Charter 2003 Annual Report Download - page 5

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Business services: The contribution of Charter’s business communications segments are increasingly noteworthy. Our
advertising sales division, Charter Media, provides affordable, targeted advertising sales and production for thousands of local
and national businesses, and contributed $263 million in revenue in 2003. At young and rising Charter Business, sales are
robust. Revenues from this division, which provides business-to-business video, data and Internet protocol (IP) solutions
to small and medium-sized businesses, rose 27 percent in 2003, to $204 million, as business owners in Charter markets
welcomed a fresh alternative in local telecommunications services.
Financing: Since we last wrote, we injected much needed liquidity into Charter’s balance sheet. We extended maturities
and captured $294 million of debt discount through a debt exchange, and issued $500 million of senior notes to repay bank debt
in Fall 2003. We completed the sale of our Port Orchard, Washington cable system, serving 25,500 analog video customers, and
entered into an agreement to divest additional geographically non-strategic cable systems serving some 228,500 customers in
2003. The sale of those cable systems, which closed in 2004, coupled with the Port Orchard transaction, generated proceeds
of approximately $824 million, which we used to pay down debt. We also amended Charter’s bank facilities, and concurrently
issued $1.5 billion in senior notes in April 2004. These transactions extended beyond 2008 approximately $8.0 billion of scheduled
debt maturities and credit facility commitment reductions which would have otherwise matured before then. The consolidation
of bank facilities, deferral of debt maturities and the imposition of less restrictive covenants created by these concurrent
transactions will benefit the Company by providing increased borrowing availability and greater operating flexibility. The market
value of Charter’s equity and public debt securities are higher today than at the beginning of 2003. We are pleased with the
improvements we’ve made in strengthening the financial profile of the Company; however, we continue to explore ways to
improve our balance sheet. We recognize the need to reduce our overall leverage in the future and look for ways to accomplish
this in a way that maximizes the interest of all our shareholders.
YEAR OF TRANSITION
2003 was an active year of transition. We strengthened our management team, improved our operations and customer base,
grew our revenues and cash flows and improved our liquidity. All while expanding and enhancing our product mix. We are better
positioned today than a year ago to benefit from the expanding capability and rising demand for services our network can provide.
We are incredibly proud of our employees’ accomplishments over the last year. During a period of extreme challenge and
transition, Charter’s employees continued to advance the cause of choice and empowerment of our customers. Their hard work
and personal dedication to their communities and Company is remarkable. To them, we dedicate this report.
Carl E. Vogel Paul G. Allen
President and Chief Executive Officer Chairman
June 23, 2004
03.
CAPITALIZING ON REVENUE
GROWTH OPPORTUNITIES OF
CHARTER BUSINESS
BENEFITING FROM EXPANDING
CAPABILITY AND RISING DEMAND
FOR OUR SERVICES