Charter 2002 Annual Report Download - page 115

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002, 2001 and 2000
(dollars in millions, except where indicated)
24. Commitments and Contingencies
Leases
The Company leases certain facilities and equipment under noncancellable operating leases. Leases and
rental costs charged to expense for the years ended December 31, 2002, 2001 and 2000, were $31 million,
$25 million and $23 million, respectively. As of December 31, 2002, future minimum lease payments are as
follows (in millions):
Year Amount
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $18,456
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,202
2005 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 12,190
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,212
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,145
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20,726
The Company also rents utility poles in its operations. Generally, pole rentals are cancelable 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, 2002, 2001 and 2000, was $41 million, $33 million and $31
million, respectively. The Company pays programming fees under multi-year contracts ranging from three to
six years typically based on a Öat fee per customer, which may be Ñxed for the term or may in some cases,
escalate over the term. Total programming costs paid to programmers were $1.2 billion, $951 million and
$763 million for the years ended December 31, 2002, 2001 and 2000, respectively.
Litigation
Fourteen putative federal class action lawsuits (the ""Federal Class Actions'') have been Ñled against
Charter and certain of its former and present oÇcers and directors in various jurisdictions allegedly on behalf
of all purchasers of Charter's securities during the period from either November 8 or November 9, 1999
through July 17 or July 18, 2002. UnspeciÑed damages are sought by the plaintiÅs. In general, the lawsuits
allege that Charter utilized misleading accounting practices and failed to disclose these accounting practices
and/or issued false and misleading Ñnancial statements and press releases concerning Charter's operations and
prospects.
In October 2002, Charter Ñled a motion with the Judicial Panel on Multidistrict Litigation (the ""Panel'')
to transfer the Federal Class Actions to the Eastern District of Missouri. On March 12, 2003, the Panel
transferred the six Federal Class Actions not Ñled in the Eastern District of Missouri to that district for
coordinated or consolidated pretrial proceedings with the eight Federal Class Actions already pending there.
The Panel's transfer order assigned the Federal Class Actions to Judge Charles A. Shaw. By virtue of a prior
court order, StoneRidge Investment Partners LLC became lead plaintiÅ upon entry of the Panel's transfer
order. We anticipate that the lead plaintiÅ will Ñle a single consolidated amended complaint shortly. No
response from Charter will be due until after this consolidated amended complaint is Ñled.
On September 12, 2002, a shareholders derivative suit (the ""State Derivative Action'') was Ñled in
Missouri state court against Charter and its current directors, as well as its former auditors. A substantively
identical derivative action was later Ñled and consolidated into the State Derivative Action. The plaintiÅs
allege that the individual defendants breached their Ñduciary duties by failing to establish and maintain
adequate internal controls and procedures. UnspeciÑed damages, allegedly on Charter's behalf, are sought by
the plaintiÅs.
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