Charter 2006 Annual Report Download - page 16

CHARTER COMMUNICATIONS, INC. 2006 FORM 10-K
RECENT EVENT campaign management tools that track, analyze, and report the
results of our marketing campaigns.
In February 2007, we engaged J.P. Morgan Securities Inc., Banc We believe that customers value our ability to combine
of America Securities LLC, and Citigroup Global Markets Inc. video, high-speed Internet, and telephone services into attrac-
to arrange and syndicate a refinancing and expansion of our tively priced bundled offerings that distinguish us from the
existing $6.85 billion senior secured credit facilities. The pro- competition. Bundling of services, by combining two or more
posed transaction includes $8.35 billion of senior secured credit Charter services for one value-based price, is fundamental to our
facilities, consisting of a $1.5 billion revolving credit facility, a marketing strategy because we believe bundled offerings increase
$1.5 billion new term facility, and a $5.0 billion refinancing term customer acceptance of our services, and improve customer
loan facility at Charter Communications Operating, LLC and a retention and satisfaction. We will pursue further growth in our
$350 million third lien term loan at CCO Holdings, LLC, customer base through targeted marketing of bundled services
(collectively, the ‘‘Transaction’’). and continually improving the end-to-end customer experience.
We expect to use a portion of the additional proceeds from During 2006, we extended the deployment of our telephone
the Transaction to redeem up to $550 million of our subsidiary, capabilities to approximately 3.9 million additional homes
CCO Holdings, LLC’s outstanding floating rate notes due 2010 passed, to reach a total of approximately 6.8 million homes
and up to $187 million of Charter Holdings’ outstanding passed across our network, and we plan to extend to additional
8.625% senior notes due 2009 in addition to other general homes passed in 2007. During 2007, we plan to focus our
corporate purposes. We expect that we will enter into the credit marketing and sales efforts to attract additional customers to our
facilities in March 2007. Upon completion of the Transaction, telephone service, primarily through bundled offers with our
we expect to have adequate liquidity to fund our operations and video and high-speed Internet services.
service our debt through 2008. In addition to serving and growing our residential customer
base, we will increase efforts to make video, high-speed Internet
FOCUS FOR 2007 and telephone services available to the business community. We
We strive to provide value to our customers by offering a high- believe that small businesses will find our bundled service
quality suite of services including video, high-speed Internet, and offerings provide value and convenience, and that we can
telephone service as well as advanced offerings including continue to grow this portion of our business.
OnDemand video service, high-definition television service, and We expect to continue a disciplined approach to managing
DVR service. We offer our services to encourage customers to capital expenditures by directing resources to initiatives and
subscribe to a combination of services known as a bundle. We opportunities offering the highest expected returns. We antici-
offer a two-services bundle, which is a combination of two of pate placing a priority on supporting deployment of telephone
our service offerings; but our main focus is marketing our three- service to residential and small business customers.
services bundle, also called ‘‘Triple Play.’’ With a bundle, the Our asset sales and operational initiatives in 2006 have
customer receives a lower total price than the sum of the price improved the density of our geographic service areas and
of individual services, along with the convenience of a single bill. provided a more efficient operating platform. We operate an
By continually focusing on the needs of our customers — raising integrated customer care system to serve our customers. We are
customer service levels and investing in products and services deploying telephone service capability to the majority of our
they desire — our goal is to be the premier provider of in-home systems to more effectively leverage the capability of our
entertainment and communications services in the communities broadband network, and are making a series of service improve-
we serve. ment initiatives related to our technical operations. We expect
In 2007, we expect to continue with the strategic priorities our continuous improvement initiatives to further enhance the
identified in 2006, which were to: operating effectiveness and efficiencies of our operating platform.
We will also continue to evaluate our geographic service areas
(improve the end-to-end customer experience and increase for opportunities to improve operating and capital efficiencies,
customer loyalty; through sales, exchanges of systems with other providers,
(grow sales and retention for all our products and services; and/or acquisitions of cable systems.
In 2007, we will continue to evaluate potential financial
(drive operating and capital effectiveness; and
transactions that can enhance our liquidity, extend debt maturi-
(continue an opportunistic approach to enhancing liquidity, ties, and/or reduce our debt.
extending maturities, and reducing debt. We believe our focus on these strategic priorities will
We strive to continually improve our customers’ exper- enable us to provide greater value to our customers and thereby
iences and, in doing so, to increase customer loyalty by instilling generate future growth opportunities for us.
a service-oriented culture throughout our care centers, field
service operations, and corporate support organization.
Charter markets its service offerings by employing a
segmented, targeted marketing approach. We determine which
marketing and sales programs are the most effective using
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