Charter 2002 Annual Report Download - page 15

Comparability of the above information from year to year is aÅected by acquisitions and dispositions
completed by us. See Note 5 to our consolidated Ñnancial statements and ""Management's Discussion and
Analysis of Financial Condition and Results of Operations Ì Acquisitions.''
(a) Financial data as of and for the years ended December 31, 2001 and 2000 has been restated to reÖect
adjustments necessary to properly reÖect changes discussed in ""Management's Discussion and Analysis
of Financial Condition and Results of Operations Ì Restatement of Prior Results.''
(b) Prior to the acquisition of the Charter companies by Mr. Allen on December 23, 1998, the cable systems
operated under the Charter Communications name were operated under three groups of companies
which were managed by Charter Investment and in which Charter Investment had an ownership interest.
One of these groups, Charter Communications Properties Holdings, LLC (""CCPH''), was wholly-owned
by Charter Investment. Subsequent to Mr. Allen's acquisition, these three groups of companies were
contributed to Charter Operating, a wholly-owned subsidiary of Charter Communications Holdings.
CCPH is deemed to be our predecessor. The contribution of CCPH was accounted for as a reorganization
under common control. Accordingly, our results of operations for 1998 prior to and including Decem-
ber 23, 1998 include the accounts of CCPH. The contributions of the operating companies that formerly
comprised the other two groups were accounted for in accordance with purchase accounting. Accordingly,
our results of operations for periods after December 23, 1998 include the accounts of CCPH and the
other two groups contributed to Charter Operating.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Reference is made to ""Certain Trends and Uncertainties'' of this section and ""Cautionary Statement
Regarding Forward-Looking Statements,'' which describe important factors that could cause actual results to
diÅer from expectations and non-historical information contained herein. In addition, this section should be
read in conjunction with the audited consolidated Ñnancial statements of Charter Communications, Inc. and
subsidiaries as of and for the years ended December 31, 2002, 2001 and 2000.
All comparisons and references in this Annual Report for Ñscal years 2001 and 2000 are to the restated
results. See ""Restatement of Prior Results'' below and Note 3 to our consolidated Ñnancial statements
contained herein.
Introduction
We have a history of net losses. Our net losses are principally attributable to the substantial interest costs
we incur because of our high level of debt, the signiÑcant depreciation expenses that we incur resulting from
the extensive capital investments we have made in our cable properties and the amortization and impairment
of our franchise intangibles. We expect these expenses will remain substantial, and therefore we expect to
continue to report net losses for the foreseeable future. During the years 1999 through 2001, we grew
signiÑcantly, principally through acquisitions of other cable businesses Ñnanced by debt and, to a lesser extent,
equity. We do not anticipate that we will engage in signiÑcant merger or acquisition activity for the foreseeable
future and, as discussed in ""Ì Liquidity and Capital Resources'' and ""Ì Certain Trends and Uncertainties''
below, we believe our access to the debt or equity markets to obtain additional Ñnancing beyond that currently
provided by our various credit facilities and the commitment proposal of Vulcan Inc. is seriously constrained.
Accordingly, we do not believe that our historical growth rates are accurate indicators of future growth.
Since our inception and currently, our ability to conduct operations is dependent on our continued access
to credit pursuant to our subsidiaries' credit facilities. The occurrence of an event of default under our
subsidiaries' credit facilities could result in capital from these facilities being unavailable to us and could also
trigger events of default under our outstanding public notes and would have a material adverse eÅect on us. In
addition, in the fourth quarter of 2003, CC V Holdings, LLC will be required to redeem $66 million of the
CC V Holdings 11.875% senior discount notes due 2008 and in October 2005 $750 million of Charter
Communications, Inc.'s outstanding public notes will mature. We expect that we will not be able to make the
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