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Delaware Delaware Delaware | 4841 4841 4841 | 43-1843179 20-3269388 13-4257699 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
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Primary Standard | ||||||||||||
Industrial | I.R.S. Employer | |||||||||||
State of | Classification Code | Identification | ||||||||||
Name | Incorporation | Number | Number | |||||||||
CCH I Holdings Capital Corp. | DE | 4841 | 20-3269474 | |||||||||
CCH I Capital Corp. | DE | 4841 | 13-4257701 |
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where such offer or sale is not permitted. |
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• | the availability, in general, of funds to meet interest payment obligations under our and our parent companies’ debt and to fund our operations and necessary capital expenditures, either through cash flows from operating activities, further borrowings or other sources and, in particular, our and our parents’ and subsidiaries’ ability to be able to provide under applicable debt instruments, such funds (by dividend, investment or otherwise) to the applicable obligor of such debt; | |
• | our ability to sustain and grow revenues and cash flows from operating activities by offering video, high-speed Internet, telephone and other services and to maintain and grow a stable customer base, particularly in the face of increasingly aggressive competition from other service providers; | |
• | our and our parent companies’ ability to comply with all covenants in our and our parent companies’ indentures, bridge loan and credit facilities, any violation of which would result in a violation of the applicable facility or indenture and could trigger a default of other obligations under cross-default provisions; | |
• | our and our parent companies’ ability to pay or refinance debt prior to or when it becomes due and/or to take advantage of market opportunities and market windows to refinance that debt in the capital markets, through new issuances, exchange offers or otherwise, including restructuring our and our parent companies’ balance sheet and leverage position; | |
• | our ability to obtain programming at reasonable prices or to pass programming cost increases on to our customers; | |
• | general business conditions, economic uncertainty or slowdown; and | |
• | the effects of governmental regulation, including but not limited to local franchise authorities, on our business. |
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• | improving the overall value to our customers of our service offerings, relative to pricing; | |
• | developing more sophisticated customer care capabilities through investment in our customer care and marketing infrastructure, including targeted marketing capabilities; | |
• | executing growth strategies for new services, including digital simulcast, VOD, telephone, and digital video recorder service (“DVR”); |
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• | managing our operating costs by exercising discipline in capital and operational spending; and | |
• | identifying opportunities to continue to improve our balance sheet and liquidity. |
• | the January 2006 sale by our subsidiaries, CCH II, LLC (“CCH II”) and CCH II Capital Corp., of an additional $450 million principal amount of their 10.250% senior notes due 2010; | |
• | the October 2005 entry by our subsidiaries, CCO Holdings, LLC (“CCO Holdings”) and CCO Holdings Capital Corp., as guarantor thereunder, into a $600 million senior bridge loan agreement with various lenders (which was reduced to $435 million as a result of the issuance of CCH II notes); | |
• | the September 2005 exchange by Charter Holdings, CCH I and CIH of approximately $6.8 billion in total principal amount of outstanding debt securities of Charter Holdings in a private placement for new debt securities; | |
• | the August 2005 sale by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., of $300 million of 83/4% senior notes due 2013; | |
• | the March and June 2005 issuance of $333 million of Charter Communications Operating, LLC (“Charter Operating”) notes in exchange for $346 million of Charter Holdings notes; | |
• | the March and June 2005 repurchase of $131 million of Charter’s 4.75% convertible senior notes due 2006 leaving $25 million in principal amount outstanding; | |
• | the March 2005 redemption of all of CC V Holdings, LLC’s outstanding 11.875% senior discount notes due 2008 at a total cost of $122 million; | |
• | the December 2004 sale by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., of $550 million of senior floating rate notes due 2010; | |
• | the November 2004 sale by Charter, our indirect parent company, of $862.5 million of 5.875% convertible senior notes due 2009 and the December 2004 redemption of all of Charter’s outstanding 5.75% convertible senior notes due 2005 ($588 million principal amount); | |
• | the April 2004 sale of $1.5 billion of senior second lien notes by our subsidiary, Charter Operating, together with the concurrent refinancing of its credit facilities; and | |
• | the sale in the first half of 2004 of non-core cable systems for a total of $735 million, the proceeds of which were used to reduce indebtedness. |
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Fourth quarter preliminary information |
• | fourth quarter 2005 net losses of analog video customers are approximately 21,800 compared to a pro forma net loss of approximately 82,600 in the fourth quarter of 2004; | |
• | fourth quarter 2005 net gains of digital video customers are approximately 47,200 compared to a pro forma net loss of approximately 14,400 in the fourth quarter of 2004; | |
• | fourth quarter 2005 net gains of high-speed Internet customers are approximately 76,400 compared to a pro forma net gain of approximately 64,500 in the fourth quarter of 2004; and | |
• | fourth quarter 2005 net gains of telephone customers are approximately 31,600 compared to a net gain of approximately 5,200 in the fourth quarter of 2004. | |
Appointment of New Executive Vice President and Chief Financial Officer |
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CCH II, LLC Note Offering |
CC VIII Settlement |
CCO Holdings Bridge Loan |
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(1) | Charter acts as the sole manager of Charter Holdco and its direct and indirect limited liability company subsidiaries, including Charter Holdings. |
(2) | These membership units are held by CII and Vulcan Cable III Inc., each of which is 100% owned by Paul G. Allen, Charter’s Chairman and controlling shareholder. They are exchangeable at any time on a one-for-one basis for shares of Charter Class A common stock. |
(3) | The percentages shown in this table reflect the issuance of the 94.9 million shares of Class A common stock issued on July 29, 2005 and November 28, 2005 and the corresponding issuance of an equal number of mirror membership units by Charter Holdco to Charter. However, for accounting purposes, Charter’s common equity interest in Charter Holdco is 48%, and Paul G. Allen’s ownership of Charter Holdco is 52%. These percentages exclude the 94.9 million mirror membership units issued to Charter due to the required return of the issued mirror units upon return of the shares offered pursuant to the share lending agreement. |
(4) | Represents preferred membership interests in CC VIII, a subsidiary of CC V Holdings, LLC, and a subordinated accreting note issued by CCHC related to the settlement of the CC VIII dispute. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter Communications, Inc. and Its Subsidiaries — Equity Put Rights — CC VIII.” |
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New notes offered | $3,525,000,000 aggregate principal amount of new CCH I 11.00% Senior Secured Notes due 2015, $150,704,000 of new CIH 11.125% Senior Accreting Notes due 2014, $470,907,287 of new CIH 9.920% Senior Accreting Notes due 2014, $299,098,000 of new CIH 10.00% Senior Accreting Notes due 2014, $814,590,000 of new CIH 11.75% Senior Accreting Notes due 2014, $580,671,000 of new CIH 13.50% Senior Accreting Notes due 2014 and $216,719,000 of new CIH 12.125% Senior Accreting Notes due 2015, the offering and sale of which will have been registered under the Securities Act. The terms of the new notes offered in the exchange offer are substantially identical to those of the respective outstanding notes, except that certain transfer restrictions and registration rights provisions relating to the outstanding notes do not apply to the registered new notes. See “Description of the Notes” for a full description of which restrictions, rights and interest provisions do not apply to the new notes. | |
Outstanding notes | $3,525,000,000 aggregate principal amount of outstanding CCH I 11.00% Senior Secured Notes due 2015, $150,704,000 of outstanding CIH 11.125% Senior Accreting Notes due 2014, $470,907,287 of outstanding CIH 9.920% Senior Accreting Notes due 2014, $299,098,000 of outstanding CIH 10.00% Senior Accreting Notes due 2014, $814,590,000 of outstanding CIH 11.75% Senior Accreting Notes due 2014, $580,671,000 of outstanding CIH 13.50% Senior Accreting Notes due 2014 and $216,719,000 of outstanding CIH 12.125% Senior Accreting Notes due 2015, each issued on September 28, 2005. | |
The exchange offer | We are offering to issue registered new notes in exchange for a like principal amount and like denomination of our outstanding notes. We are offering to issue these registered new notes to satisfy our obligations under a registration rights agreement that we entered into with the initial purchasers of the outstanding notes when we sold the outstanding notes in a transaction that was exempt from the registration requirements of the Securities Act. You may tender your outstanding notes for exchange by following the procedures described under the caption “The Exchange Offer.” | |
Tenders; Expiration date; Withdrawal | The exchange offer will expire at 5:00 p.m., New York City time, on , 2006, which is 30 days after the exchange offer registration statement is declared effective, unless we extend it. If you decide to exchange your outstanding notes for new notes, you must acknowledge that you are not engaging in, and do not intend to engage in, a distribution of the new notes. You may withdraw any outstanding notes that you tender for exchange at any time prior to the expiration of the exchange offer. If we decide for any reason not to accept any outstanding notes you have tendered for exchange, those outstanding notes will be returned to you without cost promptly after the expiration or termination of the exchange offer. See “The Exchange |
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Offer — Terms of the Exchange Offer” for a more complete description of the tender and withdrawal provisions. |
Conditions to the exchange offer | The exchange offer is subject to customary conditions, some of which we may waive. See “The Exchange Offer — Conditions to the Exchange Offer” for a description of the conditions. Other than the federal securities laws, we are not subject to federal or state regulatory requirements in connection with the exchange offer. | |
U.S. federal income tax considerations | Your exchange of outstanding notes for new notes to be issued in the exchange offer will not result in any gain or loss to you for U.S. federal income tax purposes. | |
Use of proceeds | We will not receive any cash proceeds from the exchange offer. | |
Exchange agent | Bank of New York. | |
Consequences of failure to exchange your outstanding notes | Outstanding notes that are not tendered or that are tendered but not accepted will continue to be subject to the restrictions on transfer that are described in the legend on those notes. In general, you may offer or sell your outstanding notes only if they are registered under, or offered or sold under an exemption from, the Securities Act and applicable state securities laws. Except in limited circumstances with respect to specific types of holders of outstanding notes, we, however, will have no further obligation to register the outstanding notes. If you do not participate in the exchange offer, the liquidity of your outstanding notes could be adversely affected. | |
Consequences of exchanging your outstanding notes | Based on interpretations of the staff of the SEC, we believe that you may offer for resale, resell or otherwise transfer the new notes that we issue in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act if you: | |
• acquire the new notes issued in the exchange offer in the ordinary course of your business; | ||
• are not participating, do not intend to participate, and have no arrangement or undertaking with anyone to participate, in the distribution of the new notes issued to you in the exchange offer; and | ||
• are not an “affiliate” of our company as defined in Rule 405 of the Securities Act. |
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• | will have been registered under the Securities Act; | |
• | will not contain transfer restrictions and registration rights that relate to the outstanding notes; and | |
• | will not contain provisions relating to the payment of additional interest to be made to the holders of the outstanding notes under circumstances related to the timing of the exchange offer. |
Issuer | CCH I Holdings, LLC and CCH I Holdings Capital Corp. | |
Series | 11.125% Senior Accreting Notes due 2014 (the “11.125% CIH notes”). 9.920% Senior Accreting Notes due 2014 (the “9.920% CIH notes”). 10.00% Senior Accreting Notes due 2014 (the “10.00% CIH notes”). 11.75% Senior Accreting Notes due 2014 (the “11.75% CIH notes”). 13.50% Senior Accreting Notes due 2014 (the “13.50% CIH notes”). 12.125% Senior Accreting Notes due 2015 (the “12.125% CIH notes”). | |
Maturity | 11.125% CIH notes: January 15, 2014. 9.920% CIH notes: April 1, 2014. 10.00% CIH notes: May 15, 2014. 11.75% CIH notes: May 15, 2014. 13.50% CIH notes: January 15, 2014. 12.125% CIH notes: January 15, 2015. | |
Accreted Value | The accreted value of the CIH notes as of September 28, 2005 was $800 per $1,000 principal amount at maturity. | |
Full Accretion | Each series of CIH notes accretes on a straight line basis, and the accreted value will equal the principal amount at maturity on September 30, 2007. | |
Cash Interest Rate | Cash interest accrues on 100% of the principal amount of each series of CIH notes at the rates set forth below: | |
11.125% CIH notes: 11.125%. | ||
9.920% CIH notes: 9.920%. | ||
10.00% CIH notes: 10.00%. | ||
11.75% CIH notes: 11.75%. | ||
13.50% CIH notes: 13.50%. | ||
12.125% CIH notes: 12.125%. | ||
Cash Interest Accrual | Cash interest is currently accruing on the 2011-2012 cash pay notes. Cash interest with respect to the 11.75% CIH notes, 13.50% CIH notes and 12.125% CIH notes will begin to accrue on May 15, 2006, January 15, 2006 and January 15, 2007, respectively. |
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Cash Interest Payment Dates | Cash interest with respect to each series of CIH notes is payable in cash in arrears on the dates set forth below: | |
11.125% CIH notes: January 15 and July 15. | ||
9.920% CIH notes: April 1 and October 1. | ||
10.00% CIH notes: May 15 and November 15. | ||
11.75% CIH notes: May 15 and November 15. | ||
13.50% CIH notes: January 15 and July 15. | ||
12.125% CIH notes: January 15 and July 15. | ||
Ranking | The CIH notes are the unsecured and unsubordinated obligations of CIH and rank equal in right of payment to all of CIH’s existing and future unsecured senior indebtedness. However, the CIH notes will be effectively subordinated to all future obligations of CIH subsidiaries and are effectively subordinated to the CCH I notes. As of September 30, 2005, CIH had approximately $2.4 billion of indebtedness outstanding, and its consolidated subsidiaries had approximately $15.7 billion of indebtedness and other liabilities outstanding on their consolidated balance sheet. See “Capitalization”. | |
Guarantee | Charter Holdings unconditionally guarantees the CIH notes on a senior basis. If CIH cannot make payments on the CIH notes, Charter Holdings must make them. | |
Optional Redemption | The CIH notes are not redeemable by CIH until September 30, 2007. On and after such date, CIH may redeem the CIH notes in whole or in part from time to time as described in the section “Description of CIH Notes — Optional Redemption.” | |
Change of Control | Upon the occurrence of a Change of Control (as defined herein), each holder of the CIH notes will have the right to require CIH to repurchase all or any part of that holder’s CIH notes, at a redemption price equal to the accreted value of the CIH notes repurchased plus accrued and unpaid cash interest thereon, if any, to the date of purchase, plus the applicable change of control premium. There can be no assurance that CIH will have sufficient funds available at the time of any Change of Control to make any required debt repayment (including repurchases of the CIH notes). See “Description of the CIH notes — Repurchase at the Option of Holders — Change of Control.” | |
Restrictive Covenants | The indenture under which the CIH notes were issued, which we refer to as the “CIH indenture”, restricts the ability of CIH and CIH’s Restricted Subsidiaries to: (1) incur indebtedness; (2) create liens; (3) pay dividends or make distributions in respect of capital stock and other restricted payments; (4) make investments; (5) sell assets; (6) create restrictions on the ability of restricted subsidiaries to make certain payments; (7) enter into transactions with affiliates; or (8) consolidate, merge or sell all or substantially all assets. However, such covenants are subject to a number of important qualifications and exceptions as |
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described under “Description of the CIH Notes — Certain Covenants,” including provisions allowing CIH and its restricted subsidiaries, as long as CIH’s leverage ratio is not greater than 8.75 to 1.0, to incur additional indebtedness and make investments. CIH is also permitted under these covenants to provide funds to its parent companies to pay interest on and, subject to meeting its leverage ratio test, to retire or repurchase their debt obligations. | ||
Events of Default | For a discussion of events that permit acceleration of the payment of the accreted value of and accrued cash interest on each of the CIH notes, see “Description of the CIH Notes — Events of Default and Remedies”. |
Issuers | CCH I, LLC and CCH I Capital Corp. | |
Maturity | October 1, 2015. | |
Interest | Interest accrues from and including September 28, 2005 and is payable in cash semi-annually, in arrears, on April 1 and October 1 of each year, beginning on April 1, 2006. | |
Interest Rate | The per annum interest rate on the CCH I notes equals 11.00%. | |
Ranking | The CCH I notes are the senior secured obligations of CCH I and, to the extent of the value of the collateral, rank senior to all of CCH I’s future unsecured senior indebtedness. The CCH I notes will rank equally with all future indebtedness of CCH I that may be secured equally and ratably by the collateral securing the CCH I notes. In addition, the CCH I notes will be effectively senior to the CIH notes. However, the CCH I notes will be effectively subordinated to all existing and future obligations of CCH I’s subsidiaries. As of September 30, 2005, CCH I had approximately $3.7 billion of indebtedness outstanding and its consolidated subsidiaries had approximately $12.0 billion of indebtedness and other liabilities outstanding on their consolidated balance sheet. See “Capitalization”. | |
Guarantee | Charter Holdings unconditionally guarantees the CCH I notes on a senior basis. If CCH I cannot make payments on the CCH I notes, Charter Holdings must make them. | |
Collateral | The CCH I notes are secured by a pledge of 100% of the equity interests of CCH I’s wholly owned subsidiary, CCH II, and the proceeds thereof. All future indebtedness of CCH I that is permitted to be incurred by the CCH I indenture may be secured equally and ratably by the collateral. The pledge agreement contains certain limitations on the rights of the trustee and the holders to exercise remedies with respect to the collateral. | |
Optional Redemption | CCH I may redeem, at its option, the CCH I notes in whole or in part from time to time as described in the section “Description of CCH I Notes — Optional Redemption.” |
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Change of Control | Upon the occurrence of a Change of Control (as defined herein), each holder of the CCH I notes will have the right to require CCH I to repurchase all or any part of that holder’s CCH I notes at a redemption price equal to 101% of the aggregate principal amount of the CCH I notes repurchased plus accrued and unpaid interest thereon, if any, to the date of purchase. There can be no assurance that CCH I will have sufficient funds available at the time of any Change of Control to make any required debt repayment (including repurchases of the CCH I notes). See “Description of the CCH I Notes — Repurchase at the Option of Holders — Change of Control.” | |
Restrictive Covenants | The indenture under which the CCH I notes are issued, which we refer to as the “CCH I indenture”, restricts the ability of CCH I and CCH I’s restricted subsidiaries to: (1) incur indebtedness; (2) create liens; (3) pay dividends or make distributions in respect of capital stock and other restricted payments; (4) make investments; (5) sell assets; (6) create restrictions on the ability of restricted subsidiaries to make certain payments; (7) enter into transactions with affiliates; or (8) consolidate, merge or sell all or substantially all assets. However, such covenants are subject to a number of important qualifications and exceptions as described under “Description of the CCH I Notes — Certain Covenants”, including provisions allowing CCH I and its restricted subsidiaries, as long as CCH I’s leverage ratio is not greater than 7.5 to 1.0, to incur additional indebtedness and make investments. CCH I is also permitted under these covenants to provide funds to its parent companies to pay interest on and, subject to meeting its leverage ratio test, to retire or repurchase their debt obligations. | |
Events of Default | For a discussion of events that will permit acceleration of the payment of the principal of and accrued interest on the CCH I notes, see “Description of the CCH I Notes — Events of Default and Remedies”. |
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(1) the disposition of certain assets in March and April 2004 for total proceeds of $735 million and the use of such proceeds in each case to pay down credit facilities; | |
(2) the issuance and sale of $550 million of CCO Holdings senior floating rate notes in December 2004 and $1.5 billion of Charter Operating senior second lien notes in April 2004; | |
(3) an increase in amounts outstanding under the Charter Operating credit facilities in April 2004 and the use of such funds, together with the proceeds from the sale of the Charter Operating senior second lien notes, to refinance amounts outstanding under the credit facilities of our subsidiaries, CC VI Operating Company, LLC, CC VIII Operating, LLC and Falcon Cable Communications, LLC; | |
(4) the repayment of $530 million of borrowings under the Charter Operating revolving credit facility with net proceeds from the issuance and sale of the CCO Holdings senior floating rate notes in December 2004, which were included in our cash balance at December 31, 2004; | |
(5) the redemption of all of CC V Holdings, LLC’s outstanding 11.875% senior discount notes due 2008 with cash on hand; | |
(6) the issuance and sale of $300 million of outstanding notes in August 2005 and the use of such proceeds to pay financing costs and accrued interest in the exchange transaction referenced below; | |
(7) the exchange of $3.4 billion principal amount of Charter Holdings’ notes scheduled to mature in 2009 and 2010 for CCH I notes and the exchange of $3.4 billion principal amount of Charter Holdings’ notes scheduled to mature in 2011 and 2012 for CIH notes and CCH I notes; and | |
(8) the issuance and sale of $450 million principal amount of 10.250% CCH II senior notes in January 2006 and the use of such proceeds to pay down credit facilities. | |
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Nine Months Ended | ||||||||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||||||||
2002 | 2003 | 2004 | 2004 | 2004 | 2005 | |||||||||||||||||||||
Actual | Actual | Actual | Pro Forma(a) | Pro Forma(a) | Pro Forma(a) | |||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Video | $ | 3,420 | $ | 3,461 | $ | 3,373 | $ | 3,352 | $ | 2,513 | $ | 2,551 | ||||||||||||||
High-speed Internet | 337 | 556 | 741 | 738 | 535 | 671 | ||||||||||||||||||||
Advertising sales | 302 | 263 | 289 | 288 | 204 | 214 | ||||||||||||||||||||
Commercial | 161 | 204 | 238 | 236 | 173 | 205 | ||||||||||||||||||||
Other | 346 | 335 | 336 | 334 | 247 | 271 | ||||||||||||||||||||
Total revenues | 4,566 | 4,819 | 4,977 | 4,948 | (b) | 3,672 | (b) | 3,912 | ||||||||||||||||||
Costs and Expenses: | ||||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | 1,807 | 1,952 | 2,080 | 2,068 | 1,540 | 1,714 | ||||||||||||||||||||
Selling, general and administrative | 963 | 940 | 971 | 967 | 731 | 762 | ||||||||||||||||||||
Depreciation and amortization | 1,436 | 1,453 | 1,495 | 1,489 | 1,099 | 1,134 | ||||||||||||||||||||
Impairment of franchises | 4,638 | — | 2,433 | 2,433 | 2,433 | — | ||||||||||||||||||||
Asset impairment charges | — | — | — | — | — | 39 | ||||||||||||||||||||
(Gain) loss on sale of assets, net | 3 | 5 | (86 | ) | 20 | 2 | 5 | |||||||||||||||||||
Option compensation expense, net | 5 | 4 | 31 | 31 | 34 | 11 | ||||||||||||||||||||
Hurricane asset retirement loss | — | — | — | — | — | 19 | ||||||||||||||||||||
Special charges, net | 36 | 21 | 104 | 104 | 100 | 4 | ||||||||||||||||||||
Unfavorable contracts and other settlements | — | (72 | ) | (5 | ) | (5 | ) | — | — | |||||||||||||||||
Total costs and expenses | 8,888 | 4,303 | 7,023 | 7,107 | 5,939 | 3,688 | ||||||||||||||||||||
Income (loss) from operations | (4,322 | ) | 516 | (2,046 | ) | (2,159 | ) | (2,267 | ) | 224 | ||||||||||||||||
Interest expense, net | (1,425 | ) | (1,486 | ) | (1,618 | ) | (1,643 | ) | (1,225 | ) | (1,280 | ) | ||||||||||||||
Gain (loss) on derivative instruments and hedging activities, net | (115 | ) | 65 | 69 | 69 | 48 | 43 | |||||||||||||||||||
Gain (loss) on extinguishment of debt | — | 187 | (21 | ) | — | — | 9 | |||||||||||||||||||
Other, net | 3 | (10 | ) | 2 | 2 | — | 21 | |||||||||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (5,859 | ) | (728 | ) | (3,614 | ) | (3,731 | ) | (3,444 | ) | (983 | ) | ||||||||||||||
Minority interest(c) | (16 | ) | (29 | ) | 20 | 20 | 25 | (9 | ) | |||||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (5,875 | ) | (757 | ) | (3,594 | ) | (3,711 | ) | (3,419 | ) | (992 | ) | ||||||||||||||
Income tax benefit (expense) | 216 | (13 | ) | 35 | 36 | 42 | (10 | ) | ||||||||||||||||||
Loss before cumulative effect of accounting change | $ | (5,659 | ) | $ | (770 | ) | $ | (3,559 | ) | $ | (3,675 | ) | $ | (3,377 | ) | $ | (1,002 | ) | ||||||||
Other Financial Data: | ||||||||||||||||||||||||||
Capital expenditures | $ | 2,095 | $ | 804 | $ | 893 | $ | 891 | $ | 616 | $ | 815 | ||||||||||||||
Deficiency of earnings to cover fixed charges(d) | $ | 5,859 | $ | 728 | $ | 3,614 | $ | 3,731 | $ | 3,444 | $ | 983 |
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December 31, | September 30, | ||||||||||||||||||||
2003 | 2003 | 2004 | 2004 | 2005 | |||||||||||||||||
Actual | Pro Forma | Actual | Actual | Actual | |||||||||||||||||
Operating Data (end of period)(e): | |||||||||||||||||||||
Analog video customers | 6,431,300 | 6,200,500 | 5,991,500 | 6,074,600 | 5,906,300 | ||||||||||||||||
Digital video customers | 2,671,900 | 2,588,600 | 2,674,700 | 2,688,900 | 2,749,400 | ||||||||||||||||
Residential high-speed Internet customers | 1,565,600 | 1,527,800 | 1,884,400 | 1,819,900 | 2,120,000 | ||||||||||||||||
Telephone customers | 24,900 | 24,900 | 45,400 | 40,200 | 89,900 |
Actual | |||||
As of September 30, | |||||
2005 | |||||
(Dollars in millions) | |||||
Balance Sheet Data (end of period): | |||||
Cash and cash equivalents | $ | 20 | |||
Total assets | 16,276 | ||||
Long-term debt(f) | 18,254 | ||||
Loans payable-related party | 57 | ||||
Minority interest(c) | 665 | ||||
Member’s deficit | (4,292 | ) |
(a) | Actual revenues exceeded pro forma revenues for the year ended December 31, 2004 and the nine months ended September 30, 2004 and 2005 by $29 million, $29 million and $0, respectively. Pro forma loss before cumulative effect of accounting change exceeded actual loss before cumulative effect of accounting change by $116 million, $123 million and $468 million for the year ended December 31, 2004 and the nine months ended September 30, 2004 and 2005, respectively. The unaudited pro forma financial information required allocation of certain revenues and expenses and such information has been presented for comparative purposes and is not intended to provide any indication of what our results of operations would have been had the transactions described above been completed on the dates indicated or to project our results of operations for any future date. | |
(b) | Pro forma 2004 revenue by quarter is as follows: |
2004 | |||||
Pro Forma Revenue | |||||
(Dollars in millions) | |||||
1st Quarter | $ | 1,185 | |||
2nd Quarter | 1,239 | ||||
3rd Quarter | 1,248 | ||||
4th Quarter | 1,276 | ||||
Total pro forma revenue | $ | 4,948 | |||
(c) | Minority interest represents the preferred membership interests in CC VIII. Paul G. Allen indirectly held the preferred membership units in CC VIII as a result of the exercise of a put right originally granted in connection with the Bresnan transaction in 2000. There was an issue regarding the ultimate ownership of the CC VIII membership interests following the consummation of the Bresnan put transaction on June 6, 2003. Effective January 1, 2005, we ceased recognizing minority interest in earnings or losses of CC VIII for financial reporting purposes until such time as the resolution of the issue was determinable or certain other events occurred. This dispute was settled October 31, 2005. We are currently determining the accounting impact of the settlement. See “Certain Relationships |
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and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.” | ||
(d) | Earnings include net loss plus fixed charges. Fixed charges consist of interest expense and an estimated interest component of rent expense. | |
(e) | See “Business — Products and Services” for definitions of the terms contained in this section. | |
(f) | The CIH notes and CCH I notes issued in exchange for Charter Holdings notes are recorded in accordance with generally accepted accounting principles (“GAAP”). GAAP requires that the CIH notes issued in exchange for Charter Holdings notes and the CCH I notes issued in exchange for the 8.625% Charter Holdings notes due 2009 be recorded at the historical book values of the Charter Holdings notes as opposed to the current accreted value for legal purposes and notes indenture purposes (which, for both purposes, is the amount that would become payable if the debt becomes immediately due). As of September 30, 2005, the accreted value of our long-term debt for legal purposes and notes indenture purposes is $17.7 billion. |
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There is currently no public market for the new notes, and an active trading market may not develop for the notes. The failure of a market to develop for the new notes could adversely affect the liquidity and value of the new notes. |
We may not have the ability to raise the funds necessary to fulfill our obligations under the new notes following a change of control, which would place us in default under the indenture governing the new notes. |
If we do not fulfill our obligations to you under the new notes, you will not have any recourse against Charter, Charter Holdco, CCHC, Mr. Allen or their affiliates. |
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If you do not exchange your outstanding notes for new notes, you will continue to have restrictions on your ability to resell them. |
Under certain circumstances, federal and state laws may allow courts to avoid or subordinate claims with respect to the notes or invalidate the pledge of collateral for the CCH I notes. |
• | received less than reasonably equivalent value or fair consideration for the new notes or note guarantee; and | |
• | was insolvent or rendered insolvent by reason of the incurrence; | |
• | was engaged in a business or transaction for which its remaining assets constituted an unreasonably small capital; or | |
• | intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they became due. |
• | the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets; | |
• | the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they became absolute and mature; or | |
• | it could not pay its debts as they became due. |
Claims of holders of the CIH notes will be structurally subordinate to claims of creditors of CCH I notes and its subsidiaries. |
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CCH I may grant future liens on the collateral, and the value of the collateral may be insufficient, which could impair a recovery by holders of the CCH I notes. |
Although the CCH I notes are secured by a pledge of the collateral, the trustee and the holders of CCH I notes will not have a right to sell the collateral. |
The pledge of the collateral could be wholly or partially voided as a preferential transfer. |
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We may not generate (or, in general, have available to the applicable obligor) sufficient cash flow or access to additional external liquidity sources to fund our capital expenditures, ongoing operations and debt obligations, including our payment obligations under the notes, which could have a material adverse effect on you as the holders of the old notes and the new notes. |
• | our future operating performance; | |
• | the demand for our products and services; | |
• | general economic conditions and conditions affecting customer and advertiser spending; | |
• | competition and our ability to stabilize customer losses; and | |
• | legal and regulatory factors affecting our business. |
Charter Operating may not be able to access funds under its credit facilities if it fails to satisfy the covenant restrictions in its credit facilities, which could adversely affect our financial condition and our ability to conduct our business. |
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Because of our holding company structure, the outstanding notes are, and the new notes will be, structurally subordinated in right of payment to all liabilities of our subsidiaries. Restrictions in our subsidiaries’ debt instruments limit their ability to provide funds to us. |
• | the lenders under Charter Operating’s credit facilities and the holders of our subsidiaries’ other debt instruments will have the right to be paid in full before us from any of our subsidiaries’ assets; and | |
• | Paul G. Allen, as an indirect holder of preferred membership interests in our subsidiary, CC VIII would have a claim on a portion of its assets that would reduce the amounts available for repayment to holders of the outstanding notes and new notes. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.” |
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Any failure by Charter to satisfy its substantial debt obligations could have a material adverse effect on us. |
We, our subsidiaries and Charter have a significant amount of existing debt and may incur significant additional debt, including secured debt, in the future, which could adversely affect our financial health and our ability to react to changes in our business. |
• | require us to dedicate a significant portion of our cash flow from operating activities to payments on our, Charter’s and our subsidiaries’ debt, which will reduce our funds available for working capital, | |
• | capital expenditures and other general corporate expenses; | |
• | limit our flexibility in planning for, or reacting to, changes in our business, the cable and telecommunications industries and the economy at large; |
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• | place us at a disadvantage as compared to our competitors that have proportionately less debt; | |
• | make us vulnerable to interest rate increases, because a significant portion of our borrowings are, and will continue to be, at variable rates of interest; | |
• | expose us to increased interest expense as we refinance all existing lower interest rate instruments; | |
• | adversely affect our relationship with customers and suppliers; | |
• | limit our ability to borrow additional funds in the future, if we need them, due to applicable financial and restrictive covenants in our debt; and | |
• | make it more difficult for us to satisfy our obligations to the holders of our notes and for our subsidiaries to satisfy their obligations to their lenders under their credit facilities and to their noteholders as well as Charter’s ability to satisfy its obligations to its noteholders. |
The agreements and instruments governing our debt and the debt of our subsidiaries contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our and Charter’s liquidity, and adversely affect the holders of the outstanding notes and the new notes. |
• | incur additional debt; | |
• | repurchase or redeem equity interests and debt; | |
• | make certain investments or acquisitions; | |
• | pay dividends or make other distributions; | |
• | receive distributions from subsidiaries; | |
• | dispose of assets or merge; | |
• | enter into related party transactions; | |
• | grant liens; and | |
• | pledge assets. |
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We may not have the ability to raise the funds necessary to fulfill our obligations under the outstanding notes or the new notes following a change of control, which would place us in default under the indentures governing the outstanding notes and the new notes. |
Paul G. Allen and his affiliates are not obligated to purchase equity from, contribute to or loan funds to us or any of our subsidiaries. |
We operate in a very competitive business environment, which affects our ability to attract and retain customers and can adversely affect our business and operations. We have lost a significant number of customers to direct broadcast satellite competition and further loss of customers could have a material negative impact on our business. |
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Charter is currently the subject of certain lawsuits and other legal matters, the unfavorable outcome of which could adversely affect our business and financial condition. |
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We have a history of net losses and expect to continue to experience net losses. Consequently, we may not have the ability to finance future operations. |
We may not have the ability to pass our increasing programming costs on to our customers, which would adversely affect our cash flow and operating margins. |
If our required capital expenditures exceed our projections, we may not have sufficient funding, which could adversely affect our growth, financial condition and results of operations. |
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Our inability to respond to technological developments and meet customer demand for new products and services could limit our ability to compete effectively. |
We may not be able to carry out our strategy to improve operating results by standardizing and streamlining operations and procedures. |
Recent management changes could disrupt operations. |
Malicious and abusive Internet practices could impair our high-speed Internet services. |
The failure by Mr. Allen to maintain a minimum voting and economic interest in us could trigger a change of control default under our subsidiary’s credit facilities. |
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Mr. Allen indirectly controls us and may have interests that conflict with your interests. |
We are not permitted to engage in any business activity other than the cable transmission of video, audio and data unless Mr. Allen authorizes us to pursue that particular business activity, which could adversely affect our ability to offer new products and services outside of the cable transmission business and to enter into new businesses, and could adversely affect our growth, financial condition and results of operations. |
The loss of Mr. Allen’s services could adversely affect our ability to manage our business. |
Our business is subject to extensive governmental legislation and regulation, which could adversely affect our business. |
• | rules governing the provision of cable equipment and compatibility with new digital technologies; | |
• | rules and regulations relating to subscriber privacy; | |
• | limited rate regulation; |
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• | requirements governing when a cable system must carry a particular broadcast station and when it must first obtain consent to carry a broadcast station; | |
• | rules for franchise renewals and transfers; and | |
• | other requirements covering a variety of operational areas such as equal employment opportunity, technical standards and customer service requirements. |
Our cable systems are operated under franchises that are subject to non-renewal or termination. The failure to renew a franchise in one or more key markets could adversely affect our business. |
Our cable systems are operated under franchises that are non-exclusive. Accordingly, local 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. |
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Local franchise authorities have the ability to impose additional regulatory constraints on our business, which could further increase our expenses. |
Further regulation of the cable industry could cause us to delay or cancel service or programming enhancements or impair our ability to raise rates to cover our increasing costs, resulting in increased losses. |
Actions by pole owners might subject us to significantly increased pole attachment costs. |
We may be required to provide access to our networks to other Internet service providers, which could significantly increase our competition and adversely affect our ability to provide new products and services. |
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Changes in channel carriage regulations could impose significant additional costs on us. |
Offering voice communications service may subject us to additional regulatory burdens, causing us to incur additional costs. |
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• | cash and cash equivalents; | |
• | the actual (historical) capitalization of Charter Holdings; and | |
• | the capitalization of Charter Holdings, pro forma to reflect the issuance and sale of $450 million principal amount of 10.250% CCH II senior notes in January 2006 and the use of such proceeds to pay down credit facilities. | |
As of September 30, | |||||||||||
2005 | |||||||||||
Actual | Pro Forma | ||||||||||
(Dollars in millions, | |||||||||||
unaudited) | |||||||||||
Cash and cash equivalents | $ | 20 | $ | 20 | |||||||
Long-Term Debt: | |||||||||||
Charter Holdings: | |||||||||||
Senior and senior discount notes(a) | $ | 1,736 | $ | 1,736 | |||||||
CIH: | |||||||||||
Senior and senior discount notes(b)(c) | 2,426 | 2,426 | |||||||||
CCH I: | |||||||||||
11.000% senior notes due 2015(c) | 3,686 | 3,686 | |||||||||
CCH II: | |||||||||||
10.250% senior notes due 2010 | 1,601 | 2,041 | |||||||||
CCO Holdings: | |||||||||||
83/4% senior notes due 2013 | 794 | 794 | |||||||||
Senior floating rate notes due 2010 | 550 | 550 | |||||||||
Charter Operating: | |||||||||||
8.000% senior second lien notes due 2012 | 1,100 | 1,100 | |||||||||
83/8% senior second lien notes due 2014 | 733 | 733 | |||||||||
Renaissance: | |||||||||||
10.000% senior discount notes due 2008 | 115 | 115 | |||||||||
Credit Facilities: | |||||||||||
Charter Operating(d) | 5,513 | 5,082 | |||||||||
Total long-term debt | 18,254 | 18,263 | |||||||||
Loan Payable — Related Party | 57 | 57 | |||||||||
Minority Interest(e) | 665 | 665 | |||||||||
Member’s Deficit | (4,292 | ) | (4,292 | ) | |||||||
Total Capitalization | $ | 14,684 | $ | 14,693 | |||||||
(a) | Represents the following Charter Holdings notes: |
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As of September 30, 2005 | ||||
(Dollars in millions) | ||||
8.250% senior notes due 2007 | $ | 105 | ||
8.625% senior notes due 2009 | 292 | |||
9.920% senior discount notes due 2011 | 198 | |||
10.000% senior notes due 2009 | 154 | |||
10.250% senior notes due 2010 | 49 | |||
11.750% senior discount notes due 2010 | 43 | |||
10.750% senior notes due 2009 | 131 | |||
11.125% senior notes due 2011 | 217 | |||
13.500% senior discount notes due 2011 | 91 | |||
9.6250% senior notes due 2009 | 107 | |||
10.000% senior notes due 2011 | 136 | |||
11.750% senior discount notes due 2011 | 116 | |||
12.125% senior discount notes due 2012 | 97 | |||
$ | 1,736 | |||
(b) | Represents the following CIH notes: |
As of September 30, 2005 | ||||
(Dollars in millions) | ||||
11.125% senior notes due 2014 | $ | 151 | ||
9.920% senior discount notes due 2014 | 471 | |||
10.000% senior notes due 2014 | 299 | |||
11.750% senior discount notes due 2014 | 759 | |||
13.500% senior discount notes due 2014 | 559 | |||
12.125% senior discount notes due 2015 | 187 | |||
$ | 2,426 | |||
(c) | The CIH notes and CCH I notes issued in exchange for Charter Holdings notes are recorded in accordance with GAAP. GAAP requires that the CIH notes issued in exchange for Charter Holdings notes and the CCH I notes issued in exchange for the 8.625% Charter Holdings notes due 2009 be recorded at the historical book values of the Charter Holdings notes as opposed to the current accreted value for legal purposes and notes indenture purposes (which, for both purposes, is the amount that would become payable if the debt becomes immediately due). As of September 30, 2005, the accreted value of our total long-term debt for legal purposes and notes indenture purposes is $17.7 billion. | |
(d) | Total potential borrowing availability under our credit facilities was $786 million as of September 30, 2005 (approximately $1.2 billion pro forma for the issuance and sale of $450 million principal amount of 10.250% CCH II senior notes due 2010), although the actual availability at that time was only $648 million because of limits imposed by covenant restrictions (approximately $1.1 billion pro forma for the issuance and sale of $450 million principal amount of 10.250% CCH II senior notes due 2010). | |
(e) | Minority interest consists of preferred membership interests in CC VIII. Paul G. Allen held preferred membership units in CC VIII as a result of the exercise of put rights originally granted in connection with the Bresnan transaction in 2000. There was an issue regarding the ultimate ownership of the CC VIII membership interests following the consummation of the Bresnan put transaction on June 6, 2003. This dispute was settled October 31, 2005. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.” |
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(1) the disposition of certain assets in March and April 2004 for total proceeds of $735 million and the use of such proceeds in each case to pay down credit facilities; | |
(2) the issuance and sale of $550 million of CCO Holdings senior floating rate notes in December 2004 and $1.5 billion of Charter Operating senior second lien notes in April 2004; | |
(3) an increase in amounts outstanding under the Charter Operating credit facilities in April 2004 and the use of such funds, together with the proceeds from the sale of the Charter Operating senior second lien notes, to refinance amounts outstanding under the credit facilities of our subsidiaries, CC VI Operating Company, LLC, CC VIII Operating, LLC and Falcon Cable Communications, LLC; | |
(4) the repayment of $530 million of borrowings under the Charter Operating revolving credit facility with net proceeds from the issuance and sale of the CCO Holdings senior floating rate notes in December 2004, which were included in our cash balance at December 31, 2004; | |
(5) the redemption of all of CC V Holdings, LLC’s outstanding 11.875% senior discount notes due 2008 with cash on hand; | |
(6) the issuance and sale of $300 million of 83/4% CCO Holdings senior notes in August 2005 and the use of such proceeds to pay financing costs and accrued interest in the exchange transaction referenced below; | |
(7) the exchange of $3.4 billion principal amount of Charter Holdings’ notes scheduled to mature in 2009 and 2010 for CCH I notes and the exchange of $3.4 billion principal amount of Charter Holdings’ notes scheduled to mature in 2011 and 2012 for CIH notes and CCH I notes; and | |
(8) the issuance and sale of $450 million principal amount of 10.250% CCH II senior notes in January 2006 and the use of such proceeds to pay down credit facilities. | |
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Asset | Financing | |||||||||||||||||
Historical | Dispositions(a) | Transactions(b) | Pro Forma | |||||||||||||||
(Dollars in millions) | ||||||||||||||||||
Revenues: | ||||||||||||||||||
Video | $ | 2,534 | $ | (21 | ) | $ | — | $ | 2,513 | |||||||||
High-speed Internet | 538 | (3 | ) | — | 535 | |||||||||||||
Advertising sales | 205 | (1 | ) | — | 204 | |||||||||||||
Commercial | 175 | (2 | ) | — | 173 | |||||||||||||
Other | 249 | (2 | ) | — | 247 | |||||||||||||
Total revenues | 3,701 | (29 | ) | — | 3,672 | |||||||||||||
Costs and Expenses: | ||||||||||||||||||
Operating (excluding depreciation and amortization) | 1,552 | (12 | ) | — | 1,540 | |||||||||||||
Selling, general and administrative | 735 | (4 | ) | — | 731 | |||||||||||||
Depreciation and amortization | 1,105 | (6 | ) | — | 1,099 | |||||||||||||
Impairment of franchises | 2,433 | — | — | 2,433 | ||||||||||||||
(Gain) loss on sale of assets, net | (104 | ) | 106 | — | 2 | |||||||||||||
Option compensation expense, net | 34 | — | — | 34 | ||||||||||||||
Special charges, net | 100 | — | — | 100 | ||||||||||||||
5,855 | 84 | — | 5,939 | |||||||||||||||
Loss from operations | (2,154 | ) | (113 | ) | — | (2,267 | ) | |||||||||||
Interest expense, net | (1,193 | ) | 4 | (36 | ) | (1,225 | ) | |||||||||||
Gain on derivative instruments and hedging activities, net | 48 | — | — | 48 | ||||||||||||||
Loss on extinguishment of debt | (21 | ) | — | 21 | — | |||||||||||||
(1,166 | ) | 4 | (15 | ) | (1,177 | ) | ||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (3,320 | ) | (109 | ) | (15 | ) | (3,444 | ) | ||||||||||
Minority interest | 25 | — | — | 25 | ||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (3,295 | ) | (109 | ) | (15 | ) | (3,419 | ) | ||||||||||
Income tax benefit | 41 | 1 | — | 42 | ||||||||||||||
Loss before cumulative effect of accounting change | $ | (3,254 | ) | $ | (108 | ) | $ | (15 | ) | $ | (3,377 | ) | ||||||
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(a) | Represents the elimination of operating results related to the disposition of certain assets in March and April 2004 and a reduction of interest expense related to the use of the net proceeds from such sales to repay a portion of our subsidiaries’ credit facilities. | |
(b) | Represents adjustment to interest expense associated with the completion of the financing transactions discussed in pro forma assumptions two through eight (in millions): | |
Interest on the Charter Operating senior second lien notes issued in April 2004 and the amended and restated Charter Operating credit facilities | $ | 114 | |||||||
Amortization of deferred financing costs | 8 | ||||||||
Less — Historical interest expense for Charter Operating credit facilities and on subsidiary credit facilities repaid | (83 | ) | |||||||
39 | |||||||||
Interest on $550 million of CCO Holdings senior floating rate notes issued in December 2004 | 27 | ||||||||
Amortization of deferred financing costs | 2 | ||||||||
Less — Historical interest expense for Charter Operating’s revolving credit facility repaid with cash on hand in February 2005 | (20 | ) | |||||||
Historical interest expense for the CC V Holdings, LLC 11.875% senior discount notes repaid with cash on hand in March 2005 | (10 | ) | |||||||
(1 | ) | ||||||||
Interest on $300 million of CCO Holdings 83/4% senior notes issued in August 2005 | 20 | ||||||||
Interest on new CCH I notes issued in September 2005 in exchange for CCH notes | 279 | ||||||||
Amortization of deferred financing costs | 5 | ||||||||
Less — Historical interest expense on CCH notes exchanged for CCH I notes | (327 | ) | |||||||
(43 | ) | ||||||||
Interest on $450 million principal amount of CCH II 10.250% senior notes issued in January 2006 | 36 | ||||||||
Amortization of deferred financing costs | 2 | ||||||||
Less — Historical interest expense for Charter Operating’s revolving credit facility repaid | (17 | ) | |||||||
21 | |||||||||
Net increase in interest expense | $ | 36 | |||||||
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Asset | Financing | |||||||||||||||||
Historical | Dispositions(a) | Transactions(b) | Pro Forma | |||||||||||||||
(Dollars in millions) | ||||||||||||||||||
Revenues | ||||||||||||||||||
Video | $ | 3,373 | $ | (21 | ) | $ | — | $ | 3,352 | |||||||||
High-speed Internet | 741 | (3 | ) | — | 738 | |||||||||||||
Advertising sales | 289 | (1 | ) | — | 288 | |||||||||||||
Commercial | 238 | (2 | ) | — | 236 | |||||||||||||
Other | 336 | (2 | ) | — | 334 | |||||||||||||
Total | 4,977 | (29 | ) | — | 4,948 | |||||||||||||
Costs and Expenses | ||||||||||||||||||
Operating (excluding depreciation and amortization) | 2,080 | (12 | ) | — | 2,068 | |||||||||||||
Selling, general and administrative | 971 | (4 | ) | — | 967 | |||||||||||||
Depreciation and amortization | 1,495 | (6 | ) | — | 1,489 | |||||||||||||
Impairments of franchises | 2,433 | — | — | 2,433 | ||||||||||||||
Gain (loss) on sale of assets, net | (86 | ) | 106 | — | 20 | |||||||||||||
Option compensation expense, net | 31 | — | — | 31 | ||||||||||||||
Special charges, net | 104 | — | — | 104 | ||||||||||||||
Unfavorable contracts and other settlements | (5 | ) | — | — | (5 | ) | ||||||||||||
7,023 | 84 | — | 7,107 | |||||||||||||||
Loss from operations | (2,046 | ) | (113 | ) | — | (2,159 | ) | |||||||||||
Interest expense, net | (1,618 | ) | 4 | (29 | ) | (1,643 | ) | |||||||||||
Gain on derivative instruments and hedging activities, net | 69 | — | — | 69 | ||||||||||||||
Loss on extinguishment of debt | (21 | ) | — | 21 | — | |||||||||||||
Other, net | 2 | — | — | 2 | ||||||||||||||
(1,568 | ) | 4 | (8 | ) | (1,572 | ) | ||||||||||||
Loss before minority interest, income taxes, and cumulative effect of accounting change | (3,614 | ) | (109 | ) | (8 | ) | (3,731 | ) | ||||||||||
Minority interest | 20 | — | — | 20 | ||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (3,594 | ) | (109 | ) | (8 | ) | (3,711 | ) | ||||||||||
Income tax benefit | 35 | 1 | — | 36 | ||||||||||||||
Loss before cumulative effect of accounting change | $ | (3,559 | ) | $ | (108 | ) | $ | (8 | ) | $ | (3,675 | ) | ||||||
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(a) | Represents the elimination of operating results related to the disposition of certain assets in March and April 2004 and a reduction of interest expense related to the use of the net proceeds from such sales to repay a portion of our subsidiaries’ credit facilities. | |
(b) | Represents adjustment to interest expense associated with the completion of the financing transactions discussed in pro forma assumptions two through eight (in millions): | |
Interest on the Charter Operating senior second lien notes issued in April 2004 and the amended and restated Charter Operating credit facilities | $ | 114 | ||||||
Amortization of deferred financing costs | 8 | |||||||
Less — Historical interest expense for Charter Operating credit facilities and on subsidiary credit facilities repaid | (83 | ) | ||||||
39 | ||||||||
Interest on $550 million of CCO Holdings senior floating rate notes issued in December 2004 | 35 | |||||||
Amortization of deferred financing costs | 2 | |||||||
Less — Historical interest expense for Charter Operating’s revolving credit facility repaid with cash on hand in February 2005 | (30 | ) | ||||||
Historical interest expense for the CC V Holdings, LLC 11.875% senior discount notes repaid with cash on hand in March 2005 | (13 | ) | ||||||
(6 | ) | |||||||
Interest on $300 million of CCO Holdings 83/4% senior notes issued in August 2005 | 27 | |||||||
Interest on new CCH I notes issued in September 2005 in exchange for CCH notes | 372 | |||||||
Amortization of deferred financing costs | 6 | |||||||
Less — Historical interest expense on CCH notes exchange for CCH I notes | (435 | ) | ||||||
(57 | ) | |||||||
Interest on $450 million principal amount of CCH II 10.250% senior notes issued in January 2006 | 48 | |||||||
Amortization of deferred financing costs | 2 | |||||||
Less — Historical interest expense for Charter Operating’s credit facility repaid | (24 | ) | ||||||
26 | ||||||||
Net increase in interest expense | $ | 29 | ||||||
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Financing | ||||||||||||||
Historical | Transactions(a) | Pro Forma | ||||||||||||
(Dollars in millions) | ||||||||||||||
Revenues: | ||||||||||||||
Video | $ | 2,551 | $ | — | $ | 2,551 | ||||||||
High-speed Internet | 671 | — | 671 | |||||||||||
Advertising sales | 214 | — | 214 | |||||||||||
Commercial | 205 | — | 205 | |||||||||||
Other | 271 | — | 271 | |||||||||||
Total revenues | 3,912 | — | 3,912 | |||||||||||
Costs and Expenses: | ||||||||||||||
Operating (excluding depreciation and amortization) | 1,714 | — | 1,714 | |||||||||||
Selling, general and administrative | 762 | — | 762 | |||||||||||
Depreciation and amortization | 1,134 | — | 1,134 | |||||||||||
Asset impairment charges | 39 | — | 39 | |||||||||||
Loss on sale of assets, net | 5 | — | 5 | |||||||||||
Option compensation expense, net | 11 | — | 11 | |||||||||||
Hurricane asset retirement loss | 19 | — | 19 | |||||||||||
Special charges, net | 4 | — | 4 | |||||||||||
3,688 | — | 3,688 | ||||||||||||
Income from operations | 224 | — | 224 | |||||||||||
Interest expense, net | (1,297 | ) | 17 | (1,280 | ) | |||||||||
Gain on derivative instruments and hedging activities, net | 43 | — | 43 | |||||||||||
Gain on extinguishment of debt | 494 | (485 | ) | 9 | ||||||||||
Other, net | 21 | — | 21 | |||||||||||
(739 | ) | (468 | ) | (1,207 | ) | |||||||||
Loss before minority interest and income taxes | (515 | ) | (468 | ) | (983 | ) | ||||||||
Minority interest | (9 | ) | — | (9 | ) | |||||||||
Loss before income taxes | (524 | ) | (468 | ) | (992 | ) | ||||||||
Income tax expense | (10 | ) | — | (10 | ) | |||||||||
Loss before cumulative effect of accounting change | $ | (534 | ) | $ | (468 | ) | $ | (1,002 | ) | |||||
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(a) | Represents adjustment to interest expense associated with the completion of the financing transactions discussed in pro forma assumptions four through eight (in millions): | |
Less — Historical interest expense for Charter Operating’s revolving credit facility repaid with cash on hand in February 2005 | $ | (3 | ) | |||||
Historical interest expense for the CC V Holdings, LLC 11.875% senior discount notes repaid with cash on hand in March 2005 | (3 | ) | ||||||
(6 | ) | |||||||
Interest on $300 million of CCO Holdings 83/4% senior notes issued in August 2005 | 17 | |||||||
Interest on new CCH I notes issued in September 2005 in exchange for CCH notes | 279 | |||||||
Amortization of deferred financing costs | 5 | |||||||
Less — Historical interest expense on CCH notes exchanged for CCH I notes | (327 | ) | ||||||
(43 | ) | |||||||
Interest on CCH II $450 million principal amount of CCH II 10.250% senior notes issued in January 2006 | 36 | |||||||
Amortization of deferred financing costs | 2 | |||||||
Less — Historical interest expense for Charter Operating’s credit facility repaid | (23 | ) | ||||||
15 | ||||||||
Net decrease in interest expense | $ | (17 | ) | |||||
�� |
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Financing | Pro | |||||||||||||
Historical | Transactions(a) | Forma | ||||||||||||
(Dollars in millions) | ||||||||||||||
ASSETS | ||||||||||||||
CURRENT ASSETS: | ||||||||||||||
Cash and cash equivalents | $ | 20 | $ | — | $ | 20 | ||||||||
Accounts receivable, net | 185 | — | 185 | |||||||||||
Prepaid expenses and other current assets | 23 | — | 23 | |||||||||||
Total current assets | 228 | — | 228 | |||||||||||
INVESTMENT IN CABLE PROPERTIES: | ||||||||||||||
Property, plant and equipment, net | 5,895 | — | 5,895 | |||||||||||
Franchises, net | 9,830 | — | 9,830 | |||||||||||
Total investment in cable properties, net | 15,725 | — | 15,725 | |||||||||||
OTHER ASSETS | 323 | 9 | 332 | |||||||||||
Total assets | $ | 16,276 | $ | 9 | $ | 16,285 | ||||||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||||||||
CURRENT LIABILITIES | ||||||||||||||
Accounts payable and accrued expenses | $ | 1,055 | $ | — | $ | 1,055 | ||||||||
Payables to related party | 105 | — | 105 | |||||||||||
Total current liabilities | 1,160 | — | 1,160 | |||||||||||
LONG-TERM DEBT | 18,254 | 9 | 18,263 | |||||||||||
LOANS PAYABLE — RELATED PARTY | 57 | — | 57 | |||||||||||
DEFERRED MANAGEMENT FEES — RELATED PARTY | 14 | — | 14 | |||||||||||
OTHER LONG-TERM LIABILITIES | 418 | — | 418 | |||||||||||
MINORITY INTEREST | 665 | — | 665 | |||||||||||
MEMBER’S DEFICIT | (4,292 | ) | — | (4,292 | ) | |||||||||
Total liabilities and member’s deficit | $ | 16,276 | $ | 9 | $ | 16,285 | ||||||||
(a) | Represents increase in long-term debt as a result of deferred financing costs incurred in connection with the sale of $450 million principal amount of CCH II 10.250% senior notes issued in January 2006. | |
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Nine Months Ended | |||||||||||||||||||||||||||||
Year Ended December 31, | September 30, | ||||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | |||||||||||||||||||||||
(Dollars in millions) | (Unaudited) | ||||||||||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||||||||
Revenues | $ | 3,141 | $ | 3,807 | $ | 4,566 | $ | 4,819 | $ | 4,977 | $ | 3,701 | $ | 3,912 | |||||||||||||||
Costs and Expenses: | |||||||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | 1,187 | 1,486 | 1,807 | 1,952 | 2,080 | 1,552 | 1,714 | ||||||||||||||||||||||
Selling, general and administrative | 606 | 826 | 963 | 940 | 971 | 735 | 762 | ||||||||||||||||||||||
Depreciation and amortization | 2,398 | 2,683 | 1,436 | 1,453 | 1,495 | 1,105 | 1,134 | ||||||||||||||||||||||
Impairment of franchises | — | — | 4,638 | — | 2,433 | 2,433 | — | ||||||||||||||||||||||
Asset impairment charges | — | — | — | — | — | — | 39 | ||||||||||||||||||||||
(Gain) loss on sale of assets, net | — | 10 | 3 | 5 | (86 | ) | (104 | ) | 5 | ||||||||||||||||||||
Option compensation expense (income), net | 38 | (5 | ) | 5 | 4 | 31 | 34 | 11 | |||||||||||||||||||||
Hurricane asset retirement loss | — | — | — | — | — | — | 19 | ||||||||||||||||||||||
Special charges, net | — | 18 | 36 | 21 | 104 | 100 | 4 | ||||||||||||||||||||||
Unfavorable contracts and other settlements | — | — | — | (72 | ) | (5 | ) | — | — | ||||||||||||||||||||
4,229 | 5,018 | 8,888 | 4,303 | 7,023 | 5,855 | 3,688 | |||||||||||||||||||||||
Income (loss) from operations | (1,088 | ) | (1,211 | ) | (4,322 | ) | 516 | (2,046 | ) | (2,154 | ) | 224 | |||||||||||||||||
Interest expense, net | (1,046 | ) | (1,247 | ) | (1,425 | ) | (1,486 | ) | (1,618 | ) | (1,193 | ) | (1,297 | ) | |||||||||||||||
Gain (loss) on derivative instruments and hedging activities, net | — | (50 | ) | (115 | ) | 65 | 69 | 48 | 43 | ||||||||||||||||||||
Gain (loss) on extinguishment of debt | — | — | — | 187 | (21 | ) | (21 | ) | 494 | ||||||||||||||||||||
Other, net | 5 | (52 | ) | 3 | (10 | ) | 2 | — | 21 | ||||||||||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change, net | (2,129 | ) | (2,560 | ) | (5,859 | ) | (728 | ) | (3,614 | ) | (3,320 | ) | (515 | ) | |||||||||||||||
Minority interest(a) | (13 | ) | (16 | ) | (16 | ) | (29 | ) | 20 | 25 | (9 | ) | |||||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (2,142 | ) | (2,576 | ) | (5,875 | ) | (757 | ) | (3,594 | ) | (3,295 | ) | (524 | ) | |||||||||||||||
Income tax benefit (expense) | 24 | 27 | 216 | (13 | ) | 35 | 41 | (10 | ) | ||||||||||||||||||||
Loss before cumulative effect of accounting change | (2,118 | ) | (2,549 | ) | (5,659 | ) | (770 | ) | (3,559 | ) | (3,254 | ) | (534 | ) | |||||||||||||||
Cumulative effect of accounting change, net of tax | — | (24 | ) | (540 | ) | — | (840 | ) | (840 | ) | — | ||||||||||||||||||
Net loss | $ | (2,118 | ) | $ | (2,573 | ) | $ | (6,199 | ) | $ | (770 | ) | $ | (4,399 | ) | $ | (4,094 | ) | $ | (534 | ) | ||||||||
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Nine Months Ended | ||||||||||||||||||||||||||||
Year Ended December 31, | September 30, | |||||||||||||||||||||||||||
2000 | 2001 | 2002 | 2003 | 2004 | 2004 | 2005 | ||||||||||||||||||||||
(Dollars in millions) | (Unaudited) | |||||||||||||||||||||||||||
Other Data: | ||||||||||||||||||||||||||||
Deficiencies of earnings to cover fixed charges(b) | $ | 2,129 | $ | 2,560 | $ | 5,859 | $ | 728 | $ | 3,614 | $ | 3,320 | $ | 515 | ||||||||||||||
Balance Sheet Data (end of period): | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 131 | $ | 2 | $ | 310 | $ | 85 | $ | 546 | $ | 91 | $ | 20 | ||||||||||||||
Total assets | 24,290 | 26,220 | 22,156 | 21,148 | 17,084 | 16,780 | 16,276 | |||||||||||||||||||||
Long-term debt | 12,311 | 14,960 | 17,288 | 17,873 | 18,474 | 17,740 | 18,254 | |||||||||||||||||||||
Loans payable — related party | — | 189 | 73 | 37 | 29 | 39 | 57 | |||||||||||||||||||||
Minority interest(a) | 641 | 655 | 693 | 719 | 656 | 650 | 665 | |||||||||||||||||||||
Members’ equity (deficit) | 9,156 | 8,122 | 1,906 | 639 | (3,713 | ) | (3,419 | ) | (4,292 | ) |
(a) | Minority interest represents the preferred membership interests in CC VIII. Paul G. Allen indirectly held the preferred membership units in CC VIII as a result of the exercise of a put right originally granted in connection with the Bresnan transaction in 2000. There was an issue regarding the ultimate ownership of the CC VIII membership interest following consummation of the Bresnan put transaction on June 6, 2003. Effective January 1, 2005, we ceased recognizing minority interest in earnings and losses of CC VIII for financial reporting purposes until such time as the resolution of the issue was determinable or other events occurred. This dispute was settled October 31, 2005. We are currently determining the accounting impact of the settlement. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter and Its Subsidiaries — Equity Put Rights — CC VIII.” | |
(b) | Earnings include net loss plus fixed charges. Fixed charges consist of interest expense and an estimated interest component of rent expense. |
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• | the January 2006 sale by our subsidiaries, CCH II and CCH II Capital Corp., of an additional $450 million principal amount of their 10.250% senior notes due 2010; | |
• | the October 2005 entry by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., as guarantor thereunder, into a $600 million senior bridge loan agreement with various lenders (which was reduced to $435 million as a result of the issuance of CCH II notes); | |
• | the September 2005 exchange by Charter Holdings, CCH I and CIH of approximately $6.8 billion in total principal amount of outstanding debt securities of Charter Holdings in a private placement for new debt securities; | |
• | the August 2005 sale by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., of $300 million of 83/4% senior notes due 2013; | |
• | the March and June 2005 issuance of $333 million of Charter Operating notes in exchange for $346 million of Charter Holdings notes; | |
• | the March 2005 redemption of all of CC V Holdings, LLC’s outstanding 11.875% senior discount notes due 2008 at a total cost of $122 million; | |
• | the December 2004 sale by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., of $550 million of senior floating rate notes due 2010; | |
• | the April 2004 sale of $1.5 billion of senior second-lien notes by our subsidiary, Charter Operating, together with the concurrent refinancing of its credit facilities; and | |
• | the sale in the first half of 2004 of non-core cable systems for a total of $735 million, the proceeds of which were used to reduce indebtedness; |
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Purchase Price | ||||||||||||||||||||||||||
Securities | ||||||||||||||||||||||||||
Acquisition | Cash | Assumed | Issued/Other | Total | Acquired | |||||||||||||||||||||
Date | Paid | Debt | Consideration | Price | Customers | |||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
Interlake | 1/00 | $ | 13 | $ | — | $ | — | $ | 13 | 6,000 | ||||||||||||||||
Bresnan | 2/00 | 1,100 | 963 | 1,014 | (a) | 3,077 | 695,800 | |||||||||||||||||||
Capital Cable | 4/00 | 60 | — | — | 60 | 23,200 | ||||||||||||||||||||
Farmington | 4/00 | 15 | — | — | 15 | 5,700 | ||||||||||||||||||||
Kalamazoo | 9/00 | — | — | 171 | (b) | 171 | 50,700 | |||||||||||||||||||
Total 2000 Acquisitions | $ | 1,188 | $ | 963 | $ | 1,185 | $ | 3,336 | 781,400 | |||||||||||||||||
AT&T Systems | 6/01 | $ | 1,711 | $ | — | $ | 25 | (c) | $ | 1,736 | (c) | 551,100 | ||||||||||||||
Cable USA | 8/01 | 45 | — | 55 | (d) | 100 | 30,600 | |||||||||||||||||||
Total 2001 Acquisitions | $ | 1,756 | $ | — | $ | 80 | $ | 1,836 | 581,700 | |||||||||||||||||
High Speed Access Corp. | 2/02 | $ | 78 | $ | — | $ | — | $ | 78 | N/A | ||||||||||||||||
Enstar Limited Partnership Systems | 4/02 | 48 | — | — | 48 | 21,600 | ||||||||||||||||||||
Enstar Income Program II-1, L.P. | 9/02 | 15 | — | — | 15 | 6,400 | ||||||||||||||||||||
Total 2002 Acquisitions | $ | 141 | $ | — | $ | — | $ | 141 | 28,000 | |||||||||||||||||
Total 2000-2002 Acquisitions | $ | 3,085 | $ | 963 | $ | 1,265 | $ | 5,313 | 1,391,100 | |||||||||||||||||
(a) | Comprised of $385 million in equity in Charter Holdco and $629 million of equity in CC VIII. | |
(b) | In connection with this transaction, we acquired all of the outstanding stock of Cablevision of Michigan in exchange for 11,173,376 shares of Charter Class A common stock. | |
(c) | Comprised of approximately $1.7 billion, as adjusted, in cash and a cable system located in Florida valued at approximately $25 million, as adjusted. |
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(d) | In connection with this transaction, at the closing we and Charter Holdco acquired all of the outstanding stock of Cable USA and the assets of related affiliates in exchange for cash and 505,664 shares of Charter Series A convertible redeemable preferred stock. In the first quarter of 2003, an additional $0.34 million in cash was paid and 39,595 additional shares of Charter Series A convertible redeemable preferred stock were issued to certain sellers. |
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• | Capitalization of labor and overhead costs; | |
• | Useful lives of property, plant and equipment; | |
• | Impairment of property, plant, and equipment, franchises, and goodwill; | |
• | Income taxes; and | |
• | Litigation. |
Capitalization of labor and overhead costs |
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• | Scheduling a “truck roll” to the customer’s dwelling for service connection; | |
• | Verification of serviceability to the customer’s dwelling (i.e., determining whether the customer’s dwelling is capable of receiving service by our cable network and/or receiving advanced or Internet services); | |
• | Customer premise activities performed by in-house field technicians and third-party contractors in connection with customer installations, installation of network equipment in connection with the installation of expanded services and equipment replacement and betterment; and | |
• | Verifying the integrity of the customer’s network connection by initiating test signals downstream from the headend to the customer’s digital set-top terminal. |
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Useful lives of property, plant and equipment |
Cable distribution systems | 7-20 years | |||
Customer equipment and installations | 3-5 years | |||
Vehicles and equipment | 1-5 years | |||
Buildings and leasehold improvements | 5-15 years | |||
Furniture and fixtures | 5 years |
Impairment of property, plant and equipment, franchises and goodwill |
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Percentage/ | ||||||||
Percentage Point | Impairment Charge | |||||||
Assumption | Change | Increase/(Decrease) | ||||||
(Dollars in millions) | ||||||||
Annual Operating Cash Flow(1) | +/- 5% | $ | (890)/$921 | |||||
Long-Term Growth Rate(2) | +/- 1pts | (3) | (1,579)/1,232 | |||||
Discount Rate | +/- 0.5pts | (3) | 1,336/(1,528) |
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(1) | Operating Cash Flow is defined as revenues less operating expenses and selling general and administrative expenses. |
(2) | Long-Term Growth Rate is the rate of cash flow growth beyond year ten. |
(3) | A percentage point change of one point equates to 100 basis points. |
Income Taxes |
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Litigation |
Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004 |
Nine Months Ended September 30, | ||||||||||||||||||
2005 | 2004 | |||||||||||||||||
Revenues | $ | 3,912 | 100 | % | $ | 3,701 | 100 | % | ||||||||||
Costs and expenses: | ||||||||||||||||||
Operating (excluding depreciation and amortization) | 1,714 | 44 | % | 1,552 | 42 | % | ||||||||||||
Selling, general and administrative | 762 | 19 | % | 735 | 20 | % | ||||||||||||
Depreciation and amortization | 1,134 | 29 | % | 1,105 | 30 | % | ||||||||||||
Impairment of franchises | — | — | 2,433 | 66 | % | |||||||||||||
Asset impairment charges | 39 | 1 | % | — | — | |||||||||||||
(Gain) loss on sale of assets, net | 5 | — | (104 | ) | (3 | )% | ||||||||||||
Option compensation expense, net | 11 | — | 34 | 1 | % | |||||||||||||
Hurricane asset retirement loss | 19 | 1 | % | — | — | |||||||||||||
Special charges, net | 4 | — | 100 | 2 | % | |||||||||||||
3,688 | 94 | % | 5,855 | 158 | % | |||||||||||||
Income (loss) from operations | 224 | 6 | % | (2,154 | ) | (58 | )% | |||||||||||
Interest expense, net | (1,297 | ) | (1,193 | ) | ||||||||||||||
Gain on derivative instruments and hedging activities, net | 43 | 48 | ||||||||||||||||
Gain (loss) on extinguishment of debt | 494 | (21 | ) | |||||||||||||||
Gain on investments | 21 | — | ||||||||||||||||
(739 | ) | (1,166 | ) | |||||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (515 | ) | (3,320 | ) | ||||||||||||||
Minority interest | (9 | ) | 25 | |||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (524 | ) | (3,295 | ) | ||||||||||||||
Income tax benefit (expense) | (10 | ) | 41 | |||||||||||||||
Loss before cumulative effect of accounting change | (534 | ) | (3,254 | ) | ||||||||||||||
Cumulative effect of accounting change, net of tax | — | (840 | ) | |||||||||||||||
Net loss | $ | (534 | ) | $ | (4,094 | ) | ||||||||||||
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Revenues |
Nine Months Ended September 30, | ||||||||||||||||||||||||
2005 | 2004 | 2005 over 2004 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Revenues | Revenues | Revenues | Revenues | Change | Change | |||||||||||||||||||
Video | $ | 2,551 | 65 | % | $ | 2,534 | 68 | % | $ | 17 | 1% | |||||||||||||
High-speed Internet | 671 | 17 | % | 538 | 14 | % | 133 | 25% | ||||||||||||||||
Advertising sales | 214 | 6 | % | 205 | 6 | % | 9 | 4% | ||||||||||||||||
Commercial | 205 | 5 | % | 175 | 5 | % | 30 | 17% | ||||||||||||||||
Other | 271 | 7 | % | 249 | 7 | % | 22 | 9% | ||||||||||||||||
$ | 3,912 | 100 | % | $ | 3,701 | 100 | % | $ | 211 | 6% | ||||||||||||||
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Operating Expenses |
Nine Months Ended September 30, | ||||||||||||||||||||||||
2005 | 2004 | 2005 over 2004 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Expenses | Revenues | Expenses | Revenues | Change | Change | |||||||||||||||||||
Programming | $ | 1,066 | 27 | % | $ | 991 | 27 | % | $ | 75 | 8% | |||||||||||||
Service | 572 | 15 | % | 489 | 13 | % | 83 | 17% | ||||||||||||||||
Advertising sales | 76 | 2 | % | 72 | 2 | % | 4 | 6% | ||||||||||||||||
$ | 1,714 | 44 | % | $ | 1,552 | 42 | % | $ | 162 | 10% | ||||||||||||||
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Selling, General and Administrative Expenses |
Nine Months Ended September 30, | ||||||||||||||||||||||||
2005 | 2004 | 2005 over 2004 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Expenses | Revenues | Expenses | Revenues | Change | Change | |||||||||||||||||||
General and administrative | $ | 658 | 17 | % | $ | 636 | 17 | % | $ | 22 | 3% | |||||||||||||
Marketing | 104 | 2 | % | 99 | 3 | % | 5 | 5% | ||||||||||||||||
$ | 762 | 19 | % | $ | 735 | 20 | % | $ | 27 | 4% | ||||||||||||||
Depreciation and Amortization |
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Impairment of Franchises |
Asset Impairment Charges |
(Gain) Loss on Sale of Assets, Net |
Option Compensation Expense, Net |
Hurricane Asset Retirement Loss |
Special Charges, Net |
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Interest Expense, Net |
Gain on Derivative Instruments and Hedging Activities, Net |
Gain (loss) on extinguishment of debt |
Gain on investments |
Minority Interest |
Income Tax Benefit (Expense) |
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Net Loss |
Year Ended December 31, 2004, December 31, 2003 and December 31, 2002 |
Year Ended December 31, | |||||||||||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||||||||||
Revenues | $ | 4,977 | 100 | % | $ | 4,819 | 100 | % | $ | 4,566 | 100 | % | |||||||||||||
Costs and Expenses: | |||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | 2,080 | 42 | % | 1,952 | 40 | % | 1,807 | 40 | % | ||||||||||||||||
Selling, general and administrative | 971 | 19 | % | 940 | 20 | % | 963 | 21 | % | ||||||||||||||||
Depreciation and amortization | 1,495 | 30 | % | 1,453 | 30 | % | 1,436 | 31 | % | ||||||||||||||||
Impairment of franchises | 2,433 | 49 | % | — | — | 4,638 | 102 | % | |||||||||||||||||
(Gain) loss on sale of fixed assets, net | (86 | ) | (2 | )% | 5 | — | 3 | — | |||||||||||||||||
Option compensation expense, net | 31 | 1 | % | 4 | — | 5 | — | ||||||||||||||||||
Special charges, net | 104 | 2 | % | 21 | — | 36 | 1 | % | |||||||||||||||||
Unfavorable contracts and other settlements | (5 | ) | — | (72 | ) | (1 | )% | — | — | ||||||||||||||||
7,023 | 141 | % | 4,303 | 89 | % | 8,888 | 195 | % | |||||||||||||||||
Income (loss) from operations | (2,046 | ) | (41 | )% | 516 | 11 | % | (4,322 | ) | (95 | )% | ||||||||||||||
Interest expense, net | (1,618 | ) | (1,486 | ) | (1,425 | ) | |||||||||||||||||||
Gain (loss) on derivative instruments and hedging activities, net | 69 | 65 | (115 | ) | |||||||||||||||||||||
Gain (loss) on extinguishment of debt | (21 | ) | 187 | — | |||||||||||||||||||||
Other, net | 2 | (10 | ) | 3 | |||||||||||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (3,614 | ) | (728 | ) | (5,859 | ) | |||||||||||||||||||
Minority interest | 20 | (29 | ) | (16 | ) | ||||||||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (3,594 | ) | (757 | ) | (5,875 | ) | |||||||||||||||||||
Income tax benefit (expense) | 35 | (13 | ) | 216 | |||||||||||||||||||||
Loss before cumulative effect of accounting change | (3,559 | ) | (770 | ) | (5,659 | ) | |||||||||||||||||||
Cumulative effect of accounting change, net of tax | (840 | ) | — | (540 | ) | ||||||||||||||||||||
Net loss | $ | (4,399 | ) | $ | (770 | ) | $ | (6,199 | ) | ||||||||||||||||
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 |
Revenues |
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Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2003 | 2004 over 2003 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Revenues | Revenues | Revenues | Revenues | Change | Change | |||||||||||||||||||
Video | $ | 3,373 | 68 | % | $ | 3,461 | 72 | % | $ | (88 | ) | (3 | )% | |||||||||||
High-speed Internet | 741 | 15 | % | 556 | 12 | % | 185 | 33 | % | |||||||||||||||
Advertising sales | 289 | 6 | % | 263 | 5 | % | 26 | 10 | % | |||||||||||||||
Commercial | 238 | 4 | % | 204 | 4 | % | 34 | 17 | % | |||||||||||||||
Other | 336 | 7 | % | 335 | 7 | % | 1 | — | ||||||||||||||||
$ | 4,977 | 100 | % | $ | 4,819 | 100 | % | $ | 158 | 3 | % | |||||||||||||
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Operating expenses |
Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2003 | 2004 over 2003 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Expenses | Revenues | Expenses | Revenues | Change | Change | |||||||||||||||||||
Programming | $ | 1,319 | 27 | % | $ | 1,249 | 26 | % | $ | 70 | 6% | |||||||||||||
Advertising sales | 98 | 2 | % | 88 | 2 | % | 10 | 11% | ||||||||||||||||
Service | 663 | 13 | % | 615 | 12 | % | 48 | 8% | ||||||||||||||||
$ | 2,080 | 42 | % | $ | 1,952 | 40 | % | $ | 128 | 7% | ||||||||||||||
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Selling, general and administrative expenses |
Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2003 | 2004 over 2003 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Expenses | Revenues | Expenses | Revenues | Change | Change | |||||||||||||||||||
General and administrative | $ | 849 | 17 | % | $ | 833 | 18 | % | $ | 16 | 2% | |||||||||||||
Marketing | 122 | 2 | % | 107 | 2 | % | 15 | 14% | ||||||||||||||||
$ | 971 | 19 | % | $ | 940 | 20 | % | $ | 31 | 3% | ||||||||||||||
Depreciation and amortization |
Impairment of franchises |
(Gain) loss on sale of assets, net |
Option compensation expense, net |
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Special charges, net |
Unfavorable contracts and other settlements |
Interest expense, net |
Gain on derivative instruments and hedging activities, net |
Gain (loss) on extinguishment of debt |
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Other, net |
Minority interest |
Income tax benefit (expense) |
Net income (loss) |
Year Ended December 31, 2003 Compared to Year Ended December 31, 2002 |
Revenues |
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Year Ended December 31, | ||||||||||||||||||||||||
2003 | 2002 | 2003 over 2002 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Revenues | Revenues | Revenues | Revenues | Change | Change | |||||||||||||||||||
Video | $ | 3,461 | 72 | % | $ | 3,420 | 75 | % | $ | 41 | 1 | % | ||||||||||||
High-speed Internet | 556 | 12 | % | 337 | 7 | % | 219 | 65 | % | |||||||||||||||
Advertising sales | 263 | 5 | % | 302 | 7 | % | (39 | ) | (13 | )% | ||||||||||||||
Commercial | 204 | 4 | % | 161 | 3 | % | 43 | 27 | % | |||||||||||||||
Other | 335 | 7 | % | 346 | 8 | % | (11 | ) | (3 | )% | ||||||||||||||
$ | 4,819 | 100 | % | $ | 4,566 | 100 | % | $ | 253 | 6 | % | |||||||||||||
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Operating Expenses |
Year Ended December 31, | ||||||||||||||||||||||||
2003 | 2002 | 2003 over 2002 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Expenses | Revenues | Expenses | Revenues | Change | Change | |||||||||||||||||||
Programming | $ | 1,249 | 26 | % | $ | 1,166 | 26 | % | $ | 83 | 7% | |||||||||||||
Advertising sales | 88 | 2 | % | 87 | 2 | % | 1 | 1% | ||||||||||||||||
Service | 615 | 12 | % | 554 | 12 | % | 61 | 11% | ||||||||||||||||
$ | 1,952 | 40 | % | $ | 1,807 | 40 | % | $ | 145 | 8% | ||||||||||||||
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Selling, General and Administrative Expenses |
Year Ended December 31, | ||||||||||||||||||||||||
2003 | 2002 | 2003 over 2002 | ||||||||||||||||||||||
% of | % of | % | ||||||||||||||||||||||
Expenses | Revenues | Expenses | Revenues | Change | Change | |||||||||||||||||||
General and administrative | $ | 833 | 18 | % | $ | 810 | 18 | % | $ | 23 | 3 | % | ||||||||||||
Marketing | 107 | 2 | % | 153 | 3 | % | (46 | ) | (30 | )% | ||||||||||||||
$ | 940 | 20 | % | $ | 963 | 21 | % | $ | (23 | ) | (2 | )% | ||||||||||||
Depreciation and Amortization |
Impairment of Franchises |
Loss on Sale of Assets, Net |
Option Compensation Expense, Net |
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Special Charges, Net |
Unfavorable Contracts and Other Settlements |
Interest Expense, Net |
Gain (Loss) on Derivative Instruments and Hedging Activities, Net |
Gain on extinguishment of debt |
Other, Net |
Minority Interest |
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Income Tax Benefit (Expense) |
Cumulative Effect of Accounting Change, Net of Tax |
Net Income (Loss) |
Introduction |
Overview |
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Credit Facilities and Covenants |
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Parent Company Debt Obligations |
Specific Limitations |
• | issuing debt or equity at the parent companies’ level, the proceeds of which could be loaned or contributed to us; | |
• | issuing debt securities that may have structural or other priority over our existing notes; |
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• | further reducing our expenses and capital expenditures, which may impair our ability to increase revenue; | |
• | selling assets; or | |
• | requesting waivers or amendments with respect to our credit facilities and bridge loan, the availability and terms of which would be subject to market conditions. |
Issuance of Charter Operating Notes in Exchange for Charter Holdings Notes |
Sale of Assets |
Summary of Outstanding Contractual Obligations |
Payments by Period | |||||||||||||||||||||
Less than | 1-3 | 3-5 | More than | ||||||||||||||||||
Total | 1 Year | Years | Years | 5 Years | |||||||||||||||||
Contractual Obligations | |||||||||||||||||||||
Long-Term Debt Principal Payments(1) | $ | 18,772 | $ | 30 | $ | 761 | $ | 5,035 | $ | 12,946 | |||||||||||
Long-Term Debt Interest Payments(2) | 9,845 | 1,396 | 3,243 | 3,231 | 1,975 | ||||||||||||||||
Payments on Interest Rate Instruments(3) | 81 | 50 | 31 | — | — | ||||||||||||||||
Capital and Operating Lease Obligations(1) | 88 | 23 | 30 | 17 | 18 | ||||||||||||||||
Programming Minimum Commitments(4) | 1,579 | 318 | 719 | 542 | — | ||||||||||||||||
Other(5) | 272 | 62 | 97 | 46 | 67 | ||||||||||||||||
Total | $ | 30,637 | $ | 1,879 | $ | 4,881 | $ | 8,871 | $ | 15,006 | |||||||||||
(1) | The table presents maturities of long-term debt outstanding as of December 31, 2004 and does not reflect the effects of the March 2005 redemption of the CC V Holdings, LLC notes, the exchange of $3.4 billion principal amount of Charter Holdings notes due in 2009 and 2010 and $845 million |
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principal amount of Charter Holdings notes due 2011 and 2012 for $3.5 billion principal amount of new CCH I notes due 2015 or the exchange of $2.5 billion principal amount of Charter Holdings notes due 2011 and 2012 for $2.5 billion principal amount of new CIH notes with maturities extended three years. Refer to “Description of Other Indebtedness” and Notes 9 and 20 to our December 31, 2004 consolidated financial statements included in this prospectus for a description of our long-term debt and other contractual obligations and commitments. | |
(2) | Interest payments on variable debt are estimated using amounts outstanding at December 31, 2004 and the average implied forward London Interbank Offering Rate (LIBOR) rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2004. Actual interest payments will differ based on actual LIBOR rates and actual amounts outstanding for applicable periods. |
(3) | Represents amounts we will be required to pay under our interest rate hedge agreements estimated using the average implied forward LIBOR rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2004. |
(4) | We pay programming fees under multi-year contracts ranging generally from three to six years typically based on a flat fee per customer, which may be fixed for the term or may in some cases, escalate over the term. Programming costs included in the accompanying statements of operations were $1.3 billion, $1.2 billion and $1.2 billion for the years ended December 31, 2004, 2003 and 2002, respectively. Certain of our programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under our programming contracts. |
(5) | “Other” represents other guaranteed minimum commitments, which consist primarily of commitments to our billing services vendors. |
• | We also rent utility poles used in our operations. Generally, pole rentals are cancelable on short notice, but we anticipate that such rentals will recur. Rent expense incurred for pole rental attachments for the years ended December 31, 2004, 2003 and 2002, was $43 million, $40 million and $41 million, respectively. | |
• | We pay franchise fees under multi-year franchise agreements based on a percentage of revenues earned from video service per year. We also pay other franchise related costs, such as public education grants under multi-year agreements. Franchise fees and other franchise-related costs included in the accompanying statements of operations were $164 million, $162 million and $160 million for the years ended December 31, 2004, 2003 and 2002, respectively. | |
• | We also have $166 million in letters of credit, primarily to our various worker’s compensation, property casualty and general liability carriers as collateral for reimbursement of claims. These letters of credit reduce the amount we may borrow under our credit facilities. |
Historical Operating, Financing and Investing Activities |
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Capital Expenditures |
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For the Nine | |||||||||||||||||||||
Months Ended | For the Years Ended | ||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | |||||||||||||||||
Customer premise equipment(a) | $ | 322 | $ | 344 | $ | 451 | $ | 380 | $ | 740 | |||||||||||
Scalable infrastructure(b) | 138 | 54 | 108 | 66 | 259 | ||||||||||||||||
Line extensions(c) | 114 | 94 | 131 | 130 | 101 | ||||||||||||||||
Upgrade/ Rebuild(d) | 35 | 28 | 49 | 132 | 775 | ||||||||||||||||
Support capital(e) | 206 | 96 | 154 | 96 | 220 | ||||||||||||||||
Total capital expenditures(f) | $ | 815 | $ | 616 | $ | 893 | $ | 804 | $ | 2,095 | |||||||||||
(a) | Customer premise equipment includes costs incurred at the customer residence to secure new customers, revenue units and additional bandwidth revenues. It also includes customer installation costs in accordance with SFAS 51 and customer premise equipment (e.g., set-top terminals and cable modems, etc.). | |
(b) | Scalable infrastructure includes costs, not related to customer premise equipment or our network, to secure growth of new customers, revenue units and additional bandwidth revenues or provide service enhancements (e.g., headend equipment). | |
(c) | Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering). | |
(d) | Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments. | |
(e) | Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles). | |
(f) | Represents all capital expenditures made during the nine months ended September 30, 2005 and 2004 and the years ended December 31, 2004, 2003 and 2002, respectively. |
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Fair Value at | |||||||||||||||||||||||||||||||||||||
September 30, | |||||||||||||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total | 2005 | |||||||||||||||||||||||||||||
Debt: | |||||||||||||||||||||||||||||||||||||
Fixed Rate | $ | — | $ | — | $ | 105 | $ | 114 | $ | 684 | $ | 1,693 | $ | 9,576 | $ | 12,172 | $ | 11,084 | |||||||||||||||||||
Average Interest Rate | — | — | 8.25 | % | 10.00 | % | 9.50 | % | 10.29 | % | 10.44 | % | 10.04 | % | |||||||||||||||||||||||
Variable Rate | $ | 7 | $ | 30 | $ | 280 | $ | 629 | $ | 779 | $ | 1,536 | $ | 2,802 | $ | 6,063 | $ | 6,059 | |||||||||||||||||||
Average Interest Rate | 6.81 | % | 7.88 | % | 7.73 | % | 7.78 | % | 7.88 | % | 8.33 | % | 8.20 | % | 8.12 | % | |||||||||||||||||||||
Interest Rate Instruments: | |||||||||||||||||||||||||||||||||||||
Variable to Fixed Swaps | $ | 500 | $ | 873 | $ | 775 | $ | — | $ | — | $ | — | $ | — | $ | 2,148 | $ | 13 | |||||||||||||||||||
Average Pay Rate | 7.49 | % | 8.23 | % | 8.04 | % | — | — | — | — | 7.99 | % | |||||||||||||||||||||||||
Average Receive Rate | 7.17 | % | 7.82 | % | 7.83 | % | — | — | — | — | 7.67 | % |
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• | improving the overall value to our customers of our service offerings, relative to pricing; | |
• | developing more sophisticated customer care capabilities through investment in our customer care and marketing infrastructure, including targeted marketing capabilities; | |
• | executing growth strategies for new services, including digital simulcast, VOD, telephone, and digital video recorder service (“DVR”); | |
• | managing our operating costs by exercising discipline in capital and operational spending; and | |
• | identifying opportunities to continue to improve our balance sheet and liquidity. |
• | the January 2006 sale by our subsidiaries, CCH II and CCH II Capital Corp., of an additional $450 million principal amount of their 10.250% senior notes due 2010; | |
• | the October 2005 entry by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., as guarantor thereunder, into a $600 million senior bridge loan agreement with various lenders (which was reduced to $435 million as a result of the issuance of CCH II notes); | |
• | the September 2005 exchange by Charter Holdings, CCH I and CIH, our indirect parent companies, of approximately $6.8 billion in total principal amount of outstanding debt securities of Charter Holdings in a private placement for new debt securities; | |
• | the August 2005 sale by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., of $300 million of 83/4% senior notes due 2013; | |
• | the March and June 2005 issuance of $333 million of Charter Operating notes in exchange for $346 million of Charter Holdings notes; | |
• | the March and June 2005 repurchase of $131 million of Charter’s 4.75% convertible senior notes due 2006 leaving $25 million in principal amount outstanding; | |
• | the March 2005 redemption of all of CC V Holdings, LLC’s outstanding 11.875% senior discount notes due 2008 at a total cost of $122 million; | |
• | the December 2004 sale by our subsidiaries, CCO Holdings and CCO Holdings Capital Corp., of $550 million of senior floating rate notes due 2010; |
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• | the November 2004 sale by Charter, our indirect parent company, of $862.5 million of 5.875% convertible senior notes due 2009 and the December 2004 redemption of all of Charter’s outstanding 5.75% convertible senior notes due 2005 ($588 million principal amount); | |
• | the April 2004 sale of $1.5 billion of senior second lien notes by our subsidiary, Charter Operating, together with the concurrent refinancing of its credit facilities; and | |
• | the sale in the first half of 2004 of non-core cable systems for $735 million, the proceeds of which were used to reduce indebtedness. |
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Approximate as of | |||||||||||
September 30, | September 30, | ||||||||||
2005(a) | 2004(a) | ||||||||||
Cable Video Services: | |||||||||||
Analog Video: | |||||||||||
Residential (non-bulk) analog video customers(b) | 5,636,100 | 5,825,000 | |||||||||
Multi-dwelling (bulk) and commercial unit customers(c) | 270,200 | 249,600 | |||||||||
Analog video customers(b)(c) | 5,906,300 | 6,074,600 | |||||||||
Digital Video: | |||||||||||
Digital video customers(d) | 2,749,400 | 2,688,900 | |||||||||
Non-Video Cable Services: | |||||||||||
Residential high-speed Internet customers(e) | 2,120,000 | 1,819,900 | |||||||||
Residential telephone customers(f) | 89,900 | 40,200 |
After giving effect to the sale of certain non-strategic cable systems in July 2005, September 30, 2004 analog video customers, digital video customers and high-speed Internet customers would have been 6,046,900, 2,677,600 and 1,819,300, respectively. |
(a) | “Customers” include all persons our corporate billing records show as receiving service (regardless of their payment status), except for complimentary accounts (such as our employees). In addition, at September 30, 2005 and 2004, “customers” include approximately 44,400 and 46,000 persons whose accounts were over 60 days past due in payment, approximately 9,800 and 5,500 persons whose accounts were over 90 days past due in payment, and approximately 6,000 and 2,000 of which were over 120 days past due in payment, respectively. | |
(b) | “Residential (non-bulk) analog video customers” include all customers who receive video services, except for complimentary accounts (such as our employees). | |
(c) | Included within “video customers” are those in commercial and multi-dwelling structures, which are calculated on an equivalent bulk unit (“EBU”) basis. EBU is calculated for a system by dividing the bulk price charged to accounts in an area by the most prevalent price charged to non-bulk residential customers in that market for the comparable tier of service. The EBU method of estimating analog video customers is consistent with the methodology used in determining costs paid to programmers and has been consistently applied year over year. As we increase our effective analog prices to residential customers without a corresponding increase in the prices charged to commercial service or multi-dwelling customers, our EBU count will decline even if there is no real loss in commercial service or multi-dwelling customers. | |
(d) | “Digital video customers” include all households that have one or more digital set-top terminals. Included in “digital video customers” on September 30, 2005 and 2004 are approximately 8,900 and 10,700 customers, respectively, that receive digital video service directly through satellite transmission. | |
(e) | “Residential high-speed Internet customers” represent those customers who subscribe to our high-speed Internet service. At September 30, 2005 and 2004, approximately 1,876,000 and 1,614,400 of |
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these high-speed Internet customers, respectively, also receive video services from us and are included within our video statistics above. | ||
(f) | “Residential telephone customers” include all households receiving telephone service. |
Video Services |
• | Basic Analog Video. All of our video customers receive a package of basic programming, which generally consists of local broadcast television, local community programming, including governmental and public access, and limited satellite-delivered or non-broadcast channels, such as weather, shopping and religious services. Our basic channelline-up generally has between 15 and 30 channels. | |
• | Expanded Basic Video. This expanded programming level includes a package of satellite-delivered or non-broadcast channels and generally has between 30 and 50 channels in addition to the basic channel line-up. | |
• | Premium Channels. These channels provide commercial-free movies, sports and other special event entertainment programming. Although we offer subscriptions to premium channels on an individual basis, we offer an increasing number of premium channel packages and we offer premium channels with our advanced services. | |
• | Pay-Per-View. These channels allow customers to pay on a per event basis to view a single showing of a recently released movie, a one-time special sporting event, music concert or similar event on a commercial-free basis. | |
• | Digital Video. We offer digital video service to our customers in several different service combination packages. All of our digital packages include a digital set-top terminal, an interactive electronic programming guide, an expanded menu of pay-per-view channels and the option to also receive digital packages which range from 4 to 30 additional video channels. We also offer our customers certain digital packages with one or more premium channels that give customers access to several different versions of the same premium channel. Some digital tier packages focus on the interests of a particular customer demographic and emphasize, for example, sports, movies, family or ethnic programming. In addition to video programming, digital video service enables customers to receive our advanced services such as VOD and high definition television. Other digital packages bundle digital television with our advanced services, such as high-speed Internet services. | |
• | Video On Demand and Subscription Video on Demand. We offer VOD service, which allows customers to access hundreds of movies and other programming at any time with digital picture quality. In some systems we also offer subscription VOD (SVOD) for a monthly fee or included in a digital tier premium channel subscription. | |
• | High Definition Television. High definition television offers our digital customers video programming at a higher resolution than the standard analog or digital video image. | |
• | Digital Video Recorder. DVR service enables customers to digitally record programming and to pause and rewind live programming. |
High-Speed Internet Services |
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Telephone Services |
Commercial Services |
Sale of Advertising |
Service | ||||||||
Price Range as of | ||||||||
September 30, | ||||||||
2005 | ||||||||
Analog video packages | $ | 7.00 - | $ | 54.00 | ||||
Premium channels | $ | 10.00 - | $ | 15.00 | ||||
Pay-per-view events | $ | 2.99 - | $ | 179.00 | ||||
Digital video packages (including high-speed Internet service for higher tiers) | $ | 34.00 - | $ | 113.00 | ||||
High-speed Internet service | $ | 21.95 - | $ | 59.99 | ||||
Video on demand (per selection) | $ | 0.99 - | $ | 29.99 | ||||
High definition television | $ | 3.99 - | $ | 9.99 | ||||
Digital video recorder | $ | 6.99 - | $ | 14.99 |
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550 Megahertz | ||||||||||||||||||||||
Less than | to | 750 | 870 | Two-way | Two-way | |||||||||||||||||
550 Megahertz | 660 Megahertz | Megahertz | Megahertz | Capability | Enabled | |||||||||||||||||
8 | % | 5 | % | 42 | % | 45 | % | 92 | % | 87 | % |
• | increased bandwidth capacity, for more channels and other services; | |
• | dedicated bandwidth for two-way services, which avoids reverse signal interference problems that can occur with two-way communication capability; and | |
• | improved picture quality and service reliability. |
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• | Promote awareness and loyalty among existing customers and attract new customers; | |
• | Announce the availability of our advanced services as we roll them out in our systems; | |
• | Promote our advanced services (such as DVR, high definition television, telephone, VOD and SVOD) with the goal that our customers will view their cable connection as one-stop shopping for video, voice, high-speed Internet and interactive services; and | |
• | Promote our bundling of digital video and high-speed Internet services and pricing strategies. |
General |
Costs |
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Direct Broadcast Satellite |
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DSL and Other Broadband Services |
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Broadcast Television |
Traditional Overbuilds |
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Telephone Companies and Utilities |
Private Cable |
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Wireless Distribution |
Properties |
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Securities Class Actions and Derivative Suits |
• | In re Charter Communications, Inc. Securities Litigation, MDL Docket No. 1506 (All Cases), StoneRidge Investments Partners, LLC, Individually and On Behalf of All Others Similarly Situated, v. Charter Communications, Inc., Paul Allen, Jerald L. Kent, Carl E. Vogel, Kent Kalkwarf, David G. Barford, Paul E. Martin, David L. McCall, Bill Shreffler, Chris Fenger, James H. Smith, III, Scientific-Atlanta, Inc., Motorola, Inc. and Arthur Andersen, LLP, Consolidated Case No. 4:02-CV-1186-CAS. |
• | Kenneth Stacey, Derivatively on behalf of Nominal Defendant Charter Communications, Inc., v. Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman, William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg, Arthur Andersen, LLP and Charter Communications, Inc. |
• | Thomas Schimmel, Derivatively on behalf on Nominal Defendant Charter Communications, Inc., v.Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman, William D. |
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Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg, and Arthur Andersen, LLP, and Charter Communications, Inc. |
• | Arthur Cohn, Derivatively on behalf of Nominal Defendant Charter Communications, Inc., v. Ronald L. Nelson, Paul G. Allen, Marc B. Nathanson, Nancy B. Peretsman, William Savoy, John H. Tory, Carl E. Vogel, Larry W. Wangberg, and Charter Communications, Inc. |
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Government Investigations |
Indemnification |
Other Litigation |
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Cable Rate Regulation |
Must Carry/ Retransmission Consent |
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Access Channels |
Access to Programming |
Ownership Restrictions |
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Internet Service |
Phone Service |
Pole Attachments |
Cable Equipment |
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Other Communications Act Provisions and FCC Regulatory Matters |
Copyright |
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Franchise Matters |
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Directors | Position(s) | |
Paul G. Allen | Chairman of the board of directors of Charter | |
W. Lance Conn | Director of Charter | |
Nathaniel A. Davis | Director of Charter | |
Jonathan L. Dolgen | Director of Charter | |
Robert P. May | Director of Charter | |
David C. Merritt | Director of Charter | |
Marc B. Nathanson | Director of Charter | |
Jo Allen Patton | Director of Charter | |
Neil Smit | Director of Charter, CIH Capital and CCH I Capital, President and Chief Executive Officer of Charter, Charter Holdco, Charter Holdings, CIH, CIH Capital, CCH I and CCH I Capital | |
John H. Tory | Director of Charter | |
Larry W. Wangberg | Director of Charter |
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Executive Officers | Position | |
Paul G. Allen | Chairman of the Board of Directors | |
Neil Smit | Director of Charter, CIH Capital and CCH I Capital, President and Chief Executive Officer of Charter, Charter Holdco, Charter Holdings, CIH, CIH Capital, CCH I and CCH I Capital | |
Wayne H. Davis | Executive Vice President and Chief Technical Officer | |
Sue Ann R. Hamilton | Executive Vice President, Programming | |
Michael J. Lovett | Executive Vice President and Chief Operating Officer | |
Paul E. Martin | Senior Vice President, Interim Chief Financial Officer, Principal Accounting Officer and Corporate Controller | |
Robert A. Quigley | Executive Vice President and Chief Marketing Officer | |
Grier C. Raclin | Executive Vice President, General Counsel and Corporate Secretary |
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Summary Compensation Table |
Long-Term | |||||||||||||||||||||||||||||
Annual Compensation | Compensation Award | ||||||||||||||||||||||||||||
Year | Other | Restricted | Securities | All Other | |||||||||||||||||||||||||
Ended | Annual | Stock | Underlying | Compensation | |||||||||||||||||||||||||
Name and Principal Position | Dec. 31 | Salary($) | Bonus($)(1) | Compensation($) | Awards($) | Options(#) | ($)(2) | ||||||||||||||||||||||
Neil Smit(3) | 2005 | 415,385 | 1,200,000 | (10) | — | 3,278,500 | (22) | 3,333,333 | 23,236 | (29) | |||||||||||||||||||
President and Chief | 2004 | — | — | — | — | — | — | ||||||||||||||||||||||
Executive Officer | 2003 | — | — | — | — | — | — | ||||||||||||||||||||||
Robert P. May(4) | 2005 | — | 750,000 | (11) | 1,360,239 | (17) | 180,000 | (23) | — | — | |||||||||||||||||||
Former Interim President | 2004 | — | — | 10,000 | (17) | 50,000 | (23) | — | — | ||||||||||||||||||||
and Chief Executive Officer | 2003 | — | — | — | — | — | — | ||||||||||||||||||||||
Carl E. Vogel(5) | 2005 | 115,385 | — | 1,428 | (18) | — | — | 1,697,451 | (30) | ||||||||||||||||||||
Former President and | 2004 | 1,038,462 | 500,000 | (12) | 38,977 | (18) | 4,729,400 | (24) | 580,000 | 3,239 | |||||||||||||||||||
Chief Executive Officer | 2003 | 1,000,000 | 150,000 | (13) | 40,345 | (18) | — | 750,000 | 3,239 | ||||||||||||||||||||
Michael J. Lovett(6) | 2005 | 516,153 | — | 14,898 | (19) | 265,980 | (25) | 216,000 | 59,013 | (31) | |||||||||||||||||||
Executive Vice President, | 2004 | 291,346 | 241,888 | 7,797 | (19) | 355,710 | (25) | 172,000 | 6,994 | ||||||||||||||||||||
Operations and Customer | 2003 | 81,731 | 60,000 | 2,400 | (19) | — | 100,000 | 1,592 | |||||||||||||||||||||
Care | |||||||||||||||||||||||||||||
Paul E. Martin(7) | 2005 | 350,950 | 100,000 | (14) | — | 52,650 | (26) | 83,700 | 7,047 | ||||||||||||||||||||
Senior Vice President, | 2004 | 193,173 | 25,000 | (14) | — | 269,100 | (26) | 77,500 | 6,530 | ||||||||||||||||||||
Interim Chief Financial | 2003 | 167,308 | 14,000 | — | — | — | 4,048 | ||||||||||||||||||||||
Officer, Principal | |||||||||||||||||||||||||||||
Accounting Officer and | |||||||||||||||||||||||||||||
Corporate Controller | |||||||||||||||||||||||||||||
Wayne H. Davis(8) | 2005 | 409,615 | — | — | 108,810 | (27) | 145,800 | 3,527 | |||||||||||||||||||||
Executive Vice President | 2004 | 269,231 | 61,370 | (15) | — | 435,635 | (27) | 135,000 | 2,278 | ||||||||||||||||||||
and Chief Technical Officer | 2003 | 212,885 | 47,500 | 581 | (20) | — | 225,000 | 436 | |||||||||||||||||||||
Sue Ann R. Hamilton(9) | 2005 | 362,700 | — | — | 107,838 | (28) | 145,000 | 6,351 | |||||||||||||||||||||
Executive Vice President — | 2004 | 346,000 | 13,045 | — | 245,575 | (28) | 90,000 | 3,996 | |||||||||||||||||||||
Programming | 2003 | 225,000 | 231,250 | (16) | 4,444 | (21) | — | 200,000 | 1,710 |
(1) | Generally, bonus amounts for 2005 have not yet been determined by the Compensation Committee or Charter’s Board of Directors. | |
(2) | Except as noted in notes 29 through 31 below, respectively, these amounts consist of matching contributions under our 401(k) plan, premiums for supplemental life insurance available to executives, and long-term disability available to executives. | |
(3) | Mr. Smit joined Charter on August 22, 2005 in his current position. | |
(4) | Mr. May served as Interim President and Chief Executive Officer from January 2005 through August 2005. | |
(5) | Mr. Vogel resigned from all of his positions with Charter and its subsidiaries on January 17, 2005. | |
(6) | Mr. Lovett joined Charter in August 2003 and was promoted to his current position in April 2005. |
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(7) | Mr. Martin joined Charter in March 2000. He has served as Charter’s Interim Chief Financial Officer since August 2004 and will continue to serve until February 6, 2006, upon appointment of Jeffrey Fisher as the new Chief Financial Officer. | |
(8) | Mr. Davis joined Charter in December 2001 and was promoted to his current position in June 2004. | |
(9) | Ms. Hamilton joined Charter in March 2003 and was promoted to her current position in April 2005. |
(10) | Pursuant to his employment agreement, Mr. Smit will receive a minimum bonus of $1,200,000 for 2005. |
(11) | This bonus was paid in January 2006 pursuant to Mr. May’s Executive Services Agreement. See “Employment Arrangements.” |
(12) | Mr. Vogel’s 2004 bonus was a mid-year discretionary bonus. |
(13) | Mr. Vogel’s 2003 bonus was determined in accordance with the terms of his employment agreement. |
(14) | Includes (i) for 2005, a bonus of $50,000 for his services as Interim Co-Chief Financial Officer and a discretionary bonus of $50,000 and (ii) for 2004, a SOX implementation bonus of $25,000. |
(15) | Mr. Davis’ 2004 bonus included a $50,000 discretionary bonus. |
(16) | Ms. Hamilton’s 2003 bonus included a $150,000 signing bonus. |
(17) | Includes (i) for 2005, $1,177,885 as compensation for services as Interim President and Chief Executive Officer pursuant to his Executive Services Agreement (see “Employment Arrangements”), $67,000 as compensation for services as a director on Charter’s Board of Directors, $15,717 attributed to personal use of the corporate airplane and $99,637 for reimbursement for transportation and living expenses pursuant to his Executive Services Agreement, and (ii) for 2004, compensation for services as a director on Charter’s Board of Directors. |
(18) | Includes (i) for 2005, $1,428 attributed to personal use of the corporate airplane, (ii) for 2004, $28,977 attributed to personal use of the corporate airplane and $10,000 for tax advisory services, and (iii) for 2003, $30,345 attributed to personal use of the corporate airplane and $10,000 for tax advisory services. |
(19) | Includes (i) for 2005, $7,698 attributed to personal use of the corporate airplane and $7,200 for automobile allowance, (ii) for 2004, $597 attributed to personal use of the corporate airplane and $7,200 for automobile allowance and (iii) for 2003, $2,400 for automobile allowance. |
(20) | Amount attributed to personal use of the corporate airplane. |
(21) | Amount attributed to personal use of the corporate airplane. |
(22) | Pursuant to his employment agreement, Mr. Smit received 1,250,000 restricted shares in August 2005, which will vest on the third anniversary of the grant date and 1,562,500 restricted shares in August 2005, which will vest on the first anniversary of the grant date. See “Employment Arrangements.” At December 31, 2005, the value of all of the named officer’s unvested restricted stock holdings was $3,431,250, based on a per share market value (closing sale price) of $1.22 for Charter’s Class A common stock on December 31, 2005. |
(23) | Includes (i) for 2005, 100,000 restricted shares granted in April 2005 under our 2001 Stock Incentive Plan for Mr. May’s services as Interim President and Chief Executive Officer that vested upon his termination in that position in August 2005 and 40,650 restricted shares granted in October 2005 under our 2001 Stock Incentive Plan for Mr. May’s annual director grant which vests on the first anniversary of the grant date. At December 31, 2005, the value of all of the named officer’s unvested restricted stock holdings was $49,593, based on a per share market value (closing sale price) of $1.22 for Charter’s Class A common stock on December 31, 2005, and (ii) for 2004, 19,685 restricted shares granted in October 2004 under our 2001 Stock Incentive Plan for Mr. May’s annual director grant, which vested on its first anniversary of the grant date in October 2005. |
(24) | Includes 340,000 performance shares granted in January 2004 under our Long-Term Incentive Program that were to vest on the third anniversary of the grant date only if Charter meets certain performance criteria. Also includes 680,000 restricted shares issued in exchange for stock options held by the named officer pursuant to the February 2004 option exchange program described below, |
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one half of which constituted performance shares which were to vest on the third anniversary of the grant date only if Charter meets certain performance criteria, and the other half of which were to vest over three years in equal one-third installments. Under the terms of the separation agreement described below in “Employment Arrangements,” his options and remaining restricted stock vested until December 31, 2005, and all vested options are exercisable until sixty (60) days thereafter. All performance shares were forfeited upon termination of employment. All remaining unvested restricted stock and stock options were cancelled on December 31, 2005. Therefore, at December 31, 2005, the value of all of the named officer’s unvested restricted stock holdings was $0, based on a per share market value (closing sale price) of $1.22 for Charter’s Class A common stock on December 31, 2005. | |
(25) | Includes (i) for 2005, 129,600 performance shares granted in April 2005 under our Long-Term Incentive Program which will vest on the third anniversary of the grant date only if Charter meets certain performance criteria and 75,000 restricted shares granted in April 2005 under the 2001 Stock Incentive Plan that will vest on the third anniversary of the grant date, and (ii) for 2004, 88,000 performance shares granted under our Long-Term Incentive Program that will vest on the third anniversary of the grant date only if Charter meets certain performance criteria. At December 31, 2005, the value of all of the named officer’s unvested restricted stock holdings (including performance shares) was $356,972, based on a per share market value (closing sale price) of $1.22 for Charter’s Class A common stock on December 31, 2005. |
(26) | Includes (i) for 2005, 40,500 performance shares granted under our Long-Term Incentive Program that will vest on the third anniversary of the grant date only if Charter meets certain performance criteria, and (ii) for 2004, 37,500 performance shares granted in January 2004 under our Long-Term Incentive Program which will vest on the third anniversary of the grant date only if Charter meets certain performance criteria and 17,214 restricted shares issued in exchange for stock options held by the named officer pursuant to the February 2004 option exchange program described below, one half of which constituted performance shares which will vest on the third anniversary of the grant date only if Charter meets certain performance criteria, and the other half of which will vest over three years in equal one-third installments. At December 31, 2005, the value of all of the named officer’s unvested restricted stock holdings (including performance shares) was $112,661, based on a per share market value (closing sale price) of $1.22 for Charter’s Class A common stock on December 31, 2005. |
(27) | Includes (i) for 2005, 83,700 performance shares granted under our Long-Term Incentive Program that will vest on the third anniversary of the grant date only if Charter meets certain performance criteria, and (ii) for 2004, 77,500 performance shares granted in January 2004 under our Long-Term Incentive Program which will vest on the third anniversary of the grant date only if Charter meets certain performance criteria and 8,000 restricted shares issued in exchange for stock options held by the named officer pursuant to the February 2004 option exchange program described below, one half of which constituted performance shares which will vest on the third anniversary of the grant date only if Charter meets certain performance criteria, and the other half of which will vest over three years in equal one-third installments. At December 31, 2005, the value of all of the named officer’s unvested restricted stock holdings (including performance shares) was $204,797, based on a per share market value (closing sale price) of $1.22 for Charter’s Class A common stock on December 31, 2005. |
(28) | These restricted shares consist of 83,700 and 47,500 performance shares granted in 2005 and 2004, respectively under our Long-Term Incentive Program that will vest on the third anniversary of the grant date only if Charter meets certain performance criteria. At December 31, 2005, the value of all of the named officer’s unvested restricted stock holdings (including performance shares) was $160,064 based on a per share market value (closing sale price) of $1.22 for Charter’s Class A common stock on December 31, 2005. |
(29) | In addition to items in Note 2 above, includes $19,697 attributed to reimbursement for taxes (on a “grossed up” basis) paid in respect of prior reimbursements for relocation expenses. |
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(30) | In addition to items in Note 2 above, includes accrued vacation at time of termination and severance payments pursuant to Mr. Vogel’s separation agreement (see “Employment Arrangements”). |
(31) | In addition to items in Note 2 above, includes $51,223 attributed to reimbursement for taxes (on a “grossed up” basis) paid in respect of prior reimbursements for relocation expenses. |
Number of | % of | Potential Realizable Value at | ||||||||||||||||||||
Securities | Total | Assumed Annual Rate of | ||||||||||||||||||||
Underlying | Options | Stock Price Appreciation | ||||||||||||||||||||
Options | Granted to | Exercise | For Option Term(2) | |||||||||||||||||||
Granted | Employees | Price | Expiration | |||||||||||||||||||
Name | (#)(1) | in 2005 | ($/Sh) | Date | 5% ($) | 10% ($) | ||||||||||||||||
Neil Smit | 3,333,333 | 30.83% | $ | 1.18 | 8/22/2015 | $ | 2,465,267 | $ | 6,247,470 | |||||||||||||
Robert P. May | — | — | — | — | — | — | ||||||||||||||||
Carl E. Vogel | — | — | — | — | — | — | ||||||||||||||||
Michael J. Lovett | 216,000 | 2.00% | 1.30 | 4/26/2015 | 175,914 | 445,802 | ||||||||||||||||
Paul E. Martin | 83,700 | 0.77% | 1.30 | 4/26/2015 | 68,430 | 173,415 | ||||||||||||||||
Wayne H. Davis | 145,800 | 1.35% | 1.30 | 4/26/2015 | 118,742 | 300,916 | ||||||||||||||||
Sue Ann R. Hamilton | 97,200 | 0.90% | 1.53 | 3/25/2015 | 93,221 | 236,240 | ||||||||||||||||
47,800 | 0.44% | 1.27 | 10/18/2015 | 38,208 | 96,826 |
(1) | Options are transferable under limited conditions, primarily to accommodate estate planning purposes. These options generally vest in four equal installments commencing on the first anniversary following the grant date. |
(2) | This column shows the hypothetical gains on the options granted based on assumed annual compound price appreciation of 5% and 10% over the full ten-year term of the options. The assumed rates of 5% and 10% appreciation are mandated by the SEC and do not represent our estimate or projection of future prices. |
2005 Aggregated Option Exercises and Option Value |
Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised In-the | |||||||||||||||||||||||
Options at December 31, | Money Options at | |||||||||||||||||||||||
Shares | 2005 (#)(1) | December 31, 2005 ($)(2) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise (#) | Realized ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Neil Smit | — | — | — | 3,333,333 | $ | — | $ | 133,333 | ||||||||||||||||
Robert P. May | — | — | — | — | — | — | ||||||||||||||||||
Carl E. Vogel(3) | — | — | 1,120,000 | — | — | — | ||||||||||||||||||
Michael J. Lovett | — | — | 93,000 | 395,000 | — | — | ||||||||||||||||||
Paul E. Martin | — | — | 143,125 | 193,075 | — | — | ||||||||||||||||||
Wayne H. Davis | — | — | 176,250 | 379,550 | — | — | ||||||||||||||||||
Sue Ann R. Hamilton | — | — | 122,500 | 312,500 | — | — |
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(1) | Options granted prior to 2001 and under the 1999 Charter Communications Option Plan, when vested, are exercisable for membership units of Charter Holdco which are immediately exchanged on a one-for-one basis for shares of Charter’s Class A common stock upon exercise of the option. Options granted under the 2001 Stock Incentive Plan and after 2000 are exercisable for shares of Charter’s Class A common stock. |
(2) | Based on a per share market value (closing price) of $1.22 as of December 31, 2005 for Charter’s Class A common stock. |
(3) | Mr. Vogel’s employment terminated on January 17, 2005. Under the terms of the separation agreement, his options continued to vest until December 31, 2005, and all vested options are exercisable until sixty (60) days thereafter. |
Estimated Future Payouts Under | ||||||||||||||||||||
Non-Stock Price-Based Plans | ||||||||||||||||||||
Number of | Performance or | |||||||||||||||||||
Shares, Units or | Other Period Until | Threshold | Target | Maximum | ||||||||||||||||
Name | Other Rights(#) | Maturation or Payout | (#) | (#) | (#) | |||||||||||||||
Neil Smit | 0 | n/a | — | — | — | |||||||||||||||
Robert P. May | 0 | n/a | — | — | — | |||||||||||||||
Carl E. Vogel | 0 | n/a | — | — | — | |||||||||||||||
Michael J. Lovett | 129,600 | 1 year performance cycle | 90,720 | 129,600 | 259,200 | |||||||||||||||
3 year vesting | ||||||||||||||||||||
Paul E. Martin | 40,500 | 1 year performance cycle | 28,350 | 40,500 | 81,000 | |||||||||||||||
3 year vesting | ||||||||||||||||||||
Wayne H. Davis | 83,700 | 1 year performance cycle | 58,590 | 83,700 | 167,400 | |||||||||||||||
3 year vesting | ||||||||||||||||||||
Sue Ann R. Hamilton | 83,700 | 1 year performance cycle | 58,590 | 83,700 | 167,400 | |||||||||||||||
3 year vesting |
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Number of | |||||||||||||||||||||||||
Securities | Market Price of | New | Length of Original | ||||||||||||||||||||||
Underlying | Stock at Time | Exercise Price at | Exercise | Option Term | |||||||||||||||||||||
Options | of Exchange | Time of Exchange | Price | Remaining at | |||||||||||||||||||||
Name | Date | Exchanged | ($) | ($) | ($) | Date of Exchange | |||||||||||||||||||
Carl E. Vogel | 2/25/04 | 3,400,000 | 4.37 | 13.68 | (1 | ) | 7 years 7 months | ||||||||||||||||||
Former President and | |||||||||||||||||||||||||
Chief Executive Officer | |||||||||||||||||||||||||
Paul Martin | 2/25/04 | 15,000 | 4.37 | 23.09 | (2 | ) | 7 years 0 months | ||||||||||||||||||
50,000 | 4.37 | 11.99 | 7 years 7 months | ||||||||||||||||||||||
40,000 | 4.37 | 15.03 | 6 years 2 months | ||||||||||||||||||||||
Wayne Davis | 2/25/04 | 40,000 | 4.37 | 23.09 | (3 | ) | 7 years 0 months | ||||||||||||||||||
40,000 | 4.37 | 12.27 | 7 years 11 months |
(1) | On February 25, 2004, in exchange for 3,400,000 options tendered, 340,000 performance shares were granted with a three year performance cycle and three year vesting along with 340,000 restricted stock units with one-third of the shares vesting on each of the first three anniversaries of the grant date. On the grant date, the price of the Company’s common stock was $4.37. |
(2) | On February 25, 2004, in exchange for 105,000 options tendered, 8,607 performance shares were granted with a three year performance cycle and three year vesting along with 8,607 restricted stock units with one-third of the shares vesting on each of the first three anniversaries of the grant date. On the grant date, the price of the Company’s common stock was $4.37. |
(3) | On February 25, 2004, in exchange for 80,000 options tendered, 4,000 performance shares were granted with a three year performance cycle and three year vesting along with 4,000 restricted stock units with one-third of the shares vesting on each of the first three anniversaries of the grant date. On the grant date, the price of the Company’s common stock was $4.37. |
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2005 Executive Cash Award Plan |
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(1) any breach of the director’s duty of loyalty to the corporation and its shareholders; | |
(2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; | |
(3) unlawful payments of dividends or unlawful stock purchases or redemptions; or | |
(4) any transaction from which the director derived an improper personal benefit. |
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• | each current director of Charter Holdings or Charter; | |
• | the current chief executive officer and individuals named in the Summary Compensation Table; | |
• | all persons currently serving as directors and officers of Charter Holdings or Charter, as a group; and | |
• | each person known by us to own beneficially 5% or more of Charter’s outstanding Class A common stock as of December 31, 2005. |
• | each holder of Class A common stock is entitled to one vote per share; and | |
• | each holder of Charter’s Class B common stock (“Class B common stock”) is entitled to (i) ten votes per share of Class B common stock held by such holder and its affiliates and (ii) ten votes per share of Class B Common Stock for which membership units in Charter Holdco held by such holder and its affiliates are exchangeable. |
Unvested | Class A Shares | Class B | ||||||||||||||||||||||||||
Number of | Restricted | Receivable on | Shares | |||||||||||||||||||||||||
Class A | Class A | Exercise of | Issuable | % of Class A | ||||||||||||||||||||||||
Shares | Shares | Vested Options | Number of | upon | Shares (Voting | % of | ||||||||||||||||||||||
(Voting and | (Voting | or Other | Class B | Exchange or | and Investment | Voting | ||||||||||||||||||||||
Name and Address of | Investment | Power | Convertible | Shares | Conversion of | Power) | Power | |||||||||||||||||||||
Beneficial Owner | Power)(1) | Only)(2) | Securities(3) | Owned | Units(4) | (4)(5) | (5)(6) | |||||||||||||||||||||
Paul G. Allen(7) | 29,126,463 | 39,063 | 10,000 | 50,000 | 363,794,364 | 50.38 | % | 90.45 | % | |||||||||||||||||||
Charter Investment, Inc.(8) | 247,481,191 | 37.29 | % | * | ||||||||||||||||||||||||
Vulcan Cable III Inc.(9) | 116,313,173 | 21.84 | % | * | ||||||||||||||||||||||||
Neil Smit | 2,812,500 | * | * | |||||||||||||||||||||||||
Robert P. May | 119,685 | 40,650 | * | * | ||||||||||||||||||||||||
W. Lance Conn | 19,231 | 32,072 | * | * | ||||||||||||||||||||||||
Nathaniel A. Davis | 43,215 | * | * | |||||||||||||||||||||||||
Jonathan L. Dolgen | 19,685 | 40,650 | * | * | ||||||||||||||||||||||||
David C. Merritt | 25,705 | 39,063 | * | * | ||||||||||||||||||||||||
Jo Allen Patton | 10,977 | 40,323 | * | * | ||||||||||||||||||||||||
Marc B. Nathanson | 425,705 | 39,063 | 50,000 | * | * | |||||||||||||||||||||||
John H. Tory | 30,005 | 39,063 | 40,000 | * | * | |||||||||||||||||||||||
Larry W. Wangberg | 28,705 | 39,063 | 40,000 | * | * | |||||||||||||||||||||||
Michael J. Lovett | 7,500 | 75,000 | 112,375 | * | * | |||||||||||||||||||||||
Wayne H. Davis | 2,667 | 1,332 | 210,000 | * | * | |||||||||||||||||||||||
Sue Ann Hamilton | 169,300 | * | * | |||||||||||||||||||||||||
Paul E. Martin | 11,738 | 2,869 | 162,500 | * | * | |||||||||||||||||||||||
All current directors and executive officers as a group (18 persons) | 29,828,066 | 3,383,926 | 794,175 | 50,000 | 363,794,364 | 50.95 | % | 90.56 | % | |||||||||||||||||||
Carl E. Vogel(10) | 113,334 | 1,265,000 | * | * | ||||||||||||||||||||||||
Scott A. Bommer(11) | 18,237,744 | 4.38 | % | * | ||||||||||||||||||||||||
Glenview Capital Management, LLC(12) | 19,903,500 | 4.78 | % | * | ||||||||||||||||||||||||
Glenview Capital GP, LLC(12) | 19,903,500 | 4.78 | % | * | ||||||||||||||||||||||||
Lawrence M. Robbins(12) | 19,903,500 | 4.78 | % | * | ||||||||||||||||||||||||
Steelhead Partners(13) | 30,284,630 | 7.28 | % | * | ||||||||||||||||||||||||
J-K Navigator Fund, L.P.(13) | 18,447,759 | 4.43 | % | * | ||||||||||||||||||||||||
James Michael Johnston(13) | 24,835,077 | 5.97 | % | * | ||||||||||||||||||||||||
Brian Katz Klein(13) | 24,835,077 | 5.97 | % | * | ||||||||||||||||||||||||
FMR Corp.(14) | 38,515,187 | 9.25 | % | 1.01 | % |
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Unvested | Class A Shares | Class B | ||||||||||||||||||||||||||
Number of | Restricted | Receivable on | Shares | |||||||||||||||||||||||||
Class A | Class A | Exercise of | Issuable | % of Class A | ||||||||||||||||||||||||
Shares | Shares | Vested Options | Number of | upon | Shares (Voting | % of | ||||||||||||||||||||||
(Voting and | (Voting | or Other | Class B | Exchange or | and Investment | Voting | ||||||||||||||||||||||
Name and Address of | Investment | Power | Convertible | Shares | Conversion of | Power) | Power | |||||||||||||||||||||
Beneficial Owner | Power)(1) | Only)(2) | Securities(3) | Owned | Units(4) | (4)(5) | (5)(6) | |||||||||||||||||||||
Fidelity Management & Research Company(14) | 14,961,471 | 20,487,601 | 8.12 | % | * | |||||||||||||||||||||||
Edward C. Johnson 3d(14) | 38,515,187 | 9.25 | % | 1.01 | % | |||||||||||||||||||||||
Standard Pacific Capital LLC(15) | 21,804,756 | 5.24 | % | * | ||||||||||||||||||||||||
Kingdon Capital Management, LLC(16) | 24,236,312 | 5.82 | % | * |
(1) | Includes shares for which the named person has sole voting and investment power; or shared voting and investment power with a spouse. Does not include shares that may be acquired through exercise of options. | |
(2) | Includes unvested shares of restricted stock issued under the Charter Communications, Inc. 2001 Stock Incentive Plan (including those issued in the February 2004 option exchange for those eligible employees who elected to participate), as to which the applicable director or employee has sole voting power but not investment power. Excludes certain performance units granted under the Charter 2001 Stock Incentive Plan with respect to which shares will not be issued until the third anniversary of the grant date and then only if Charter meets certain performance criteria (and which consequently do not provide the holder with any voting rights). | |
(3) | Includes shares of Class A common stock issuable (a) upon exercise of options that have vested or will vest on or before March 1, 2006 under the 1999 Charter Communications Option Plan and the 2001 Stock Incentive Plan or (b) upon conversion of other convertible securities. | |
(4) | Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act. The beneficial owners at December 31, 2005 of Class B common stock, Charter Holdco membership units and convertible senior notes of Charter are deemed to be beneficial owners of an equal number of shares of Class A common stock because such holdings are either convertible into Class A shares (in the case of Class B shares and convertible senior notes) or exchangeable (directly or indirectly) for Class A shares (in the case of the membership units) on a one-for-one basis. Unless otherwise noted, the named holders have sole investment and voting power with respect to the shares listed as beneficially owned. As a result of the settlement of the CC VIII dispute, Mr. Allen received an accreting note exchangeable as of December 31, 2005 for 24,662,333 Charter Holdco units. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter Communications, Inc. and Its Subsidiaries — Equity Put Rights — CC VIII.” | |
(5) | The calculation of this percentage assumes for each person that: |
• | 416,204,671 shares of Class A common stock are issued and outstanding as of December 31, 2005; | |
• | 50,000 shares of Class B common stock held by Mr. Allen have been converted into shares of Class A common stock; | |
• | the acquisition by such person of all shares of Class A common stock that such person or affiliates of such person has the right to acquire upon exchange of membership units in subsidiaries or conversion of Series A Convertible Redeemable Preferred Stock or 5.875% or 4.75% convertible senior notes; | |
• | the acquisition by such person of all shares that may be acquired upon exercise of options to purchase shares or exchangeable membership units that have vested or will vest by March 1, 2006; and | |
• | that none of the other listed persons or entities has received any shares of Class A common stock that are issuable to any of such persons pursuant to the exercise of options or otherwise. |
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A person is deemed to have the right to acquire shares of Class A common stock with respect to options vested under the 1999 Charter Communications Option Plan. When vested, these options are exercisable for membership units of Charter Holdco, which are immediately exchanged on a one-for-one basis for shares of Class A common stock. A person is also deemed to have the right to acquire shares of Class A common stock issuable upon the exercise of vested options under the 2001 Stock Incentive Plan. |
(6) | The calculation of this percentage assumes that Mr. Allen’s equity interests are retained in the form that maximizes voting power (i.e., the 50,000 shares of Class B common stock held by Mr. Allen have not been converted into shares of Class A common stock; that the membership units of Charter Holdco owned by each of Vulcan Cable III Inc. and Charter Investment, Inc. have not been exchanged for shares of Class A common stock). | |
(7) | The total listed includes: |
• | 247,481,191 membership units in Charter Holdco held by Charter Investment, Inc.; and | |
• | 116,313,173 membership units in Charter Holdco held by Vulcan Cable III Inc. |
The listed total includes 24,662,333 shares of Class A common stock issuable as of December 31, 2005 upon exchange of units of Charter Holdco, which are issuable to Charter Investment, Inc. (which is owned by Mr. Allen) as a consequence of the settlement of the CC VIII dispute. See “Certain Relationships and Related Transactions — Transactions Arising Out of Our Organizational Structure and Mr. Allen’s Investment in Charter Communications, Inc. and Its Subsidiaries — Equity Put Rights — CC VIII.” The address of this person is: 505 Fifth Avenue South, Suite 900, Seattle, WA 98104. |
(8) | Includes 247,481,191 membership units in Charter Holdco, which are exchangeable for shares of Class B common stock on a one-for-one basis, which are convertible to shares of Class A common stock on a one-for-one basis. The address of this person is: Charter Plaza, 12405 Powerscourt Drive, St. Louis, MO 63131. | |
(9) | Includes 116,313,173 membership units in Charter Holdco, which are exchangeable for shares of Class B common stock on a one-for-one basis, which are convertible to shares of Class A common stock on a one-for-one basis. The address of this person is: 505 Fifth Avenue South, Suite 900, Seattle, WA 98104. |
(10) | Mr. Vogel terminated his employment effective on January 17, 2005. His stock options and restricted stock shown in this table continued to vest until December 31, 2005, and his options will be exercisable for another 60 days thereafter. |
(11) | The equity ownership reported in this table is based upon the holder’s Schedule 13G filed with the SEC March 28, 2005. The address of this person is 712 Fifth Avenue, 42nd Floor, New York, New York 10019. Mr. Bommer is the managing member of SAB Capital Advisors, L.L.C., which serves as general partner of SAB Capital Partners, L.P. and SAB Capital Partners II, L.P. (which in turn collectively hold 10,124,695 shares of Class A common stock). Mr. Bommer is also the managing member of SAB Capital Management, L.L.C., which serves as general partner of SAB Overseas Capital Management, L.P. (which in turn serves as investment manager to and has investment discretion over the securities held by a holder of 8,113,049 shares of Class A common stock). |
(12) | The equity ownership reported in this table is based upon the holder’s Schedule 13G filed with the SEC June 3, 2005. The address of the principal business office of the reporting person is: 399 Park Avenue, Floor 39, New York, New York 10022. The shares shown consist of: (A) 1,669,400 shares held for the account of Glenview Capital Partners; (B) 5,991,000 shares held for the account of Glenview Capital Master Fund; and (C) 12,243,100 shares held for the account of Glenview Institutional Partners. Glenview Capital Management serves as investment manager to each of Glenview Capital Partners, Glenview Institutional Partners, and Glenview Capital Master Fund. Glenview Capital GP is the general partner of Glenview Capital Partners and Glenview Institutional |
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Partners. Glenview Capital GP also serves as the sponsor of the Glenview Capital Master Fund. Mr. Robbins is the Chief Executive Officer of Glenview Capital Management and Glenview Capital GP. | |
(13) | The equity ownership reported in this table is based upon the holder’s Form 13F filed with the SEC January 25, 2006. The business address of the reporting person is: 1301 First Avenue, Suite 201, Seattle, WA 98101. Steelhead Partners, LLC acts as general partner of J-K Navigator Fund, L.P., and J. Michael Johnston and Brian K. Klein act as the member-managers of Steelhead Partners, LLC. Accordingly, shares shown as beneficially held by Steelhead Partners, LLC, Mr. Johnston and Mr. Klein include shares beneficially held by J-K Navigator Fund, L.P. |
(14) | The equity ownership reported in this table is based on the holder’s Schedule 13G filed with the SEC on September 12, 2005. The address of the person is: 82 Devonshire Street, Boston, Massachusetts 02109. Fidelity Management & Research Company is a wholly-owned subsidiary of FMR Corp. and is the beneficial owner of 35,449,072 shares as a result of acting as investment adviser to various investment companies and includes: 20,487,601 shares resulting from the assumed conversion of 5.875% senior notes. Edward C. Johnson 3d, chairman of FMR Corp., and FMR Corp. each has sole power to dispose of 38,515,187 shares. |
(15) | The equity ownership in this table is based upon the holder’s Schedule 13G filed with the SEC on November 9, 2005. The address of the reporting person is: 101 California Street, 36th Floor, San Francisco, CA 94111. |
(16) | The equity ownership in this table is based upon the holder’s Schedule 13G filed with the SEC on January 25, 2006. The address of the reporting person is: 152 West 57th Street, 50th Floor, New York, New York 10019. |
Number of Securities | Number of Securities | |||||||||||
to be Issued | Weighted Average | Remaining Available | ||||||||||
Upon Exercise of | Exercise Price of | for Future Issuance | ||||||||||
Outstanding Options, | Outstanding Options, | Under Equity | ||||||||||
Plan Category | Warrants and Rights | Warrants and Rights | Compensation Plans | |||||||||
Equity compensation plans approved by security holders | 29,126,744 | (1) | $ | 4.47 | 42,758,409 | |||||||
Equity compensation plans not approved by security holders | 289,268 | (2) | $ | 3.91 | — | |||||||
TOTAL | 29,416,012 | $ | 4.46 | 42,758,409 | ||||||||
(1) | This total does not include 4,252,570 shares issued pursuant to restricted stock grants made under our 2001 Stock Incentive Plan, which were subject to vesting based on continued employment or 11,258,256 performance shares issued under our LTIP plan, which are subject to vesting based on continued employment and Charter’s achievement of certain performance criteria. |
(2) | Includes shares of Class A common stock to be issued upon exercise of options granted pursuant to an individual compensation agreement with a consultant. |
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• | Transactions in which Mr. Allen has an interest that arise directly out of Mr. Allen’s investment in Charter and Charter Holdco. A large number of the transactions described below arise out of Mr. Allen’s direct and indirect (through Charter Investment, Inc., or the Vulcan entities, each of which Mr. Allen controls) investment in Charter and its subsidiaries, as well as commitments made as consideration for the investments themselves. | |
• | Transactions with third party providers of products, services and content in which Mr. Allen has or had a material interest. Mr. Allen has had numerous investments in the areas of technology and media. We have a number of commercial relationships with third parties in which Mr. Allen has or had an interest. | |
• | Other Miscellaneous Transactions. We have a limited number of transactions in which certain of the officers, directors and principal shareholders of Charter and its subsidiaries, other than Mr. Allen, have an interest. |
Transaction | Interested Related Party | Description of Transaction | ||
Intercompany Management Arrangements | Paul G. Allen | Subsidiaries of Charter Holdco paid Charter approximately $84 million, $90 million and $95 million for management services rendered in 2003 and 2004 and for the nine months ended September 30, 2005, respectively. | ||
Mutual Services Agreement | Paul G. Allen | Charter paid Charter Holdco approximately $73 million, $74 million and $64 million for services rendered in 2003 and 2004 and for the nine months ended September 30, 2005, respectively. | ||
Previous Management Agreement | Paul G. Allen | No fees were paid in 2003, 2004 or 2005, although total management fees accrued and payable to Charter Investment, Inc., exclusive of interest, were approximately $14 million at December 31, 2003 and 2004 and September 30, 2005. |
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Transaction | Interested Related Party | Description of Transaction | ||
Channel Access Agreement | Paul G. Allen W. Lance Conn Jo Allen Patton | At Vulcan Ventures’ request, we will provide Vulcan Ventures with exclusive rights for carriage on eight of our digital cable channels as partial consideration for a 1999 capital contribution of approximately $1.3 billion. | ||
Equity Put Rights | Paul G. Allen | Certain sellers of cable systems that we acquired were granted, or previously had the right, as described below, to put to Paul Allen equity in us (in the case of Rifkin and Falcon), Charter Holdco (in the case of Rifkin) and CC VIII, LLC (in the case of Bresnan) and a preferred membership interest (in the case of Charter Helicon, LLC) issued to such sellers in connection with such acquisitions. | ||
Previous Funding Commitment of Vulcan Inc | Paul G. Allen W. Lance Conn Jo Allen Patton | Pursuant to a commitment letter dated April 14, 2003, Vulcan Inc., which is an affiliate of Paul Allen, agreed to lend, under certain circumstances, or cause an affiliate to lend to Charter Holdings or any of its subsidiaries a total amount of up to $300 million, which amount included a subfacility of up to $100 million for the issuance of letters of credit. In November 2003, the commitment was terminated. We incurred expenses to Vulcan Inc. totaling $5 million in connection with the commitment prior to termination. | ||
TechTV Carriage Agreement | Paul G. Allen W. Lance Conn Jo Allen Patton Larry W. Wangberg | We recorded approximately $1 million, $5 million and $1 million from TechTV under the affiliation agreement in 2003 and 2004 and for the nine months ended September 30, 2005, respectively, related to launch incentives as a reduction of programming expense. We paid TechTV approximately $80,600, $2 million and $2 million in 2003 and 2004 and for the nine months ended September 30, 2005, respectively. |
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Transaction | Interested Related Party | Description of Transaction | ||
Oxygen Media Corporation Carriage Agreement | Paul G. Allen W. Lance Conn Jo Allen Patton | We paid Oxygen Media approximately $9 million, $13 million and $7 million under a carriage agreement in exchange for programming in 2003 and 2004 and for the nine months ended September 30, 2005, respectively. We recorded approximately $1 million, $1 million and $0.1 million in 2003 and 2004 and the nine months ended September 30, 2005, respectively, from Oxygen Media related to launch incentives as a reduction of programming expense. We received 1 million shares of Oxygen Preferred Stock with a liquidation preference of $33.10 per share in March 2005. We recognized approximately $9 million, $13 million and $2 million as a reduction of programming expense in 2003 and 2004 and for the nine months ended September 30, 2005, respectively, in recognition of the guaranteed value of the investment. | ||
Portland Trail Blazers Carriage Agreement | Paul G. Allen | We paid approximately $135,200, $96,100 and $116,500 for rights to carry the cable broadcast of certain Trail Blazers basketball games in 2003 and 2004 and for the nine months ended September 30, 2005, respectively. | ||
Digeo, Inc. Broadband Carriage Agreement | Paul G. Allen Carl E. Vogel Jo Allen Patton W. Lance Conn Michael J. Lovett | We paid Digeo approximately $4 million, $3 million and $2 million for customized development of the i-channels and the local content tool kit in 2003 and 2004 and for the nine months ended September 30, 2005, respectively. We entered into a license agreement in 2004 for the Digeo software that runs DVR units purchased from a third party. We paid approximately $0.5 million and $1 million in license and maintenance fees in 2004 and for the nine months ended September 30, 2005, respectively. In 2004 we executed a purchase agreement for the purchase of up to 70,000 DVR units and a related software license agreement, both subject to satisfaction of certain conditions. We paid approximately $0 and $9 million in capital purchases in 2004 and the nine months ended September 30, 2005, respectively. |
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Transaction | Interested Related Party | Description of Transaction | ||
Viacom Networks | Jonathan L. Dolgen | We are party to certain affiliation agreements with networks of New Viacom and CBS Corporation, pursuant to which they provide Charter with programming for distribution via our cable systems. For the years ended December 31, 2003 and 2004 and for the nine months ended September 30, 2005, Charter paid Old Viacom approximately $188 million, $194 million and $150 million, respectively, for programming, and Charter recorded as receivables approximately $5 million, $8 million and $15 million from Old Viacom for launch incentives and marketing support for the years ended December 31, 2003 and 2004 and for the nine months ended September 30, 2005, respectively. | ||
Payment for relatives’ services | Carl E. Vogel | Since June 2003, Mr. Vogel’s brother-in-law has been an employee of Charter Holdco and has received a salary commensurate with his position in the engineering department. | ||
Radio advertising | Marc B. Nathanson | We believe that, through a third party advertising agency, we have paid approximately $67,300, $49,300 and $55,500 in 2003 and 2004 and for the nine months ended September 30, 2005, respectively, to Mapleton Communications, an affiliate of Mapleton Investments, LLC. | ||
Enstar Limited Partnership Systems Purchase and Management Services | Charter officers who were appointed by a Charter subsidiary (as general partner) to serve as officers of Enstar limited partnerships | Certain of our subsidiaries purchased certain assets of the Enstar Limited Partnerships for approximately $63 million in 2002. We also earned approximately $469,300, $0 and $0 in 2003 and 2004 and for the nine months ended September 30, 2005, respectively, by providing management services to the Enstar Limited Partnerships. | ||
Indemnification Advances | Directors and current and former officers named in certain legal proceedings | Charter reimbursed certain of its current and former directors and executive officers a total of approximately $8 million, $3 million and $15,700 for costs incurred in connection with litigation matters in 2003 and 2004 and for the nine months ended September 30, 2005, respectively. |
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Intercompany Management Arrangements |
Mutual Services Agreement |
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Previous Management Agreement with Charter Investment, Inc. |
Vulcan Ventures Channel Access Agreement |
Equity Put Rights |
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Previous Funding Commitment of Vulcan Inc. |
Allocation of Business Opportunities with Mr. Allen |
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TechTV, Inc. |
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Oxygen Media Corporation |
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Portland Trail Blazers |
Digeo, Inc. |
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Viacom Networks |
Payments for Relatives’ Services |
Radio Advertising |
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Purchase of Certain Enstar Limited Partnership Systems; Management Fees |
Indemnification Advances |
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Actual | Actual | Start date for | |||||||||||||||||||||||||||
September 30, 2005 | December 31, 2004 | cash interest | |||||||||||||||||||||||||||
Interest | payment on | ||||||||||||||||||||||||||||
Principal | Accreted | Principal | Accreted | payment | discount | Maturity | |||||||||||||||||||||||
Long-Term Debt(b) | amount | value(a) | amount | value(a) | dates | notes | date(b) | ||||||||||||||||||||||
Renaissance: | |||||||||||||||||||||||||||||
10.000% senior discount notes due 2008 | $ | 114 | $ | 115 | $ | 114 | $ | 116 | 4/15 & 10/15 | 10/15/03 | 4/15/08 | ||||||||||||||||||
CC V Holdings: | |||||||||||||||||||||||||||||
11.875% senior discount notes due 2008(c) | — | — | 113 | 113 | 6/1 & 12/1 | 6/1/04 | 12/1/08 | ||||||||||||||||||||||
Charter Operating: | |||||||||||||||||||||||||||||
Credit facilities(d) | 5,513 | 5,513 | 5,515 | 5,515 | |||||||||||||||||||||||||
8% senior second lien notes due 2012 | 1,100 | 1,100 | 1,100 | 1,100 | 4/30 & 10/30 | 4/30/12 | |||||||||||||||||||||||
83/8% senior second lien notes due 2014 | 733 | 733 | 400 | 400 | 4/30 & 10/30 | 4/30/14 | |||||||||||||||||||||||
CCO Holdings: | |||||||||||||||||||||||||||||
8.750% senior notes due 2013 | 800 | 794 | 500 | 500 | 5/15 & 11/15 | 11/15/13 | |||||||||||||||||||||||
Senior floating rate notes due 2010 | 550 | 550 | 550 | 550 | 3/15, 6/15, | 12/15/10 | |||||||||||||||||||||||
9/15 & 12/15 | |||||||||||||||||||||||||||||
CCH II: | |||||||||||||||||||||||||||||
10.250% senior notes due 2010(d) | 1,601 | 1,601 | 1,601 | 1,601 | 3/15 & 9/15 | 9/15/10 | |||||||||||||||||||||||
CCH I(a): | |||||||||||||||||||||||||||||
11.00% senior notes due 2015 | 3,525 | 3,686 | — | — | 4/1 & 10/1 | 10/1/15 | |||||||||||||||||||||||
CIH(a): | |||||||||||||||||||||||||||||
11.125% senior notes due 2014 | 151 | 151 | — | — | 1/15 & 7/15 | 1/15/14 | |||||||||||||||||||||||
9.920% senior discount notes due 2014 | 471 | 471 | — | — | 4/1 & 10/1 | 4/1/14 | |||||||||||||||||||||||
10.000% senior notes due 2014 | 299 | 299 | — | — | 5/15 & 11/15 | 5/15/14 | |||||||||||||||||||||||
11.750% senior discount notes due 2014 | 815 | 759 | — | — | 5/15 & 11/15 | 11/15/06 | 5/15/14 | ||||||||||||||||||||||
13.500% senior discount notes due 2014 | 581 | 559 | — | — | 1/15 & 7/15 | 7/15/06 | 1/15/14 | ||||||||||||||||||||||
12.125% senior discount notes due 2015 | 217 | 187 | — | — | 1/15 & 7/15 | 7/15/07 | 1/15/15 | ||||||||||||||||||||||
Charter Holdings: | |||||||||||||||||||||||||||||
8.250% senior notes due 2007 | 105 | 105 | 451 | 451 | 4/1 & 10/1 | 4/1/07 | |||||||||||||||||||||||
8.625% senior notes due 2009 | 292 | 292 | 1,244 | 1,243 | 4/1 & 10/1 | 4/1/09 | |||||||||||||||||||||||
9.920% senior discount notes due 2011 | 198 | 198 | 1,108 | 1,108 | 4/1&10/1 | 10/1/04 | 4/1/11 | ||||||||||||||||||||||
10.000% senior notes due 2009 | 154 | 154 | 640 | 640 | 4/1 & 10/1 | 4/1/09 | |||||||||||||||||||||||
10.250% senior notes due 2010 | 49 | 49 | 318 | 318 | 1/15 & 7/15 | 1/15/10 | |||||||||||||||||||||||
11.750% senior discount notes due 2010 | 43 | 43 | 450 | 448 | 1/15 & 7/15 | 7/15/05 | 1/15/10 | ||||||||||||||||||||||
10.750% senior notes due 2009 | 131 | 131 | 874 | 874 | 4/1 & 10/1 | 10/1/09 | |||||||||||||||||||||||
11.125% senior notes due 2011 | 217 | 217 | 500 | 500 | 1/15 & 7/15 | 1/15/11 | |||||||||||||||||||||||
13.500% senior discount notes due 2011 | 94 | 91 | 675 | 589 | 1/15 & 7/15 | 7/15/06 | 1/15/11 | ||||||||||||||||||||||
9.625% senior notes due 2009 | 107 | 107 | 640 | 638 | 5/15 & 11/15 | 11/15/09 | |||||||||||||||||||||||
10.000% senior notes due 2011 | 137 | 136 | 710 | 708 | 5/15 & 11/15 | 5/15/11 | |||||||||||||||||||||||
11.750% senior discount notes due 2011 | 125 | 116 | 939 | 803 | 5/15 & 11/15 | 11/15/06 | 5/15/11 | ||||||||||||||||||||||
12.125% senior discount notes due 2012 | 113 | 97 | 330 | 259 | 1/15 & 7/15 | 7/15/07 | 1/15/12 | ||||||||||||||||||||||
$ | 18,235 | $ | 18,254 | $ | 18,772 | $ | 18,474 | ||||||||||||||||||||||
(a) | The accreted value presented above represents the principal amount of the notes less the original issue discount at the time of sale plus the accretion to the balance sheet date. The accreted value of CIH notes and CCH I notes issued in exchange for Charter Holdings notes are recorded in accordance with GAAP. GAAP requires that the CIH notes issued in exchange for Charter Holdings notes and the CCH I notes issued in exchange for the 8.625% Charter Holdings notes due 2009 be recorded at the historical book values of the Charter Holdings notes as opposed to the current accreted value for legal purposes and notes indenture purposes (which, for both purposes, is the amount that would become payable if the debt becomes immediately due). As of September 30, 2005, the accreted value of our parent companies’ debt for legal purposes and notes and indentures purposes is $17.7 billion. |
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(b) | In general, the obligors have the right to redeem all of the notes set forth in the above table (except with respect to the Charter Holdings notes with terms of eight years) in whole or part at their option, beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest. For additional information, see Note 9 to our consolidated financial statements included elsewhere in this prospectus. | |
(c) | On March 14, 2005, CC V Holdings, LLC redeemed all of its outstanding notes, at 103.958% of principal amount, plus accrued and unpaid interest to the date of redemption. We are not required to redeem any of the other notes listed above prior to their stated maturity dates. | |
(d) | In January 2006, our subsidiaries, CCH II and CCH II Capital Corp., issued $450 million principal amount of 10.250% senior notes due 2010, the proceeds of which were used to pay down credit facilities. | |
Charter Operating Credit Facilities — General |
• | provide borrowing availability of up to $6.5 billion; | |
• | provide for two term facilities: |
(i) a Term A facility with a total principal amount of $2.0 billion, of which 12.5% matures in 2007, 30% matures in 2008, 37.5% matures in 2009 and 20% matures in 2010; and | |
(ii) a Term B facility with a total principal amount of $3.0 billion, which shall be repayable in 27 equal quarterly installments aggregating in each loan year to 1% of the original amount of the Term B facility, with the remaining balance due at final maturity in 2011; and |
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• | provide for a revolving credit facility, in a total amount of $1.5 billion, with a maturity date in 2010. |
Charter Operating Credit Facilities — Restrictive Covenants |
(i) the failure to make payments when due or within the applicable grace period, | |
(ii) the failure to comply with specified covenants, including but not limited to a covenant to deliver audited financial statements with an unqualified opinion from our independent auditors, |
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(iii) the failure to pay or the occurrence of events that cause or permit the acceleration of other indebtedness owing by CCO Holdings, Charter Operating or Charter Operating’s subsidiaries in amounts in excess of $50 million in aggregate principal amount, | |
(iv) the failure to pay or the occurrence of events that result in the acceleration of other indebtedness owing by certain of CCO Holdings’ direct and indirect parent companies in amounts in excess of $200 million in aggregate principal amount, | |
(v) Paul Allen and/or certain of his family members and/or their exclusively owned entities (collectively, the “Paul Allen Group”) ceasing to have the power, directly or indirectly, to vote at least 35% of the ordinary voting power of Charter Operating, | |
(vi) the consummation of any transaction resulting in any person or group (other than the Paul Allen Group) having power, directly or indirectly, to vote more than 35% of the ordinary voting power of Charter Operating, unless the Paul Allen Group holds a greater share of ordinary voting power of Charter Operating, | |
(vii) certain of Charter Operating’s indirect or direct parent companies having indebtedness in excess of $500 million aggregate principal amount which remains undefeased three months prior to the final maturity of such indebtedness, and | |
(viii) Charter Operating ceasing to be a wholly-owned direct subsidiary of CCO Holdings, except in certain very limited circumstances. |
Charter Communications Holdings, LLC Notes |
March 1999 Charter Holdings Notes |
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January 2000 Charter Holdings Notes |
January 2001 Charter Holdings Notes |
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May 2001 Charter Holdings Notes |
January 2002 Charter Holdings Notes |
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Summary of Restrictive Covenants Under the Charter Holdings High-Yield Notes |
• | up to $3.5 billion of debt under credit facilities, | |
• | up to $75 million of debt incurred to finance the purchase or capital lease of new assets, | |
• | up to $300 million of additional debt for any purpose, | |
• | additional debt in an amount equal to 200% of new cash equity proceeds received by Charter Holdings and its restricted subsidiaries since March 1999, the date of its first indenture, and not allocated for restricted payments or permitted investments, and | |
• | other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest rate swaps to provide protection against fluctuation in interest rates. |
• | Charter Holdings and its restricted subsidiaries are generally permitted to pay dividends on equity interests, repurchase interests, or make other specified restricted payments only if, after giving pro |
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forma effect to the transaction, the Charter Holdings Leverage Ratio would be below 8.75 to 1.0 and if no default exists or would exist as a consequence of such incurrence. If those conditions are met, restricted payments in a total amount of up to 100% of Charter Holdings’ consolidated EBITDA, as defined, minus 1.2 times its consolidated interest expense, plus 100% of new cash and non-cash equity proceeds received by Charter Holdings and not allocated to the debt incurrence covenant or to permitted investments, all cumulatively from March 1999, the date of the first Charter Holdings indenture, plus $100 million. |
• | to repurchase management equity interests in amounts not to exceed $10 million per fiscal year, | |
• | regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests in Charter Holdings or its restricted subsidiaries, or | |
• | to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests. |
• | investments by Charter Holdings in restricted subsidiaries or by restricted subsidiaries in Charter Holdings, | |
• | investments in productive assets (including through equity investments) aggregating up to $150 million since March 1999, | |
• | investments aggregating up to 100% of new cash equity proceeds received by Charter Holdings since March 1999 and not allocated to the debt incurrence or restricted payments covenant, and | |
• | other investments aggregating up to $50 million since March 1999. |
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CCH II, LLC Notes |
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• | up to $9.75 billion of debt under credit facilities, including debt under credit facilities outstanding on the issue date of the CCH II notes, | |
• | up to $75 million of debt incurred to finance the purchase or capital lease of new assets, | |
• | up to $300 million of additional debt for any purpose, and | |
• | other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest rate swaps to provide protection against fluctuation in interest rates. |
• | to repurchase management equity interests in amounts not to exceed $10 million per fiscal year; | |
• | regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests in CCH II or its restricted subsidiaries; | |
• | regardless of the existence of any default, to pay interest when due on Charter Holdings notes, to pay, so long as there is no default, interest on the convertible senior notes of Charter, to purchase, redeem or refinance, so long as CCH II could incur $1.00 of indebtedness under the 5.5 to 1.0 leverage ratio test referred to above and there is no default, Charter Holdings notes, Charter notes, and other direct or indirect parent company notes (including the CCH II notes); | |
• | to make distributions in connection with the private exchanges pursuant to which the CCH II notes were issued; and | |
• | other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests. |
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• | investments by CCH II and its restricted subsidiaries in CCH II and in other restricted subsidiaries, or entities that become restricted subsidiaries as a result of the investment; | |
• | investments aggregating up to 100% of new cash equity proceeds received by CCH II since September 23, 2003 to the extent the proceeds have not been allocated to the restricted payments covenant described above; | |
• | investments resulting from the private exchanges pursuant to which the CCH II notes were issued; | |
• | other investments up to $750 million outstanding at any time; and | |
• | certain specified additional investments, such as investments in customers and suppliers in the ordinary course of business and investments received in connection with permitted asset sales. |
CCO Holdings, LLC Notes and Bridge Loan |
83/4% Senior Notes Due 2013 |
Senior Floating Rate Notes Due 2010 |
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83/4% Senior Notes due 2013 |
Additional Terms of the CCO Holdings Senior Notes and Senior Floating Rate Notes |
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• | up to $9.75 billion of debt under credit facilities, including debt under credit facilities outstanding on the issue date of the CCO Holdings senior notes; | |
• | up to $75 million of debt incurred to finance the purchase or capital lease of new assets; | |
• | up to $300 million of additional debt for any purpose; and | |
• | other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt, and interest rate swaps to provide protection against fluctuation in interest rates. |
• | CCO Holdings and its restricted subsidiaries are permitted to pay dividends on equity interests, repurchase interests, or make other specified restricted payments only if CCO Holdings can incur $1.00 of new debt under the leverage ratio test, which requires that CCO Holdings meet a 4.5 to 1.0 leverage ratio after giving effect to the transaction, and if no default exists or would exist as a consequence of such incurrence. If those conditions are met, restricted payments are permitted in a total amount of up to 100% of CCO Holdings’ consolidated EBITDA, as defined, minus 1.3 times its consolidated interest expense, plus 100% of new cash and appraised non-cash equity proceeds received by CCO Holdings and not allocated to the debt incurrence covenant, all cumulatively from the fiscal quarter commenced on October 1, 2003, plus $100 million. |
• | to repurchase management equity interests in amounts not to exceed $10 million per fiscal year; | |
• | to pay, regardless of the existence of any default, pass-through tax liabilities in respect of ownership of equity interests in Charter Holdings or its restricted subsidiaries; | |
• | to pay, regardless of the existence of any default, interest when due on Charter Holdings notes and our notes; | |
• | to pay, so long as there is no default, interest on the Charter convertible notes; | |
• | to purchase, redeem or refinance Charter Holdings notes, CCH II notes, Charter notes, and other direct or indirect parent company notes, so long as CCO Holdings could incur $1.00 of indebtedness under the 4.5 to 1.0 leverage ratio test referred to above and there is no default; or | |
• | to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests. |
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• | investments by CCO Holdings and its restricted subsidiaries in CCO Holdings and in other restricted subsidiaries, or entities that become restricted subsidiaries as a result of the investment, | |
• | investments aggregating up to 100% of new cash equity proceeds received by CCO Holdings since November 10, 2003 to the extent the proceeds have not been allocated to the restricted payments covenant described above, | |
• | other investments up to $750 million outstanding at any time, and | |
• | certain specified additional investments, such as investments in customers and suppliers in the ordinary course of business and investments received in connection with permitted asset sales. |
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Bridge Loan |
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Charter Communications Operating, LLC Notes |
• | a senior obligation of such guarantor; | |
• | structurally senior to the outstanding senior notes of CCO Holdings and CCO Holdings Capital Corp. (except in the case of CCO Holdings’ note guarantee, which is structurallypari passuwith such senior notes), the outstanding senior notes of CCH II and CCH II Capital Corp., the outstanding senior notes and senior discount notes of Charter Holdings, the outstanding convertible senior notes of Charter and any future indebtedness of parent companies of CCO Holdings (but subject to provisions in the Charter Operating indenture that permit interest and, subject to meeting the 4.25 to 1.0 leverage ratio test, principal payments to be made thereon); and | |
• | senior in right of payment to any future subordinated indebtedness of such guarantor. |
• | up to $6.5 billion of debt under credit facilities (but such incurrence is permitted only by Charter Operating and its restricted subsidiaries that are guarantors of the Charter Operating notes, so long as there are such guarantors), including debt under credit facilities outstanding on the issue date of the Charter Operating notes; | |
• | up to $75 million of debt incurred to finance the purchase or capital lease of assets; | |
• | up to $300 million of additional debt for any purpose, and |
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• | other items of indebtedness for specific purposes such as refinancing of existing debt and interest rate swaps to provide protection against fluctuation in interest rates and, subject to meeting the leverage ratio test, debt existing at the time of acquisition of a restricted subsidiary. |
• | to repurchase management equity interests in amounts not to exceed $10 million per fiscal year; | |
• | regardless of the existence of any default, to pay pass-through tax liabilities in respect of ownership of equity interests in Charter Operating or its restricted subsidiaries; | |
• | to pay, regardless of the existence of any default, interest when due on the Charter Holdings notes, the CCH II notes and the CCO Holdings notes; | |
• | to pay, so long as there is no default, interest on the Charter convertible notes; | |
• | to purchase, redeem or refinance the Charter Holdings notes, CCH II notes, the CCO Holdings notes, the Charter notes, and other direct or indirect parent company notes, so long as Charter Operating could incur $1.00 of indebtedness under the 4.25 to 1.0 leverage ratio test referred to above and there is no default, or | |
• | to make other specified restricted payments including merger fees up to 1.25% of the transaction value, repurchases using concurrent new issuances, and certain dividends on existing subsidiary preferred equity interests. |
• | investments by Charter Operating and its restricted subsidiaries in Charter Operating and in other restricted subsidiaries, or entities that become restricted subsidiaries as a result of the investment, | |
• | investments aggregating up to 100% of new cash equity proceeds received by Charter Operating since April 27, 2004 to the extent the proceeds have not been allocated to the restricted payments covenant described above, | |
• | other investments up to $750 million outstanding at any time, and |
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• | certain specified additional investments, such as investments in customers and suppliers in the ordinary course of business and investments received in connection with permitted asset sales. |
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• | with certain exceptions, all capital stock (limited in the case of capital stock of foreign subsidiaries, if any, to 66% of the capital stock of first tier foreign Subsidiaries) held by Charter Operating or any guarantor; and | |
• | with certain exceptions, all intercompany obligations owing to Charter Operating or any guarantor. |
CC V Holdings, LLC Notes |
Renaissance Media Notes |
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• | if, after giving effect to the incurrence, Renaissance Media Group could meet a leverage ratio (ratio of consolidated debt to four times consolidated EBITDA, as defined, from the most recent quarter) of 6.75 to 1.0, and, regardless of whether the leverage ratio could be met, | |
• | up to the greater of $200 million or 4.5 times Renaissance Media Group’s consolidated annualized EBITDA, as defined, | |
• | up to an amount equal to 5% of Renaissance Media Group’s consolidated total assets to finance the purchase of new assets, | |
• | up to two times the sum of (a) the net cash proceeds of new equity issuances and capital contributions, and (b) 80% of the fair market value of property received by Renaissance Media Group or an issuer as a capital contribution, in each case received after the issue date of the Renaissance notes and not allocated to make restricted payments, and | |
• | other items of indebtedness for specific purposes such as intercompany debt, refinancing of existing debt and interest rate swaps to provide protection against fluctuation in interest rates. |
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Actual | Actual | ||||||||||||||||||||||||||||
September 30, | December 31, | ||||||||||||||||||||||||||||
2005 | 2004 | Start date for | |||||||||||||||||||||||||||
Interest | cash interest | ||||||||||||||||||||||||||||
Principal | Accreted | Principal | Accreted | payment | payment on | Maturity | |||||||||||||||||||||||
amount | value(a) | amount | value(a) | dates | discount notes | date(b) | |||||||||||||||||||||||
Charter Communications, Inc.: | |||||||||||||||||||||||||||||
4.750% convertible senior notes due 2006(c) | $ | 25 | $ | 25 | $ | 156 | $ | 156 | 12/1 & 6/1 | 6/1/06 | |||||||||||||||||||
5.875% convertible senior notes due 2009(c) | 863 | 841 | 863 | 834 | 5/16 & 11/16 | 11/16/09 | |||||||||||||||||||||||
$ | 888 | $ | 866 | $ | 1,019 | $ | 990 | ||||||||||||||||||||||
(a) | The accreted value presented above represents the principal amount of the notes less the original issue discount at the time of sale plus the accretion to the balance sheet date. | |
(b) | In general, the obligors have the right to redeem the 4.750% convertible senior notes due 2006 in whole or part at their option, beginning at various times prior to its stated maturity date, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest. The 5.875% convertible senior notes are redeemable if the closing price of Charter’s Class A common stock exceeds the conversion price by certain percentages as described below. | |
(c) | The 5.875% convertible senior notes and the 4.75% convertible senior notes are convertible at the option of the holder into shares of Charter Class A common stock at an initial conversion rate of 413.2231 and 38.0952 shares, respectively, per $1,000 principal amount of notes, which is equivalent to a price of $2.42 and $26.25 per share, respectively. Certain anti-dilutive provisions cause adjustments to occur automatically upon the occurrence of specified events. Additionally, the conversion ratio may be adjusted by Charter when deemed appropriate. |
Charter Communications, Inc. Notes |
4.75% Convertible Senior Notes Due 2006 |
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Charter 5.875% Convertible Senior Notes due 2009 |
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CCHC, LLC Note |
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(a) existing law or applicable policy or interpretations of the staff of the Securities and Exchange Commission do not permit us to effect the exchange offer, | |
(b) any holder of notes notifies us that either: |
(1) such holder is not eligible to participate in the exchange offer, or | |
(2) such holder participates in the exchange offer and does not receive freely transferable new notes in exchange for tendered outstanding notes, or |
(c) the exchange offer is not completed within 240 days after September 28, 2005, we will, at our cost: |
• | file a shelf registration statement covering resales of the outstanding notes, | |
• | use our reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act of 1933 at the earliest possible time, but no later than 90 days after the time such obligation to file arises, and | |
• | use our reasonable best efforts to keep effective the shelf registration statement until the earlier of two years after the date as of which the Securities and Exchange Commission declares such shelf registration statement effective or the shelf registration otherwise becomes effective, or the time when all of the applicable outstanding notes are no longer outstanding. |
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(a) to delay accepting any outstanding notes, to extend the exchange offer or to terminate the exchange offer and not accept outstanding notes not previously accepted if any of the conditions set forth under “— Conditions” shall have occurred and shall not have been waived by us, if permitted to be waived by us, by giving oral or written notice of such delay, extension or termination to the exchange agent, or | |
(b) to amend the terms of the exchange offer in any manner deemed by us to be advantageous to the holders of the outstanding notes. |
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(a) by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal or | |
(b) for the account of an eligible institution. In the event that signatures on a letter of transmittal or a notice of withdrawal, are required to be guaranteed, such guarantee must be by an eligible institution. |
(a) purchase or make offers for any outstanding notes that remain outstanding subsequent to the expiration date or, as set forth under “— Conditions,” to terminate the exchange offer in accordance with the terms of the registration rights agreement and | |
(b) to the extent permitted by applicable law, purchase outstanding notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers may differ from the terms of the exchange offer. |
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(a) the new notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of such holder or other person, | |
(b) neither such holder nor such other person is engaged in or intends to engage in a distribution of the new notes, | |
(c) neither such holder or other person has any arrangement or understanding with any person to participate in the distribution of such new notes, and | |
(d) such holder or other person is not our “affiliate,” as defined under Rule 405 of the Securities Act of 1933, or, if such holder or other person is such an affiliate, will comply with the registration and prospectus delivery requirements of the Securities Act of 1933 to the extent applicable. |
(a) whose outstanding notes are not immediately available or | |
(b) who cannot deliver their outstanding notes, the letter of transmittal or any other required documents to the exchange agent prior to the expiration date, may effect a tender if: |
(1) The tender is made through an eligible institution; | |
(2) prior to the expiration date, the exchange agent receives from such eligible institution a properly completed and duly executed Notice of Guaranteed Delivery, by facsimile transmission, mail or hand delivery, setting forth the name and address of the holder of the outstanding notes, the certificate number or numbers of such outstanding notes and the principal amount of outstanding notes tendered, stating that the tender is being made thereby, and guaranteeing that, within three business days after the expiration date, the letter of transmittal, or facsimile thereof or agent’s message in lieu of the letter of transmittal, together with the certificate(s) representing the outstanding notes to be tendered in proper form for transfer and any other documents required by the letter of transmittal will be deposited by the eligible institution with the exchange agent; and | |
(3) such properly completed and executed letter of transmittal (or facsimile thereof) together with the certificate(s) representing all tendered outstanding notes in proper form for transfer and all other documents required by the letter of transmittal are received by the exchange agent within three business days after the expiration date. |
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(a) specify the name of the depositor, who is the person having deposited the outstanding notes to be withdrawn, | |
(b) identify the outstanding notes to be withdrawn, including the certificate number or numbers and principal amount of such outstanding notes or, in the case of outstanding notes transferred by book-entry transfer, the name and number of the account at The Depository Trust Company to be credited, | |
(c) be signed by the depositor in the same manner as the original signature on the letter of transmittal by which such outstanding notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the outstanding notes register the transfer of such outstanding notes into the name of the depositor withdrawing the tender, and | |
(d) Specify the name in which any such outstanding notes are to be registered, if different from that of the depositor. All questions as to the validity, form and eligibility, including time of receipt, of such withdrawal notices will be determined by us, and our determination shall be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no new notes will be issued with respect to the outstanding notes withdrawn unless the outstanding notes so withdrawn are validly retendered. Any outstanding notes which have been tendered but which are not accepted for exchange will be returned to its holder without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn outstanding notes may be retendered by following one of the procedures described above under “— Procedures for Tendering” at any time prior to the expiration date. |
(1) refuse to accept any outstanding notes and return all tendered outstanding notes to the tendering holders, | |
(2) extend the exchange offer and retain all outstanding notes tendered prior to the expiration of the exchange offer, subject, however, to the rights of holders who tendered such outstanding notes to withdraw their tendered outstanding notes, or | |
(3) waive such condition, if permissible, with respect to the exchange offer and accept all properly tendered outstanding notes which have not been withdrawn. If such waiver constitutes a material change to the exchange offer, we will promptly disclose such waiver by means of a |
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prospectus supplement that will be distributed to the holders, and we will extend the exchange offer as required by applicable law. |
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• | to us, upon redemption of these notes or otherwise, | |
• | so long as the outstanding notes are eligible for resale pursuant to Rule 144A under the Securities Act of 1933, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, | |
• | in accordance with Rule 144 under the Securities Act of 1933, or under another exemption from the registration requirements of the Securities Act of 1933, and based upon an opinion of counsel reasonably acceptable to us, | |
• | outside the United States to a foreign person in a transaction meeting the requirements of Rule 904 under the Securities Act of 1933, or | |
• | under an effective registration statement under the Securities Act of 1933, |
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• | will have been registered under the Securities Act; | |
• | will not bear the restrictive legends restricting their transfer under the Securities Act; and | |
• | will not contain the registration rights and additional interest provisions contained in the outstanding notes. |
• | 11.125% Senior Accreting Notes due 2014 (the “11.125% CIH Notes”); | |
• | 9.920% Senior Accreting Notes due 2014 (the “9.920% CIH Notes”); | |
• | 10.00% Senior Accreting Notes due 2014 (the “10.00% CIH Notes”); | |
• | 11.75% Senior Accreting Notes due 2014 (the “11.750% CIH Notes”); | |
• | 13.50% Senior Accreting Notes due 2014 (the “13.50% CIH Notes”); and | |
• | 12.125% Senior Accreting Notes due 2015 (the “12.125% CIH Notes”). |
• | general unsecured obligations of the Issuers; | |
• | effectively subordinated in right of payment to any future secured Indebtedness of the Issuers, to the extent of the value of the assets securing such Indebtedness; | |
• | equal in right of payment to any future unsubordinated, unsecured Indebtedness of the Issuers; | |
• | structurally senior to the outstanding notes and the outstanding convertible senior notes of Charter Communications, Inc.; |
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• | senior in right of payment to any future subordinated Indebtedness of the Issuers; | |
• | structurally subordinated to all Indebtedness and other liabilities (including trade payables) of the Issuers’ subsidiaries, including Indebtedness under our subsidiaries’ credit facilities and the senior notes of CCH I, CCH II, CCO Holdings and CCO; and | |
• | unconditionally guaranteed on a senior basis by the Parent Guarantor. |
• | is a general unsecured obligation of the Parent Guarantor; | |
• | ispari passuin right of payment with all existing and future unsubordinated indebtedness of the Parent Guarantor, including the outstanding notes that remained outstanding following consummation of the Exchange Offers; and | |
• | is senior in right of payment to any existing and future subordinated indebtedness of the Parent Guarantor. |
Principal, Maturity and Interest |
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Series of CIH Notes | ||||||||||||||||||||||||
11.125% | 9.920% | 10.00% | 11.75% | 13.50% | 12.125% | |||||||||||||||||||
CIH Notes | CIH Notes | CIH Notes | CIH Notes | CIH Notes | CIH Notes | |||||||||||||||||||
Principal Amount issued per $1,000 Principal Amount | $ | 1,000 | $ | 1,000 | $ | 1,000 | $ | 1,000 | $ | 1,000 | $ | 1,000 | ||||||||||||
Principal Amount of outstanding notes | $ | 150,704,000 | $ | 470,907,287 | $ | 299,098,000 | $ | 814,590,000 | $ | 580,671,000 | $ | 216,719,000 | ||||||||||||
Maturity Date | January 15, 2014 | April 1, 2014 | May 15, 2014 | May 15, 2014 | January 15, 2014 | January 15, 2015 | ||||||||||||||||||
Accretion per semi-annual period per $1,000 Principal Amount(1) | $ | 50 | $ | 50 | $ | 50 | $ | 50 | $ | 50 | $ | 50 | ||||||||||||
Cash Interest Rate (based on principal amount) | 11.125% | 9.920% | 10.00% | 11.750% | 13.50% | 12.125% | ||||||||||||||||||
Date From Which Cash Interest First Accrues | Current | Current | Current | May 15, 2006 | January 15, 2006 | January 15, 2007 | ||||||||||||||||||
Interest Payment Dates | January 15 and July 15 | April 1 and October 1 | May 15 and November 15 | May 15 and November 15 | January 15 and July 15 | January 15 and July 15 | ||||||||||||||||||
Interest Payment Record Dates | January 1 and July 1 | March 15 and September 15 | May 1 and November 1 | May 1 and November 1 | January 1 and July 1 | January 1 and July 1 |
(1) | The accreted value of each series of CIH Notes was $800 per $1,000 principal amount as of September 28, 2005 and accretes on a straight line basis to $1,000 on September 30, 2007. |
11.125% CIH Notes: |
Redemption Date | Percentage of Principal Amount | |||
September 30, 2007 until January 14, 2008 | 103.708 | % | ||
January 15, 2008 until January 14, 2009 | 101.854 | % | ||
Thereafter | 100.000 | % |
9.920% CIH Notes: |
Redemption Date | Percentage of Principal Amount | |||
September 30, 2007 and Thereafter | 100.000% |
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10.00% CIH Notes |
Redemption Date | Percentage of Principal Amount | |||
September 30, 2007 until May 14, 2008 | 103.333 | % | ||
May 15, 2008 until May 14, 2009 | 101.667 | % | ||
Thereafter | 100.000 | % |
11.75% CIH Notes |
Redemption Date | Percentage of Principal Amount | |||
September 30, 2007 until May 14, 2008 | 103.917 | % | ||
May 15, 2008 until May 14, 2009 | 101.958 | % | ||
Thereafter | 100.000 | % |
13.50% CIH Notes |
Redemption Date | Percentage of Principal Amount | |||
September 30, 2007 until January 14, 2008 | 104.500 | % | ||
January 15, 2008 until January 14, 2009 | 102.250 | % | ||
Thereafter | 100.000 | % |
12.125% CIH Notes |
Redemption Date | Percentage of Principal Amount | |||
September 30, 2007 until January 14, 2008 | 106.063 | % | ||
January 15, 2008 until January 14, 2009 | 104.042 | % | ||
January 15, 2009 until January 14, 2010 | 102.021 | % | ||
Thereafter | 100.000 | % |
Change of Control |
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(1) accept for payment all CIH Notes or portions thereof properly tendered pursuant to the Change of Control Offer; | |
(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all CIH Notes of each series or portions thereof so tendered; and | |
(3) deliver or cause to be delivered to the trustee the CIH Notes of each series so accepted together with an officers’ certificate stating the aggregate principal amount of CIH Notes of such series or portions thereof being purchased by the Issuers. |
Asset Sales |
(1) CIH or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; | |
(2) such fair market value is determined by the Board of Directors of CIH and evidenced by a resolution of such Board of Directors set forth in an officers’ certificate delivered to the trustee; and | |
(3) at least 75% of the consideration therefor received by CIH or such Restricted Subsidiary is in the form of cash, Cash Equivalents or readily marketable securities. |
(a) any liabilities (as shown on CIH’s or such Restricted Subsidiary’s most recent balance sheet) of CIH or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the CIH Notes) that are assumed by the transferee of any such assets |
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pursuant to a customary novation agreement that releases CIH or such Restricted Subsidiary from further liability; | |
(b) any securities, notes or other obligations received by CIH or any such Restricted Subsidiary from such transferee that are converted by the recipient thereof into cash, Cash Equivalents or readily marketable securities within 60 days after receipt thereof (to the extent of the cash, Cash Equivalents or readily marketable securities received in that conversion); and | |
(c) Productive Assets. |
(1) to repay debt under the Credit Facilities or any other Indebtedness of the Restricted Subsidiaries of CIH (other than Indebtedness represented by a guarantee of a Restricted Subsidiary of CIH); or | |
(2) to invest in Productive Assets; provided that any such amount of Net Proceeds which CIH or a Restricted Subsidiary has committed to invest in Productive Assets within 365 days of the applicable Asset Sale may be invested in Productive Assets within two years of such Asset Sale. |
(1) if any CIH Notes are listed, in compliance with the requirements of the principal national securities exchange on which the CIH Notes are listed; or | |
(2) if the CIH Notes are not so listed, on a pro rata basis, by lot or by such method as the trustee shall deem fair and appropriate. |
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• | “— Repurchase at the Option of Holders — Asset Sales,” | |
• | “— Restricted Payments,” | |
• | “— Investments,” | |
• | “— Incurrence of Indebtedness and Issuance of Preferred Stock,” | |
• | “— Dividend and Other Payment Restrictions Affecting Subsidiaries,” | |
• | clause (D) of the first paragraph of “— Merger, Consolidation or Sale of Assets,” | |
• | “— Transactions with Affiliates” and | |
• | “— Sale and Leaseback Transactions.” |
(1) declare or pay any dividend or make any other payment or distribution on account of its or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving CIH or any of its Restricted Subsidiaries) or to the direct or indirect holders of CIH’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable (x) solely in Equity Interests (other than Disqualified Stock) of CIH or (y) in the case of CIH and its Restricted Subsidiaries, to CIH or a Restricted Subsidiary thereof); |
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(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving CIH or any of its Restricted Subsidiaries) any Equity Interests of CIH or any direct or indirect Parent of CIH or any Restricted Subsidiary of CIH (other than, in the case of CIH and its Restricted Subsidiaries, any such Equity Interests owned by CIH or any of its Restricted Subsidiaries); or | |
(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness of CIH that is subordinated to the CIH Notes, except a payment of interest or principal at the Stated Maturity thereof, |
(1) no Default or Event of Default under the CIH Indenture shall have occurred and be continuing or would occur as a consequence thereof; and | |
(2) CIH would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; and | |
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by CIH and its Restricted Subsidiaries from and after the Charter Holdings Issue Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8), (9) and (10) of the next succeeding paragraph), shall not exceed, at the date of determination, the sum of the following (the “Restricted Payments Basket”): |
(a) an amount equal to 100% of the Consolidated EBITDA of CIH for the period beginning on the Charter Holdings Issue Date to the end of CIH’s most recently ended full fiscal quarter for which internal financial statements are available, taken as a single accounting period, less the product of 1.2 times the Consolidated Interest Expense of CIH for such period, plus | |
(b) an amount equal to 100% of Capital Stock Sale Proceeds less any amount of such Capital Stock Sale Proceeds used in connection with (i) an Investment made on or after the Charter Holdings Issue Date pursuant to clause (5) of the definition of “Permitted Investments” or (ii) the incurrence of Indebtedness pursuant to clause (9) of the definition of “Permitted Debt,” plus |
(c) $100 million. |
(1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the CIH Indenture; | |
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of CIH in exchange for, or out of the net proceeds of, the substantially concurrent sale (other than to a Subsidiary of CIH) of Equity Interests of CIH (other than Disqualified Stock);providedthat the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph; | |
(3) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of CIH or any of its Restricted Subsidiaries with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; |
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(4) regardless of whether a Default then exists, the payment of any dividend or distribution made in respect of any calendar year or portion thereof during which CIH or any of its Subsidiaries is a Person that is not treated as a separate tax paying entity for United States federal income tax purposes by CIH and its Subsidiaries (directly or indirectly) to the direct or indirect holders of the Equity Interests of CIH or its Subsidiaries that are Persons that are treated as a separate tax paying entity for United States federal income tax purposes, in an amount sufficient to permit each such holder to pay the actual income taxes (including required estimated tax installments) that are required to be paid by it with respect to the taxable income of any Parent (through its direct or indirect ownership of CIH and/or its Subsidiaries), CIH, its Subsidiaries or any Unrestricted Subsidiary, as applicable, in any calendar year, as estimated in good faith by CIH or its Subsidiaries, as the case may be; | |
(5) regardless of whether a Default then exists, the payment of any dividend by a Restricted Subsidiary of CIH to the holders of its common Equity Interests on a pro rata basis; | |
(6) the payment of any dividend on the Helicon Preferred Stock or the redemption, repurchase, retirement or other acquisition of the Helicon Preferred Stock in an amount not in excess of its aggregate liquidation value; | |
(7) the repurchase, redemption or other acquisition or retirement for value, or the payment of any dividend or distribution to the extent necessary to permit the repurchase, redemption or other acquisition or retirement for value, of any Equity Interests of CIH or a Parent of CIH held by any member of CIH’s, such Parent’s or any Restricted Subsidiary’s management pursuant to any management equity subscription agreement or stock option agreement entered into in accordance with the policies of CIH, any Parent or any Restricted Subsidiary; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $10 million in any fiscal year of the Issuers; | |
(8) payment of fees in connection with any acquisition, merger or similar transaction in an amount that does not exceed an amount equal to 1.25% of the transaction value of such acquisition, merger or similar transaction; | |
(9) additional Restricted Payments directly or indirectly to any Parent (i) regardless of whether a Default exists (other than a Default described in paragraphs (1), (2), (7) or (8) under the caption “Events of Default and Remedies”), for the purpose of enabling Charter Holdings or any Charter Refinancing Subsidiary to pay interest when due on Indebtedness under the Charter Holdings Indentures and/or any Charter Refinancing Indebtedness, (ii) for the purpose of enabling CCI and/or any Charter Refinancing Subsidiary to pay interest when due on Indebtedness under the CCI Indentures and/or any Charter Refinancing Indebtedness and (iii) so long as CIH would have been permitted, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable quarter period, to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” (A) to the extent required to enable Charter Holdings, CCI or any Charter Refinancing Subsidiary to defease, redeem, repurchase, prepay, repay, discharge or otherwise acquire or retire Indebtedness under the Charter Holdings Indentures, the CCI Indentures or any Charter Refinancing Indebtedness (including any expenses incurred by any Parent in connection therewith) or (B) consisting of purchases, redemptions or other acquisitions by CIH or its Restricted Subsidiaries of Indebtedness under the Charter Holdings Indentures, the CCI Indentures, or any Charter Refinancing Indebtedness (including any expenses incurred by CIH and its Restricted Subsidiaries in connection therewith) and the distribution, loan to or investment in any Parent of Indebtedness so purchased, redeemed or acquired; and | |
(10) Restricted Payments that are part of the Exchange Offers. |
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(1) make any Restricted Investment; or | |
(2) allow any of its Restricted Subsidiaries to become an Unrestricted Subsidiary, unless, in each case: |
(a) no Default or Event of Default under the CIH Indenture shall have occurred and be continuing or would occur as a consequence thereof; and | |
(b) CIH would, at the time of, and after giving effect to, such Restricted Investment or such designation of a Restricted Subsidiary as an Unrestricted Subsidiary, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the applicable Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock.” |
Incurrence of Indebtedness and Issuance of Preferred Stock |
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(1) the incurrence by CIH and its Restricted Subsidiaries of Indebtedness under the Credit Facilities;providedthat the aggregate principal amount of all Indebtedness of CIH and its Restricted Subsidiaries outstanding under this clause (1) for all Credit Facilities of CIH and its Restricted Subsidiaries after giving effect to such incurrence does not exceed an amount equal to $9.75 billion less the aggregate amount of all Net Proceeds from Asset Sales applied by CIH or any of its Restricted Subsidiaries after the Issue Date to repay any such Indebtedness under a Credit Facility pursuant to the covenant described under “— Repurchase at the Option of Holders — Asset Sales;” | |
(2) the incurrence by CIH and its Restricted Subsidiaries of Existing Indebtedness (other than under Credit Facilities); | |
(3) the incurrence on the Issue Date by CIH of Indebtedness represented by the CIH Notes (but not including any Additional CIH Notes); | |
(4) the incurrence by CIH or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement (including, without limitation, the cost of design, development, construction, acquisition, transportation, installation, improvement, and migration) of Productive Assets of CIH or any of its Restricted Subsidiaries in an aggregate principal amount not to exceed, together with any related Permitted Refinancing Indebtedness permitted by clause (5) below, $75 million at any time outstanding; | |
(5) the incurrence by CIH or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, in whole or in part, Indebtedness (other than intercompany Indebtedness) that was permitted by the CIH Indenture to be incurred under this clause (5), the first paragraph of this covenant or clauses (2), (3) or (4) of this paragraph; | |
(6) the incurrence by CIH or any of its Restricted Subsidiaries of intercompany Indebtedness between or among CIH and any of its Restricted Subsidiaries; provided that: |
(a) if CIH is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the CIH Notes; and | |
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than CIH or a Restricted Subsidiary of CIH and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either CIH or a Restricted Subsidiary of CIH, shall be deemed, in each case, to constitute an incurrence of such Indebtedness that was not permitted by this clause (6); |
(7) the incurrence by CIH or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the CIH Indenture to be outstanding; | |
(8) the guarantee by CIH or any of its Restricted Subsidiaries of Indebtedness of a Restricted Subsidiary that was permitted to be incurred by another provision of this covenant; | |
(9) the incurrence by CIH or any of its Restricted Subsidiaries, of additional Indebtedness in an aggregate principal amount at any time outstanding, not to exceed an amount equal to (the “Equity Proceeds Basket”) 200% of the net cash proceeds received by CIH from the sale of its Equity Interests (other than Disqualified Stock) or a contribution to the common equity capital of CIH after the Charter Holdings Issue Date to the extent such net cash proceeds have not been applied to make |
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Restricted Payments or to effect other transactions pursuant to the covenant described above under the caption “— Restricted Payments” or to make Permitted Investments pursuant to clause (5) of the definition thereof; | |
(10) the incurrence by CIH or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding under this clause (10) not to exceed $300 million; and | |
(11) the accretion or amortization of original issue discount and the write up of Indebtedness in accordance with purchase accounting. |
(a) any Indebtedness or Preferred Stock of any Person existing at the time such Person is merged with or into or becomes a Subsidiary of CIH;providedthat such Indebtedness or Preferred Stock was not incurred or issued in connection with, or in contemplation of, such Person merging with or into, or becoming a Subsidiary of, CIH, and | |
(b) any Indebtedness or Preferred Stock of a Restricted Subsidiary issued in connection with, and as part of the consideration for, an acquisition, whether by stock purchase, asset sale, merger or otherwise, in each case involving such Restricted Subsidiary, which Indebtedness or Preferred Stock is issued to the seller or sellers of such stock or assets;providedthat such Restricted Subsidiary is not obligated to register such Indebtedness or Preferred Stock under the Securities Act or obligated to provide information pursuant to Rule 144A under the Securities Act. |
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Liens |
Dividend and Other Payment Restrictions Affecting Subsidiaries |
(1) pay dividends or make any other distributions on its Capital Stock to CIH or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to CIH or any of its Restricted Subsidiaries; | |
(2) make loans or advances to CIH or any of its Restricted Subsidiaries; or | |
(3) transfer any of its properties or assets to CIH or any of its Restricted Subsidiaries. |
(1) Existing Indebtedness, contracts and other instruments as in effect on the Issue Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof;providedthat such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the most restrictive Existing Indebtedness, contracts or other instruments, as in effect on the Issue Date; | |
(2) applicable law; | |
(3) any instrument governing Indebtedness or Capital Stock of a Person acquired by CIH or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the CIH Indenture to be incurred; | |
(4) customary non-assignment provisions in leases, franchise agreements and other commercial agreements entered into in the ordinary course of business; | |
(5) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (3) of the preceding paragraph; | |
(6) any agreement for the sale or other disposition of Capital Stock or assets of a Restricted Subsidiary that restricts distributions by such Restricted Subsidiary pending such sale or other disposition; | |
(7) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive at the time such restrictions become effective, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; | |
(8) Liens securing Indebtedness or other obligations otherwise permitted to be incurred pursuant to the provisions of the covenant described above under the caption “— Liens” that limit the right of CIH or any of its Restricted Subsidiaries to dispose of the assets subject to such Lien; |
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(9) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business; | |
(10) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; | |
(11) restrictions contained in the terms of Indebtedness or Preferred Stock permitted to be incurred under the covenant described under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”;providedthat such restrictions are not materially more restrictive, taken as a whole, than the terms contained in the most restrictive, together or individually, of the Credit Facilities and other Existing Indebtedness as in effect on the Issue Date; and | |
(12) restrictions that are not materially more restrictive, taken as a whole, than customary provisions in comparable financings and that the management of CIH determines, at the time of such financing, will not materially impair the Issuers’ ability to make payments as required under the CIH Notes. |
Merger, Consolidation or Sale of Assets |
(A) either: |
(i) such Issuer is the surviving Person; or | |
(ii) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a Person organized or existing under the laws of the United States, any state thereof or the District of Columbia,providedthat if the Person formed by or surviving any such consolidation or merger with such Issuer is a Person other than a corporation, a corporate co-issuer shall also be an obligor with respect to the CIH Notes; |
(B) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of such Issuer under the CIH Notes and the CIH Indenture pursuant to agreements reasonably satisfactory to the trustee; | |
(C) immediately after such transaction no Default or Event of Default exists; and | |
(D) such Issuer or the Person formed by or surviving any such consolidation or merger (if other than such Issuer) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, |
(x) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock;” or | |
(y) have a Leverage Ratio immediately after giving effect to such consolidation or merger no greater than the Leverage Ratio immediately prior to such consolidation or merger. |
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Transactions with Affiliates |
(1) such Affiliate Transaction is on terms that are not less favorable to CIH or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by CIH or such Restricted Subsidiary with an unrelated Person; and | |
(2) CIH delivers to the trustee: |
(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration given or received by CIH or any such Restricted Subsidiary in excess of $15 million, a resolution of the Board of Directors of CIH or CCI set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the members of such Board of Directors; and | |
(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration given or received by CIH or any such Restricted Subsidiary in excess of $50 million, an opinion as to the fairness to the holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. |
(1) any existing employment agreement and employee benefit arrangement (including stock purchase or option agreements, deferred compensation plans, and retirement, savings or similar plans) entered into by CIH or any of its Subsidiaries and any employment agreement and employee benefit arrangements entered into by CIH or any of its Restricted Subsidiaries in the ordinary course of business; | |
(2) transactions between or among CIH and/or its Restricted Subsidiaries; | |
(3) payment of reasonable directors fees to Persons who are not otherwise Affiliates of CIH, and customary indemnification and insurance arrangements in favor of directors, regardless of affiliation with CIH or any of its Restricted Subsidiaries; | |
(4) payment of Management Fees; | |
(5) Restricted Payments that are permitted by the provisions of the covenant described above under the caption “— Restricted Payments” and Restricted Investments that are permitted by the provisions of the covenant described above under the caption “— Investments”; | |
(6) Permitted Investments; | |
(7) transactions pursuant to agreements existing on the Issue Date, as in effect on the Issue Date, or as subsequently modified, supplemented, or amended, to the extent that any such modifications, supplements, or amendments comply with the applicable provisions of paragraph (1) of this covenant; and | |
(8) contributions to the common equity capital of CIH or the issue or sale of Equity Interests of CIH. |
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Sale and Leaseback Transactions |
(1) CIH or such Restricted Subsidiary could have |
(a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Leverage Ratio test in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; and | |
(b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption “— Liens” or the definition of “Permitted Liens”; and |
(2) the transfer of assets in that sale and leaseback transaction is permitted by, and CIH or such Restricted Subsidiary applies the proceeds of such transaction in compliance with, the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales.” |
Limitations on Issuances of Guarantees of Indebtedness |
(1) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee (a “Subsidiary Guarantee”) of the payment of the CIH Notes by such Restricted Subsidiary, and | |
(2) until one year after all the CIH Notes have been paid in full in cash, such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against CIH or any other Restricted Subsidiary of CIH as a result of any payment by such Restricted Subsidiary under its Subsidiary Guarantee;provided that this paragraph shall not be applicable to any Guarantee or any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. |
Payments for Consent |
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Reports |
(1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuers were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and, with respect to the annual information only, a report on the annual consolidated financial statements of CIH of its independent public accountants; and | |
(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Issuers were required to file such reports. |
(1) default for 30 consecutive days in the payment when due of interest on such series of the CIH Notes; | |
(2) default in payment when due of the principal of or premium, if any, on such series of the CIH Notes; | |
(3) failure by CIH or any of its Restricted Subsidiaries to comply with the provisions of the CIH Indenture described under the captions “— Repurchase at the Option of Holders — Change of Control” or “— Certain Covenants — Merger, Consolidation or Sale of Assets”; | |
(4) failure by CIH or any of its Restricted Subsidiaries for 30 consecutive days after written notice thereof has been given to the Issuers by the trustee or to the Issuers and the trustee by holders of at least 25% of the aggregate principal amount of all of the series of the CIH Notes to which such failure relates outstanding to comply with any of their other covenants or agreements in the CIH Indenture; |
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(5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by CIH or any of its Restricted Subsidiaries (or the payment of which is guaranteed by CIH or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the Issue Date, if that default: |
(a) is caused by a failure to pay at final stated maturity the principal amount on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or | |
(b) results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $100 million or more; |
(6) failure by CIH or any of its Restricted Subsidiaries to pay final judgments which are nonappealable aggregating in excess of $100 million, net of applicable insurance which has not been denied in writing by the insurer, which judgments are not paid, discharged or stayed for a period of 60 days; | |
(7) CIH or any of its Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy Law: |
(a) commences a voluntary case, | |
(b) consents to the entry of an order for relief against it in an involuntary case, | |
(c) consents to the appointment of a custodian of it or for all or substantially all of its property, or | |
(d) makes a general assignment for the benefit of its creditors; or |
(8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: |
(a) is for relief against CIH or any of its Significant Subsidiaries in an involuntary case; | |
(b) appoints a custodian of CIH or any of its Significant Subsidiaries or for all or substantially all of the property of CIH or any of its Significant Subsidiaries; or | |
(c) orders the liquidation of CIH or any of its Significant Subsidiaries; |
and the order or decree remains unstayed and in effect for 60 consecutive days. |
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(1) the rights of holders of outstanding CIH Notes of such series to receive payments in respect of the principal of, premium, if any, and interest on the CIH Notes of such series when such payments are due from the trust referred to below; | |
(2) the Issuers’ obligations with respect to the CIH Notes of such series concerning issuing temporary CIH Notes, registration of CIH Notes, mutilated, destroyed, lost or stolen CIH Notes and the maintenance of an office or agency for payment and money for security payments held in trust; | |
(3) the rights, powers, trusts, duties and immunities of the trustee, and the Issuers’ obligations in connection therewith; and | |
(4) the Legal Defeasance provisions of the CIH Indenture. |
(1) the Issuers or the Parent Guarantor must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the CIH Notes of such series, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the outstanding CIH Notes of such series on the stated maturity or on the applicable redemption date, as the case may be, and the Issuers and the Parent Guarantor must specify whether the CIH Notes of such series will be defeased to maturity or to a particular redemption date; |
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(2) in the case of Legal Defeasance, the Issuers shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that |
(a) the Issuers and the Parent Guarantor have received from, or there has been published by, the Internal Revenue Service a ruling or | |
(b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the outstanding CIH Notes of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; |
(3) in the case of Covenant Defeasance, the Issuers or the Parent Guarantor shall have delivered to the trustee an opinion of counsel confirming that the holders of the outstanding CIH Notes of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; | |
(4) no Default or Event of Default under the CIH Indenture shall have occurred and be continuing either (a) on the date of such deposit with respect to such series (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing); or (b) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; | |
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the CIH Indenture) to which the Issuers or any of their Restricted Subsidiaries is a party or by which the Issuers or any of their Restricted Subsidiaries is bound; | |
(6) the Issuers must have delivered to the trustee an opinion of counsel to the effect that after the 91st day, assuming no intervening bankruptcy, that no holder is an insider of either of the Issuers following the deposit and that such deposit would not be deemed by a court of competent jurisdiction a transfer for the benefit of the Issuers in their capacities as such, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; | |
(7) the Issuers or the Parent Guarantor must deliver to the trustee an officers’ certificate stating that the deposit was not made by the Issuers with the intent of preferring the holders of the CIH Notes of such series over the other creditors of the Issuers or the Parent Guarantor with the intent of defeating, hindering, delaying or defrauding creditors of the Issuers, the Parent Guarantor or others; and | |
(8) the Issuers or the Parent Guarantor must deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. |
(a) have become due and payable or | |
(b) will become due and payable on the maturity date or a redemption date within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of the Issuers. |
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(1) reduce the principal amount of such CIH Notes, or change the definition of “Accreted Value”; | |
(2) change the fixed maturity of such CIH Notes or reduce the premium payable upon redemption of such CIH Notes; | |
(3) reduce the rate of or extend the time for payment of interest on such CIH Notes; | |
(4) waive a Default or an Event of Default in the payment of principal of or premium, if any, or interest on such CIH Notes (except a rescission of acceleration of the CIH Notes of any series by the holders of at least a majority in aggregate principal amount of the CIH Notes of such series and a waiver of the payment default that resulted from such acceleration); | |
(5) make such CIH Notes payable in money other than that stated in such CIH Notes; | |
(6) make any change in the provisions of the CIH Indenture relating to waivers of past Defaults applicable to any CIH Notes or the rights of holders thereof to receive payments of Accreted Value or principal of, or premium, if any, or interest on such CIH Notes; | |
(7) waive a redemption payment with respect to such CIH Notes (other than a payment required by one of the covenants described above under the caption “— Repurchase at the Option of Holders”); or | |
(8) make any change in the preceding amendment and waiver provisions. |
(1) to cure any ambiguity, defect or inconsistency; | |
(2) to provide for uncertificated CIH Notes in addition to or in place of certificated CIH Notes; | |
(3) to provide for or confirm the issuance of Additional CIH Notes; | |
(4) to provide for the assumption of the Issuers’ or the Parent Guarantor’s obligations to holders of CIH Notes of any series in the case of a merger or consolidation or sale of all or substantially all of the Issuers’ assets; | |
(5) to release any Subsidiary Guarantee in accordance with the provisions of the CIH Indenture; | |
(6) to make any change that would provide any additional rights or benefits to the holders of CIH Notes of any series or that does not adversely affect the legal rights under the CIH Indenture of any such holder; or |
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(7) to comply with requirements of the SEC in order to effect or maintain the qualification of the CIH Indenture under the Trust Indenture Act or otherwise as necessary to comply with applicable law. |
(1) if the specified date occurs on one or more of the following dates (each such date, other than the Issue Date, a “Semi-Annual Accrual Date”) the Accreted Value will equal the amount set forth below for such Semi-Annual Accrual Date: |
Accreted | ||||
Date | Value | |||
Issue Date | $ | 800.00 | ||
March 31, 2006 | $ | 850.00 | ||
September 30, 2006 | $ | 900.00 | ||
March 31, 2007 | $ | 950.00 | ||
September 30, 2007 | $ | 1,000.00 |
(2) if the specified date occurs before the first Semi-Annual Accrual Date, the Accreted Value will equal the sum of |
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(a) the Accreted Value of such series on the Issue Date set forth above and | |
(b) an amount equal to the product of |
(x) the Accreted Value for the first Semi-Annual Accrual Date less the Accreted Value on the Issue Date multiplied by | |
(y) a fraction, the numerator of which is the number of days from the Issue Date to the specified date, using a360-day year of twelve30-day months, and the denominator of which is the number of days from the Issue Date to the first Semi-Annual Accrual Date, using a360-day year of twelve30-day months; |
(3) if the specified date occurs between two Semi-Annual Accrual Dates, the Accreted Value will equal the sum of |
(a) the Accreted Value for the Semi-Annual Accrual Date immediately preceding such specified date and | |
(b) an amount equal to the product of |
(x) the Accreted Value for the immediately following Semi-Annual Accrual Date less the Accreted Value for the immediately preceding Semi-Annual Accrual Date multiplied by | |
(y) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Accrual Date to the specified date, using a360-day year of twelve30-day months, and the denominator of which is 180; or |
(4) if the specified date occurs after the last Semi-Annual Accrual Date, the Accreted Value will equal $1,000. |
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and | |
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. |
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(1) if the specified date occurs on one or more of the following dates (each such date, other than the Issue Date, a “Semi-Annual Reference Date”) the Applicable Change of Control Premium will equal the amount set forth below for such Semi-Annual Reference Date: |
Applicable Change of | ||||
Date | Control Premium | |||
Issue Date | $ | 200.00 | ||
March 31, 2006 | $ | 152.50 | ||
September 30, 2006 | $ | 105.00 | ||
March 31, 2007 | $ | 57.50 | ||
September 30, 2007 | $ | 10.00 |
(2) if the specified date occurs before the first Semi-Annual Reference Date, the Applicable Change of Control Premium will equal the sum of |
(a) the Applicable Change of Control Premium of such series on the Issue Date set forth above minus | |
(b) an amount equal to the product of |
(x) the Applicable Change of Control Premium on the Issue Date less the Applicable Change of Control Premium for the first Semi-Annual Reference Date multiplied by | |
(y) a fraction, the numerator of which is the number of days from the Issue Date to the specified date, using a360-day year of twelve30-day months, and the denominator of which is the number of days from the Issue Date to the first Semi-Annual Reference Date, using a360-day year of twelve30-day months; |
(3) if the specified date occurs between two Semi-Annual Reference Dates, the Applicable Change of Control Premium will equal the sum of |
(a) the Applicable Change of Control Premium for the Semi-Annual Reference Date immediately preceding such specified date minus | |
(b) an amount equal to the product of |
(x) the Applicable Change of Control Premium for the immediately preceding Semi- Annual Reference Date less the Applicable Change of Control Premium for the immediately following Semi-Annual Reference Date multiplied by | |
(y) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Reference Date to the specified date, using a360-day year of twelve30-day months, and the denominator of which is 180; or |
(4) if the specified date occurs after the last Semi-Annual Reference Date, the Applicable Change of Control Premium will equal $10.00. |
(1) an Investment by CIH or any of its Restricted Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary of CIH or any of its Restricted Subsidiaries or shall be merged with or into CIH or any of its Restricted Subsidiaries, or | |
(2) the acquisition by CIH or any of its Restricted Subsidiaries of the assets of any Person which constitute all or substantially all of the assets of such Person, any division or line of business of |
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such Person or any other properties or assets of such Person other than in the ordinary course of business. |
(1) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of the Cable Related Business; provided that the sale, conveyance or other disposition of all or substantially all of the assets of CIH and its Subsidiaries, taken as a whole, will be governed by the provisions of the CIH Indenture described above under the caption “— Repurchase at the Option of Holders — Change of Control” and/or the provisions described above under the caption “— Certain Covenants — Merger, Consolidation, or Sale of Assets” and not by the provisions of the covenant described above under the caption “Repurchase at the Option of Holders — Asset Sales”; and | |
(2) the issuance of Equity Interests by any Restricted Subsidiary of CIH or the sale by CIH or any Restricted Subsidiary of CIH of Equity Interests of any Restricted Subsidiary of CIH. |
(1) any single transaction or series of related transactions that: |
(a) involves assets having a fair market value of less than $100 million; or | |
(b) results in net proceeds to CIH and its Restricted Subsidiaries of less than $100 million; |
(2) a transfer of assets between or among CIH and/or its Restricted Subsidiaries; | |
(3) an issuance of Equity Interests by a Restricted Subsidiary of CIH to CIH or to another Wholly Owned Restricted Subsidiary of CIH; | |
(4) a Restricted Payment that is permitted by the covenant described above under the caption “— Certain Covenants — Restricted Payments,” a Restricted Investment that is permitted by the covenant described above under the caption “— Certain Covenants — Investments” or a Permitted Investment; | |
(5) the incurrence of Liens not prohibited by the CIH Indenture and the disposition of assets related to such Liens by the secured party pursuant to a foreclosure; and | |
(6) any disposition of cash or Cash Equivalents. |
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(1) in the case of a corporation, corporate stock; | |
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; | |
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and | |
(4) any other interest (other than any debt obligation) or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. |
(x) as a contribution to the common equity capital or from the issue or sale of Equity Interests (other than Disqualified Stock and other than issuances or sales to a Subsidiary of CIH) of CIH after the Charter Holdings Issue Date, or | |
(y) from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of CIH that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of CIH). |
(1) United States dollars; | |
(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition; | |
(3) certificates of deposit and eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having combined capital and surplus in excess of $500 million and a Thompson Bank Watch Rating at the time of acquisition of “B” or better; | |
(4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; | |
(5) commercial paper having a rating at the time of acquisition of at least “P-1” from Moody’s or at least “A-1” from S&P and in each case maturing within twelve months after the date of acquisition; | |
(6) corporate debt obligations maturing within twelve months after the date of acquisition thereof, rated at the time of acquisition at least “Aaa” or “P-1” by Moody’s or “AAA” or “A-1” by S&P; |
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(7) auction-rate Preferred Stocks of any corporation maturing not later than 45 days after the date of acquisition thereof, rated at the time of acquisition at least “Aaa” by Moody’s or “AAA” by S&P; | |
(8) securities issued by any state, commonwealth or territory of the United States, or by any political subdivision or taxing authority thereof, maturing not later than six months after the date of acquisition thereof, rated at the time of acquisition at least “A” by Moody’s or S&P; and | |
(9) money market or mutual funds at least 90% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (8) of this definition. |
(1) the sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of CIH and its Subsidiaries, taken as a whole, or of a Parent and its Subsidiaries, taken as a whole, to any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) other than Paul G. Allen and the Related Parties; | |
(2) the adoption of a plan relating to the liquidation or dissolution of CIH or a Parent (except the liquidation of any Parent into any other Parent); | |
(3) the consummation of any transaction, including, without limitation, any merger or consolidation, the result of which is that any “person” (as defined above) other than Paul G. Allen and Related Parties becomes the Beneficial Owner, directly or indirectly, of more than 35% of the Voting Stock of CIH or a Parent, measured by voting power rather than the number of shares, unless Paul G. Allen or a Related Party Beneficially Owns, directly or indirectly, a greater percentage of |
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Voting Stock of CIH or such Parent, as the case may be, measured by voting power rather than the number of shares, than such person; | |
(4) after the Issue Date, the first day on which a majority of the members of the Board of Directors of CCI are not Continuing Directors; | |
(5) CIH or a Parent consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, CIH or a Parent, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of CIH or such Parent is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of CIH or such Parent outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person immediately after giving effect to such issuance; or | |
(6) (i) Charter Communications Holdings Company, LLC shall cease to own beneficially, directly or indirectly, 100% of the Capital Stock of Charter Holdings or (ii) Charter Holdings shall cease to own beneficially, directly or indirectly, 100% of the Capital Stock of CIH. |
(1) the principal amount (or accreted value, if applicable) of such Charter Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of, plus accrued interest and premium, if any, on the Indebtedness so extended, refinanced, renewed, replaced, defeased, purchased, acquired or refunded (plus the amount of reasonable fees, commissions and expenses incurred in connection therewith); and |
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(2) such Charter Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased, purchased, acquired or refunded. |
(1) Consolidated Interest Expense; | |
(2) income taxes; | |
(3) depreciation expense; | |
(4) amortization expense; | |
(5) all other non-cash items, extraordinary items and nonrecurring and unusual items (including without limitation any restructuring charges and charges related to litigation settlements or judgments) and the cumulative effects of changes in accounting principles reducing such net income, less all noncash items, extraordinary items, nonrecurring and unusual items and cumulative effects of changes in accounting principles increasing such net income; | |
(6) amounts actually paid during such period pursuant to a deferred compensation plan; and | |
(7) for purposes of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” Management Fees; |
all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in conformity with GAAP,providedthat Consolidated EBITDA shall not include: |
(x) the net income (or net loss) of any Person that is not a Restricted Subsidiary (“Other Person”), except |
(i) with respect to net income, to the extent of the amount of dividends or other distributions actually paid to such Person or any of its Restricted Subsidiaries by such Other Person during such period; and | |
(ii) with respect to net losses, to the extent of the amount of investments made by such Person or any Restricted Subsidiary of such Person in such Other Person during such period; |
(y) solely for the purposes of calculating the amount of Restricted Payments that may be made pursuant to the second clause (3) in the first paragraph of the covenant described under the caption “— Certain Covenants — Restricted Payments” (and in such case, except to the extent includable pursuant to clause (x) above), the net income (or net loss) of any Other Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into or consolidated with such Person or any Restricted Subsidiaries or all or substantially all of the property and assets of such Other Person are acquired by such Person or any of its Restricted Subsidiaries; and | |
(z) the net income of any Restricted Subsidiary of CIH to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of such net income is not at the time of determination of such Consolidated EBITDA permitted by the operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute, |
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rule or governmental regulation applicable to such Restricted Subsidiary (other than any agreement or instrument evidencing Indebtedness or Preferred Stock (i) outstanding on the Issue Date or (ii) incurred or issued thereafter in compliance with the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”;providedthat (a) the terms of any such agreement or instrument (other than Existing Indebtedness and any modifications, increases or refinancings that are not materially more restrictive taken as a whole) restricting the declaration and payment of dividends or similar distributions apply only in the event of a default with respect to a financial covenant or a covenant relating to payment, beyond any applicable period of grace, contained in such agreement or instrument; (b) such terms are determined by such Person to be customary in comparable financings; and (c) such restrictions are determined by CIH not to materially affect the Issuers’ ability to make principal or interest payments on the applicable CIH Notes when due). |
(1) the total amount of outstanding Indebtedness of such Person and its Restricted Subsidiaries, plus | |
(2) the total amount of Indebtedness of any other Person that has been Guaranteed by the referent Person or one or more of its Restricted Subsidiaries, plus | |
(3) the aggregate liquidation value of all Disqualified Stock of such Person and all Preferred Stock of Restricted Subsidiaries of such Person, in each case, determined on a consolidated basis in accordance with GAAP. |
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization or original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations); and | |
(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; and | |
(3) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon); |
in each case, on a consolidated basis and in accordance with GAAP, excluding, however, any amount of such interest of any Restricted Subsidiary of the referent Person if the net income of such Restricted Subsidiary is excluded in the calculation of Consolidated EBITDA pursuant to clause (z) of the definition thereof (but only in the same proportion as the net income of such Restricted Subsidiary is excluded from the calculation of Consolidated EBITDA pursuant to clause (z) of the definition thereof). |
(1) was a member of the Board of Directors of CCI on the Issue Date; or | |
(2) was nominated for election or elected to the Board of Directors of CCI with the approval of a majority of the Continuing Directors who were members of such Board of Directors of CCI at the time of such nomination or election or whose election or appointment was previously so approved. |
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(1) the acquisition by CIH and CCH I of Indebtedness outstanding under the Charter Holdings Indentures, in exchange for CIH Notes and CCH I Notes, pursuant to the Offering Memorandum, dated August 23, 2005 and related documents, as such documents may be supplemented, modified, extended or amended from time to time; and | |
(2) the distribution, loan or investment of (a) Indebtedness accepted in exchange for CIH Notes or CCH I Notes as contemplated by clause (1) of this definition, and (b) amounts sufficient to satisfy the expenses incurred by any Parent in connection therewith (including any required payment of accrued interest thereon), in each case, directly or indirectly to or in any Parent; |
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(1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; | |
(2) interest rate option agreements, foreign currency exchange agreements, foreign currency swap agreements; and | |
(3) other agreements or arrangements designed to protect such Person against fluctuations in interest and currency exchange rates. |
(1) in respect of borrowed money; | |
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); | |
(3) in respect of banker’s acceptances; | |
(4) representing Capital Lease Obligations; | |
(5) in respect of the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or | |
(6) representing the notional amount of any Hedging Obligations, |
(1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and | |
(2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. |
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(1) the Consolidated Indebtedness of CIH on such date to | |
(2) the aggregate amount of Consolidated EBITDA for CIH for the most recently ended fiscal quarter for which internal financial statements are available (the “Reference Period”), multiplied by four. |
(1) the issuance of the CIH Notes and the CCH I Notes; | |
(2) the incurrence of the Indebtedness or the issuance of the Disqualified Stock by CIH or a Restricted Subsidiary or Preferred Stock of a Restricted Subsidiary (and the application of the proceeds therefrom) giving rise to the need to make such calculation and any incurrence or issuance (and the application of the proceeds therefrom) or repayment of other Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, other than the incurrence or repayment of Indebtedness for ordinary working capital purposes, at any time subsequent to the beginning of the Reference Period and on or prior to the date of determination, as if such incurrence (and the application of the proceeds thereof), or the repayment, as the case may be, occurred on the first day of the Reference Period; and | |
(3) any Dispositions or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any person that becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring, assuming or otherwise becoming liable for or issuing Indebtedness, Disqualified Stock or Preferred Stock) made on or subsequent to the first day of the Reference Period and on or prior to the date of determination, as if such Disposition or Asset Acquisition (including the incurrence, assumption or liability for any such Indebtedness, Disqualified Stock or Preferred Stock and also including any Consolidated EBITDA associated with such Asset Acquisition, including any cost savings adjustments in compliance with Regulation S-X promulgated by the SEC) had occurred on the first day of the Reference Period. |
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(1) as to which neither CIH nor any of its Restricted Subsidiaries |
(a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness); | |
(b) is directly or indirectly liable as a guarantor or otherwise; or | |
(c) constitutes the lender; |
(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the CIH Notes) of CIH or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and | |
(3) as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of CIH or any of its Restricted Subsidiaries. |
(1) any Investment by CIH in a Restricted Subsidiary thereof, or any Investment by a Restricted Subsidiary of CIH in CIH or in another Restricted Subsidiary of CIH; | |
(2) any Investment in Cash Equivalents; |
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(3) any Investment by CIH or any of its Restricted Subsidiaries in a Person, if as a result of such Investment: |
(a) such Person becomes a Restricted Subsidiary of CIH; or | |
(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, CIH or a Restricted Subsidiary of CIH; |
(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales”; | |
(5) any Investment made out of the net cash proceeds of the issue and sale (other than to a Subsidiary of CIH) of Equity Interests (other than Disqualified Stock) of CIH or capital contributions to the common equity of CIH, in each case after the Charter Holdings Issue Date, to the extent that such net cash proceeds have not been applied, at any time after the Charter Holdings Issue Date, to make a Restricted Payment or to effect other transactions pursuant to the covenant described under “Certain Covenants — Restricted Payments” and to the extent such net cash proceeds have not been used, at any time after the Charter Holdings Issue Date, to incur Indebtedness pursuant to clause (9) of the second paragraph of the covenant described under “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”, provided that the amount of usage of the basket described in this clause (5) shall be determined net of the aggregate amount of principal, interest, dividends, distributions, repayments, proceeds or other value otherwise returned or recovered in respect of any such Investment, but not to exceed the initial amount of such Investment; | |
(6) other Investments in any Person (other than any Parent) having an aggregate fair market value when taken together with all other Investments in any Person made by CIH and its Restricted Subsidiaries (without duplication) pursuant to this clause (6) from and after the Issue Date, not to exceed $750 million (initially measured on the date each such Investment was made and without giving effect to subsequent changes in value, but reducing the amount outstanding by the aggregate amount of principal, interest, dividends, distributions, repayments, proceeds or other value otherwise returned or recovered in respect of any such Investment, but not to exceed the initial amount of such Investment) at any one time outstanding; | |
(7) Investments in customers and suppliers in the ordinary course of business which either |
(A) generate accounts receivable, or | |
(B) are accepted in settlement of bona fide disputes; |
(8) Investments consisting of payments by CIH or any of its subsidiaries of amounts that are neither dividends nor distributions but are payments of the kind described in clause (4) of the second paragraph of the covenant described above under the caption “— Certain Covenants — Restricted Payments” to the extent such payments constitute Investments; | |
(9) regardless of whether a Default then exists, Investments in any Unrestricted Subsidiary made by CIH and/or any of its Restricted Subsidiaries with the proceeds of distributions from any Unrestricted Subsidiary; and | |
(10) Investments that are part of the Exchange Offers. |
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(1) Liens on the assets of CIH securing Indebtedness and other obligations incurred under Credit Facilities so long as contemporaneously therewith effective provision is made to secure the CIH Notes and all other amounts due under the CIH Indenture, equally and ratably with such Credit Facilities (or, in the event that such Credit Facilities are subordinated in right of payment to the CIH Notes, prior to such Credit Facilities) with a Lien on the same properties and assets securing such Credit Facilities for so long as such Credit Facilities are secured by such Liens; | |
(2) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with CIH;providedthat such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with CIH and related assets, such as the proceeds thereof; | |
(3) Liens on property existing at the time of acquisition thereof by CIH;providedthat such Liens were in existence prior to the contemplation of such acquisition; | |
(4) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; | |
(5) purchase money mortgages or other purchase money Liens (including, without limitation, any Capitalized Lease Obligations) incurred by CIH upon any fixed or capital assets acquired after the Issue Date or purchase money mortgages (including, without limitation, Capital Lease Obligations) on any such assets, whether or not assumed, existing at the time of acquisition of such assets, whether or not assumed, so long as |
(a) such mortgage or lien does not extend to or cover any of the assets of CIH, except the asset so developed, constructed, or acquired, and directly related assets such as enhancements and modifications thereto, substitutions, replacements, proceeds (including insurance proceeds), products, rents and profits thereof, and | |
(b) such mortgage or lien secures the obligation to pay all or a portion of the purchase price of such asset, interest thereon and other charges, costs and expenses (including, without limitation, the cost of design, development, construction, acquisition, transportation, installation, improvement, and migration) and is incurred in connection therewith (or the obligation under such Capitalized Lease Obligation) only; |
(6) Liens existing on the Issue Date and replacement Liens therefor that do not encumber additional property; | |
(7) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded;providedthat any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; | |
(8) statutory and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; | |
(9) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security; | |
(10) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligation, bankers’ acceptance, surety and appeal bonds, government contracts, performance andreturn-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); |
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(11) easements,rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that do not materially interfere with the ordinary course of business of CIH or any of its Restricted Subsidiaries; | |
(12) Liens of franchisors or other regulatory bodies arising in the ordinary course of business; | |
(13) Liens arising from filing Uniform Commercial Code financing statements regarding leases or other Uniform Commercial Code financing statements for precautionary purposes relating to arrangements not constituting Indebtedness; | |
(14) Liens arising from the rendering of a final judgment or order against CIH or any of its Restricted Subsidiaries that does not give rise to an Event of Default; | |
(15) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof; | |
(16) Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business, in each case, securing Indebtedness under Hedging Obligations and forward contracts, options, future contracts, future options or similar agreements or arrangements designed solely to protect CIH or any of its Restricted Subsidiaries from fluctuations in interest rates, currencies or the price of commodities; | |
(17) Liens consisting of any interest or title of licensor in the property subject to a license; | |
(18) Liens on the Capital Stock of Unrestricted Subsidiaries; | |
(19) Liens arising from sales or other transfers of accounts receivable which are past due or otherwise doubtful of collection in the ordinary course of business; | |
(20) Liens incurred in the ordinary course of business of CIH and its Restricted Subsidiaries with respect to obligations which in the aggregate do not exceed $50 million at any one time outstanding; | |
(21) Liens in favor of the trustee arising under the CIH Indenture and similar provisions in favor of trustees or other agents or representatives under indentures or other agreements governing debt instruments entered into after the date hereof; | |
(22) Liens in favor of the trustee for its benefit and the benefit of holders of the CIH Notes, as their respective interests appear; and | |
(23) Liens securing Permitted Refinancing Indebtedness, to the extent that the Indebtedness being refinanced was secured or was permitted to be secured by such Liens. |
(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable) plus accrued interest and premium, if any, on the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith), except to the extent that any such excess principal amount (or accreted value, as applicable) would be then permitted to be incurred by other provisions of the covenant described above under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”; |
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(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and | |
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the CIH Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the CIH Notes on terms at least as favorable to the holders of CIH Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. |
(1) any corporation, association or other business entity of which at least 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and, in the case of any such entity of which 50% of the total voting power of |
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shares of Capital Stock is so owned or controlled by such Person or one or more of the other Subsidiaries of such Person, such Person and its Subsidiaries also have the right to control the management of such entity pursuant to contract or otherwise; and | |
(2) any partnership |
(a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person, or | |
(b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof). |
(1) has no Indebtedness other than Non-Recourse Debt; | |
(2) is not party to any agreement, contract, arrangement or understanding with CIH or any Restricted Subsidiary of CIH unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to CIH or such Restricted Subsidiary of CIH than those that might be obtained at the time from Persons who are not Affiliates of CIH unless such terms constitute Investments permitted by the covenant described above under the caption “— Certain Covenants — Investments,” Permitted Investments, Asset Sales permitted under the covenant described above under the caption “— Repurchase at the Option of the Holders — Asset Sales” or sale-leaseback transactions permitted by the covenant described above under the caption “— Certain Covenants — Sale and Leaseback Transactions”; | |
(3) is a Person with respect to which neither CIH nor any of its Restricted Subsidiaries has any direct or indirect obligation |
(a) to subscribe for additional Equity Interests or | |
(b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; |
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of CIH or any of its Restricted Subsidiaries; and | |
(5) does not own any Capital Stock of any Restricted Subsidiary of CIH. |
(1) such Indebtedness is permitted under the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and |
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(2) no Default or Event of Default would be in existence immediately following such designation. |
(1) the sum of the products obtained by multiplying |
(a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by | |
(b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by |
(2) the then outstanding principal amount of such Indebtedness. |
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• | will have been registered under the Securities Act; | |
• | will not bear the restrictive legends restricting their transfer under the Securities Act; and | |
• | will not contain the registration rights and additional interest provisions contained in the outstanding notes. |
• | senior secured obligations of the Issuers, secured by the Collateral equally and ratably with all future indebtedness of CCH I that may be secured by the Collateral as permitted by the CCH I Indenture, including all Additional CCH I Notes; | |
• | effectively senior in right of payment to any future unsecured Indebtedness of the Issuers, to the extent of the value of the Collateral; | |
• | structurally senior to the outstanding notes and the outstanding convertible senior notes of Charter Communications, Inc.; | |
• | senior in right of payment to any future subordinated Indebtedness of the Issuers; | |
• | structurally subordinated to all indebtedness and other liabilities (including trade payables) of the Issuers’ subsidiaries, including indebtedness under our subsidiaries’ credit facilities and the senior notes of CCH II, CCO Holdings and CCO; and | |
• | unconditionally guaranteed on a senior basis by the Parent Guarantor. |
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• | is a general unsecured obligation of the Parent Guarantor; | |
• | ispari passuin right of payment with all existing and future unsubordinated indebtedness of the Parent Guarantor, including the outstanding notes that remained outstanding following consummation of the Exchange Offers; and | |
• | is senior in right of payment to any existing and future subordinated indebtedness of the Parent Guarantor. |
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Assets Pledged as Collateral |
Certain Limitations on Remedies, Etc. |
(i) have no authority to exercise any voting rights with respect to the Collateral or receive any dividends or other distributions with respect thereto, except for distributions in any bankruptcy or insolvency case or proceeding (an “insolvency proceeding”); | |
(ii) are prohibited from commencing judicial or non-judicial foreclosure or collection proceedings with respect to, seeking to have a trustee, receiver, liquidator or similar official appointed for or over, attempting any action to take possession of any Collateral, exercising any right, remedy or power with respect to, or otherwise taking any action to realize upon the Collateral, including without limitation (a) any right to dispose of the Collateral after default under Article 9 of the Uniform Commercial Code or (b) any other default remedy under applicable law; and | |
(iii) are prohibited from seeking relief from the automatic stay or from any other stay in any insolvency proceeding, in each case, with respect to any Collateral. |
Pari Passu Secured Indebtedness |
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Certain Bankruptcy Limitations |
Sufficiency of Collateral |
Release |
(1) in whole, upon payment in full of the principal of, and accrued and unpaid interest and premium, if any, on the CCH I Notes; | |
(2) in whole, upon satisfaction and discharge of the CCH I Indenture; | |
(3) in whole, upon a legal or covenant defeasance as set forth under “Legal Defeasance and Covenant Defeasance,” below; | |
(4) upon the sale or other disposition of the Collateral in accordance with, and as expressly provided for under, the CCH I Indenture (subject to any continuing Lien on the proceeds of such sale or disposition); and | |
(5) with the consent of the holders of a majority in aggregate principal amount of the then outstanding CCH I Notes, including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, CCH I Notes. |
(a) an officers’ certificate and such other documentation as required under the CCH I Indenture and the Pledge Agreement; and | |
(b) an opinion of counsel to the effect that such accompanying documents constitute all documents required by the CCH I Indenture and the Pledge Agreement. |
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(1) at least 65% of the aggregate principal amount of the CCH I Notes must remain outstanding immediately after the occurrence of such redemption (excluding CCH I Notes held by the Issuers and their Subsidiaries), and | |
(2) the redemption must occur within 60 days of the date of the closing of such Equity Offering. |
Year | Percentage | |||
2010 | 105.500% | |||
2011 | 102.750% | |||
2012 | 101.375% | |||
2013 and thereafter | 100.000% |
Change of Control |
(1) accept for payment all CCH I Notes or portions thereof properly tendered pursuant to the Change of Control Offer; |
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(2) deposit with the paying agent an amount equal to the Change of Control Payment in respect of all CCH I Notes or portions thereof so tendered; and | |
(3) deliver or cause to be delivered to the trustee the CCH I Notes so accepted together with an officers’ certificate stating the aggregate principal amount of CCH I Notes or portions thereof being purchased by the Issuers. |
Asset Sales |
(1) CCH I or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; | |
(2) such fair market value is determined by the Board of Directors of CCH I and evidenced by a resolution of such Board of Directors set forth in an officers’ certificate delivered to the trustee; and | |
(3) at least 75% of the consideration therefor received by CCH I or such Restricted Subsidiary is in the form of cash, Cash Equivalents or readily marketable securities. |
(a) any liabilities (as shown on CCH I’s or such Restricted Subsidiary’s most recent balance sheet) of CCH I or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the CCH I Notes) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases CCH I or such Restricted Subsidiary from further liability; |
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(b) any securities, notes or other obligations received by CCH I or any such Restricted Subsidiary from such transferee that are converted by the recipient thereof into cash, Cash Equivalents or readily marketable securities within 60 days after receipt thereof (to the extent of the cash, Cash Equivalents or readily marketable securities received in that conversion); and | |
(c) Productive Assets. |
(1) to repay debt under the Credit Facilities or any other Indebtedness of the Restricted Subsidiaries of CCH I (other than Indebtedness represented by a guarantee of a Restricted Subsidiary of CCH I); or | |
(2) to invest in Productive Assets; provided that any such amount of Net Proceeds which CCH I or a Restricted Subsidiary has committed to invest in Productive Assets within 365 days of the applicable Asset Sale may be invested in Productive Assets within two years of such Asset Sale. |
(1) if any CCH I Notes are listed, in compliance with the requirements of the principal national securities exchange on which the CCH I Notes are listed; or | |
(2) if the CCH I Notes are not so listed, on a pro rata basis, by lot or by such method as the trustee shall deem fair and appropriate. |
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• | “— Repurchase at the Option of Holders — Asset Sales,” | |
• | “— Restricted Payments,” | |
• | “— Investments,” | |
• | “— Incurrence of Indebtedness and Issuance of Preferred Stock,” | |
• | “— Dividend and Other Payment Restrictions Affecting Subsidiaries,” | |
• | clause (D) of the first paragraph of “— Merger, Consolidation or Sale of Assets,” | |
• | “— Transactions with Affiliates” and | |
• | “— Sale and Leaseback Transactions.” |
Restricted Payments |
(1) declare or pay any dividend or make any other payment or distribution on account of its or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving CCH I or any of its Restricted Subsidiaries) or to the direct or indirect holders of CCH I’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable (x) solely in Equity Interests (other than Disqualified Stock) of CCH I or (y) in the case of CCH I and its Restricted Subsidiaries, to CCH I or a Restricted Subsidiary thereof); | |
(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving CCH I or any of its Restricted Subsidiaries) any Equity Interests of CCH I or any direct or indirect Parent of CCH I or any Restricted Subsidiary of CCH I (other than, in the case of CCH I and its Restricted Subsidiaries, any such Equity Interests owned by CCH I or any of its Restricted Subsidiaries); or |
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(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, any Indebtedness of CCH I that is subordinated to the CCH I Notes, except a payment of interest or principal at the Stated Maturity thereof, |
(all such payments and other actions set forth in clauses (1) through (3) above are collectively referred to as “Restricted Payments”), unless, at the time of and after giving effect to such Restricted Payment: |
(1) no Default or Event of Default under the CCH I Indenture shall have occurred and be continuing or would occur as a consequence thereof; and | |
(2) CCH I would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”; and | |
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by CCH I and its Restricted Subsidiaries from and after the Issue Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8), (9) and (10) of the next succeeding paragraph), shall not exceed, at the date of determination, the sum of the following: |
(a) an amount equal to 100% of the Consolidated EBITDA of CCH I for the period beginning on the Issue Date to the end of CCH I’s most recently ended full fiscal quarter for which internal financial statements are available, taken as a single accounting period, less the product of 1.3 times the Consolidated Interest Expense of CCH I for such period, plus | |
(b) an amount equal to 100% of Capital Stock Sale Proceeds less any amount of such Capital Stock Sale Proceeds used in connection with an Investment made on or after the Issue Date pursuant to clause (5) of the definition of “Permitted Investments,” plus | |
(c) $100 million. |
So long as no Default under the CCH I Indenture has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit: |
(1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the CCH I Indenture; | |
(2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of CCH I in exchange for, or out of the net proceeds of, the substantially concurrent sale (other than to a Subsidiary of CCH I) of Equity Interests of CCH I (other than Disqualified Stock);providedthat the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph; | |
(3) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of CCH I or any of its Restricted Subsidiaries with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; | |
(4) regardless of whether a Default then exists, the payment of any dividend or distribution made in respect of any calendar year or portion thereof during which CCH I or any of its Subsidiaries is a Person that is not treated as a separate tax paying entity for United States federal income tax purposes by CCH I and its Subsidiaries (directly or indirectly) to the direct or indirect holders of the Equity Interests of CCH I or its Subsidiaries that are Persons that are treated as a separate tax paying entity for United States federal income tax purposes, in an amount sufficient to permit each such holder to pay the actual income taxes (including required estimated tax installments) that are required to be paid by it with respect to the taxable income of any Parent (through its direct or indirect ownership of CCH I and/or its Subsidiaries), CCH I, its Subsidiaries or any Unrestricted |
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Subsidiary, as applicable, in any calendar year, as estimated in good faith by CCH I or its Subsidiaries, as the case may be; | |
(5) regardless of whether a Default then exists, the payment of any dividend by a Restricted Subsidiary of CCH I to the holders of its common Equity Interests on a pro rata basis; | |
(6) the payment of any dividend on the Helicon Preferred Stock or the redemption, repurchase, retirement or other acquisition of the Helicon Preferred Stock in an amount not in excess of its aggregate liquidation value; | |
(7) the repurchase, redemption or other acquisition or retirement for value, or the payment of any dividend or distribution to the extent necessary to permit the repurchase, redemption or other acquisition or retirement for value, of any Equity Interests of CCH I or a Parent of CCH I held by any member of CCH I’s, such Parent’s or any Restricted Subsidiary’s management pursuant to any management equity subscription agreement or stock option agreement entered into in accordance with the policies of CCH I, any Parent or any Restricted Subsidiary; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $10 million in any fiscal year of the Issuers; | |
(8) payment of fees in connection with any acquisition, merger or similar transaction in an amount that does not exceed an amount equal to 1.25% of the transaction value of such acquisition, merger or similar transaction; | |
(9) additional Restricted Payments directly or indirectly to CIH or any other Parent (i) regardless of whether a Default exists (other than a Default described in paragraphs (1), (2), (7) or (8) under the caption “Events of Default and Remedies”), for the purpose of enabling Charter Holdings, CIH or any Charter Refinancing Subsidiary to pay interest when due on Indebtedness under the Charter Holdings Indentures, the CIH Indenture, and/or any Charter Refinancing Indebtedness, (ii) for the purpose of enabling CCI and/or any Charter Refinancing Subsidiary to pay interest when due on Indebtedness under the CCI Indentures and/or any Charter Refinancing Indebtedness and (iii) so long as CCH I would have been permitted, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable quarter period, to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” (A) to the extent required to enable Charter Holdings, CIH, CCI or any Charter Refinancing Subsidiary to defease, redeem, repurchase, prepay, repay, discharge or otherwise acquire or retire Indebtedness under the Charter Holdings Indentures, the CIH Indenture, the CCI Indentures or any Charter Refinancing Indebtedness (including any expenses incurred by any Parent in connection therewith) or (B) consisting of purchases, redemptions or other acquisitions by CCH I or its Restricted Subsidiaries of Indebtedness under the Charter Holdings Indentures, the CIH Indenture, the CCI Indentures, or any Charter Refinancing Indebtedness (including any expenses incurred by CCH I and its Restricted Subsidiaries in connection therewith) and the distribution, loan to or investment in any Parent of Indebtedness so purchased, redeemed or acquired; and | |
(10) Restricted Payments that are part of the Exchange Offers. |
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Investments |
(1) make any Restricted Investment; or | |
(2) allow any of its Restricted Subsidiaries to become an Unrestricted Subsidiary, unless, in each case: |
(a) no Default or Event of Default under the CCH I Indenture shall have occurred and be continuing or would occur as a consequence thereof; and | |
(b) CCH I would, at the time of, and after giving effect to, such Restricted Investment or such designation of a Restricted Subsidiary as an Unrestricted Subsidiary, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the applicable Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock.” |
Incurrence of Indebtedness and Issuance of Preferred Stock |
(1) the incurrence by CCH I and its Restricted Subsidiaries of Indebtedness under the Credit Facilities;providedthat the aggregate principal amount of all Indebtedness of CCH I and its Restricted Subsidiaries outstanding under this clause (1) for all Credit Facilities of CCH I and its Restricted Subsidiaries after giving effect to such incurrence does not exceed an amount equal to $9.75 billion less the aggregate amount of all Net Proceeds from Asset Sales applied by CCH I or any of its Restricted Subsidiaries to repay any such Indebtedness under a Credit Facility pursuant to the covenant described under “— Repurchase at the Option of Holders — Asset Sales;” | |
(2) the incurrence by CCH I and its Restricted Subsidiaries of Existing Indebtedness (other than under Credit Facilities); | |
(3) the incurrence on the Issue Date by CCH I of Indebtedness represented by the CCH I Notes (but not including any Additional CCH I Notes); | |
(4) the incurrence by CCH I or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, |
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incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement (including, without limitation, the cost of design, development, construction, acquisition, transportation, installation, improvement, and migration) of Productive Assets of CCH I or any of its Restricted Subsidiaries in an aggregate principal amount not to exceed, together with any related Permitted Refinancing Indebtedness permitted by clause (5) below, $75 million at any time outstanding; | |
(5) the incurrence by CCH I or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, in whole or in part, Indebtedness (other than intercompany Indebtedness) that was permitted by the CCH I Indenture to be incurred under this clause (5), the first paragraph of this covenant or clauses (2), (3) or (4) of this paragraph; | |
(6) the incurrence by CCH I or any of its Restricted Subsidiaries of intercompany Indebtedness between or among CCH I and any of its Restricted Subsidiaries;providedthat: |
(a) if CCH I is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the CCH I Notes; and | |
(b) (b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than CCH I or a Restricted Subsidiary of CCH I and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either CCH I or a Restricted Subsidiary of CCH I, shall be deemed, in each case, to constitute an incurrence of such Indebtedness that was not permitted by this clause (6); |
(7) the incurrence by CCH I or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the CCH I Indenture to be outstanding; | |
(8) the guarantee by CCH I or any of its Restricted Subsidiaries of Indebtedness of a Restricted Subsidiary that was permitted to be incurred by another provision of this covenant; | |
(9) the incurrence by CCH I or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding under this clause (9), not to exceed $300 million; and | |
(10) the accretion or amortization of original issue discount and the write up of Indebtedness in accordance with purchase accounting. |
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(a) any Indebtedness or Preferred Stock of any Person existing at the time such Person is merged with or into or becomes a Subsidiary of CCH I;providedthat such Indebtedness or Preferred Stock was not incurred or issued in connection with, or in contemplation of, such Person merging with or into, or becoming a Subsidiary of, CCH I, and | |
(b) any Indebtedness or Preferred Stock of a Restricted Subsidiary issued in connection with, and as part of the consideration for, an acquisition, whether by stock purchase, asset sale, merger or otherwise, in each case involving such Restricted Subsidiary, which Indebtedness or Preferred Stock is issued to the seller or sellers of such stock or assets;providedthat such Restricted Subsidiary is not obligated to register such Indebtedness or Preferred Stock under the Securities Act or obligated to provide information pursuant to Rule 144A under the Securities Act. |
Liens |
Dividend and Other Payment Restrictions Affecting Subsidiaries |
(1) pay dividends or make any other distributions on its Capital Stock to CCH I or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to CCH I or any of its Restricted Subsidiaries; | |
(2) make loans or advances to CCH I or any of its Restricted Subsidiaries; or | |
(3) transfer any of its properties or assets to CCH I or any of its Restricted Subsidiaries. |
(1) Existing Indebtedness, contracts and other instruments as in effect on the Issue Date and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof;providedthat such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in the most restrictive Existing Indebtedness, contracts or other instruments, as in effect on the Issue Date; | |
(2) applicable law; | |
(3) any instrument governing Indebtedness or Capital Stock of a Person acquired by CCH I or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, |
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other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the CCH I Indenture to be incurred; | |
(4) customary non-assignment provisions in leases, franchise agreements and other commercial agreements entered into in the ordinary course of business; | |
(5) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (3) of the preceding paragraph; | |
(6) any agreement for the sale or other disposition of Capital Stock or assets of a Restricted Subsidiary that restricts distributions by such Restricted Subsidiary pending such sale or other disposition; | |
(7) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive at the time such restrictions become effective, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; | |
(8) Liens securing Indebtedness or other obligations otherwise permitted to be incurred pursuant to the provisions of the covenant described above under the caption “— Liens” that limit the right of CCH I or any of its Restricted Subsidiaries to dispose of the assets subject to such Lien; | |
(9) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business; | |
(10) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; | |
(11) restrictions contained in the terms of Indebtedness or Preferred Stock permitted to be incurred under the covenant described under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock”;providedthat such restrictions are not materially more restrictive, taken as a whole, than the terms contained in the most restrictive, together or individually, of the Credit Facilities and other Existing Indebtedness as in effect on the Issue Date; and | |
(12) restrictions that are not materially more restrictive, taken as a whole, than customary provisions in comparable financings and that the management of CCH I determines, at the time of such financing, will not materially impair the Issuers’ ability to make payments as required under the CCH I Notes. |
Merger, Consolidation or Sale of Assets |
(A) either: |
(i) such Issuer is the surviving Person; or | |
(ii) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a Person organized or existing under the laws of the United States, any state thereof or the District of Columbia,providedthat if the Person formed by or surviving any such consolidation or merger with such Issuer is a Person other than a corporation, a corporate co-issuer shall also be an obligor with respect to the CCH I Notes; |
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(B) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of such Issuer under the CCH I Notes and the CCH I Indenture pursuant to agreements reasonably satisfactory to the trustee; | |
(C) immediately after such transaction no Default or Event of Default exists; and | |
(D) such Issuer or the Person formed by or surviving any such consolidation or merger (if other than such Issuer) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, |
(x) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock;” or | |
(y) have a Leverage Ratio immediately after giving effect to such consolidation or merger no greater than the Leverage Ratio immediately prior to such consolidation or merger. |
Transactions with Affiliates |
(1) such Affiliate Transaction is on terms that are not less favorable to CCH I or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by CCH I or such Restricted Subsidiary with an unrelated Person; and | |
(2) CCH I delivers to the trustee: |
(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration given or received by CCH I or any such Restricted Subsidiary in excess of $15 million, a resolution of the Board of Directors of CCH I or CCI set forth in an officers’ certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the members of such Board of Directors; and | |
(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration given or received by CCH I or any such Restricted Subsidiary in excess of $50 million, an opinion as to the fairness to the holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. |
(1) any existing employment agreement and employee benefit arrangement (including stock purchase or option agreements, deferred compensation plans, and retirement, savings or similar plans) entered into by CCH I or any of its Subsidiaries and any employment agreement and employee benefit arrangements entered into by CCH I or any of its Restricted Subsidiaries in the ordinary course of business; |
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(2) transactions between or among CCH I and/or its Restricted Subsidiaries; | |
(3) payment of reasonable directors fees to Persons who are not otherwise Affiliates of CCH I, and customary indemnification and insurance arrangements in favor of directors, regardless of affiliation with CCH I or any of its Restricted Subsidiaries; | |
(4) payment of Management Fees; | |
(5) Restricted Payments that are permitted by the provisions of the covenant described above under the caption “— Restricted Payments” and Restricted Investments that are permitted by the provisions of the covenant described above under the caption “— Investments”; | |
(6) Permitted Investments; | |
(7) transactions pursuant to agreements existing on the Issue Date, as in effect on the Issue Date, or as subsequently modified, supplemented, or amended, to the extent that any such modifications, supplements, or amendments comply with the applicable provisions of paragraph (1) of this covenant; and | |
(8) contributions to the common equity capital of CCH I or the issue or sale of Equity Interests of CCH I. |
Sale and Leaseback Transactions |
(1) CCH I or such Restricted Subsidiary could have |
(a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Leverage Ratio test in the first paragraph of the covenant described above under the caption “— Incurrence of Additional Indebtedness and Issuance of Preferred Stock”; and | |
(b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption “— Liens” or the definition of “Permitted Liens”; and |
(2) the transfer of assets in that sale and leaseback transaction is permitted by, and CCH I or such Restricted Subsidiary applies the proceeds of such transaction in compliance with, the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales.” |
Limitations on Issuances of Guarantees of Indebtedness |
(1) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee (a “Subsidiary Guarantee”) of the payment of the CCH I Notes by such Restricted Subsidiary, and | |
(2) until one year after all the CCH I Notes have been paid in full in cash, such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against CCH I or any other Restricted Subsidiary of CCH I as a result of any payment by such Restricted Subsidiary under its Subsidiary Guarantee;providedthat this paragraph shall not be applicable to any Guarantee or any |
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Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary. |
Payments for Consent |
Reports |
(1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Issuers were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and, with respect to the annual information only, a report on the annual consolidated financial statements of CCH I of its independent public accountants; and | |
(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Issuers were required to file such reports. |
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(1) default for 30 conse4cutive days in the payment when due of interest on the CCH I Notes; | |
(2) default in payment when due of the principal of or premium, if any, on the CCH I Notes; | |
(3) failure by CCH I or any of its Restricted Subsidiaries to comply with the provisions of the CCH I Indenture described under the captions “— Repurchase at the Option of Holders — Change of Control” or “— Certain Covenants — Merger, Consolidation or Sale of Assets”; | |
(4) failure by CCH I or any of its Restricted Subsidiaries for 30 consecutive days after written notice thereof has been given to the Issuers by the trustee or to the Issuers and the trustee by holders of at least 25% of the aggregate principal amount of the CCH I Notes outstanding to comply with any of their other covenants or agreements in the CCH I Indenture; | |
(5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by CCH I or any of its Restricted Subsidiaries (or the payment of which is guaranteed by CCH I or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the Issue Date, if that default: |
(a) is caused by a failure to pay at final stated maturity the principal amount on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or | |
(b) results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $100 million or more; |
(6) failure by CCH I or any of its Restricted Subsidiaries to pay final judgments which are nonappealable aggregating in excess of $100 million, net of applicable insurance which has not been denied in writing by the insurer, which judgments are not paid, discharged or stayed for a period of 60 days; | |
(7) CCH I or any of its Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy Law: |
(a) commences a voluntary case, | |
(b) consents to the entry of an order for relief against it in an involuntary case, | |
(c) consents to the appointment of a custodian of it or for all or substantially all of its property, or | |
(d) makes a general assignment for the benefit of its creditors; |
(8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: |
(a) is for relief against CCH I or any of its Significant Subsidiaries in an involuntary case; | |
(b) appoints a custodian of CCH I or any of its Significant Subsidiaries or for all or substantially all of the property of CCH I or any of its Significant Subsidiaries; or | |
(c) orders the liquidation of CCH I or any of its Significant Subsidiaries; and the order or decree remains unstayed and in effect for 60 consecutive days; or |
(9) so long as the Pledge Agreement has not otherwise been terminated in accordance with its terms, (a) failure by CCH I for 30 consecutive days after written notice thereof has been given to CCH I by the trustee or to CCH I and the trustee by holders of at least 25% of the aggregate |
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principal amount of the CCH I Notes outstanding to comply with any of CCH I’s covenants or agreements in the Pledge Agreement which failure adversely affects the enforceability, validity, perfection or priority of the trustee’s Lien on the Collateral or (b) repudiation or disaffirmation by CCH I of the Pledge Agreement. |
(1) the rights of holders of outstanding CCH I Notes to receive payments in respect of the principal of, premium, if any, and interest on the CCH I Notes when such payments are due from the trust referred to below; | |
(2) the Issuers’ obligations with respect to the CCH I Notes concerning issuing temporary CCH I Notes, registration of CCH I Notes, mutilated, destroyed, lost or stolen CCH I Notes and the maintenance of an office or agency for payment and money for security payments held in trust; | |
(3) the rights, powers, trusts, duties and immunities of the trustee, and the Issuers’ obligations in connection therewith; and | |
(4) the Legal Defeasance provisions of the CCH I Indenture. |
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(1) the Issuers or the Parent Guarantor must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the CCH I Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the outstanding CCH I Notes on the stated maturity or on the applicable redemption date, as the case may be, and the Issuers and the Parent Guarantor must specify whether the CCH I Notes will be defeased to maturity or to a particular redemption date; | |
(2) in the case of Legal Defeasance, the Issuers shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that |
(a) the Issuers and the Parent Guarantor have received from, or there has been published by, the Internal Revenue Service a ruling or | |
(b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the outstanding CCH I Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; |
(3) in the case of Covenant Defeasance, the Issuers or the Parent Guarantor shall have delivered to the trustee an opinion of counsel confirming that the holders of the outstanding CCH I Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; | |
(4) no Default or Event of Default under the CCH I Indenture shall have occurred and be continuing either (a) on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing); or (b) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; | |
(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the CCH I Indenture) to which the Issuers or any of their Restricted Subsidiaries is a party or by which the Issuers or any of their Restricted Subsidiaries is bound; | |
(6) the Issuers must have delivered to the trustee an opinion of counsel to the effect that after the 91st day, assuming no intervening bankruptcy, that no holder is an insider of either of the Issuers following the deposit and that such deposit would not be deemed by a court of competent jurisdiction a transfer for the benefit of the Issuers in their capacities as such, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally; |
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(7) the Issuers or the Parent Guarantor must deliver to the trustee an officers’ certificate stating that the deposit was not made by the Issuers with the intent of preferring the holders of the CCH I Notes over the other creditors of the Issuers or the Parent Guarantor with the intent of defeating, hindering, delaying or defrauding creditors of the Issuers, the Parent Guarantor or others; and | |
(8) the Issuers or the Parent Guarantor must deliver to the trustee an officers’ certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. |
(a) have become due and payable or | |
(b) will become due and payable on the maturity date or a redemption date within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of the Issuers. |
(1) reduce the principal amount of such CCH I Notes; | |
(2) change the fixed maturity of such CCH I Notes or reduce the premium payable upon redemption of such CCH I Notes; | |
(3) reduce the rate of or extend the time for payment of interest on such CCH I Notes; | |
(4) waive a Default or an Event of Default in the payment of principal of or premium, if any, or interest on the CCH I Notes (except a rescission of acceleration of the CCH I Notes by the holders of at least a majority in aggregate principal amount of the CCH I Notes and a waiver of the payment default that resulted from such acceleration); | |
(5) make such CCH I Notes payable in money other than that stated in such CCH I Notes; | |
(6) make any change in the provisions of the CCH I Indenture relating to waivers of past Defaults applicable to any CCH I Notes or the rights of holders thereof to receive payments of principal of, or premium, if any, or interest on such CCH I Notes; | |
(7) waive a redemption payment with respect to such CCH I Notes (other than a payment required by one of the covenants described above under the caption “— Repurchase at the Option of Holders”); or | |
(8) make any change in the preceding amendment and waiver provisions. |
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(1) to cure any ambiguity, defect or inconsistency; | |
(2) to provide for uncertificated CCH I Notes in addition to or in place of certificated CCH I Notes; | |
(3) to provide for or confirm the issuance of Additional CCH I Notes; | |
(4) to provide for the assumption of the Issuers’ or the Parent Guarantor’s obligations to holders of CCH I Notes in the case of a merger or consolidation or sale of all or substantially all of the Issuers’ assets; | |
(5) to release any Subsidiary Guarantee in accordance with the provisions of the CCH I Indenture; | |
(6) to make any change that would provide any additional rights or benefits to the holders of CCH I Notes or that does not adversely affect the legal rights under the CCH I Indenture of any such holder; | |
(7) to comply with requirements of the SEC in order to effect or maintain the qualification of the CCH I Indenture under the Trust Indenture Act or otherwise as necessary to comply with applicable law; or | |
(8) to provide for the issuance or incurrence of Pari Passu Secured Indebtedness in compliance with the provisions set forth in the CCH I Indenture and the Pledge Agreement as in effect on the Issue Date. |
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(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and | |
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. |
(1) an Investment by CCH I or any of its Restricted Subsidiaries in any other Person pursuant to which such Person shall become a Restricted Subsidiary of CCH I or any of its Restricted Subsidiaries or shall be merged with or into CCH I or any of its Restricted Subsidiaries, or | |
(2) the acquisition by CCH I or any of its Restricted Subsidiaries of the assets of any Person which constitute all or substantially all of the assets of such Person, any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business. |
(1) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of the Cable Related Business; provided that the sale, conveyance or other disposition of all or substantially all of the assets of CCH I and its Subsidiaries, taken as a whole, will be governed by the provisions of the CCH I Indenture described above under the caption “— Repurchase at the Option of Holders — Change of Control” and/or the provisions described above under the caption “— Certain Covenants — Merger, Consolidation, or Sale of Assets” and not by the provisions of the covenant described above under the caption “Repurchase at the Option of Holders — Asset Sales”; and | |
(2) the issuance of Equity Interests by any Restricted Subsidiary of CCH I or the sale by CCH I or any Restricted Subsidiary of CCH I of Equity Interests of any Restricted Subsidiary of CCH I. |
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(1) any single transaction or series of related transactions that: |
(a) involves assets having a fair market value of less than $100 million; or | |
(b) results in net proceeds to CCH I and its Restricted Subsidiaries of less than $100 million; |
(2) a transfer of assets between or among CCH I and/or its Restricted Subsidiaries; | |
(3) an issuance of Equity Interests by a Restricted Subsidiary of CCH I to CCH I or to another Wholly Owned Restricted Subsidiary of CCH I; | |
(4) a Restricted Payment that is permitted by the covenant described above under the caption “— Certain Covenants — Restricted Payments,” a Restricted Investment that is permitted by the covenant described above under the caption “— Certain Covenants — Investments” or a Permitted Investment; | |
(5) the incurrence of Liens not prohibited by the CCH I Indenture and the disposition of assets related to such Liens by the secured party pursuant to a foreclosure; and | |
(6) any disposition of cash or Cash Equivalents. |
(1) in the case of a corporation, corporate stock; | |
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; | |
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and |
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(4) any other interest (other than any debt obligation) or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. |
(x) as a contribution to the common equity capital or from the issue or sale of Equity Interests (other than Disqualified Stock and other than issuances or sales to a Subsidiary of CCH I) of CCH I after the Issue Date, or | |
(y) from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of CCH I that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of CCH I). |
(1) United States dollars; | |
(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition; | |
(3) certificates of deposit and eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having combined capital and surplus in excess of $500 million and a Thompson Bank Watch Rating at the time of acquisition of “B” or better; | |
(4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; | |
(5) commercial paper having a rating at the time of acquisition of at least “P-1” from Moody’s or at least “A-1” from S&P and in each case maturing within twelve months after the date of acquisition; | |
(6) corporate debt obligations maturing within twelve months after the date of acquisition thereof, rated at the time of acquisition at least “Aaa” or “P-1” by Moody’s or “AAA” or “A-1” by S&P; | |
(7) auction-rate Preferred Stocks of any corporation maturing not later than 45 days after the date of acquisition thereof, rated at the time of acquisition at least “Aaa” by Moody’s or “AAA” by S&P; | |
(8) securities issued by any state, commonwealth or territory of the United States, or by any political subdivision or taxing authority thereof, maturing not later than six months after the date of acquisition thereof, rated at the time of acquisition at least “A” by Moody’s or S&P; and | |
(9) money market or mutual funds at least 90% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (8) of this definition. |
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(1) the sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of CCH I and its Subsidiaries, taken as a whole, or of a Parent and its Subsidiaries, taken as a whole, to any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) other than Paul G. Allen and the Related Parties; | |
(2) the adoption of a plan relating to the liquidation or dissolution of CCH I or a Parent (except the liquidation of any Parent into any other Parent); | |
(3) the consummation of any transaction, including, without limitation, any merger or consolidation, the result of which is that any “person” (as defined above) other than Paul G. Allen and Related Parties becomes the Beneficial Owner, directly or indirectly, of more than 35% of the Voting Stock of CCH I or a Parent, measured by voting power rather than the number of shares, unless Paul G. Allen or a Related Party Beneficially Owns, directly or indirectly, a greater percentage of Voting Stock of CCH I or such Parent, as the case may be, measured by voting power rather than the number of shares, than such person; | |
(4) after the Issue Date, the first day on which a majority of the members of the Board of Directors of CCI are not Continuing Directors; | |
(5) CCH I or a Parent consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, CCH I or a Parent, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of CCH I or such Parent is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of CCH I or such Parent outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person immediately after giving effect to such issuance; or | |
(6) (i) Charter Communications Holdings Company, LLC shall cease to own beneficially, directly or indirectly, 100% of the Capital Stock of Charter Holdings or (ii) Charter Holdings shall cease to own beneficially, directly or indirectly, 100% of the Capital Stock of CCH I. |
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(1) the principal amount (or accreted value, if applicable) of such Charter Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of, plus accrued interest and premium, if any, on the Indebtedness so extended, refinanced, renewed, replaced, defeased, purchased, acquired or refunded (plus the amount of reasonable fees, commissions and expenses incurred in connection therewith); and | |
(2) such Charter Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased, purchased, acquired or refunded. |
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(1) Consolidated Interest Expense; | |
(2) income taxes; | |
(3) depreciation expense; | |
(4) amortization expense; | |
(5) all other non-cash items, extraordinary items and nonrecurring and unusual items (including without limitation any restructuring charges and charges related to litigation settlements or judgments) and the cumulative effects of changes in accounting principles reducing such net income, less all noncash items, extraordinary items, nonrecurring and unusual items and cumulative effects of changes in accounting principles increasing such net income; | |
(6) amounts actually paid during such period pursuant to a deferred compensation plan; and | |
(7) for purposes of the covenant described above under the caption “— Incurrence of Indebtedness and Issuance of Preferred Stock,” Management Fees; all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in conformity with GAAP,providedthat Consolidated EBITDA shall not include: |
(x) the net income (or net loss) of any Person that is not a Restricted Subsidiary (“Other Person”), except |
(i) with respect to net income, to the extent of the amount of dividends or other distributions actually paid to such Person or any of its Restricted Subsidiaries by such Other Person during such period; and | |
(ii) with respect to net losses, to the extent of the amount of investments made by such Person or any Restricted Subsidiary of such Person in such Other Person during such period; |
(y) solely for the purposes of calculating the amount of Restricted Payments that may be made pursuant to the second clause (3) in the first paragraph of the covenant described under the caption “— Certain Covenants — Restricted Payments” (and in such case, except to the extent includable pursuant to clause (x) above), the net income (or net loss) of any Other Person accrued prior to the date it becomes a Restricted Subsidiary or is merged into or consolidated with such Person or any Restricted Subsidiaries or all or substantially all of the property and assets of such Other Person are acquired by such Person or any of its Restricted Subsidiaries; and | |
(z) the net income of any Restricted Subsidiary of CCH I to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of such net income is not at the time of determination of such Consolidated EBITDA permitted by the operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Restricted Subsidiary (other than any agreement or instrument evidencing Indebtedness or Preferred Stock (i) outstanding on the Issue Date or (ii) incurred or issued thereafter in compliance with the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”;providedthat (a) the terms of any such agreement or instrument (other than Existing Indebtedness and any modifications, increases or refinancings that are not materially more restrictive taken as a whole) restricting the declaration and payment of dividends or similar distributions apply only in the event of a default with respect to a financial covenant or a covenant relating to payment, beyond any applicable period of grace, contained in such agreement or instrument; (b) such terms are determined by such Person to be customary in |
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comparable financings; and (c) such restrictions are determined by CCH I not to materially affect the Issuers’ ability to make principal or interest payments on the applicable CCH I Notes when due). |
(1) the total amount of outstanding Indebtedness of such Person and its Restricted Subsidiaries, plus | |
(2) the total amount of Indebtedness of any other Person that has been Guaranteed by the referent Person or one or more of its Restricted Subsidiaries, plus | |
(3) the aggregate liquidation value of all Disqualified Stock of such Person and all Preferred Stock of Restricted Subsidiaries of such Person, in each case, determined on a consolidated basis in accordance with GAAP. |
(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization or original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net payments (if any) pursuant to Hedging Obligations); and | |
(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; and | |
(3) any interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon); |
in each case, on a consolidated basis and in accordance with GAAP, excluding, however, any amount of such interest of any Restricted Subsidiary of the referent Person if the net income of such Restricted Subsidiary is excluded in the calculation of Consolidated EBITDA pursuant to clause (z) of the definition thereof (but only in the same proportion as the net income of such Restricted Subsidiary is excluded from the calculation of Consolidated EBITDA pursuant to clause (z) of the definition thereof). |
(1) was a member of the Board of Directors of CCI on the Issue Date; or | |
(2) was nominated for election or elected to the Board of Directors of CCI with the approval of a majority of the Continuing Directors who were members of such Board of Directors of CCI at the time of such nomination or election or whose election or appointment was previously so approved. |
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(1) the acquisition by CIH and CCH I of Indebtedness outstanding under the Charter Holdings Indentures, in exchange for CIH Notes and CCH I Notes, pursuant to the Offering Memorandum dated August 23, 2005 and related documents, as such documents may be supplemented, modified, extended or mended from time to time; and | |
(2) the distribution, loan or investment of (a) Indebtedness accepted in exchange for CIH Notes or CCH I Notes as contemplated by clause (1) of this definition, and (b) amounts sufficient to satisfy the expenses incurred by any Parent in connection therewith (including any required payment of accrued interest thereon), in each case, directly or indirectly to or in any Parent;provided, that any such Indebtedness referred to in clauses (1) and (2) of this definition shall be cancelled as part of the Exchange Offers. |
(1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; |
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(2) interest rate option agreements, foreign currency exchange agreements, foreign currency swap agreements; and | |
(3) other agreements or arrangements designed to protect such Person against fluctuations in interest and currency exchange rates. |
(1) in respect of borrowed money; | |
(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); | |
(3) in respect of banker’s acceptances; | |
(4) representing Capital Lease Obligations; | |
(5) in respect of the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or | |
(6) representing the notional amount of any Hedging Obligations, |
(1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and | |
(2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. |
(1) the Consolidated Indebtedness of CCH I on such date to | |
(2) the aggregate amount of Consolidated EBITDA for CCH I for the most recently ended fiscal quarter for which internal financial statements are available (the “Reference Period”), multiplied by four. |
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(1) the issuance of the CCH I Notes; | |
(2) the incurrence of the Indebtedness or the issuance of the Disqualified Stock by CCH I or a Restricted Subsidiary or Preferred Stock of a Restricted Subsidiary (and the application of the proceeds therefrom) giving rise to the need to make such calculation and any incurrence or issuance (and the application of the proceeds therefrom) or repayment of other Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary, other than the incurrence or repayment of Indebtedness for ordinary working capital purposes, at any time subsequent to the beginning of the Reference Period and on or prior to the date of determination, as if such incurrence (and the application of the proceeds thereof), or the repayment, as the case may be, occurred on the first day of the Reference Period; and | |
(3) any Dispositions or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any person that becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring, assuming or otherwise becoming liable for or issuing Indebtedness, Disqualified Stock or Preferred Stock) made on or subsequent to the first day of the Reference Period and on or prior to the date of determination, as if such Disposition or Asset Acquisition (including the incurrence, assumption or liability for any such Indebtedness, Disqualified Stock or Preferred Stock and also including any Consolidated EBITDA associated with such Asset Acquisition, including any cost savings adjustments in compliance with Regulation S-X promulgated by the SEC) had occurred on the first day of the Reference Period. |
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(1) as to which neither CCH I nor any of its Restricted Subsidiaries |
(a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness); | |
(b) is directly or indirectly liable as a guarantor or otherwise; or | |
(c) constitutes the lender; |
(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the CCH I Notes) of CCH I or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and | |
(3) as to which the lenders have been notified in writing that they will not have any recourse to the Capital Stock or assets of CCH I or any of its Restricted Subsidiaries. |
(1) any Investment by CCH I in a Restricted Subsidiary thereof, or any Investment by a Restricted Subsidiary of CCH I in CCH I or in another Restricted Subsidiary of CCH I; | |
(2) any Investment in Cash Equivalents; | |
(3) any Investment by CCH I or any of its Restricted Subsidiaries in a Person, if as a result of such Investment: |
(a) such Person becomes a Restricted Subsidiary of CCH I; or | |
(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, CCH I or a Restricted Subsidiary of CCH I; |
(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “— Repurchase at the Option of Holders — Asset Sales”; |
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(5) any Investment made out of the net cash proceeds of the issue and sale (other than to a Subsidiary of CCH I) of Equity Interests (other than Disqualified Stock) or cash contributions to the common equity of CCH I, in each case after the Issue Date, to the extent that such net cash proceeds have not been applied to make a Restricted Payment or to effect other transactions pursuant to the covenant described under “Certain Covenants — Restricted Payments” (with the amount of usage of the basket in this clause (5) being determined net of the aggregate amount of principal, interest, dividends, distributions, repayments, proceeds or other value otherwise returned or recovered in respect of any such Investment, but not to exceed the initial amount of such Investment); | |
(6) other Investments in any Person (other than any Parent) having an aggregate fair market value when taken together with all other Investments in any Person made by CCH I and its Restricted Subsidiaries (without duplication) pursuant to this clause (6) from and after the Issue Date, not to exceed $750 million (initially measured on the date each such Investment was made and without giving effect to subsequent changes in value, but reducing the amount outstanding by the aggregate amount of principal, interest, dividends, distributions, repayments, proceeds or other value otherwise returned or recovered in respect of any such Investment, but not to exceed the initial amount of such Investment) at any one time outstanding; | |
(7) Investments in customers and suppliers in the ordinary course of business which either |
(A) generate accounts receivable, or | |
(B) are accepted in settlement of bona fide disputes; |
(8) Investments consisting of payments by CCH I or any of its subsidiaries of amounts that are neither dividends nor distributions but are payments of the kind described in clause (4) of the second paragraph of the covenant described above under the caption “— Certain Covenants — Restricted Payments” to the extent such payments constitute Investments; | |
(9) regardless of whether a Default then exists, Investments in any Unrestricted Subsidiary made by CCH I and/or any of its Restricted Subsidiaries with the proceeds of distributions from any Unrestricted Subsidiary; and | |
(10) Investments that are part of the Exchange Offers. |
(1) Liens on the assets of CCH I securing Pari Passu Secured Indebtedness,providedany such Liens rank equally and ratably with the Lien securing the Obligations under the CCH I Notes; | |
(2) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with CCH I;providedthat such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with CCH I and related assets, such as the proceeds thereof; | |
(3) Liens on property existing at the time of acquisition thereof by CCH I;providedthat such Liens were in existence prior to the contemplation of such acquisition; | |
(4) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; | |
(5) purchase money mortgages or other purchase money Liens (including, without limitation, any Capitalized Lease Obligations) incurred by CCH I upon any fixed or capital assets acquired after the Issue Date or purchase money mortgages (including, without limitation, Capital Lease Obligations) on any such assets, whether or not assumed, existing at the time of acquisition of such assets, whether or not assumed, so long as |
(a) such mortgage or lien does not extend to or cover any of the assets of CCH I, except the asset so developed, constructed, or acquired, and directly related assets such as enhancements |
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and modifications thereto, substitutions, replacements, proceeds (including insurance proceeds), products, rents and profits thereof, and | |
(b) such mortgage or lien secures the obligation to pay all or a portion of the purchase price of such asset, interest thereon and other charges, costs and expenses (including, without limitation, the cost of design, development, construction, acquisition, transportation, installation, improvement, and migration) and is incurred in connection therewith (or the obligation under such Capitalized Lease Obligation) only; |
(6) Liens existing on the Issue Date (other than on the Collateral) and replacement Liens therefore that do not encumber additional property; | |
(7) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded;providedthat any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; | |
(8) statutory and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; | |
(9) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security; | |
(10) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligation, bankers’ acceptance, surety and appeal bonds, government contracts, performance andreturn-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); | |
(11) easements,rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that do not materially interfere with the ordinary course of business of CCH I or any of its Restricted Subsidiaries; | |
(12) Liens of franchisors or other regulatory bodies arising in the ordinary course of business; | |
(13) Liens arising from filing Uniform Commercial Code financing statements regarding leases or other Uniform Commercial Code financing statements for precautionary purposes relating to arrangements not constituting Indebtedness; | |
(14) Liens arising from the rendering of a final judgment or order against CCH I or any of its Restricted Subsidiaries that does not give rise to an Event of Default; | |
(15) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof; | |
(16) Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business, in each case, securing Indebtedness under Hedging Obligations and forward contracts, options, future contracts, future options or similar agreements or arrangements designed solely to protect CCH I or any of its Restricted Subsidiaries from fluctuations in interest rates, currencies or the price of commodities; | |
(17) Liens consisting of any interest or title of licensor in the property subject to a license; | |
(18) Liens on the Capital Stock of Unrestricted Subsidiaries; | |
(19) Liens arising from sales or other transfers of accounts receivable which are past due or otherwise doubtful of collection in the ordinary course of business; |
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(20) Liens incurred in the ordinary course of business of CCH I and its Restricted Subsidiaries with respect to obligations which in the aggregate do not exceed $50 million at any one time outstanding; | |
(21) Liens in favor of the trustee arising under the CCH I Indenture and similar provisions in favor of trustees or other agents or representatives under indentures or other agreements governing debt instruments entered into after the date hereof; | |
(22) Liens in favor of the trustee for its benefit and the benefit of holders of the CCH I Notes, as their respective interests appear; and | |
(23) Liens securing Permitted Refinancing Indebtedness, to the extent that the Indebtedness being refinanced was secured or was permitted to be secured by such Liens. |
(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable) plus accrued interest and premium, if any, on the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith), except to the extent that any such excess principal amount (or accreted value, as applicable) would be then permitted to be incurred by other provisions of the covenant described above under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock”; | |
(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and | |
(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the CCH I Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the CCH I Notes on terms at least as favorable to the holders of CCH I Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. |
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(1) any corporation, association or other business entity of which at least 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof) and, in the case of any such entity of which 50% of the total voting power of shares of Capital Stock is so owned or controlled by such Person or one or more of the other Subsidiaries of such Person, such Person and its Subsidiaries also have the right to control the management of such entity pursuant to contract or otherwise; and | |
(2) any partnership |
(a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person, or | |
(b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof). |
(1) has no Indebtedness other than Non-Recourse Debt; | |
(2) is not party to any agreement, contract, arrangement or understanding with CCH I or any Restricted Subsidiary of CCH I unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to CCH I or such Restricted Subsidiary of CCH I than those that might be obtained at the time from Persons who are not Affiliates of CCH I unless such terms constitute Investments permitted by the covenant described above under the caption “— Certain |
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Covenants — Investments,” Permitted Investments, Asset Sales permitted under the covenant described above under the caption “— Repurchase at the Option of the Holders — Asset Sales” or sale-leaseback transactions permitted by the covenant described above under the caption “— Certain Covenants — Sale and Leaseback Transactions”; | |
(3) is a Person with respect to which neither CCH I nor any of its Restricted Subsidiaries has any direct or indirect obligation |
(a) to subscribe for additional Equity Interests or | |
(b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; |
(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of CCH I or any of its Restricted Subsidiaries; and | |
(5) does not own any Capital Stock of any Restricted Subsidiary of CCH I. |
(1) such Indebtedness is permitted under the covenant described under the caption “— Certain Covenants — Incurrence of Indebtedness and Issuance of Preferred Stock,” calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and | |
(2) no Default or Event of Default would be in existence immediately following such designation. |
(1) the sum of the products obtained by multiplying |
(a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by | |
(b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by |
(2) the then outstanding principal amount of such Indebtedness. |
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Exchange Offer |
(1) no gain or loss will be realized by a U.S. Holder upon receipt of a new note, | |
(2) the holding period of the new note will include the holding period of the outstanding note exchanged therefor, | |
(3) the adjusted tax basis of the new notes will be the same as the adjusted tax basis of the outstanding notes exchanged at the time of the exchange, and | |
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(4) the U.S. Holder will continue to take into account income in respect of the new note in the same manner as before the exchange. |
Payments of Interest on the New CCH 1 Notes |
Payments of Interest and Original Issue Discount on the CIH Notes |
(1) the product of |
(a) | the “adjusted issue price” at the beginning of such accrual period and | |
(b) | the “yield to maturity” of the instrument stated in a manner appropriately taking into account the length of the accrual period, | |
(2) less the amount of any qualified stated interest allocable to the accrual period. |
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Sale, Redemption, Retirement or Other Taxable Disposition of the New Notes |
Market Discount |
Amortizable Bond Premium |
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Information Reporting and Backup Withholding |
Exchange Offer |
Payments of Interest |
(1) the interest is not effectively connected with the conduct of a trade or business in the United States; | |
(2) theNon-U.S. Holder (A) does not actually or constructively own 10 percent or more of the combined voting power of all classes of stock of CCO Holdings Capital entitled to vote nor 10 percent or more of the capital or profits interests of Charter Communications Holding Company, LLC and (B) is neither a controlled foreign corporation that is related to us through stock ownership within the meaning of the Code, nor a bank that received the new notes on an extension of credit in the ordinary course of its trade or business; and | |
(3) either (A) the beneficial owner of the new notes certifies to us or our paying agent, under penalties of perjury, that it is not a U.S. Holder and provides its name and address on Internal Revenue Service Form W-8BEN (or a suitable substitute form) or (B) a securities clearing organization, bank or other financial institution that holds the new notes on behalf of suchNon-U.S. Holder in the ordinary course of its trade or business (a “financial institution”) certifies under penalties of perjury that such an Internal Revenue Service Form W-8BEN orW-8IMY (or suitable substitute form) has been received from the beneficial owner by it or by a financial | |
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institution between it and the beneficial owner and, in case of a non-qualified intermediary, furnishes the payor with a copy thereof. |
Sale, Redemption, Retirement or Other Taxable Disposition of New Notes |
(1) such gain is effectively connected with the conduct by such holder of a trade or business in the United States, and, where an income tax treaty applies, the gain is attributable to a permanent establishment maintained in the United States or, in the case of an individual, a fixed base in the United States, or | |
(2) in the case of gains derived by an individual, such individual is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions are met. | |
Information Reporting and Backup Withholding |
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F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
Unaudited Financial Statements: | ||||
F-61 | ||||
F-62 | ||||
F-63 | ||||
F-64 |
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/s/ KPMG LLP |
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December 31, | ||||||||||||
2004 | 2003 | |||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 546 | $ | 85 | ||||||||
Accounts receivable, less allowance for doubtful accounts of $15 and $17, respectively | 186 | 189 | ||||||||||
Receivables from related party | — | 56 | ||||||||||
Prepaid expenses and other current assets | 20 | 21 | ||||||||||
Total current assets | 752 | 351 | ||||||||||
INVESTMENT IN CABLE PROPERTIES: | ||||||||||||
Property, plant and equipment, net of accumulated depreciation of $5,142 and $3,834, respectively | 6,110 | 6,808 | ||||||||||
Franchises | 9,878 | 13,680 | ||||||||||
Total investment in cable properties, net | 15,988 | 20,488 | ||||||||||
OTHER NONCURRENT ASSETS | 344 | 309 | ||||||||||
Total assets | $ | 17,084 | $ | 21,148 | ||||||||
LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Accounts payable and accrued expenses | $ | 1,112 | $ | 1,179 | ||||||||
Payables to related party | 19 | — | ||||||||||
Total current liabilities | 1,131 | 1,179 | ||||||||||
LONG-TERM DEBT | 18,474 | 17,873 | ||||||||||
LOANS PAYABLE — RELATED PARTY | 29 | 37 | ||||||||||
DEFERRED MANAGEMENT FEES — RELATED PARTY | 14 | 14 | ||||||||||
OTHER LONG-TERM LIABILITIES | 493 | 687 | ||||||||||
MINORITY INTEREST | 656 | 719 | ||||||||||
MEMBER’S EQUITY (DEFICIT): | ||||||||||||
Member’s equity (deficit) | (3,698 | ) | 696 | |||||||||
Accumulated other comprehensive loss | (15 | ) | (57 | ) | ||||||||
Total member’s equity (deficit) | (3,713 | ) | 639 | |||||||||
Total liabilities and member’s equity (deficit) | $ | 17,084 | $ | 21,148 | ||||||||
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Year Ended December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
REVENUES | $ | 4,977 | $ | 4,819 | $ | 4,566 | ||||||||
COSTS AND EXPENSES: | ||||||||||||||
Operating (excluding depreciation and amortization) | 2,080 | 1,952 | 1,807 | |||||||||||
Selling, general and administrative | 971 | 940 | 963 | |||||||||||
Depreciation and amortization | 1,495 | 1,453 | 1,436 | |||||||||||
Impairment of franchises | 2,433 | — | 4,638 | |||||||||||
(Gain) loss on sale of fixed assets | (86 | ) | 5 | 3 | ||||||||||
Option compensation expense, net | 31 | 4 | 5 | |||||||||||
Special charges, net | 104 | 21 | 36 | |||||||||||
Unfavorable contracts and other settlements | (5 | ) | (72 | ) | — | |||||||||
7,023 | 4,303 | 8,888 | ||||||||||||
Income (loss) from operations | (2,046 | ) | 516 | (4,322 | ) | |||||||||
OTHER INCOME AND EXPENSES: | ||||||||||||||
Interest expense, net | (1,618 | ) | (1,486 | ) | (1,425 | ) | ||||||||
Gain (loss) on derivative instruments and hedging activities, net | 69 | 65 | (115 | ) | ||||||||||
Gain (loss) on extinguishment of debt | (21 | ) | 187 | — | ||||||||||
Other, net | 2 | (10 | ) | 3 | ||||||||||
(1,568 | ) | (1,244 | ) | (1,537 | ) | |||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (3,614 | ) | (728 | ) | (5,859 | ) | ||||||||
MINORITY INTEREST | 20 | (29 | ) | (16 | ) | |||||||||
Loss before income taxes and cumulative effect of accounting change | (3,594 | ) | (757 | ) | (5,875 | ) | ||||||||
INCOME TAX BENEFIT (EXPENSE) | 35 | (13 | ) | 216 | ||||||||||
Loss before cumulative effect of accounting change | (3,559 | ) | (770 | ) | (5,659 | ) | ||||||||
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX | (840 | ) | — | (540 | ) | |||||||||
Net loss | $ | (4,399 | ) | $ | (770 | ) | $ | (6,199 | ) | |||||
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Accumulated | |||||||||||||
Other | Total | ||||||||||||
Member’s | Comprehensive | Member’s | |||||||||||
Equity | Income | Equity | |||||||||||
(Deficit) | (Loss) | (Deficit) | |||||||||||
BALANCE, December 31, 2001 | $ | 8,162 | $ | (40 | ) | $ | 8,122 | ||||||
Capital contribution | 95 | — | 95 | ||||||||||
Distributions to parent company | (52 | ) | — | (52 | ) | ||||||||
Changes in fair value of interest rate agreements | — | (65 | ) | (65 | ) | ||||||||
Other, net | 5 | — | 5 | ||||||||||
Net loss | (6,199 | ) | — | (6,199 | ) | ||||||||
BALANCE, December 31, 2002 | 2,011 | (105 | ) | 1,906 | |||||||||
Distributions to parent company | (548 | ) | — | (548 | ) | ||||||||
Changes in fair value of interest rate agreements | — | 48 | 48 | ||||||||||
Other, net | 3 | — | 3 | ||||||||||
Net loss | (770 | ) | — | (770 | ) | ||||||||
BALANCE, December 31, 2003 | 696 | (57 | ) | 639 | |||||||||
Changes in fair value of interest rate agreements | — | 42 | 42 | ||||||||||
Other, net | 5 | — | 5 | ||||||||||
Net loss | (4,399 | ) | — | (4,399 | ) | ||||||||
BALANCE, December 31, 2004 | $ | (3,698 | ) | $ | (15 | ) | $ | (3,713 | ) | ||||
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Year Ended December 31, | |||||||||||||||
2004 | 2003 | 2002 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net loss | $ | (4,399 | ) | $ | (770 | ) | $ | (6,199 | ) | ||||||
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||||||||||
Minority interest | (20 | ) | 29 | 16 | |||||||||||
Depreciation and amortization | 1,495 | 1,453 | 1,436 | ||||||||||||
Impairment of franchises | 2,433 | — | 4,638 | ||||||||||||
Option compensation expense, net | 27 | 4 | 5 | ||||||||||||
Special charges, net | 85 | — | — | ||||||||||||
Noncash interest expense | 315 | 410 | 387 | ||||||||||||
(Gain) loss on derivative instruments and hedging activities, net | (69 | ) | (65 | ) | 115 | ||||||||||
(Gain) loss on sale of assets | (86 | ) | 5 | 3 | |||||||||||
(Gain) loss on extinguishment of debt | 18 | (187 | ) | — | |||||||||||
Deferred income taxes | (42 | ) | 13 | (216 | ) | ||||||||||
Cumulative effect of accounting change, net | 840 | — | 540 | ||||||||||||
Unfavorable contracts and other settlements | (5 | ) | (72 | ) | — | ||||||||||
Other, net | (3 | ) | — | — | |||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | |||||||||||||||
Accounts receivable | (3 | ) | 62 | 18 | |||||||||||
Prepaid expenses and other assets | (4 | ) | 13 | 19 | |||||||||||
Accounts payable, accrued expenses and other | (83 | ) | (109 | ) | 58 | ||||||||||
Receivables from and payables to related party, including deferred management fees | (68 | ) | (40 | ) | (79 | ) | |||||||||
Net cash flows from operating activities | 431 | 746 | 741 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Purchases of property, plant and equipment | (893 | ) | (804 | ) | (2,095 | ) | |||||||||
Change in accrued expenses related to capital expenditures | (33 | ) | (41 | ) | (49 | ) | |||||||||
Proceeds from sale of systems | 744 | 91 | — | ||||||||||||
Payments for acquisitions, net of cash acquired | — | — | (140 | ) | |||||||||||
Purchases of investments | (6 | ) | (8 | ) | (10 | ) | |||||||||
Other, net | (3 | ) | (3 | ) | 2 | ||||||||||
Net cash flows from investing activities | (191 | ) | (765 | ) | (2,292 | ) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Borrowings of long-term debt | 3,147 | 739 | 4,107 | ||||||||||||
Repayments of long-term debt | (4,860 | ) | (1,369 | ) | (2,135 | ) | |||||||||
Repayments to parent companies | (8 | ) | (36 | ) | (116 | ) | |||||||||
Proceeds from issuance of long-term debt | 2,050 | 529 | — | ||||||||||||
Payments for debt issuance costs | (108 | ) | (42 | ) | (40 | ) | |||||||||
Capital contributions | — | — | 95 | ||||||||||||
Distributions | — | (27 | ) | (52 | ) | ||||||||||
Net cash flows from financing activities | 221 | (206 | ) | 1,859 | |||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 461 | (225 | ) | 308 | |||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 85 | 310 | 2 | ||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 546 | $ | 85 | $ | 310 | |||||||||
CASH PAID FOR INTEREST | $ | 1,264 | $ | 1,069 | $ | 1,033 | |||||||||
NONCASH TRANSACTIONS: | |||||||||||||||
Issuance of debt by CCH II, LLC | $ | — | $ | 1,572 | $ | — | |||||||||
Retirement of debt | — | 1,257 | — | ||||||||||||
CCH II, LLC notes distributed to retire parent company debt | — | 521 | — |
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1. | Organization and Basis of Presentation |
Reclassifications |
2. | Liquidity and Capital Resources |
F-7
Table of Contents
Credit Facilities and Covenants |
Parent Company Debt Obligations |
F-8
Table of Contents
Specific Limitations at Charter Holdings |
Sale of Assets |
F-9
Table of Contents
3. | Summary of Significant Accounting Policies |
Cash Equivalents |
Property, Plant and Equipment |
Cable distribution systems | 7-20 years | |||
Customer equipment and installations | 3-5 years | |||
Vehicles and equipment | 1-5 years | |||
Buildings and leasehold improvements | 5-15 years | |||
Furniture and fixtures | 5 years |
Franchises |
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Other Noncurrent Assets |
Carrying | Gain (loss) for the | |||||||||||||||||||
Value at | Years Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2004 | 2003 | 2004 | 2003 | 2002 | ||||||||||||||||
Equity investments, under the cost method | $ | 8 | $ | 30 | $ | (3 | ) | $ | (2 | ) | $ | — | ||||||||
Equity investments, under the equity method | 24 | 10 | 6 | 2 | (2 | ) | ||||||||||||||
Marketable securities, at market value | — | — | — | — | 2 | |||||||||||||||
$ | 32 | $ | 40 | $ | 3 | $ | — | $ | — | |||||||||||
Valuation of Property, Plant and Equipment |
Derivative Financial Instruments |
F-11
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Revenue Recognition |
Programming Costs |
Advertising Costs |
Stock-Based Compensation |
F-12
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Year Ended December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
Net loss | $ | (4,399 | ) | $ | (770 | ) | $ | (6,199 | ) | ||||
Add back stock-based compensation expense related to stock options included in reported net loss | 31 | 4 | 5 | ||||||||||
Less employee stock-based compensation expense determined under fair value based method for all employee stock option awards | (33 | ) | (30 | ) | (105 | ) | |||||||
Effects of unvested options in stock option exchange (see Note 16) | 48 | — | — | ||||||||||
Pro forma | $ | (4,353 | ) | $ | (796 | ) | $ | (6,299 | ) | ||||
Unfavorable Contracts and Other Settlements |
Income Taxes |
F-13
Table of Contents
Minority Interest |
Segments |
4. | Acquisitions |
F-14
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5. | Allowance for Doubtful Accounts |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Balance, beginning of year | $ | 17 | $ | 19 | $ | 33 | ||||||
Charged to expense | 92 | 79 | 108 | |||||||||
Uncollected balances written off, net of recoveries | (94 | ) | (81 | ) | (122 | ) | ||||||
Balance, end of year | $ | 15 | $ | 17 | $ | 19 | ||||||
6. | Property, Plant and Equipment |
2004 | 2003 | |||||||
Cable distribution systems | $ | 6,555 | $ | 6,304 | ||||
Customer equipment and installations | 3,497 | 3,157 | ||||||
Vehicles and equipment | 419 | 415 | ||||||
Buildings and leasehold improvements | 518 | 524 | ||||||
Furniture and fixtures | 263 | 242 | ||||||
11,252 | 10,642 | |||||||
Less: accumulated depreciation | (5,142 | ) | (3,834 | ) | ||||
$ | 6,110 | $ | 6,808 | |||||
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7. | Franchises and Goodwill |
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December 31, | |||||||||||||||||||||||||
2004 | 2003 | ||||||||||||||||||||||||
Gross | Net | Gross | Net | ||||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | ||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
Franchises with indefinite lives | $ | 9,845 | $ | — | $ | 9,845 | $ | 13,606 | $ | — | $ | 13,606 | |||||||||||||
Goodwill | 52 | — | 52 | 52 | — | 52 | |||||||||||||||||||
$ | 9,897 | $ | — | $ | 9,897 | $ | 13,658 | $ | — | $ | 13,658 | ||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Franchises with finite lives | $ | 37 | $ | 4 | $ | 33 | $ | 107 | $ | 33 | $ | 74 | |||||||||||||
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8. | Accounts Payable and Accrued Expenses |
2004 | 2003 | ||||||||
Accounts payable — trade | $ | 140 | $ | 150 | |||||
Accrued capital expenditures | 60 | 93 | |||||||
Accrued expenses: | |||||||||
Interest | 310 | 270 | |||||||
Programming costs | 278 | 319 | |||||||
Franchise related fees | 67 | 70 | |||||||
State sales tax | 47 | 61 | |||||||
Other | 210 | 216 | |||||||
$ | 1,112 | $ | 1,179 | ||||||
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9. | Long-Term Debt |
2004 | 2003 | ||||||||||||||||
Face | Accreted | Face | Accreted | ||||||||||||||
Value | Value | Value | Value | ||||||||||||||
Long-Term Debt | |||||||||||||||||
Charter Holdings: | |||||||||||||||||
8.250% senior notes due 2007 | $ | 451 | $ | 451 | $ | 451 | $ | 450 | |||||||||
8.625% senior notes due 2009 | 1,244 | 1,243 | 1,244 | 1,242 | |||||||||||||
9.920% senior discount notes due 2011 | 1,108 | 1,108 | 1,108 | 1,082 | |||||||||||||
10.000% senior notes due 2009 | 640 | 640 | 640 | 640 | |||||||||||||
10.250% senior notes due 2010 | 318 | 318 | 318 | 318 | |||||||||||||
11.750% senior discount notes due 2010 | 450 | 448 | 450 | 400 | |||||||||||||
10.750% senior notes due 2009 | 874 | 874 | 874 | 873 | |||||||||||||
11.125% senior notes due 2011 | 500 | 500 | 500 | 500 | |||||||||||||
13.500% senior discount notes due 2011 | 675 | 589 | 675 | 517 | |||||||||||||
9.625% senior notes due 2009 | 640 | 638 | 640 | 638 | |||||||||||||
10.000% senior notes due 2011 | 710 | 708 | 710 | 708 | |||||||||||||
11.750% senior discount notes due 2011 | 939 | 803 | 939 | 717 | |||||||||||||
12.125% senior discount notes due 2012 | 330 | 259 | 330 | 231 | |||||||||||||
CCH II, LLC: | |||||||||||||||||
10.250% senior notes due 2010 | 1,601 | 1,601 | 1,601 | 1,601 | |||||||||||||
CCO Holdings, LLC: | |||||||||||||||||
83/4% senior notes due 2013 | 500 | 500 | 500 | 500 | |||||||||||||
Senior floating rate notes due 2010 | 550 | 550 | — | — | |||||||||||||
Charter Operating: | |||||||||||||||||
8% senior second-lien notes due 2012 | 1,100 | 1,100 | — | — | |||||||||||||
83/8% senior second-lien notes due 2014 | 400 | 400 | — | — | |||||||||||||
Renaissance Media Group LLC: | |||||||||||||||||
10.000% senior discount notes due 2008 | 114 | 116 | 114 | 116 | |||||||||||||
CC V Holdings, LLC: | |||||||||||||||||
11.875% senior discount notes due 2008 | 113 | 113 | 113 | 113 | |||||||||||||
Credit Facilities | |||||||||||||||||
Charter Operating | 5,515 | 5,515 | 4,459 | 4,459 | |||||||||||||
CC VI Operating | — | — | 868 | 868 | |||||||||||||
Falcon Cable | — | — | 856 | 856 | |||||||||||||
CC VIII Operating | — | — | 1,044 | 1,044 | |||||||||||||
$ | 18,772 | $ | 18,474 | $ | 18,434 | $ | 17,873 | ||||||||||
F-19
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F-20
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F-21
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F-22
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F-23
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CCO Holdings Notes. |
83/4% Senior Notes due 2013 |
Senior Floating Rate Notes Due 2010 |
F-24
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• | a senior obligation of such guarantor; | |
• | structurally senior to the outstanding senior notes of CCO Holdings and CCO Holdings Capital Corp. (except in the case of CCO Holdings’ note guarantee, which ranks equally with such senior notes), the outstanding senior notes of CCH II and CCH II Capital Corp., the outstanding senior notes and senior discount notes of Charter Holdings, the outstanding convertible senior notes of Charter and any future indebtedness of parent companies of CCO Holdings (but subject to provisions in the Charter Operating indenture that permit interest and, subject to meeting the 4.25 to 1.0 leverage ratio test, principal payments to be made thereon); and | |
• | senior in right of payment to any future subordinated indebtedness of such guarantor. |
F-25
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• | incur additional debt; | |
• | pay dividends on equity or repurchase equity; | |
• | make investments; | |
• | sell all or substantially all of their assets or merge with or into other companies; | |
• | sell assets; | |
• | enter into sale-leasebacks; | |
• | in the case of restricted subsidiaries, create or permit to exist dividend or payment restrictions with respect to the bond issuers, guarantee their parent companies debt, or issue specified equity interests; | |
• | engage in certain transactions with affiliates; and | |
• | grant liens. |
F-26
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F-27
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• | the failure to make payments when due or within the applicable grace period, | |
• | the failure to comply with specified covenants, including but not limited to a covenant to deliver audited financial statements with an unqualified opinion from the Company’s independent auditors, | |
• | the failure to pay or the occurrence of events that cause or permit the acceleration of other indebtedness owing by CCO Holdings, Charter Operating or Charter Operating’s subsidiaries in amounts in excess of $50 million in aggregate principal amount, | |
• | the failure to pay or the occurrence of events that result in the acceleration of other indebtedness owing by certain of CCO Holdings’ direct and indirect parent companies in amounts in excess of $200 million in aggregate principal amount, | |
• | Paul Allen and/or certain of his family members and/or their exclusively owned entities (collectively, the “Paul Allen Group”) ceasing to have the power, directly or indirectly, to vote at least 35% of the ordinary voting power of Charter Operating, | |
• | the consummation of any transaction resulting in any person or group (other than the Paul Allen Group) having power, directly or indirectly, to vote more than 35% of the ordinary voting power of Charter Operating, unless the Paul Allen Group holds a greater share of ordinary voting power of Charter Operating, | |
• | certain of Charter Operating’s indirect or direct parent companies having indebtedness in excess of $500 million aggregate principal amount which remains undefeased three months prior to the final maturity of such indebtedness, and | |
• | Charter Operating ceasing to be a wholly-owned direct subsidiary of CCO Holdings, except in certain very limited circumstances. |
F-28
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Year | Amount | |||
2005 | $ | 30 | ||
2006 | 30 | |||
2007 | 731 | |||
2008 | 857 | |||
2009 | 4,178 | |||
Thereafter | 12,946 | |||
$ | 18,772 | |||
10. | Comprehensive Loss |
F-29
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11. | Accounting for Derivative Instruments and Hedging Activities |
12. | Fair Value of Financial Instruments |
F-30
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2004 | 2003 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
Debt | ||||||||||||||||
Charter Holdings debt | $ | 8,579 | $ | 7,669 | $ | 8,316 | $ | 7,431 | ||||||||
CCH II debt | 1,601 | 1,698 | 1,601 | 1,680 | ||||||||||||
CCO Holdings debt | 1,050 | 1,064 | 500 | 510 | ||||||||||||
Charter Operating debt | 1,500 | 1,563 | — | — | ||||||||||||
Credit facilities | 5,515 | 5,502 | 7,227 | 6,949 | ||||||||||||
Other | 229 | 236 | 229 | 238 | ||||||||||||
Interest Rate Agreements | ||||||||||||||||
Liabilities Swaps | 69 | 69 | 171 | 171 | ||||||||||||
Collars | 1 | 1 | 8 | 8 |
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13. | Revenues |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Video | $ | 3,373 | $ | 3,461 | $ | 3,420 | ||||||
High-speed data | 741 | 556 | 337 | |||||||||
Advertising sales | 289 | 263 | 302 | |||||||||
Commercial | 238 | 204 | 161 | |||||||||
Other | 336 | 335 | 346 | |||||||||
$ | 4,977 | $ | 4,819 | $ | 4,566 | |||||||
14. | Operating Expenses |
�� | ||||||||||||
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Programming | $ | 1,319 | $ | 1,249 | $ | 1,166 | ||||||
Advertising sales | 98 | 88 | 87 | |||||||||
Service | 663 | 615 | 554 | |||||||||
$ | 2,080 | $ | 1,952 | $ | 1,807 | |||||||
15. | Selling, General and Administrative Expenses |
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
General and administrative | $ | 849 | $ | 833 | $ | 810 | ||||||
Marketing | 122 | 107 | 153 | |||||||||
$ | 971 | $ | 940 | $ | 963 | |||||||
16. | Stock Compensation Plans |
F-32
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F-33
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2004 | 2003 | 2002 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Exercise | Exercise | Exercise | ||||||||||||||||||||||
Shares | Price | Shares | Price | Shares | Price | |||||||||||||||||||
Options outstanding, beginning of period | 47,882 | $ | 12.48 | 53,632 | $ | 14.22 | 46,558 | $ | 17.10 | |||||||||||||||
Granted | 9,405 | 4.88 | 7,983 | 3.53 | 13,122 | 4.88 | ||||||||||||||||||
Exercised | (839 | ) | 2.02 | (165 | ) | 3.96 | — | — | ||||||||||||||||
Cancelled | (31,613 | ) | 15.16 | (13,568 | ) | 14.10 | (6,048 | ) | 16.32 | |||||||||||||||
Options outstanding, end of period | 24,835 | $ | 6.57 | 47,882 | $ | 12.48 | 53,632 | $ | 14.22 | |||||||||||||||
Weighted average remaining contractual life | 8 years | 8 years | 8 years | |||||||||||||||||||||
Options exercisable, end of period | 7,731 | $ | 10.77 | 22,861 | $ | 16.36 | 17,844 | $ | 17.93 | |||||||||||||||
Weighted average fair value of options granted | $ | 3.71 | $ | 2.71 | $ | 2.89 | ||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||||
Weighted- | Weighted- | |||||||||||||||||||||||
Average | Weighted- | Average | Weighted- | |||||||||||||||||||||
Remaining | Average | Remaining | Average | |||||||||||||||||||||
Number | Contractual | Exercise | Number | Contractual | Exercise | |||||||||||||||||||
Range of Exercise Prices | Outstanding | Life | Price | Exercisable | Life | Price | ||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||
$ 1.11 - $ 1.60 | 3,144 | 8 years | $ | 1.52 | 782 | 8 years | $ | 1.45 | ||||||||||||||||
$ 2.85 - $ 4.56 | 7,408 | 8 years | 3.45 | 2,080 | 8 years | 3.28 | ||||||||||||||||||
$ 5.06 - $ 5.17 | 8,857 | 9 years | 5.14 | 533 | 9 years | 5.06 | ||||||||||||||||||
$ 9.13 - $13.68 | 2,264 | 7 years | 11.08 | 1,481 | 7 years | 11.28 | ||||||||||||||||||
$13.96 - $23.09 | 3,162 | 5 years | 19.63 | 2,855 | 5 years | 19.59 |
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F-35
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17. | Special Charges |
Severance | Total Special | ||||||||||||||||
/Leases | Litigation | Other | Charge | ||||||||||||||
Special Charges | $ | 31 | $ | — | $ | 5 | $ | 36 | |||||||||
Balance at December 31, 2002 | 31 | ||||||||||||||||
Special Charges | 26 | $ | — | $ | (5 | ) | $ | 21 | |||||||||
Payments | (43 | ) | |||||||||||||||
Balance at December 31, 2003 | 14 | ||||||||||||||||
Special Charges | 12 | $ | 92 | $ | — | $ | 104 | ||||||||||
Payments | (20 | ) | |||||||||||||||
Balance at December 31, 2004 | $ | 6 | |||||||||||||||
18. | Income Taxes |
F-36
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December 31, | |||||||||||||
2004 | 2003 | 2002 | |||||||||||
Current expense: | |||||||||||||
Federal income taxes | $ | 2 | $ | 1 | $ | — | |||||||
State income taxes | 4 | 1 | 2 | ||||||||||
Current income tax expense | 6 | 2 | 2 | ||||||||||
Deferred benefit: | |||||||||||||
Federal income taxes | (50 | ) | 10 | (219 | ) | ||||||||
State income taxes | (7 | ) | 1 | (31 | ) | ||||||||
Deferred income tax (benefit) expense: | (57 | ) | 11 | (250 | ) | ||||||||
Total income (benefit) expense | $ | (51 | ) | $ | 13 | $ | (248 | ) | |||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Statutory federal income taxes | $ | (1,258 | ) | $ | (265 | ) | $ | (2,056 | ) | |||
State income taxes, net of federal benefit | (180 | ) | (38 | ) | (294 | ) | ||||||
Losses allocated to limited liability companies not subject to income taxes | 1,367 | 290 | 2,105 | |||||||||
Valuation allowance provided | 20 | 26 | (3 | ) | ||||||||
Income tax (benefit) expense | (51 | ) | 13 | (248 | ) | |||||||
Less: cumulative effect of accounting change | 16 | — | 32 | |||||||||
Income tax (benefit) expense | $ | (35 | ) | $ | 13 | $ | (216 | ) | ||||
F-37
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December 31, | |||||||||
2004 | 2003 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforward | $ | 95 | $ | 80 | |||||
Other | 8 | 6 | |||||||
Total gross deferred tax assets | 103 | 86 | |||||||
Less: valuation allowance | (71 | ) | (51 | ) | |||||
Net deferred tax assets | $ | 32 | $ | 35 | |||||
Deferred tax liabilities: | |||||||||
Property, plant & equipment | $ | (39 | ) | $ | (42 | ) | |||
Franchises | (201 | ) | (260 | ) | |||||
Gross deferred tax liabilities | (240 | ) | (302 | ) | |||||
Net deferred tax liabilities | $ | (208 | ) | $ | (267 | ) | |||
19. | Related Party Transactions |
F-38
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F-39
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F-41
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F-42
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F-43
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F-44
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20. | Commitments and Contingencies |
Commitments |
Total | 2005 | 2006 | 2007 | 2008 | 2009 | Thereafter | |||||||||||||||||||||||
Contractual Obligations | |||||||||||||||||||||||||||||
Operating and Capital Lease Obligations(1) | $ | 88 | $ | 23 | $ | 17 | $ | 13 | $ | 10 | $ | 7 | $ | 18 | |||||||||||||||
Programming Minimum Commitments(2) | 1,579 | 318 | 344 | 375 | 308 | 234 | — | ||||||||||||||||||||||
Other(3) | 272 | 62 | 50 | 47 | 25 | 21 | 67 | ||||||||||||||||||||||
Total | $ | 1,939 | $ | 403 | $ | 411 | $ | 435 | $ | 343 | $ | 262 | $ | 85 | |||||||||||||||
(1) | The Company leases certain facilities and equipment under noncancellable operating leases. Leases and rental costs charged to expense for the years ended December 31, 2004, 2003 and 2002, were $23 million, $30 million and $31 million, respectively. |
(2) | The Company pays programming fees under multi-year contracts ranging from three to six years typically based on a flat fee per customer, which may be fixed for the term or may in some cases, escalate over the term. Programming costs included in the accompanying statement of operations were $1.3 billion, $1.2 billion and $1.2 billion for the years ended December 31, 2004, 2003 and 2002, respectively. Certain of the Company’s programming agreements are based on a flat fee per month or have guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under the Company’s programming contracts. |
(3) | “Other” represents other guaranteed minimum commitments, which consist primarily of commitments to the Company’s billing services vendors. |
• | The Company also rents utility poles used in its operations. Generally, pole rentals are cancellable on short notice, but the Company anticipates that such rentals will recur. Rent expense incurred for pole rental attachments for the years ended December 31, 2004, 2003 and 2002, was $43 million, $40 million and $41 million, respectively. | |
• | The Company pays franchise fees under multi-year franchise agreements based on a percentage of revenues earned from video service per year. The Company also pays other franchise related costs, such as public education grants under multi-year agreements. Franchise fees and other franchise-related costs included in the accompanying statement of operations were $164 million, $162 million and $160 million for the years ended December 31, 2004, 2003 and 2002, respectively. | |
• | The Company also has $166 million in letters of credit, primarily to its various worker’s compensation, property casualty and general liability carriers as collateral for reimbursement of claims. These letters of credit reduce the amount the Company may borrow under its credit facilities. |
F-45
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Litigation |
F-46
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F-47
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F-48
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Regulation in the Cable Industry |
21. | Employee Benefit Plan |
F-49
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22. | Recently Issued Accounting Standards |
23. | Parent Company Only Financial Statements |
December 31, | ||||||||
2004 | 2003 | |||||||
ASSETS | ||||||||
Accounts receivable | $ | 11 | $ | 11 | ||||
Receivable from related party | 11 | — | ||||||
Investment in subsidiaries | 4,913 | 8,951 | ||||||
Other assets | 94 | 131 | ||||||
$ | 5,029 | $ | 9,093 | |||||
LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||
Current liabilities | $ | 163 | $ | 138 | ||||
Long-term debt | 8,579 | 8,316 | ||||||
Member’s equity (deficit) | (3,713 | ) | 639 | |||||
Total liabilities and member’s equity (deficit) | $ | 5,029 | $ | 9,093 | ||||
F-50
Table of Contents
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Interest expense | $ | (892 | ) | $ | (941 | ) | $ | (913 | ) | |||
Gain on extinguishment of debt | — | 187 | — | |||||||||
Equity in losses in subsidiaries | (3,506 | ) | (15 | ) | (5,286 | ) | ||||||
Other, net | (1 | ) | (1 | ) | — | |||||||
Net loss | $ | (4,399 | ) | $ | (770 | ) | $ | (6,199 | ) | |||
Year Ended December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||
Net loss | $ | (4,399 | ) | $ | (770 | ) | $ | (6,199 | ) | |||||
Noncash interest expense | 288 | 372 | 349 | |||||||||||
Equity in losses of subsidiaries | 3,506 | 15 | 5,286 | |||||||||||
Gain on extinguishment of debt | — | (187 | ) | — | ||||||||||
Other, net | 2 | — | ||||||||||||
Changes in operating assets and liabilities | 25 | (5 | ) | (20 | ) | |||||||||
Net cash flows from operating activities | (578 | ) | (575 | ) | (584 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||
Purchases of investments | — | (8 | ) | (7 | ) | |||||||||
Investment in subsidiaries | — | (10 | ) | (359 | ) | |||||||||
Repayment on loans to subsidiaries | — | 59 | (374 | ) | ||||||||||
Net cash flows from investing activities | — | 41 | (740 | ) | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||
Proceeds from issuance of debt | — | — | 894 | |||||||||||
Payments for debt issuance costs | — | — | (19 | ) | ||||||||||
Capital contributions | — | — | 95 | |||||||||||
Distributions from subsidiaries | 578 | 561 | 404 | |||||||||||
Distributions to parent companies | — | (27 | ) | (52 | ) | |||||||||
Net cash flows from financing activities | 578 | 534 | 1,322 | |||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | — | — | (2 | ) | ||||||||||
CASH AND CASH EQUIVALENTS, beginning of year | — | — | 2 | |||||||||||
CASH AND CASH EQUIVALENTS, end of year | $ | — | $ | — | $ | — | ||||||||
24. | Consolidating Schedules |
F-51
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F-52
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Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | — | $ | 546 | $ | — | $ | 546 | ||||||||||||||
Accounts receivable, net | 11 | — | — | 175 | — | 186 | ||||||||||||||||||||
Receivables from related party | 11 | — | — | — | (11 | ) | — | |||||||||||||||||||
Prepaid expenses and other current assets | — | — | — | 20 | — | 20 | ||||||||||||||||||||
Total current assets | 22 | — | — | 741 | (11 | ) | 752 | |||||||||||||||||||
INVESTMENT IN CABLE PROPERTIES: | ||||||||||||||||||||||||||
Property, plant and equipment, net | — | — | — | 6,110 | — | 6,110 | ||||||||||||||||||||
Franchises, net | — | — | — | 9,878 | — | 9,878 | ||||||||||||||||||||
Total investment in cable properties, net | — | — | — | 15,988 | — | 15,988 | ||||||||||||||||||||
INVESTMENT IN SUBSIDIARIES | 4,913 | 4,913 | 4,913 | — | (14,739 | ) | — | |||||||||||||||||||
OTHER NONCURRENT ASSETS | 94 | — | — | 250 | — | 344 | ||||||||||||||||||||
Total assets | $ | 5,029 | $ | 4,913 | $ | 4,913 | $ | 16,979 | $ | (14,750 | ) | $ | 17,084 | |||||||||||||
LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||||||
Accounts payable and accrued expenses | $ | 163 | $ | — | $ | — | $ | 949 | $ | — | $ | 1,112 | ||||||||||||||
Payables to related party | — | — | — | 30 | (11 | ) | 19 | |||||||||||||||||||
Total current liabilities | 163 | — | — | 979 | (11 | ) | 1,131 | |||||||||||||||||||
LONG-TERM DEBT | 8,579 | — | — | 9,895 | — | 18,474 | ||||||||||||||||||||
LOANS PAYABLE — RELATED PARTY | — | — | — | 29 | — | 29 | ||||||||||||||||||||
DEFERRED MANAGEMENT FEES — RELATED PARTY | — | — | — | 14 | — | 14 | ||||||||||||||||||||
OTHER LONG-TERM LIABILITIES | — | — | — | 493 | — | 493 | ||||||||||||||||||||
MINORITY INTEREST | — | — | — | 656 | — | 656 | ||||||||||||||||||||
MEMBER’S EQUITY (DEFICIT): | ||||||||||||||||||||||||||
Member’s equity (deficit) | (3,713 | ) | 4,913 | 4,913 | 4,928 | (14,739 | ) | (3,698 | ) | |||||||||||||||||
Accumulated other comprehensive loss | — | — | — | (15 | ) | — | (15 | ) | ||||||||||||||||||
Total member’s equity (deficit) | (3,713 | ) | 4,913 | 4,913 | 4,913 | (14,739 | ) | (3,713 | ) | |||||||||||||||||
Total liabilities and member’s equity (deficit) | $ | 5,029 | $ | 4,913 | $ | 4,913 | $ | 16,979 | $ | (14,750 | ) | $ | 17,084 | |||||||||||||
F-53
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Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | — | $ | 85 | $ | — | $ | 85 | ||||||||||||||
Accounts receivable, net | 11 | — | — | 178 | — | 189 | ||||||||||||||||||||
Receivables from related party | — | — | — | 59 | (3 | ) | 56 | |||||||||||||||||||
Prepaid expenses and other current assets | — | — | — | 21 | — | 21 | ||||||||||||||||||||
Total current assets | 11 | — | — | 343 | (3 | ) | 351 | |||||||||||||||||||
INVESTMENT IN CABLE PROPERTIES: | ||||||||||||||||||||||||||
Property, plant and equipment, net | — | — | — | 6,808 | — | 6,808 | ||||||||||||||||||||
Franchises, net | — | — | — | 13,680 | — | 13,680 | ||||||||||||||||||||
Total investment in cable properties, net | — | — | — | 20,488 | — | 20,488 | ||||||||||||||||||||
INVESTMENT IN SUBSIDIARIES | 8,951 | 8,951 | 8,951 | — | (26,853 | ) | — | |||||||||||||||||||
OTHER NONCURRENT ASSETS | 131 | — | — | 178 | — | 309 | ||||||||||||||||||||
Total assets | $ | 9,093 | $ | 8,951 | $ | 8,951 | $ | 21,009 | $ | (26,856 | ) | $ | 21,148 | |||||||||||||
LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||||||
Accounts payable and accrued expenses | $ | 135 | $ | — | $ | — | $ | 1,044 | $ | — | $ | 1,179 | ||||||||||||||
Payables to related party | 3 | — | — | — | (3 | ) | — | |||||||||||||||||||
Total current liabilities | 138 | — | — | 1,044 | (3 | ) | 1,179 | |||||||||||||||||||
LONG-TERM DEBT | 8,316 | — | — | 9,557 | — | 17,873 | ||||||||||||||||||||
LOANS PAYABLE — RELATED PARTY | — | — | — | 37 | — | 37 | ||||||||||||||||||||
DEFERRED MANAGEMENT FEES — RELATED PARTY | — | — | — | 14 | — | 14 | ||||||||||||||||||||
OTHER LONG-TERM LIABILITIES | — | — | — | 687 | — | 687 | ||||||||||||||||||||
MINORITY INTEREST | — | — | — | 719 | — | 719 | ||||||||||||||||||||
MEMBER’S EQUITY (DEFICIT): | ||||||||||||||||||||||||||
Member’s equity (deficit) | 639 | 8,951 | 8,951 | 9,008 | (26,853 | ) | 696 | |||||||||||||||||||
Accumulated other comprehensive loss | — | — | — | (57 | ) | — | (57 | ) | ||||||||||||||||||
Total member’s equity (deficit) | 639 | 8,951 | 8,951 | 8,951 | (26,853 | ) | 639 | |||||||||||||||||||
Total liabilities and member’s equity (deficit) | $ | 9,093 | $ | 8,951 | $ | 8,951 | $ | 21,009 | $ | (26,856 | ) | $ | 21,148 | |||||||||||||
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Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
REVENUES | $ | — | $ | — | $ | — | $ | 4,977 | $ | — | $ | 4,977 | ||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | — | — | — | 2,080 | — | 2,080 | ||||||||||||||||||||
Selling, general and administrative | — | — | — | 971 | — | 971 | ||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,495 | — | 1,495 | ||||||||||||||||||||
Impairment of franchises | — | — | — | 2,433 | — | 2,433 | ||||||||||||||||||||
Gain on sale of fixed assets | — | — | — | (86 | ) | — | (86 | ) | ||||||||||||||||||
Option compensation expense, net | — | — | — | 31 | — | 31 | ||||||||||||||||||||
Special charges, net | — | — | — | 104 | — | 104 | ||||||||||||||||||||
Unfavorable contracts and other settlements | — | — | — | (5 | ) | — | (5 | ) | ||||||||||||||||||
— | — | — | 7,023 | — | 7,023 | |||||||||||||||||||||
Loss from operations | — | — | — | (2,046 | ) | — | (2,046 | ) | ||||||||||||||||||
OTHER INCOME AND EXPENSES: | ||||||||||||||||||||||||||
Interest expense, net | (892 | ) | — | — | (726 | ) | — | (1,618 | ) | |||||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | 69 | — | 69 | ||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | (21 | ) | — | (21 | ) | ||||||||||||||||||
Other, net | (1 | ) | — | — | 3 | — | 2 | |||||||||||||||||||
Income (loss) from equity investment in subsidiaries | (3,506 | ) | (3,506 | ) | (3,506 | ) | — | 10,518 | — | |||||||||||||||||
(4,399 | ) | (3,506 | ) | (3,506 | ) | (675 | ) | 10,518 | (1,568 | ) | ||||||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (4,399 | ) | (3,506 | ) | (3,506 | ) | (2,721 | ) | 10,518 | (3,614 | ) | |||||||||||||||
MINORITY INTEREST | — | — | — | 20 | — | 20 | ||||||||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (4,399 | ) | (3,506 | ) | (3,506 | ) | (2,701 | ) | 10,518 | (3,594 | ) | |||||||||||||||
INCOME TAX BENEFIT | — | — | — | 35 | — | 35 | ||||||||||||||||||||
Loss before cumulative effect of accounting change | (4,399 | ) | (3,506 | ) | (3,506 | ) | (2,666 | ) | 10,518 | (3,559 | ) | |||||||||||||||
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX | — | — | — | (840 | ) | — | (840 | ) | ||||||||||||||||||
Net loss | $ | (4,399 | ) | $ | (3,506 | ) | $ | (3,506 | ) | $ | (3,506 | ) | $ | 10,518 | $ | (4,399 | ) | |||||||||
F-55
Table of Contents
Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
REVENUES | $ | — | $ | — | $ | — | $ | 4,819 | $ | — | $ | 4,819 | ||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | — | — | — | 1,952 | — | 1,952 | ||||||||||||||||||||
Selling, general and administrative | — | — | — | 940 | — | 940 | ||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,453 | — | 1,453 | ||||||||||||||||||||
Loss on sale of fixed assets | — | — | — | 5 | — | 5 | ||||||||||||||||||||
Option compensation expense, net | — | — | — | 4 | — | 4 | ||||||||||||||||||||
Special charges, net | — | — | — | 21 | — | 21 | ||||||||||||||||||||
Unfavorable contracts and other settlements | — | — | — | (72 | ) | — | (72 | ) | ||||||||||||||||||
— | — | — | 4,303 | — | 4,303 | |||||||||||||||||||||
Loss from operations | — | — | — | 516 | — | 516 | ||||||||||||||||||||
OTHER INCOME AND EXPENSES: | ||||||||||||||||||||||||||
Interest expense, net | (941 | ) | — | — | (545 | ) | — | (1,486 | ) | |||||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | 65 | — | 65 | ||||||||||||||||||||
Gain on extinguishment of debt | 187 | — | — | — | — | 187 | ||||||||||||||||||||
Other, net | (1 | ) | — | — | (9 | ) | — | (10 | ) | |||||||||||||||||
Income (loss) from equity investment in subsidiaries | (15 | ) | (15 | ) | (15 | ) | — | 45 | — | |||||||||||||||||
(770 | ) | (15 | ) | (15 | ) | (489 | ) | 45 | (1,244 | ) | ||||||||||||||||
Loss before minority interest and income taxes | (770 | ) | (15 | ) | (15 | ) | 27 | 45 | (728 | ) | ||||||||||||||||
MINORITY INTEREST | — | — | — | (29 | ) | — | (29 | ) | ||||||||||||||||||
Loss before income taxes | (770 | ) | (15 | ) | (15 | ) | (2 | ) | 45 | (757 | ) | |||||||||||||||
INCOME TAX EXPENSE | — | — | — | (13 | ) | — | (13 | ) | ||||||||||||||||||
Net loss | $ | (770 | ) | $ | (15 | ) | $ | (15 | ) | $ | (15 | ) | $ | 45 | $ | (770 | ) | |||||||||
F-56
Table of Contents
Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
REVENUES | $ | — | $ | — | $ | — | $ | 4,566 | $ | — | $ | 4,566 | ||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | — | — | — | 1,807 | — | 1,807 | ||||||||||||||||||||
Selling, general and administrative | — | — | — | 963 | — | 963 | ||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,436 | — | 1,436 | ||||||||||||||||||||
Impairment of franchises | — | — | — | 4,638 | — | 4,638 | ||||||||||||||||||||
Loss on sale of fixed assets | — | — | — | 3 | — | 3 | ||||||||||||||||||||
Option compensation expense, net | — | — | — | 5 | — | 5 | ||||||||||||||||||||
Special charges, net | — | — | — | 36 | — | 36 | ||||||||||||||||||||
— | — | — | 8,888 | — | 8,888 | |||||||||||||||||||||
Loss from operations | — | — | — | (4,322 | ) | — | (4,322 | ) | ||||||||||||||||||
OTHER INCOME AND EXPENSES: | ||||||||||||||||||||||||||
Interest expense, net | (913 | ) | — | — | (512 | ) | — | (1,425 | ) | |||||||||||||||||
Loss on derivative instruments and hedging activities, net | — | — | — | (115 | ) | — | (115 | ) | ||||||||||||||||||
Other, net | — | — | — | 3 | — | 3 | ||||||||||||||||||||
Income (loss) from equity investment in subsidiaries | (5,286 | ) | (5,286 | ) | (5,286 | ) | — | 15,858 | — | |||||||||||||||||
(6,199 | ) | (5,286 | ) | (5,286 | ) | (624 | ) | 15,858 | (1,537 | ) | ||||||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (6,199 | ) | (5,286 | ) | (5,286 | ) | (4,946 | ) | 15,858 | (5,859 | ) | |||||||||||||||
MINORITY INTEREST | — | — | — | (16 | ) | — | (16 | ) | ||||||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (6,199 | ) | (5,286 | ) | (5,286 | ) | (4,962 | ) | 15,858 | (5,875 | ) | |||||||||||||||
INCOME TAX BENEFIT | — | — | — | 216 | — | 216 | ||||||||||||||||||||
Loss before cumulative effect of accounting change | (6,199 | ) | (5,286 | ) | (5,286 | ) | (4,746 | ) | 15,858 | (5,659 | ) | |||||||||||||||
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX | — | — | — | (540 | ) | — | (540 | ) | ||||||||||||||||||
Net loss | $ | (6,199 | ) | $ | (5,286 | ) | $ | (5,286 | ) | $ | (5,286 | ) | $ | 15,858 | $ | (6,199 | ) | |||||||||
F-57
Table of Contents
Charter | |||||||||||||||||||||||||||
Charter | All Other | Holdings | |||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||
Net loss | $ | (4,399 | ) | $ | (3,506 | ) | $ | (3,506 | ) | $ | (3,506 | ) | $ | 10,518 | $ | (4,399 | ) | ||||||||||
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||||||||||||||||||||||
Minority interest | — | — | — | (20 | ) | — | (20 | ) | |||||||||||||||||||
Depreciation and amortization | — | — | — | 1,495 | — | 1,495 | |||||||||||||||||||||
Impairment of franchises | — | — | — | 2,433 | — | 2,433 | |||||||||||||||||||||
Option compensation expense, net | — | — | — | 27 | — | 27 | |||||||||||||||||||||
Special charges, net | — | — | — | 85 | — | 85 | |||||||||||||||||||||
Noncash interest expense | 288 | — | — | 27 | — | 315 | |||||||||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | (69 | ) | — | (69 | ) | |||||||||||||||||||
Gain on sale of assets | — | — | — | (86 | ) | — | (86 | ) | |||||||||||||||||||
Equity in losses in subsidiaries | 3,506 | 3,506 | 3,506 | — | (10,518 | ) | — | ||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | 18 | — | 18 | |||||||||||||||||||||
Deferred income taxes | — | — | — | (42 | ) | — | (42 | ) | |||||||||||||||||||
Cumulative effect of accounting change, net | — | — | — | 840 | — | 840 | |||||||||||||||||||||
Unfavorable contracts and other settlements | — | — | — | (5 | ) | — | (5 | ) | |||||||||||||||||||
Other, net | 2 | — | — | (5 | ) | — | (3 | ) | |||||||||||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | |||||||||||||||||||||||||||
Accounts receivable | 1 | — | — | (4 | ) | — | (3 | ) | |||||||||||||||||||
Prepaid expenses and other assets | — | — | — | (4 | ) | — | (4 | ) | |||||||||||||||||||
Accounts payable, accrued expenses and other | 20 | — | — | (103 | ) | — | (83 | ) | |||||||||||||||||||
Receivables from and payables to related party, including deferred management fees | 4 | — | — | (72 | ) | — | (68 | ) | |||||||||||||||||||
Net cash flows from operating activities | (578 | ) | — | — | 1,009 | — | 431 | ||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||||||||
Purchases of property, plant and equipment | — | — | — | (893 | ) | — | (893 | ) | |||||||||||||||||||
Change in accrued expenses related to capital expenditures | — | — | — | (33 | ) | — | (33 | ) | |||||||||||||||||||
Proceeds from sale of systems | — | — | — | 744 | — | 744 | |||||||||||||||||||||
Purchases of investments | — | — | — | (6 | ) | — | (6 | ) | |||||||||||||||||||
Other, net | — | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||||
Net cash flows from investing activities | — | — | — | (191 | ) | — | (191 | ) | |||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||||||||||
Borrowings of long-term debt | — | — | — | 3,147 | — | 3,147 | |||||||||||||||||||||
Repayments of long-term debt | — | — | — | (4,860 | ) | — | (4,860 | ) | |||||||||||||||||||
Repayments to parent companies | — | — | — | (8 | ) | — | (8 | ) | |||||||||||||||||||
Proceeds from issuance of long-term debt | — | — | — | 2,050 | — | 2,050 | |||||||||||||||||||||
Payments for debt issuance costs | — | — | — | (108 | ) | — | (108 | ) | |||||||||||||||||||
Distributions | 578 | — | — | (578 | ) | — | — | ||||||||||||||||||||
Net cash flows from financing activities | 578 | — | — | (357 | ) | — | 221 | ||||||||||||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | — | — | — | 461 | — | 461 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | — | — | — | 85 | — | 85 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | — | $ | — | $ | 546 | $ | — | $ | 546 | |||||||||||||||
F-58
Table of Contents
Charter | ||||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||
Net loss | $ | (770 | ) | $ | (15 | ) | $ | (15 | ) | $ | (15 | ) | $ | 45 | $ | (770 | ) | |||||||||||
Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||||||||||||||||||||||
Minority interest | — | — | — | 29 | — | 29 | ||||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,453 | — | 1,453 | ||||||||||||||||||||||
Option compensation expense, net | — | — | — | 4 | — | 4 | ||||||||||||||||||||||
Noncash interest expense | 372 | — | — | 38 | — | 410 | ||||||||||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | (65 | ) | — | (65 | ) | ||||||||||||||||||||
Loss on sale of assets | — | — | — | 5 | — | 5 | ||||||||||||||||||||||
Equity in losses in subsidiaries | 15 | 15 | 15 | — | (45 | ) | — | |||||||||||||||||||||
Gain on extinguishment of debt | (187 | ) | — | — | — | — | (187 | ) | ||||||||||||||||||||
Deferred income taxes | — | — | — | 13 | — | 13 | ||||||||||||||||||||||
Unfavorable contracts and other settlements | — | — | — | (72 | ) | — | (72 | ) | ||||||||||||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | ||||||||||||||||||||||||||||
Accounts receivable | (7 | ) | — | — | 69 | — | 62 | |||||||||||||||||||||
Prepaid expenses and other assets | 1 | — | — | 12 | — | 13 | ||||||||||||||||||||||
Accounts payable, accrued expenses and other | (6 | ) | — | — | (103 | ) | — | (109 | ) | |||||||||||||||||||
Receivables from and payables to related party, including deferred management fees | 7 | — | — | (47 | ) | — | (40 | ) | ||||||||||||||||||||
Net cash flows from operating activities | (575 | ) | — | — | 1,321 | — | 746 | |||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||
Purchases of property, plant and equipment | — | — | — | (804 | ) | — | (804 | ) | ||||||||||||||||||||
Change in accrued expenses related to capital expenditures | — | — | — | (41 | ) | — | (41 | ) | ||||||||||||||||||||
Proceeds from sale of systems | — | — | — | 91 | — | 91 | ||||||||||||||||||||||
Purchases of investments | (8 | ) | — | — | — | — | (8 | ) | ||||||||||||||||||||
Investment in subsidiaries | (10 | ) | — | — | — | 10 | — | |||||||||||||||||||||
Repayment on loans to subsidiaries | 59 | — | — | — | (59 | ) | — | |||||||||||||||||||||
Other, net | — | — | — | (3 | ) | — | (3 | ) | ||||||||||||||||||||
Net cash flows from investing activities | 41 | — | — | (757 | ) | (49 | ) | (765 | ) | |||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||
Borrowings of long-term debt | — | — | — | 739 | — | 739 | ||||||||||||||||||||||
Repayments of long-term debt | — | — | — | (1,369 | ) | — | (1,369 | ) | ||||||||||||||||||||
Repayments to parent companies | — | — | — | (96 | ) | 60 | (36 | ) | ||||||||||||||||||||
Proceeds from issuance of long-term debt | — | — | — | 529 | — | 529 | ||||||||||||||||||||||
Payments for debt issuance costs | — | — | — | (42 | ) | — | (42 | ) | ||||||||||||||||||||
Distributions | 534 | — | — | (552 | ) | (9 | ) | (27 | ) | |||||||||||||||||||
Net cash flows from financing activities | 534 | — | — | (791 | ) | 51 | (206 | ) | ||||||||||||||||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | — | — | — | (227 | ) | 2 | (225 | ) | ||||||||||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | — | — | — | 310 | — | 310 | ||||||||||||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | — | $ | — | $ | 83 | $ | 2 | $ | 85 | ||||||||||||||||
F-59
Table of Contents
Charter | |||||||||||||||||||||||||||
Charter | All Other | Holdings | |||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||
Net loss | $ | (6,199 | ) | $ | (5,286 | ) | $ | (5,286 | ) | $ | (5,286 | ) | $ | 15,858 | $ | (6,199 | ) | ||||||||||
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||||||||||||||||||||||
Minority interest | — | — | — | 16 | — | 16 | |||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,436 | — | 1,436 | |||||||||||||||||||||
Impairment of franchises | — | — | — | 4,638 | — | 4,638 | |||||||||||||||||||||
Option compensation expense, net | — | — | — | 5 | — | 5 | |||||||||||||||||||||
Noncash interest expense | 349 | — | — | 38 | — | 387 | |||||||||||||||||||||
Loss on derivative instruments and hedging activities, net | — | — | — | 115 | — | 115 | |||||||||||||||||||||
Loss on sale of assets | — | — | — | 3 | — | 3 | |||||||||||||||||||||
Equity in losses in subsidiaries | 5,286 | 5,286 | 5,286 | — | (15,858 | ) | — | ||||||||||||||||||||
Deferred income taxes | — | — | — | (216 | ) | — | (216 | ) | |||||||||||||||||||
Cumulative effect of accounting change, net | — | — | — | 540 | — | 540 | |||||||||||||||||||||
Changes in operating assets and liabilities, net of effects from acquisitions and dispositions: | |||||||||||||||||||||||||||
Accounts receivable | (3 | ) | — | — | 21 | — | 18 | ||||||||||||||||||||
Prepaid expenses and other assets | 1 | — | — | 18 | — | 19 | |||||||||||||||||||||
Accounts payable, accrued expenses and other | 19 | — | — | 39 | — | 58 | |||||||||||||||||||||
Receivables from and payables to related party, including deferred management fees | (37 | ) | — | — | (42 | ) | — | (79 | ) | ||||||||||||||||||
Net cash flows from operating activities | (584 | ) | — | — | 1,325 | — | 741 | ||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||||||||
Purchases of property, plant and equipment | — | — | — | (2,095 | ) | — | (2,095 | ) | |||||||||||||||||||
Change in accrued expenses related to capital expenditures | — | — | — | (49 | ) | — | (49 | ) | |||||||||||||||||||
Payments for acquisitions, net of cash acquired | — | — | — | (140 | ) | — | (140 | ) | |||||||||||||||||||
Purchases of investments | (7 | ) | — | — | (3 | ) | — | (10 | ) | ||||||||||||||||||
Investment in subsidiaries | (359 | ) | — | — | — | 359 | — | ||||||||||||||||||||
Repayment of loans from subsidiaries | (374 | ) | — | — | — | 374 | — | ||||||||||||||||||||
Other, net | — | — | — | 2 | — | 2 | |||||||||||||||||||||
Net cash flows from investing activities | (740 | ) | — | — | (2,285 | ) | 733 | (2,292 | ) | ||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||||||||||||
Borrowings of long-term debt | 894 | — | — | 3,213 | — | 4,107 | |||||||||||||||||||||
Repayments of long-term debt | — | — | — | (2,135 | ) | — | (2,135 | ) | |||||||||||||||||||
Repayments to parent companies | — | — | — | (233 | ) | 117 | (116 | ) | |||||||||||||||||||
Payments for debt issuance costs | (19 | ) | — | — | (21 | ) | — | (40 | ) | ||||||||||||||||||
Contributions | 447 | — | — | 446 | (850 | ) | 43 | ||||||||||||||||||||
Net cash flows from financing activities | 1,322 | — | — | 1,270 | (733 | ) | 1,859 | ||||||||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (2 | ) | — | — | 310 | — | 308 | ||||||||||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 2 | — | — | — | — | 2 | |||||||||||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | — | $ | — | $ | 310 | $ | — | $ | 310 | |||||||||||||||
F-60
Table of Contents
September 30, | December 31, | |||||||||
2005 | 2004 | |||||||||
(Unaudited) | ||||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 20 | $ | 546 | ||||||
Accounts receivable, less allowance for doubtful accounts of $15 and $15, respectively | 185 | 186 | ||||||||
Prepaid expenses and other current assets | 23 | 20 | ||||||||
Total current assets | 228 | 752 | ||||||||
INVESTMENT IN CABLE PROPERTIES: | ||||||||||
Property, plant and equipment, net of accumulated depreciation of $6,357 and $5,142, respectively | 5,895 | 6,110 | ||||||||
Franchises, net | 9,830 | 9,878 | ||||||||
Total investment in cable properties, net | 15,725 | 15,988 | ||||||||
OTHER NONCURRENT ASSETS | 323 | 344 | ||||||||
Total assets | $ | 16,276 | $ | 17,084 | ||||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable and accrued expenses | $ | 1,055 | $ | 1,112 | ||||||
Payables to related party | 105 | 19 | ||||||||
Total current liabilities | 1,160 | 1,131 | ||||||||
LONG-TERM DEBT | 18,254 | 18,474 | ||||||||
LOANS PAYABLE — RELATED PARTY | 57 | 29 | ||||||||
DEFERRED MANAGEMENT FEES — RELATED PARTY | 14 | 14 | ||||||||
OTHER LONG-TERM LIABILITIES | 418 | 493 | ||||||||
MINORITY INTEREST | 665 | 656 | ||||||||
MEMBER’S DEFICIT: | ||||||||||
Member’s deficit | (4,292 | ) | (3,698 | ) | ||||||
Accumulated other comprehensive loss | — | (15 | ) | |||||||
Total member’s deficit | (4,292 | ) | (3,713 | ) | ||||||
Total liabilities and member’s deficit | $ | 16,276 | $ | 17,084 | ||||||
F-61
Table of Contents
Three Months Ended | Nine Months Ended | |||||||||||||||||
September 30, | September 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
REVENUES | $ | 1,318 | $ | 1,248 | $ | 3,912 | $ | 3,701 | ||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||
Operating (excluding depreciation and amortization) | 586 | 525 | 1,714 | 1,552 | ||||||||||||||
Selling, general and administrative | 269 | 252 | 762 | 735 | ||||||||||||||
Depreciation and amortization | 375 | 371 | 1,134 | 1,105 | ||||||||||||||
Impairment of franchises | — | 2,433 | — | 2,433 | ||||||||||||||
Asset impairment charges | — | — | 39 | — | ||||||||||||||
(Gain) loss on sale of assets, net | 1 | — | 5 | (104 | ) | |||||||||||||
Option compensation expense, net | 3 | 8 | 11 | 34 | ||||||||||||||
Hurricane asset retirement loss | 19 | — | 19 | — | ||||||||||||||
Special charges, net | 2 | 3 | 4 | 100 | ||||||||||||||
1,255 | 3,592 | 3,688 | 5,855 | |||||||||||||||
Income (loss) from operations | 63 | (2,344 | ) | 224 | (2,154 | ) | ||||||||||||
OTHER INCOME AND EXPENSES: | ||||||||||||||||||
Interest expense, net | (442 | ) | (413 | ) | (1,297 | ) | (1,193 | ) | ||||||||||
Gain (loss) on derivative instruments and hedging activities, net | 17 | (8 | ) | 43 | 48 | |||||||||||||
Gain (loss) on extinguishment of debt | 490 | — | 494 | (21 | ) | |||||||||||||
Gain on investments | — | — | 21 | — | ||||||||||||||
65 | (421 | ) | (739 | ) | (1,166 | ) | ||||||||||||
Income (loss) before minority interest, income taxes and cumulative effect of accounting change | 128 | (2,765 | ) | (515 | ) | (3,320 | ) | |||||||||||
MINORITY INTEREST | (3 | ) | 34 | (9 | ) | 25 | ||||||||||||
Income (loss) before income taxes and cumulative effect of accounting change | 125 | (2,731 | ) | (524 | ) | (3,295 | ) | |||||||||||
INCOME TAX BENEFIT (EXPENSE) | (2 | ) | 45 | (10 | ) | 41 | ||||||||||||
Income (loss) before cumulative effect of accounting change | 123 | (2,686 | ) | (534 | ) | (3,254 | ) | |||||||||||
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX | — | (840 | ) | — | (840 | ) | ||||||||||||
Net income (loss) | $ | 123 | $ | (3,526 | ) | $ | (534 | ) | $ | (4,094 | ) | |||||||
F-62
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Nine Months Ended | |||||||||||
September 30, | |||||||||||
2005 | 2004 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | (534 | ) | $ | (4,094 | ) | |||||
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||||||
Minority interest | 9 | (25 | ) | ||||||||
Depreciation and amortization | 1,134 | 1,105 | |||||||||
Asset impairment charges | 39 | — | |||||||||
Impairment of franchises | — | 2,433 | |||||||||
Option compensation expense, net | 11 | 25 | |||||||||
Hurricane asset retirement loss | 19 | — | |||||||||
Special charges, net | — | 85 | |||||||||
Noncash interest expense | 195 | 232 | |||||||||
Gain on derivative instruments and hedging activities, net | (43 | ) | (48 | ) | |||||||
(Gain) loss on sale of assets, net | 5 | (104 | ) | ||||||||
(Gain) loss on extinguishment of debt | (501 | ) | 18 | ||||||||
Gain on investments | (21 | ) | — | ||||||||
Deferred income taxes | 6 | (44 | ) | ||||||||
Cumulative effect of accounting change, net of tax | — | 840 | |||||||||
Other, net | — | (1 | ) | ||||||||
Changes in operating assets and liabilities, net of effects from dispositions: | |||||||||||
Accounts receivable | (5 | ) | 2 | ||||||||
Prepaid expenses and other assets | (7 | ) | (3 | ) | |||||||
Accounts payable, accrued expenses and other | (121 | ) | (15 | ) | |||||||
Receivables from and payables to related party, including deferred management fees | (65 | ) | (53 | ) | |||||||
Net cash flows from operating activities | 121 | 353 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Purchases of property, plant and equipment | (815 | ) | (616 | ) | |||||||
Change in accrued expenses related to capital expenditures | 39 | (11 | ) | ||||||||
Proceeds from sale of assets | 38 | 727 | |||||||||
Purchases of investments | (1 | ) | (14 | ) | |||||||
Proceeds from investments | 16 | — | |||||||||
Other, net | (2 | ) | (2 | ) | |||||||
Net cash flows from investing activities | (725 | ) | 84 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Borrowings of long-term debt | 897 | 2,873 | |||||||||
Borrowings from related parties | 140 | — | |||||||||
Repayments of long-term debt | (1,014 | ) | (4,707 | ) | |||||||
Repayments to related parties | (112 | ) | — | ||||||||
Proceeds from issuance of debt | 294 | 1,500 | |||||||||
Payments for debt issuance costs | (67 | ) | (97 | ) | |||||||
Distributions | (60 | ) | — | ||||||||
Net cash flows from financing activities | 78 | (431 | ) | ||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (526 | ) | 6 | ||||||||
CASH AND CASH EQUIVALENTS, beginning of period | 546 | 85 | |||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 20 | $ | 91 | |||||||
CASH PAID FOR INTEREST | $ | 1,139 | $ | 809 | |||||||
NONCASH TRANSACTIONS: | |||||||||||
Issuance of debt by CCH I Holdings, LLC | $ | 2,423 | $ | — | |||||||
Issuance of debt by CCH I, LLC | $ | 3,686 | $ | — | |||||||
Issuance of debt by Charter Communications Operating, LLC | $ | 333 | $ | — | |||||||
Retirement of Charter Communications Holdings, LLC debt | $ | (7,000 | ) | $ | — | ||||||
Transfer of property, plant and equipment from parent company | $ | 139 | $ | — | |||||||
F-63
Table of Contents
1. | Organization and Basis of Presentation |
Reclassifications |
2. | Liquidity and Capital Resources |
F-64
Table of Contents
F-65
Table of Contents
F-66
Table of Contents
3. | Sale of Assets |
4. | Franchises and Goodwill |
F-67
Table of Contents
F-68
Table of Contents
September 30, 2005 | December 31, 2004 | ||||||||||||||||||||||||
Gross | Net | Gross | Net | ||||||||||||||||||||||
Carrying | Accumulated | Carrying | Carrying | Accumulated | Carrying | ||||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | ||||||||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||
Franchises with indefinite lives | $ | 9,797 | $ | — | $ | 9,797 | $ | 9,845 | $ | — | $ | 9,845 | |||||||||||||
Goodwill | 52 | — | 52 | 52 | — | 52 | |||||||||||||||||||
$ | 9,849 | $ | — | $ | 9,849 | $ | 9,897 | $ | — | $ | 9,897 | ||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||||
Franchises with finite lives | $ | 40 | $ | 7 | $ | 33 | $ | 37 | $ | 4 | $ | 33 | |||||||||||||
5. | Accounts Payable and Accrued Expenses |
September 30, | December 31, | ||||||||
2005 | 2004 | ||||||||
Accounts payable — trade | $ | 67 | $ | 140 | |||||
Accrued capital expenditures | 99 | 60 | |||||||
Accrued expenses: | |||||||||
Interest | 278 | 310 | |||||||
Programming costs | 287 | 278 | |||||||
Franchise-related fees | 56 | 67 | |||||||
Compensation | 57 | 47 | |||||||
Other | 211 | 210 | |||||||
$ | 1,055 | $ | 1,112 | ||||||
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6. | Long-Term Debt |
September 30, 2005 | December 31, 2004 | |||||||||||||||||
Principal | Accreted | Principal | Accreted | |||||||||||||||
Amount | Value | Amount | Value | |||||||||||||||
Long-Term Debt | ||||||||||||||||||
Charter Communications Holdings, LLC: | ||||||||||||||||||
8.250% senior notes due 2007 | $ | 105 | $ | 105 | $ | 451 | $ | 451 | ||||||||||
8.625% senior notes due 2009 | 292 | 292 | 1,244 | 1,243 | ||||||||||||||
9.920% senior discount notes due 2011 | 198 | 198 | 1,108 | 1,108 | ||||||||||||||
10.000% senior notes due 2009 | 154 | 154 | 640 | 640 | ||||||||||||||
10.250% senior notes due 2010 | 49 | 49 | 318 | 318 | ||||||||||||||
11.750% senior discount notes due 2010 | 43 | 43 | 450 | 448 | ||||||||||||||
10.750% senior notes due 2009 | 131 | 131 | 874 | 874 | ||||||||||||||
11.125% senior notes due 2011 | 217 | 217 | 500 | 500 | ||||||||||||||
13.500% senior discount notes due 2011 | 94 | 91 | 675 | 589 | ||||||||||||||
9.625% senior notes due 2009 | 107 | 107 | 640 | 638 | ||||||||||||||
10.000% senior notes due 2011 | 137 | 136 | 710 | 708 | ||||||||||||||
11.750% senior discount notes due 2011 | 125 | 116 | 939 | 803 | ||||||||||||||
12.125% senior discount notes due 2012 | 113 | 97 | 330 | 259 | ||||||||||||||
CCH I Holdings, LLC: | ||||||||||||||||||
11.125% senior notes due 2014 | 151 | 151 | — | — | ||||||||||||||
9.920% senior discount notes due 2014 | 471 | 471 | — | — | ||||||||||||||
10.000% senior notes due 2014 | 299 | 299 | — | — | ||||||||||||||
11.750% senior discount notes due 2014 | 815 | 759 | — | — | ||||||||||||||
13.500% senior discount notes due 2014 | 581 | 559 | — | — | ||||||||||||||
12.125% senior discount notes due 2015 | 217 | 187 | — | — | ||||||||||||||
CCH I, LLC: | ||||||||||||||||||
11.00% senior notes due 2015 | 3,525 | 3,686 | — | — | ||||||||||||||
CCH II, LLC: | ||||||||||||||||||
10.250% senior notes due 2010 | 1,601 | 1,601 | 1,601 | 1,601 | ||||||||||||||
CCO Holdings, LLC: | ||||||||||||||||||
83/4% senior notes due 2013 | 800 | 794 | 500 | 500 | ||||||||||||||
Senior floating rate notes due 2010 | 550 | 550 | 550 | 550 | ||||||||||||||
Charter Communications Operating, LLC: | ||||||||||||||||||
8% senior second lien notes due 2012 | 1,100 | 1,100 | 1,100 | 1,100 | ||||||||||||||
83/8% senior second lien notes due 2014 | 733 | 733 | 400 | 400 | ||||||||||||||
Renaissance Media Group LLC: | ||||||||||||||||||
10.000% senior discount notes due 2008 | 114 | 115 | 114 | 116 | ||||||||||||||
CC V Holdings, LLC: | ||||||||||||||||||
11.875% senior discount notes due 2008 | — | — | 113 | 113 | ||||||||||||||
Credit Facilities | ||||||||||||||||||
Charter Operating | 5,513 | 5,513 | 5,515 | 5,515 | ||||||||||||||
$ | 18,235 | $ | 18,254 | $ | 18,772 | $ | 18,474 | |||||||||||
F-70
Table of Contents
Gain (loss) on extinguishment of debt |
F-71
Table of Contents
7. | Minority Interest |
8. | Comprehensive Income (Loss) |
9. | Accounting for Derivative Instruments and Hedging Activities |
F-72
Table of Contents
F-73
Table of Contents
10. | Revenues |
Three Months | Nine Months | |||||||||||||||
Ended | Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Video | $ | 848 | $ | 839 | $ | 2,551 | $ | 2,534 | ||||||||
High-speed Internet | 230 | 189 | 671 | 538 | ||||||||||||
Advertising sales | 74 | 73 | 214 | 205 | ||||||||||||
Commercial | 71 | 61 | 205 | 175 | ||||||||||||
Other | 95 | 86 | 271 | 249 | ||||||||||||
$ | 1,318 | $ | 1,248 | $ | 3,912 | $ | 3,701 | |||||||||
11. | Operating Expenses |
Three Months | Nine Months | |||||||||||||||
Ended | Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Programming | $ | 357 | $ | 328 | $ | 1,066 | $ | 991 | ||||||||
Service | 203 | 173 | 572 | 489 | ||||||||||||
Advertising sales | 26 | 24 | 76 | 72 | ||||||||||||
$ | 586 | $ | 525 | $ | 1,714 | $ | 1,552 | |||||||||
12. | Selling, General and Administrative Expenses |
Three Months | Nine Months | |||||||||||||||
Ended | Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
General and administrative | $ | 231 | $ | 220 | $ | 658 | $ | 636 | ||||||||
Marketing | 38 | 32 | 104 | 99 | ||||||||||||
$ | 269 | $ | 252 | $ | 762 | $ | 735 | |||||||||
13. | Hurricane Asset Retirement Loss |
F-74
Table of Contents
14. | Special Charges |
Three Months | Nine Months | |||||||||||||||
Ended | Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Beginning Balance | $ | 4 | $ | 6 | $ | 6 | $ | 14 | ||||||||
Special Charges | 1 | 6 | 5 | 9 | ||||||||||||
Payments | (1 | ) | (3 | ) | (7 | ) | (14 | ) | ||||||||
Balance at September 30, | $ | 4 | $ | 9 | $ | 4 | $ | 9 | ||||||||
15. | Income Taxes |
F-75
Table of Contents
16. | Contingencies |
Securities Class Actions and Derivative Suits |
F-76
Table of Contents
Government Investigations |
F-77
Table of Contents
Indemnification |
Other Litigation |
17. | Stock Compensation Plans |
F-78
Table of Contents
Three Months | |||||||||||||||||
Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
Net income (loss) | $ | 123 | $ | (3,526 | ) | $ | (534 | ) | $ | (4,094 | ) | ||||||
Add back stock-based compensation expense related to stock options included in reported net income (loss) | 3 | 8 | 11 | 34 | |||||||||||||
Less employee stock-based compensation expense determined under fair value based method for all employee stock option awards | (3 | ) | (6 | ) | (11 | ) | (37 | ) | |||||||||
Effects of unvested options in stock option exchange | — | — | — | 48 | |||||||||||||
Pro forma | $ | 123 | $ | (3,524 | ) | $ | (534 | ) | $ | (4,049 | ) | ||||||
F-79
Table of Contents
18. | Related Party Transactions |
CC VIII |
F-80
Table of Contents
F-81
Table of Contents
TechTV, Inc. |
F-82
Table of Contents
Digeo, Inc. |
F-83
Table of Contents
F-84
Table of Contents
Oxygen Media LLC |
F-85
Table of Contents
Helicon |
19. | Consolidating Schedules |
F-86
Table of Contents
F-87
Table of Contents
Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 3 | $ | 8 | $ | 9 | $ | — | $ | 20 | ||||||||||||||
Accounts receivable, net | — | — | — | 185 | — | 185 | ||||||||||||||||||||
Receivables from related party | 10 | — | — | — | (10 | ) | — | |||||||||||||||||||
Prepaid expenses and other current assets | — | — | — | 23 | — | 23 | ||||||||||||||||||||
Total current assets | 10 | 3 | 8 | 217 | (10 | ) | 228 | |||||||||||||||||||
INVESTMENT IN CABLE PROPERTIES: | ||||||||||||||||||||||||||
Property, plant and equipment, net | — | — | — | 5,895 | — | 5,895 | ||||||||||||||||||||
Franchises, net | — | — | — | 9,830 | — | 9,830 | ||||||||||||||||||||
Total investment in cable properties, net | — | — | — | 15,725 | — | 15,725 | ||||||||||||||||||||
INVESTMENT IN SUBSIDIARIES | (2,496 | ) | (92 | ) | 3,553 | — | (965 | ) | — | |||||||||||||||||
OTHER NONCURRENT ASSETS | 15 | 22 | 46 | 240 | — | 323 | ||||||||||||||||||||
Total assets | $ | (2,471 | ) | $ | (67 | ) | $ | 3,607 | $ | 16,182 | $ | (975 | ) | $ | 16,276 | |||||||||||
LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||||||
Accounts payable and accrued expenses | $ | 101 | $ | 2 | $ | 12 | $ | 940 | $ | — | $ | 1,055 | ||||||||||||||
Payables to related party | — | 1 | 1 | 113 | (10 | ) | 105 | |||||||||||||||||||
Total current liabilities | 101 | 3 | 13 | 1,053 | (10 | ) | 1,160 | |||||||||||||||||||
LONG-TERM DEBT | 1,736 | 2,426 | 3,686 | 10,406 | — | 18,254 | ||||||||||||||||||||
LOANS PAYABLE — RELATED PARTY | — | — | — | 57 | — | 57 | ||||||||||||||||||||
DEFERRED MANAGEMENT FEES — RELATED PARTY | — | — | — | 14 | — | 14 | ||||||||||||||||||||
OTHER LONG-TERM LIABILITIES | (16 | ) | — | — | 434 | — | 418 | |||||||||||||||||||
MINORITY INTEREST | — | — | — | 665 | — | 665 | ||||||||||||||||||||
MEMBER’S EQUITY (DEFICIT): | ||||||||||||||||||||||||||
Member’s equity (deficit) | (4,292 | ) | (2,496 | ) | (92 | ) | 3,553 | (965 | ) | (4,292 | ) | |||||||||||||||
Accumulated other comprehensive loss | — | — | — | — | — | — | ||||||||||||||||||||
Total member’s equity (deficit) | (4,292 | ) | (2,496 | ) | (92 | ) | 3,553 | (965 | ) | (4,292 | ) | |||||||||||||||
Total liabilities and member’s equity (deficit) | $ | (2,471 | ) | $ | (67 | ) | $ | 3,607 | $ | 16,182 | $ | (975 | ) | $ | 16,276 | |||||||||||
F-88
Table of Contents
Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | — | $ | 546 | $ | — | $ | 546 | ||||||||||||||
Accounts receivable, net | 11 | — | — | 175 | — | 186 | ||||||||||||||||||||
Receivables from related party | 11 | — | — | — | (11 | ) | — | |||||||||||||||||||
Prepaid expenses and other current assets | — | — | — | 20 | — | 20 | ||||||||||||||||||||
Total current assets | 22 | — | — | 741 | (11 | ) | 752 | |||||||||||||||||||
INVESTMENT IN CABLE PROPERTIES: | ||||||||||||||||||||||||||
Property, plant and equipment, net | — | — | — | 6,110 | — | 6,110 | ||||||||||||||||||||
Franchises, net | — | — | — | 9,878 | — | 9,878 | ||||||||||||||||||||
Total investment in cable properties, net | — | — | — | 15,988 | — | 15,988 | ||||||||||||||||||||
INVESTMENT IN SUBSIDIARIES | 4,913 | 4,913 | 4,913 | — | (14,739 | ) | — | |||||||||||||||||||
OTHER NONCURRENT ASSETS | 94 | — | — | 250 | — | 344 | ||||||||||||||||||||
Total assets | $ | 5,029 | $ | 4,913 | $ | 4,913 | $ | 16,979 | $ | (14,750 | ) | $ | 17,084 | |||||||||||||
LIABILITIES AND MEMBER’S EQUITY (DEFICIT) | ||||||||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||||||
Accounts payable and accrued expenses | $ | 163 | $ | — | $ | — | $ | 949 | $ | — | $ | 1,112 | ||||||||||||||
Payables to related party | — | — | — | 30 | (11 | ) | 19 | |||||||||||||||||||
Total current liabilities | 163 | — | — | 979 | (11 | ) | 1,131 | |||||||||||||||||||
LONG-TERM DEBT | 8,579 | — | — | 9,895 | — | 18,474 | ||||||||||||||||||||
LOANS PAYABLE — RELATED PARTY | — | — | — | 29 | — | 29 | ||||||||||||||||||||
DEFERRED MANAGEMENT FEES — RELATED PARTY | — | — | — | 14 | — | 14 | ||||||||||||||||||||
OTHER LONG-TERM LIABILITIES | — | — | — | 493 | — | 493 | ||||||||||||||||||||
MINORITY INTEREST | — | — | — | 656 | — | 656 | ||||||||||||||||||||
MEMBER’S EQUITY (DEFICIT): | ||||||||||||||||||||||||||
Member’s equity (deficit) | (3,713 | ) | 4,913 | 4,913 | 4,928 | (14,739 | ) | (3,698 | ) | |||||||||||||||||
Accumulated other comprehensive loss | — | — | — | (15 | ) | — | (15 | ) | ||||||||||||||||||
Total member’s equity (deficit) | (3,713 | ) | 4,913 | 4,913 | 4,913 | (14,739 | ) | (3,713 | ) | |||||||||||||||||
Total liabilities and member’s equity (deficit) | $ | 5,029 | $ | 4,913 | $ | 4,913 | $ | 16,979 | $ | (14,750 | ) | $ | 17,084 | |||||||||||||
F-89
Table of Contents
Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
REVENUES | $ | — | $ | — | $ | — | $ | 3,912 | $ | — | $ | 3,912 | ||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | — | — | — | 1,714 | — | 1,714 | ||||||||||||||||||||
Selling, general and administrative | — | — | — | 762 | — | 762 | ||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,134 | — | 1,134 | ||||||||||||||||||||
Asset impairment charges | — | — | — | 39 | — | 39 | ||||||||||||||||||||
Loss on sale of assets | — | — | — | 5 | — | 5 | ||||||||||||||||||||
Option compensation expense, net | — | — | — | 11 | — | 11 | ||||||||||||||||||||
Hurricane asset retirement loss | — | — | — | 19 | — | 19 | ||||||||||||||||||||
Special charges, net | — | — | — | 4 | — | 4 | ||||||||||||||||||||
— | — | — | 3,688 | — | 3,688 | |||||||||||||||||||||
Income from operations | — | — | — | 224 | — | 224 | ||||||||||||||||||||
OTHER INCOME AND EXPENSES: | ||||||||||||||||||||||||||
Interest expense, net | (665 | ) | (2 | ) | (3 | ) | (627 | ) | — | (1,297 | ) | |||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | 43 | — | 43 | ||||||||||||||||||||
Gain (loss) on extinguishment of debt | 520 | (8 | ) | (12 | ) | (6 | ) | — | 494 | |||||||||||||||||
Gain on investments | — | — | — | 21 | — | 21 | ||||||||||||||||||||
Income (loss) from equity investment in subsidiaries | (389 | ) | (379 | ) | (364 | ) | — | 1,132 | — | |||||||||||||||||
(534 | ) | (389 | ) | (379 | ) | (569 | ) | 1,132 | (739 | ) | ||||||||||||||||
Loss before minority interest and income taxes | (534 | ) | (389 | ) | (379 | ) | (345 | ) | 1,132 | (515 | ) | |||||||||||||||
MINORITY INTEREST | — | — | — | (9 | ) | — | (9 | ) | ||||||||||||||||||
Loss before income taxes | (534 | ) | (389 | ) | (379 | ) | (354 | ) | 1,132 | (524 | ) | |||||||||||||||
INCOME TAX EXPENSE | — | — | — | (10 | ) | — | (10 | ) | ||||||||||||||||||
Net loss | $ | (534 | ) | $ | (389 | ) | $ | (379 | ) | $ | (364 | ) | $ | 1,132 | $ | (534 | ) | |||||||||
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Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
REVENUES | $ | — | $ | — | $ | — | $ | 3,701 | $ | — | $ | 3,701 | ||||||||||||||
COSTS AND EXPENSES: | ||||||||||||||||||||||||||
Operating (excluding depreciation and amortization) | — | — | — | 1,552 | — | 1,552 | ||||||||||||||||||||
Selling, general and administrative | — | — | — | 735 | — | 735 | ||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,105 | — | 1,105 | ||||||||||||||||||||
Impairment of franchises | — | — | — | 2,433 | — | 2,433 | ||||||||||||||||||||
Gain on sale of assets | — | — | — | (104 | ) | — | (104 | ) | ||||||||||||||||||
Option compensation expense, net | — | — | — | 34 | — | 34 | ||||||||||||||||||||
Special charges, net | — | — | — | 100 | — | 100 | ||||||||||||||||||||
— | — | — | 5,855 | — | 5,855 | |||||||||||||||||||||
Income from operations | — | — | — | (2,154 | ) | — | (2,154 | ) | ||||||||||||||||||
OTHER INCOME AND EXPENSES: | ||||||||||||||||||||||||||
Interest expense, net | (662 | ) | — | — | (531 | ) | — | (1,193 | ) | |||||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | 48 | — | 48 | ||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | (21 | ) | — | (21 | ) | ||||||||||||||||||
Income (loss) from equity investment in subsidiaries | (3,432 | ) | (3,432 | ) | (3,432 | ) | — | 10,296 | — | |||||||||||||||||
(4,094 | ) | (3,432 | ) | (3,432 | ) | (504 | ) | 10,296 | (1,166 | ) | ||||||||||||||||
Loss before minority interest, income taxes and cumulative effect of accounting change | (4,094 | ) | (3,432 | ) | (3,432 | ) | (2,658 | ) | 10,296 | (3,320 | ) | |||||||||||||||
MINORITY INTEREST | — | — | — | 25 | — | 25 | ||||||||||||||||||||
Loss before income taxes and cumulative effect of accounting change | (4,094 | ) | (3,432 | ) | (3,432 | ) | (2,633 | ) | 10,296 | (3,295 | ) | |||||||||||||||
INCOME TAX BENEFIT | — | — | — | 41 | — | 41 | ||||||||||||||||||||
Loss before cumulative effect of accounting change | (4,094 | ) | (3,432 | ) | (3,432 | ) | (2,592 | ) | 10,296 | (3,254 | ) | |||||||||||||||
CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET OF TAX | — | — | — | (840 | ) | — | (840 | ) | ||||||||||||||||||
Net loss | $ | (4,094 | ) | $ | (3,432 | ) | $ | (3,432 | ) | $ | (3,432 | ) | $ | 10,296 | $ | (4,094 | ) | |||||||||
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Charter | |||||||||||||||||||||||||||
Charter | All Other | Holdings | |||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||
Net loss | $ | (534 | ) | $ | (389 | ) | $ | (379 | ) | $ | (364 | ) | $ | 1,132 | $ | (534 | ) | ||||||||||
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||||||||||||||||||||||
Minority interest | — | — | — | 9 | — | 9 | |||||||||||||||||||||
Depreciation and amortization | — | — | — | 1,134 | — | 1,134 | |||||||||||||||||||||
Asset impairment charges | — | — | — | 39 | — | 39 | |||||||||||||||||||||
Option compensation expense, net | — | — | — | 11 | — | 11 | |||||||||||||||||||||
Hurricane asset retirement loss | — | — | — | 19 | — | 19 | |||||||||||||||||||||
Noncash interest expense | 170 | 2 | — | 23 | — | 195 | |||||||||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | (43 | ) | — | (43 | ) | |||||||||||||||||||
Gain on sale of assets | — | — | — | 5 | — | 5 | |||||||||||||||||||||
Equity in losses in subsidiaries | 389 | 379 | 364 | — | (1,132 | ) | — | ||||||||||||||||||||
Gain on investments | — | — | — | (21 | ) | — | (21 | ) | |||||||||||||||||||
(Gain) loss on extinguishment of debt | (521 | ) | 8 | 12 | — | — | (501 | ) | |||||||||||||||||||
Deferred income taxes | — | — | — | 6 | — | 6 | |||||||||||||||||||||
Changes in operating assets and liabilities, net of effects from dispositions: | |||||||||||||||||||||||||||
Accounts receivable | 10 | — | — | (15 | ) | — | (5 | ) | |||||||||||||||||||
Prepaid expenses and other assets | — | — | — | (7 | ) | — | (7 | ) | |||||||||||||||||||
Accounts payable, accrued expenses and other | (67 | ) | 3 | 12 | (69 | ) | — | (121 | ) | ||||||||||||||||||
Receivables from and payables to related party, including deferred management fees | 1 | 1 | 1 | (68 | ) | — | (65 | ) | |||||||||||||||||||
Net cash flows from operating activities | (552 | ) | 4 | 10 | 659 | — | 121 | ||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||||||||||||
Purchases of property, plant and equipment | — | — | — | (815 | ) | — | (815 | ) | |||||||||||||||||||
Change in accrued expenses related to capital expenditures | — | — | — | 39 | — | 39 | |||||||||||||||||||||
Proceeds from sale of assets | — | — | — | 38 | — | 38 | |||||||||||||||||||||
Purchases of investments | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||||||
Proceeds from investments | — | — | — | 16 | — | 16 | |||||||||||||||||||||
Other, net | — | — | — | (2 | ) | — | (2 | ) | |||||||||||||||||||
Net cash flows from investing activities | — | — | — | (725 | ) | — | (725 | ) | |||||||||||||||||||
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Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||
Borrowings of long-term debt | — | — | — | 897 | — | 897 | ||||||||||||||||||||
Borrowings from related parties | — | — | — | 140 | — | 140 | ||||||||||||||||||||
Repayments of long-term debt | — | — | — | (1,014 | ) | — | (1,014 | ) | ||||||||||||||||||
Repayments to parent companies | — | — | — | (112 | ) | — | (112 | ) | ||||||||||||||||||
Proceeds from issuance of debt | — | — | — | 294 | — | 294 | ||||||||||||||||||||
Payments for debt issuance costs | — | (8 | ) | (51 | ) | (8 | ) | — | (67 | ) | ||||||||||||||||
Distributions | 552 | 7 | 49 | (668 | ) | — | (60 | ) | ||||||||||||||||||
Net cash flows from financing activities | 552 | (1 | ) | (2 | ) | (471 | ) | — | 78 | |||||||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — | 3 | 8 | (537 | ) | — | (526 | ) | ||||||||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | — | — | — | 546 | — | 546 | ||||||||||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | 3 | $ | 8 | $ | 9 | $ | — | $ | 20 | ||||||||||||||
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Charter | |||||||||||||||||||||||||||
Charter | All Other | Holdings | |||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | ||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||||||||||||
Net loss | $ | (4,094 | ) | $ | (3,432 | ) | $ | (3,432 | ) | $ | (3,432 | ) | $ | 10,296 | $ | (4,094 | ) | ||||||||||
Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||||||||||||||||||||||
Minority interest | — | — | — | (25 | ) | — | (25 | ) | |||||||||||||||||||
Depreciation and amortization | — | — | — | 1,105 | — | 1,105 | |||||||||||||||||||||
Impairment of franchises | — | — | — | 2,433 | — | 2,433 | |||||||||||||||||||||
Option compensation expense, net | — | — | — | 25 | — | 25 | |||||||||||||||||||||
Special charges | — | — | — | 85 | — | 85 | |||||||||||||||||||||
Noncash interest expense | 217 | — | — | 15 | — | 232 | |||||||||||||||||||||
Gain on derivative instruments and hedging activities, net | — | — | — | (48 | ) | — | (48 | ) | |||||||||||||||||||
Gain on sale of assets | — | — | — | (104 | ) | — | (104 | ) | |||||||||||||||||||
Equity in losses in subsidiaries | 3,432 | 3,432 | 3,432 | — | (10,296 | ) | — | ||||||||||||||||||||
Gain on investments | — | — | — | — | — | — | |||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | 18 | — | 18 | |||||||||||||||||||||
Deferred income taxes | — | — | — | (44 | ) | — | (44 | ) | |||||||||||||||||||
Cumulative effect of accounting change, net | — | — | — | 840 | — | 840 | |||||||||||||||||||||
Other, net | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||||||||
Changes in operating assets and liabilities, net of effects from dispositions: | |||||||||||||||||||||||||||
Accounts receivable | 3 | — | — | (1 | ) | — | 2 | ||||||||||||||||||||
Prepaid expenses and other assets | — | — | — | (3 | ) | — | (3 | ) | |||||||||||||||||||
Accounts payable, accrued expenses and other | 134 | — | — | (149 | ) | — | (15 | ) | |||||||||||||||||||
Receivables from and payables to related party, including deferred management fees | 12 | — | — | (65 | ) | — | (53 | ) | |||||||||||||||||||
Net cash flows from operating activities | (296 | ) | — | — | 649 | — | 353 | ||||||||||||||||||||
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Charter | ||||||||||||||||||||||||||
Charter | All Other | Holdings | ||||||||||||||||||||||||
Holdings | CIH | CCH I | Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||
Purchases of property, plant and equipment | — | — | — | (616 | ) | — | (616 | ) | ||||||||||||||||||
Change in accrued expenses related to capital expenditures | — | — | — | (11 | ) | — | (11 | ) | ||||||||||||||||||
Proceeds from sale of assets | — | — | — | 727 | — | 727 | ||||||||||||||||||||
Purchases of investments | (10 | ) | — | — | (4 | ) | — | (14 | ) | |||||||||||||||||
Proceeds from investments | — | — | — | — | — | — | ||||||||||||||||||||
Other, net | — | — | — | (2 | ) | — | (2 | ) | ||||||||||||||||||
Net cash flows from investing activities | (10 | ) | — | — | 94 | — | 84 | |||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||
Borrowings of long-term debt | — | — | — | 2,873 | — | 2,873 | ||||||||||||||||||||
Repayments of long-term debt | — | — | — | (4,707 | ) | — | (4,707 | ) | ||||||||||||||||||
Proceeds from issuance of debt | — | — | — | 1,500 | — | 1,500 | ||||||||||||||||||||
Payments for debt issuance costs | — | — | — | (97 | ) | — | (97 | ) | ||||||||||||||||||
Distributions | 306 | — | — | (306 | ) | — | — | |||||||||||||||||||
Net cash flows from financing activities | 306 | — | — | (737 | ) | — | (431 | ) | ||||||||||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | — | — | — | 6 | — | 6 | ||||||||||||||||||||
CASH AND CASH EQUIVALENTS, beginning of period | — | — | — | 85 | — | 85 | ||||||||||||||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | — | $ | — | $ | — | $ | 91 | $ | — | $ | 91 | ||||||||||||||
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Item 20. | Indemnification of Directors and Officers |
Indemnification Under the Delaware Limited Liability Company Act |
Indemnification Under the Delaware General Corporation Law |
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Table of Contents
(i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, | |
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, | |
(iii) for unlawful payments of dividends or unlawful stock purchases or redemptions, or | |
(iv) for any transaction from which the director derived an improper personal benefit. These provisions will not limit the liability of directors or officers under the federal securities laws of the United States. |
Item 21. | Exhibits and Financial Schedules. |
Exhibits |
Exhibit | Description | |||
2 | .1(a) | Purchase and Contribution Agreement, entered into as of June 1999, by and among BCI (USA), LLC, William Bresnan, Blackstone BC Capital Partners L.P., Blackstone BC Offshore Capital Partners L.P., Blackstone Family Investment Partnership III L.P., TCID of Michigan, Inc. and TCI Bresnan LLC and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 2.11 to Amendment No. 2 to the registration statement on Form S-1 of Charter Communications, Inc. filed on September 28, 1999 (File No. 333-83887)). | ||
2 | .1(b) | First Amendment to Purchase and Contribution Agreement dated as of February 14, 2000, by and among BCI (USA), LLC, William J. Bresnan, Blackstone BC Capital Partners L.P., Blackstone BC Offshore Capital Partners, L.P., Blackstone Family Media III L.P. (as assignee of Blackstone Family Investment III, L.P.), TCID of Michigan, Inc., TCI Bresnan, LLC and Charter Communications Holding Company, LLC. (incorporated by reference to Exhibit 2.11(a) to the current report on Form 8-K filed by Charter Communications, Inc. on February 29, 2000 (File No. 000-27927)). | ||
2 | .2 | Asset Purchase Agreement, dated as of September 28, 2001, between High Speed Access Corp. and Charter Communications Holding Company, LLC (including as Exhibit A, the Form of Voting Agreement, as Exhibit B, the form of Management Agreement, as Exhibit C, the form of License Agreement, and as Exhibit D, the Form of Billing Letter Agreement) (incorporated by reference to Exhibit 10.1 to Amendment No. 6 to Schedule 13D filed by Charter Communications, Inc. and others with respect to High Speed Access Corp., filed on October 1, 2001 (File No. 005-56431)). | ||
2 | .3(a) | Asset Purchase Agreement, dated August 29, 2001, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisitions Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (incorporated by reference to Exhibit 2.1 to the current report of Form 8-K filed by Enstar IV-2, L.P. on September 13, 2001 (File No. 000-15706)). |
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Exhibit | Description | |||
2 | .3(b) | Letter of Amendment, dated September 10, 2001, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisitions Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (incorporated by reference to Exhibit 2.1 to the current report of Form 8-K filed by Enstar IV-2, L.P. on September 13, 2001 (File No. 000-15706)). | ||
2 | .3(c) | Letter of Amendment, dated April 10, 2002, by and between Charter Communications Entertainment I, LLC, Interlink Communications Partners, LLC, and Rifkin Acquisitions Partners, LLC and Enstar Income Program II-1, L.P., Enstar Income Program II-2, L.P., Enstar Income Program IV-3, L.P., Enstar Income/ Growth Program Six-A, L.P., Enstar IV/ PBD Systems Venture, and Enstar Cable of Macoupin County (incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by Enstar Income Program IV-1, L.P. on April 22, 2002 (File No. 000-15705)). | ||
2 | .4 | Asset Purchase Agreement, dated April 10, 2002, by and between Charter Communications Entertainment I, LLC, and Enstar Income Program II-1, L.P. (incorporated by reference to Exhibit 2.2 to the current report on Form 8-K filed by Enstar Income Program II-1, L.P. on April 26, 2002 (File No. 000-14508)). | ||
2 | .5 | Purchase Agreement, dated May 29, 2003, by and between Falcon Video Communications, L.P. and WaveDivision Holdings, LLC (incorporated by reference to Exhibit 2.1 to Charter Communications, Inc.’s current report on Form 8-K filed on May 30, 2003 (File No. 000-27927)). | ||
2 | .6 | Asset Purchase Agreement, dated September 3, 2003, by and between Charter Communications VI, LLC, The Helicon Group, L.P., Hornell Television Service, Inc., Interlink Communications Partners, LLC, Charter Communications Holdings, LLC and Atlantic Broadband Finance, LLC (incorporated by reference to Exhibit 2.1 to Charter Communications, Inc.’s current report on Form 8-K/ A filed on September 3, 2003 (File No. 000-27927)). | ||
2 | .7 | Purchase Agreement dated as of January 26, 2006, by and between CCH II, LLC, CCH II Capital Corp and J.P. Morgan Securities, Inc as Representative of several Purchasers for $450,000,000 10.25% Senior Notes Due 2010 (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K of Charter Communications, Inc. filed on January 27, 2006 (File No. 000-27927)). | ||
3 | .1 | Certificate of Formation of Charter Communications Holdings, LLC (incorporated by reference to Exhibit 3.3 to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)). | ||
3 | .2(a) | Amended and Restated Limited Liability Company Agreement of Charter Communications Holdings, LLC, dated as of October 30, 2001 (incorporated by reference to Exhibit 3.2 to the annual report on Form 10-K of Charter Communications Holdings, LLC and Charter Communications Holding Capital Corporation on March 29, 2002 (File No. 333-77499)). | ||
3 | .2(b) | Second Amended and Restated Limited Liability Company Agreement for Charter Communications Holdings, LLC, dated as of October 31, 2005 (incorporated by reference to Exhibit 10.21 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on November 2, 2005 (File No. 000-27927)). | ||
3 | .3 | Certificate of Incorporation of Charter Communications Holdings Capital Corporation (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)). | ||
3 | .4(a) | By-laws of Charter Communications Holdings Capital Corporation (incorporated by reference to Exhibit 3.4 to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)). |
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Exhibit | Description | |||
3 | .4(b) | Amendment to By-Laws of Charter Communications Holdings Capital Corporation, dated as of October 30, 2001 (incorporated by reference to Exhibit 3.4(b) to the annual report on Form 10-K of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation on March 29, 2002 (File No. 333-77499)). | ||
3 | .5 | Certificate of Formation of CCH I Holdings, LLC (incorporated by reference to Exhibit 3.5 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .6 | Limited Liability Company Agreement of CCH I Holdings, LLC, dated as of August 18, 2005 (incorporated by reference to Exhibit 3.6 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .7 | Certificate of Incorporation of CCH I Holdings Capital Corp (incorporated by reference to Exhibit 3.7 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .8 | By-laws of CCH I Holdings Capital Corp., dated as of August 18, 2005 (incorporated by reference to Exhibit 3.8 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .9 | Certificate of Formation of CCH I, LLC (incorporated by reference to Exhibit 3.9 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .10(a) | Limited Liability Company Agreement of CCH I, LLC, dated as of July 9, 2003 (incorporated by reference to Exhibit 3.10(a) to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .10(b) | First Amendment to the Limited Liability Company Agreement of CCH I, LLC, dated as of June 22, 2004 (incorporated by reference to Exhibit 3.10(b) to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .11 | Certificate of Incorporation of CCH I Capital Corp. (incorporated by reference to Exhibit 3.11 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
3 | .12 | Amended and Restated By-laws of CCH I Capital Corp., dated as of September 19, 2003 (incorporated by reference to Exhibit 3.12 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
4 | .1 | Indenture relating to the 8.250% Senior Notes due 2007, dated as of March 17, 1999, between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.1(a) to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)). | ||
4 | .2(a) | Indenture relating to the 8.625% Senior Notes due 2009, dated as of March 17, 1999, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.2(a) to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)). | ||
4 | .2(b) | First Supplemental Indenture relating to the 8.625% Senior Notes due 2009, dated as of September 28, 2005, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). |
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Exhibit | Description | |||
4 | .3(a) | Indenture relating to the 9.920% Senior Discount Notes due 2011, dated as of March 17, 1999, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.3(a) to Amendment No. 2 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on June 22, 1999 (File No. 333-77499)). | ||
4 | .3(b) | First Supplemental Indenture relating to the 9.920% Senior Discount Notes due 2011, dated as of September 28, 2005, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .4(a) | Indenture relating to the 10.00% Senior Notes due 2009, dated as of January 12, 2000, between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.1(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)). | ||
4 | .4(b) | First Supplemental Indenture relating to the 10.00% Senior Notes due 2009, dated as of September 28, 2005, between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .5(a) | Indenture relating to the 10.25% Senior Notes due 2010, dated as of January 12, 2000, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.2(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)). | ||
4 | .5(b) | First Supplemental Indenture relating to the 10.25% Senior Notes due 2010, dated as of September 28, 2005, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee (incorporated by reference to Exhibit 10.6 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .6(a) | Indenture relating to the 11.75% Senior Discount Notes due 2010, dated as of January 12, 2000, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and Harris Trust and Savings Bank (incorporated by reference to Exhibit 4.3(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)). | ||
4 | .6(b) | First Supplemental Indenture relating to the 11.75% Senior Discount Notes due 2010, among Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee, dated as of September 28, 2005 (incorporated by reference to Exhibit 10.7 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .7(a) | Indenture dated as of January 10, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.750% senior notes due 2009 (incorporated by reference to Exhibit 4.2(a) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)). | ||
4 | .7(b) | First Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.750% Senior Notes due 2009 (incorporated by reference to Exhibit 10.8 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). |
II-5
Table of Contents
Exhibit | Description | |||
4 | .8(a) | Indenture dated as of January 10, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 11.125% senior notes due 2011 (incorporated by reference to Exhibit 4.2(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)). | ||
4 | .8(b) | First Supplemental Indenture dated as of September 28, 2005, between Charter Communications Holdings, LLC, Charter Communications Capital Corporation and BNY Midwest Trust Company governing 11.125% Senior Notes due 2011 (incorporated by reference to Exhibit 10.9 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .9(a) | Indenture dated as of January 10, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 13.500% senior discount notes due 2011 (incorporated by reference to Exhibit 4.2(c) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)). | ||
4 | .9(b) | First Supplemental Indenture dated as of September 28, 2005, between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 13.500% Senior Discount Notes due 2011 (incorporated by reference to Exhibit 10.10 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .10(a) | Indenture dated as of May 15, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009. (incorporated by reference to Exhibit 10.2(a) to the current report on Form 8-K filed by Charter Communications, Inc. on June 1, 2001 (File No. 000-27927)). | ||
4 | .10(b) | First Supplemental Indenture dated as of January 14, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009 (incorporated by reference to Exhibit 10.2(a) to the current report on Form 8-K filed by Charter Communications, Inc. on January 15, 2002 (File No. 000-27927)). | ||
4 | .10(c) | Second Supplemental Indenture dated as of June 25, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009 (incorporated by reference to Exhibit 4.1 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 6, 2002 (File No. 000-27927)). | ||
4 | .10(d) | Third Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Capital Corporation and BNY Midwest Trust Company as Trustee governing 9.625% Senior Notes due 2009 (incorporated by reference to Exhibit 10.11 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .11(a) | Indenture dated as of May 15, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.000% Senior Notes due 2011. (incorporated by reference to Exhibit 10.3(a) to the current report on Form 8-K filed by Charter Communications, Inc. on June 1, 2001 (File No. 000-27927)). | ||
4 | .11(b) | First Supplemental Indenture dated as of January 14, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.000% Senior Notes due 2011 (incorporated by reference to Exhibit 10.3(a) to the current report on Form 8-K filed by Charter Communications, Inc. on January 15, 2002 (File No. 000-27927)). |
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Exhibit | Description | |||
4 | .11(c) | Second Supplemental Indenture dated as of June 25, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 10.000% Senior Notes due 2011 (incorporated by reference to Exhibit 4.2 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 6, 2002 (File No. 000-27927)). | ||
4 | .11(d) | Third Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing the 10.000% Senior Notes due 2011 (incorporated by reference to Exhibit 10.12 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .12(a) | Indenture dated as of May 15, 2001 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 11.750% Senior Discount Notes due 2011. (incorporated by reference to Exhibit 10.4(a) to the current report on Form 8-K filed by Charter Communications, Inc. on June 1, 2001 (File No. 000-27927)). | ||
4 | .12(b) | First Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 11.750% Senior Discount Notes due 2011 (incorporated by reference to Exhibit 10.13 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
4 | .13(a) | Indenture dated as of January 14, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 12.125% Senior Discount Notes due 2012 (incorporated by reference to Exhibit 10.4(a) to the current report on Form 8-K filed by Charter Communications, Inc. on January 15, 2002 (File No. 000-27927)). | ||
4 | .13(b) | First Supplemental Indenture dated as of June 25, 2002 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 12.125% Senior Discount Notes due 2012 (incorporated by reference to Exhibit 4.3 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 6, 2002 (File No. 000-27927)). | ||
4 | .13(c) | Second Supplemental Indenture dated as of September 28, 2005 between Charter Communications Holdings, LLC, Charter Communications Holdings Capital Corporation and BNY Midwest Trust Company as Trustee governing 12.125% Senior Discount Notes due 2012 (incorporated by reference to Exhibit 10.14 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
5 | .1* | Opinion of Gibson, Dunn & Crutcher LLP regarding legality. | ||
10 | .1 | Indenture, dated as of April 9, 1998, by and among Renaissance Media (Louisiana) LLC, Renaissance Media (Tennessee) LLC, Renaissance Media Capital Corporation, Renaissance Media Group LLC and United States Trust Company of New York, as trustee (incorporated by reference to Exhibit 4.1 to the registration statement on Forms S-4 of Renaissance Media Group LLC, Renaissance Media (Tennessee) LLC, Renaissance Media (Louisiana) LLC and Renaissance Media Capital Corporation filed on June 12, 1998 (File No. 333-56679)). | ||
10 | .2 | Indenture relating to the 10.25% Senior Notes due 2010, dated as of September 23, 2003, among CCH II, LLC, CCH II Capital Corporation and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications Inc. filed on September 26, 2003 (File No. 000-27927)). | ||
10 | .3 | Indenture relating to the 83/4% Senior Notes due 2013, dated as of November 10, 2003, by and among CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Charter Communications, Inc.’s current report on Form 8-K filed on November 12, 2003 (File No. 000-27927)). | ||
10 | .4 | Amended and Restated Credit Agreement among Charter Communications Operating, LLC, CCO Holdings, LLC and certain lenders and agents named therein dated April 27, 2004 (incorporated by reference to Exhibit 10.25 to Amendment No. 2 to the registration statement on Form S-4 of CCH II, LLC filed on May 5, 2004 (File No. 333-111423)). |
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Exhibit | Description | |||
10 | .5 | Indenture relating to the 8% senior second lien notes due 2012 and 83/8% senior second lien notes due 2014, dated as of April 27, 2004, by and among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp. and Wells Fargo Bank, N.A. as trustee (incorporated by reference to Exhibit 10.32 to Amendment No. 2 to the registration statement on Form S-4 of CCH II, LLC filed on May 5, 2004 (File No.333-111423)). | ||
10 | .6 | Indenture dated as of December 15, 2004 among CCO Holdings, LLC, CCO Holdings Capital Corp. and Wells Fargo Bank, N.A., as trustee (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of CCO Holdings, LLC filed on December 21, 2004 (File No. 333-112593)). | ||
10 | .7 | Indenture dated as of September 28, 2005 among CCH I Holdings, LLC and CCH I Holdings Capital Corp., as Issuers and Charter Communications Holdings, LLC, as Parent Guarantor, and The Bank of New York Trust Company, NA, as Trustee, governing: 11.125% Senior Accreting Notes due 2014, 9.920% Senior Accreting Notes due 2014, 10.000% Senior Accreting Notes due 2014, 11.75% Senior Accreting Notes due 2014, 13.50% Senior Accreting Notes due 2014, 12.125% Senior Accreting Notes due 2015 (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
10 | .8 | Indenture dated as of September 28, 2005 among CCH I, LLC and CCH I Capital Corp., as Issuers, Charter Communications Holdings, LLC, as Parent Guarantor, and The Bank of New York Trust Company, NA, as Trustee, governing 11.00% Senior Secured Notes due 2015 (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
10 | .9 | Pledge Agreement made by CCH I, LLC in favor of The Bank of New York Trust Company, NA, as Collateral Agent dated as of September 28, 2005 (incorporated by reference to Exhibit 10.15 to the current report on Form 8-K of Charter Communications, Inc. filed on October 4, 2005 (File No. 000-27927)). | ||
10 | .10(a) | Senior Bridge Loan Agreement dated as of October 17, 2005 by and among CCO Holdings, LLC, CCO Holdings Capital Corp., certain lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities Inc. and Credit Suisse, Cayman Islands Branch, as joint lead arrangers and joint bookrunners, and Deutsche Bank Securities Inc., as documentation agent. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on October 19, 2005 (File No. 000-27927)). | ||
10 | .10(b) | Waiver and Amendment Agreement to the Senior Bridge Loan Agreement dated as of January 26, 2006 by and among CCO Holdings, LLC, CCO Holdings Capital Corp., certain lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Securities Inc. and Credit Suisse, Cayman Islands Branch, as joint lead arrangers and joint bookrunners, and Deutsche Bank Securities Inc., as documentation agent (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc. filed on January 27, 2006 (File No. 000-27927)). | ||
10 | .11 | Consulting Agreement, dated as of March 10, 1999, by and between Vulcan Northwest Inc., Charter Communications, Inc. (now called Charter Investment Inc.) and Charter Communications Holdings, LLC (incorporated by reference to Exhibit 10.3 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)). | ||
10 | .12(a) | First Amended and Restated Mutual Services Agreement, dated as of December 21, 2000, by and between Charter Communications, Inc., Charter Investment, Inc. and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 10.2(b) to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on February 2, 2001 (File No. 333-54902)). |
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Exhibit | Description | |||
10 | .12(b) | Letter Agreement, dated June 19, 2003, by and among Charter Communications, Inc., Charter Communications Holding Company, LLC and Charter Investment, Inc. regarding Mutual Services Agreement (incorporated by reference to Exhibit No. 10.5(b) to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)). | ||
10 | .12(c) | Second Amended and Restated Mutual Services Agreement, dated as of June 19, 2003 between Charter Communications, Inc. and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 10.5(a) to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)). | ||
10 | .13(a) | Amended and Restated Limited Liability Company Agreement for Charter Communications Holding Company, LLC made as of August 31, 2001 (incorporated by reference to Exhibit 10.9 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)). | ||
10 | .13(b) | Letter Agreement between Charter Communications, Inc. and Charter Investment Inc. and Vulcan Cable III Inc. amending the Amended and Restated Limited Liability Company Agreement of Charter Communications Holding Company, LLC, dated as of November 22, 2004 (incorporated by reference to Exhibit 10.10 to the current report on Form 8-K of Charter Communications, Inc. filed on November 30, 2004 (File No. 000-27927)). | ||
10 | .14(a) | Amended and Restated Limited Liability Company Agreement for CC VIII, LLC, dated as of March 31, 2003 (incorporated by reference to Exhibit 10.27 to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)). | ||
10 | .14(b) | Third Amended and Restated Limited Liability Company Agreement for CC VIII, LLC, dated as of October 31, 2005 (incorporated by reference to Exhibit 10.20 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on November 2, 2005 (File No. 000-27927)). | ||
10 | .15 | Amended and Restated Limited Liability Company Agreement of Charter Communications Operating, LLC, dated as of June 19, 2003 (incorporated by reference to Exhibit No. 10.2 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 000-27927)). | ||
10 | .16 | Amended and Restated Management Agreement, dated as of June 19, 2003, between Charter Communications Operating, LLC and Charter Communications, Inc. (incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on August 5, 2003 (File No. 333-83887)). | ||
10 | .17 | Stipulation of Settlement, dated as of January 24, 2005, regarding settlement of Consolidated Federal Class Action entitled in Re Charter Communications, Inc. Securities Litigation. (incorporated by reference to Exhibit 10.48 to the Annual Report on Form 10-K filed by Charter Communications, Inc. on March 3, 2005 (File No. 000-27927)). | ||
10 | .18 | Amendment to Stipulation of Settlement, dated as of May 23, 2005, regarding settlement of Consolidated Federal Class Action entitled In Re Charter Communications, Inc. Securities Litigation (incorporated by reference to Exhibit 10.35(b) to Amendment No. 4 to the registration statement on Form S-1 filed by Charter Communications, Inc. on June 7, 2005 (File No. 333-121136)). | ||
10 | .19† | Settlement Agreement and Mutual Releases, dated as of October 31, 2005, by and among Charter Communications, Inc., Special Committee of the Board of Directors of Charter Communications, Inc., Charter Communications Holding Company, LLC, CCHC, LLC, CC VIII, LLC, CC V, LLC, Charter Investment, Inc., Vulcan Cable III, LLC and Paul G. Allen (incorporated by reference to Exhibit 10.17 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on November 2, 2005 (File No. 000-27927)). | ||
10 | .20 | Exchange Agreement, dated as of October 31, 2005, by and among Charter Communications Holding Company, LLC, Charter Investment, Inc. and Paul G. Allen (incorporated by reference to Exhibit 10.18 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on November 2, 2005 (File No. 000-27927)). |
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Exhibit | Description | |||
10 | .21 | CCHC, LLC Subordinated and Accreting Note, dated as of October 31, 2005 (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K of Charter Communications, Inc. filed on November 4, 2005 (File No. 000-27927)). | ||
10 | .22(a)+ | Charter Communications Holdings, LLC 1999 Option Plan (incorporated by reference to Exhibit 10.4 to Amendment No. 4 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on July 22, 1999 (File No. 333-77499)). | ||
10 | .22(b)+ | Assumption Agreement regarding Option Plan, dated as of May 25, 1999, by and between Charter Communications Holdings, LLC and Charter Communications Holding Company, LLC (incorporated by reference to Exhibit 10.13 to Amendment No. 6 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on August 27, 1999 (File No. 333-77499)). | ||
10 | .22(c)+ | Form of Amendment No. 1 to the Charter Communications Holdings, LLC 1999 Option Plan (incorporated by reference to Exhibit 10.10(c) to Amendment No. 4 to the registration statement on Form S-1 of Charter Communications, Inc. filed on November 1, 1999 (File No. 333-83887)). | ||
10 | .22(d)+ | Amendment No. 2 to the Charter Communications Holdings, LLC 1999 Option Plan (incorporated by reference to Exhibit 10.4(c) to the annual report on Form 10-K filed by Charter Communications, Inc. on March 30, 2000 (File No. 000-27927)). | ||
10 | .22(e)+ | Amendment No. 3 to the Charter Communications 1999 Option Plan (incorporated by reference to Exhibit 10.14(e) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927)). | ||
10 | .22(f)+ | Amendment No. 4 to the Charter Communications 1999 Option Plan (incorporated by reference to Exhibit 10.10(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)). | ||
10 | .23(a)+ | Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.25 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on May 15, 2001 (File No. 000-27927)). | ||
10 | .23(b)+ | Amendment No. 1 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.11(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)). | ||
10 | .23(c)+ | Amendment No. 2 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.10 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)). | ||
10 | .23(d)+ | Amendment No. 3 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective January 2, 2002 (incorporated by reference to Exhibit 10.15(c) to the annual report of Form 10-K of Charter Communications, Inc. filed on March 29, 2002 (File No. 000-27927)). | ||
10 | .23(e)+ | Amendment No. 4 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.11(e) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)). | ||
10 | .23(f)+ | Amendment No. 5 to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.11(f) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)). | ||
10 | .23(g) | Amendment No. 6 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective December 23, 2004 (incorporated by reference to Exhibit 10.43(g) to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 5, 2005 (File No. 333-128828)). | ||
10 | .23(h) | Amendment No. 7 to the Charter Communications, Inc. 2001 Stock Incentive Plan effective August 23, 2005 (incorporated by reference to Exhibit 10.43(h) to the registration statement on Form S-1 of Charter Communications, Inc. filed on October 5, 2005 (File No. 333-128828)). |
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Table of Contents
Exhibit | Description | |||
10 | .23(i)+ | Description of Long-Term Incentive Program to the Charter Communications, Inc. 2001 Stock Incentive Plan (incorporated by reference to Exhibit 10.11(g) to the annual report on Form 10-K of Charter Communications, Inc. filed on March 15, 2004 (File No. 000-27927)). | ||
10 | .24+ | Description of Charter Communications, Inc. 2005 Executive Bonus Plan (incorporated by reference to Exhibit 10.51 to the annual report on Form 10-K filed by Charter Communications, Inc. on March 3, 2005 (File No. 000-27927)). | ||
10 | .25+ | 2005 Executive Cash Award Plan dated as of June 9, 2005 (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed June 15, 2005 (File No. 000-27927)). | ||
10 | .26(a)+ | Letter Agreement, dated May 25, 1999, between Charter Communications, Inc. and Marc Nathanson (incorporated by reference to Exhibit 10.36 to the registration statement on Form S-4 of Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corporation filed on January 25, 2000 (File No. 333-95351)). | ||
10 | .26(b)+ | Letter Agreement, dated March 27, 2000, between CC VII Holdings, LLC and Marc Nathanson, amending the Letter Agreement dated May 25, 1999 (incorporated by reference to Exhibit 10.13(b) to the annual report on Form 10-K of Charter Communications, Inc. filed on April 15, 2003 (File No. 000-27927)). | ||
10 | .27+ | Executive Services Agreement, dated as of January 17, 2005, between Charter Communications, Inc. and Robert P. May (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on January 21, 2005 (File No. 000-27927)). | ||
10 | .28+ | Employment Agreement between Charter Communications, Inc. and Carl E. Vogel, entered into as of October 1, 2001 (incorporated by reference to Exhibit 10.4 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on November 14, 2001 (File No. 000-27927)). | ||
10 | .29+ | Separation Agreement and Release for Carl E. Vogel, dated as of February 17, 2005 (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K filed by Charter Communications, Inc. on February 22, 2005 (File No. 000-27927)). | ||
10 | .30+ | Employment Agreement, dated as of April 1, 2005, by and between Michael J. Lovett and Charter Communications, Inc. (incorporated by reference to Exhibit 10.11 to the quarterly report on Form 10-Q filed by Charter Communications, Inc. on May 3, 2005 (File No. 000-27927)). | ||
10 | .31+ | Letter Agreement, dated April 15, 2005, by and between Charter Communications, Inc. and Paul E. Martin (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed April 19, 2005 (File No. 000-27927)). | ||
10 | .32+ | Restricted Stock Agreement, dated as of July 13, 2005, by and between Robert P. May and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed July 13, 2005 (File No. 000-27927)). | ||
10 | .33+ | Restricted Stock Agreement, dated as of July 13, 2005, by and between Michael J. Lovett and Charter Communications, Inc. (incorporated by reference to Exhibit 99.2 to the current report on Form 8-K of Charter Communications, Inc. filed July 13, 2005 (File No. 000-27927)). | ||
10 | .34+ | Employment Agreement, dated as of August 9, 2005, by and between Neil Smit and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on August 15, 2005 (File No. 000-27927)). | ||
10 | .35+ | Employment Agreement dated as of September 2, 2005, by and between Paul E. Martin and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on September 9, 2005 (File No. 000-27927)). |
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Exhibit | Description | |||
10 | .36+ | Employment Agreement dated as of September 2, 2005, by and between Wayne H. Davis and Charter Communications, Inc. (incorporated by reference to Exhibit 99.2 to the current report on Form 8-K of Charter Communications, Inc. filed on September 9, 2005 (File No. 000-27927)). | ||
10 | .37+ | Employment Agreement dated as of October 31, 2005, by and between Sue Ann Hamilton and Charter Communications, Inc. (incorporated by reference to Exhibit 10.28 to the quarterly report on Form 10-Q of Charter Communications, Inc. filed on November 2, 2005 (File No. 000-27927)). | ||
10 | .38+ | Employment Agreement dated as of October 10, 2005, by and between Grier C. Raclin and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on November 14, 2005 (File No. 000-27927)). | ||
10 | .39+ | Employment Agreement dated as of December 9, 2005, by and between Robert A. Quigley and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on December 13, 2005 (File No. 000-27927)). | ||
10 | .40† | Employment Offer Letter, dated November 22, 2005, by and between Charter Communications, Inc. and Robert A. Quigley (incorporated by reference to Exhibit 10.68 to the Amendment No. 1 to registration statement on Form S-1 of Charter Communications, Inc. filed on February 3, 2006 (File No. 333-130898)). | ||
10 | .41+ | Retention Agreement dated as of January 9, 2006, by and between Paul E. Martin and Charter Communications, Inc. (incorporated by reference to Exhibit 99.1 to the current report on Form 8-K of Charter Communications, Inc. filed on January 10, 2006 (File No. 000-27927)). | ||
10 | .42+ | Employment Agreement dated as of January 20, 2006 by and between Jeffrey T. Fisher and Charter Communications, Inc. (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc. filed on January 27, 2006 (File No. 000-27927)). | ||
12 | .1 | Computation of Ratio of Earnings to Fixed Charges (incorporated by reference to Exhibit 12.1 to the registration statement on Form S-4 by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
21 | .1 | Subsidiaries of Charter Communications Holdings, LLC (incorporated by reference to Exhibit 21.1 to the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
23 | .1* | Consent of Gibson, Dunn &Crutcher LLP (included with Exhibit 5.1). | ||
23 | .2* | Consent of KPMG LLP. | ||
24 | .1 | Power of attorney (filed with signature pages on the registration statement on Form S-4 filed by Charter Communications Holdings, LLC on January 24, 2006 (File No. 333-131251-03)). | ||
24 | .2* | Power of Attorney for Nathaniel A. Davis. | ||
25 | .1* | Statement of eligibility of trustee for 11.125% Senior Accreting Notes due 2014 | ||
25 | .2* | Statement of eligibility of trustee for 9.920% Senior Accreting Notes due 2014 | ||
25 | .3* | Statement of eligibility of trustee for 10.00% Senior Accreting Notes due 2014 | ||
25 | .4* | Statement of eligibility of trustee for 11.75% Senior Accreting Notes due 2014 | ||
25 | .5* | Statement of eligibility of trustee for 13.50% Senior Accreting Notes due 2014 | ||
25 | .6* | Statement of eligibility of trustee for 12.125% Senior Accreting Notes due 2015 | ||
25 | .7* | Statement of eligibility of trustee for 11.00% Senior Secured Notes due 2015 | ||
99 | .1* | Form of Cover Letter to Registered Holders and the Depository Trust Company Participants. | ||
99 | .2* | Form of Broker Letter. | ||
99 | .3* | Form of Letter of Transmittal. | ||
99 | .4* | Form of Notice of Guaranteed Delivery. |
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* | Document attached |
+ | Management compensatory plan or arrangement |
Financial Statement Schedules |
Item 22. | Undertakings |
(1) Prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. | |
(2) Every prospectus: (i) that is filed pursuant to the immediately preceding paragraph or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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Table of Contents
Charter Communications Holdings, llc; | |
CCH I Holdings, llc; and CCH I, llc | |
Registrants |
By: | Charter Communications, Inc., |
Sole Manager |
By: | /s/Paul E. Martin |
Paul E. Martin | |
Senior Vice President, | |
Interim Chief Financial Officer, | |
Principal Accounting Officer and | |
Corporate Controller |
Signature | Title | Date | ||||
* Paul G. Allen | Chairman of the Board of Directors of Charter Communications, Inc. | February 3, 2006 | ||||
* Neil Smit | President and Chief Executive Officer, Director (Principal Executive Officer) Charter Communications, Inc. | February 3, 2006 | ||||
/s/Paul E. Martin Paul E. Martin | Senior Vice President, Interim Chief Financial Officer, Principal Accounting Officer and Corporate Controller (Principal Financial Officer and Principal Accounting Officer) Charter Communications, Inc. | February 3, 2006 | ||||
* W. Lance Conn | Director of Charter Communications, Inc. | February 3, 2006 | ||||
* Nathaniel A. Davis | Director of Charter Communications, Inc. | February 3, 2006 |
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Table of Contents
Signature | Title | Date | ||||
* Jonathan L. Dolgen | Director of Charter Communications, Inc. | February 3, 2006 | ||||
* Robert P. May | Director of Charter Communications, Inc. | February 3, 2006 | ||||
* David C. Merritt | Director of Charter Communications, Inc. | February 3, 2006 | ||||
* Marc B. Nathanson | Director of Charter Communications, Inc. | February 3, 2006 | ||||
* Jo Allen Patton | Director of Charter Communications, Inc. | February 3, 2006 | ||||
* John H. Tory | Director of Charter Communications, Inc. | February 3, 2006 | ||||
* Larry W. Wangberg | Director of Charter Communications, Inc. | February 3, 2006 | ||||
By: | /s/Grier C. Raclin Grier C. Raclin Attorney-in-Fact |
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Table of Contents
CCH I Holdings Capital Corp.; and | |
CCH I Capital Corp | |
Registrants |
By: | /s/Paul E. Martin |
Paul E. Martin | |
Senior Vice President, Interim Chief Financial | |
Officer, Principal Accounting Officer | |
and Corporate Controller |
Signature | Title | Date | ||||
* Neil Smit | President and Chief Executive Officer, Director (Principal Executive Officer) CCH I Holdings Capital Corp and CCH I Capital Corp | February 3, 2006 | ||||
/s/Paul E. Martin Paul E. Martin | Senior Vice President, Interim Chief Financial Officer, Principal Accounting Officer and Corporate Controller (Principal Financial Officer and Principal Accounting Officer) CCH I Holdings Capital Corp and CCH I Capital Corp | February 3, 2006 | ||||
By: | /s/Grier C. Raclin Grier C. Raclin Attorney-in-Fact |
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