin-Off." In particular, we believe that the Spin-Off will better position us to take advantage of business opportunities, strategic alliances and other acquisitions through Broadband's enhanced acquisition currency, as well as facilitate a potential combination of Broadband and Charter. We also expect the Spin-Off to enable Broadband to provide its employees with more attractive equity incentive awards. However, no assurance can be given that the market will react favorably to the Spin-Off or that the current discount applied by the market to the Liberty common stock will not be applied to Broadband's common stock, thereby causing Broadband's equity to not be as attractive to its employees as well as any potential acquisition counterparties. In addition, no assurance can be given that any investment, acquisition or other strategic opportunities will become available following the Spin-Off on terms that Broadband finds favorable or at all, nor can any assurance be given that a combination of Broadband and Charter will ever occur. Given the added costs associated with the completion of the Spin-Off, including the separate accounting, legal and other compliance costs of being a separate public company, our failure to realize the anticipated benefits of the Spin-Off in the near term or at all could adversely affect our company.

Our company has overlapping directors and officers with Liberty, Liberty Interactive and Liberty TripAdvisor Holdings, Inc., which may lead to conflicting interests.

        As a result of the Spin-Off, the September 2011 separation of Starz from Liberty and the January 2013 spin-off of Liberty from Starz, most of the executive officers of Broadband also serve as executive officers of Liberty, Liberty Interactive and Liberty TripAdvisor Holdings, Inc. (TripCo) and there are overlapping directors. None of these companies has any ownership interest in any of the others. Our executive officers and members of our company's board of directors have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at Liberty, Liberty Interactive, TripCo or any other public company have fiduciary duties to that company's stockholders. For example, there may be the potential for a conflict of interest when our company, Liberty, Liberty Interactive or TripCo pursues acquisitions and other business opportunities that may be suitable for each of them. Therefore, such persons may have conflicts of interest or the appearance of conflicts of interest with respect to matters involving or affecting more than one of the companies to which they owe fiduciary duties. Our company has renounced its rights to certain business opportunities and our restated certificate of incorporation will provide that no director or officer of our company will breach their fiduciary duty and therefore be liable to our company or its stockholders by reason of the fact that any such individual directs a corporate opportunity to another person or entity (including Liberty, Liberty Interactive and TripCo) instead of our company, or does not refer or communicate information regarding such corporate opportunity to our company, unless (x) such opportunity was expressly offered to such person solely in his or her capacity as a director or officer of our company or as a director or officer of any of our subsidiaries, and (y) such opportunity relates to a line of business in which our company or any of its subsidiaries is then directly engaged. In addition, any potential conflict that qualifies as a "related party transaction" (as defined in Item 404 of Regulation S-K) is subject to review by an independent committee of the applicable issuer's board of directors in accordance with its corporate governance guidelines. Any other potential conflicts that arise will be addressed on a

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case-by-case basis, keeping in mind the applicable fiduciary duties owed by the executive officers and directors of each issuer. From time to time, we may enter into transactions with Liberty or Liberty Interactive and/or their respective subsidiaries or other affiliates. There can be no assurance that the terms of any such transactions will be as favorable to our company, Liberty, Liberty Interactive or any of their respective subsidiaries or affiliates as would be the case where there is no overlapping officer or director.

Our inter-company agreements are being negotiated while we are a subsidiary of Liberty.

        We are entering into a number of inter-company agreements covering matters such as tax sharing and our responsibility for certain liabilities previously undertaken by Liberty for certain of our businesses. In addition, we are entering into a services agreement with Liberty pursuant to which it will provide to us certain management, administrative, financial, treasury, accounting, tax, legal and other services, for which we will reimburse them on a fixed fee basis. The terms of all of these agreements are being established while we are a wholly-owned subsidiary of Liberty, and hence may not be the result of arms' length negotiations. We believe that the terms of these inter-company agreements are commercially reasonable and fair to all parties under the circumstances; however, conflicts could arise in the interpretation or any extension or renegotiation of the foregoing agreements after the Spin-Off. See "Certain Relationships and Related Party Transactions."

Liberty's board of directors may abandon the Spin-Off at any time, and its board of directors may determine to amend the terms of any agreement we enter into relating to the Spin-Off.

        No assurance can be given that the Spin-Off will occur, or if it occurs that it will occur on the terms described in this prospectus. In addition to the conditions to the Spin-Off described herein (certain of which may be waived by the Liberty board of directors in its sole discretion), the Liberty board of directors may abandon the Spin-Off at any time prior to the distribution date for any reason or for no reason. In addition, the agreements to be entered into by Broadband with Liberty in connection with the Spin-Off (including the reorganization agreement, the tax sharing agreement, the services agreement and the facilities sharing agreement) may be amended or modified prior to the distribution date in the sole discretion of Liberty. If any condition to the Spin-Off is waived or if any material amendments or modifications are made to the terms of the Spin-Off or to such ancillary agreements prior to the Spin-Off, Liberty intends to promptly issue a press release and file a Form 8-K informing the market of the substance of such waiver, amendment or modification.


Factors Relating to the Rights Offering

If we terminate the rights offering, neither we nor the subscription agent will have any obligation to you except to return your subscription payments.

        Following the distribution, we may terminate the rights offering for any reason prior to the expiration time. However, you may not revoke any exercise of your Series C Rights. If we terminate the rights offering, neither we nor the subscription agent will have any obligation to you with respect to the Series C Rights, except to return your subscription payments, without interest or deduction. In addition, if you purchase Series C Rights on the public market and we later terminate the rights offering, you will lose the purchase price you paid for your Series C Rights.

The subscription price may not reflect the value of our company.

        Our board of directors determined that the subscription price will represent a discount of 20% to the 20-trading day volume weighted average trading price of our Series C common stock beginning on the first day on which our Series C common stock begins trading "regular way" on the Nasdaq Global Select Market following the distribution (the 20 day VWAP). The subscription price does not necessarily

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bear any relationship to the book value of our assets, historic or future cash flows, financial condition, recent or historic stock prices or any other established criteria for valuation, and you should not consider the subscription price as any indication of the value of our company.

Stockholders who do not exercise their Series C Rights will experience dilution.

        The Series C Rights will permit rightsholders to acquire an aggregate number of our Series C shares equal to one-fifth of the aggregate number of shares of our Series A common stock, Series B common stock and Series C common stock, that will be outstanding immediately following the distribution, at a 20% discount to the 20 day VWAP. If you do not exercise your basic subscription privilege in full and the rights offering is fully subscribed and completed, you will experience material dilution in your proportionate interest in the equity ownership of our company. If you do not exercise or sell your Series C Rights, you will relinquish any value inherent in the Series C Rights.


Factors Relating to our Common Stock and the Securities Market

We cannot be certain that an active trading market will develop or be sustained after the Spin-Off, and following the Spin-Off, our stock price may fluctuate significantly.

        There can be no assurance that an active trading market will develop or be sustained for our common stock after the Spin-Off. We cannot predict the prices at which either series of our common stock may trade after the Spin-Off, the effect of the Spin-Off on the trading prices of the Liberty common stock or whether the market value of the shares of a series of our common stock and the shares of the same series of the Liberty common stock held by a stockholder after the Spin-Off will be less than, equal to or greater than the market value of a share of the corresponding series of Liberty common stock held by such stockholder prior to the Spin-Off.

        The market price of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including:

        The fair value of Liberty's investment in Charter, on an as-converted basis, was approximately $4.5 billion as of March 31, 2014, which represents only 1/4 of the total market value of Liberty's common stock, as a whole, but will represent almost all of our total market value following the Spin-Off. As a result of the Spin-Off, our stock price will move in tandem with the Charter stock price to a far greater degree than the Liberty common stock does today. Our stock price will be affected by the results of operations of Charter and developments in its business.

If, following the Spin-Off, we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our stock price may suffer.

        Section 404 of the Sarbanes-Oxley Act of 2002 requires any company subject to the reporting requirements of the U.S. securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries' internal control over financial reporting. To comply with this statute, we will be required to document and test our internal control procedures; our management will be required to assess and issue a report concerning our internal control over financial reporting; and our independent auditors will be required to issue an opinion on management's assessment of those matters. Our compliance with Section 404 of the Sarbanes-Oxley Act will first be tested in connection with the filing of our

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Annual Report on Form 10-K for the fiscal year ending December 31, 201[5]. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules. During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act. If our management cannot favorably assess the effectiveness of our internal control over financial reporting or our auditors identify material weaknesses in our internal controls, investor confidence in our financial results may weaken, and our stock price may suffer. In addition, our internal controls must necessarily rely in part upon the adequacy of Charter's internal controls. However, because we do not control the day-to-day business management practices of Charter, we cannot control, or require Charter to change, its internal controls. See "Risk Factors—Factors Relating to Our Corporate History and Structure—We rely on Charter to provide us with the financial information that we use in accounting for our ownership interest in Charter as well as information regarding Charter that we include in our public filings."

It may be difficult for a third party to acquire us, even if doing so may be beneficial to our stockholders.

        Certain provisions of our certificate of incorporation and bylaws may discourage, delay or prevent a change in control of our company that a stockholder may consider favorable. These provisions include the following:

After the Spin-Off, we may be controlled by one principal stockholder.

        John C. Malone currently beneficially owns shares of Liberty common stock representing approximately 47.3% of the aggregate voting power of the outstanding shares of Liberty common stock as of June 30, 2014. Following the consummation of the Spin-Off, Mr. Malone is expected to

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beneficially own shares of our common stock representing approximately 47.3% of our voting power, based upon the one-for-four distribution ratio in the Spin-Off and his beneficial ownership of LMCA, LMCB and LMCK as of June 30, 2014 (as reflected under "Security Ownership of Certain Beneficial Owners—Security Ownership of Management" below). Mr. Malone's rights to vote or dispose of his equity interest in Broadband will not be subject to any restrictions in favor of Broadband other than as may be required by applicable law and except for customary transfer restrictions pursuant to incentive award agreements.

Holders of a single series of our common stock may not have any remedies if an action by our directors has an adverse effect on only that series of our common stock.

        Principles of Delaware law and the provisions of our certificate of incorporation may protect decisions of our board of directors that have a disparate impact upon holders of any single series of our common stock. Under Delaware law, the board of directors has a duty to act with due care and in the best interests of all of our stockholders, including the holders of all series of our common stock. Principles of Delaware law established in cases involving differing treatment of multiple classes or series of stock provide that a board of directors owes an equal duty to all common stockholders regardless of class or series and does not have separate or additional duties to any group of stockholders. As a result, in some circumstances, our directors may be required to make a decision that is viewed as adverse to the holders of one series of our common stock. Under the principles of Delaware law and the business judgment rule, holders may not be able to successfully challenge decisions that they believe have a disparate impact upon the holders of one series of our stock if our board of directors is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and acts in good faith and in the honest belief that the board is acting in the best interest of all of our stockholders.

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CAUTIONARY STATEMENTS CONCERNING FORWARD LOOKING STATEMENTS

        Certain statements in this prospectus and in the documents incorporated by reference herein constitute forward-looking statements, including certain statements relating to the business strategies, market potential and future financial performance of our company and our subsidiaries, and other matters. In particular, information included under "The Spin-Off," "The Rights Offering," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of our Business" and "Financial Statements" contain forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but such statements necessarily involve risks and uncertainties and there can be no assurance that the expectation or belief will result or be achieved or accomplished. In addition to the risk factors described herein under the headings "Risk Factors," the following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated:

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These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this prospectus, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein or therein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based. When considering such forward-looking statements, you should keep in mind the factors described in "Risk Factors" and other cautionary statements contained or incorporated in this document. Such risk factors and statements describe circumstances which could cause actual results to differ materially from those contained in any forward-looking statement.

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THE SPIN-OFF

Background for the Spin-Off

        Our company is currently a wholly-owned subsidiary of Liberty. Following the Spin-Off, our principal businesses, assets and liabilities will initially consist of Liberty's 26% ownership interest and certain warrants to purchase additional shares of Charter, Liberty's 100% ownership interest in TruePosition, a minority equity investment in TWC, certain deferred tax liabilities, liabilities related to a TWC call option and $300 million in indebtedness. To accomplish the Spin-Off, Liberty will effect the distribution, whereby holders of LMCA, LMCB and LMCK will receive, by means of a dividend, shares of our Series A common stock, Series B common stock and Series C common stock, respectively, and subscription rights to purchase shares of our Series C common stock. Following the Spin-Off, Liberty will cease to own any equity interest in our company, and we will be an independent publicly traded company. No vote of Liberty's stockholders is required or being sought in connection with the Spin-Off, and holders of Liberty common stock will have no appraisal rights in connection with the Spin-Off.

        The businesses and assets that remain at Liberty following the Spin-Off will consist of the remainder of its businesses and assets not included in the distribution, including Liberty's subsidiaries Sirius XM and ANLBC and its interest in Live Nation.


Reasons for the Spin-Off

        The board of directors of Liberty periodically reviews with management the strategic goals and prospects of its various businesses, equity affiliates and other investments. As a result of a review undertaken earlier this year, the Liberty board authorized management to pursue a plan to implement a new tracking stock structure at Liberty, pursuant to which Liberty's investment in Charter and its subsidiary TruePosition, among other assets and liabilities, would be attributed to a new tracking stock group to be named the Broadband Group. The purpose for the tracking stock was to provide Liberty with greater operational and financial flexibility in executing its business strategies, by permitting it to bring greater clarity with respect to its businesses and assets and thereby allow the stock of each group to trade more in line with the fundamentals of the more focused businesses and assets attributed to each of its tracking stock groups. Liberty also believed that implementing a tracking stock structure would provide the company with stronger acquisition currencies in its new tracking stocks and the ability to issue more tailored equity incentives to its management and employees.

        However, during the time that management was evaluating the creation of the tracking stocks as directed by the Liberty board, a number of significant agreements were reached between some of the largest broadband distributors in the United States, including Charter. In the first quarter of 2014, Comcast and TWC announced the execution of a merger agreement, and then, in the second quarter of 2014, Charter and Comcast announced the Comcast Transactions. Although these transactions are subject to a number of conditions, including regulatory clearance, the Liberty board believes that, assuming they are completed as currently contemplated, the broadband distribution landscape in the United States will change dramatically. For example, as described above under "Summary—Recent Developments," Charter would become the 2nd largest cable operator, in terms of subscribers, in the U.S.

        Following these developments, the Liberty board determined that its business objectives in reducing the complexity discount associated with the Liberty common stock, and thereby creating more efficiently priced acquisition currencies and more effectively tailored equity incentives for its management and employees, would be better achieved through the Spin-Off, as opposed to the earlier contemplated tracking stock structure. Further, the Liberty board determined that the Spin-Off would allow Broadband to raise capital through the rights offering on more attractive terms than Liberty would be able to in the absence of the Spin-Off and that the Spin-Off, in avoiding uncertainties which may arise with a tracking stock structure, would better facilitate both a potential combination of

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Broadband with Charter and also of Liberty with Sirius XM. TruePosition, as an operating company, has been included in the businesses and assets of Broadband in order to preserve the tax-free nature of the Spin-Off to Liberty and to holders of Liberty common stock under applicable tax regulations.

        Among the factors considered by the Liberty board in arriving at its determination were the following:

        The Liberty board also considered a number of costs and risks associated with the Spin-Off in approving the Spin-Off, including the following:

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        Liberty's board evaluated the costs and benefits of the transaction as a whole and did not find it necessary to assign relative weights to the specific factors considered. Liberty's board concluded, however, that the potential benefits of the Spin-Off outweighed its potential costs, and that separating our company from Liberty in the form of a distribution to Liberty's stockholders that is generally tax-free is appropriate, advisable and in the best interests of Liberty and its stockholders.


Interests of Certain Persons

        In connection with the Spin-Off, the executive officers and directors of Liberty will receive adjustments to their stock incentive awards with respect to Liberty common stock and stock incentive awards with respect to Broadband common stock. See "—Effect of the Spin-Off on Outstanding Liberty Incentive Awards" below for more information.

        Certain current executive officers of Liberty will also serve as executive officers of Broadband immediately following the Spin-Off. See "Risk Factors—Factors Relating to the Spin-Off—Our company has overlapping management with Liberty and Liberty Interactive, which may lead to conflicting interests." Furthermore the executive officers of Liberty and Broadband are entitled to indemnification with respect to actions taken by them in connection with the Spin-Off under the organizational documents of Liberty and Broadband, as well as customary indemnification agreements to which Liberty and Broadband, on the one hand, and these persons, on the other hand, are parties.

        As of June 30, 2014, Liberty's executive officers and directors beneficially owned shares of Liberty common stock representing in the aggregate approximately 48.8% of the aggregate voting power of the outstanding shares of Liberty common stock.

        The Liberty board was aware of these interests and considered them when it approved the Spin-Off.


Conditions to the Spin-Off

        Liberty's board of directors has reserved the right, in its sole discretion, to amend, modify, delay or abandon the Spin-Off and the related transactions at any time prior to the distribution date. In addition, the completion of the Spin-Off and related transactions are subject to the satisfaction (as determined by the Liberty board of directors in its sole discretion) of the following conditions, certain of which may be waived by the Liberty board of directors in its sole discretion:

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        The first, second and third conditions set forth above are non-waivable. The Liberty board may, however, waive the fourth and fifth conditions set forth above. In the event the Liberty board of directors waives a material condition to the Spin-Off, Liberty intends to promptly issue a press release and file a Current Report on Form 8-K to report such event.


Manner of Effecting the Spin-Off

        The Spin-Off is being effected as a dividend, pursuant to which Liberty will distribute to holders of its Liberty common stock:

        Following the record date and prior to the distribution date, Liberty will deliver all of the issued and outstanding shares of our Series A common stock, Series B common stock, Series C common stock and the Series C Rights to the distribution agent. If you own Liberty common stock as of the close of business on the record date, the shares of Broadband common stock and Series C Rights that you are entitled to receive in the Spin-Off will be issued electronically in book-entry form, as of the distribution date, to you or to your bank or brokerage firm on your behalf, which we expect to occur within one (1) business day of the distribution date to allow the distribution agent to effect the distribution of shares and rights. Registration in book-entry form refers to a method of recording stock ownership when no physical share certificates are issued to stockholders, as is the case in the Spin-Off. Please note that if any holder of Liberty common stock sells shares of LMCA, LMCB or LMCK before the record date, so that such stockholder is not the record holder on the record date, the buyer of those shares, and not the seller, will become entitled to receive the shares of our common stock and our Series C Rights issuable in respect of the shares sold. If you are a holder of shares of Liberty common stock on the record date, you will be entitled to receive the shares of our common stock and our Series C Rights issuable in respect of those shares only if you hold them on both the record date and the distribution date. See "—Trading Prior to the Record Date" below for more information. If you are a record holder of Liberty common stock on the record date, Computershare will mail you a book-entry account statement that reflects your shares of Broadband common stock and Series C Rights. If you are a beneficial owner of Liberty common stock (but not a record holder) on the record

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date, your bank or brokerage firm will credit your account with the shares of Broadband common stock and Series C Rights that you are entitled to receive.

        Stockholders of Liberty are not being asked to take any action in connection with the Spin-Off. No stockholder approval of the distribution is required or being sought. Neither Liberty nor our company is asking you for a proxy, and you are requested not to send us a proxy. You are not required to pay any consideration or give up any portion of your Liberty common stock to receive shares of our common stock and Series C Rights in the distribution.


Effect of the Spin-Off on Outstanding Liberty Awards

        Options to purchase shares of Liberty common stock, stock appreciation rights with respect to shares of Liberty common stock and restricted shares of Liberty common stock have been granted to various directors, officers and employees and consultants of Liberty and certain of its subsidiaries pursuant to the various stock incentive plans administered by the Liberty board of directors or the compensation committee thereof. Below is a description of the effect of the Spin-Off (but not the distribution of the Series C Rights or the rights offering) on these outstanding equity awards. For a description of the effect of the rights offering on these outstanding equity awards, see "The Rights Offering—Treatment of Stock Awards and Other Awards."

        Each holder of an outstanding option to purchase shares of Liberty common stock on the record date (an original Liberty option award) will receive an option to purchase shares of the corresponding series of our common stock (a new Broadband option award) and an adjustment to the exercise price of and the number of shares subject to the original Liberty option award (as so adjusted, an adjusted Liberty option award). The exercise prices of and the number of shares subject to the new Broadband option award and the related adjusted Liberty option award will be determined based on the exercise price of and the number of shares subject to the original Liberty option award, the distribution ratio, the pre-Spin-Off trading price of Liberty common stock (determined using the volume weighted average price of the applicable series of Liberty common stock over the three-consecutive trading days immediately preceding the Spin-Off) and the relative post-Spin-Off trading prices of Liberty common stock and Broadband common stock (determined using the volume weighted average price of the applicable series of common stock over the three-consecutive trading days beginning on the first trading day following the Spin-Off on which both the Liberty common stock and the Broadband common stock trade in the "regular way" (meaning once the common stock trades using a standard settlement cycle)), such that the pre-Spin-Off intrinsic value of the original Liberty option award is allocated between the new Broadband option award and the adjusted Liberty option award.

        Except as described above, all other terms of an adjusted Liberty option award and a new Broadband option award (including, for example, the vesting terms thereof) will in all material respects, be the same as those of the corresponding original Liberty option award. The terms of the adjusted Liberty option awards will be determined and the new Broadband option awards will be granted as soon as practicable following the determination of the pre- and post-Spin-Off trading prices of Liberty common stock and Broadband common stock, as applicable.

        Each holder of an outstanding stock appreciation right with respect to shares of Liberty common stock on the record date (an original Liberty SAR) will receive a stock appreciation right with respect to shares of the corresponding series of our common stock (a new Broadband SAR) and an adjustment to the base price of and the number of shares subject to the original Liberty SAR (as so adjusted, an adjusted Liberty SAR). The base prices of and the number of shares subject to the new Broadband

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SAR and the related adjusted Liberty SAR will be determined based upon the base price of and the number of shares subject to the original Liberty SAR, the distribution ratio, the pre-Spin-Off trading price of Liberty common stock (determined as described above) and the relative post-Spin-Off trading prices of Liberty common stock and Broadband common stock (determined as described above), such that the pre-Spin-Off intrinsic value of the original Liberty SAR is allocated between the new Broadband SAR and the adjusted Liberty SAR.

        Except as described above, all other terms of an adjusted Liberty SAR and a new Broadband SAR (including, for example, the vesting terms thereof) will, in all material respects, be the same as those of the corresponding original Liberty SAR. The terms of the adjusted Liberty SAR will be determined and the new Broadband SAR will be granted as soon as practicable following the determination of the pre-and post-Spin-Off trading prices of Liberty common stock and Broadband common stock, as applicable.

        Each holder of a restricted stock award with respect to shares of Liberty common stock (an original Liberty restricted stock award) will receive in the distribution one restricted share of the corresponding series of Broadband common stock (a new Broadband restricted stock award) for every four restricted shares of Liberty common stock held by them as of the record date for the distribution. Except as described above, all new Broadband restricted stock awards (including, for example, the vesting terms thereof) will, in all material respects, be the same as those of the corresponding original Liberty restricted stock award.

        All of the new Broadband option awards, new Broadband SARs and new Broadband restricted stock awards will be issued pursuant to the Liberty Broadband Corporation Transitional Stock Adjustment Plan (the transitional plan), a copy of which will be filed as an exhibit to the Registration Statement on Form S-1 of which this prospectus forms a part. The transitional plan will govern the terms and conditions of the foregoing Broadband incentive awards but will not be used to make any grants following the Spin-Off.


Conduct of the Business of Broadband if the Spin-Off is Not Completed

        If the Spin-Off is not completed, Liberty intends to continue to conduct the business of Broadband substantially in the same manner as it is operated today. From time to time, Liberty will evaluate and review its business operations, properties, dividend policy and capitalization, and make such changes as are deemed appropriate, and continue to seek to identify strategic alternatives to maximize stockholder value.


Amount and Source of Funds and Financing of the Transaction; Expenses

        It is expected that Liberty will incur an aggregate of $5.1 million in expenses in connection with the Spin-Off. These expenses will be comprised of:

These expenses will be paid by Liberty from its existing cash balances.

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Accounting Treatment

        The Spin-Off will be accounted for at historical cost due to the fact that our common stock is to be distributed pro rata to holders of Liberty common stock.


No Appraisal Rights

        Under the General Corporation Law of the State of Delaware, holders of Liberty common stock will not have appraisal rights in connection with the Spin-Off.


Results of the Spin-Off

        Immediately following the Spin-Off, we expect to have outstanding approximately [    •    ] shares of our Series A common stock, [    •    ] shares of our Series B common stock and [    •    ] shares of our Series C common stock, based upon the number of shares of LMCA, LMCB and LMCK, respectively, outstanding as of [    •    ], 2014. The actual number of shares of our Series A common stock, our Series B common stock and our Series C common stock to be distributed in the Spin-Off will depend upon the actual number of shares of LMCA, LMCB and LMCK outstanding on the record date.

        Immediately following the Spin-Off, we expect to have approximately [    •    ] holders of record of our Series A common stock, [    •    ] holders of record of our Series B common stock and [    •    ] holders of record of our Series C common stock, based upon the number of holders of record of LMCA, LMCB and LMCK, respectively, as of [    •    ], 2014 (which amount does not include the number of stockholders whose shares are held of record by banks, brokerage houses or other institutions, but includes each such institution as one stockholder).


Listing and Trading of our Common Stock

        On the date of this prospectus, we are a wholly-owned subsidiary of Liberty. Accordingly, there is no public market for our common stock. We have applied to list our Series A common stock and our Series C common stock on the Nasdaq Global Select Market under the symbols "LBRDA" and "LBRDK," respectively. Although no assurance can be given, we currently expect that our Series B common stock will trade on the OTC Bulletin Board under the symbol "LBRDB." Neither we nor Liberty can assure you as to the trading price of any series of our common stock after the Spin-Off. The approval of Nasdaq for the listing of our Series A common stock and our Series C common stock is a condition to the Spin-Off, which may not be waived by the Liberty board of directors.


Stock Transfer Agent and Registrar

        Computershare Trust Company, N.A. is the transfer agent and registrar for all series of Broadband common stock.


Trading Prior to the Record Date

        Prior to the record date, Liberty common stock will continue to trade on the Nasdaq Global Select Market in the regular way. During this time, shares of LMCA, LMCB and LMCK that trade in the regular way will trade with an entitlement to receive shares of the same series of our common stock distributable in the Spin-Off. Therefore, if you own shares of either LMCA, LMCB or LMCK common stock and sell those shares prior to the record date, so that you are not the record holder of such shares on the record date, you will also be selling your right to the shares of our common stock and Series C Rights that would have been distributed to you in the distribution with respect to the shares of LMCA, LMCB or LMCK common stock you sell. However, because it is expected that the "ex-dividend" date for the Spin-Off will be the first trading date following the distribution date, if you are a holder of shares of LMCA, LMCB or LMCK on the record date, you will be entitled to receive

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the shares of Broadband common stock and Series C Rights issuable in respect of those shares only if you hold them on both the record date and the distribution date. If you are a holder of shares of LMCA, LMCB or LMCK on the record date but sell them between the record date and the distribution date, you will not be entitled to receive the shares of Broadband common stock and Series C rights issuable in respect of those shares sold. On the first day of trading following the distribution date, shares of our Series A common stock and our Series C common stock will begin trading under the symbols "LBRDA" and "LBRDK," respectively. Although no assurance can be given, we currently expect that our Series B common stock will trade on the OTC Bulletin Board under the symbol "LBRDB."


Reasons for Furnishing this Prospectus

        This prospectus is being furnished solely to provide information to Liberty stockholders who will receive shares of our common stock and Series C Rights in the distribution. We believe that the information contained in this prospectus is accurate as of the date set forth on the cover. Changes to the information contained in this prospectus may occur after that date, and neither our company nor Liberty undertakes any obligation to update the information except in the normal course of our respective public disclosure obligations and practices.

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THE RIGHTS OFFERING

General

        Liberty's board has determined that in the distribution (but subject to the satisfaction or, where applicable, waiver of all other conditions to the distribution), holders of Liberty common stock as of the record date for the distribution, which will also serve as the record date for the rights offering, will receive, in addition to the shares of our common stock distributable in the Spin-Off, one Series C Right for every five shares of our Series A common stock received by such holder in the distribution, one Series C Right for every five shares of our Series B common stock received by such holder in the distribution, and one Series C Right for every five shares of our Series C common stock received by such holder in the distribution. Fractional Series C Rights will be rounded up to the nearest whole right.

        Each Series C Right entitles the holder to a basic subscription privilege and an oversubscription privilege. Under the basic subscription privilege, each whole Series C Right entitles the holder to purchase one share of our Series C common stock at a subscription price equal to a 20% discount to the 20 Day VWAP. Each Series C Right also has an oversubscription privilege, as described below under the heading "—Subscription Privileges—Oversubscription Privilege."

        The following describes the rights offering in general and assumes (unless specifically provided otherwise) that you will be a holder of Liberty common stock as of the record date. If you will hold your shares of our common stock in a brokerage account or through a dealer or other nominee as of the record date, please see the information included below under the heading "—Delivery of Subscription Materials and Payment—Beneficial Owners." As used in this proxy statement/prospectus, the term "business day" means any day on which securities may be traded on the Nasdaq Global Select Market.


Reasons for the Rights Offering

        We are conducting the rights offering in order to raise capital for general corporate purposes. The proceeds may be used, among other purposes, for investments in our equity affiliate Charter or new business opportunities. See "Use of Proceeds From the Rights Offering."


Determination of Subscription Prices

        In determining the formula under which the subscription price will be calculated, the Liberty board of directors considered, among other things, the estimated market price of our Series C common stock following the distribution, discounts used in similar rights offerings, the general conditions of the securities markets and the amount of proceeds, after any deductions for expenses related to the rights offering, we wish to raise.


No Fractional Series C Rights

        Liberty will not issue or pay cash in lieu of fractional Series C Rights. Instead, fractional Series C Rights will be rounded up to the nearest whole Series C Right. For example, if you receive 34 shares of our Series A common stock in the distribution, you will receive 7 Series C Rights to purchase shares of our Series C common stock, instead of the 6.8 Series C Rights you would have received without rounding.

        You may request that the subscription agent divide your rights certificate into transferable parts if you are the record holder for a number of beneficial owners of common stock. However, the subscription agent will not divide your rights certificate such that (through rounding or otherwise) you would receive a greater number of Series C Rights than those to which you would be entitled if you had not divided your certificates.

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Commencement of the Rights Offering

        The rights offering will commence upon the determination of the subscription price, which we expect to occur promptly following the 20th "regular way" trading day after the distribution is completed. We will announce by press release the determination of the subscription price, the commencement of the rights offering and the expiration time of the rights offering.


Expiration Time

        You may exercise the basic subscription privilege and the oversubscription privilege at any time before the expiration time, which is 5:00 p.m., New York City time, on the 20th trading day following the commencement of the rights offering (as the same will be publicly announced by us), unless the rights offering is extended. Any Series C Rights not exercised before the expiration time will expire and become null and void. We will not be obligated to honor your exercise of Series C Rights if the subscription agent receives any of the required documents relating to your exercise after the expiration time, regardless of when you transmitted the documents, unless you have timely transmitted the documents pursuant to the guaranteed delivery procedures described below.

        We may extend the expiration time for any reason. However, we may not extend the expiration time of the rights offering for more than 25 trading days past the original 20 trading day period. If we do not complete the rights offering by the 45th trading day of the subscription period, we will cause the subscription agent to return to each exercising holder the entirety of such holder's aggregate subscription price previously paid (without interest).

        If we elect to extend the date the Series C Rights expire, we will issue a press release announcing the extension before 9:00 a.m., New York City time, on the first business day after the most recently announced expiration time.


Subscription Privileges

        Your rights entitle you to a basic subscription privilege and an oversubscription privilege.

        Basic Subscription Privilege.    The basic subscription privilege entitles you to purchase one share of our Series C common stock per whole right, upon delivery of the required documents and payment of the subscription price per share, prior to the expiration time. You are not required to exercise your basic subscription privilege, in full or in part, unless you wish to also purchase shares under your oversubscription privilege described below.

        Oversubscription Privilege.    The Series C Rights include an oversubscription privilege relating to shares of our Series C common stock. The oversubscription privilege entitles you to purchase up to that number of shares of our Series C common stock offered in the rights offering which are not purchased by other rightsholders pursuant to their basic subscription privilege, upon delivery of the required documents and payment of the subscription price per share prior to the expiration time. You will be permitted to purchase shares of our Series C common stock pursuant to your oversubscription privilege only if other holders of rights of our Series C common stock do not exercise their basic subscription privilege in full. You may exercise your oversubscription privilege with respect to our Series C common stock only if you exercise your basic subscription privilege in full. If you wish to exercise your oversubscription privilege, you must specify the number of additional shares you wish to purchase, which may be up to the maximum number of shares of our Series C common stock offered in the rights offering, less the number of shares you may purchase under your basic subscription privilege.

        Pro Rata Allocation.    If there are not enough shares of our Series C common stock to satisfy all subscriptions pursuant to the exercise of the oversubscription privilege, we will allocate the shares that are available for purchase under the oversubscription privilege pro rata (subject to the elimination of

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fractional shares) among those rightsholders who exercise their oversubscription privilege. Pro rata means in proportion to the number of shares of the Broadband common stock that you and the other holders of rights have purchased pursuant to the exercise of the basic subscription privilege. If there is a need to prorate the exercise of rights pursuant to the oversubscription privilege and the proration results in the allocation to you of a greater number of shares than you subscribed for pursuant to the oversubscription privilege, then we will allocate to you only the number of shares for which you subscribed pursuant to your basic and oversubscription privileges. We will allocate the remaining shares among all other rightsholders exercising their oversubscription privileges relating to our Series C common stock.

        Full Exercise of Basic Subscription Privilege.    You may exercise your oversubscription privilege relating to our Series C common stock only if you exercise, in full, your basic subscription privilege represented by a single rights certificate. To determine if you have fully exercised your basic subscription privilege, we will consider only the basic subscription privilege held by you in the same capacity under a single rights certificate. For example, if you were granted rights under a single Series C Rights certificate for shares of our Series C common stock you own individually and rights under a single Series C rights certificate for shares of our Series common stock you own jointly with your spouse, you only need to fully exercise your basic subscription privilege with respect to your individually owned rights in order to exercise your oversubscription privilege with respect to those rights. You do not have to subscribe for any shares under the basic subscription privilege owned jointly with your spouse to exercise your individual oversubscription privilege. If you transfer a portion of your rights, you may exercise your oversubscription privilege if you exercise all of the remaining rights represented by the rights certificate you receive back from the subscription agent following the transfer.

        You must exercise your oversubscription privilege at the same time as you exercise your basic subscription privilege in full.

        If you will own your shares of our Series A, Series B or Series C common stock through your broker, dealer or other nominee holder following the distribution and you wish for them to exercise your oversubscription privilege on your behalf, the nominee holder will be required to certify to us and the subscription agent:

Your nominee holder must also disclose to us certain other information received from you.

        Return of Excess Payment.    If you exercise your oversubscription privilege and are allocated less than all of the shares of Broadband common stock for which you subscribed, the funds you paid for those shares of Broadband common stock that are not allocated to you will be returned by mail or similarly prompt means, without interest or deduction, as soon as practicable after the expiration time.

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Exercising Your Series C Rights

        Subscription materials, including rights certificates, will be made available to holders upon the commencement of the rights offering. You may exercise your Series C Rights by delivering the following to the subscription agent before the expiration time:

        Alternatively, if you deliver a notice of guaranteed delivery together with your subscription price payment prior to the expiration time, you must deliver the rights certificate within three business days after the delivery of such notice of guaranteed delivery using the guaranteed delivery procedures described below under the heading "—Delivery of Subscription Materials and Payment—Guaranteed Delivery Procedures." You must, in any event, provide payment in full of the subscription price for each share of our Series C common stock being subscribed for pursuant to the basic subscription privilege and the oversubscription privilege to the subscription agent before the expiration time.

        Payment of Subscription Price.    Your cash payment of the subscription price must be made by either check or bank draft drawn upon a U.S. bank or postal, telegraphic or express money order payable to the subscription agent. Your cash payment of the subscription price will be deemed to have been received by the subscription agent only when:

        You should note that funds paid by uncertified personal checks may take five business days or more to clear. If you wish to pay the subscription price in respect of your basic subscription privilege and oversubscription privilege by an uncertified personal check, we urge you to make payment sufficiently in advance of the time the rights expire to ensure that your payment is received and clears by that time. We urge you to consider using a certified or cashier's check or money order to avoid missing the opportunity to exercise your rights.

        We will retain any interest earned on the cash funds held by the subscription agent prior to the earlier of the consummation or termination of the rights offering.

        The subscription agent will hold your payment of the subscription price in a segregated escrow account with other payments received from holders of rights until we issue to you your shares of our Series C common stock, or return your overpayment, if any.

        Exercising a Portion of Your Series C Rights.    If you subscribe for fewer than all of the shares of our Series C common stock that you are eligible to purchase pursuant to the basic subscription privilege represented by your rights certificate, you may, under certain circumstances, request from the subscription agent a new rights certificate representing the unused rights and then attempt to sell your unused rights. See "—Method of Transferring and Selling Series C Rights" below. Alternatively, you may transfer a portion of your rights and request from the subscription agent a new rights certificate representing the rights you did not transfer. If you exercise less than all of your rights represented by a single rights certificate, you may not exercise the oversubscription privilege.

        Calculation of Rights Exercised.    If you do not indicate the number of rights being exercised, or do not forward full payment of the aggregate subscription price for the number of rights that you indicate are being exercised, then you will be deemed to have exercised the basic subscription privilege with

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respect to the maximum number of rights that may be exercised for the aggregate subscription price payment you delivered to the subscription agent. If your aggregate subscription price payment is greater than the amount you owe for your basic subscription and no direction is given as to the excess, you will be deemed to have exercised the oversubscription privilege to purchase the maximum number of shares available to you pursuant to your oversubscription privilege that may be purchased with your overpayment. If we do not apply your full subscription price payment to your purchase of shares of our Series C common stock, we will return the excess amount to you by mail or similarly prompt means, without interest or deduction as soon as practicable after the expiration time.

        Instructions for Completing the Rights Certificate.    You should read and follow the instructions accompanying the rights certificate carefully. If you want to exercise your rights, you must send your completed rights certificates, any necessary accompanying documents and payment of the subscription price to the subscription agent. You should not send the rights certificates, any other documentation or payment to us. Any rights certificates and other items received by us will be returned to the sender as promptly as possible.

        You are responsible for the method of delivery of rights certificates, any necessary accompanying documents and payment of the subscription price to the subscription agent. If you send the rights certificates and other items by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. You should allow a sufficient number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified check prior to the expiration time.

        Signature Guarantee May Be Required.    Your signature on each rights certificate must be guaranteed by an eligible institution such as a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, subject to standards and procedures adopted by the subscription agent, unless:


Delivery of Subscription Materials and Payment

        You should deliver the rights certificate and payment of the subscription price, as well as any notices of guaranteed delivery and any other required documentation:

If delivering by mail:       If delivering by courier

Computershare Inc.
[            ]

 

 

 

Computershare Inc.
[            ]

 

 

Eligible Institutions Only:
Fax: [            ]
Confirmation of Faxes Only: [            ]

 

 

        Guaranteed Delivery Procedures.    If you wish to exercise your rights, but you do not have sufficient time to deliver the rights certificates evidencing your rights to the subscription agent before the expiration time, you may exercise your rights by the following guaranteed delivery procedures:

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        Your notice of guaranteed delivery must be substantially in the form provided with the "Instructions For Use of Liberty Broadband Corporation Series C Rights Certificates" distributed to you with your rights certificate. Your notice of guaranteed delivery must come from an eligible institution which is a member of, or a participant in, a signature guarantee program acceptable to the subscription agent. In your notice of guaranteed delivery you must state:

        You may deliver the notice of guaranteed delivery to the subscription agent in the same manner as the rights certificate at the addresses set forth under "—Delivery of Subscription Materials and Payment" above.

        The information agent will send you additional copies of the form of notice of guaranteed delivery if you need them. Please call the information agent at the numbers noted below under "—Information Agent".

        Notice to Nominees.    If you are a broker, a dealer, a trustee or a depositary for securities who will hold shares of our Broadband common stock for the account of others as a nominee holder following the distribution, you should notify the respective beneficial owners of those shares of the issuance of the Series C Rights as soon as possible to find out the beneficial owners' intentions.

        You should obtain instructions from the beneficial owner with respect to the rights, as set forth in the instructions we have provided to you for your distribution to beneficial owners. If the beneficial owner so instructs, you should complete the appropriate rights certificates and submit them to the subscription agent with the proper payment. A nominee holder that holds shares for the account(s) of more than one beneficial owner may exercise the number of rights to which all such beneficial owners in the aggregate otherwise would have been entitled if they had been direct record holders of Liberty common stock on the record date, so long as the nominee submits the appropriate rights certificates and proper payment to the subscription agent.

        Beneficial Owners.    If you will be a beneficial owner of shares of Liberty common stock on the record date, and thus will be a beneficial owner of shares of our Broadband common stock and Series C Rights that you hold through a nominee holder following the distribution, we will ask your broker, dealer or other nominee to notify you of this rights offering. If you wish to sell or exercise your rights, you will need to have your broker, dealer or other nominee act for you. To indicate your decision with respect to your Series C Rights, you should complete and return to your broker, dealer or other nominee the form entitled "Beneficial Owners Election Form." You should receive this form from your broker, dealer or other nominee with the other subscription materials.

        Procedures for DTC Participants.    If you will be a broker, a dealer, a trustee or a depositary for securities who holds shares of our Broadband common stock for the account of others as a nominee

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holder following the distribution, you may, upon proper showing to the subscription agent, exercise your beneficial owners' basic and oversubscription privileges through DTC. Any rights exercised through DTC are referred to as DTC Exercised Rights. You may exercise your DTC Exercised Rights through DTC's PSOP Function on the "agents subscription over PTS" procedures and instructing DTC to charge the applicable DTC account for the subscription payment and to deliver such amount to the subscription agent. DTC must receive the subscription instructions and payment for the new shares by the expiration time unless guaranteed delivery procedures are utilized, as described above.

        Determinations Regarding the Exercise of Series C Rights.    We will decide all questions concerning the timeliness, validity, form and eligibility of your exercise of rights. Our decisions will be final and binding. We, in our sole discretion, may waive any defect or irregularity, or permit a defect or irregularity to be corrected within whatever time we determine. We may reject the exercise of any of your rights because of any defect or irregularity. Your subscription will not be deemed to have been received or accepted until all irregularities have been waived by us or cured by you within the time we decide, in our sole discretion.

        We reserve the right to reject your exercise of rights if your exercise is not in accordance with the terms of the rights offering or in proper form. Neither we nor the subscription agent will have any duty to notify you of a defect or irregularity in your exercise of the rights. We will not be liable for failing to give you that notice. We will also not accept your exercise of rights if our issuance of shares of our Series C common stock pursuant to your exercise could be deemed unlawful or materially burdensome. See "—Regulatory Limitation" and "—Compliance with State Regulations Pertaining to the Rights Offering" below.


Revocation of Exercised Series C Rights

        Once you have exercised your basic subscription privilege and, should you choose, your oversubscription privilege, you may not revoke your exercise.


Subscription Agent

        We have appointed Computershare Trust Company, N.A. as subscription agent for the rights offering. We will pay its fees and expenses related to the rights offering.


Information Agent

        You may direct any questions or requests for assistance concerning the method of exercising your Series C Rights, additional copies of this prospectus, the instructions, the notice of guaranteed delivery or other subscription materials referred to herein, to the information agent, at the following telephone number and address:


Method of Transferring and Selling Series C Rights

        We anticipate that the Series C Rights will be traded on the Nasdaq Global Select Market under the symbol "[LBRKR]"; however, the Series C Rights will not be tradeable until after the subscription price is determined and announced. We will announce by press release the determination of the subscription price. We expect that Series C Rights may be purchased or sold through usual investment channels until the close of business on the last trading day preceding the expiration time. However, there has been no prior public market for the Series C Rights, and we cannot assure you that a trading market for the Series C Rights will develop or, if a market develops, that the market will remain

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available throughout the subscription period. We also cannot assure you of the prices at which the Series C Rights will trade, if at all. If you do not exercise or sell your Series C Rights you will lose any value inherent in the Series C Rights, respectively. See "—General Considerations Regarding the Partial Exercise, Transfer or Sale of Series C Rights" below.

        Transfer of Series C Rights.    You may transfer Series C Rights in whole by endorsing the rights certificate for transfer. Please follow the instructions for transfer included in the information sent to you with your rights certificate. If you wish to transfer only a portion of the rights, you should deliver your properly endorsed rights certificate to the subscription agent. With your rights certificate, you should include instructions to register such portion of the rights evidenced thereby in the name of the transferee (and to issue a new rights certificate to the transferee evidencing such transferred rights). You may only transfer whole rights and not fractions of a right. If there is sufficient time before the expiration of the rights offering, the subscription agent will send you a new rights certificate evidencing the balance of the rights issued to you but not transferred to the transferee. You may also instruct the subscription agent to send the rights certificate to one or more additional transferees. If you wish to sell your remaining rights, you may request that the subscription agent send you certificates representing your remaining (whole) rights so that you may sell them through your broker or dealer. You may also request that the subscription agent sell your rights for you, as described below.

        If you wish to transfer all or a portion of your rights, you should allow a sufficient amount of time prior to the time the rights expire for the subscription agent to:

        If you wish to transfer your rights to any person other than a bank or broker, the signatures on your rights certificate must be guaranteed by an eligible institution.

        Sales of Series C Rights Through the Subscription Agent. If you choose not to sell your rights through your broker or dealer, you may seek to sell your rights through the subscription agent. If you wish to have the subscription agent seek to sell your rights, you must deliver your properly executed rights certificate, with appropriate instructions, to the subscription agent. If you want the subscription agent to seek to sell only a portion of your rights, you must send the subscription agent instructions setting forth what you would like done with the rights, along with your rights certificate.

        If the subscription agent sells rights for you, it will send you a check for the net proceeds from the sale of any of your rights as soon as practicable after the expiration time. If your rights can be sold, the sale will be deemed to have been made at the weighted average net sale price of all rights of the applicable series sold by the subscription agent. The aggregate fees charged by the subscription agent for selling rights will be deducted from the aggregate sale price for all such rights in determining the weighted average net sale price of all such rights. We cannot assure you, however, that a market will develop for the Series C Rights, or that the subscription agent will be able to sell your Series C Rights.

        You must have your order to sell your rights to the subscription agent before 11:00 a.m., New York City time, on the fifth business day before the expiration time. If less than all sales orders received by the subscription agent are filled, it will prorate the sales proceeds among you and the other holders of rights of the same series based on the number of rights of the same series that each holder has instructed the subscription agent to sell during that period, irrespective of when during the period the instructions are received by it. The subscription agent is required to sell your rights only if it is able to find buyers. If the subscription agent cannot sell your Series C Rights by 5:00 p.m., New York City time, on the third business day before the expiration time, the subscription agent will return your rights certificate to you by overnight delivery.

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        If you sell your rights through your broker or dealer, you will likely receive a different amount of proceeds than if you sell the same amount of rights through the subscription agent. If you sell your rights through your broker or dealer instead of the subscription agent, your sales proceeds will be the actual sales price of your rights rather than the weighted average sales price described above.

        General Considerations Regarding the Partial Exercise, Transfer or Sale of Series C Rights.    The amount of time needed by your transferee to exercise or sell its rights depends upon the method by which the transferor delivers the rights certificates, the method of payment made by the transferee and the number of transactions which the holder instructs the subscription agent to effect. You should also allow up to ten business days for your transferee to exercise or sell the rights transferred to it. Neither we nor the subscription agent will be liable to a transferee or transferor of rights if rights certificates or any other required documents are not received in time for exercise or sale prior to the expiration time.

        You will receive a new rights certificate upon a partial exercise, transfer or sale of rights only if the subscription agent receives your properly endorsed rights certificate no later than 5:00 p.m., New York City time, on the fifth business day before the expiration time. The subscription agent will not issue a new rights certificate if your rights certificate is received after that time and date. If your instructions and rights certificate are received by the subscription agent after that time and date, you will not receive a new rights certificate and therefore will not be able to sell or exercise your remaining rights.

        You are responsible for all commissions, fees and other expenses (including brokerage commissions and transfer taxes) incurred in connection with the purchase, sale or exercise of your rights, except that we will pay any fees of the subscription agent associated with the exercise of rights. Any amounts you owe will be deducted from your account.

        If you do not exercise your Series C Rights before the expiration time, your Series C Rights will expire and will no longer be exercisable.


Treatment of Stock Options and Other Awards

        Holders of options to purchase shares of Liberty common stock, regardless of series, on the record date will not receive Series C Rights in the Spin-Off unless they exercise their options for shares of Liberty common stock prior to the record date. Similarly, holders of stock appreciation rights with respect to shares of Liberty common stock, regardless of series, on the record date will not receive Series C Rights in the Spin-Off, unless they exercise and settle their stock appreciation rights (to the extent applicable) for shares of Liberty common stock prior to the record date. Liberty's compensation committee of its board of directors may make such equitable adjustments as it determines to be appropriate, if any, to preserve the benefits or potential benefits intended to be made available pursuant to any such options or stock appreciation rights that remain outstanding and unexercised as of the record date.

        Restricted shares of Liberty's common stock outstanding on the record date will receive Series C Rights in the Spin-Off. These rights will not be subject to any similar vesting restrictions as apply to the restricted shares on which they were distributed due to the short-term nature of the rights offering. The fair market value of each Series C Right received by a holder of restricted shares will be included in his or her income for tax purposes, regardless of whether the holder sells, transfers or exercises his or her Series C Rights. Holders of restricted shares are encouraged to speak with their tax advisors.


No Recommendations to Rightsholders

        Neither we nor our board of directors has made any recommendation as to whether you should exercise or transfer your rights. You should decide whether to transfer your rights, subscribe for shares of our Series C common stock, or simply take no action with respect to your rights, based on your own assessment of your best interests.

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Termination

        The consummation of the rights offering is subject to the satisfaction or, where applicable, waiver of the conditions to the distribution. However, following the distribution, we may terminate the rights offering for any reason at any time before the expiration time. If we terminate the rights offering, we will promptly issue a press release announcing the termination, and we will promptly thereafter return all subscription payments. We will not pay interest on, or deduct any amounts from, subscription payments if we terminate the rights offering.


Foreign Stockholders

        Liberty will not mail rights certificates to stockholders on the record date or to subsequent transferees whose addresses are outside the United States. Instead, Liberty will have the subscription agent hold the rights certificates for those holders' accounts. To exercise their rights, foreign holders must notify the subscription agent before 11:00 a.m., New York City time, on the fifth business day prior to the expiration time, and must establish to the satisfaction of the subscription agent that such exercise is permitted under applicable law. If a foreign holder does not notify and provide acceptable instructions to the subscription agent by such time (and if no contrary instructions have been received), the rights will be sold, subject to the subscription agent's ability to find a purchaser. Any such sales will be deemed to be effected at the weighted average sale price of all Series C Rights sold by the subscription agent. See "—Method of Transferring and Selling Series C Rights" above. If the subscription agent sells the rights, the subscription agent will remit a check for the net proceeds from the sale of any rights to foreign holders by mail. The proceeds, if any, resulting from the sales of Series C Rights of holders whose addresses are not known by the subscription agent or to whom delivery cannot be made will be held in an interest bearing account. Any amount remaining unclaimed on the second anniversary of the expiration time will be turned over to us.


Regulatory Limitation

        We will not be required to issue to you shares of our Series C common stock pursuant to the rights offering if, in our opinion, you would be required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control such shares and if, at the expiration time, you have not obtained such clearance or approval.


Issuance of Our Series C Common Stock

        Unless we earlier terminate the rights offering, the subscription agent will issue to you the shares of our Series C common stock purchased by you in the rights offering as soon as practicable after the expiration time. The subscription agent will effect delivery of the subscribed for shares of our Series C common stock through the subscription agent's book-entry registration system by mailing to each subscribing holder a statement of holdings detailing the subscribing holder's subscribed for shares of our Series C common stock and the method by which the subscribing holder may access its account and, if desired, trade its shares.

        Your payment of the aggregate subscription price will be retained by the subscription agent and will not be delivered to us, unless and until your subscription is accepted and you are issued your subscribed for shares of our Series C common stock. We will not pay you any interest on funds paid to the subscription agent, regardless of whether the funds are applied to the subscription price or returned to you. You will have no rights as a stockholder of our company with respect to your subscribed for shares of our Series C common stock until the shares are delivered via the book-entry registration statement. Upon such delivery, you will be deemed the owner of the shares you purchased by exercise of your rights. Unless otherwise instructed in the rights certificates, the shares issued to you pursuant to your subscription will be registered in your name or the name of your nominee, if applicable.

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        We will not issue any fractional rights or shares of our Series C common stock.


Shares of Our Series C Common Stock Outstanding Following the Rights Offering

        Based on [    •    ] shares of LMCA, [    •    ] shares of LMCB and [    •    ] shares of LMCK outstanding as of [    •    ], 2014 (exclusive of securities convertible into or exercisable or exchangeable for shares of Liberty common stock), and assuming the rights offering is fully subscribed, we would have outstanding approximately [    •    ] shares of our Series C common stock immediately following the completion of the rights offering.


Compliance with State Regulations Pertaining to the Rights Offering

        We are not making the rights offering in any state or other jurisdiction in which it is unlawful to do so. We will not sell or accept an offer to purchase shares of our Series C common stock from you if you are a resident of any state or other jurisdiction in which the sale or offer of the rights would be unlawful. We may delay the commencement of the rights offering in certain states or other jurisdictions in order to comply with the laws of those states or other jurisdictions. However, we may decide, in our sole discretion, not to modify the terms of the rights offering as may be requested by certain states or other jurisdictions. If that happens and you are a resident of the state or jurisdiction that requests the modification, you will not be eligible to participate in the rights offering. We do not expect that there will be any changes in the terms of the rights offering.

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USE OF PROCEEDS FROM THE RIGHTS OFFERING

        We will use any net proceeds we receive from the rights offering for general corporate purposes. The proceeds may be used, among other purposes, for investments in our equity affiliate Charter or new business opportunities. We expect our expenses related to the rights offering to be approximately $[    •    ].


PLAN OF DISTRIBUTION FOR THE RIGHTS OFFERING

        Liberty is distributing our Series C Rights directly to holders of Liberty common stock, on a pro rata basis, pursuant to the distribution.

        We will pay D.F. King & Co., Inc., the information agent, an estimated fee of approximately $[    •    ] and Computershare Trust Company, N.A., the subscription agent, an estimated fee of approximately $[    •    ] for their services in connection with this rights offering (which includes the subscription agent's fees associated with the exercise but not the sale of rights). We have also agreed to reimburse the information agent and the subscription agent their reasonable expenses.

        We estimate that our total expenses in connection with the rights offering, including registration, legal, printing and accounting fees, will be $[    •    ].

        We have not employed any brokers, dealers or underwriters in connection with the solicitation or exercise of rights. Except as described in this section, we are not paying any other commissions, fees or discounts in connection with the rights offering. Some of our employees may solicit responses from you as a holder of rights, but we will not pay our employees any commissions or compensation for such services other than their normal employment compensation.

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MATERIAL U.S. INCOME TAX CONSEQUENCES OF THE TRANSACTION

        The following discussion is a summary of the material U.S. federal income tax consequences of the Spin-Off to holders of Liberty common stock. This discussion is based on the Code, applicable Treasury regulations, judicial authority, and administrative rulings and practice, all as in effect as of the date of this document. Such authorities are subject to change or differing interpretations at any time, possibly with retroactive effect. This discussion is limited to holders of Liberty common stock that are U.S. holders, as defined below, and that hold their shares of Liberty common stock as capital assets, within the meaning of Section 1221 of the Code. Further, this discussion does not discuss all tax considerations that may be relevant to holders of Liberty common stock in light of their particular circumstances, nor does it address any tax consequences to holders of Liberty common stock subject to special treatment under the U.S. federal income tax laws, such as tax-exempt entities, partnerships (including entities treated as partnerships for U.S. federal income tax purposes), persons who acquired such shares of Liberty common stock pursuant to the exercise of employee stock options or otherwise as compensation, financial institutions, insurance companies, dealers or traders in securities, and persons who hold their shares of Liberty common stock as part of a straddle, hedge, conversion, constructive sale, synthetic security, integrated investment, or other risk-reduction transaction for U.S. federal income tax purposes. This discussion does not address any U.S. federal estate, gift, or other non-income tax consequences or any state, local, or foreign tax consequences.

        Holders of Liberty common stock are urged to consult with their tax advisors as to the specific tax consequences of the Spin-Off to them in light of their particular circumstances.

        For purposes of this section, a U.S. holder is a beneficial owner of Liberty common stock that is, for U.S. federal income tax purposes:

        If a partnership (including any entity treated as partnership for U.S. federal income tax purposes) holds shares of Liberty common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A partner in a partnership holding shares of Liberty common stock should consult its tax advisor regarding the tax consequences of the Spin-Off.


U.S. Federal Income Tax Treatment of the Spin-Off

        The completion of the Spin-Off is conditioned upon the receipt by Liberty of the opinion of Skadden Arps, dated as of the date of the Spin-Off, to the effect that, under current U.S. federal income tax law, the Spin-Off will qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Code. The receipt of the opinion may not be waived by the Liberty board of directors as a condition to the Spin-Off.

        The opinion of Skadden Arps will be based upon certain assumptions, as well as statements, representations and certain undertakings made by officers of Liberty and Broadband and John C. Malone.

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These assumptions, statements, representations and undertakings are expected to relate to, among other things, Liberty's business reasons for engaging in the Spin-Off, the conduct of certain business activities by Liberty and Broadband, and the current plans and intentions of Liberty and Broadband to continue conducting those business activities and not to materially modify their ownership or capital structure following the Spin-Off. If any of those statements, representations or assumptions is incorrect or untrue in any material respect or any of those undertakings is not complied with, or if the facts upon which the opinion is based are materially different from the facts that prevail at the time of the Spin-Off, the conclusions reached in such opinion could be adversely affected.

        Stockholders should note that Liberty does not intend to seek a ruling from the IRS as to the U.S. federal income tax treatment of the Spin-Off. The opinion of Skadden Arps will not be binding on the IRS or a court, and there can be no assurance that the IRS will not challenge the conclusions reached in the opinion or that a court would not sustain such a challenge.

        Assuming that the Spin-Off qualifies as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Code, then:

        Stockholders who have acquired different blocks of Liberty common stock at different times or at different prices should consult their tax advisors regarding the allocation of their aggregate tax basis among, and the holding period of, the shares of our common stock and Series C Rights received with respect to such blocks of Liberty common stock.

        If a stockholder receives cash in lieu of fractional shares of our common stock, the stockholder will be treated as receiving such fractional shares in the Spin-Off and then selling such fractional shares for the amount of cash received. The sale will generally result in the recognition of capital gain or loss for U.S. federal income tax purposes, measured by the difference between the amount of cash received for the fractional shares and the stockholder's tax basis in the fractional shares (determined as described above).

        If the Spin-Off does not qualify under Section 355, Section 368(a)(1)(D) and related provisions of the Code, Liberty would generally be subject to tax as if it sold the shares of our common stock and Series C Rights distributed in the Spin-Off in a taxable transaction. Liberty would recognize taxable gain in an amount equal to the excess of (i) the total fair market value of the shares of our common stock and Series C Rights distributed in the Spin-Off over (ii) Liberty's aggregate tax basis in such shares of our common stock and Series C Rights. A stockholder who receives shares of our common stock and Series C Rights in the Spin-Off would be treated as receiving a taxable distribution in an

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amount equal to the total fair market value of such shares of our common stock and Series C Rights. In general, the distribution would be taxable as a dividend to the extent of Liberty's current and accumulated earnings and profits. Any amount of the distribution in excess of Liberty's earnings and profits would be treated first as a non-taxable return of capital to the extent of the stockholder's tax basis in its shares of Liberty common stock, with any remaining amount taxed as capital gain. A stockholder would have a tax basis in its shares of our common stock and Series C Rights following the Spin-Off equal to their respective fair market values. Certain stockholders may be subject to special rules governing taxable distributions, such as those that relate to the dividends received deduction and extraordinary dividends.

        Even if the Spin-Off otherwise qualifies under Section 355, Section 368(a)(1)(D) and related provisions of the Code, the Spin-Off would result in a significant U.S. federal income tax liability to Liberty (but not to Liberty stockholders) under Section 355(e) of the Code if one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by vote or value) in the stock of Liberty or in the stock of Broadband (excluding, for this purpose, the acquisition of Broadband common stock by Liberty stockholders in the Spin-Off) as part of a plan or series of related transactions that includes the Spin-Off. Current tax law generally creates a presumption that any acquisition of the stock of Liberty or Broadband within two years before or after the Spin-Off is part of a plan that includes the Spin-Off, although the parties may be able to rebut that presumption under certain circumstances. The process for determining whether an acquisition is part of a plan under these rules is complex, inherently factual in nature, and subject to a comprehensive analysis of the facts and circumstances of the particular case. Notwithstanding the opinion of Skadden Arps described above, Liberty or Broadband might inadvertently cause or permit a prohibited change in the ownership of Liberty or Broadband to occur. If the Spin-Off were determined to be taxable to Liberty under Section 355(e) of the Code, Liberty would recognize taxable gain in an amount equal to the excess of (i) the total fair market value of the our common stock and Series C Rights distributed in the Spin-Off over (ii) Liberty's aggregate tax basis in the our common stock and Series C Rights.

        Pursuant to the tax sharing agreement, subject to certain limited exceptions, we will be required to indemnify Liberty, its subsidiaries, and certain related persons for taxes and losses resulting from the failure of the Spin-Off to qualify as a tax-free transaction under Section 355, Section 368(a)(1)(D) and related provisions of the Code to the extent that such taxes and losses (i) result primarily from, individually or in the aggregate, the breach of certain covenants made by Broadband (applicable to actions or failures to act by Broadband and its subsidiaries following the completion of the Spin-Off), or (ii) result from the application of Section 355(e) of the Code to the Spin-Off as a result of the treatment of the Spin-Off as part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by either vote or value) in the stock of Broadband or any successor corporation. For a more detailed discussion of the terms of the tax sharing agreement, please see "Certain Relationships and Related Party Transactions—Relationships between Broadband and Liberty—Tax Sharing Agreement."


Ownership of Series C Rights

        A holder will recognize capital gain or loss upon the sale or exchange of a Series C Right. A holder is also expected to recognize capital loss equal to the holder's tax basis in its Series C Right upon the failure to exercise such Series C Right or upon the termination of the rights offering. Any loss from a lapsed Series C Right or from the termination of the rights offering will be deemed to occur on the date that the Series C Right expires or the date that the rights offering is terminated, as applicable.

        The exercise of a Series C Right will not be a taxable event to a holder. Upon the exercise of a Series C Right, a holder will have a tax basis in the shares of our Series C common stock received

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equal to the exercise price of the Series C Right plus the holder's tax basis in the Series C Right. The holding period of such shares of our Series C common stock will begin on the date of exercise.


Information Reporting and Backup Withholding

        A stockholder may be subject to backup withholding (currently imposed at a rate of 28%) to the extent of any cash received in lieu of fractional shares of our common stock pursuant to the Spin-Off, unless the stockholder provides its correct taxpayer identification number and complies with applicable certification procedures or otherwise establishes an exemption. In addition, a stockholder who receives cash in lieu of fractional shares of our common stock and fails to provide its correct taxpayer identification number or other adequate basis for exemption may be subject to certain penalties imposed by the IRS. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a credit against a stockholder's U.S. federal income tax liability, provided that certain required information is furnished to the IRS on a timely basis.


Net Investment Income

        Recently enacted legislation imposes a 3.8% tax on the net investment income of certain U.S. citizens and resident aliens and on the undistributed net investment income of certain estates and trusts. Among other items, net investment income would generally include any capital gain recognized by a stockholder (i) as a result of the receipt of cash in lieu of fractional shares of our common stock pursuant to the Spin-Off or (ii) upon a sale or exchange of a Series C Right prior to its exercise (in each case, net of certain capital losses).

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CAPITALIZATION

        The following table sets forth (i) Broadband's historical capitalization as of March 31, 2014 and (ii) Broadband's adjusted capitalization assuming the Spin-Off was effective on March 31, 2014. The table below should be read in conjunction with the accompanying historical combined financial statements of Broadband, including the notes thereto.

 
  Historical
3/31/2014
  As Adjusted
3/31/2014
 
 
  (amounts in thousands)
 

Cash and cash equivalents

  $ 13,057     73,443  

Note receivable from parent(1)

   
60,386
   
 

Credit arrangement(2)

   
   
300,000
 

Equity

   
 
   
 
 

Parent's investment

    3,034,179     2,734,179  

Accumulated other comprehensive earnings, net of taxes

    6,575     6,575  

Retained earnings (accumulated deficit)

    (272,490 )   (272,490 )
           

Total stockholders' equity

    2,768,264     2,468,264  
           

Total capitalization

  $ 2,768,264     2,768,264  
           
           

(1)
It is anticipated that Liberty will reimburse TruePosition for any amounts outstanding on this intercompany note prior to completion of the Spin-Off.

(2)
In connection with the Spin-Off, Broadband intends to enter into a $320 million credit arrangement pursuant to which it is expected that Broadband will borrow $300 million prior to the completion of the Spin-Off and will have $20 million available to be drawn following the Spin-Off (see "Description of Our Indebtedness"). Pursuant to the internal restructuring, and prior to the Spin-Off, it is anticipated that Broadband will distribute $300 million in cash to Liberty. Liberty intends to use all of the distributed proceeds received from Broadband to repay indebtedness or to repurchase shares of Liberty common stock under its share repurchase program, pursuant to a special authorization by Liberty's board of directors, within twelve months following the completion of the Spin-Off.

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SELECTED FINANCIAL DATA

        The following tables present selected historical information relating to our financial condition and results of operations for the past five years. The following data should be read in conjunction with our combined financial statements.

 
  March 31,   December 31,  
 
  2014   2013   2012   2011(3)   2010   2009  
 
  (amounts in thousands)
 

Cash and cash equivalents

  $ 13,057     9,251     10,031     30,890     31,677     42,958  

Investments in available for sale securities

  $ 326,710     326,700     232,648     151,581     157,852     98,336  

Investment in affiliates, accounted for using the equity method(2)

  $ 2,328,271     2,402,024                 2,282  

Intangible assets not subject to amortization(1)

  $ 45,600     20,669     20,669     20,669     20,669     20,669  

Intangible assets subject to amortization, net(1)

  $ 35,133     429     1,562     3,645     5,540      

Total assets

  $ 2,945,002     2,909,379     315,634     254,784     719,073     839,559  

Deferred income tax liabilities, noncurrent

  $ 3,615     24,338     43,014     21,422     57,330     71,358  

Total equity (deficit)

  $ 2,768,264     2,779,194     196,459     161,128     (440,587 )   (295,080 )

 
  Three months
ended March 31,
  Years Ended December 31,  
 
  2014   2013   2013   2012   2011(3)   2010   2009  
 
  (amounts in thousands)
 

Revenue

  $ 16,921     24,001     77,363     83,098     1,136,934     136,186     26,431  

Operating income (loss)

  $ (4,536 )   2,535     (88 )   7,879     640,359     60,048     (62,112 )

Share of earnings (losses) of affiliates(2)

  $ (29,650 )       (76,090 )           (2,321 )   (2,766 )

Realized and unrealized gains (losses) on financial instruments

  $ (12,702 )   12,814     97,860     57,582     (4,150 )   58,019     77,949  

Gain (loss) on dilution of investment in affiliate

  $ (45,838 )       (92,933 )                

Net earnings (loss) attributable to Broadband shareholders

  $ (57,715 )   11,116     (41,728 )   44,196     607,374     62,342     (21,519 )

Pro Forma basic earnings (loss) per common share(4)

  $ (2.02 )   0.39     (1.46 )   1.55     21.26     2.18     (0.75 )

(1)
As discussed in note 1 to the accompanying combined financial statements, TruePosition acquired 100% of the outstanding common shares of Skyhook, a Delaware corporation, on February 14, 2014 for approximately $57.5 million in cash.

(2)
As discussed in note 1 in the accompanying combined financial statements, in May 2013, the company acquired approximately 26.9 million shares of common stock and approximately 1.1 million warrants in Charter for approximately $2.6 billion, which represented an approximate 27% beneficial ownership in Charter at the time of purchase.

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(3)
In 2011, TruePosition recognized $1,014 million of previously deferred revenue and $405 million of deferred costs associated with two separate contracts.

(4)
Pro Forma earnings (loss) per share have been calculated, for fiscal years ended December 31, 2013, 2012, 2011, 2010 and 2009 based on the outstanding shares of Liberty common stock at December 31, 2013 assuming a distribution on a 1 for 4 basis. Liberty Series A and B aggregate common stock outstanding at December 31, 2013 was 114,297,666 shares. Pro Forma earnings per share have been calculated, for the three months ended March 31, 2014 and 2013 based on the outstanding shares of Liberty common stock at March 31, 2014 assuming a distribution on a 1 for 4 basis. Liberty Series A and B aggregate common stock outstanding at March 31, 2014 was 114,323,715 shares.

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DESCRIPTION OF OUR BUSINESS

Overview

        Broadband is currently a wholly owned subsidiary of Liberty. Following the Spin-Off, we will be an independent, publicly traded company, and Liberty will not retain any ownership interest in us. Broadband is a holding company, engaged primarily in the provision of digital cable services to residential and commercial customers and the provision of wireless location positioning and related services, in each case, through our ownership of interests in our equity affiliate Charter and our subsidiary TruePosition, respectively. Following the Spin-Off, our principal assets and businesses will initially consist of Liberty's 26% ownership interest in Charter and certain warrants to purchase additional shares of Charter, Liberty's 100% ownership interest in TruePosition and Liberty's minority equity investment in TWC.

Charter Communications, Inc.

Introduction

        Charter is among the largest providers of cable services in the United States, offering a variety of entertainment, information and communications solutions to residential and commercial customers. Charter's infrastructure consists of a hybrid of fiber and coaxial cable plant with approximately 12.8 million estimated passings, with 97% at 550 MHz or greater and 98% of plant miles two-way active. A national IP infrastructure interconnects Charter's markets. Charter was organized as a Delaware corporation in 1999.

        As of March 31, 2014, Charter served approximately 6.1 million residential and commercial customers. Charter sells its video, Internet and voice services primarily on a subscription basis, often in a bundle of two or more services, providing savings and convenience to its customers. Bundled services are available to approximately 97% of Charter's passings, and approximately 62% of Charter's customers subscribe to a bundle of services.

        Charter served approximately 4.2 million residential video customers as of March 31, 2014, and approximately 92% of Charter's video customers subscribed to digital video service as of December 31, 2013. Digital video enables Charter's customers to access advanced video services such as high definition (HD) television, Charter OnDemand™ (OnDemand) video programming, an interactive program guide and digital video recorder (DVR) service. Charter commenced its all-digital initiative in 2013 in a number of its markets. Charter expects to complete its all-digital rollout by the end of 2014. Once a market is all-digital, Charter can offer over 200 HD channels and faster Internet speeds in these areas.

        Charter also served approximately 4.5 million residential Internet customers as of March 31, 2014. Its Internet service is available in a variety of download speeds up to 100 megabits per second (Mbps) and upload speeds of up to 5 Mbps. Approximately 75% of Charter's Internet customers have at least 30 Mbps download speed which currently is the minimum speed it offers.

        Charter provided voice service to approximately 2.3 million residential customers as of March 31, 2014. Its voice services typically include unlimited local and long distance calling to the U.S., Canada and Puerto Rico, plus other features, including voicemail, call waiting and caller ID.

        Through Charter's Business®, it provides scalable, tailored broadband communications solutions to business and carrier organizations, such as video entertainment services, Internet access, business telephone services, data networking and fiber connectivity to cellular towers and office buildings. As of March 31, 2014, Charter served approximately 581,000 commercial primary service units, primarily small- and medium-sized commercial customers. Charter's advertising sales division, Charter Media®, provides local, regional and national businesses with the opportunity to advertise in individual markets on cable television networks.

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        For the year ended December 31, 2013, Charter generated approximately $8.2 billion in revenue, of which approximately 84% was generated from Charter's residential video, Internet and voice services. Charter also generated revenue from providing video, Internet, voice and fiber connectivity services to commercial businesses and from the sale of advertising. Sales from residential triple play customers, Internet and video revenues and from commercial services have contributed to the majority of Charter's recent revenue growth.

        Charter has a history of net losses. Charter's net losses are principally attributable to insufficient revenue to cover the combination of operating expenses, interest expenses that Charter incurs on its debt, depreciation expenses resulting from the capital investments Charter has made (and continues to make) in its cable properties, amortization expenses related to its customer relationship intangibles and non-cash taxes resulting from increases in its deferred tax liabilities.

        In July 2013, Charter and Charter Operating acquired Bresnan Broadband Holdings, LLC and its subsidiaries (collectively, Bresnan) from a wholly-owned subsidiary of Cablevision Systems Corporation for $1.625 billion in cash, subject to a working capital adjustment and a reduction for certain funded indebtedness of Bresnan (the Bresnan Acquisition). Bresnan manages cable operating systems in Colorado, Montana, Wyoming and Utah that pass approximately 670,000 homes and serve approximately 375,000 residential and commercial customer relationships.

Products and Services

        Through its hybrid fiber and coaxial cable network, Charter offers its customers traditional cable video services, as well as advanced video services (such as OnDemand, HD television, and DVR service), Internet services and voice services. Charter's voice services are primarily provided using VoIP technology, to transmit digital voice signals over its systems. Charter's video, Internet, and voice services are offered to residential and commercial customers on a subscription basis, with prices and related charges based on the types of service selected, whether the services are sold as a "bundle" or on an individual basis, and the equipment necessary to receive the services.

        The following table summarizes Charter's customer statistics for video, Internet and voice as of March 31, 2014 and 2013.

 
  Approximate as of
March 31,
 
 
  2014(a)   2013(a)  

Residential

             

Video(b)

    4,195     3,965  

Internet(c)

    4,519     3,884  

Voice(d)

    2,325     1,973  

Residential PSUs(e)

    11,039     9,822  

Residential Customer Relationships(f)

   
5,673
   
5,091
 

Monthly Residential Revenue per Residential Customer(g)

  $ 110.29   $ 107.25  

Commercial

   
 
   
 
 

Video(b)(h)

    160     159  

Internet(c)

    269     202  

Voice(d)

    152     112  

Commercial PSUs(e)

    581     473  

Commercial Customer Relationships(f)(h)

   
379
   
323
 

(a)
Charter calculates the aging of customer accounts based on the monthly billing cycle for each account. On that basis, at March 31, 2014 and 2013, customers include approximately 11,100 and 12,000 customers, respectively, whose accounts were over

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(b)
"Video customers" represent those customers who subscribe to Charter's video cable services. Charter's methodology for reporting residential video customers generally excludes units under bulk arrangements, unless those units have a digital set-top box, thus a direct billing relationship. As Charter completes its all-digital transition, bulk units are supplied with digital set-top boxes adding to Charter's bulk digital upgrade customers. First quarter 2014 and 2013 residential video net additions include 16,000 and 5,000, respectively, bulk video units as a result of adding digital set-top boxes to bulk units.

(c)
"Internet customers" represent those customers who subscribe to Charter's Internet service.

(d)
"Voice customers" represent those customers who subscribe to Charter's voice service.

(e)
"Primary Service Units" or "PSUs" represent the total of video, Internet and voice customers.

(f)
"Customer Relationships" include the number of customers that receive one or more levels of service, encompassing video, Internet and voice services, without regard to which service(s) such customers receive. This statistic is computed in accordance with the guidelines of the National Cable & Telecommunications Association (NCTA). Commercial customer relationships include video customers in commercial structures, which are calculated on an EBU basis (see footnote (h)) and non-video commercial customer relationships.

(g)
"Monthly Residential Revenue per Residential Customer" is calculated as total residential video, Internet and voice quarterly revenue divided by three divided by average residential customer relationships during the respective quarter.

(h)
Included within commercial video customers are those in commercial structures, which are calculated on an equivalent bulk unit (EBU) basis. Charter calculates EBUs by dividing the bulk price charged to accounts in an area by the published rate charged to non-bulk residential customers in that market for the comparable tier of service. This EBU method of estimating basic video customers is consistent with the methodology used in determining costs paid to programmers and is consistent with the methodology used by other multiple system operators. As Charter increases its published video rates to residential customers without a corresponding increase in the prices charged to commercial service customers, its EBU count will decline even if there is no real loss in commercial service customers. For example, commercial video customers decreased by 5,000 and 10,000 during the three months ended March 31, 2014 and 2013, respectively, due to published video rate increases and other revisions to customer reporting methodology.

        In 2013, residential video services represented approximately 49% of Charter's total revenues. Charter's video service offerings include the following:

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        In 2013, residential Internet services represented approximately 27% of Charter's total revenues. Approximately 94% of Charter's estimated passings have DOCSIS 3.0 wideband technology, allowing Charter to offer multiple tiers of Internet services with speeds up to 100 Mbps download to its residential customers. Charter's Internet services also include its Internet portal, Charter.net, which provides multiple e-mail addresses, as well as variety of content and media from local, national and international providers including entertainment, games, news and sports. Finally, Charter Security Suite is included with Charter Internet services and protects computers from viruses and spyware and provides parental control features.

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        Accelerated growth in the number of IP devices and bandwidth used in homes has created a need for faster speeds and greater reliability. Charter is focused on providing services to fill those needs. In 2013, Charter reintroduced an in-home WiFi product permitting customers to lease a high performing wireless router to maximize their wireless Internet experience. Charter's base Internet speed offering is 30 Mbps download and it offers speeds up to 100 Mbps in all of its markets. As Charter completes the all-digital initiative, it expects to increase its minimum offered Internet speed to 60 Mbps, and 100 Mbps in certain markets, with the ability to go faster.

        In 2013, residential voice services represented approximately 8% of Charter's total revenues. Charter provides voice communications services primarily using VoIP technology to transmit digital voice signals over its network. Charter Voice includes unlimited nationwide calling, voicemail, call waiting, caller ID, call forwarding and other features. Charter Voice also provides international calling either by the minute or through packages of minutes per month. For Charter Voice and video customers, caller ID on TV is available.

        In 2013, commercial services represented approximately 10% of Charter's total revenues. Commercial services offered through Charter Business include scalable broadband communications solutions for businesses and carrier organizations of all sizes such as Internet access, data networking, fiber connectivity to cellular towers and office buildings, video entertainment services and business telephone services.

        In 2013, sales of advertising represented approximately 4% of Charter's total revenues. Charter receives revenues from the sale of local advertising on satellite-delivered networks such as MTV®, CNN® and ESPN®. In any particular market, Charter generally inserts local advertising on up to 40 channels. Charter also sells advertising on its Internet portal, Charter.net. In most cases, the available

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advertising time is sold by Charter's sales force, however in some cases, Charter enters into representation agreements with contiguous cable system operators under which another operator in the area will sell advertising on its behalf for a percentage of the revenue. In some markets, Charter sells advertising on behalf of other operators.

        Charter has deployed Enhanced TV Binary Interchange Format (EBIF) technology to set-top boxes in most service areas within the Charter footprint. EBIF is a technology foundation that will allow Charter to deliver enhanced and interactive television applications and enable Charter's video customers to use their remote control to interact with their television programming and its advertisements. EBIF will enable Charter's customers to request such items as coupons, samples, and brochures from advertisers.

        From time to time, certain of Charter's vendors, including programmers and equipment vendors, have purchased advertising from Charter. For the years ending December 31, 2013, 2012 and 2011, Charter had advertising revenues from vendors of approximately $41 million, $59 million and $51 million, respectively. These revenues resulted from purchases at market rates pursuant to binding agreements.

        Charter's revenues are derived principally from the monthly fees customers pay for the services it provides. Charter typically charges a one-time installation fee which is sometimes waived or discounted during certain promotional periods. The prices Charter charges for its products and services vary based on the level of service the customer chooses and in some cases the geographic market. In accordance with FCC rules, the prices Charter charges for video cable-related equipment, such as set-top boxes and remote control devices, and for installation services, are based on actual costs plus a permitted rate of return in regulated markets.

        In mid-2012, Charter launched a new pricing and packaging approach which emphasizes the triple play products of video, Internet and voice services and combines Charter's most popular services in core packages at a fair price. Charter believes the benefits of this new approach are:

        As of December 31, 2013, approximately 64% of Charter's customers, or 68% excluding those acquired in the Bresnan Acquisition, are in the new pricing and packaging plan.

Charter's Network Technology

        Charter's network includes three components: the national backbone, regional/metro networks and the "last-mile" network. Both Charter's national backbone and regional/metro network components utilize or plan to utilize a redundant Internet Protocol (IP) ring/mesh architecture with the capability to differentiate quality of service for each residential or commercial product offering. The national backbone provides connectivity from the regional demarcation points to nationally centralized content, connectivity and services. The regional/metro network components provide connectivity between the

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regional demarcation points and headends within a specific geographic area and enable the delivery of content and services between these network components.

        Charter's last-mile network utilizes a traditional hybrid fiber coaxial cable (HFC) architecture, which combines the use of fiber optic cable with coaxial cable. In most systems, Charter delivers its signals via fiber optic cable from the headend to a group of nodes, and uses coaxial cable to deliver the signal from individual nodes to the homes served by that node. For Charter's fiber Internet, Ethernet, carrier wholesale, SIP and PRI commercial customers, fiber optic cable is extended from the individual nodes all the way to the customer's site. On average, Charter's system design enables up to 340 homes passed to be served by a single node and provides for six strands of fiber to each node, with two strands activated and four strands reserved for spares and future services. Charter believes that this hybrid network design provides high capacity and signal quality. The design also provides two-way signal capacity for the addition of further interactive services.

        HFC architecture benefits include:

        Approximately 97% of Charter's estimated passings are served by systems that have bandwidth of 550 megahertz or greater and 98% are two-way activated as of December 31, 2013. This bandwidth capacity enables Charter to offer digital television, Internet services, voice services and other advanced video services.

        In 2013, Charter initiated a transition from analog to digital transmission of the channels it distributes which allows Charter to recapture bandwidth. Charter completed this transition in approximately 15% of its footprint in 2013 and expects to complete the initiative in 2014 across its remaining footprint. The all-digital platform enables Charter to offer a larger selection of HD channels, faster Internet speeds and better picture quality while providing greater plant security and lower transaction costs.

        In 2013, Charter initiated a trial of a network, or "cloud," based user interface designed to enable its customers to enjoy a common user interface with a state-of-the-art video experience on all existing and future set-top boxes. Charter plans to continue to trial and enhance this technology in 2014.

Management, Customer Care and Marketing

        Charters operations are centralized with its corporate office responsible for coordinating and overseeing operations including establishing company-wide strategies, policies and procedures. Sales and marketing, network operations, field operations, customer care, engineering, advertising sales, human resources, legal, government relations, information technology and finance are all directed at the corporate level. Regional and local field operations are responsible for servicing customers and maintenance and construction of outside plants.

        Charter continues to focus on improving the customer experience through improvements to its customer care processes, product offerings and the quality and reliability of its service. Charter's customer care centers are managed centrally. Charter has eight internal customer care locations which route calls to the appropriate agents, plus several third-party call center locations that through technology and procedures function as an integrated system. Charter also has two additional customer care locations acquired as part of the Bresnan Acquisition. Charter increased the portion of service calls handled by Charter employees in 2013 and intends to continue to do so in 2014. Charter also utilizes its website to enable its customers to view and pay their bills on-line, obtain information

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regarding their account or services, and perform various equipment troubleshooting procedures. Charter's customers may also obtain support through its on-line chat functionality. Charter increased its outside plant maintenance activities in 2012 and 2013 to improve the reliability and technical quality of its plant to avoid repeat trouble calls, which has resulted in reductions in the number of service-related calls to its care centers and in the number of trouble call truck rolls in 2012 and 2013.

        Charter's marketing strategy emphasizes its bundled services through targeted direct response marketing programs to existing and potential customers and increases awareness and value of the Charter brand. Marketing expenditures increased by $57 million, or 14%, over the year ended December 31, 2012 to $479 million for the year ended December 31, 2013 as a result of increased media investment and commercial marketing efforts. Charter's marketing organization creates and executes marketing programs intended to increase customers, retain existing customers and cross-sell additional products to current customers. Charter monitors the effectiveness of its marketing efforts, customer perception, competition, pricing, and service preferences, among other factors, to increase its customer responsiveness. Charter's marketing organization also manages and directs several sales channels including direct sales, on-line, outbound telemarketing and Charter stores.

Programming

        Charter believes that offering a wide variety of programming influences a customer's decision to subscribe to and retain its cable services. Charter relies on its experience in programming cable systems, which includes market research, customer demographics and local programming preferences to determine channel offerings in each of its markets. Charter obtains basic and premium programming from a number of suppliers, usually pursuant to written contracts. Charter's programming contracts generally continue for a fixed period of time, usually from three to eight years, and are subject to negotiated renewal. Some programming suppliers offer financial incentives to support the launch of a channel and/or ongoing marketing support. Charter also negotiates volume discount pricing structures. Charter has more recently negotiated for additional content rights, allowing it to provide programming on-line to its authenticated customers.

        Programming is usually made available to Charter for a license fee, which is generally paid based on the number of customers to whom Charter makes such programming available. Programming costs are usually payable each month based on calculations performed by it and are generally subject to annual cost escalations and audits by the programmers. Programming license fees may include "volume" discounts available for higher numbers of customers, as well as discounts for channel placement or service penetration. Some channels are available without cost to Charter for a limited period of time, after which Charter pays for the programming. For home shopping channels, Charter receives a percentage of the revenue attributable to its customers' purchases, as well as, in some instances, incentives for channel placement.

        Charter's programming costs have increased in every year it has operated in excess of customary inflationary and cost-of-living type increases. Charter expects them to continue to increase due to a variety of factors including amounts paid for retransmission consent, annual increases imposed by programmers with additional selling power as a result of media consolidation and additional programming, including new sports services and non-linear programming for on-line and OnDemand programming. In particular, sports programming costs have increased significantly over the past several years as well as increases in the demands of large media companies who link carriage of their most popular networks to carriage and cost increases for all of their networks. In addition, contracts to purchase sports programming sometimes provide for optional additional games to be added to the service and made available on a surcharge basis during the term of the contract. Additionally,

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programmers continue to create new networks and migrate popular programming such as sporting events to those networks.

        Federal law allows commercial television broadcast stations to make an election between "must-carry" rights and an alternative "retransmission-consent" regime. When a station opts for the retransmission-consent regime, Charter is not allowed to carry the station's signal without the station's permission. Continuing demands by owners of broadcast stations for cash payments at substantial increases over amounts paid in prior years in exchange for retransmission consent will increase Charter's programming costs or require it to cease carriage of popular programming, potentially leading to a loss of customers in affected markets.

        Over the past several years, increases in Charter's video service rates have not fully offset increasing programming costs, and with the impact of increasing competition and other marketplace factors, Charter does not expect them to do so in the foreseeable future. Although Charter passes along a portion of amounts paid for retransmission consent to the majority of its customers, its inability to fully pass these programming cost increases on to its video customers has had and is expected in the future to have an adverse impact on Charter's cash flow and operating margins associated with the video product. In order to mitigate reductions of Charter's operating margins due to rapidly increasing programming costs, Charter continues to review its pricing and programming packaging strategies, and plans to continue to migrate certain program services from its basic level of service to its digital tiers, remove underperforming services and limit the launch of non-essential, new networks.

        Charter has programming contracts that have expired and others that will expire at or before the end of 2014. Charter will seek to renegotiate the terms of these agreements. There can be no assurance that these agreements will be renewed on favorable or comparable terms. To the extent that Charter is unable to reach agreement with certain programmers on terms that it believes are reasonable, Charter has been, and may in the future be, forced to remove such programming channels from its line-up, which may result in a loss of customers.

Franchises

        As of December 31, 2013, Charter's systems operated pursuant to a total of approximately 3,300 franchises, permits, and similar authorizations issued by local and state governmental authorities. Such governmental authorities often must approve a transfer to another party. Most franchises are subject to termination proceedings in the event of a material breach. In addition, most franchises require Charter to pay the granting authority a franchise fee of up to 5.0% of revenues as defined in the various agreements, which is the maximum amount that may be charged under the applicable federal law. Charter is entitled to and generally does pass this fee through to the customer.

        Prior to the scheduled expiration of most franchises, Charter generally initiates renewal proceedings with the granting authorities. This process usually takes three years but can take a longer period of time. The Communications Act of 1934, as amended (the Communications Act), which is the primary federal statute regulating interstate communications, provides for an orderly franchise renewal process in which granting authorities may not unreasonably withhold renewals. In connection with the franchise renewal process, many governmental authorities require the cable operator to make certain commitments, such as building out certain of the franchise areas, customer service requirements, and supporting and carrying public access channels. Historically Charter has been able to renew its franchises without incurring significant costs, although any particular franchise may not be renewed on commercially favorable terms or otherwise. If Charter failed to obtain renewals of franchises representing a significant number of its customers, it could have a material adverse effect on Charter's consolidated financial condition, results of operations, or its liquidity, including Charter's ability to comply with its debt covenants. See "—Regulation and Legislation—Video Services—Franchise Matters."

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Markets

        Charter operates in geographically diverse areas which are organized in regional clusters it calls key market areas. These key market areas are managed centrally on a consolidated level. Charter's twelve key market areas and the customer relationships within each market as of December 31, 2013 are as follows (in thousands):

Key Market Area
  Total
Customer
Relationships
 

California

    595  

Carolinas

    585  

Central States

    599  

Alabama/Georgia

    626  

Michigan

    644  

Minnesota/Nebraska

    346  

Mountain States

    384  

New England

    357  

Northwest

    499  

Tennessee/Louisiana

    530  

Texas

    193  

Wisconsin

    578  

Ownership Interests

        We own an approximate 26% ownership interest in Charter. Under the Charter Stockholders Agreement, we have the right to nominate four directors to the Charter board of directors, subject to certain exclusions and requirements. We also have the right to cause one of our nominees to serve on the nominating and corporate governance, audit and compensation and benefits committees of the board, provided they meet the independence and other qualifications for membership on those committees.

TruePosition, Inc.

        TruePosition was incorporated on November 24, 1992. TruePosition develops and markets technology for locating wireless phones and other wireless devices on a cellular network, enabling wireless carriers and government agencies to provide public safety E-9-1-1 services domestically and services in support of national security and law enforcement worldwide. "E-9-1-1" or "Enhanced 9-1-1" refers to an FCC mandate requiring wireless carriers to implement wireless location capability. TruePosition's location system is a passive network overlay system designed to enable mobile wireless service providers to determine the location of all network wireless devices, including cellular and PCS telephones. Using its patented U-TDOA and other technologies, TruePosition's location system calculates the latitude and longitude of a designated wireless telephone or transmitter and forwards the information in real time to application software. TruePosition's offerings cover major wireless air interfaces including CDMA, GSM and UMTS, and an offering for LTE is currently under development.

        TruePosition earns revenue from the sale of hardware and licensing of software required to generate location records for wireless phones and other wireless devices on a cellular network and from the design, installation, testing and commissioning of such hardware and software. In addition, TruePosition earns software maintenance revenue through the provision of ongoing technical and software support.

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        TruePosition's location system competes against a number of other satellite and terrestrial based location technology offerings. In addition, there are a number of new location technologies in development which may further increase competition to be a location solution for new air interfaces and to meet more stringent accuracy standards.

        On February 14, 2014, TruePosition completed the acquisition of Skyhook. Skyhook is a provider of hybrid wireless positioning technology and contextual location intelligence worldwide. Skyhook is a global location network with more than 1 billion geocoded access points and over 13 million venues. The large amount of data collected by Skyhook powers all of its products, providing a location for any mobile app or device and delivering it with context. Skyhook utilizes demographics to create a way for companies and agencies to gather increased and contextual data on consumers' mobile behavior, improving mobile customer experience, and allowing advertisers to reach their audiences in new and relevant ways.

        Skyhook earns revenue from device manufacturers and application providers by enabling devices and applications to access and utilize location information from Skyhook's location system.


Geographic Areas

        Please see Note 13—Segment Information of our Combined Financial Statements included in this prospectus for certain financial information in each geographic area in which we conduct business.


Regulatory Matters

Charter

        The following summary addresses the key regulatory and legislative developments affecting the cable industry and Charter's three primary services for both residential and commercial customers: video service, Internet service, and voice service. Cable system operations are extensively regulated by the federal government (primarily the FCC), certain state governments, and many local governments. A failure to comply with these regulations could subject Charter to substantial penalties. Charter's business can be significantly impacted by changes to the existing regulatory framework, whether triggered by legislative, administrative, or judicial rulings. Congress and the FCC have frequently revisited the subject of communications regulation and are likely to do so again in the future.

Video Service

        Federal regulations currently restrict the prices that cable systems charge for the minimum level of video programming service, referred to as "basic service," and associated equipment. All other video service offerings are now universally exempt from rate regulation. Although basic service rate regulation operates pursuant to a federal formula, local governments, commonly referred to as local franchising authorities, are primarily responsible for administering this regulation. The majority of Charter's local franchising authorities have never been certified to regulate basic service cable rates (and order rate reductions and refunds), but they generally retain the right to do so (subject to potential regulatory limitations under state franchising laws), except in those specific communities facing "effective competition," as defined under federal law. Charter has secured FCC recognition of effective competition, and become rate deregulated, in many of its communities.

        Congress may adopt new constraints on the retail pricing or packaging of cable programming. Any such constraints could adversely affect Charter's operations.

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        There are two alternative legal methods for carriage of local broadcast television stations on cable systems. Federal "must carry" regulations require cable systems to carry local broadcast television stations upon the request of the local broadcaster. Alternatively, federal law includes "retransmission consent" regulations, by which popular commercial television stations can prohibit cable carriage unless the cable operator first negotiates for "retransmission consent," which may be conditioned on significant payments or other concessions. Popular stations invoking "retransmission consent" have been demanding substantial compensation increases in their recent negotiations with cable operators, thereby significantly increasing Charter's operating costs.

        Local franchise agreements often require cable operators to set aside certain channels for public, educational, and governmental access programming. Federal law also requires cable systems to designate up to 15% of their channel capacity for commercial leased access by unaffiliated third parties, who may offer programming that Charter's customers do not particularly desire. The FCC adopted rules in 2007 reducing the rates that operators can charge commercial leased access users. The effect of the FCC's new rules was stayed by a federal court, pending a cable industry appeal and an adverse finding by the Office of Management and Budget. Although commercial leased access activity historically has been relatively limited, increased activity in this area could further burden the channel capacity of Charter's cable systems.

        The Communications Act requires most utilities owning utility poles to provide cable systems with access to poles and conduits and simultaneously subjects the rates charged for this access to either federal or state regulation. In 2011, the FCC amended its existing pole attachment rules to promote broadband deployment. The 2011 order maintains the favorable basic rate formula applicable to "cable" attachments, but reduces the rate formula previously applicable to "telecommunications" attachments. The FCC and the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) subsequently affirmed the new rules. Although the order maintains the status quo treatment of cable-provided VoIP service as an unclassified service eligible for the favorable cable rate, any change in classification of cable-provided VoIP service could adversely impact Charter's pole attachment rates.

        The FCC has adopted regulations to assure the development of an independent retail market for "navigation devices," such as cable set-top boxes. As a result, the FCC generally requires cable operators to make a separate offering of security modules (i.e., a CableCARD) that can be used with retail navigation devices, and to use these separate security modules even in their own set-top boxes. The FCC commenced a proceeding in 2010 to adopt standards for a successor technology to CableCARD that would involve the development of smart video devices that are compatible with any multichannel video programming distributor service in the United States. Some of the FCC's rules requiring support for CableCARDs were vacated by the D.C. Circuit in 2013, and the FCC is considering the adoption of replacement rules. Either of the above proceedings could result in additional equipment-related obligations. In April 2013, Charter received a two-year waiver from the FCC's "integration ban," which otherwise requires all new leased cable set-top boxes to have separable security such as CableCARDs. A condition to the waiver is the requirement for Charter to meet certain milestones regarding downloadable security. By the end of the waiver period, Charter intends to have deployed a downloadable security system that will comply with the integration ban without the use of CableCARDs.

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        The FCC has adopted regulations to foster competition with established cable operators in MDU complexes. These regulations allow Charter's competitors to access certain existing cable wiring inside MDUs. The FCC regulations also limit the ability of established cable operators, like Charter, to enter into exclusive service contracts for MDU complexes.

        The Communications Act limits Charter's ability to collect and disclose subscribers' personally identifiable information for its video, voice, and Internet services and provides requirements to safeguard such information. Charter is subject to additional federal, state, and local laws and regulations that impose additional restrictions on the collection, use and disclosure of consumer, subscriber and employee information. Further, the FCC, the Federal Trade Commission (FTC), and many states regulate and restrict the marketing practices of cable operators, including telemarketing and online marketing efforts. Various federal agencies, including the FTC, are now considering new restrictions affecting the use of personal and profiling data for online advertising. Charter's operations are also subject to federal and state laws governing information security, including rules requiring customer notification in the event of an information security breach. Congress is considering the adoption of new data security and cybersecurity legislation that could result in additional network and information security requirements for Charter's business.

        Additional FCC regulations affect Charter's operations to varying degrees, including, among other things: (1) equal employment opportunity obligations; (2) customer service standards; (3) technical service standards; (4) mandatory blackouts of certain network, syndicated and sports programming; (5) restrictions on political advertising; (6) restrictions on advertising in children's programming; (7) licensing of systems and facilities; (8) maintenance of public files; (9) emergency alert systems; and (10) disability access, including new requirements governing video-description and closed-captioning. Congress or the FCC may expand or modify its regulation of cable systems in the future, which could further impact Charter's businesses.

        Cable systems are subject to a federal copyright compulsory license covering carriage of television and radio broadcast signals. The possible modification or elimination of this compulsory copyright license is the subject of continuing legislative proposals and administrative review and could adversely affect Charter's ability to obtain desired broadcast programming. Pursuant to the Satellite Television Extension and Localism Act of 2010, which expires in 2014 unless extended by Congress, the Copyright Office, the Government Accountability Office and the FCC all issued reports to Congress in 2011 that generally support an eventual phase-out of the compulsory licenses, although they also acknowledge the potential adverse impact on cable subscribers and the absence of any clear marketplace alternative to the compulsory license. If adopted, a phase-out plan could adversely affect Charter's ability to obtain certain programming and substantially increase its programming costs. Legislation to extend the compulsory copyright license is pending in Congress.

        Copyright clearances for non-broadcast programming services are arranged through private negotiations. Cable operators also must obtain music rights for locally originated programming and advertising from the major music performing rights organizations.

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        Cable systems generally are operated pursuant to nonexclusive franchises granted by a municipality or other state or local government entity in order to utilize and cross public rights-of-way. Cable franchises generally are granted for fixed terms and in many cases include monetary penalties for noncompliance and may be terminable if the franchisee fails to comply with material provisions. The specific terms and conditions of cable franchises vary significantly between jurisdictions. Cable franchises generally contain provisions governing cable operations, franchise fees, system construction, maintenance, technical performance, customer service standards, and changes in the ownership of the franchisee. Although local franchising authorities have considerable discretion in establishing franchise terms, there are certain federal protections that benefit cable operators, such as federal caps on local franchise fees and franchise renewal procedures designed to protect incumbent franchisees from arbitrary denials of renewal. Even if a franchise is renewed, however, the local franchising authority may seek to impose new and more onerous requirements as conditions of renewal, or may impose such requirements as conditions to approval of the purchase or sale of a cable system.

        The traditional cable franchising regime has undergone significant change as a result of various federal and state actions. The FCC has adopted rules that streamline entry for new competitors (particularly those affiliated with telephone companies) and reduce certain franchising burdens for these new entrants. The FCC adopted more modest relief for existing cable operators. A substantial number of states have adopted new franchising laws to streamline entry for new competitors. These new franchising laws often provide advantages for new entrants that are not immediately available to existing cable operators until, for example, the existing franchise expires or a competitor directly enters the franchise territory. The exact nature of these state franchising laws, and their varying application to new and existing video providers, will impact Charter's franchising obligations and its competitive position.

Internet Service

        On January 14, 2014, the D.C. Circuit Court of Appeals, in Verizon v. FCC, struck down major portions of the FCC's 2010 "net neutrality" rules governing the operating practices of broadband Internet access providers such as Charter. The FCC originally designed the rules to ensure an "open Internet" and included three key requirements for broadband providers: 1) a prohibition against blocking websites or other online applications; 2) a prohibition against unreasonable discrimination among Internet users or among different websites or other sources of information; and 3) a transparency requirement compelling the disclosure of network management policies. The Court struck down the first two requirements, concluding that they constitute "common carrier" restrictions that are not permissible given the FCC's earlier decision to classify Internet access as an "information service," rather than a "telecommunications service." The Court upheld the FCC's transparency requirement and the FCC's authority to adopt regulations regarding the Internet. On May 15, 2014, the FCC issued the Notice regarding new open Internet rules in which the FCC proposes, among other things, to retain the definitions and scope of the 2010 rules, enhance the disclosure rule, and require broadband providers to comply with an enforceable legal standard of commercially reasonable practices. The Notice also seeks comment regarding whether certain practices, such as paid prioritization for content, application and service providers, should be prohibited. The FCC intends to adopt revised open Internet rules this year.

        As the Internet has matured, it has become the subject of increasing regulatory interest. Congress and federal regulators have adopted a wide range of measures directly or potentially affecting Internet use, including, for example, consumer privacy, copyright protections, defamation liability, taxation, obscenity, and unsolicited commercial e-mail. Charter's Internet services are subject to the CALEA requirements regarding law enforcement surveillance. Content owners are now seeking additional legal mechanisms to combat copyright infringement over the Internet. Pending and future legislation in this

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area could adversely affect Charter's operations as an Internet service provider and its relationship with its Internet customers. State and local governmental organizations have also adopted Internet-related regulations. These various governmental jurisdictions are also considering additional regulations in these and other areas, such as privacy, pricing, service and product quality, and taxation. The adoption of new Internet regulations or the adaptation of existing laws to the Internet could adversely affect Charter's business.

Voice Service

        The Telecommunications Act of 1996 created a more favorable regulatory environment for Charter to provide telecommunications and/or competitive voice services than had previously existed. In particular, it established requirements ensuring that competitive telephone companies could interconnect their networks with those providers of traditional telecommunications services to open the market to competition. The FCC has subsequently ruled that competitive telephone companies that support VoIP services, such as those Charter offers its customers, are entitled to interconnection with incumbent providers of traditional telecommunications services, which ensures that Charter's VoIP services can compete in the market. New rules or obligations arising from ongoing FCC rulemaking proceedings regarding interconnection and IP technology matters may affect Charter's ability to compete in the provision of voice services. On November 18, 2011, the FCC released an order, which was affirmed by the Tenth Circuit Court of Appeals on May 23, 2014, significantly changing the rules governing intercarrier compensation payments for the origination and termination of telephone traffic between carriers. The new rules will result in a substantial decrease in intercarrier compensation payments over a multi-year period, which will affect both the amounts that Charter pays to other carriers and the amounts that Charter receives from other carriers. The schedule and magnitude of these decreases, however, will vary depending on the nature of the carriers and the telephone traffic at issue, and the FCC's new ruling initiates further implementation rulemakings.

        Further regulatory changes are being considered that could impact Charter's voice business and that of its primary telecommunications competitors. The FCC and state regulatory authorities are considering, for example, whether certain common carrier regulations traditionally applied to incumbent local exchange carriers should be modified or reduced, and the extent to which common carrier requirements should be extended to VoIP providers. The FCC has already determined that certain providers of voice services using IP technology must comply with requirements regarding E-9-1-1, the CALEA regarding law enforcement surveillance of communications, Universal Service Fund contributions, customer privacy and Customer Proprietary Network Information issues, number portability, disability access, regulatory fees, and discontinuance of service. In March 2007, a federal appeals court affirmed the FCC's decision concerning federal regulation of certain VoIP services, but declined to specifically find that VoIP service provided by cable companies should be regulated only at the federal level. As a result, some states have begun proceedings to subject cable VoIP services to state level regulation. Although Charter has registered with, or obtained certificates or authorizations from, the FCC and the state regulatory authorities in those states in which it offers competitive voice services in order to ensure the continuity of its services and to maintain needed network interconnection arrangements, it is unclear whether and how these and other ongoing regulatory matters ultimately will be resolved.

TruePosition

        TruePosition's wireless phone and device location technology enables wireless carriers, governments and other enterprises to provide E-9-1-1 services domestically and other location-based services domestically and worldwide. The FCC's wireless E-9-1-1 rules apply to all wireless licensees, broadband personal communications services licensees, and certain specialized mobile radio licensees. Such carriers must provide a 911 call center, called a local public safety answering point (PSAP) under FCC rules,

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with the telephone number of the originator of a wireless 9-1-1 call and the location of the cell site or base station transmitting the call. In addition, upon a valid request by a PSAP, such carriers must provide more precise information to the PSAP, such as the latitude and longitude of the caller.

        The E-9-1-1 location accuracy requirements adopted by the FCC in 1996 has not been applied to indoor wireless callers. However, because of the increased use of wireless phones indoors and advances in location technology, the FCC intends to adopt indoor location requirements to assist first responders. On February 20, 2014, the FCC adopted a Third Further Notice of Proposed Rulemaking in its E-9-1-1 location accuracy proceeding (Third Further Notice). The regulations proposed in the Third Further Notice would require wireless carriers to provide the following indoor location information: (1) horizontal location within 50 meters of the caller for 67% of 911 calls placed from indoor environments within two years of the effective date of adoption of the rules, and for 80% of indoor calls within five years; and (2) vertical location within three meters of the caller for 67 percent of indoor 911 calls within three years of adoption of the rules, and for 80% of calls within five years. As with the existing E-9-1-1 regulations, the Third Further Notice requires wireless carriers to comply with these indoor requirements at either the county or PSAP geographic level. The Third Further Notice also proposes to adopt a 30 second maximum time period allowed for a wireless provider to generate a location fix and to require wireless providers to inform PSAPs of the specific location technology used to generate location information for each call. The period for public comment on the Third Further Notice has closed. The FCC may issue new regulations in response to the Third Further Notice later this year or in 2015.

        Various U.S and foreign regulatory requirements apply, or may apply in the future, to the global positioning technologies and services offered by Skyhook. Skyhook's use of personal information must comply with all applicable consumer and data protection laws in the United States and abroad. Legislatures and regulatory agencies in the U.S., Europe and elsewhere continue to implement additional consumer and data protection requirements.


Competition

Charter

        Charter faces competition for both residential and commercial customers in the areas of price, service offerings, and service reliability. In its residential business, Charter competes with other providers of video, high-speed Internet access, voice services, and other sources of home entertainment. In its commercial business, Charter competes with other providers of video, high-speed Internet access and related value-added services, fiber solutions, business telephony, and Ethernet services. Charter operates in a competitive business environment, which can adversely affect the results of its business and operations. Charter cannot predict the impact on it of broadband services offered by its competitors.

        In terms of competition for customers, Charter views itself as a member of the broadband communications industry, which encompasses multi-channel video for television and related broadband services, such as high-speed Internet, voice, and other interactive video services. In the broadband communications industry, Charter's principal competitors for video services are DBS and telephone companies that offer video services. Charter's principal competitors for high-speed Internet services are the broadband services provided by telephone companies, including both traditional DSL, fiber-to-the-node, and fiber-to-the-home offerings. Charter's principal competitors for voice services are established telephone companies, other telephone service providers, and other carriers, including VoIP providers. At this time, Charter does not consider other cable operators to be significant competitors in its overall market, as overbuilds are infrequent and geographically spotty (although in any particular market, a cable operator overbuilder would likely be a significant competitor at the local level). Charter

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could, however, face additional competition from other cable operators if they began distributing video over the Internet to customers residing outside their current territories.

Charter's key competitors include:

DBS

        Direct broadcast satellite is a significant competitor to cable systems. The two largest DBS providers now serve more than 34 million subscribers nationwide. DBS service allows the subscriber to receive video services directly via satellite using a dish antenna.

        Video compression technology and high powered satellites allow DBS providers to offer more than 280 digital channels. In 2013, major DBS competitors were especially competitive with promotional pricing for more basic services. While Charter continues to believe that the initial investment by a DBS customer exceeds that of a cable customer, the initial equipment cost for DBS has decreased substantially, as the DBS providers have aggressively marketed offers to new customers of incentives for discounted or free equipment, installation, and multiple units. DBS providers are able to offer service nationwide and are able to establish a national image and branding with standardized offerings, which together with their ability to avoid franchise fees of up to 5% of revenues and property tax, leads to greater efficiencies and lower costs in the lower tiers of service. Charter believes that cable-delivered OnDemand and Subscription OnDemand services, which include HD programming, are superior to DBS service, because cable headends can provide two-way communication to deliver many titles which customers can access and control independently, whereas DBS technology can only make available a much smaller number of titles with DVR-like customer control. DBS providers have also made attempts at deployment of Internet access services via satellite, but those services have been technically constrained and of limited appeal.

Telephone Companies and Utilities

        Incumbent telephone companies, including AT&T and Verizon, offer video and other services in competition with Charter, and Charter expects they will increasingly do so in the future. These companies are able to offer two-way video, data services and provide digital voice services similar to Charter's in various portions of their networks. In the case of Verizon, FiOS high-speed data services offer speeds as high as or higher than Charter's. In addition, these companies continue to offer their traditional telephone services, as well as service bundles that include wireless voice services provided by affiliated companies. Based on internal estimates, Charter believes that AT&T and Verizon are offering video services in areas serving approximately 30% and 4%, respectively, of its estimated passings and Charter has experienced customer losses in these areas. AT&T and Verizon have also launched campaigns to capture more of the MDU market. AT&T has publicly stated that it expects to roll out its video product beyond the territories currently served although it is unclear where and to what extent. When AT&T or Verizon have introduced or expanded their offering of video products in Charter's market areas, Charter has seen a decrease in its video revenue as AT&T and Verizon typically roll out aggressive marketing and discounting campaigns to launch their products.

        In addition to incumbent telephone companies obtaining franchises or alternative authorizations in some areas, and seeking them in others, they have been successful through various means in reducing or streamlining the franchising requirements applicable to them. They have had significant success at the federal and state level in securing FCC rulings and numerous statewide franchise laws that facilitate telephone company entry into the video marketplace. Because telephone companies have been successful in avoiding or reducing franchise and other regulatory requirements that remain applicable to cable operators like Charter, their competitive posture has often been enhanced. The large scale entry of incumbent telephone companies as direct competitors in the video marketplace has adversely affected the profitability and valuation of Charter's cable systems.

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        Most telephone companies, including AT&T and Verizon, which already have plant, an existing customer base, and other operational functions in place (such as billing and service personnel), offer Internet access via traditional DSL service. DSL service allows Internet access to subscribers at data transmission speeds greater than those formerly available over conventional telephone lines. Charter believes DSL service is an alternative to its high-speed Internet service and is often offered at prices lower than its Internet services, although typically at speeds lower than the speeds Charter offers. DSL providers may currently be in a better position to offer voice and data services to businesses since their networks tend to be more complete in commercial areas. Charter expects DSL to remain a significant competitor to its high-speed Internet services.

        Many large telephone companies also provide fiber-to-the-node or fiber-to-the-home services in select areas of their footprints. Fiber-to-the-node networks can provide faster Internet speeds than conventional DSL, but still cannot typically match Charter's Internet speeds. Charter's primary fiber-to-the-node competitor is AT&T's U-verse. The competition from U-verse is expected to intensify over time as AT&T completes the expansion plans announced in late 2012. Fiber-to-the-home networks, however, can provide Internet speeds equal to or greater than Charter's current Internet speeds. Verizon's FiOS is the primary fiber-to-the-home competitor.

        Charter's voice service competes directly with incumbent telephone companies and other carriers, including Internet-based VoIP providers, for both residential and commercial voice service customers. Because Charter offers voice services, it is subject to considerable competition from such companies and other telecommunications providers, including wireless providers with an increasing number of consumers choosing wireless over wired telephone services. The telecommunications and voice services industry is highly competitive and includes competitors with greater financial and personnel resources, strong brand name recognition, and long-standing relationships with regulatory authorities and customers. Moreover, mergers, joint ventures and alliances among Charter's competitors have resulted in providers capable of offering cable television, Internet, and voice services in direct competition with Charter.

        Additionally, Charter is subject to limited competition from utilities and/or municipal utilities (collectively, Utilities) that possess fiber optic transmission lines capable of transmitting signals with minimal signal distortion. Certain Utilities are also developing broadband over power line technology, which may allow the provision of Internet, phone and other broadband services to homes and offices.

Traditional Overbuilds

        Cable systems are operated under non-exclusive franchises historically granted by state and local authorities. More than one cable system may legally be built in the same area. Franchising authorities may grant a second franchise to another cable operator that may contain terms and conditions more favorable than those afforded to Charter. Well-financed businesses from outside the cable industry, such as public utilities that already possess fiber optic and other transmission lines in the areas they serve, have in some cases become competitors. There are a number of cities that have constructed their own cable systems, in a manner similar to city-provided utility services. There also has been interest in traditional cable overbuilds by private companies not affiliated with established local exchange carriers. Constructing a competing cable system is a capital intensive process which involves a high degree of risk. Charter believes that in order to be successful, a competitor's overbuild would need to be able to serve the homes and businesses in the overbuilt area with equal or better service quality, on a more cost-effective basis than Charter can. Any such overbuild operation would require access to capital or access to facilities already in place that are capable of delivering cable television programming. Charter cannot predict the extent to which additional overbuild situations may occur.

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Broadcast Television

        Cable television has long competed with broadcast television, which consists of television signals that the viewer is able to receive without charge using an "off-air" antenna. The extent of such competition is dependent upon the quality and quantity of broadcast signals available through "off-air" reception, compared to the services provided by the local cable system. Traditionally, cable television has provided higher picture quality and more channel offerings than broadcast television. However, the recent licensing of digital spectrum by the FCC now provides traditional broadcasters with the ability to deliver HD television pictures and multiple digital-quality program streams, as well as advanced digital services such as subscription video and data transmission.

Internet Delivered Video

        Internet access facilitates the streaming of video, including movies and television shows, into homes and businesses. Increasingly, content owners are using Internet-based delivery of content directly to consumers, some without charging a fee to access the content. Further, due to consumer electronic innovations, consumers are able to watch such Internet-delivered content on televisions, personal computers, tablets, gaming boxes connected to televisions and mobile devices. Charter believes some customers have chosen to receive video over the Internet rather than through its VOD and premium video services, thereby reducing Charter's video revenues. Charter cannot predict the impact that Internet delivered video will have on its revenues and adjusted EBITDA as technologies continue to evolve.

Private Cable

        Additional competition is posed by satellite master antenna television systems, or SMATV systems, serving MDUs, such as condominiums, apartment complexes, and private residential communities. Private cable systems can offer improved reception of local television stations, and many of the same satellite-delivered program services that are offered by cable systems. Although disadvantaged from a programming cost perspective, SMATV systems currently benefit from operating advantages not available to franchised cable systems, including fewer regulatory burdens and no requirement to service low density or economically depressed communities. The FCC previously adopted regulations that favor SMATV and private cable operators serving MDU complexes, allowing them to continue to secure exclusive contracts with MDU owners. This regulatory disparity provides a competitive advantage to certain of Charter's current and potential competitors.

Other Competitors

        Local wireless Internet services operate in some markets using available unlicensed radio spectrum. Various wireless phone companies are now offering third and fourth generation (3G and 4G) wireless high-speed Internet services. In addition, a growing number of commercial areas, such as retail malls, restaurants and airports, offer Wi-Fi Internet service. Numerous local governments are also considering or actively pursuing publicly subsidized Wi-Fi and WiMAX Internet access networks. Operators are also marketing PC cards and "personal hotspots" offering wireless broadband access to their cellular networks. These service options offer another alternative to cable-based Internet access.

TruePosition

        TruePosition faces competition from a second provider of UTDOA, Commscope, and from the suppliers of other wireless location technologies and solutions, such as GPS, OTDOA and Terrestrial Beacons, which provide similar location-based product and services to TruePosition. Although TruePosition's products are in part complimentary to GPS, in that UTDOA operates in areas where GPS is not currently available due to lack of connection to satellites, solutions such as OTDOA

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and Terrestrial Beacons also can operate in environments where GPS signals are blocked. In addition, Skyhook faces competition from Google, HERE (a division of Nokia) and smaller regional or niche market competitors such as Locaid, as providers of location-based services and products.


Properties

Broadband

        In connection with the Spin-Off, a wholly-owned subsidiary of Liberty will enter into a facilities sharing agreement with Broadband, pursuant to which Broadband will share office facilities with Liberty, Liberty Interactive and TripCo located at 12300 Liberty Boulevard, Englewood, Colorado. See "Certain Relationships and Related Party Transactions—Relationships between Broadband and Liberty—Facilities Sharing Agreement."

Charter

        Charter's principal physical assets consist of cable distribution plant and equipment, including signal receiving, encoding and decoding devices, headend reception facilities, distribution systems, and customer premise equipment for each of its cable systems.

        Charter's cable plant and related equipment are generally attached to utility poles under pole rental agreements with local public utilities and telephone companies, and in certain locations are buried in underground ducts or trenches. Charter owns or leases real property for signal reception sites, and owns its service vehicles.

        Charter's subsidiaries generally lease space for business offices. Charter's headend and tower locations are located on owned or leased parcels of land, and it generally owns the towers on which its equipment is located. Charter Holdco owns the land and building for its St. Louis corporate office. Charter leases space for its offices in Denver, Colorado and for its corporate headquarters in Stamford, Connecticut.

        The physical components of Charter's cable systems require maintenance as well as periodic upgrades to support the new services and products we introduce. Charter believes that its properties are generally in good operating condition and are suitable for its business operations.

TruePosition

        TruePosition has its corporate headquarters in Berwyn, Pennsylvania. TruePosition leases its 70,000 square foot facility for its headquarters and research and development operations pursuant to a lease agreement which expires in 2017.

        Skyhook has its corporate headquarters in Boston, Massachusetts. Skyhook leases its 7,900 square foot facility for its headquarters pursuant to a lease agreement which expires in 2018.


Employees

Broadband

        Broadband (on a nonconsolidated basis) currently does not have any corporate employees. We anticipate that, subsequent to the Spin-Off, Liberty will provide Broadband with certain transitional services pursuant to a services agreement, and that certain of Liberty's corporate employees and executive officers will serve as corporate employees and executive officers of Broadband. See "Certain Relationships and Related Party Transactions—Relationships between Broadband and Liberty—Services Agreements."

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Charter

        As of December 31, 2013, Charter had approximately 21,600 full-time equivalent employees. As of December 31, 2013, approximately 90 Charter employees were represented by collective bargaining agreements. Charter has never experienced a work stoppage.

TruePosition

        As of December 31, 2013, TruePosition had approximately 122 full and part-time employees and Skyhook had approximately 43 full and part-time employees. None of these employees is represented by a labor union or covered by a collective bargaining agreement. Broadband believes that these employee relations are good.


Legal Proceedings

Charter

        The Montana Department of Revenue (Montana DOR) generally assesses property taxes on cable companies at 3% and on telephone companies at 6%. Historically, Bresnan's cable and telephone operations have been taxed separately by the Montana DOR. In 2010, the Montana DOR assessed Bresnan as a single telephone business and retroactively assessed it as such for 2007 through 2009. Bresnan filed a declaratory judgment action against the Montana DOR in Montana State Court challenging its property tax classifications for 2007 through 2010. Under Montana law, a taxpayer must first pay a current assessment of disputed property tax in order to challenge such assessment. In accordance with that law, Bresnan paid the disputed 2010, 2011 and 2012 property tax assessments of approximately $5 million, $11 million and $9 million, respectively, under protest. No payments for additional tax for 2007 through 2009, which could be up to approximately $16 million, including interest, were made at that time. On September 26, 2011, the Montana State Court granted Bresnan's summary judgment motion seeking to vacate the Montana DOR's retroactive tax assessments for the years 2007, 2008 and 2009. The Montana DOR's assessment for 2010 was the subject of a trial, which took place the week of October 24, 2011. On July 6, 2012, the Montana State Court entered judgment in favor of Bresnan, ruling that the Montana's DOR 2010 assessment was invalid and contrary to law, vacating the 2010 assessment, and directing that the Montana DOR refund the amounts paid by Bresnan under protest, plus interest and certain costs. The Montana DOR filed a notice of appeal to the Montana Supreme Court on September 20, 2012. The appeal was fully briefed, and was argued to the Montana Supreme Court in September 2013. On December 2, 2013, the Montana Supreme Court reversed the trial court's decision and remanded the matter to the trial court. Charter filed a petition for rehearing which was denied on January 7, 2014. Charter then filed pleadings to renew challenges to the Montana DOR's assessments that had been mooted by the Montana State Court's prior ruling. With respect to the Montana Supreme Court ruling, Charter filed a petition for writ of certiorari to the United States Supreme Court on June 6, 2014. However, the parties settled this dispute on June 19, 2014 before the petition could be heard. The settlement resolves property tax amounts owed historically. As a result of the settlement, Charter dismissed the petition for writ of certiorari.

        On January 15, 2014, the California Department of Justice, in conjunction with the Alameda County, California District Attorney's Office, initiated an investigation into whether Charter's waste disposal policies, practices, and procedures violate the provisions of the California Health and Safety Code, the California Hazardous Waste Control Law, and any of their related regulations. Charter intends to cooperate with the investigation. Although this investigation has only commenced recently, at this time Charter does not expect that its outcome will have a material effect on its operations, financial condition, or cash flows.

        Charter is a defendant, co-defendant or plaintiff seeking declaratory judgments in several lawsuits involving alleged infringement of various patents relating to various aspects of its businesses. Other

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industry participants are also defendants or plaintiffs seeking declaratory judgments in certain of these cases. In the event that a court ultimately determines that Charter infringes on any intellectual property rights, Charter may be subject to substantial damages and/or an injunction that could require Charter or its vendors to modify certain products and services it offers to its subscribers, as well as negotiate royalty or license agreements with respect to the patents at issue. While Charter believes the lawsuits are without merit and intends to defend the actions vigorously, no assurance can be given that any adverse outcome would not be material to Charter's consolidated financial condition, results of operations, or liquidity. No prediction can be made as to the outcome of any such claims nor can a range of possible loss be reasonably estimated.

        Charter is also a party to other lawsuits and claims that arise in the ordinary course of its business, including lawsuits claiming violation of anti-trust laws and violation of wage and hour laws. The ultimate outcome of these other legal matters pending against Charter or its subsidiaries cannot be predicted, and although such lawsuits and claims are not expected individually to have a material adverse effect on our or Charters' consolidated financial condition, results of operations, or liquidity, such lawsuits could have in the aggregate a material adverse effect on ours or Charter's consolidated financial condition, results of operations, or liquidity. Whether or not Charter ultimately prevails in any particular lawsuit or claim, litigation can be time consuming and costly and injure its reputation.

TruePosition

        On July 21, 2011, TruePosition filed an antitrust lawsuit in the U.S. District Court for the Eastern District of Pennsylvania against LM Ericsson Telephone Company (Ericsson), the Third Generation Partnership Project (3GPP) and certain other defendants for anticompetitive conduct associated with the standard setting processes for LTE wireless data communication technology as it pertains to location technology. On November 19, 2012, 3GPP filed a counterclaim against TruePosition alleging, among other things, that TruePosition violated 3GPP working procedures, and is seeking an award of damages in an amount to be determined at trial. On October 9, 2013, the 3GPP counterclaims were dismissed. No other defendant filed counterclaims. TruePosition has reached settlement with all but one of the defendants, Ericsson. The case is proceeding through discovery with respect to Ericsson.

        On September 10, 2010, Skyhook filed a patent infringement lawsuit in the U.S. District Court for the District of Massachusetts against Google. In March 2014, Skyhook amended its lawsuit to add additional claims. In total, Skyhook alleges that Google is infringing on nine Skyhook patents involving location technology and seeks an injunction and/or award of damages in an amount to be determined at trial. The case is proceeding through discovery and is scheduled to be tried before a jury in March 2015. In addition, on September 10, 2010, Skyhook filed a companion case in State Superior Court in Massachusetts alleging that Google improperly interfered with contracts that Skyhook entered into with a number of important Android OEM manufacturers. In October 2013, the state court granted summary judgment to Google. Skyhook has appealed the state court's grant of summary judgment and oral argument on the appeal was held in May 2014. Skyhook's appeal of the state court ruling remains pending.

        In the normal course of business, TruePosition provides indemnification to certain customers against specified claims that might arise against those customers from the use of TruePosition's products. To date, TruePosition has not had to reimburse any of its customers for any losses related to these indemnification provisions. Although six such claims are currently pending, no legal proceedings have been instituted with respect to such claims. TruePosition is unable to estimate the maximum potential impact of these indemnification provisions on its future results of operations, although TruePosition's liabilities in certain of those arrangements are customarily limited in various respects, including monetarily.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying combined financial statements and the notes thereto.

Overview

        During May 2014, the board of Liberty (formerly named Liberty Spinco, Inc.) authorized management to pursue a plan to spin-off to its stockholders common stock of a wholly-owned subsidiary, Broadband, and to distribute subscription rights to acquire shares of our Series C common stock pursuant to the Spin-Off. Broadband will be comprised of, among other things, Liberty's (i) interest in Charter, (ii) wholly-owned subsidiary TruePosition, (iii) minority equity investment in TWC, (iv) certain deferred tax liabilities, as well as liabilities related to the TWC call option and (v) initial indebtedness, pursuant to a credit arrangement to be entered into prior to the completion of the Spin-Off. In the Spin-Off, record holders of Liberty Series A, Series B and Series C common stock will receive one-fourth of a share of the corresponding series of Broadband common stock for each share of Liberty common stock held by them as of the record date for the Spin-Off, with cash in lieu of fractional shares. In addition, stockholders will also receive a subscription right to acquire one share of our Series C common stock for every five shares of each series of Broadband common stock they receive in the Spin-Off.

        The subscription rights are being issued to raise capital for general corporate purposes of Broadband and will enable the holders to acquire shares of our Series C common stock at a 20% discount to the 20-trading day volume weighted average trading price of our Series C common stock following the completion of the Spin-Off. We expect the subscription rights to become publicly traded once the exercise price has been established and the rights offering to expire forty trading days following the completion of the spin-off.

        The Spin-Off and rights offering are intended to be tax-free to stockholders of Liberty and the completion of the Spin-Off and commencement of the rights offering will be subject to various conditions, including the receipt of an opinion of tax counsel.

        The financial information represents a combination of the historical financial information of TruePosition, Liberty's interest in Charter, Liberty's minority equity investment in TWC and certain deferred tax liabilities, as well as liabilities related to the TWC call option. These financial statements refer to the combination of the aforementioned subsidiary, investments, and financial instruments, as "Broadband," "the Company," "us," "we" and "our" in the notes to the combined financial statements.

Strategies and Challenges

        Our results prior to May 2013 were largely dependent on the operating performance of TruePosition. In 2013 and future periods, results for Broadband will be largely dependent upon the operating performance of Charter. Therefore, the executive summary below contains the strategies and challenges of TruePosition and Charter.

        TruePosition was incorporated on November 24, 1992. TruePosition develops and markets technology for locating wireless phones and other wireless devices on a cellular network, enabling wireless carriers and government agencies to provide public safety E-9-1-1 services domestically and services in support of national security and law enforcement worldwide. "E-9-1-1" or "Enhanced 9-1-1" refers to a FCC mandate requiring wireless carriers to implement wireless location capability. TruePosition's location system is a passive network overlay system designed to enable mobile wireless

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service providers to determine the location of all network wireless devices, including cellular and PCS telephones. Using its patented U-TDOA and other technologies, TruePosition's location system calculates the latitude and longitude of a designated wireless telephone or transmitter and forwards the information in real time to application software. TruePosition's offerings cover major wireless air interfaces including CDMA, GSM and UMTS, and TruePosition is currently developing an offering for LTE. The FCC is currently looking at imposing accuracy standards for E-9-1-1 services that TruePosition believes its services would meet or exceed which could provide further opportunity for work with wireless carriers in the future.

        On February 14, 2014, TruePosition completed the acquisition of Skyhook. Skyhook is a provider of hybrid wireless positioning technology and contextual location intelligence worldwide. Skyhook is a global location network with more than 1 billion geocoded access points and over 13 million venues. The large amount of data collected by Skyhook powers all of its products, providing a location for any mobile app or device and delivering it with context. Skyhook utilizes demographics to create a way for companies and agencies to gather increased and contextual data on consumers' mobile behavior, improving mobile customer experience, and allowing advertisers to reach their audiences in new and relevant ways.

        Charter is one of the largest providers of cable services in the United States with approximately 5.9 million residential and commercial customers at December 31, 2013, offering a variety of entertainment, information and communications solutions to residential and commercial customers, including traditional cable video programming, Internet services, and voice services, as well as advanced video services such as OnDemandTM, HD television and DVR service. Charter also sells local advertising on cable networks and provides fiber connectivity to cellular towers. Its infrastructure consists of a hybrid of fiber and coaxial cable plant with approximately 12.8 million estimated passings, with 97% at 550 MHz or greater and 98% of plant miles two-way active. A national IP infrastructure interconnects Charter markets. Liberty acquired its interest in Charter on May 1, 2013. At December 31, 2013, Liberty beneficially owned approximately 26.9 million shares of and 1.1 million warrants to purchase shares of Charter common stock. The owned shares represent an approximate 25% ownership interest in the issued and outstanding shares and a beneficial ownership interest (including warrants on an as if converted basis) of 26% as of December 31, 2013. Under Liberty's stockholders agreement with Charter, Liberty has the right to nominate four directors to the Charter board of directors, subject to certain exclusions and requirements. Liberty also has the right to cause one of its nominees to serve on the nominating and corporate governance, audit and compensation and benefits committees of the board, provided they meet the independence and other qualifications for membership on those committees. For additional information regarding this agreement (including certain termination rights), see "Certain Relationships and Related Party Transactions—Charter Stockholders Agreement."

        TruePosition earns revenue from the sale of hardware and licensing of software required to generate location records for wireless phones and other wireless devices on a cellular network and from the design, installation, testing and commissioning of such hardware and software. In addition, TruePosition earns software maintenance revenue through the provision of ongoing technical and software support.

        Charter revenue is derived principally from the monthly fees customers pay for the residential and commercial video, Internet and voice services provided. Charter also earns revenue from one-time installation fees and advertising sales. Charter expects to continue to grow revenue by increasing the number of products in the company's current customer homes and obtaining new customers with an improved value offering. In addition, Charter expects to increase revenues by expanding the sales of services to its commercial customers.

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        TruePosition's location system competes against a number of other satellite and terrestrial based location technology offerings. In addition, there are a number of new location technologies in development which may further increase competition to be a location solution for new air interfaces to provide commercial location based services and to meet more stringent commercial and governmental accuracy standards.

        Charter faces competition for both residential and commercial customers in the areas of price, service offerings, and service reliability. With respect to its residential business, Charter competes with other providers of video, high-speed Internet access, telephone services, and other sources of home entertainment. With respect to its commercial business, Charter competes with other providers of video, high-speed Internet access and related value-added services, fiber solutions, business telephony, and Ethernet services. In the broadband communications industry, Charter's principal competitors for video services are DBS and telephone companies that offer video services. Charter's principal competitors for high-speed Internet services are the broadband services provided by telephone companies, including both traditional DSL, fiber-to-the-node, and fiber-to-the-home offerings. Charter's principal competitors for telephone services are established telephone companies, other telephone service providers, and other carriers, including VoIP providers. At this time, Charter does not consider other cable operators to be significant competitors in the overall market, as overbuilds are infrequent and geographically spotty (although in any particular market, a cable operator overbuilder would likely be a significant competitor at the local level). Charter could, however, face additional competition from multi-channel video providers if they began distributing video over the Internet to customers residing outside their current territories.

        TruePosition and Charter must stay abreast of rapidly evolving technological developments and offerings to remain competitive and increase the utility of their products and services. These companies must be able to incorporate new technologies into their products and services in order to address the needs of their customers.


Results of Operations—Combined—March 31, 2014 and 2013

Combined operating results:

 
  Three months
ended
March 31,
 
 
  2014   2013  
 
  (amounts
in thousands)

 

Revenue

  $ 16,921     24,001  

Operating expenses, excluding stock-based compensation

             

Cost of goods sold

    342     6,940  

Operating expense

    1,687     2,210  

Research and development

    4,320     4,262  

Selling, general and administrative, excluding stock-based compensation

    13,029     6,553  
           

Adjusted OIBDA

    (2,457 )   4,036  
           

Stock-based compensation

    456     327  

Depreciation and amortization

    1,623     1,174  
           

Operating income (loss)

  $ (4,536 )   2,535  
           
           

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        Revenue decreased $7.1 million for the three months ended March 31, 2014 as compared to the same period in 2013, primarily due to reduced hardware and software license sales in the international markets. Domestic hardware and software sales also decreased primarily due to the uncertainty around potential FCC indoor accuracy mandates and most companies delaying investments in location technologies until a path forward is known.

        We define Adjusted OIBDA as revenue less operating expenses and selling, general and administrative expenses (excluding stock compensation). Our chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our businesses, including each business's ability to service debt and fund capital expenditures. In addition, this measure allows us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes such costs as depreciation and amortization, stock-based compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. See note 11 to the accompanying quarterly condensed combined financial statements for a reconciliation of Adjusted OIBDA to Earnings (loss) from continuing operations before income taxes.

        Adjusted OIBDA decreased $6.5 million in the first quarter of 2014 compared to the first quarter of 2013. The decrease in Adjusted OIBDA was primarily a result of increased legal expenses, cost of the Skyhook acquisition and Skyhook generating negative Adjusted OIBDA. The reduction in overall revenue, discussed above, of $7.1 million was substantially offset by lower cost of goods sold of $6.6 million.

        Legal expenses increased $3.9 million in the first quarter of 2014 compared to the first quarter in 2013, primarily as a result of TruePosition's antitrust lawsuit alleging anticompetitive conduct associated with the standard setting processes for LTE wireless data communication technology as it pertains to location technology. Legal expenses are included in selling, general and administrative expense.

        Operating and Selling, general and administrative expenses related to Skyhook were $2.1 million against revenue of $825 thousand. Additionally, merger costs of $890 thousand related to the Skyhook acquisition were incurred in the first quarter of 2014. Merger costs are included in selling, general and administrative costs.

        Operating income (loss) decreased $7.1 million for the three months ended March 31, 2014 as compared to the same period in the prior year. In addition to those items impacting Adjusted OIBDA, operating income (loss) was also impacted by an increase of $129 thousand in stock-based compensation expense and an increase in depreciation and amortization of $449 thousand.

        TruePosition sponsors a long-term incentive plan that provides for the granting of phantom stock appreciation rights and phantom stock units to employees, directors and contractors. Stock-based compensation expense is the change in the vested fair value of outstanding awards under the plan during the period and is impacted by the issuance of new grants, the exercise and/or cancellation of existing grants, additional vesting of outstanding grants and changes in the fair value of a grant. The increase in Stock-based compensation of $129 thousand for the first quarter of 2014 as compared to the

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first quarter of 2013 was primarily due to additional vesting of the outstanding awards, partially offset by a decrease in the estimated fair value of TruePosition based on an annual independent appraisal of its value.

        Depreciation and amortization expense increased by $449 thousand primarily due to the acquisition of Skyhook and the resulting depreciation and amortization of its long-lived assets of $898 thousand partially offset by lower depreciation and amortization for TruePosition's historical asset base as a result of certain assets becoming fully amortized at the end of 2013.


Other Income and Expense

        Components of Other Income (Expense) are presented in the table below.

 
  Three months ended
March 31,
 
 
  2014   2013  
 
  (amounts
in thousands)

 

Other income (expense):

             

Dividend and interest income

  $ 1,423     1,580  

Share of earnings (losses) of affiliates

    (29,650 )    

Realized and unrealized gains (losses) on financial instruments, net

    (12,702 )   12,814  

Gain (loss) on dilution of investment in affiliate

    (45,838 )    

Other, net

    (45 )   (14 )
           

  $ (86,812 )   14,380  
           
           

        Dividend and interest income decreased $157 thousand during the three months ended March 31, 2014 as compared to the corresponding period in the prior year due to an increase in the TWC dividend rate from $0.65 per share in 2013 to $0.75 per share in 2014.

        Share of losses from affiliates increased $29.7 million during the three months ended March 31, 2014 as compared to the corresponding period in the prior year as a result of the Company's acquisition of approximately 26.9 million shares of common stock and approximately 1.1 million warrants in Charter, for approximately $2.6 billion, which represented an approximate 27% beneficial ownership (including the warrants on an as if converted basis) in Charter at the time of purchase and a price per share of $95.50 during May 2013. See note 5 in the accompanying notes to the quarterly condensed combined financial statements for additional discussion of the Company's investment in Charter.

        The following is a discussion of Charter's results of operations. In order to provide a better understanding of Charter's operations, we have included a summarized presentation of Charter's results from operations. The amounts included in the table below represent Charter's results for the three months ended March 31, 2014 and 2013. However, only Charter's share of earnings (losses) for the

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three months ended March 31, 2014 is included in the condensed combined financial statements of Broadband, as the acquisition of Charter occurred in May 2013.

 
  Three months
ended March 31,
 
 
  2014   2013  
 
  amounts in millions
 

Revenue

  $ 2,202     1,917  

Operating expenses, excluding stock-based compensation

    (1,442 )   (1,258 )
           

Adjusted OIBDA

    760     659  

Depreciation and amortization

    (505 )   (425 )

Stock-based compensation

    (12 )   (11 )
           

Operating income

    243     223  

Other expenses, net

    (216 )   (256 )
           

Net earnings (loss) before income taxes

    27     (33 )

Income tax expense

    (64 )   (9 )
           

Net loss

  $ (37 )   (42 )
           
           

        Charter had a net loss of approximately $37 million for the three months ended March 31, 2014, a $5 million improvement from the loss of $42 million generated during the three months ended March 31, 2013.

        Charter's revenue increased $285 million for the three months ended March 31, 2014 as compared to the corresponding period in the prior year. Revenue growth primarily reflects increases in the number of residential Internet and triple play customers and in commercial business customers, growth in expanded basic and digital penetration, promotional and annual rate increases, and higher advanced services penetration, partially offset by a decrease in basic video customers. Charter's acquisition of Bresnan on July 1, 2013 increased revenue for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013 by approximately $137 million.

        The increase in revenue during the three months ended March 31, 2014 was partially offset by the net impact of a $184 million increase in operating expenses, an $80 million increase in depreciation and amortization, a $1 million increase in stock-based compensation, a $40 million decrease in other expenses and a $55 million increase in income tax expense. The increase in operating expenses was primarily attributable to the acquisition of Bresnan and an increase in programming costs as a result of annual contractual rate adjustments, including increases in amounts paid for retransmission consents and for new programming, offset in part by video customer losses. The increase in depreciation expense is primarily attributable to the acquisition of Bresnan and depreciation on recent capital expenditures, partially offset by certain assets becoming full depreciated. The decrease in other expenses was primarily the result of a $42 million loss on extinguishment of debt recognized during the three months ended March 31, 2013 and none during the three months ended March 31, 2014. Income tax expense for the three months ended March 31, 2013 included a step-up in basis of indefinite-lived assets for tax, but not GAAP purposes, resulting from the effects of partnership gains related to financing transactions, which decreased Charter's net deferred tax liability related to indefinite-lived assets resulting in a benefit of $57 million.

        Realized and unrealized gains on financial instruments, net decreased $25.5 million for the three months ended March 31, 2014, as compared to the corresponding period in the prior year. The decrease in the gain during 2014 is attributable to a $15.2 million loss in the fair value of the Charter warrants acquired during May 2013 due to a decline in the Charter price per share of outstanding stock

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during the three months ended March 31, 2014 and a $10.3 million decrease in the gain on the investment in TWC shares and outstanding call options as compared to the same period in the prior year.

        The loss in 2014 is due to Charter warrant and stock option exercises at a price below Broadband's book basis per share.

        Other expense increased $31 thousand during the three months ended March 31, 2014, as compared to the corresponding period in the prior year. The increase is primarily attributable to a $41 thousand increase in income tax penalties during 2014, partially offset by a $12 thousand decrease in the loss on disposition of property, plant and equipment and increases in other expenses.


Liquidity and Capital Resources

        As of March 31, 2014 substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly rated financial and corporate debt instruments.

        The following are potential sources of liquidity: available cash balances, cash generated by the operating activities of our subsidiaries (to the extent such cash exceeds the working capital needs of the subsidiaries), proceeds from asset sales, monetization of our investments, debt and equity issuances, and dividend and interest receipts.

        As of March 31, 2014 Broadband had a cash balance of $13.1 million. In addition, Broadband had cash of $60.4 million invested with Liberty, under the terms of an intercompany note agreement. Additionally, in connection with the Spin-Off, Broadband intends to enter into a $320 million credit arrangement pursuant to which it is expected that Broadband will borrow $300 million prior to the completion of the Spin-Off and will have $20 million available to be drawn following the Spin-Off (see "Description of Our Indebtedness"). Pursuant to the internal restructuring, and prior to the Spin-Off, it is anticipated that Broadband will distribute $300 million in cash to Liberty. Liberty intends to use all of the distributed proceeds received from Broadband to repay indebtedness or to repurchase shares of Liberty common stock under its share repurchase program, pursuant to a special authorization by Liberty's board of directors, within twelve months following the completion of the Spin-Off.

 
  Three months ended
March 31,
 
 
  2014   2013  
 
  (amounts
in thousands)

 

Cash flow information

             

Net cash provided (used) by operating activities

  $ 45,261     47,733  

Net cash provided (used) by investing activities

  $ (89,555 )   (38,433 )

Net cash provided (used) by financing activities

  $ 48,100     (1,537 )

        TruePosition generally collects the majority of its annual software maintenance from its customers during the first quarter of each calendar year, contributing to the significant cash generated from operations in both the three months ended March 31, 2014 and 2013.

        During the three months ended March 31, 2014, our primary uses of cash were $48.1 million to acquire Skyhook and a net $41.3 million investment with Liberty through an intercompany note agreement. The Skyhook acquisition was funded using a capital contribution of $49.4 million from

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Liberty and existing cash resources. During the three months ended March 31, 2013, our primary use of cash was the investment of excess cash balances with Liberty.

        The projected use of our cash will be primarily to fund any operational cash deficits and to invest in both existing and new products and services with a goal of ensuring TruePosition is able to continue to serve customers in the domestic market or other investment opportunities. TruePosition's contract with AT&T expires on January 1, 2016. Securing new long term contracts with the U.S. wireless carriers is likely contingent on promulgation by the FCC of regulations establishing minimum accuracy requirements for 9-1-1 calls originating indoors (current FCC regulation only require the carriers to certify accuracy for calls originating outdoors). On February 20, 2014, the FCC adopted a Third Further Notice of Proposed Rulemaking in the E-9-1-1 Location Accuracy proceeding, which included proposed indoor accuracy requirements. The period for public comment on the proposed rules expired on July 14, 2014, and action, if any, by the FCC is anticipated in late 2014 or early 2015. If the FCC promulgates the regulations as currently proposed, then TruePosition will be in a position to actively compete for carrier contracts required to meet those regulations. If, on the other hand, the regulations as currently proposed are significantly modified, not adopted or not adopted in a timely manner, such outcomes could have a material impact on the ability of TruePosition to secure new long term contracts with the U.S. wireless carriers. Additionally, funds raised by the rights offering are expected to fund the exercise of Charter warrants which are expected to be exercised in the third quarter of 2014 prior to expiration and the repayment of any parent level credit arrangements or further investment in new or existing businesses.


Results of Operations—Combined—December 31, 2013, 2012 and 2011

Combined operating results:

 
  Years ended December 31,  
 
  2013   2012   2011  
 
  (amounts in thousands)
 

Revenue

  $ 77,363     83,098     1,136,934  

Operating expenses, excluding stock-based compensation

                   

Cost of goods sold

    15,993     20,358     433,454  

Operating expense

    7,449     9,223     12,301  

Research and development

    15,314     16,301     21,358  

Selling, general and administrative, excluding stock-based compensation

    33,317     25,881     27,423  
               

Adjusted OIBDA

    5,290     11,335     642,398  

Stock-based compensation

    996     (2,383 )   2,848  

Legal settlement

            (6,970 )

Depreciation and amortization

    4,382     5,839     6,161  
               

Operating income (loss)

  $ (88 )   7,879     640,359  
               
               

        Revenue decreased $5.7 million and $1.1 billion for the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year periods. The decrease in revenue during 2013 was primarily due to reduced hardware and software license sales of $2.9 million and reduced services revenue of $2.5 million. Sales of hardware and services to existing customers with installed networks can vary from year to year as such sales are dependent on any expansion or maintenance of the networks. The decrease in revenue during 2012 was primarily due to the 2011 recognition of $1.0 billion of revenue from TruePosition's two largest customers which had previously been deferred due to the existence of undelivered software elements coupled with the expiration of the contract of one of those customers.

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        TruePosition's agreement with T-Mobile, one of its two significant customers at the time, expired in 2011. TruePosition had deferred substantially all of the revenue and costs associated with goods and services billed to this customer since the inception of the arrangement due to the arrangement including an obligation to provide specific future product upgrades, which were never provided and for which no vendor specific objective evidence existed. Upon expiration of the arrangement, the obligation ceased to exist and, accordingly, TruePosition recognized approximately $491 million and $242 million of previously deferred revenue and costs, respectively. TruePosition has not entered into a new, or amended, agreement with T-Mobile.

        In February 2011, TruePosition amended and extended its agreement with AT&T, the other of its two significant customers at the time. The amendment was considered a material modification, requiring elements under the agreement that met the separation criteria and which had been delivered to be recognized as of the modification date. Accordingly, TruePosition recognized approximately $523 million of revenue and $163 million of associated costs as of the modification date, both of which had been previously deferred and were being recognized over the expected life of the equipment as maintenance was delivered.

        We define Adjusted OIBDA as revenue less operating expenses and selling, general and administrative expenses (excluding stock compensation). Our chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our businesses, including each business's ability to service debt and fund capital expenditures. In addition, this measure allows us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes such costs as depreciation and amortization, stock-based compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. See note 13 to the accompanying year-end combined financial statements for a reconciliation of Adjusted OIBDA to Earnings (loss) from continuing operations before income taxes.

        Adjusted OIBDA decreased $6.0 million and $631.1 million in the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year periods. The decrease in Adjusted OIBDA in 2013 was primarily due to lower revenue, increased legal expenses and the cost of the Skyhook acquisition partially offset by lower cost of goods sold and the impacts of cost reduction initiatives. The decrease in Adjusted OIBDA in 2012 was primarily due to the recognition of previously deferred revenue and costs in 2011, as previously discussed, inventory obsolescence charges and the impacts of cost reduction initiatives.

        Legal expenses increased $8.7 million and decreased $849 thousand in the years ended December 31, 2013 and 2012, respectively, as compared to the prior years. The increase in legal costs in 2013 was primarily as a result of TruePosition's antitrust lawsuit. Legal expenses are included in selling, general and administrative expense.

        Merger costs of $624 thousand related to the Skyhook acquisition were incurred in 2013. Merger costs are included in selling, general and administrative costs.

        Operating expenses, research and development, and selling, general and administrative, excluding legal expenses and merger costs, discussed above, decreased by $4.7 million and $8.8 million in the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year

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periods primarily as a result of the Company implementing cost reductions initiatives, including personnel and contractor headcount reductions and curtailment of other expenses.

        Operating income decreased $8.0 million and $632.5 million for the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year periods. In addition to those items impacting Adjusted OIBDA, operating income (loss) for the year ended December 31, 2013 was further impacted by an increase in stock-based compensation of $3.4 million partially offset by a decrease in depreciation and amortization of $1.5 million as compared to the same period in 2012. For the year ended December 31, 2012, operating income (loss) was further impacted by a decrease in Stock-based compensation of $5.2 million coupled with a decrease in depreciation and amortization of $322 thousand as compared to the same period in 2011.

        Stock-based compensation expense increased $3.4 million and decreased $5.2 million for the years ended December 31, 2013 and 2012, respectively, primarily as a result of a significant reduction in the estimated fair value of TruePosition during 2012. The decrease in the estimated fair value of the Company was driven, in part, by one of the Company's two major customers' determination not to renew its contract and general uncertainty about the domestic market.

        Depreciation and amortization decreased by $1.5 million and $322 thousand for the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year periods as a result of certain assets becoming fully amortized.


Other Income and Expense

        Components of Other Income (Expense) are presented in the table below.

 
  Years ended December 31,  
 
  2013   2012   2011  
 
  (amounts in thousands)
 

Other income (expense):

                   

Dividend and interest income

  $ 6,878     5,415     4,588  

Share of earnings (losses) of affiliates

    (76,090 )        

Realized and unrealized gains (losses) on financial instruments, net

    97,860     57,582     (4,150 )

Gain (loss) on dilution of investment in affiliate

    (92,933 )        

Other, net

    (53 )   (117 )   162  
               

  $ (64,338 )   62,880     600  
               
               

        Dividend and interest income increased $1.5 million and $827 thousand for each of the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year periods, due to increasing dividend rates paid on TWC shares from $0.48 per share in 2011 to $0.56 per share in 2012 to $0.65 per share in 2013.

        Share of losses from affiliates increased $76.1 million during 2013 as a result of the Company's acquisition of approximately 26.9 million shares of common stock and approximately 1.1 million warrants in Charter for approximately $2.6 billion, which represented an approximate 27% beneficial ownership (including the warrants on an as if converted basis) in Charter at the time of purchase and a

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price per share of $95.50 during May 2013. See note 5 in the accompanying notes to the combined financial statements for additional discussion of the Company's investment in Charter.

        The following is a discussion of Charter's results of operations. In order to provide a better understanding of Charter's operations, we have included a summarized presentation of Charter's results from operations. The amounts included in the table below represent Charter's results for each of the years ended December 31, 2013, 2012 and 2011. However, the portion of Charter's share of earnings (losses) included in the combined financial statements of Broadband only includes Charter's results from the time of acquisition (May 2013) through December 31, 2013.

 
  Years ended December 31,  
 
  2013   2012   2011  
 
  amounts in millions
 

Revenue

  $ 8,155     7,504     7,204  

Operating expenses, excluding stock-based compensation

    (5,328 )   (4,825 )   (4,535 )
               

Adjusted OIBDA

    2,827     2,679     2,669  

Depreciation and amortization

    (1,854 )   (1,713 )   (1,592 )

Stock-based compensation

    (48 )   (50 )   (36 )
               

Operating income

    925     916     1,041  

Other expenses, net

    (974 )   (963 )   (1,111 )
               

Net loss before income taxes

    (49 )   (47 )   (70 )

Income tax expense

    (120 )   (257 )   (299 )
               

Net loss

  $ (169 )   (304 )   (369 )
               
               

        Charter had net losses of approximately $169 million, $304 million and $369 million for the years ended December 31, 2013, 2012 and 2011, respectively.

        Charter's revenue increased $651 million and $300 million during the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior years. Revenue growth primarily reflects increases in the number of residential Internet and triple play customers and in commercial business customers, growth in expanded basic and digital penetration, promotional and annual rate increases, and higher advanced services penetration, partially offset by a decrease in basic video customers. Charter's acquisition of Bresnan on July 1, 2013 also contributed to an increase in revenue for the year ended December 31, 2013.

        The increase in revenue during 2013 was partially offset by the net impact of a $503 million increase in operating expenses, a $141 million increase in depreciation and amortization expense, a $2 million decrease in stock-based compensation expense, an $11 million increase in other expenses and a $137 million decrease in income tax expense. The increase in operating expense is primarily attributable to the acquisition of Bresnan, higher spending on labor to deliver improved products and service levels, and an increase in programming costs as a result of annual contractual rate adjustments, including increases in amounts paid for retransmission consents and for new programming, offset in part by video customer losses. The increase in depreciation expense is primarily attributable to the acquisition of Bresnan and depreciation on recent capital expenditures, partially offset by certain assets becoming full depreciated.

        Income tax expense decreased during 2013, primarily as a result of step-ups in basis of indefinite-lived assets for tax, but not GAAP purposes, including the effects of partnership gains related to financing transactions and a partnership restructuring, which decreased Charter's net deferred tax liability related to indefinite-lived assets by $137 million.

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        The increase in revenue during 2012 was partially offset by the net impact of a $290 million increase in operating expenses, a $121 million increase in depreciation and amortization expense, a $14 million increase in stock-based compensation expense, a $148 million decrease in other expenses and a decrease in income tax expense of $42 million. The increase in operating expenses was primarily attributable to an increase in programming costs as a result of annual contractual rate adjustments, including increases in amounts paid for retransmission consents and for new programming, offset in part by video customer losses and higher spending on labor to deliver improved products and service levels. The increase in depreciation expense is primarily attributable to the depreciation on recent capital expenditures, partially offset by certain assets becoming full depreciated. The decrease in income tax expense is attributable to increases in deferred tax liabilities related to certain of Charter's investments and indirect subsidiaries.

        Realized and unrealized gains on financial instruments, net increased $40.3 million and $61.7 million for each of the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year periods. The increase in the gain during 2013 is attributable to a $38.2 million gain in the fair value of the Charter warrants acquired during May 2013 and a $2.1 million increase in the gain on the investment TWC shares and outstanding call options as compared to the prior year. The increase in the gain during 2012 is attributable to an increase in the gain on the investment TWC shares and outstanding call options as compared to the prior year.

        The loss in 2013 is due to Charter warrant and stock option exercises at a price below Broadband's book basis per share.

        Other expense decreased $64 thousand and increased $279 thousand for each of the years ended December 31, 2013 and 2012, respectively, as compared to the corresponding prior year periods. The decrease in 2012 is primarily attributable to a decrease in income tax penalties during 2013, partially offset by an increase in the loss on disposition of property, plant and equipment. The increase in 2012 is primarily attributable to an increase in income tax penalties during 2012, partially offset by a decrease in the loss on disposition of property, plant and equipment and increases in other expenses.


Liquidity and Capital Resources

        As of December 31, 2013 substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly rated financial and corporate debt instruments.

        The following are potential sources of liquidity: available cash balances, cash generated by the operating activities of our privately-owned subsidiaries (to the extent such cash exceeds the working capital needs of the subsidiaries and is not otherwise restricted), proceeds from asset sales, monetization of our other investments, outstanding debt facilities, debt and equity issuances, and dividend and interest receipts.

        As of December 31, 2013 Broadband had a cash balance of $9.3 million. In addition, Broadband had cash of $19.1 million invested with Liberty, under the terms of an intercompany note agreement. Additionally, in connection with the Spin-Off, Broadband intends to enter into a $320 million credit arrangement pursuant to which it is expected that Broadband will borrow $300 million prior to the completion of the Spin-Off and will have $20 million available to be drawn following the Spin-Off (see "Description of Our Indebtedness"). Pursuant to the internal restructuring, and prior to the Spin-Off, it

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is anticipated that Broadband will distribute $300 million in cash to Liberty. Liberty intends to use all of the distributed proceeds received from Broadband to repay indebtedness or to repurchase shares of Liberty common stock under its share repurchase program, pursuant to a special authorization by Liberty's board of directors, within twelve months following the completion of the Spin-Off.

 
  Years ended December 31,  
 
  2013   2012   2011  
 
  (amounts in thousands)
 

Cash flow information

                   

Net cash provided (used) by operating activities

  $ 5,475     6,438     7,276  

Net cash provided (used) by investing activities

  $ (2,624,868 )   (21,999 )   (3,180 )

Net cash provided (used) by financing activities

  $ 2,618,613     (5,298 )   (4,883 )

        During the year ended December 31, 2013, our primary uses of cash included the acquisition of a 27% beneficial ownership interest in Charter Communications (including the warrants on an as if converted basis) for approximately $2.6 billion. The purchase was funded by a contribution from parent during the period. During the year ended December 31, 2012, our primary uses of cash were the funds invested through an intercompany note agreement with Liberty.

        The projected use of our cash will be the continued operational needs of our subsidiary and potential investment in location technology at TruePosition or other investment opportunities. Additionally, funds raised by the rights offering are expected to fund the exercise of Charter warrants which are expected to be exercised in the third quarter of 2014 prior to expiration and the repayment of any parent level credit arrangements or further investment in new or existing businesses.

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DESCRIPTION OF OUR INDEBTEDNESS

Credit Arrangement

        [To Come]

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MANAGEMENT

Directors

        The following sets forth certain information concerning the persons who are expected to serve as the initial directors of Broadband immediately following the Spin-Off, including their ages, directorships held and a description of their business experience. No assurance can be given, however, as to whether these directors will continue to serve on the Broadband board following the expiration of their respective terms, as their re-election will be subject to the approval of Broadband's stockholders.

Name
  Position and Experience
[•]
Age: [•]
  [•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].

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Name
  Position and Experience
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]

[•]
Age: [•]

 

[•].
    Professional Background: [•]

 

 

Other Public Company Directorships: [•]

 

 

Board Membership Qualifications: [•]


Executive Officers

        The following sets forth certain information concerning the persons [(other than [    •    ] [and [    •    ]] who are also expected to serve as directors of Broadband and are described above)] who are expected to serve as Broadband's initial executive officers immediately following the Spin-Off, including their ages, directorships held and a description of their business experience.

Name
  Positions
[•]
Age: [•]
  [•]
    Professional Background: [•]

[•]
Age: [•]

 

[•]
    Professional Background: [•]

[•]
Age: [•]

 

[•]
    Professional Background: [•]

        Broadband's executive officers will serve in such capacities until the first annual meeting of its board of directors, or until their respective successors have been duly elected and have been qualified, or until their earlier death, resignation, disqualification or removal from office.


Directors and Executive Officers

        There is no family relationship between any of Broadband's executive officers or directors, by blood, marriage or adoption.

        During the past ten years, none of the above persons has had any involvement in such legal proceedings as would be material to an evaluation of his or her ability or integrity.

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Director Independence

        It will be Broadband's policy that a majority of the members of its board of directors will be independent of its management. For a director to be deemed independent, Broadband's board of directors must affirmatively determine that the director has no direct or indirect material relationship with the company. To assist Broadband's board of directors in determining which of its directors will qualify as independent, the nominating and corporate governance committee of Broadband's board is expected to follow the Corporate Governance Rules of the Nasdaq Stock Market on the criteria for director independence.

        In accordance with these criteria, it is expected that the Broadband board of directors will determine that each of [    •    ] qualifies as an independent director of Broadband.


Board Composition

        The board of Broadband will be comprised of directors with a broad range of backgrounds and skill sets, including in [    •    ]. Detailed information on Broadband's policies with respect to board candidates will be available following the establishment of the board's nominating and corporate governance committee.

        The following directors will serve in the following classes upon completion of the Spin-Off:

Class I
  Class II   Class III

[•]

  [•]   [•]

[•]

  [•]   [•]

[•]

  [•]   [•]


Committees of the Board

        It is expected that Broadband's board of directors will form the following committees: audit committee, compensation committee, nominating and corporate governance committee and executive committee, which will have comparable responsibilities to the corresponding committees of Liberty's board. It is currently contemplated that the following persons will serve on the following committees upon completion of the Spin-Off:

Executive Committee
  Compensation
Committee
  Audit Committee   Nominating and
Corporate Governance
Committee
[•]   [•]   [•]   [•]
[•]   (Chairman)   (Chairman)   (Chairman)
    [•]   [•]   [•]

        In addition, it is currently contemplated that [    •    ] will be designated an "audit committee financial expert" for purposes of the Exchange Act and the rules and regulations of Nasdaq.


Compensation Committee Interlocks and Insider Participation

        Broadband's board of directors does not currently have a compensation committee. It is expected that no member of Broadband's compensation committee (once formed) will be or will have been, during 2013, an officer or employee of Broadband or Liberty, or will have engaged in any related party transaction in which Broadband or Liberty was a participant. It is expected that no interlocking relationship will exist between the Broadband board and its compensation committee and the board of directors or compensation committee of any other company.

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EXECUTIVE COMPENSATION

Executive Officers of Broadband

        Broadband is a newly formed company and therefore has not paid any compensation to any of its executive officers. In September 2011, Liberty Interactive completed the split-off (the Split-Off) of its former subsidiary then-known as Liberty Media Corporation (currently known as Starz, Old LMC). In January 2013, Old LMC completed the spin-off of its former subsidiary Liberty (then-known as Liberty Spinco, Inc.) (the LMC Spin-Off). In connection with the Split-Off, Liberty Interactive entered into a services agreement with Old LMC, which was assumed by Liberty in the LMC Spin-Off, pursuant to which Liberty Interactive compensates Liberty for the portion of the salary and other cash compensation Liberty pays to its employees, including its named executive officers, that is allocable to Liberty Interactive for time spent by each such employee on matters related to that company. As noted elsewhere and described in more detail herein, in connection with the Spin-Off, Broadband and Liberty will enter into a services agreement pursuant to which Broadband will pay Liberty an agreed-upon services fee in exchange for the performance of specified services by Liberty and its employees for Broadband, including the services of Liberty's executive officers. For more information regarding this agreement, please see "Certain Relationships and Related Party Transactions—Relationships Between Broadband and Liberty—Services Agreements." Although, as noted above, Broadband has not paid any executive compensation, compensation has historically been paid to Liberty's executive officers for their service to each of Liberty and Liberty Interactive. Thus, for information concerning the compensation paid to these executive officers for their service to each of Liberty and Liberty Interactive for the year ended December 31, 2013 and certain related information, see Exhibit 99.1 to the Registration Statement on Form S-1, of which this prospectus forms a part, which includes substantially the same information that is included in each of the "Executive Compensation" sections of the definitive proxy statements on Schedule 14A filed by each of Liberty and Liberty Interactive with the SEC on June 23, 2014 relating to their respective 2014 annual meetings of stockholders.

        The historical compensation information included in the section of Exhibit 99.1 entitled "Liberty Media Corporation" is not solely attributable to services performed with respect to our business and assets and no specific allocation of such compensation is determinable solely with respect to such services. Rather the information in Exhibit 99.1 reflects the full amount of compensation paid by Liberty to each applicable person during the applicable period.

        The amount and timing of any equity-based compensation to be paid to the Broadband executive officers following the Spin-Off (other than awards issued pursuant to the transitional plan) will be determined by the compensation committee of the Broadband board of directors. Any equity incentive awards granted to executive officers of Broadband following the Spin-Off will generally be granted pursuant to the Liberty Broadband Corporation 2014 Omnibus Incentive Plan, which is described under "—Equity Incentive Plans" below.


Directors

        Broadband's non-employee directors will receive cash compensation directly from Broadband in such amounts and at such times as the Broadband board of directors shall determine. The amount and timing of any equity-based compensation to be paid to the Broadband non-employee directors following the Spin-Off (other than awards issued pursuant to the transitional plan) will be determined by the Broadband board of directors. Any equity incentive awards granted to nonemployee directors of Broadband following the Spin-Off will generally be granted pursuant to the Liberty Broadband Corporation 2014 Omnibus Incentive Plan, which is described under "—Equity Incentive Plans" below. For information concerning the compensation paid to the directors of Liberty and Liberty Interactive for the year ended December 31, 2013 and certain related information, see Exhibit 99.1 to the Registration Statement on Form S-1, of which this prospectus forms a part.

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Equity Incentive Plans

        In connection with the Spin-Off, Broadband will adopt the Liberty Broadband Corporation 2014 Omnibus Incentive Plan (the incentive plan). The incentive plan is designed to provide additional remuneration to officers, employees, nonemployee directors and independent contractors for service to Broadband and to encourage those persons' investment in Broadband. Non-qualified stock options, SARs, restricted shares, restricted stock units, cash awards, performance awards or any combination of the foregoing may be granted under the incentive plan (collectively, awards). The maximum number of shares of Broadband common stock with respect to which awards may be granted is [    •    ], subject to anti-dilution and other adjustment provisions of the incentive plan. With limited exceptions, under the incentive plan, no person may be granted in any calendar year awards covering more than [    •    ] shares of Broadband common stock, subject to anti-dilution and other adjustment provisions of the incentive plan. In addition, no person may receive payment for cash awards during any calendar year in excess of $[    •    ] and no nonemployee director may be granted during any calendar year awards having a value (as determined on the grant date of such award) in excess of $[    •    ]. Shares of Broadband common stock issuable pursuant to awards will be made available from either authorized but unissued shares or shares that have been issued but reacquired by Broadband. The incentive plan will be administered by the compensation committee with regard to all awards granted under the incentive plan (other than awards granted to the nonemployee directors), and the compensation committee will have full power and authority to determine the terms and conditions of such awards. The incentive plan will be administered by the full board of directors with regard to all awards granted under the incentive plan to nonemployee directors, and the full board of directors will have full power and authority to determine the terms and conditions of such awards.

        At the time of the Spin-Off, Broadband will also have awards outstanding under the transitional plan as described under "The Spin-Off—Effect of the Spin-Off on Outstanding Liberty Awards."


Equity Compensation Plan Information

        At the time of the Spin-Off, Broadband will have three equity compensation plans, each of which is listed below. The only plan under which awards will be outstanding immediately following the Spin-Off is the transitional plan.

        The following table reflects the awards that would have been outstanding as of December 31, 2013 assuming that (i) the Spin-Off had occurred on that date and (ii) the treatment of the outstanding

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Liberty incentive awards described under "The Spin-Off—Effect of the Spin-Off on Outstanding Liberty Awards."

Plan Category
  Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights (a)
  Weighted
average
exercise
price of
outstanding
options,
warrants
and rights
  Number of
securities
available for
future issuance
under equity
compensation
plans (excluding
securities reflected
in column (a))(2)
 

Equity compensation plans not approved by security holders—None

                   

Equity compensation plans approved by security holders

   
0
   
N/A
   
[            ]
 

Liberty Broadband Corporation 2014 Omnibus Incentive Plan(1):

                   

Series A

    0     N/A     [            ]  

Series B

    0     N/A        

Liberty Broadband Corporation Transitional Stock Adjustment Plan(1):

                   

Series A

    [            ]     [            ]     0  

Series B

    [            ]     [            ]        

Total

                   

Series A

    [            ]     [            ]     [            ]  

Series B

    [            ]     [            ]     [            ]  

(1)
Each plan will be approved by Liberty in its capacity as the sole stockholder of Broadband prior to the Spin-Off. Following the Spin-Off, Broadband will seek stockholder approval of the incentive plan at its first annual meeting of stockholders.

(2)
Each plan permits grants of, or with respect to, shares of any series of Broadband common stock, subject to a single aggregate limit.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners

        Prior to the Spin-Off, all of the outstanding shares of our common stock and Series C Rights will be owned by Liberty. The following table sets forth information, to the extent known by Liberty or ascertainable from public filings, with respect to the estimated beneficial ownership of each person or entity (other than certain persons who will serve as directors or executive officers of Broadband, whose ownership information follows) who is expected to beneficially own more than five percent of the outstanding shares of any series of our common stock, assuming that the distribution had occurred at 5:00 p.m., New York City time, on June 30, 2014. The percentage voting power is presented on an aggregate basis for all series of our common stock.

        The security ownership information for Broadband common stock has been estimated based upon the distribution ratio of 1-for-4 to holders of LMCA, LMCB and LMCK and outstanding stock information for Liberty's common stock as of June 30, 2014, and, in the case of percentage ownership information, has been estimated based upon 26,114,860 shares of our Series A common stock, 2,468,518 shares of our Series B common stock and 1,751,000 shares of our Series C common stock estimated to have been issued in the distribution assuming that the distribution had occurred at 5:00 p.m., New York City time, on June 30, 2014 and assuming that Liberty's dividend of Series C shares, the payment date for which was July 23, 2014, had been distributed prior to the assumed distribution date. However, because of the difficulty in determining in advance the precise effect of the distribution on outstanding option awards and stock appreciation rights with respect to shares of LMCA, LMCB and LMCK (see "The Spin-Off—Effect of the Spin-Off on Outstanding Liberty Incentive Awards" for more information), for purposes of the following presentation, we have not included beneficial ownership information with respect to any new option awards or stock appreciation rights with respect to shares of LMCA, LMCB or LMCK that may be received by the persons for whom beneficial ownership information is presented below. In addition, for purposes of the following presentation, we have not given effect to the distribution or exercise of any Series C rights.

        So far as is known to Liberty, the persons indicated below would have sole voting power with respect to the shares estimated to be owned by them, except as otherwise stated in the notes to the table.

Name and Address of Beneficial Owner
  Title of
Class
  Amount and
Nature of
Beneficial
Ownership
  Percent of
Class (%)
  Voting
Power (%)
 

John C. Malone

  LBRDA     383,563 (1)(2)(3)(4)(5)   1.5     47.3  

12300 Liberty Boulevard

  LBRDB     2,363,835 (1)(2)(6)   95.8        

Englewood, CO 80112

  LBRDK     5,494,798 (1)(2)(3)(4)(5)(6)   9.6        

Berkshire Hathaway Inc. 

 

LBRDA

   
1,396,458

(7)
 
5.3
   
2.7
 

3555 Farnam Street

  LBRDB                

Omaha, NE 68131

  LBRDK     2,792,917     4.9        

Horizon Kinetics LLC

 

LBRDA

   
1,543,768

(8)
 
5.9
   
3.0
 

470 Park Avenue South, 4th Floor South

  LBRDB                

New York, NY 10016

  LBRDK     3,087,537     5.4        

S.A.C. Capital Advisors, L.P. 

 

LBRDA

   
1,477,815

(9)
 
5.7
   
2.9
 

77 Cummings Point Road

  LBRDB     2,955,631            

Stamford, CT 06902

  LBRDK           5.2        

Gates Capital Management, Inc. 

 

LBRDA

   
1,488,454

(10)
 
5.7
   
2.9
 

1177 Ave. of the Americas, 32nd Floor

  LBRDB                

New York, NY 10036

  LBRDK     2,976,908     5.2        

*
Less than one percent

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(1)
Includes 25,444 LBRDA shares, 57,641 LBRDB shares and 166,171 shares of LBRDK held by Mr. Malone's wife, Mrs. Leslie Malone, as to which shares Mr. Malone has disclaimed beneficial ownership.

(2)
Includes 8,689 shares of LBRDA, 27,171 shares of LBRDB and 71,723 shares of LBRDK held by two trusts which are managed by an independent trustee, of which the beneficiaries are Mr. Malone's adult children and in which Mr. Malone has no pecuniary interest. Mr. Malone retains the right to substitute assets held by the trusts and has disclaimed beneficial ownership of the shares held by the trusts.

(3)
Includes 231,149 shares of LBRDA and 462,298 shares of LBRDK pledged to Fidelity Brokerage Services, LLC (Fidelity) in connection with a margin loan facility extended by Fidelity to Mr. Malone and 23,720 shares of LBRDA and 47,441 shares of LBRDK pledged to Bank of America (BoA) in connection with a loan facility extended by BoA to Mr. Malone.

(4)
Includes 62,500 shares of LBRDA and 125,000 shares of LBRDK held by The Malone Family Land Preservation Foundation and 50,760 shares of LBRDA and 101,521 shares of LBRDK held by The Malone Family Foundation, as to which shares Mr. Malone has disclaimed beneficial ownership.

(5)
Includes shares held in the Liberty Media 401(k) Savings Plan as follows:

 
  LBRDA   LBRDK  

John C. Malone

    21     43  
(6)
Includes 122,649 shares of LBRDB and 245,299 shares of LBRDK held by a trust with respect to which Mr. Malone is the sole trustee and, with his wife, retains a unitrust interest in the trust.

(7)
Based on Amendment No. 2 to Schedule 13G, dated February 14, 2014, filed by Berkshire Hathaway Inc. (BH), Warren E. Buffett (WB), GEICO Corporation (GEICO), National Indemnity Company (NIC), Government Employees Insurance Company (GEIC), BNSF Master Retirement Trust (BNSF), FlightSafety International Inc. Retirement Income Plan (FIRIP), Fruit of the Loom Pension Trust (FLPT), GEICO Corporation Pension Plan Trust (GEICOT), Johns Manville Corporation Master Pension Trust (JMCMPT) and R. Ted Weschler (Wechsler), which states that (i) BH and WB have shared voting power and dispositive power over 5,300,000 of such shares, (ii) GEICO, NIC and GEIC have shared voting power and dispositive power over 2,677,660 of such shares, (iii) FIRIP has shared voting power and dispositive power over 270,000 of such shares, (iv) FLPT has shared voting power and dispositive power over 439,000 of such shares, (v) GEICOT has shared voting power and dispositive power over 975,000 of such shares, (vi) JMCMPT has shared voting power and dispositive power over 816,000 of such shares and (vii) BNSF has shared voting power and dispositive power over 122,340 of such shares. Wechsler has sole voting and dispositive power over 285,834 and shared dispositive power over 8,277 of such shares for which the other entities in the group disclaim beneficial ownership.

(8)
Based on Schedule 13G, dated January 23, 2012, filed by Horizon Kinetics LLC (Horizon), which states that Horizon has sole dispositive and sole voting power over such shares.

(9)
Based on Schedule 13G, dated January 28, 2013, filed by S.A.C. Capital Advisors, L.P. (SAC LP), S.A.C. Capital Advisors, Inc. (SAC Inc.), S.A.C. Capital Associates, LLC (SAC LLC), CR Intrinsic Investors, LLC (CR Intrinsic) and Steven A. Cohen, which states that (i) SAC LP and SAC Inc. have shared voting power and dispositive power over 5,911,262 of such shares, (ii) SAC LLC has shared voting power and dispositive power over 5,909,200 of such shares, (iii) CR Intrinsic and Mr. Cohen have shared voting and dispositive power over 400,000 of such shares and (iv) Mr. Cohen has shared voting power and dispositive power over 5,911,262 of such shares. Each of SAC LP, SAC Inc., CR Intrinsic and Mr. Cohen disclaims beneficial ownership of such shares, and SAC LLC disclaims beneficial ownership of shares held by CR Intrinsic.

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(10)
Based on Schedule 13G, dated January 14, 2013, filed by Gates Capital Management, Inc., Gates Capital Partners, L.P., ECF Value Fund, L.P., ECF Value Fund II, L.P., ECF Value Fund International, Ltd. and Jeffrey L. Gates, which states that each of such entities or persons has shared voting power and dispositive power over such shares.


Security Ownership of Management

        The following table sets forth information with respect to the estimated beneficial ownership by each person who is expected to serve as an executive officer or director of Broadband and all of such persons as a group of shares of our Series A common stock, Series B common stock and Series C common stock, assuming that the distribution had occurred at 5:00 p.m., New York City time, on June 30, 2014 and assuming that Liberty's dividend of Series C shares, the payment date for which was July 23, 2014, had been distributed prior to the assumed distribution date. The percentage voting power is presented on an aggregate basis for all series of our common stock.

        Shares of restricted stock that will be issued pursuant to the transitional plan are included in the outstanding share numbers provided throughout this prospectus. However, because of the difficulty in determining in advance the precise effect of the distribution on outstanding option awards and stock appreciation rights with respect to shares of LMCA, LMCB and LMCK for our directors and named executive officers (see "The Spin-Off—Effect of the Spin-Off on Outstanding Liberty Incentive Awards" for more information), for purposes of the following presentation, we have not included beneficial ownership information with respect to any new option awards or stock appreciation rights with respect to shares of LBRDA, LBRDB and LBRDK that may be received by the directors or named executive officers for whom beneficial ownership information is presented below. In addition, for purposes of the following presentation, we have not given effect to the distribution or exercise of any Series C rights.

        For purposes of the following presentation, beneficial ownership of shares of our Series B common stock, though convertible on a one-for-one basis into shares of our Series A common stock, is reported as beneficial ownership of our Series B common stock, and not as beneficial ownership of our Series A common stock, but the voting power of our Series A common stock and Series B common stock has been aggregated.

        The number of shares indicated as owned by the persons in the table includes interests in shares held by the Liberty 401(k) Savings Plan as of June 30, 2014. The shares held by the trustee of the Liberty 401(k) Savings Plan for the benefit of these persons are voted as directed by such persons.

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        So far as is known to Liberty, the persons indicated below would have sole voting power with respect to the shares estimated to be owned by them, except as otherwise stated in the notes to the table.

Name of Beneficial Owner
  Title of
Class
  Amount and
Nature of
Beneficial
Ownership
  Percent of
Class (%)
  Voting
Power (%)
 
 
   
  (In thousands)
   
   
 

[•]

  LBRDA     [•] ([•])   [•]     [•]  

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

Director

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
*
   
*
 

Senior Vice President and General Counsel     

  LBRDB                

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
*
   
*
 

Senior Vice President

  LBRDB                

  LBRDK     [•] ([•])   [•]      

[•]

 

LBRDA

   
[•]

([•])
 
*
   
*
 

Senior Vice President and Chief Financial Officer

  LBRDB                

  LBRDK     [•] ([•])   [•]      

All directors and executive officers as a

 

LBRDA

   
[•]

([•])
 
[•]
   
[•]
 

group ([•] persons)

  LBRDB     [•] ([•])   [•]        

  LBRDK     [•] ([•])   [•]      

*
Less than one percent

**
Less than 1,000 shares

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(1)
Includes shares held in the Liberty 401(k) Savings Plan as follows:

 
  LBRDA   LBRDK  

[•]

    [•]     [•]  

[•]

    [•]     [•]  

[•]