Delaware
Delaware
|
43-1843179
43-1843177
|
|
(State
or other jurisdiction of incorporation or
organization)
|
(I.R.S.
Employer Identification
Number)
|
PART
I. FINANCIAL INFORMATION
|
Page
|
Item
1. Report
of Independent Registered Public Accounting Firm
|
4
|
Financial
Statements - Charter Communications Holdings, LLC and
Subsidiaries
|
|
Condensed
Consolidated Balance Sheets as of June
30, 2006
|
|
and
December 31, 2005
|
5
|
Condensed
Consolidated Statements of Operations for the three and
six
|
|
months
ended June
30, 2006 and
2005
|
6
|
Condensed
Consolidated Statements of Cash Flows for the
|
|
six
months ended June
30, 2006
and 2005
|
7
|
Notes
to Condensed Consolidated Financial Statements
|
8
|
Item
2. Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
27
|
Item
3. Quantitative
and Qualitative Disclosures about Market Risk
|
41
|
Item
4. Controls
and Procedures
|
42
|
PART
II. OTHER INFORMATION
|
|
Item
1. Legal
Proceedings
|
43
|
Item
1A. Risk Factors
|
43
|
Item
6. Exhibits
|
52
|
SIGNATURES
|
53
|
EXHIBIT
INDEX
|
54
|
·
|
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 parent companies’ ability to be able to provide under the
applicable debt instruments such funds (by dividend, investment or
otherwise) to the applicable obligor of such
debt;
|
· |
our
and our parent companies’ ability to comply with all covenants in our and
our parent companies’ indentures 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 through new issuances, exchange
offers or otherwise, including restructuring our and our parent companies’
balance sheet and leverage
position;
|
·
|
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
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.
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
(Unaudited)
|
|||||||
ASSETS
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
and cash equivalents
|
$
|
48
|
$
|
14
|
|||
Accounts
receivable, less allowance for doubtful accounts of
|
|||||||
$19
and $17, respectively
|
178
|
212
|
|||||
Prepaid
expenses and other current assets
|
20
|
22
|
|||||
Assets
held for sale
|
768
|
--
|
|||||
Total
current assets
|
1,014
|
248
|
|||||
INVESTMENT
IN CABLE PROPERTIES:
|
|||||||
Property,
plant and equipment, net of accumulated
|
|||||||
depreciation
of $7,014 and $6,712, respectively
|
5,354
|
5,800
|
|||||
Franchises,
net
|
9,280
|
9,826
|
|||||
Total
investment in cable properties, net
|
14,634
|
15,626
|
|||||
OTHER
NONCURRENT ASSETS
|
294
|
318
|
|||||
Total
assets
|
$
|
15,942
|
$
|
16,192
|
|||
LIABILITIES
AND MEMBER’S DEFICIT
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable and accrued expenses
|
$
|
1,129
|
$
|
1,096
|
|||
Payables
to related party
|
90
|
83
|
|||||
Liabilities
held for sale
|
20
|
--
|
|||||
Total
current liabilities
|
1,239
|
1,179
|
|||||
LONG-TERM
DEBT
|
19,012
|
18,525
|
|||||
LOANS
PAYABLE - RELATED PARTY
|
3
|
22
|
|||||
DEFERRED
MANAGEMENT FEES - RELATED PARTY
|
14
|
14
|
|||||
OTHER
LONG-TERM LIABILITIES
|
359
|
392
|
|||||
MINORITY
INTEREST
|
631
|
622
|
|||||
MEMBER’S
DEFICIT:
|
|||||||
Member’s
deficit
|
(5,318
|
)
|
(4,564
|
)
|
|||
Accumulated
other comprehensive income
|
2
|
2
|
|||||
Total
member’s deficit
|
(5,316
|
)
|
(4,562
|
)
|
|||
Total
liabilities and member’s deficit
|
$
|
15,942
|
$
|
16,192
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
REVENUES
|
$
|
1,383
|
$
|
1,266
|
$
|
2,703
|
$
|
2,481
|
|||||
COSTS
AND EXPENSES:
|
|||||||||||||
Operating
(excluding depreciation and amortization)
|
611
|
546
|
1,215
|
1,081
|
|||||||||
Selling,
general and administrative
|
279
|
250
|
551
|
483
|
|||||||||
Depreciation
and amortization
|
340
|
364
|
690
|
730
|
|||||||||
Asset
impairment charges
|
--
|
8
|
99
|
39
|
|||||||||
Other
operating (income) expenses, net
|
7
|
(2
|
)
|
10
|
6
|
||||||||
1,237
|
1,166
|
2,565
|
2,339
|
||||||||||
Operating
income from continuing operations
|
146
|
100
|
138
|
142
|
|||||||||
OTHER
INCOME AND (EXPENSES):
|
|||||||||||||
Interest
expense, net
|
(456
|
)
|
(431
|
)
|
(907
|
)
|
(855
|
)
|
|||||
Other
income (expenses), net
|
(26
|
)
|
14
|
(19
|
)
|
45
|
|||||||
(482
|
)
|
(417
|
)
|
(926
|
)
|
(810
|
)
|
||||||
Loss
from continuing operations before income taxes
|
(336
|
)
|
(317
|
)
|
(788
|
)
|
(668
|
)
|
|||||
INCOME
TAX EXPENSE
|
(2
|
)
|
(2
|
)
|
(4
|
)
|
(8
|
)
|
|||||
Loss
from continuing operations
|
(338
|
)
|
(319
|
)
|
(792
|
)
|
(676
|
)
|
|||||
INCOME
FROM DISCONTINUED OPERATIONS,
NET
OF TAX
|
23
|
10
|
38
|
19
|
|||||||||
Net
loss
|
$
|
(315
|
)
|
$
|
(309
|
)
|
$
|
(754
|
)
|
$
|
(657
|
)
|
Six
Months Ended June
30,
|
|||||||
2006
|
2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
loss
|
$
|
(754
|
)
|
$
|
(657
|
)
|
|
Adjustments
to reconcile net loss to net cash flows from operating
activities:
|
|||||||
Depreciation
and amortization
|
698
|
759
|
|||||
Asset
impairment charges
|
99
|
39
|
|||||
Noncash
interest expense
|
74
|
128
|
|||||
Deferred
income taxes
|
--
|
5
|
|||||
Other,
net
|
27
|
(42
|
)
|
||||
Changes
in operating assets and liabilities, net of effects from acquisitions
and
dispositions:
|
|||||||
Accounts
receivable
|
29
|
--
|
|||||
Prepaid
expenses and other assets
|
--
|
(21
|
)
|
||||
Accounts
payable, accrued expenses and other
|
28
|
(19
|
)
|
||||
Receivables
from and payables to related party, including management
fees
|
3
|
(28
|
)
|
||||
Net
cash flows from operating activities
|
204
|
164
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of property, plant and equipment
|
(539
|
)
|
(542
|
)
|
|||
Change
in accrued expenses related to capital expenditures
|
(9
|
)
|
48
|
||||
Proceeds
from sale of assets
|
9
|
8
|
|||||
Purchase
of cable system
|
(42
|
)
|
--
|
||||
Proceeds
from investments
|
28
|
16
|
|||||
Other,
net
|
--
|
(2
|
)
|
||||
Net
cash flows from investing activities
|
(553
|
)
|
(472
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Borrowings
of long-term debt
|
5,830
|
635
|
|||||
Borrowings
from related parties
|
--
|
140
|
|||||
Repayments
of long-term debt
|
(5,838
|
)
|
(819
|
)
|
|||
Repayments
to related parties
|
(20
|
)
|
(107
|
)
|
|||
Proceeds
from issuance of debt
|
440
|
--
|
|||||
Payments
for debt issuance costs
|
(29
|
)
|
(3
|
)
|
|||
Distributions
|
--
|
(60
|
)
|
||||
Net
cash flows from financing activities
|
383
|
(214
|
)
|
||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
34
|
(522
|
)
|
||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
14
|
546
|
|||||
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
48
|
$
|
24
|
|||
CASH
PAID FOR INTEREST
|
$
|
765
|
$
|
707
|
|||
NONCASH
TRANSACTIONS:
|
|||||||
Issuance
of debt by Charter Communications Operating, LLC
|
$
|
37
|
$
|
333
|
|||
Retirement
of Renaissance Media Group LLC debt
|
$
|
(37
|
)
|
$
|
--
|
||
Retirement
of Charter Communications Holdings, LLC debt
|
$
|
--
|
$
|
(346
|
)
|
||
Transfer
of property, plant and equipment from parent company
|
$
|
--
|
$
|
139
|
Organization
and Basis of Presentation
|
Liquidity
and Capital Resources
|
3.
|
Sale
of Assets
|
Three
Months
Ended
June 30,
|
Six
Months
Ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Revenues
|
$
|
55
|
$
|
57
|
$
|
109
|
$
|
113
|
|||||
Income
(loss) before income taxes
|
$
|
23
|
$
|
10
|
$
|
38
|
$
|
19
|
4.
|
Franchises
and Goodwill
|
June
30, 2006
|
December 31,
2005
|
||||||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
||||||||||||||
Indefinite-lived
intangible assets:
|
|||||||||||||||||||
Franchises
with indefinite lives
|
$
|
9,263
|
$
|
--
|
$
|
9,263
|
$
|
9,806
|
$
|
--
|
$
|
9,806
|
|||||||
Goodwill
|
61
|
--
|
61
|
52
|
--
|
52
|
|||||||||||||
$
|
9,324
|
$
|
--
|
$
|
9,324
|
$
|
9,858
|
$
|
--
|
$
|
9,858
|
||||||||
Finite-lived
intangible assets:
|
|||||||||||||||||||
Franchises
with finite lives
|
$
|
23
|
$
|
6
|
$
|
17
|
$
|
27
|
$
|
7
|
$
|
20
|
Accounts
Payable and Accrued
Expenses
|
June
30,
2006
|
December 31,
2005
|
||||||
Accounts
payable - trade
|
$
|
74
|
$
|
102
|
|||
Accrued
capital expenditures
|
64
|
73
|
|||||
Accrued
expenses:
|
|||||||
Interest
|
394
|
329
|
|||||
Programming
costs
|
297
|
272
|
|||||
Franchise-related
fees
|
55
|
67
|
|||||
Compensation
|
64
|
60
|
|||||
Other
|
181
|
193
|
|||||
$
|
1,129
|
$
|
1,096
|
6.
|
Long-Term
Debt
|
June
30, 2006
|
December
31, 2005
|
||||||||||||
Principal
Amount
|
Accreted
Value
|
Principal
Amount
|
Accreted
Value
|
||||||||||
Long-Term
Debt
|
|||||||||||||
Charter
Communications Holdings, LLC:
|
|||||||||||||
8.250%
senior notes due 2007
|
$
|
105
|
$
|
105
|
$
|
105
|
$
|
105
|
|||||
8.625%
senior notes due 2009
|
292
|
292
|
292
|
292
|
|||||||||
9.920%
senior discount notes due 2011
|
198
|
198
|
198
|
198
|
|||||||||
10.000%
senior notes due 2009
|
154
|
154
|
154
|
154
|
|||||||||
10.250%
senior notes due 2010
|
49
|
49
|
49
|
49
|
|||||||||
11.750%
senior discount notes due 2010
|
43
|
43
|
43
|
43
|
|||||||||
10.750%
senior notes due 2009
|
131
|
131
|
131
|
131
|
|||||||||
11.125%
senior notes due 2011
|
217
|
217
|
217
|
217
|
|||||||||
13.500%
senior discount notes due 2011
|
94
|
94
|
94
|
94
|
|||||||||
9.625%
senior notes due 2009
|
107
|
107
|
107
|
107
|
|||||||||
10.000%
senior notes due 2011
|
137
|
136
|
137
|
136
|
|||||||||
11.750%
senior discount notes due 2011
|
125
|
125
|
125
|
120
|
|||||||||
12.125%
senior discount notes due 2012
|
113
|
106
|
113
|
100
|
|||||||||
CCH
I Holdings, LLC:
|
|||||||||||||
11.125%
senior notes due 2014
|
151
|
151
|
151
|
151
|
|||||||||
9.920%
senior discount notes due 2014
|
471
|
471
|
471
|
471
|
|||||||||
10.000%
senior notes due 2014
|
299
|
299
|
299
|
299
|
|||||||||
11.750%
senior discount notes due 2014
|
815
|
815
|
815
|
781
|
|||||||||
13.500%
senior discount notes due 2014
|
581
|
581
|
581
|
578
|
|||||||||
12.125%
senior discount notes due 2015
|
217
|
203
|
217
|
192
|
|||||||||
CCH
I, LLC:
|
|||||||||||||
11.000%
senior notes due 2015
|
3,525
|
3,678
|
3,525
|
3,683
|
|||||||||
CCH
II, LLC:
|
|||||||||||||
10.250%
senior notes due 2010
|
2,051
|
2,042
|
1,601
|
1,601
|
|||||||||
CCO
Holdings, LLC:
|
|||||||||||||
8¾%
senior notes due 2013
|
800
|
795
|
800
|
794
|
|||||||||
Senior
floating 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
|
|||||||||
8
3/8% senior second lien notes due 2014
|
770
|
770
|
733
|
733
|
|||||||||
Renaissance
Media Group LLC:
|
|||||||||||||
10.000%
senior discount notes due 2008
|
--
|
--
|
114
|
115
|
|||||||||
Credit
Facilities
|
|||||||||||||
Charter
Operating
|
5,800
|
5,800
|
5,731
|
5,731
|
|||||||||
$
|
18,895
|
$
|
19,012
|
$
|
18,453
|
$
|
18,525
|
Minority
Interest
|
8.
|
Comprehensive
Loss
|
9.
|
Accounting
for Derivative Instruments and Hedging
Activities
|
10.
|
Revenues
|
Three
Months
Ended
June 30,
|
Six
Months
Ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Video
|
$
|
853
|
$
|
821
|
$
|
1,684
|
$
|
1,623
|
|||||
High-speed
Internet
|
261
|
218
|
506
|
425
|
|||||||||
Telephone
|
29
|
8
|
49
|
14
|
|||||||||
Advertising
sales
|
79
|
73
|
147
|
135
|
|||||||||
Commercial
|
76
|
66
|
149
|
128
|
|||||||||
Other
|
85
|
80
|
168
|
156
|
|||||||||
$
|
1,383
|
$
|
1,266
|
$
|
2,703
|
$
|
2,481
|
11.
|
Operating
Expenses
|
Three
Months
Ended
June 30,
|
Six
Months
Ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Programming
|
$
|
379
|
$
|
336
|
$
|
755
|
$
|
678
|
|||||
Service
|
205
|
186
|
408
|
356
|
|||||||||
Advertising
sales
|
27
|
24
|
52
|
47
|
|||||||||
$
|
611
|
$
|
546
|
$
|
1,215
|
$
|
1,081
|
12.
|
Selling,
General and Administrative
Expenses
|
Three
Months
Ended
June 30,
|
Six
Months
Ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
General
and administrative
|
$
|
236
|
$
|
220
|
$
|
471
|
$
|
418
|
|||||
Marketing
|
43
|
30
|
80
|
65
|
|||||||||
$
|
279
|
$
|
250
|
$
|
551
|
$
|
483
|
13.
|
Other
Operating (Income) Expenses,
Net
|
Three
Months
Ended
June 30,
|
Six
Months
Ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Loss
on sale of assets, net
|
$
|
--
|
$
|
--
|
$
|
--
|
$
|
4
|
|||||
Special
charges, net
|
7
|
(2
|
)
|
10
|
2
|
||||||||
$
|
7
|
$
|
(2
|
)
|
$
|
10
|
$
|
6
|
14.
|
Other
Income (Expenses), Net
|
Three
Months
Ended
June 30,
|
Six
Months
Ended
June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Gain
(loss) on derivative instruments and
hedging
activities, net
|
$
|
3
|
$
|
(1
|
)
|
$
|
11
|
$
|
26
|
||||
Gain
(loss) on extinguishment of debt
|
(27
|
)
|
(2
|
)
|
(27
|
)
|
4
|
||||||
Minority
interest
|
(6
|
)
|
(3
|
)
|
(10
|
)
|
(6
|
)
|
|||||
Gain
on investments
|
5
|
20
|
4
|
21
|
|||||||||
Other,
net
|
(1
|
)
|
--
|
3
|
--
|
||||||||
$
|
(26
|
)
|
$
|
14
|
$
|
(19
|
)
|
$
|
45
|
15.
|
Income
Taxes
|
16.
|
Contingencies
|
17.
|
Stock
Compensation Plans
|
18.
|
Related
Party Transactions
|
19.
|
Recently
Issued Accounting
Standards
|
20.
|
Consolidating
Schedules
|
Charter
Holdings
|
|||||||||||||||||||
Condensed
Consolidating Balance Sheet
|
|||||||||||||||||||
As
of June 30, 2006
|
|||||||||||||||||||
Charter
Holdings
|
CIH
|
CCH
I
|
All
Other Subsidiaries
|
Eliminations
|
Charter
Holdings Consolidated
|
||||||||||||||
ASSETS
|
|||||||||||||||||||
CURRENT
ASSETS:
|
|||||||||||||||||||
Cash
and cash equivalents
|
$
|
--
|
$
|
2
|
$
|
2
|
$
|
44
|
$
|
--
|
$
|
48
|
|||||||
Accounts
receivable, net
|
--
|
--
|
--
|
178
|
--
|
178
|
|||||||||||||
Receivables
from related party
|
128
|
--
|
--
|
--
|
(128
|
)
|
--
|
||||||||||||
Prepaid
expenses and other current assets
|
--
|
--
|
--
|
20
|
--
|
20
|
|||||||||||||
Assets
held for sale
|
--
|
--
|
--
|
768
|
--
|
768
|
|||||||||||||
Total
current assets
|
128
|
2
|
2
|
1,010
|
(128
|
)
|
1,014
|
||||||||||||
INVESTMENT
IN CABLE PROPERTIES:
|
|||||||||||||||||||
Property,
plant and equipment, net
|
--
|
--
|
--
|
5,354
|
--
|
5,354
|
|||||||||||||
Franchises,
net
|
--
|
--
|
--
|
9,280
|
--
|
9,280
|
|||||||||||||
Total
investment in cable properties, net
|
--
|
--
|
--
|
14,634
|
--
|
14,634
|
|||||||||||||
INVESTMENT
IN SUBSIDIARIES
|
--
|
--
|
2,648
|
--
|
(2,648
|
)
|
--
|
||||||||||||
OTHER
NONCURRENT ASSETS
|
13
|
21
|
43
|
217
|
--
|
294
|
|||||||||||||
Total
assets
|
$
|
141
|
$
|
23
|
$
|
2,693
|
$
|
15,861
|
$
|
(2,776
|
)
|
$
|
15,942
|
||||||
LIABILITIES
AND MEMBER’S EQUITY (DEFICIT)
|
|||||||||||||||||||
CURRENT
LIABILITIES:
|
|||||||||||||||||||
Accounts
payable and accrued expenses
|
$
|
46
|
$
|
69
|
$
|
97
|
$
|
917
|
$
|
--
|
$
|
1,129
|
|||||||
Payables
to related party
|
--
|
2
|
4
|
106
|
(22
|
)
|
90
|
||||||||||||
Liabilities
held for sale
|
--
|
--
|
--
|
20
|
--
|
20
|
|||||||||||||
Total
current liabilities
|
46
|
71
|
101
|
1,043
|
(22
|
)
|
1,239
|
||||||||||||
LONG-TERM
DEBT
|
1,757
|
2,520
|
3,678
|
11,057
|
--
|
19,012
|
|||||||||||||
LOANS
PAYABLE - RELATED PARTY
|
--
|
--
|
--
|
109
|
(106
|
)
|
3
|
||||||||||||
DEFERRED
MANAGEMENT FEES - RELATED PARTY
|
--
|
--
|
--
|
14
|
--
|
14
|
|||||||||||||
OTHER
LONG-TERM LIABILITIES
|
--
|
--
|
--
|
359
|
--
|
359
|
|||||||||||||
LOSSES
IN EXCESS OF INVESTMENT
|
3,654
|
1,086
|
--
|
--
|
(4,740
|
)
|
--
|
||||||||||||
MINORITY
INTEREST
|
--
|
--
|
--
|
631
|
--
|
631
|
|||||||||||||
MEMBER’S
EQUITY (DEFICIT):
|
|||||||||||||||||||
Member’s
equity (deficit)
|
(5,316
|
)
|
(3,654
|
)
|
(1,086
|
)
|
2,646
|
2,092
|
(5,318
|
)
|
|||||||||
Accumulated
other comprehensive income
|
--
|
--
|
--
|
2
|
--
|
2
|
|||||||||||||
Total
member’s equity (deficit)
|
(5,316
|
)
|
(3,654
|
)
|
(1,086
|
)
|
2,648
|
2,092
|
(5,316
|
)
|
|||||||||
Total
liabilities and member’s equity (deficit)
|
$
|
141
|
$
|
23
|
$
|
2,693
|
$
|
15,861
|
$
|
(2,776
|
)
|
$
|
15,942
|
Charter
Holdings
|
|||||||||||||||||||
Condensed
Consolidating Balance Sheet
|
|||||||||||||||||||
As
of December 31, 2005
|
|||||||||||||||||||
Charter
Holdings
|
CIH
|
CCH
I
|
All
Other Subsidiaries
|
Eliminations
|
Charter
Holdings Consolidated
|
||||||||||||||
ASSETS
|
|||||||||||||||||||
CURRENT
ASSETS:
|
|||||||||||||||||||
Cash
and cash equivalents
|
$
|
--
|
$
|
3
|
$
|
8
|
$
|
3
|
$
|
--
|
$
|
14
|
|||||||
Accounts
receivable, net
|
--
|
--
|
--
|
212
|
--
|
212
|
|||||||||||||
Receivables
from related party
|
24
|
--
|
--
|
--
|
(24
|
)
|
--
|
||||||||||||
Prepaid
expenses and other current assets
|
--
|
--
|
--
|
22
|
--
|
22
|
|||||||||||||
Total
current assets
|
24
|
3
|
8
|
237
|
(24
|
)
|
248
|
||||||||||||
INVESTMENT
IN CABLE PROPERTIES:
|
|||||||||||||||||||
Property,
plant and equipment, net
|
--
|
--
|
--
|
5,800
|
--
|
5,800
|
|||||||||||||
Franchises,
net
|
--
|
--
|
--
|
9,826
|
--
|
9,826
|
|||||||||||||
Total
investment in cable properties, net
|
--
|
--
|
--
|
15,626
|
--
|
15,626
|
|||||||||||||
INVESTMENT
IN SUBSIDIARIES
|
--
|
--
|
3,402
|
--
|
(3,402
|
)
|
--
|
||||||||||||
OTHER
NONCURRENT ASSETS
|
14
|
21
|
45
|
238
|
--
|
318
|
|||||||||||||
Total
assets
|
$
|
38
|
$
|
24
|
$
|
3,455
|
$
|
16,101
|
$
|
(3,426
|
)
|
$
|
16,192
|
||||||
LIABILITIES
AND MEMBER’S EQUITY (DEFICIT)
|
|||||||||||||||||||
CURRENT
LIABILITIES:
|
|||||||||||||||||||
Accounts
payable and accrued expenses
|
$
|
42
|
$
|
24
|
$
|
107
|
$
|
923
|
$
|
--
|
$
|
1,096
|
|||||||
Payables
to related party
|
--
|
2
|
3
|
102
|
(24
|
)
|
83
|
||||||||||||
Total
current liabilities
|
42
|
26
|
110
|
1,025
|
(24
|
)
|
1,179
|
||||||||||||
LONG-TERM
DEBT
|
1,746
|
2,472
|
3,683
|
10,624
|
--
|
18,525
|
|||||||||||||
LOANS
PAYABLE - RELATED PARTY
|
--
|
--
|
--
|
22
|
--
|
22
|
|||||||||||||
DEFERRED
MANAGEMENT FEES - RELATED PARTY
|
--
|
--
|
--
|
14
|
--
|
14
|
|||||||||||||
OTHER
LONG-TERM LIABILITIES
|
--
|
--
|
--
|
392
|
--
|
392
|
|||||||||||||
LOSSES
IN EXCESS OF INVESTMENT
|
2,812
|
338
|
--
|
--
|
(3,150
|
)
|
--
|
||||||||||||
MINORITY
INTEREST
|
--
|
--
|
--
|
622
|
--
|
622
|
|||||||||||||
MEMBER’S
EQUITY (DEFICIT):
|
|||||||||||||||||||
Member’s
equity (deficit)
|
(4,562
|
)
|
(2,812
|
)
|
(338
|
)
|
3,400
|
(252
|
)
|
(4,564
|
)
|
||||||||
Accumulated
other comprehensive income
|
--
|
--
|
--
|
2
|
--
|
2
|
|||||||||||||
Total
member’s equity (deficit)
|
(4,562
|
)
|
(2,812
|
)
|
(338
|
)
|
3,402
|
(252
|
)
|
(4,562
|
)
|
||||||||
Total
liabilities and member’s equity (deficit)
|
$
|
38
|
$
|
24
|
$
|
3,455
|
$
|
16,101
|
$
|
(3,426
|
)
|
$
|
16,192
|
Charter
Holdings
|
|||||||||||||||||||
Condensed
Consolidating Statement of Operations
|
|||||||||||||||||||
For
the six months ended June 30, 2006
|
|||||||||||||||||||
Charter
Holdings
|
CIH
|
CCH
I
|
All
Other Subsidiaries
|
Eliminations
|
Charter
Holdings Consolidated
|
||||||||||||||
REVENUES
|
$
|
--
|
$
|
--
|
$
|
--
|
$
|
2,703
|
$
|
--
|
$
|
2,703
|
|||||||
COSTS
AND EXPENSES:
|
|||||||||||||||||||
Operating
(excluding depreciation and amortization)
|
--
|
--
|
--
|
1,215
|
--
|
1,215
|
|||||||||||||
Selling,
general and administrative
|
--
|
--
|
--
|
551
|
--
|
551
|
|||||||||||||
Depreciation
and amortization
|
--
|
--
|
--
|
690
|
--
|
690
|
|||||||||||||
Asset
impairment charges
|
--
|
--
|
--
|
99
|
--
|
99
|
|||||||||||||
Other
operating expenses, net
|
--
|
--
|
--
|
10
|
--
|
10
|
|||||||||||||
|
--
|
--
|
--
|
2,565
|
--
|
2,565
|
|||||||||||||
Operating
income from continuing operations
|
--
|
--
|
--
|
138
|
--
|
138
|
|||||||||||||
OTHER
INCOME AND (EXPENSES):
|
|||||||||||||||||||
Interest
expense, net
|
(88
|
)
|
(141
|
)
|
(190
|
)
|
(488
|
)
|
--
|
(907
|
)
|
||||||||
Other
expense, net
|
--
|
--
|
--
|
(19
|
)
|
--
|
(19
|
)
|
|||||||||||
Equity
in losses of subsidiaries
|
(666
|
)
|
(525
|
)
|
(335
|
)
|
--
|
1,526
|
|
--
|
|||||||||
(754
|
)
|
(666
|
)
|
(525
|
)
|
(507
|
)
|
1,526
|
|
(926
|
)
|
||||||||
Loss
from continuing operations before income taxes
|
(754
|
)
|
(666
|
)
|
(525
|
)
|
(369
|
)
|
1,526
|
|
(788
|
)
|
|||||||
INCOME
TAX EXPENSE
|
--
|
--
|
--
|
(4
|
)
|
--
|
(4
|
)
|
|||||||||||
Loss
from continuing operations
|
(754
|
)
|
(666
|
)
|
(525
|
)
|
(373
|
)
|
1,526
|
|
(792
|
)
|
|||||||
INCOME
FROM DISCONTINUED OPERATIONS,
NET
OF TAX
|
--
|
--
|
--
|
38
|
--
|
38
|
|||||||||||||
Net
loss
|
$
|
(754
|
)
|
$
|
(666
|
)
|
$
|
(525
|
)
|
$
|
(335
|
)
|
$
|
1,526
|
|
$
|
(754
|
)
|
Charter
Holdings
|
|||||||||||||||||||
Condensed
Consolidating Statement of Operations
|
|||||||||||||||||||
For
the six months ended June 30, 2005
|
|||||||||||||||||||
Charter
Holdings
|
CIH
|
CCH
I
|
All
Other Subsidiaries
|
Eliminations
|
Charter
Holdings Consolidated
|
||||||||||||||
REVENUES
|
$
|
--
|
$
|
--
|
$
|
--
|
$
|
2,481
|
$
|
--
|
$
|
2,481
|
|||||||
COSTS
AND EXPENSES:
|
|||||||||||||||||||
Operating
(excluding depreciation and amortization)
|
--
|
--
|
--
|
1,081
|
--
|
1,081
|
|||||||||||||
Selling,
general and administrative
|
--
|
--
|
--
|
483
|
--
|
483
|
|||||||||||||
Depreciation
and amortization
|
--
|
--
|
--
|
730
|
--
|
730
|
|||||||||||||
Asset
impairment charges
|
--
|
--
|
--
|
39
|
--
|
39
|
|||||||||||||
Other
operating expenses, net
|
--
|
--
|
--
|
6
|
--
|
6
|
|||||||||||||
|
--
|
--
|
--
|
2,339
|
--
|
2,339
|
|||||||||||||
Operating
income from continuing operations
|
--
|
--
|
--
|
142
|
--
|
142
|
|||||||||||||
OTHER
INCOME AND (EXPENSES):
|
|||||||||||||||||||
Interest
expense, net
|
(447
|
)
|
--
|
--
|
(408
|
)
|
--
|
(855
|
)
|
||||||||||
Other
income, net
|
10
|
--
|
--
|
35
|
--
|
45
|
|||||||||||||
Equity
in losses of subsidiaries
|
(220
|
)
|
(220
|
)
|
(220
|
)
|
--
|
660
|
--
|
||||||||||
(657
|
)
|
(220
|
)
|
(220
|
)
|
(373
|
)
|
660
|
(810
|
)
|
|||||||||
Loss
from continuing operations before income taxes
|
(657
|
)
|
(220
|
)
|
(220
|
)
|
(231
|
)
|
660
|
(668
|
)
|
||||||||
INCOME
TAX EXPENSE
|
--
|
--
|
--
|
(8
|
)
|
--
|
(8
|
)
|
|||||||||||
Loss
from continuing operations
|
(657
|
)
|
(220
|
)
|
(220
|
)
|
(239
|
)
|
660
|
(676
|
)
|
||||||||
INCOME
FROM DISCONTINUED OPERATIONS,
NET
OF TAX
|
--
|
--
|
--
|
19
|
--
|
19
|
|||||||||||||
Net
loss
|
$
|
(657
|
)
|
$
|
(220
|
)
|
$
|
(220
|
)
|
$
|
(220
|
)
|
$
|
660
|
|
$
|
(657
|
)
|
Charter
Holdings
|
|||||||||||||||||||
Condensed
Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For
the six months ended June 30, 2006
|
|||||||||||||||||||
Charter
Holdings
|
CIH
|
CCH
I
|
All
Other Subsidiaries
|
Eliminations
|
Charter
Holdings Consolidated
|
||||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||||||||||||||
Net
loss
|
$
|
(754
|
)
|
$
|
(666
|
)
|
$
|
(525
|
)
|
$
|
(335
|
)
|
$
|
1,526
|
|
$
|
(754
|
)
|
|
Adjustments
to reconcile net loss to net cash flows from operating
activities:
|
|||||||||||||||||||
Depreciation
and amortization
|
--
|
--
|
--
|
698
|
--
|
698
|
|||||||||||||
Asset
impairment charges
|
--
|
--
|
--
|
99
|
--
|
99
|
|||||||||||||
Noncash
interest expense
|
12
|
49
|
(3
|
)
|
16
|
--
|
74
|
||||||||||||
Equity
in losses of subsidiaries
|
666
|
525
|
335
|
--
|
(1,526
|
)
|
--
|
||||||||||||
Other,
net
|
--
|
--
|
--
|
27
|
--
|
27
|
|||||||||||||
Changes
in operating assets and liabilities, net of effects from acquisitions
and
dispositions:
|
|||||||||||||||||||
Accounts
receivable
|
--
|
--
|
--
|
29
|
--
|
29
|
|||||||||||||
Accounts
payable, accrued expenses and other
|
4
|
44
|
(10
|
)
|
(10
|
)
|
--
|
28
|
|||||||||||
Receivables
from and payables to related party, including deferred management
fees
|
2
|
--
|
--
|
1
|
--
|
3
|
|||||||||||||
Net
cash flows from operating activities
|
(70
|
)
|
(48
|
)
|
(203
|
)
|
525
|
--
|
204
|
||||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||||||||||||||
Purchases
of property, plant and equipment
|
--
|
--
|
--
|
(539
|
)
|
--
|
(539
|
)
|
|||||||||||
Change
in accrued expenses related to capital expenditures
|
--
|
--
|
--
|
(9
|
)
|
--
|
(9
|
)
|
|||||||||||
Proceeds
from sale of assets
|
--
|
--
|
--
|
9
|
--
|
9
|
|||||||||||||
Purchase
of cable system
|
--
|
--
|
--
|
(42
|
)
|
--
|
(42
|
)
|
|||||||||||
Proceeds
from investments
|
--
|
--
|
--
|
28
|
--
|
28
|
|||||||||||||
Net
cash flows from investing activities
|
--
|
--
|
--
|
(553
|
)
|
--
|
(553
|
)
|
|||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||||||||||||
Borrowings
of long-term debt
|
--
|
--
|
--
|
5,830
|
--
|
5,830
|
|||||||||||||
Repayments
of long-term debt
|
--
|
--
|
--
|
(5,838
|
)
|
--
|
(5,838
|
)
|
|||||||||||
Repayments
to related parties
|
--
|
--
|
--
|
(20
|
)
|
--
|
(20
|
)
|
|||||||||||
Proceeds
from issuance of debt
|
--
|
--
|
--
|
440
|
--
|
440
|
|||||||||||||
Payments
for debt issuance costs
|
--
|
--
|
--
|
(29
|
)
|
--
|
(29
|
)
|
|||||||||||
Distributions
|
70
|
47
|
197
|
(314
|
)
|
--
|
--
|
||||||||||||
Net
cash flows from financing activities
|
70
|
47
|
197
|
69
|
--
|
383
|
|||||||||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
--
|
(1
|
)
|
(6
|
)
|
41
|
--
|
34
|
|||||||||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
--
|
3
|
8
|
3
|
--
|
14
|
|||||||||||||
|
|||||||||||||||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
--
|
$
|
2
|
$
|
2
|
$
|
44
|
$
|
--
|
$
|
48
|
Charter
Holdings
|
|||||||||||||||||||
Condensed
Consolidating Statement of Cash Flows
|
|||||||||||||||||||
For
the six months ended June 30, 2005
|
|||||||||||||||||||
Charter
Holdings
|
CIH
|
CCH
I
|
All
Other Subsidiaries
|
Eliminations
|
Charter
Holdings Consolidated
|
||||||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||||||||||||||
Net
loss
|
$
|
(657
|
)
|
$
|
(220
|
)
|
$
|
(220
|
)
|
$
|
(220
|
)
|
$
|
660
|
$
|
(657
|
)
|
||
Adjustments
to reconcile net loss to net cash flows from operating
activities:
|
|||||||||||||||||||
Depreciation
and amortization
|
--
|
--
|
--
|
759
|
--
|
759
|
|||||||||||||
Asset
impairment charges
|
--
|
--
|
--
|
39
|
--
|
39
|
|||||||||||||
Noncash
interest expense
|
114
|
--
|
--
|
14
|
--
|
128
|
|||||||||||||
Deferred
income taxes
|
--
|
--
|
--
|
5
|
--
|
5
|
|||||||||||||
Equity
in losses of subsidiaries
|
220
|
220
|
220
|
--
|
(660
|
)
|
--
|
||||||||||||
Other,
net
|
(11
|
)
|
--
|
--
|
(31
|
)
|
--
|
(42
|
)
|
||||||||||
Changes
in operating assets and liabilities, net of effects from acquisitions
and
dispositions:
|
|||||||||||||||||||
Accounts
receivable
|
10
|
--
|
--
|
(10
|
)
|
--
|
--
|
||||||||||||
Prepaid
expenses and other assets
|
--
|
--
|
--
|
(21
|
)
|
--
|
(21
|
)
|
|||||||||||
Accounts
payable, accrued expenses and other
|
27
|
--
|
--
|
(46
|
)
|
--
|
(19
|
)
|
|||||||||||
Receivables
from and payables to related party, including deferred management
fees
|
(8
|
)
|
--
|
--
|
(20
|
)
|
--
|
(28
|
)
|
||||||||||
Net
cash flows from operating activities
|
(305
|
)
|
--
|
--
|
469
|
--
|
164
|
||||||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||||||||||||||
Purchases
of property, plant and equipment
|
--
|
--
|
--
|
(542
|
)
|
--
|
(542
|
)
|
|||||||||||
Change
in accrued expenses related to capital expenditures
|
--
|
--
|
--
|
48
|
--
|
48
|
|||||||||||||
Proceeds
from sale of assets
|
--
|
--
|
--
|
8
|
--
|
8
|
|||||||||||||
Proceeds
from investments
|
--
|
--
|
--
|
16
|
--
|
16
|
|||||||||||||
Other,
net
|
--
|
--
|
--
|
(2
|
)
|
--
|
(2
|
)
|
|||||||||||
Net
cash flows from investing activities
|
--
|
--
|
--
|
(472
|
)
|
--
|
(472
|
)
|
|||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||||||||||||||
Borrowings
of long-term debt
|
--
|
--
|
--
|
635
|
--
|
635
|
|||||||||||||
Borrowings
from related parties
|
--
|
--
|
--
|
140
|
--
|
140
|
|||||||||||||
Repayments
of long-term debt
|
--
|
--
|
--
|
(819
|
)
|
--
|
(819
|
)
|
|||||||||||
Repayments
to parent companies
|
--
|
--
|
--
|
(107
|
)
|
--
|
(107
|
)
|
|||||||||||
Payments
for debt issuance costs
|
--
|
--
|
--
|
(3
|
)
|
--
|
(3
|
)
|
|||||||||||
Distributions
|
307
|
--
|
--
|
(367
|
)
|
--
|
(60
|
)
|
|||||||||||
Net
cash flows from financing activities
|
307
|
--
|
--
|
(521
|
)
|
--
|
(214
|
)
|
|||||||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
2
|
--
|
--
|
(524
|
)
|
--
|
(522
|
)
|
|||||||||||
CASH
AND CASH EQUIVALENTS, beginning of period
|
--
|
--
|
--
|
546
|
546
|
||||||||||||||
|
|||||||||||||||||||
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
2
|
$
|
--
|
$
|
--
|
$
|
22
|
$
|
--
|
$
|
24
|
Approximate
as of
|
|||||||
June
30,
|
June
30,
|
||||||
2006
(a)
|
2005
(a)
|
||||||
Cable
Video Services:
|
|||||||
Analog
Video:
|
|||||||
Residential
(non-bulk) analog video customers (b)
|
5,600,300
|
5,683,400
|
|||||
Multi-dwelling
(bulk) and commercial unit customers (c)
|
275,800
|
259,700
|
|||||
Total
analog video customers (b)(c)
|
5,876,100
|
5,943,100
|
|||||
Digital
Video:
|
|||||||
Digital
video customers (d)
|
2,889,000
|
2,685,600
|
|||||
Non-Video
Cable Services:
|
|||||||
Residential
high-speed Internet customers (e)
|
2,375,100
|
2,022,200
|
|||||
Residential
telephone customers (f)
|
257,600
|
67,800
|
(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). At June 30, 2006 and 2005, "customers"
include approximately 55,900 and 45,100 persons whose accounts were
over
60 days past due in payment, approximately 14,300 and 8,200 persons
whose
accounts were over 90 days past due in payment, and approximately
8,900
and 4,500 of which were over 120 days past due in payment, respectively.
|
(b) |
"Analog
video customers" include all customers who receive video services
(including those who also purchase high-speed Internet and telephone
services) but excludes approximately 296,500 and 248,400 customers
at June
30, 2006 and 2005, respectively, who receive high-speed Internet
service
only or telephone service only and who are only counted as high-speed
Internet customers or telephone
customers.
|
(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 June
30, 2006
and 2005 are approximately 8,400 and 9,700 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.
|
(f)
|
"Residential
telephone customers" include all households receiving telephone
service.
|
Three
Months Ended June 30,
|
|||||||||||||
2006
|
2005
|
||||||||||||
Revenues
|
$
|
1,383
|
100
|
%
|
$
|
1,266
|
100
|
%
|
|||||
Costs
and expenses:
|
|||||||||||||
Operating
(excluding depreciation and amortization)
|
611
|
44
|
%
|
546
|
43
|
%
|
|||||||
Selling,
general and administrative
|
279
|
20
|
%
|
250
|
19
|
%
|
|||||||
Depreciation
and amortization
|
340
|
25
|
%
|
364
|
29
|
%
|
|||||||
Asset
impairment charges
|
--
|
--
|
8
|
1
|
%
|
||||||||
Other
operating (income) expenses, net
|
7
|
--
|
(2
|
)
|
--
|
||||||||
1,237
|
89
|
%
|
1,166
|
92
|
%
|
||||||||
Operating
income from continuing operations
|
146
|
11
|
%
|
100
|
8
|
%
|
|||||||
Interest
expense, net
|
(456
|
)
|
(431
|
)
|
|||||||||
Other
income (expenses), net
|
(26
|
)
|
14
|
||||||||||
(482
|
)
|
(417
|
)
|
||||||||||
Loss
from continuing operations before income taxes
|
(336
|
)
|
(317
|
)
|
|||||||||
Income
tax expense
|
(2
|
)
|
(2
|
)
|
|||||||||
Loss
from continuing operations
|
(338
|
)
|
(319
|
)
|
|||||||||
Income
from discontinued operations, net of tax
|
23
|
10
|
|||||||||||
Net
loss
|
$
|
(315
|
)
|
$
|
(309
|
)
|
Three
Months Ended June 30,
|
|||||||||||||||||||
2006
|
2005
|
2006
over 2005
|
|||||||||||||||||
Revenues
|
%
of
Revenues
|
Revenues
|
%
of
Revenues
|
Change
|
%
Change
|
||||||||||||||
Video
|
$
|
853
|
62
|
%
|
$
|
821
|
65
|
%
|
$
|
32
|
4
|
%
|
|||||||
High-speed
Internet
|
261
|
19
|
%
|
218
|
17
|
%
|
43
|
20
|
%
|
||||||||||
Telephone
|
29
|
2
|
%
|
8
|
1
|
%
|
21
|
263
|
%
|
||||||||||
Advertising
sales
|
79
|
6
|
%
|
73
|
6
|
%
|
6
|
8
|
%
|
||||||||||
Commercial
|
76
|
5
|
%
|
66
|
5
|
%
|
10
|
15
|
%
|
||||||||||
Other
|
85
|
6
|
%
|
80
|
6
|
%
|
5
|
6
|
%
|
||||||||||
$
|
1,383
|
100
|
%
|
$
|
1,266
|
100
|
%
|
$
|
117
|
9
|
%
|
Three
Months Ended June 30, 2006,
|
|||||||||||||||||||
2006
|
2005
|
2006
over 2005
|
|||||||||||||||||
Expenses
|
%
of
Revenues
|
Expenses
|
%
of
Revenues
|
Change
|
%
Change
|
||||||||||||||
Programming
|
$
|
379
|
27
|
%
|
$
|
336
|
26
|
%
|
$
|
43
|
13
|
%
|
|||||||
Service
|
205
|
15
|
%
|
186
|
15
|
%
|
19
|
10
|
%
|
||||||||||
Advertising
sales
|
27
|
2
|
%
|
24
|
2
|
%
|
3
|
13
|
%
|
||||||||||
$
|
611
|
44
|
%
|
$
|
546
|
43
|
%
|
$
|
65
|
12
|
%
|
Three
Months Ended June 30,
|
|||||||||||||||||||
2006
|
2005
|
2006
over 2005
|
|||||||||||||||||
Expenses
|
%
of
Revenues
|
Expenses
|
%
of
Revenues
|
Change
|
%
Change
|
||||||||||||||
General
and administrative
|
$
|
236
|
17
|
%
|
$
|
220
|
17
|
%
|
$
|
16
|
7
|
%
|
|||||||
Marketing
|
43
|
3
|
%
|
30
|
2
|
%
|
13
|
43
|
%
|
||||||||||
$
|
279
|
20
|
%
|
$
|
250
|
19
|
%
|
$
|
29
|
12
|
%
|
Six
Months Ended June 30,
|
|||||||||||||
2006
|
2005
|
||||||||||||
Revenues
|
$
|
2,703
|
100
|
%
|
$
|
2,481
|
100
|
%
|
|||||
Costs
and expenses:
|
|||||||||||||
Operating
(excluding depreciation and amortization)
|
1,215
|
45
|
%
|
1,081
|
44
|
%
|
|||||||
Selling,
general and administrative
|
551
|
20
|
%
|
483
|
19
|
%
|
|||||||
Depreciation
and amortization
|
690
|
26
|
%
|
730
|
29
|
%
|
|||||||
Asset
impairment charges
|
99
|
4
|
%
|
39
|
2
|
%
|
|||||||
Other
operating expenses, net
|
10
|
--
|
6
|
--
|
|||||||||
2,565
|
95
|
%
|
2,339
|
94
|
%
|
||||||||
Operating
income from continuing operations
|
138
|
5
|
%
|
142
|
6
|
%
|
|||||||
Interest
expense, net
|
(907
|
)
|
(855
|
)
|
|||||||||
Other
income (expenses), net
|
(19
|
)
|
45
|
||||||||||
(926
|
)
|
(810
|
)
|
||||||||||
Loss
before income taxes
|
(788
|
)
|
(668
|
)
|
|||||||||
Income
tax expense
|
(4
|
)
|
(8
|
)
|
|||||||||
Loss
from continuing operations
|
(792
|
)
|
(676
|
)
|
|||||||||
Income
from discontinued operations, net of tax
|
38
|
19
|
|||||||||||
Net
loss
|
$
|
(754
|
)
|
$
|
(657
|
)
|
Six
Months Ended June 30,
|
|||||||||||||||||||
2006
|
2005
|
2006
over 2005
|
|||||||||||||||||
Revenues
|
%
of
Revenues
|
Revenues
|
%
of
Revenues
|
Change
|
%
Change
|
||||||||||||||
Video
|
$
|
1,684
|
62
|
%
|
$
|
1,623
|
66
|
%
|
$
|
61
|
4
|
%
|
|||||||
High-speed
Internet
|
506
|
19
|
%
|
425
|
17
|
%
|
81
|
19
|
%
|
||||||||||
Telephone
|
49
|
2
|
%
|
14
|
1
|
%
|
35
|
250
|
%
|
||||||||||
Advertising
sales
|
147
|
5
|
%
|
135
|
5
|
%
|
12
|
9
|
%
|
||||||||||
Commercial
|
149
|
6
|
%
|
128
|
5
|
%
|
21
|
16
|
%
|
||||||||||
Other
|
168
|
6
|
%
|
156
|
6
|
%
|
12
|
8
|
%
|
||||||||||
$
|
2,703
|
100
|
%
|
$
|
2,481
|
100
|
%
|
$
|
222
|
9
|
%
|
Six
Months Ended June 30,
|
|||||||||||||||||||
2006
|
2005
|
2006
over 2005
|
|||||||||||||||||
Expenses
|
%
of
Revenues
|
Expenses
|
%
of
Revenues
|
Change
|
%
Change
|
||||||||||||||
Programming
|
$
|
755
|
28
|
%
|
$
|
678
|
27
|
%
|
$
|
77
|
11
|
%
|
|||||||
Service
|
408
|
15
|
%
|
356
|
15
|
%
|
52
|
15
|
%
|
||||||||||
Advertising
sales
|
52
|
2
|
%
|
47
|
2
|
%
|
5
|
11
|
%
|
||||||||||
$
|
1,215
|
45
|
%
|
$
|
1,081
|
44
|
%
|
$
|
134
|
12
|
%
|
Six
Months Ended June 30,
|
|||||||||||||||||||
2006
|
2005
|
2006
over 2005
|
|||||||||||||||||
Expenses
|
%
of
Revenues
|
Expenses
|
%
of
Revenues
|
Change
|
%
Change
|
||||||||||||||
General
and administrative
|
$
|
471
|
17
|
%
|
$
|
418
|
17
|
%
|
$
|
53
|
13
|
%
|
|||||||
Marketing
|
80
|
3
|
%
|
65
|
2
|
%
|
15
|
23
|
%
|
||||||||||
$
|
551
|
20
|
%
|
$
|
483
|
19
|
%
|
$
|
68
|
14
|
%
|
•
|
issuing
equity at the Charter or Charter Holdco 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;
|
|
•
|
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, the
availability and terms of which would be subject to market conditions.
|
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Customer
premise equipment (a)
|
$
|
128
|
$
|
142
|
$
|
258
|
$
|
228
|
|||||
Scalable
infrastructure (b)
|
63
|
47
|
97
|
89
|
|||||||||
Line
extensions (c)
|
33
|
48
|
59
|
77
|
|||||||||
Upgrade/Rebuild
(d)
|
14
|
12
|
23
|
22
|
|||||||||
Support
capital (e)
|
60
|
82
|
102
|
126
|
|||||||||
Total
capital expenditures
|
$
|
298
|
$
|
331
|
$
|
539
|
$
|
542
|
(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
No. 51,
Financial
Reporting by Cable Television Companies, 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).
|
2006
|
2007
|
2008
|
2009
|
2010
|
2011
|
Thereafter
|
Total
|
Fair
Value at June 30, 2006
|
||||||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Fixed
Rate
|
$ | -- | $ | 105 | $ | -- | $ | 684 | $ | 2,143 | $ | 771 | $ | 8,842 | $ | 12,545 | $ | 10,430 | ||||||||||
Average
Interest Rate
|
-- | 8.25% | -- | 9.50% | 10.28% | 11.01% | 10.38% | 10.34% | ||||||||||||||||||||
Variable
Rate
|
$ | -- | $ | 25 | $ | 50 | $ | 50 | $ | 600 | $ | 850 | $ | 4,775 | $ | 6,350 | $ | 6,359 | ||||||||||
Average
Interest Rate
|
-- | 8.21% | 8.14% | 8.22% | 9.64% | 8.66% | 8.39% | 8.75% | ||||||||||||||||||||
Interest Rate Instruments: | ||||||||||||||||||||||||||||
Variable
to Fixed Swaps
|
$ | 898 | $ | 875 | $ | -- | $ | -- | $ | -- | $ | -- | $ | -- | $ | 1,773 | $ | 6 | ||||||||||
Average
Pay Rate
|
7.70% | 7.58% | -- | -- | -- | -- | -- | 7.64% | ||||||||||||||||||||
Average
Receive Rate
|
8.33% | 8.31% | -- | -- | -- | -- | -- | 8.32% |
·
|
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.
|
·
|
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
|
·
|
the
holders of preferred membership interests in our subsidiary, CC VIII,
would have a claim on a portion of its assets that may reduce the
amounts
available for repayment to holders of our outstanding notes.
|
·
|
require
us to dedicate a significant portion of our cash flow from operating
activities to make payments on our and our parent companies’ 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;
|
·
|
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 existing lower interest
rate instruments;
|
·
|
adversely
affect our relationship with customers and
suppliers;
|
·
|
limit
our and our parent companies’ ability to borrow additional funds in the
future, if we need them, due to applicable financial and restrictive
covenants in our and our parent companies’ debt;
and
|
·
|
make
it more difficult for us to satisfy our obligations to the holders
of our
notes and to the lenders under our credit facilities as well as our
parent
companies’ ability to satisfy their obligations to their
noteholders.
|
·
|
incur
additional debt;
|
·
|
repurchase
or redeem equity interests and
debt;
|
·
|
make
certain investments or
acquisitions;
|
·
|
pay
dividends or make other
distributions;
|
·
|
dispose
of assets or merge;
|
·
|
enter
into related party transactions;
|
·
|
grant
liens and pledge assets.
|
·
|
rules
governing the provision of cable equipment and compatibility with
new
digital technologies;
|
·
|
rules
and regulations relating to subscriber
privacy;
|
·
|
limited
rate regulation;
|
·
|
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
and regulations relating to provision of voice
communications;
|
·
|
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.
|
Exhibit
Number
|
Description
of Document
|
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)).
|
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)).
|
10.1
|
Amended
and Restated Credit Agreement, dated as of April 28, 2006, among
Charter
Communications Operating, LLC, CCO Holdings, LLC, the lenders from
time to
time parties thereto and JPMorgan Chase Bank, N.A., as administrative
agent (incorporated by reference to
Exhibit 10.1 on the current report on Form 8-K of Charter Communications,
Inc. filed April 28, 2006 (File No. 000-27927)).
|
10.2+
|
Charter
Communications, Inc. 2005 Executive Cash Award Plan, amended for
2006
(incorporated by reference to Exhibit 10.1 on the current report
on Form
8-K of Charter Communications, Inc. filed April 17, 2006 (File No.
000-27927)).
|
15.1*
|
Letter
re Unaudited Interim Financial Statements.
|
31.1*
|
Certificate
of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a)
under
the Securities Exchange Act of 1934.
|
31.2*
|
Certificate
of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a)
under
the Securities Exchange Act of 1934.
|
32.1*
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002 (Chief Executive
Officer).
|
32.2*
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002 (Chief Financial
Officer).
|
1.
|
|
I
have reviewed this Quarterly Report on Form 10-Q of Charter
Communications Holdings, LLC and Charter Communications Holdings
Capital
Corporation;
|
|
||
2.
|
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
||
3.
|
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrants as of, and for, the periods presented in this
report;
|
|
||
4.
|
|
The
registrants’ other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the registrants and have:
|
|
(a)
|
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrants, including
their
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
|||
(b)
|
[Reserved];
|
||
|
(c)
|
|
Evaluated
the effectiveness of the registrants’ disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
|
|||
|
(d)
|
|
Disclosed
in this report any change in the registrants’ internal control over
financial reporting that occurred during the registrants’ most recent
fiscal quarter (the registrants’ fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrants’ internal control over financial
reporting; and
|
5.
|
|
The
registrants’ other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrants’ auditors and the audit committee of the registrants’
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants’ ability to record,
process, summarize and report financial information;
and
|
|
|||
|
(b)
|
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants’ internal control
over financial reporting.
|
1.
|
|
I
have reviewed this Quarterly Report on Form 10-Q of Charter
Communications Holdings, LLC and Charter Communications Holdings
Capital
Corporation;
|
|
||
2.
|
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
|
||
3.
|
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrants as of, and for, the periods presented in this
report;
|
|
||
4.
|
|
The
registrants’ other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrants and have:
|
|
(a)
|
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrants, including
their
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
|||
(b)
|
[Reserved];
|
||
|
(c)
|
|
Evaluated
the effectiveness of the registrants’ disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
|
|||
|
(d)
|
|
Disclosed
in this report any change in the registrants’ internal control over
financial reporting that occurred during the registrants’ most recent
fiscal quarter (the registrants’ fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrants’ internal control over financial
reporting; and
|
5.
|
|
The
registrants’ other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrants’ auditors and the audit committee of the registrants’
board of directors (or persons performing the equivalent
functions):
|
|
(a)
|
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants’ ability to record,
process, summarize and report financial information;
and
|
|
|||
|
(b)
|
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants’ internal control
over financial reporting.
|
· |
fully
complies with the requirements of Section 13(a) of the Securities
Exchange
Act of 1934; and
|
· |
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
· |
fully
complies with the requirements of Section 13(a) of the Securities
Exchange
Act of 1934; and
|
· |
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|