Charter 2006 Annual Report Download - page 20

CHARTER COMMUNICATIONS, INC. 2006 FORM 10-K
Charter Communications Holding Company, LLC. Charter Holdco, a Interim Holding Company Debt Issuers. As indicated in the organiza-
Delaware limited liability company formed on May 25, 1999, is tional chart above, our interim holding company debt issuers
the direct 100% parent of CCHC. The common membership indirectly own the subsidiaries that own or operate all of our
units of Charter Holdco are owned approximately 55% by cable systems, subject to a CC VIII minority interest held by
Charter, 15% by Vulcan Cable III Inc. and 30% by CII. All of Mr. Allen and CCH I as described below. For a description of
the outstanding common membership units in Charter Holdco the debt issued by these issuers please see ‘‘Item 7. Manage-
held by Vulcan Cable III Inc. and CII are controlled by ment’s Discussion and Analysis of Financial Condition and
Mr. Allen and are exchangeable on a one-for-one basis at any Results of Operations — Description of Our Outstanding Debt.’’
time for shares of Class B common stock of Charter, which are
Preferred Equity in CC VIII, LLC. CII owns 30% of the CC VIII
in turn convertible into Class A common stock of Charter.
preferred membership interests. CCH I, a direct subsidiary of
Charter controls 100% of the voting power of Charter Holdco
CCH I Holdings, LLC (‘‘CIH’’), directly owns the remaining
and is its sole manager.
70% of these preferred interests. The common membership
Certain provisions of Charter’s certificate of incorporation
interests in CC VIII are indirectly owned by Charter Operating.
and Charter Holdco’s limited liability company agreement
See Notes 11 and 22 to our accompanying consolidated
effectively require that Charter’s investment in Charter Holdco
financial statements contained in ‘‘Item 8. Financial Statements
replicate, on a ‘‘mirror’’ basis, Charter’s outstanding equity and
and Supplementary Data.’’
debt structure. As a result, in addition to its equity interest in
common units of Charter Holdco, Charter also holds 100% of PRODUCTS AND SERVICES
the 5.875% mirror convertible notes of Charter Holdco that
automatically convert into common membership units upon the We sell video services, high-speed Internet services, and in many
conversion of any Charter 5.875% convertible senior notes and areas, telephone services utilizing our cable system. Our video
100% of the mirror preferred membership units of Charter services include traditional cable video services (analog and
Holdco that automatically convert into common membership digital) and in some areas advanced broadband services such as
units upon the conversion of the Series A convertible redeem- high definition television, OnDemand, and DVR. Our telephone
able preferred stock of Charter. services are primarily provided using voice over Internet
protocol (‘‘VoIP’’), to transmit digital voice signals over our
CCHC, LLC. CCHC, a Delaware limited liability company formed systems. Our video, high-speed Internet, and telephone services
on October 25, 2005, is the issuer of an exchangeable accreting are offered to residential and commercial customers. We sell our
note. In October 2005, Charter, acting through a Special video services, high-speed Internet, and telephone services on a
Committee of Charter’s Board of Directors, and Mr. Allen, subscription basis, with prices and related charges that vary
settled a dispute that had arisen between the parties with regard primarily based on the types of service selected, whether the
to the ownership of CC VIII. As part of that settlement, CCHC services are sold as a ‘‘bundle’’ or on an individual basis, and the
issued the CCHC note to CII. equipment necessary to receive the services, with some variation
in prices depending on geographic location.
The following table summarizes our customer statistics for analog and digital video, residential high-speed Internet and residential
telephone approximate as of December 31, 2006 and 2005.
Approximate as of
December 31, December 31,
2006(a) 2005(a)
Video Services:
Analog Video:
Residential (non-bulk) analog video customers(b) 5,172,300 5,616,300
Multi-dwelling (bulk) and commercial unit customers(c) 261,000 268,200
Total analog video customers(b)(c) 5,433,300 5,884,500
Digital Video:
Digital video customers(d) 2,808,400 2,796,600
Non-Video Services:
Residential high-speed Internet customers(e) 2,402,200 2,196,400
Residential telephone customers(f) 445,800 121,500
After giving effect to the acquisition of cable systems in January 2006 and the sales of certain non-strategic cable systems in the
third quarter of 2006, December 31, 2005 analog video customers, digital video customers, high-speed Internet customers and
telephone customers would have been 5,506,800, 2,638,500, 2,097,700 and 136,000, respectively.
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