Charter 2003 Annual Report Download - page 122

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 and 2001
(dollars in millions, except where indicated)
2001 11.750% Charter Holdings notes, in each case, at a premium with proceeds of certain oÅerings of equity
securities. In addition, on or after May 15, 2006, Charter Holdings and Charter Capital may redeem some or
all of the May 2001 10.000% Charter Holdings notes and the May 2001 11.750% Charter Holdings notes at
any time, in each case, at a premium. The optional redemption price declines to 100% of the principal amount
of the May 2001 Charter Holdings notes redeemed, plus accrued and unpaid interest, if any, for redemption on
or after May 15, 2009.
In the event that a speciÑed change of control event occurs, Charter Holdings and Charter Capital must
oÅer to repurchase any then outstanding May 2001 Charter Holdings notes at 101% of their total principal
amount or accreted value, as applicable, plus accrued and unpaid interest, if any.
The indentures governing the May 2001 Charter Holdings notes contain substantially identical events of
default, aÇrmative covenants and negative covenants as those contained in the indentures governing the
March 1999, January 2000 and January 2001 Charter Holdings notes.
January 2002 Charter Holdings Notes. The January 2002 Charter Holdings notes were issued under
three separate indentures, each among Charter Holdings and Charter Capital, as the issuers, and BNY
Midwest Trust Company, as trustee, two of which were supplements to the indentures for the May 2001
Charter Holdings notes. In July 2002, Charter Holdings and Charter Capital exchanged substantially all of
these notes for new January 2002 Charter Holdings notes, with substantially similar terms, except that the new
January 2002 notes are registered under the Securities Act and, therefore, do not bear legends restricting their
transfer and are not subject to further registration or special interest obligations.
The January 2002 Charter Holdings notes are general unsecured obligations of Charter Holdings and
Charter Capital. The January 2002 Charter Holdings notes consisted of $350 million in total principal amount
of 9.625% senior notes due 2009, $300 million in total principal amount of 10.000% senior notes due 2011
(both combined with their respective May 2001 issue in the tabular presentation above) and $330 million in
total principal amount at maturity of 12.125% senior discount notes due 2012.
The January 2002 12.125% senior discount notes mature on January 15, 2012, and as of December 31,
2003, the total principal amount outstanding was $330 million and the total accreted value of these notes was
approximately $231 million. Cash interest on the January 2002 12.125% Charter Holdings notes will not
accrue prior to January 15, 2007.
The January 2002 Charter Holdings notes are senior debts of Charter Holdings and Charter Capital.
They rank equally with the current and future unsecured and unsubordinated debt of Charter Holdings,
including the March 1999, January 2000, January 2001 and May 2001 Charter Holdings notes. They are
structurally subordinated to the obligations of Charter Holdings' subsidiaries, including the CCH II notes, the
CCO Holdings notes, and the credit facilities.
The Charter Holdings 12.125% senior discount notes are redeemable at the option of the issuers at
amounts decreasing from 106.063% to 100% of accreted value beginning January 15, 2007. At any time prior
to January 15, 2005, the issuers may redeem up to 35% of the total principal amount of the 12.125% senior
discount notes at a redemption price of 112.125% of the accreted value under certain conditions.
In the event that a speciÑed change of control event occurs, Charter Holdings and Charter Capital must
oÅer to repurchase any then outstanding January 2002 Charter Holdings notes at 101% of their total principal
amount or accreted value, as applicable, plus accrued and unpaid interest, if any.
The indentures governing the January 2002 Charter Holdings notes contain substantially identical events
of default, aÇrmative covenants and negative covenants as those contained in the indentures governing the
March 1999, January 2000, January 2001 and May 2001 Charter Holdings notes.
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