Charter 2004 Annual Report Download - page 12

CHARTER COMMUNICATIONS, INC. 2004 FORM 10-K
expect to use to fund the first six interest payments on the
(the sale in the first half of 2004 of non-core cable systems notes.
for a total of $733 million, the proceeds of which were used For additional terms of the notes, see ‘‘Description of
to reduce indebtedness. Certain Indebtedness — Outstanding Notes — Charter Communi-
cations, Inc. Notes — 5.875% Convertible Senior Notes due
RECENT EVENTS
2009.’’
CC V Holdings, LLC Notes FOCUS FOR 2005
In February 2005, CC V Holdings, LLC called for redemption
all of its outstanding notes, at 103.958% of principal amount, Our principal financial goal is to maximize our return on
plus accrued and unpaid interest to the anticipated date of invested capital. To do so, we will focus on increasing revenues,
redemption, on March 14, 2005. The total cost of redemption is growing our customer base, improving customer retention and
expected to be approximately $122 million and is expected to be enhancing customer satisfaction by providing reliable, high-
funded through borrowings under our credit facilities. quality service offerings, superior customer service and attractive
bundled offerings.
Management Changes Specifically, in the near term, we are focusing on:
On January 17, 2005, Robert P. May was appointed as Interim
President and Chief Executive Officer of Charter, replacing Carl (generating improvements in the overall customer experi-
E. Vogel who, effective on the same date, resigned his position ence in such critical areas as service delivery, customer care,
as President, Chief Executive Officer and a member of the board and new product offerings;
of directors of Charter and each of Charter’s subsidiaries for (developing more sophisticated customer management capa-
which Mr. Vogel served as a director and officer. Additionally, bilities through investment in our customer care and
Mr. May was appointed to the Executive Committee and the marketing infrastructure, including targeted marketing
Finance Committee of Charter’s board of directors and will capabilities;
continue to serve on the Board’s Strategic Planning Committee.
(executing growth strategies for new services, including
He was also appointed as an officer and director of Charter’s
digital simulcast, VOD, telephony, and digital video
subsidiaries for which Mr. Vogel was an officer and director.
recorder service (‘‘DVR’’);
Charter’s board of directors has formed an Executive
Search Committee to oversee Charter’s search for a permanent (managing our operating costs by exercising discipline in
President and Chief Executive Officer. capital and operational spending; and
Derek Chang, our Executive Vice President of Finance and
(identifying opportunities to continue to improve our bal-
Strategy and Interim co-Chief Financial Officer, has informed ance sheet and liquidity.
Charter of his intention to resign effective April 15, 2005. We have begun an internal operational improvement
Sale of CCO Holdings, LLC Senior Floating Rate Notes initiative aimed at helping us gain new customers and retain
On December 15, 2004, our subsidiaries, CCO Holdings, LLC existing customers, which is focused on customer care, technical
and CCO Holdings Capital Corp., issued and sold $550 million operations and sales. We intend to increase efforts to focus
senior floating rate notes due 2010 in a private transaction to management attention on instilling a customer service oriented
qualified institutional buyers in reliance on Rule 144A and culture throughout the company and to give those areas of our
outside the United States to non-U.S. persons in reliance on operations increased priority of resources for staffing levels,
Regulation S. The notes have an annual interest rate of LIBOR training budgets and financial incentives for employee perform-
plus 4.125%, reset and payable quarterly. The net proceeds from ance in those areas.
the sale of the notes were used to pay down bank debt and for We believe that our high-speed data service will continue
general corporate purposes. to provide a substantial portion of our revenue growth in the
near future. We also plan to continue to expand our marketing
Sale of 5.875% Convertible Senior Notes
of high-speed data service to the business community, which we
On November 22, 2004, we issued $862.5 million original believe has shown an increasing interest in high-speed data
principal amount of 5.875% convertible senior notes due 2009, service and private network services. Additionally, we plan to
which are convertible into shares of our Class A common stock, continue to prepare additional markets for telephony launches in
par value $.001 per share, at a rate of 413.2231 shares per 2005.
$1,000 principal amount of notes (or approximately $2.42 per We believe we offer our customers an excellent choice of
share), subject to adjustment in certain circumstances. On services through a variety of bundled packages, particularly with
December 23, 2004, we used a portion of the proceeds from the respect to our digital video and high-speed data services, as well
sale of the notes to redeem all of our outstanding 5.75% con- as telephony in certain markets. Our digital platform enables us
vertible senior notes due 2005 (total principal amount of to offer a significant number and variety of channels, and we
$588 million). We also used a portion of the proceeds from the offer customers the opportunity to choose among groups of
sale of the notes to purchase certain U.S. government securities channel offerings, including premium channels, and to combine
which were pledged as security for the notes and which we
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