Charter 2006 Annual Report Download - page 41

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CHARTER COMMUNICATIONS, INC. 2006 FORM 10-K
E911 and Universal Service requirements, to many VoIP Telecommunications companies generally are subject to other
providers, such as Charter. The FCC has also required that significant regulation which could also be extended to VoIP
these VoIP providers comply with obligations applied to providers. If additional telecommunications regulations are
traditional telecommunications carriers to ensure their networks applied to our VoIP service, it could cause us to incur additional
can accommodate law enforcement wiretaps by May 2007. costs.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
Our principal physical assets consist of cable distribution plant over $34 million worth of land and buildings since early 2003.
and equipment, including signal receiving, encoding and decod- We plan to continue to reduce operating costs and improve
ing devices, headend reception facilities, distribution systems, utilization in this area through consolidation of sites within our
and customer premise equipment for each of our cable systems. system footprints. Our subsidiaries generally have leased space
Our cable plant and related equipment are generally for business offices throughout our operating divisions. Our
attached to utility poles under pole rental agreements with local headend and tower locations are located on owned or leased
public utilities and telephone companies, and in certain locations parcels of land, and we generally own the towers on which our
are buried in underground ducts or trenches. We own or lease equipment is located. Charter Holdco owns the real property
real property for signal reception sites, and own most of our and building for our principal executive offices.
service vehicles. The physical components of our cable systems require
Historically, our subsidiaries have owned the real property maintenance as well as periodic upgrades to support the new
and buildings for our data centers, customer contact centers, and services and products we introduce. See ‘‘Item 1. Business — Our
our divisional administrative offices. Since early 2003 we have Network Technology.’’ We believe that our properties are
reduced our total real estate portfolio square footage by generally in good operating condition and are suitable for our
approximately 15% and have decreased our annual operating business operations.
lease costs by approximately 28%. In addition, Charter has sold
ITEM 3. LEGAL PROCEEDINGS.
We are a defendant or co-defendant in several unrelated results of operations of any one period, and no assurance can be
lawsuits claiming infringement of various patents relating to given that any adverse outcome would not be material to our
various aspects of our businesses. Other industry participants are consolidated financial condition, results of operations or
also defendants in certain of these cases, and, in many cases, we liquidity.
expect that any potential liability would be the responsibility of We are a party to other lawsuits and claims that arise in
our equipment vendors pursuant to applicable contractual the ordinary course of conducting our business. The ultimate
indemnification provisions. In the event that a court ultimately outcome of these other legal matters pending against us or our
determines that we infringe on any intellectual property rights, subsidiaries cannot be predicted, and although such lawsuits and
we may be subject to substantial damages and/or an injunction claims are not expected individually to have a material adverse
that could require us or our vendors to modify certain products effect on our consolidated financial condition, results of opera-
and services we offer to our subscribers. While we believe the tions or liquidity, such lawsuits could have, in the aggregate, a
lawsuits are without merit, and intend to defend the actions material adverse effect on our consolidated financial condition,
vigorously, the lawsuits could be material to our consolidated results of operations or liquidity.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during
the fourth quarter of the year ended December 31, 2006.
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