Charter 2002 Annual Report Download - page 37

Our future cash needs will be signiÑcantly aÅected by our outstanding debt balances. The following table
summarizes our payment obligations as of December 31, 2002 under our long-term debt and certain other
contractual obligations and commitments (dollars in millions).
Payments by Period
Less than 1-3 3-5 More than
Contractual Obligations Total 1 year years years 5 years
Long-Term Debt(1)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $19,692 $236 $1,403 $4,638 $13,415
Capital and Operating Lease Obligations(1) 78 17 25 17 19
Programming Minimum Commitments(2) 714 173 228 34 279
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $20,484 $426 $1,656 $4,689 $13,713
(1) The table presents maturities of long-term debt outstanding as of December 31, 2002. Refer to Note 10
and 24 to our consolidated Ñnancial statements for a description of our long-term debt and other long-
term liabilities.
(2) We pay programming fees under multi-year contracts ranging from three to six years typically based on
increasing Öat fees per customer. 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.
Certain of our programming contracts provide that the amount payable is the greater of the amount
payable based on the per customer fees or a guaranteed minimum payment or commitment set forth in
the contract. The table sets forth the aggregate guaranteed minimum commitments under our program-
ming contracts.
As the principal amounts owing under our various debt obligations become due, sustaining our liquidity
and access to capital will become more diÇcult over time. In the fourth quarter of 2003, CC V will be required
to repay approximately $66 million in principal amount of the CC V bonds. In 2005, $750 million of Charter
Communications Inc.'s outstanding convertible notes will mature. In subsequent years, substantial additional
amounts will become due under our remaining obligations. In addition, a default under the covenants
governing any of our debt instruments could result in the acceleration of our payment obligations under that
debt and, under certain circumstances, in cross-defaults under our other debt obligations.
We expect to remain in compliance with the covenants under the credit facilities of our subsidiaries and
indentures, and that our cash on hand, cash Öow from operations and the amounts available under the credit
facilities should be suÇcient to satisfy our liquidity needs through the end of 2003. However, it is unclear
whether we will have access to suÇcient capital to satisfy our principal repayment obligations which are
scheduled to come due in 2005 and thereafter. We do not expect that cash Öows from operations will be
suÇcient, on their own, to permit us to satisfy these obligations. Our substantial debt levels and the depressed
price of our equity securities limit our access to the debt and equity markets on reasonable terms at this time
and for the foreseeable future. In addition, the maximum allowable leverage ratios under our credit facilities
will decline over time and the total potential borrowing available under our subsidiaries' current credit
facilities (subject to covenant restrictions and limitations) will decrease from approximately $9.2 billion as of
the end of 2002 to $9.0 billion, $8.7 billion and $7.7 billion by the end of 2003, 2004 and 2005, respectively.
Although Mr. Allen and his aÇliates have purchased equity from us and our subsidiaries in the past, except
for the commitment of Vulcan Inc., an aÇliate of Mr. Allen, described below under ""Ì Funding Commit-
ment of Vulcan Inc.'', there is no obligation for Mr. Allen or his aÇliates to purchase equity from or contribute
or loan funds to us or to our subsidiaries in the future.
In addition, because of our corporate structure, Charter Communications, Inc. has less access to capital
than certain of its operating subsidiaries and therefore Charter Communications, Inc.'s ability to repay its
senior notes is subject to additional uncertainties. Charter Communications, Inc. is a holding company and its
principal assets are its interest in Charter Communications Holding Company, LLC and the mirror notes
payable by Charter Communications Holding Company, LLC to Charter Communications, Inc., which have
the same principal amount and terms as those of Charter Communications, Inc.'s convertible senior notes. As
a result, Charter Communications, Inc.'s ability to make interest payments, and, in 2005 and 2006, to repay
35