Noncontrolling Interests (Notes)

12 Months Ended

Dec. 31, 2023

Noncontrolling interests represents consolidated subsidiaries of which the Company owns less than 100%. The Company is a holding company whose principal asset is a controlling equity interest in Charter Holdings, the indirect owner of the Company’s cable systems. Noncontrolling interests on the Company’s balance sheet primarily includes A/N’s equity interests in Charter Holdings, which is comprised of a common ownership interest and prior to June 18, 2021, a convertible preferred ownership interest.

On June 18, 2021, the Company caused the conversion of all of A/N's 25 million Charter Holdings convertible preferred units into Charter Holdings common units. Each preferred unit was converted into 0.37334 Charter Holdings common unit, representing a conversion price of $267.85 per unit, based on a conversion feature as defined in the Charter Holdings Limited Liability Company Agreement ("LLC Agreement"), resulting in the issuance of a total of 9.3 million common units to A/N. The convertible preferred units had a face amount of $2.5 billion and paid a 6% annual preferred dividend which was paid quarterly in cash. Net income of Charter Holdings attributable to A/N's preferred noncontrolling interest for financial reporting purposes was based on the preferred dividend which was $70 million for the year ended December 31, 2021.

As of December 31, 2023, A/N held 17.1 million Charter Holdings common units which are exchangeable at any time into either Charter Class A common stock on a one-for-one basis, or, at Charter’s option, cash, based on the then current market price of Charter Class A common stock. Net income of Charter Holdings attributable to A/N’s common noncontrolling interest for financial reporting purposes is based on the weighted average effective common ownership interest of approximately 11% during 2023 and 2022, and 7% prior to the conversion of the preferred units and 11% after conversion during 2021, and was $702 million, $792 million and $594 million for the years ended December 31, 2023, 2022 and 2021, respectively. Charter Holdings is required to make quarterly cash tax distributions (with annual true-ups) on a pro rata basis to its partners based on the partner with the highest proportionate cash tax requirement. To the extent such tax distributions would exceed Charter’s cash tax requirements, it may waive its entitlement to tax distributions and, instead, issue a non-pro rata "advance" to A/N, which will accrue interest at a money market rate and will reduce A/N’s exchange value into cash or Charter Class A common stock. Charter Holdings distributed $156 million, $110 million and $4 million to A/N as a pro rata tax distribution on its common units during the years ended December 31, 2023, 2022 and 2021, respectively.

The following table represents Charter Holdings' purchase of Charter Holdings common units from A/N pursuant to the A/N Letter Agreement (see Note 19) and the effect on total shareholders' equity during the years ended December 31, 2023, 2022 and 2021.


	Year Ended December 31,
	2023		2022		2021
Number of units purchased	1,079,322		3,171,681		3,274,391
Amount of units purchased	$	427	$	1,602	$	2,234
Decrease in noncontrolling interest based on carrying value	$	(240)	$	(700)	$	(808)
Decrease in additional paid-in-capital, net of tax	$	(140)	$	(681)	$	(1,077)

Total shareholders' equity was also adjusted during the years ended December 31, 2023, 2022 and 2021 due to changes in Charter Holdings' ownership, including the impact of the preferred unit conversion discussed above, as follows.


	Year Ended December 31,
	2023		2022		2021
Decrease in noncontrolling interest	$	(104)	$	(659)	$	(2,153)
Increase in additional paid-in-capital, net of tax	$	78	$	497	$	1,625

As a result of the preferred unit conversion, the preferred noncontrolling interest carrying amount of $3.2 billion was reclassified to common noncontrolling interest and remeasured to $2.0 billion representing the relative effective Charter Holdings common ownership amount in all Charter Holdings partnership capital account balances resulting in a $1.2 billion reclass from noncontrolling interest to additional paid-in capital. A deferred tax liability of $300 million was recorded with the offset to additional paid-in capital as part of the Charter Holdings ownership change equity adjustments.