Charter 2003 Annual Report Download - page 3

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Carl E. Vogel
President and
Chief Executive Officer
Paul G. Allen
Chairman
To Our Shareholders: This past year was a year of rebuilding our business and strengthening our foundation. We often
characterized this process as a process of transition.
In 2003, we repackaged and repriced several of our consumer offerings, enhanced management depth at every level
of our organization and began to improve our financial flexibility by increasing our liquidity, all in the interest of improving
our competitive position and serving our customers. In 2004, we are continuing our strategy of driving customer satisfaction,
operational efficiency, and product enhancement to generate further improvements in our revenues. We firmly believe the
revenue potential of our business is improving as we offer differentiated video services, ubiquitous high-speed Internet
products and expanded voice-over-Internet protocol telephony services.
Improvements in the Company’s performance are already visible. With the vast majority of our network rebuild
completed, Charter is continuing to grow revenues and adjusted EBITDA, while our capital spending has shifted to revenue-
based opportunities.
In 2003, our revenues increased 6 percent to $4.8 billion, adjusted EBITDA grew 7 percent to $1.9 billion, and our
capital expenditures decreased by $1.3 billion, or 61 percent, to $854 million compared to 2002. Overall, Charter improved
free cash flow by $1.4 billion compared to 2002, going from negative $1.5 billion to negative $70 million. Free cash flow
measures the funds generated internally after deducting operating costs, capital expenditures and cash interest on debt.
This important metric measures our fundamental ability to drive economic value from our broadband network. In 2002,
capital expenditures surpassed adjusted EBITDA by $371 million; in 2003, even during our operating transition, adjusted
EBITDA was $1.1 billion higher than our capital expenditures.
We’re proud of this achievement. It affirms the central premise of Charter Communications: the delivery of new and
growing digital communications services that generate value as they produce customer satisfaction. Our broadband network
delivers an array of communications services, from on-demand television to a superior high-speed Internet product to one
of the best high definition TV offerings available.
01.
REBUILDING OUR BUSINESS AND
STRENGTHENING OUR FOUNDATION
DELIVERING NEW AND GROWING
DIGITAL COMMUNICATIONS SERVICES