Charter 2002 Annual Report Download - page 86

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002, 2001 and 2000
(dollars in millions, except where indicated)
Income Taxes
The Company recognizes deferred tax assets and liabilities for temporary diÅerences between the
Ñnancial reporting basis and the tax basis of the Company's assets and liabilities and expected beneÑts of
utilizing net operating loss carryforwards. The impact on deferred taxes of changes in tax rates and tax law, if
any, applied to the years during which temporary diÅerences are expected to be settled, are reÖected in the
consolidated Ñnancial statements in the period of enactment (see Note 22).
Minority Interest
Minority interest represents total members' equity of Charter Holdco not owned by Charter, plus
preferred membership interests in an indirect subsidiary of Charter held by certain sellers of the Bresnan
systems, less redeemable securities. Minority interest totaled $1.0 billion, $4.4 billion and $4.5 billion as of
December 31, 2002, 2001 and 2000, respectively, on the accompanying consolidated balance sheets. Gains or
losses arising from issuances by Charter Holdco of its membership units are recorded as capital transactions
thereby increasing or decreasing shareholders' equity and decreasing or increasing minority interest on the
consolidated balance sheets. These gains (losses) totaled ($1) million, ($253) million and ($272) million for
the years ended December 31, 2002, 2001 and 2000, respectively, on the accompanying consolidated
statements of changes in shareholders' equity. Operating losses are allocated to the minority owners based on
their ownership percentage, thereby reducing the Company's net loss.
Loss per Common Share
Basic loss per common share is computed by dividing the net loss applicable to common stock by
294,440,261 shares, 269,594,386 shares and 225,697,775 shares for the years ended December 31, 2002, 2001
and 2000, representing the weighted-average common shares outstanding during the respective periods.
Diluted loss per common share equals basic loss per common share for the periods presented, as the eÅect of
stock options is antidilutive because the Company incurred net losses. All membership units of Charter
Holdco are exchangeable on a one-for-one basis into common stock of Charter at the option of the holders.
Should the holders exchange units for shares, the eÅect would not be dilutive.
Segments
SFAS No. 131, ""Disclosure about Segments of an Enterprise and Related Information,'' established
standards for reporting information about operating segments in annual Ñnancial statements and in interim
Ñnancial reports issued to shareholders. Operating segments are deÑned as components of an enterprise about
which separate Ñnancial information is available that is evaluated on a regular basis by the chief operating
decision maker, or decision making group, in deciding how to allocate resources to an individual segment and
in assessing performance of the segment.
The Company's operations are managed on the basis of distinct geographic regional and divisional
operating segments. The Company has evaluated the criteria for aggregation of the geographic operating
segments under paragraph 17 of SFAS No. 131 and believes it meets each of the respective criteria set forth.
The Company delivers similar products and services within each of its geographic divisional operations. Each
geographic and divisional service area utilizes similar means for delivering the programming of the Company's
services; have similarity in the type or class of customer receiving the products and services; distributes the
Company's services over a uniÑed network; and operates within a consistent regulatory environment. In
addition, each of the geographic regional and divisional operating segments has similar economic characteris-
tics. Accordingly, management has determined that the Company has one reportable segment, broadband
services.
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