Charter 2005 Annual Report Download - page 48

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
to hurricane Katrina and Rita impacted customers related to analog video customer base and increase the number of our
service outages. We have restored service to our impacted customers who purchase bundled services including high-speed
customers. Included in the reduction in analog video customers Internet, digital video and telephone services, in addition to
and reducing the increase in digital video and high-speed VOD, high-definition television and DVR services. In addition,
Internet customers are 26,800 analog video customers, 12,000 we intend to increase revenues by expanding marketing of our
digital video customers and 600 high-speed Internet customers services to our commercial customers.
sold in the cable system sales in Texas and West Virginia, Average monthly revenue per analog video customer
which closed in July 2005. The cable system sales to Atlantic increased from $68.02 for the year ended December 31, 2004 to
Broadband Finance, LLC, which closed in March and April $73.68 for the year ended December 31, 2005 primarily as a
2004 and the cable system sales in Texas and West Virginia, result of price increases and incremental revenues from
which closed in July 2005 (collectively referred to in this section advanced services. Average monthly revenue per analog video
as the ‘‘Systems Sales’’) reduced the increase in revenues by customer represents total annual revenue, divided by twelve,
approximately $38 million. Our goal is to increase revenues by divided by the average number of analog video customers
improving customer service which we believe will stabilize our during the respective period.
Revenues by service offering were as follows (dollars in millions):
Year Ended December 31,
2005 2004 2005 over 2004
% of % of %
Revenues Revenues Revenues Revenues Change Change
Video $3,401 65% $3,373 68% $28 1%
High-speed Internet 908 17% 741 15% 167 23%
Telephone 36 1% 18 —18 100%
Advertising sales 294 6% 289 6% 5 2%
Commercial 279 5% 238 5% 41 17%
Other 336 6% 318 6% 18 6%
$5,254 100% $4,977 100% $277 6%
Video revenues consist primarily of revenues from analog decline in national advertising sales. In addition, the increase
and digital video services provided to our non-commercial was offset by a decrease of $1 million as a result of the System
customers. Approximately $108 million of the increase in video Sales. For the years ended December 31, 2005 and 2004, we
revenues was the result of price increases and incremental video received $15 million and $16 million, respectively, in advertising
revenues from existing customers and approximately $17 million sales revenues from programmers.
was the result of an increase in digital video customers. The Commercial revenues consist primarily of revenues from
increases were offset by decreases of approximately $59 million cable video and high-speed Internet services provided to our
related to a decrease in analog video customers, approximately commercial customers. Commercial revenues increased primarily
$29 million resulting from the System Sales and approximately as a result of an increase in commercial high-speed Internet
$9 million of credits issued to hurricanes Katrina and Rita revenues. The increase was reduced by approximately $3 million
impacted customers related to service outages. as a result of the System Sales.
Approximately $138 million of the increase in revenues Other revenues consist of revenues from franchise fees,
from high-speed Internet services provided to our non-commer- equipment rental, customer installations, home shopping, dial-up
cial customers related to the increase in the average number of Internet service, late payment fees, wire maintenance fees and
customers receiving high-speed Internet services, whereas other miscellaneous revenues. For the years ended December 31,
approximately $35 million related to the increase in average 2005 and 2004, franchise fees represented approximately 54% and
price of the service. The increase was offset by approximately 52%, respectively, of total other revenues. The increase in other
$3 million of credits issued to hurricanes Katrina and Rita revenues was primarily the result of an increase in franchise fees
impacted customers related to service outages and $3 million of $14 million and installation revenue of $8 million offset by a
resulting from the System Sales. decrease of $2 million in equipment rental and $2 million in
Revenues from telephone services increased primarily as a processing fees. In addition, other revenues were offset by
result of an increase of 76,100 telephone customers in 2005. approximately $2 million as a result of the System Sales.
Advertising sales revenues consist primarily of revenues
from commercial advertising customers, programmers and other
vendors. Advertising sales revenues increased primarily as a
result of an increase in local advertising sales and offset by a
38