Charter 2007 Annual Report Download - page 17

Charter Communications Holding Company, LLC. Charter Holdco, a
Delaware limited liability company formed on May 25, 1999, is
the direct 100% parent of CCHC. The common membership
units of Charter Holdco are owned approximately 54% by
Charter, 16% by Vulcan Cable III Inc. and 30% by CII. All of the
outstanding common membership units in Charter Holdco held
by Vulcan Cable III Inc. and CII are controlled by Mr. Allen and
are exchangeable on a one-for-one basis at any time for shares of
Class B common stock of Charter, which are in turn convertible
into Class A common stock of Charter on a one-for-one basis.
Charter controls 100% of the voting power of Charter Holdco
and is its sole manager.
Certain provisions of Charter’s certificate of incorporation
and Charter Holdco’s limited liability company agreement effec-
tively require that Charter’s investment in Charter Holdco repli-
cate, on a “mirror” basis, Charter’s outstanding equity and debt
structure. As a result, in addition to its equity interest in common
units of Charter Holdco, Charter also holds 100% of the 5.875%
and the 6.50% mirror convertible notes of Charter Holdco that
automatically convert into common membership units upon the
conversion of Charter 5.875% or 6.50% convertible senior notes
and 100% of the mirror preferred membership units of Charter
Holdco that automatically convert into common membership
units upon the conversion of the Series A convertible redeemable
preferred stock of Charter.
CCHC, LLC. CCHC, a Delaware limited liability company formed
on October 25, 2005, is the issuer of an exchangeable accreting
note. In October 2005, Charter, acting through a Special Com-
mittee of Charter’s board of directors, and Mr. Allen, settled a
dispute that had arisen between the parties with regard to the
ownership of CC VIII. As part of that settlement, CCHC issued
the CCHC note to CII.
Interim Holding Company Debt Issuers. As indicated in the organiza-
tional chart above, our interim holding company debt issuers
indirectly own the subsidiaries that own or operate all of our
cable systems, subject to a CC VIII minority interest held by
Mr. Allen and CCH I as described below. For a description of
the debt issued by these issuers please see “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of
Operations – Description of Our Outstanding Debt.”
Preferred Equity in CC VIII. CII owns 30% of the CC VIII preferred
membership interests. CCH I, a direct subsidiary of CIH, directly
owns the remaining 70% of these preferred interests. The
common membership interests in CC VIII are indirectly owned
by Charter Operating. See Notes 11 and 23 to our accompanying
consolidated financial statements contained in “Item 8. Financial
Statements and Supplementary Data.”
PRODUCTS AND SERVICES
We sell video services, high-speed Internet services, and tele-
phone services utilizing our cable network. Our video services
include traditional cable video services (analog and digital) and in
some areas advanced broadband services such as OnDemand,
high definition television, and DVR service. Our telephone
services are primarily provided using voice over Internet protocol
(“VoIP”) technology, to transmit digital voice signals over our
systems. Our video, high-speed Internet, and telephone services
are offered to residential and commercial customers on a sub-
scription basis, with prices and related charges that vary prima-
rily based on the types of service selected, whether the services
are sold as a “bundle” or on an individual basis, and the
equipment necessary to receive the services, with some variation
in prices depending on geographic location.
The following table approximates our customer statistics for video, residential high-speed Internet and telephone as of
December 31, 2007 and 2006.
December 31,
2007
(a)
December 31,
2006
(a)
Approximate as of
Video Cable Services:
Video:
Residential (non-bulk) video customers
(b)
4,959,800 5,172,300
Multi-dwelling (bulk) and commercial unit customers
(c)
260,100 261,000
Total video customers 5,219,900 5,433,300
Digital Video:
Digital video customers
(d)
2,920,400 2,808,400
Non-Video Cable Services:
Residential high-speed Internet customers
(e)
2,682,500 2,402,200
Telephone customers
(f)
959,300 445,800
Total Revenue Generating Units 11,782,100 11,089,700
After giving effect to sales and acquisitions of cable systems in 2007, December 31, 2006 video customers, digital video customers,
high-speed Internet customers, and telephone customers would have been 5,336,200, 2,770,300, 2,393,400, and 446,300, respectively.
(a)
“Customers” include all persons our corporate billing records show as receiving service (regardless of their payment status), except for complimentary accounts (such as our
employees). At December 31, 2007 and 2006, “customers” include approximately 48,200 and 32,700 persons whose accounts were over 60 days past due in payment,
approximately 10,700 and 5,400 persons, whose accounts were over 90 days past due in payment, and approximately 2,900 and 2,700 of which were over 120 days past
due in payment, respectively.
(b)
Includes all residential customers who receive video services.
CHARTER COMMUNICATIONS, INC. 2007 FORM 10-K
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