Charter 2005 Annual Report Download - page 58

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
Summary of Outstanding Contractual Obligations
The following table summarizes our payment obligations as of December 31, 2005 under our long-term debt and certain other
contractual obligations and commitments (dollars in millions).
Payments by Period
Less than More than
Total 1 Year 1-3 Years 3-5 Years 5 Years
Contractual Obligations
Long-Term Debt Principal Payments(1) $19,336 $ 50 $1,129 $5,781 $12,376
Long-Term Debt Interest Payments(2) 11,426 1,469 3,224 3,066 3,667
Payments on Interest Rate Instruments(3) 18 8 10 ——
Capital and Operating Lease Obligations(1) 94 20 27 23 24
Programming Minimum Commitments(4) 1,253 342 678 233 —
Other(5) 301 146 70 42 43
Total $32,428 $2,035 $5,138 $9,145 $16,110
(1) The table presents maturities of long-term debt outstanding as of December 31, 2005. Refer to Notes 9 and 26 to our accompanying consolidated financial statements
contained in ‘‘Item 8. Financial Statements and Supplementary Data’’ for a description of our long-term debt and other contractual obligations and commitments.
(2) Interest payments on variable debt are estimated using amounts outstanding at December 31, 2005 and the average implied forward London Interbank Offering Rate
(LIBOR) rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2005. Actual interest payments will differ based
on actual LIBOR rates and actual amounts outstanding for applicable periods.
(3) Represents amounts we will be required to pay under our interest rate hedge agreements estimated using the average implied forward LIBOR applicable rates for the
quarter during the interest rate reset based on the yield curve in effect at December 31, 2005.
(4) We pay programming fees under multi-year contracts ranging from three to ten years typically based on a flat fee per customer, which may be fixed for the term or may
in some cases, escalate over the term. Programming costs included in the accompanying statement of operations were $1.4 billion, $1.3 billion and $1.2 billion for the
years ended December 31, 2005, 2004 and 2003, respectively. Certain of our programming agreements are based on a flat fee per month or have guaranteed minimum
payments. The table sets forth the aggregate guaranteed minimum commitments under our programming contracts.
(5) ‘‘Other’’ represents other guaranteed minimum commitments, which consist primarily of commitments to our billing services vendors.
The following items are not included in the contractual activities after paying cash interest of $1.5 billion. In addition,
obligations table because the obligations are not fixed and/or we used approximately $1.1 billion for purchases of property,
determinable due to various factors discussed below. However, plant and equipment. Finally, we had net cash flows from
we incur these costs as part of our operations: financing activities of $136 million.
(We also rent utility poles used in our operations. Generally, Operating activities. Net cash provided by operating activities
pole rentals are cancelable on short notice, but we decreased $212 million, or 45%, from $472 million for the year
anticipate that such rentals will recur. Rent expense ended December 31, 2004 to $260 million for the year ended
incurred for pole rental attachments for the years ended December 31, 2005. For the year ended December 31, 2005, net
December 31, 2005, 2004 and 2003, was $46 million, cash provided by operating activities decreased primarily as a
$43 million and $40 million, respectively. result of an increase in cash interest expense of $189 million
(We pay franchise fees under multi-year franchise agree- over the corresponding prior period and changes in operating
ments based on a percentage of revenues earned from video assets and liabilities that used $45 million more cash during the
service per year. We also pay other franchise related costs, year ended December 31, 2005 than the corresponding period
such as public education grants under multi-year agree- in 2004. The change in operating assets and liabilities is
ments. Franchise fees and other franchise-related costs primarily the result of the finalization of the class action
included in the accompanying statement of operations were settlement in the third quarter of 2005.
$170 million, $164 million and $162 million for the years Net cash provided by operating activities decreased
ended December 31, 2005, 2004 and 2003, respectively. $293 million, or 38%, from $765 million for the year ended
December 31, 2003 to $472 million for the year ended
(We also have $165 million in letters of credit, primarily to December 31, 2004. For the year ended December 31, 2004, net
our various worker’s compensation, property casualty and cash provided by operating activities decreased primarily as a
general liability carriers as collateral for reimbursement of result of an increase in cash interest expense of $203 million
claims. These letters of credit reduce the amount we may over the corresponding prior period and changes in operating
borrow under our credit facilities. assets and liabilities that provided $83 million less cash during
Historical Operating, Financing and Investing Activities the year ended December 31, 2004 than the corresponding
We held $21 million in cash and cash equivalents as of period in 2003. The change in operating assets and liabilities is
December 31, 2005 compared to $650 million as of Decem- primarily the result of the benefit in the year ended Decem-
ber 31, 2004. For the year ended December 31, 2005, we ber 31, 2003 from collection of receivables from programmers
generated $260 million of net cash flows from operating
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