Charter 2003 Annual Report Download - page 144

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 and 2001
(dollars in millions, except where indicated)
Mr. Allen disagrees with the Special Committee's determinations described above and has so notiÑed the
Special Committee. Mr. Allen contends that the transaction is accurately reÖected in the transaction
documentation and contemporaneous and subsequent company public disclosures.
The parties engaged in a process of non-binding mediation to seek to resolve this matter, without success.
The Special Committee is evaluating what further actions or processes it may undertake to resolve this
dispute. To accommodate further deliberation, each party has agreed to refrain from initiating legal
proceedings over this matter until it has given at least ten days' prior notice to the other. In addition, the
Special Committee and Mr. Allen have determined to utilize the Delaware Court of Chancery's program for
mediation of complex business disputes in an eÅort to resolve the CC VIII interest dispute. If the Special
Committee and Mr. Allen are unable to reach a resolution through that mediation process or to agree on an
alternative dispute resolution process, the Special Committee intends to seek resolution of this dispute through
judicial proceedings in an action that would be commenced, after appropriate notice, in the Delaware Court of
Chancery against Mr. Allen and his aÇliates seeking contract reformation, declaratory relief as to the
respective rights of the parties regarding this dispute and alternative forms of legal and equitable relief. The
ultimate resolution and Ñnancial impact of the dispute are not determinable at this time.
23. Commitments and Contingencies
Commitments
The following table summarizes the Company's payment obligations as of December 31, 2003 for its
contractual obligations.
Total 2004 2005 2006 2007 2008 Thereafter
Contractual Obligations
Operating Lease Obligations(1) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 70 $ 17 $ 14 $ 11 $ 7 $ 5 $ 16
Programming Minimum Commitments(2) ÏÏÏÏÏÏÏÏÏÏÏÏ 1,949 320 329 355 386 317 242
Other(3)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 282 63 47 39 24 25 84
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,301 $400 $390 $405 $417 $347 $342
(1) The Company leases certain facilities and equipment under noncancellable operating leases. Leases and
rental costs charged to expense for the years ended December 31, 2003, 2002 and 2001, were $30 million,
$31 million and $25 million, respectively.
(2) The Company pays programming fees under multi-year contracts ranging from three to six years typically
based on a Öat fee per customer, which may be Ñxed for the term or may in some cases, escalate over the
term. Programming costs included in the accompanying statement of operations were $1.2 billion,
$1.2 billion and $963 million for the years ended December 31, 2003, 2002 and 2001, respectively.
Certain of the Company's programming agreements are based on a Öat fee per month or have guaranteed
minimum payments. The table sets forth the aggregate guaranteed minimum commitments under the
Company's programming contracts.
(3) ""Other'' represents other guaranteed minimum commitments, which consist primarily of commitments to
the Company's billing services vendors.
The following items are not included in the contractual obligation table due to various factors discussed
below. However, the Company incurs these costs as part of its operations:
‚ The Company also rents utility poles used in its operations. Generally, pole rentals are cancelable on
short notice, but the Company anticipates that such rentals will recur. Rent expense incurred for pole
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