Charter 2002 Annual Report Download - page 93

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002, 2001 and 2000
(dollars in millions, except where indicated)
5.75% Charter Convertible Notes. In October and November 2000, the Company issued 5.75%
convertible senior notes with an aggregate principal amount at maturity of $750 million (the ""5.75% Charter
Convertible Notes''). The net proceeds of $728 million were used to repay certain amounts outstanding under
the Charter Holdings 2000 senior bridge loan facility. The 5.75% Charter Convertible Notes are convertible at
the option of the holder into shares of Class A common stock at a conversion rate of 46.3822 shares per $1,000
principal amount of notes, which is equivalent to a price of $21.56 per share, subject to certain adjustments.
SpeciÑcally, the adjustments include anti-dilutive provisions, which cause adjustments to occur automatically
based on the occurrence of speciÑed events to provide protection rights to holders of the notes. Additionally,
the conversion ratio may be adjusted by the Company when deemed appropriate. These notes are redeemable
at the option of the Company at amounts decreasing from 102.3% to 100% of the principal amount plus
accrued and unpaid interest beginning on October 15, 2003, to the date of redemption. Interest is payable
semiannually on April 15 and October 15, beginning April 15, 2001, until maturity on October 15, 2005.
4.75% Charter Convertible Notes. In May 2001, the Company issued 4.75% convertible senior notes
with an aggregate principal amount at maturity of $633 million (the ""4.75% Charter Convertible Notes'').
The net proceeds of $609 million were used to repay certain amounts outstanding under the revolving portions
of the credit facilities of the Company's subsidiaries and for general corporate purposes, including capital
expenditures. The 4.75% Charter Convertible Notes are convertible at the option of the holder into shares of
Class A common stock at a conversion rate of 38.0952 shares per $1,000 principal amount of notes, which is
equivalent to a price of $26.25 per share, subject to certain adjustments. SpeciÑcally, the adjustments include
anti-dilutive provisions, which automatically occur based on the occurrence of speciÑed events to provide
protection rights to holders of the notes. Additionally, the conversion ratio may be adjusted by the Company
when deemed appropriate. These notes are redeemable at the option of the Company at amounts decreasing
from 101.9% to 100% of the principal amount, plus accrued and unpaid interest beginning on June 4, 2004, to
the date of redemption. Interest is payable semiannually on December 1 and June 1, beginning December 1,
2001, until maturity on June 1, 2006.
The 5.75% Charter Convertible Notes and the 4.75% Charter Convertible Notes rank equally with any
future unsubordinated and unsecured indebtedness of Charter, but are structurally subordinated to all existing
and future indebtedness and other liabilities of the Company's subsidiaries. Upon a change of control, subject
to certain conditions and restrictions, the Company may be required to repurchase the notes, in whole or in
part, at 100% of their principal amount plus accrued interest at the repurchase date.
March 1999 Charter Holdings Notes. In March 1999, Charter Holdings and Charter Communications
Holdings Capital Corporation (""Charter Capital'') (collectively, the ""Issuers'') issued $3.6 billion principal
amount of senior notes. The March 1999 Charter Holdings notes consisted of $600 million in aggregate
principal amount of 8.250% senior notes due 2007, $1.5 billion in aggregate principal amount of 8.625% senior
notes due 2009, and $1.5 billion in aggregate principal amount at maturity of 9.920% senior discount notes due
2011. The net proceeds of approximately $2.9 billion, combined with the borrowings under the Company's
credit facilities, were used to consummate tender oÅers for publicly held debt of several of the Company's
subsidiaries, as described below, to reÑnance borrowings under the Company's previous credit facilities, for
working capital purposes and to Ñnance acquisitions.
The 8.250% senior notes are not redeemable prior to maturity. Interest is payable semiannually in arrears
on April 1 and October 1, beginning October 1, 1999, until maturity.
The 8.625% senior notes are redeemable at the option of the Issuers at amounts decreasing from
104.313% to 100% of par value plus accrued and unpaid interest beginning on April 1, 2004, to the date of
redemption. Interest is payable semiannually in arrears on April 1 and October 1, beginning October 1, 1999,
until maturity.
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