HomeMy WebLinkAbout1999-071
RESOLUTION NO. 1999-71
RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE
TRANSFER OF CABLE TELEVISION FRANCHISE FROM AMERICAN CABLE
ENTERTAINMENT COMPANY, L.L.C., TO CHARTER COMMUNICATIONS
ENTERTAINMENT II, L.L.C.
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5 WHEREAS, American Cable Entertainment Company, L.L.C., ["A.C.E.C."] a Delaware
6 limited liability company ["Seller"] is a duly authorized holder of a franchise authorizing the
7 operation and maintenance of a cable system within the City of San Bernardino pursuant to the
8 City of San Bernardino's Ordinances No. MC-2395, as amended, and an assignment dated August
9 30, 1993, and Resolution 93-383, and Resolution 98-263 ["the Franchise"]; and,
10 WHEREAS, Seller and Charter Communications Entertainment II, L.L.c., a Delaware
II limited liability company ["Purchaser"] are parties that certain Asset Purchase and Sale Agreement
12 dated January, 1999 and assignment dated March 8, 1999 ["the Agreement"] wherein Seller and
,
13 Purchaser agree that Purchaser will acquire all the assets used in the ownership and operation of
14 the cable television system; and,
15 WHEREAS, the Agreement provides that Purchaser has the right to assign all of its rights,
16 title and interest in the Agreement to Charter Communications Entertainment II, L.L.C., hereafter
17 has assigned its rights to Charter Communications Entertainment II, L.L.C.; and,
18 WHEREAS, CCE-II as Charter Communications Entertainment II, L.L.C. desires to
19 acquire from Seller all the rights and privileges of the Franchise and assume all of the obligations
20 of Seller under the Franchise accruing from the date of closing under the Agreements above
21 described; and,
22 WHEREAS, the Franchise, as amended in 1968, authorizes transfer and assignment of the
23 Franchise by Seller, provided that the net worth of Purchaser at the time of such transfer is not
24 less than $250,000.00 (adjusted to include increases in the Cost of Living Index for Southern
25 California over the then current Cost of Living Index), as shown by a statement of net worth
26 certified to by a licensed certified public accountant; and,
27 III
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Resolution (American Cable Trans to charter Comm.)[Cable.Res] 1
Res 1999-71
I RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE
TRANSFER OF CABLE TELEVISION FRANCHISE FROM AMERICAN CABLE
2 ENTERTAINMENT COMPANY, L.L.C., TO CHARTER COMMUNICATIONS
ENTERTAINMENT II, L.L.C.
3
4 WHEREAS, the City has received such evidence of financial responsibility submitted by
5 the Purchaser and its affiliates and has found that Purchaser and its affiliates have the financial
6 managerial ability to operate the system in a proper manner; and,
7 WHEREAS, Seller, and Purchaser, have jointly submitted to the City Council of the City
8 an application on Federal Communication Commission Form 394 for consent to the transfer and
9 such other information concerning the transfer as is required by applicable law and the Franchise
10 and as has been requested by the City Council; and,
II WHEREAS, the Purchaser has agreed, by letter (a copy of which is attached hereto as
12 Exhibit "A" and incorporated herein), in response to the City's request, its assurance that Charter
13 intends to upgrade the system within the next three years to provide greater bandwidth and a two-
14 way capability, the current system architecture of choice is hybrid fiber optic and coaxial cable
15 with the fiber used to transmit signals to neighborhood service nodes of between 500 and 1000
16 homes, the upgraded bandwidth of the system is typically 750 or 860 MHZ, and upon completion
17 of the upgrade, new services such as Charter Pipeline high-speed Internet access can be offered
18 as well as digital television and other data services to the City; and,
19 WHEREAS, the Purchaser has further agreed by letter (a copy of which is attached hereto
20 as Exhibit "A" and incorporated herein) to abide by any previous Agreement between the City and
21 and Seller including, but not limited to, the franchise ordinances and any attachments or
22 amendments thereto, which concludes the Judgment and Settlement Agreement in the case of City
23 of San Bernardino v. Liberty TV Cable. Inc., Case No. 82-6876 WMB (Gx), U.S. District Court,
24 Central District of California; and,
25 WHEREAS, Seller has requested the approval of the City for the transfer and assignment
26 of the Franchise by the Seller to the Purchaser;
27 / / /
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Resolution (American Cable Trans to charter Comm.)[Cable.Res] 2
Res 1999-71
1 RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE
TRANSFER OF CABLE TELEVISION FRANCHISE FROM AMERICAN CABLE
2 ENTERTAINMENT COMPANY, L.L.C., TO CHARTER COMMUNICATIONS
ENTERTAINMENT II, L.L.C.
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BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
SECTION 1. The Mayor and Common Council of the City of San Bernardino hereby
approve the assignment of the Franchise and related assets of the cable television system by Seller
to the Purchaser.
SECTION 2. The Mayor and Common Council hereby affirm that: (a) the Franchise was
properly granted; (b) the Franchise is in full force and effect; (c) the Franchise is scheduled to
expire on December 31,2003; and (d) to the City's knowledge there exists no fact or circumstance
which constitutes or which, with the passage of time or giving of notice or both, would constitute
a default under the Franchise or will entitle the City to cancel or terminate the rights thereunder,
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except upon the expiration of the full term thereof.
SECTION 3: The authorization of the transfer and assignment of the franchise from Seller
to the Purchaser is expressly conditioned upon, and shall be deemed effective upon, the
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consummation of the sale to the Purchaser of the Franchise and related assets and the closing of
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the transaction under the Agreement.
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Resolution (American Cable Trans to charter Comm.)[Cablc.Rcs] 3
Res 1999-71
I RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING THE
TRANSFER OF CABLE TELEVISION FRANCHISE FROM AMERICAN CABLE
2 ENTERTAINMENT COMPANY, L.L.C., TO CHARTER COMMUNICATIONS
ENTERTAINMENT II, L.L.C.
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a ioint relrular
meeting thereof,
held on the 19th
day of
Anril
, 1999, by the following vote, to wit:
AYES
NAYS
ABSTAIN
ABSENT
y
x
x
x
x
x
x
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yfc r I' I>>. .
o.Jldi ()../ trlJ (JJ/I'1{L" -121f!I-
. City Clerk ,/ , !
The foregoing Resolution is hereby approved this ~ \::, t day of
April
, 1999.
,
;::;;;( ~~
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Esther R. Estrada
Mayor Pro Tempore
City of San Bernardino
Approved as to form and
23 legal content:
24 JAMES F. PENMAN,
City Attorney
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Resolution (American Cable Trans to charter Comm.)[Cable.Res] 4
Res 1999-71
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Mar-31-99 ~~:17P Charter Communications
626 537 6156
Res 1999-71
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March 31, 1999
Mr. Frank Keller Via Fax and Mail
Cable Commission
City of San Bernardino
300 North D Street
PO. Box 1318
San Bernardino, CA 92402-0001
Dear Frank:
This letter serves as Charter Communication's commitment to assume and abide by all
terms and conditions of the existing franchise agreement upon closing of the transaction
with American Cable Entertainment Company, LLC. Since ACEC will continue in
existence under Charter Communications Entertainment II, LLC's ownership, this
transaction will simply result in a transfer of control.
In our recent phone conversation you asked tor information regarding our upgrade plans
tor the system. While it is premature to provide detailed upgrade plans and a schedule, I
can assure you that Charter intends to upgrade the system within the next three years to
provide greater bandwidth and two-way capability. Our current system architecture of
choice is hybrid fiber optic and coaxial cable with the fiber used to transmit signals to
neighborhood service nodes of between 500 and 1000 homes. The upgraded bandwidth
of the system is typically 750 or 860 MHz. Upon completion of the upgrade, new
services such as Clulrter Pipeline high-speed Internet access can be offered as well as
digital television and other data services.
We look forward to serving your community in the months and years ahead.
Sincerely,
-?'lUP~
Melvin L. Matthews
-'_~n'~'1o.>,""'''''--'''' ".,'."...'.n,,',. .
. Director of Government and Community Relations
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Res 1999-71
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOUDATED FINANOAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH AUDITORS' REPORT
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ARTHUR ANDERSEN LLlJ
Res 1999-71
REPORT OF INDEPENDENT PUBUC ACCOUNTANTS
To the Board of Directors and Shareholders
of Charter Communications, Inc.:
We have audited the accompanying consolidated balance sheets of Charter Communications, Inc. (a
Delaware corporation) and subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of operations, shareholders' investment and cash flows for each of the three years in the period
ended December 31,1997. These consolidated financial statements and the supplementary consolidating
information referred to below are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and supplementary consolidating
information based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Charter Communications, Inc. and subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in the period ended December 31,
1997, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as
a whole. The consolidating information included in Exhibits I and II is presented for purposes of additional
analysis of the consolidated financial statements rather than to present the financial position and results of
operations of the individual companies. This information has been subjected to the auditing procedures
applied in our andils of the consolidated financial statements and, in our opinion, is fairly stated in all
material respects in relation to the consolidated financial statements taken as a whole.
,___h~,,~~Llf
Sl Louis, Missouri,
February 6, 1998
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Res 1999-7<IHARTER COMMUNICATIONS, IKC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - DECEMBER 31, 1997 AND 1996
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
Accounts receivable, net of allowance for doubtful accounts of $52,329
and $88,798, respectively
Prepaid expenses and other
Total current assets
RECEIVABLES FROM CABLE TELEVISION SYSTEMS MANAGED BY
CHARTER, net of allowance for doubtful accounts of $1,315,019 and
$1,084,084, respectively
PROPERTY, PLANT AND EQUIPMENT, net
FRANCHISE COSTS, net of accumulated amortization of $3,828,546 and
$2,836,570, respectively
OTHER ASSETS, net
INVESTMENTS IN UNCONSOUDATED ENTITIES
LIABIUTIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Current maturities of long-term debt
Accounts payable and accrued expenses
Subscriber deposits
T ota! current liabilities
DEFERRED REVENUE
LONG-TERM DEBT
DEFERRED COMPENSATION
LOSSES IN EXCESS OF INVESTMENTS IN UNCONSOLIDATED "
ENTITIES
COWvITI'MENTS AND CONTINGENCIES
SHAREHOLDERS'INVESTMENT:
Common stock
Preferred stock
Additional paid-in capita!
Accumulated deficit
T ota! sharehoiders' investment
1997 1996
$ 1,814,834
$ 1,165,519
1,585,018
4,131,537
7,531,389
573,456
720,467
2,459,442
4,621,886 9,030,799
27,620,853 30,929,001
28,195,268 41,973,754
1,014,952 1,505,748
11,912,525 9,107,085
$ 80,896,873 $ 95,005,829
--------- ---------
--------- ---------
$ 3,659,167 $ 8,947,509
9,192,315 7,781,625
85,476
12,851,482 16,814,610
93,593 67,471
56,812,496 68,600,319
4,447,051 1,970,675
,
255,324
276 276
18,998,210 17,999,739
(12,306,235) (10,702,585)
6,692,251 7,297,430
$ 80,896,873 $ 95,005,829
===a===-==- ========
The accompanying notes are an integral part of these consolidated balance sheets.
Res 1999-71
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31. 1997, 1996 AND 1995
Net loss
1997 1996 1995
$14,944,835 $ 13,447,488 $ 13,073,432
981,875 2,877,500 1,500,000
15,926,710 16,324,988 14,573,432
19,046,253 15,831,588 2,795,942
34,972,963 32,156,576 17,369,374
25,104,004 23,142,414 12,190,569
6,962,778 5,819,490 1,714,519
2,476,376 1,833,952 3,354,606
34,543,158 30,795,856 17,259,694
429,805 1,360,720 109,680 t
111,545 111,791 288,728
(5,752,176) (5,576,496) (2,197,903)
4.944,858 2,794,246 (4,917,912)
(1,337,682) 66,762 (51,654)
(2,033,455) (2,603,697) (6,878,741)
(1,603,650) (1,242,977) (6,769,061)
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$ (1,603,650) $ (1,242,977) $ (6,769,061)
--------- ========= ---------
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SERVICE REVENUES:
Management services-
Management fees
Acquisition fees
Cable television services
OPERATING EXPENSES:
Operating, general and administrative
Depreciation and amortization
Deferred compensation
Income from operations
OTHER INCOME (EXPENSE):
Interest income
Interest expense
Equity in income (loss) of investments in unconsolidated
entities
Other, net
Loss before provision for income taxes
...._...~~lIl",""'""7.,......."."'~-~~..~-',.....,.""_.-..'"'.
PROVISION FOR INCOME TAXES
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The accompanying notes are an integral part of these consolidated statements,
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Res 1999-71
CHARTER COMMUNICATIONS. INe. AND SUBSIDIARIES
CONSOLIDATED Sf A TEMENTS OF SHAREHOLDERS' INVESTMENT
FOR THE YEARS ENDED DECEMBER 31.1997.1996 AND 1995
Additional Total
Common Preferred Paid-In Accumulated Shareholders'
Stock Stock Capital Deficit Investment
BALANCE, December 31, 1994 $450 $ $ 5,999,565 $ (2,690,547) $ 3,309,468
Common stock retired (229) 229
Common stock issued 55 11,999,945 12,000,000
Net loss (6,769,061) (6,769,061)
BALANCE, December 31,1995 276 17,999,739 (9,459,608) 8,540,407
Net loss (1,242,977) (1,242,977)
BALANCE, December 31, 1996 276 17,999,739 (10,702,585) 7,297,430
Capital contribution 998,471 998,471
Net loss (1,603,650) (1,603,650)
BALANCE, December 31, 1997 $276 $ $ 18,998,210 $(12,306,235) $ 6,692,251
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The accompanying notes are an integral part of these consolidated statements.
Res 1999-71
CHARTER COMMUNICATIONS. INe. AND SUBSIDIARIES
CONSOLIDATED SfATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31. 1997. 1996 AND 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities-
Depreciation and amortization
Amortization of debt issuance costs
Equity in (income) loss of investments in
unconsolidated entities
Loss on sale of cable television system
Loss on sale of property, plant and equipment
Changes in assets and liabilities, net of effects from
acquisitions-
Accounts receivable, net
Prepaid expenses and other
Receivables from cable television systems managed by
Charter
Accounts payable and accrued expenses
Deferred revenue
Deferred compensation
Subscriber deposits
Net cash provided by (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of cable television system
Purchases of propef"ty, plant and equipment
Distributions from investments in unconsolidated entities
Investments in unconsolidated entities
Payments for other assets
Payments for acquisitions, net of cash acquired
Proceeds from sale of property, plant and equipment
EXerase'6f purchase option
, Decrease in restricted funds held in escrow
Other investing activities
Net cash provided by (used in) investing activities
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Res 1999-71
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CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings in long-term debt
Repayments of long-term debt
Issuance of common stock
Payments of debt issuance costs
Net cash provided by (used in) financing activities
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUIVALENTS, beginning of year
CASH AND CASH EQUIVALENTS, end of year
CASH PAID FOR INTERESf
CASH PAID FOR TAXES, net of refunds
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1997 1996 1995
$15,800,000 $ 42,630,094 $ 45,392,110
(26,541,165) (13,245,606) (3,781,493)
12,000,000
(46,263) (748,083) (498,004)
(10,787,428) 28,636,405 53,112,613
649,315 (1,399,300) 2,214,853
1,165,519 2,564,819 349,966
$ 1,814,834 $ 1,165,519 $ 2,564,819
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$ 3,869,502 $ 3,765,611 $ 1,781,737
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$ $ $
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The accompanying notes are an integral part of these consolidated statements.
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Res 1999-71
CHARTER COMMUNICATIONS, 1NC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLIGES:
Organization and Basis of Presentation
The accompanying consolidated financial statements include the accounts of Charter Communications, Inc.
(Charter) and its wholly owned subsidiaries, collectively referred to as the "Company" herein. All
significant intercompany balances and transactions have been eliminated in consolidation.
Investments in partnerships and limited liability companies for which Charter is the General Partner or
holds limited partnership (member) interests are accounted for using the equity method. Under this
method, the investments are originally recorded at cost and are subsequently adjusted to recognize
Charter's share of net earnings or losses as they occur and distributions when received.
Since Charter does not exercise significant influence and owns less than a 20% interest, its investments in
CCA Holdings Corp. (CCA Holdings), cer Holdings Corp. (Cer Holdings), Charter Communications
Long Beach, Inc. (CC-LB), Worldgate Communications, Inc. (Worldgate) and TeleSynergy, Inc. are carried
at cost
Charter provides management services to cable television systems which are owned directly and indirectly
by the Company. Charter also receives acquisition fees for certain advisory services provided to entities
managed by Charter that acquire existing cable television systems.
As of December 31, 1997, Charter Communications Properties, Inc. (CCP) provided cable television service
to approximately 45,200 basic subscribers in Colorado, Georgia, Kansas, Montana, North Carolina and
South Carolina.
Cash Eauivalents
Cash equivalents consist primarily of repurchase agreements with original maturities of 90 days or less.
These investments are carried at cost which approximates market value.
Property, Plant and Eauipment
Property, plant and equipment is recorded at cost, including all direct and certain indirect costs associated
with the construction of cable transmission and distribution facilities, and the cost of new customer
. 'insta1lation. The costs of disconnecting customers are charged to expense in the period incurred. . ,,' ,-..'" .
" Expenditures for repairs and maintenance are .charged to expense as incurred, and equipment replacement
.., . costs and betterments are capitalized.
Property, plant and equipment is depreciated on a straight-line basis over the estimated useful lives of the
. related assets as follows:
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Cable distribution systems
Buildings and leasehold improvements
Premium subscription units
Vehicles and equipment
5-15 years
5-15 years
3-5 years
3-5 years
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Res 1999-71
During 1997 and 1996, the Company shortened the estimated useful lives of certain property, plant and
equipment for depreciation purposes. As a result, an additional $658,000 and $271,000 of depreciation was
recorded during 1997 and 1996, respectively.
Franchise Costs
Costs incurred in obtaining and renewing cable franchises are deferred and amortized over the lives of the
franchises. Costs relating to unsuccessful franchise applications are charged to expense when it is
determined that the efforts to obtain the franchise will not be successful. Franchise rights acquired through
the purchase of cable television systems represent the excess of the cost of properties acquired over the
amounts assigned to net tangible assets at the date of acquisition. Acquired franchise rights are amortized
using the straight-line method over 15 years.
Other Assets
Organizational costs are being amortized on a straight-line basis over five years. Debt issuance costs are
being amortized over the term of the related debt. The covenant not to compete agreement was amortized
on a straight-line basis over the five year term of the agreement.
Impairment of Assets
If the facts and circumstances suggest that a long-lived asset may be impaired, the carrying value is
reviewed. If a review indicates that the carrying value of such asset is not recoverable as determined based
on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of such
asset is reduced to its estimated fair value.
Service Revenues
Management fees, acquisition fees and cable service revenues are recorded when the related services are
provided.
Charter does not recognize revenues associated with deferred management fees for agreements entered into
during 1995, 1996 and 1997, because the cable systems managed by Charter are restricted from making
payments due to provisions contained in their debt agreements. The deferred management fees will be
recognized (if ever) when ultimately received.
Installation service revenues are recognized to the extent of direct selling costs incurred. The remainder, if
any, is deferred and amortized to income over the average estimated period that customers are expected to
remain connected to the cable television system. No installation service revenue has been deferred as of
December 31, 1997 and 1996, and direct selling costs have exceeded installation service revenue.
Fees collected from programmers to guarantee carriage are deferred and amortized to income over the life
" ,..of the contracts. Franchise fees coll~4,,!r~m,s:able ,subscribers and paid to local franchises are reported as '1..;.
service revenues. . .., . , , .
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Interest Rate Hedlre Aereements
The Company manages fluctuations in interest rates by using interest rate hedge agreements as required by
certain of its debt agreements. The interest rate caps and collars are accounted for as hedges of debt
obligations, and accordingly, the net settlement amounts are recorded as adjusbnents to interest expense in
the period incurred. Premiums paid for interest rate caps are deferred, included in other assets and are
amortized over the. original term of the interest rate agreement as an adjusbnent to interest expense.
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Res 1999-71
Interest rate caps and collars are entered into by the Company to reduce the impact of rising interest rates
on floating rate debt.
The Company's participation in interest rate hedging transactions involves instruments that have a close
correlation with its debt, thereby managing its risk. Interest rate hedge agreements have been designed for
hedging purposes and are not held or issued for speculative purposes.
Income Taxes
Income taxes are recorded in accordance with SFAS No. 109, "Accounting for Income Taxes."
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
2. ACOUISmONS:
Charter Acquisitions
In January 1995, Charter acquired limited partnership interests in Cencom Cable Income Partners, L.P.
(CCIP), Cencom Cable Income Partners II, L.P. (CCIP II) and Cencom Partners, L.P. (CPLP) and an option to
purchase an equity interest in Cencom Cable Television, Inc. for approximately $12.6 million. During 1995,
Charter exercised this option and thereafter sold its equity interest to a related party.
CCP Acquisitions
In 1995, CCP, a wholly owned subsidiary of Charter Communications Properties Holdings Corp. (CCP
Holdings), a wholly owned subsidiary of Charter, acquired cable television systems for an aggregate
purchase price, net of cash acquired, of approximately $29.4 million (including a $9.4 million unsecured
seller note executed by CCP Holdings). The excess of the cost of properties acquired over the amounts
assigned to net tangible assets at the date of acquisition was $18.4 million and is included in Franchise
costs.
In 1996, CCP acquired cable television systems in three separate transactions for an aggregate purchase
price, net of cash acquired, of approximately $34.1 million. The excess of the cost of properties acquired
over the amounts assigned to net tangible assets at the date of acquisition was $24.3 million and is included
in Franchise costs.
~--"'-"'-""'3. SALEOF CABLE TELEVISION SYSTEMS:
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In February 1997, CCP sold the net assets of the Ft. Hood system, which served approximately 5,900 basic
subscribers in Texas, for an aggregate sale price of approximately $12.5 million. The sale of the Ft. Hood
system resulted in a loss of $1.363,415, which is included in Other, net in the accompanying statement of
. operations for the year ended December 31, 1997.
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Res 1999-71
4. PROPERTY, PLANT AND EOUlPMENT, net:
Property, plant and equipment, net consists of the following at December 31:
Less- Accumulated depreciation
1997 1996
$ 26,143,984 $ 27,230,310
925,286 1,208,421
.2,916,942 2,947,066
5,002,595 3,926,413
34,988,807 35,312,210
(7,367,954) (4,383,209)
$ 27,620,853 $ 30,929,001
--------- ---------
--------- ---------
Cable distribution systems
Land, buildings and leasehold improvements
Premium subscription units
Vehicles and equipment
5. OTHER ASSETS, net:
Other assets, net consist of the following at December 31:
Covenant not to compete, net of accumulated amortization
of $-0- and $112,658, respectively
Organizational costs, net of accumulated amortization of
$155,096 and $109,325, respectively
Debt issuance costs, net of accumulated amortization of
$304,677 and $113,059, respectively
Long-term deposits
Other receivables
1997 1996
$ $ 147,342
86,290 142,062
798,012 935,694
130,650 130,650
150,000
$1,014,952 $1,505,748
-------- --------
------- --------
6. INVESTMENTS IN UNCONSOUDATED ENTITIES:
Investments in unconsolidated entities consist of the following at December 31:
1997 19%
Carried on the Eauitv Method
COP (limited partnership interest)
COP n (limited partnership interest)
< CPLP (limited partnership interest) .,., - " 'c
COP (general partnership interest) '.
CPLP (general partnership interest)
CharterComm, LLC
CharterComm II, LLC
Carried ~n th~'Cost Method
... ,.._--~...
CCA Holdings and ccr Holdings
CC-LB
Worldgate
T eleSynergy, Inc,
- 5 -
Res 1999-71
Losses in excess of equity investments in partnerships consist of the following at December 31:
1997 1996
COP II (general partnership interest)
CPLP (general partnership interest)
$
$ 64,521
190,803
$ $ 255,324
------- -------
------- -------
CCA Holdings and ccr Holdings
In 1995, Charter acquired 15% common stock equity interests in both CCA Holdings and ccr Holdings for
$7.7 million. CCA Holdings and ccr Holdings maintain indirect investments in limited partnerships
providing cable television service to approximately 523,300 basic subscribers in California, Connecticut,
Illinois, Massachusetts, Missouri and New Hampshire.
CC-LB
In 1997, Charter acquired a 15% common stock equity interest in CC-LB for $3.0 million. CC-LB maintains a
direct investment in Long Beach Acquisition Corp. which provides cable television service to approximately
71,000 basic subscribers in southern California.
CCIP
In March 1996, CCIP liquidated its assets in accordance with its partnership agreement. In connection
therewith, the Company recorded distributions, including interest, of approximately $7.0 million for its
limited partnership interests and $2.5 million for its general partnership interest. The Company anticipates
an additional distribution in the amount equal to its investment balance in COP.
COP II and CPLP
In accordance with the COP II partnership agreement, Cencom Properties II, Ine. (Cencom Properties II),
the general partner of COP II and a wholly owned subsidiary of CC II Holdings, is in the process of a
complete and orderly dissolution of COP II which includes the disposition of COP II's assets through the
sale of its cable television systems. Concurrent with the disposition of COP II's assets, including its 84%
ownership interest in CPLP, CPLP is disposing of its assets through the sale of its cable television systems to
facilitate the liquidation of COP II. During 1997, COP II and CPLP sold a portion of their cable systems
resulting in distributions to their limited partners.
During 1997, Charter received distributions of approximately $548,200 related to its limited partnership
interests in COP II.
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During 1997, Charter received distributions of approximately $6,994,100 related to its limited partnership
interests in CPLP.
In 1994, Charter purchased a 1 % general partnership interest in CCIP II and a 1.5% general partnership
interest in CPLP. During 1997, Charter recorded a net gain of approximately $64,500 related to its general
partnership interest in CCIP II. Charter received a distribution of approximately $98,800 and recorded a net
gain of approximately $337,200 related to its general partnership interest in CPLP _ The Iosses.in excess of
equity investments in these partnerships on the Company's consolidated balance sheet at December 31,
1996, represent Charter's recognition of cumulative losses in excess of its equity contributions.
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Res 1999-71
CharterComm, LLC and CharterComm II. LLC
Charter has invested approximately $4,674,900 (including $2,256,900 during 1997) in CharterComm, LLC
(CharterComm) and CharterComm II, LLC (CharterComm II), which together indirectly own
approximately 81 % of the interests in Charter Communications, L.P. and Charter Communications II, L.P.,
both limited partnerships which together provide cable television service to approximately 432,200 basic
subscribers in Alabama, Georgia, Kentucky, Louisiana, North Carolina, South Carolina and Tennessee. At
December 31, 1997, Charter's investments in CharterComm and CharterComm II have been reduced to $-0-
to reflect cumulative losses through December 31,1997.
7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES:
Accounts payable and accrued expenses consist of the following at December 31:
1997 1996
Salary and related benefits
Medical insurance claims reserve
Accounts payable
Capital expenditures
Franchise fees .
Accrued programming
Accrued interest
Other
$ 2,295,790
806,522
583,142
561,501
426,018
398,084
293,194
3,828,064
$ 2,087,349
1,280,323
308,427
1,646,342
513,032
389,442
405,704
1,151,006
$ 9,192,315 $ 7,781,625
-------- --------
-------- --------
8. LONG-TERM DEBT:
Long-term debt is as follows at December 31:
1997 1996
$ 41,500,000 $ 49,775,000
Revolving credit agreement, variable interest rate (a)
Promissory seller note, due September 30, 2005, varying
interest rates (b)
Revolving credit agreement, dated December 19%,
maturing June 1998, variable interest rate (c)
Promissory note, due upon sale of certain assets,
noninterest bearing (d)
Promissory note, due October 31, 2004, interest increasing
n"."from 8% to 15% overperiodofnote(e)-", .. ,
Promissory note, due on demand, noninterest bearing (f)
Promissory note, due September 1, 19W (g)
Promissory notes (h)
13,089,541
3,200,000
459,167
2,222,955
60,471,663
Less- Current maturities of long-term debt
3,659,167
11,283,650
5,500,000
3,255,000
3,080,000 ,
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2,153,342 .
.~
2,041,669 ,
,
77,547,828
4
8,947,509
$ 56,812,4% $ 68,600,319
Long-term debt
========= ===--=====
- 7 -
Res 1999-71
(a) CCP maintains a revolving credit agreement (the "CCP Credit Agreement") with a consortium of
banks for borrowings up to $47,500,000, of which $41,500,000 was outstanding at December 31,
1997. In 1997, the Credit Agreement was amended to reflect the impact of the sale of a cable
television system. The debt bears interest, at the Company's option, at rates based on the prime
rate of the Bank of Montreal (the agent bank), or LIBOR, plus applicable margins based upon
CCP's leverage ratio at the time of the borrowings. The variable interest rates ranged from 7.44%
to 7.63% and 7.38% to 7.50% at December 31, 1997 and 1996, respectively.
Borrowings under the CCP Credit Agreement are subject to certain financial and nonfinancial
covenants and restrictions, the most restrictive of which requires the maintenance of a ratio of total
debt to annualized operating cash flow of 5.5 to 1 at December 31, 1997. Borrowings under the
Credit Agreement are collateralized by the assets of CCP. In addition, CCP Holdings has pledged
its equity interest in CCP as additional security to the Credit Agreement. A quarterly commib;nent
fee of 0.375% per annum is payable on the unused portion of the CCP Credit Agreement.
Commencing June 30, 1998, and at the end of each calendar quarter thereafter, available
borrowings under the CCP Credit Agreement shall be reduced on an annual basis by 4.7% in 1998,
6.5% in 1999, 10.7% in 2000, 13.4% in 2001 and 16.2% in 2002.
Based upon the outstanding indebtedness at December 31, 1997, and the schedule reductions in
available borrowings detailed in the CCP Credit Agreement, aggregate future principal payments
on the Credit Agreement at December 31,1997, are as follows:
Year
Amount
1998
1999
2000
2001
2002
Thereafter
$
3,297,500
9,528,500
28,674,000
$ 41,500,000
---------
--------
(b) In connection with a 1995 acquisition, CCP Holdings entered into a $9,447,390 promissory seller
note with ccr Holdings. The promissory seller note bears interest at the following rates:
Year
Interest Rate
Years 1-5
Year 6
.........-,~~,,~-,,~.,.~ '" ....~""'....,,-~.-,,,..-.. ",~.:.''''' ..Year 7
Year 8
Year 9
Year 10
12%
15%
.17%
19%
21%
23%
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Interest expense has been accrued based on an average rate of interest over the life of the
promissory seller note, which approximates 15.43%. The balance at December 31, 1997, includes
accrued interest of $3,642,151.
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- 8 -
Res 1999-71
(c) In December 1996, Charter entered into a revolving credit agreement (the "Charter Credit
Agreement") with a bank for borrowings up to $12,000,000. The Charter Credit Agreement is
collateralized by the assets of the Company. Interest on the credit agreement is based on the
lender's Corporate Base Rate plus .75% or the LIDOR rate plus 3.25% when borrowings on the
agreement are under $6,000,000. Interest is based on the lender's Corporate Base Rate plus 1.0% or
the UBOR rate plus 3.5% when the commitment is in excess of $6,000,000. Interest is payable
quarterly in arrears.
(d) The promissory note with a related party was settled in connection with the transaction discUssed
in Note 16.
(e) The promissory seller note was assumed by CharterComm II in connection with the transaction
discussed in Note 16.
(f) This note represents one-half of Cencom Properties II's general partner capital contribution to
CCIP II. This note is payable on demand to CCIP II.
(g) In February 1996, in connection with a settlement agreement, Charter entered into a promissory
note for which principal and interest was due and paid in full on September 1, 1997 (see Note 10).
(h) In August 1996, in connection with two separate settlement agreements, Charter entered into two
promissory notes for which principal and interest are payable in full as soon as permitted out of
available funds of the Company within a period not to exceed 10 years from the date of the notes.
The notes bear interest at 9.25%. The interest rate on one of the promissory notes doubles after the
fifth anniversary of this note. The balance at December 31, 1997, includes accrued interest of
$254,420 (see Note 10).
Aggregate future principal payments required on outstanding debt at December 31, 1997, are as follows:
Year
Amount
1998
1999
2000
2001
2002
Thereafter
$ 3,659,167
3,297,500
9,528,500
43,986,496
$ 60,471,663
---------
---------
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Res 1999-71
9. SHAREHOLDERS' INVESTMENT:
Common Stock
Common stock consists of the following at December 31:
1997 1996
Class A Voting Common Stock, $.01 par value, 160,000 shares
authorized, 14,700 issued and outstanding
Class B Voting Common Stock, $.01 par value, 20,000 shares authorized,
7,350 issued and outstanding
Class C Non-Voting Common Stock, $.01 par value, 5,000 shares
authorized, 16.079 shares issued and outstanding
Class D Non-Voting Common Stock, $.01 par value, 20,000 shares
authorized, 0 shares issued and outstanding
Class E Non-Voting Common Stock, $.01 par value, 20,000 shares
authorized, 5,495.921 shares issued and outstanding
Non-Voting Common Stock, $.01 par value, 0 shares authorized, issued
and outstanding
$ 147 $147
74 74
55 55
$276 $276
Preferred Stock
Preferred stock consists of the following at December 31:
1997 1996
Preferred stock, $.01 par value, 20,000 shares authorized, 0 issued and
outstanding
$-
$-
The Class B Voting Common Stock (Class B Common Stock) has certain preferential rights upon liquidation
of Charter. Subject to the rights of the holders of any Preferred Stock, in the event of liquidation, dissolution
or "winding up" of Charter, holders of Class B Common Stock are entitled to a preference of $680 per share.
After such amount is paid, holders of Class A Voting Common Stock (Class A Common Stock), Class C
Non-Voting Common Stock (Class C Common Stock), Class D Non-Voting Common Stock (Class D
Common Stock) and Class E Non-Voting Common Stock (Class E Common Stock) are entitled to receive
$680 per share. Thereafter, all shareholders shall ratably receive the remaining proceeds.
If upon liquidation, dissolution or "winding up" the assets of Charter are insufficient to permit payment to
Class B shareholders for their full preferential amounts, all assets of Charter shall then be distributed
.....'.....-... .......ratabIy. Furthermore. if the proceeds from liquidation are inadequate to pay Class A, C. D and E
shareholders their full preferential amounts, the proceeds are to be distributed on a pro rata basis to these
shareholders.
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Upon the occurrence of any Conversion Event (as defined within the Amended and Restated Certificate of
Incorporation) Class C and E shareholders may convert any or all of their outstanding shares into the same
number of Class A shares. Furthermore, upon the occurrence of any Conversion Event, Charter may
automatically convert outstanding Class C shares into the same number of Class A shares.
Charter is' restricted from paying cash dividends on its common stock by its revolving credit agreement
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- 10 -
Res 1999-71
Preferred Stock
Charter is authorized to issue 20,000 shares of Preferred Stock with par value of $.01. No Preferred Stock
has been issued as of December 31, 1997.
Warrants
Charter has issued warrants to purchase Class D Common Stock. The warrants are exercisable upon sale of
all the outstanding common stock of Charter, sale of substantially all of the assets of the Company, or public
offering of Charter's common stock. Furthermore, the warrants shall not be exercisable until the aggregate
common equity value of Charter exceeds $90 million, net of the value attributable to stock appreciation
rights. The warrants are not exercisable as of December 31, 1997.
10. RELATED-PARTY TRANSACTIONS:
The Company provides management and other services under contracts to entities managed by Charter.
The associated revenues recorded by the Company for the years ended December 31,1997,1996 and 1995,
were $14,944,835, $13,447,488 and $13,073,432, respectively. Receivables from cable television systems
managed by Charter primarily consist of management fees due under the related agreements.
The Company received acquisition fees from entities managed by Charter of $981,875, $2,877,500 and
$1,500,000 during 1997, 1996 and 1995, respectively, in connection with the search, investigation and
negotiation of cable television systems acquired.
In 1997 and 1996, Charter's National Data Center (the "National Data Center"), which performs certain
subscriber billing services and provides computer network, hardware and software support to entities
managed by Charter, allocated expenses of approximately $1,400,600 and $836,400, respectively. All costs
incurred by the National Data Center are allocated to the entities managed by Charter based on the number
of subscribers. In addition, the National Data Center leases office space from Charter Communications
EntertaiIunent I, L.P. (CCE-I), an entity 15% indirectly owned and managed by Charter. Rent expense
under this lease totaled approximately $212,700 and $141,800 for the years ended December 31, 1997 and
1996, respectively.
Charter and entities managed by Charter collectively utilize a combination of insurance coverage and
self-insurance programs for medical, dental and workers' compensation claims. Charter performs certain
administrative duties, including the allocation of such charges to the affiliated entities and funding of the
disbursement account The costs are allocated monthly based upon the total number of employees,
historical claims and medical cost trend rates. During 1997, 1996 and 1995, the Company expensed
approximately $426,600, $454,300 and $236,100, respectively, relating to insurance allocations.
.1.' ~
During 1997, 1996 and 1995, certain costs, otherwise chargeable to CPLP in connection with the operation of
certain of its systems, were borne by Charter, resulting in additional expense of approximately $52,200,
, $122,000 and $125,000, respectively; Charter is not obligated to make such payments in the future.
Severance
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In February 1996, Charter and other entities managed by Charter entered into a settlement agreement and
mutual release with a former employee and an entity jointly owned by the former employee and indirectly
by CharterComm. In accordance with this agreement, the former employee is entitled to a severance
package from Charter comprised of a cash payment of $1,250,000, an IS-month promissory note for
$1,999,000 (see Note 8), and forgiveness of $126,000 in debt outstanding under a promissory note.
'!
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In August 1996, Charter entered into separate settlement agreements with two former employees. In
accordance with these agreements, the former employees are entitled to receive $1,968,535 of principal and
interest pursuant to promissory notes issued by Charter (see Note 8).
-"":-,-,"'..:,~~""- --
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- 11 -
Res 1999-71
11. COMMITMENTS AND CONTINGENCIES:
Leases
The Company leases certain facilities and equipment under noncancelable operating leases. Rent expense
incurred under these leases during 1997, 1996 and 1995 was approximately $1,354,200, $908,000 and
$415,000, respectively.
Future minimum lease payments are as follows:
1998
1999
2000
2001
2002
Thereafter
$1,427,200
1,366,900
1,085,000
838,600
870,100
242,000
The Company rents utility poles in its operations. Generally, pole rental agreements are short-term, but the
Company anticipates that such rentals will recur. Rent expense incurred for pole attachments for the years
ended December 31, 1997, 1996 and 1995, were approximately $271,000, $175,100 and $2,600, respectively.
Litigation
Charter is a named defendant in a purported class action lawsuit (the" Action") filed in October 1995 on
behalf of the CCll' limited partners. The Action named as defendants the general partner of COP, the
purchasers of all the systems previously owned by CCIP (which includes certain entities managed by
Charter) and certain individuals, including the directors and executive officers of the general partner of
CCll'. On February 15, 1996, all of the plaintiffs claims for injunctive relief were dismissed (including that
which sought to prevent the consummation of cable television sales by Ccll'); the plaintiffs claims for
money damages which may have resulted from sale by Ccll' of its assets remain pending. Based upon,
among other things, the advice of Counsel, each of the defendants to the Action believes the Action to be
without merit and is contesting it vigorously. In October 1996, the plaintiff filed a Consolidated Amended
Class Action Complaint (the" Amended Complaint"). The general partner of Ccll' believes that portions of
the Amended Complaint are legally inadequate and in January 1997, filed a motion for summary judgment
to dismiss all remaining claims in the Action. In October 1997, the court granted in part and denied in part
defendants motion for summary judgment, the effect of which narrowed the remaining issues significantly.
The plaintiff filed a motion to alter or amend the court's order which was denied. There can be no
assurance, however, that the plaintiff will not be awarded damages in connection with the Action, some or
all of which may be payable by Charter.
Charter and certain of its subsidiaries are named defendants in two actions involving an affiliate of Charter,
Ccll' II, a public limited partnership. In April 1997, a complaint was filed, and two amended complaints
",,- subsequently filed, by plaintiffs who are limited partners of COP II against Cencom Properties II, Inc., the
general partner of Ccll' II, Cencom Partners Inc., the general partner of CPLP, an entity in which Ccll' II
. invested, certain named brokerage firms involved in the original sale of the limited partnership units and
certain other affiliates of Charter. The plaintiffs allege that the defendants breached fiduciary duties and
the terms of the Ccll' II partnership agreement in connection with the investment in CPLP, the
management of certain Ccll' II assets and the sale of certain Ccll' II assets. The plaintiffs seek recovery of
the consideration paid for their partnership units, restitution of all profits received by the defendants in
connection with the Ccll' II transaction and punitive damages. In June 1997, a purported class action was
filed on behalf of the limited partners of Ccll' II against Cencom Properties II, Charter, certain other
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- 12 -
Res 1999-71
affiliates of Charter and certain individuals, including officers of Charter or Cencom Properties II. The
plaintiffs allege that the defendants breached fiduciary duties and the terms of the CCIP II partnership
agreement in connection with the investment in CPLP, the management of certain CCIP II assets and the
sale of certain CCIP II assets. The damages claimed by the plaintiffs are as yet unspecified. Charter
believes that it has meritorious defenses in both actions and intends to defend the actions vigorously.
Charter is not able to project the expenses which will be associated with the actions or to predict any
potential outcome or financial impact.
Charter is also a party to lawsuits which are generally incidental to its business. In the opinion of
management, after consulting with legal counsel, the outcome of these lawsuits will not have a material
adverse effect on the Company's financial position or results of operations.
12. RATE REGULA nON IN THE CABLE TELEVISION INDUSTRY:
The cable television industry is subject to extensive regulation at the federal, local and, in some instances,
state levels. In addition, recent legislative and regulatory changes and additional regulatory proposals
under consideration may materially affect the cable television industry.
Congress enacted the Cable Television Consumer Protection and Competition Act of 1992 (the "1992 Cable
Act"), which became effective on December 4, 1992. The 1992 Cable Act generally allows for a greater
degree of regulation of the cable television industry. Under the 1992 Cable Act's definition of effective
competition, nearly all cable systems in the United States are subject to rate regulation of basic cable
services, provided the local franchising authority becomes certified to regulate basic service rates. The 1992
Cable Act and the Federal Communications Commission's (FCC) rules implementing the 1992 Cable Act
have generally increased the administrative and operational expenses of cable television systems and have
resulted in additional regulatory oversight by the FCC and local franchise authorities.
While management believes that the Company has complied in all material respects with the rate
provisions of the 1992 Cable Act, in jurisdictions that have not yet chosen to certify, refunds covering a
one-year period on basic services may be ordered upon future certification if the Company is unable to
justify its rates through a benchmark or cost-of-service filing or small system cost-of-service filing pursuant
to FCC rules. Management is unable to estimate at this time the amount of refunds, if any, that may be
payable by the Company in the event certain of its rates are successfully challenged by franchising
authorities or found to be unreasonable by the FCC. Management does not believe that the amount of any
such refunds would have a material adverse effect on the consolidated financial position or results of
operations of the Company.
During 1996, Congress passed and the President signed into law the Telecommunications Act of 1996 (the
"Telecommunications Act") which alters federal, state, and local laws and regulations pertaining to cable
television, telecommunications and other services. Under the Telecommunications Act, telephone
companies can compete directly with cable operators in the provision of video programming. This new
legislation recognizes several multiple entry options for telephone companies to provide competitive video
'programming. .'.'...'.,.,.,.......,,...-~"',.."""-<>.'--'~..._'." ",-,,,,,,,,~'-'" 4,*','''' .. "....:..,--.?
Certain provisions of the Telecommunications Act could materially affect the growth and operation of the
cable television industry and the cable services provided by the Company. Although the new legislation
may substantially lessen regulatory burdens, the cable television industry may be subject to additional
competition as a result thereof, There are numerous ruIe-makings to be undertaken by the FCC which will
interpret and implement t1ie Telecommunications Acts provisions. In addition, certain provisions of the
Telecommunications Act (such as the deregulation of cable programming rates) are not immediately
effective Further, certain of the Telecommunications Acts provisions have been and are likely to be
subject to judicial challenges. Management is unable at this time to predict the outcome of such
rule-makings or litigation or the substantive effect of the new legislation and the rule-makings on the
consolidated financial position or results of operations of the Company.
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Res 1999-71
- 13 -
13. FAIR VALUE OFFlNANCIALINSTRUMENTS:
A summary of debt and the related interest rate hedge agreements at December 31, 1997, is as follows:
Carrying
Value
Notional
Amount
Fair
Value
Debt
CCE Credit Agreement
Charter Credit Agreement
$41,500,000 $
3,200,000
$ 41,500,000
3,200,000
Interest Rate Hedge Agreements
Caps
Collars
15,000,000
20,000,000
648
(73,539)
As the Credit Agreement bears interest at current market rates, its carrying amount approximates fair
market value at December 31, 1997.
The weighted average interest rate for interest rate cap agreements was 8.45% at December 31,1997. The
weighted average interest rates for interest rate collar agreements were 8.63% and 7.21 % for the cap and
floor components, respectively, at December 31, 1997.
The notional amounts of interest rate hedge agreements do not represent amounts exchanged by the parties
and, thus, are not a measure of the Company's exposure through its use of interest rate hedge agreements.
The amounts exchanged are determined by reference to the notional amount and the other terms of the
contracts.
The fair value of interest rate hedge agreements generally reflects the estimated amounts that the Company
would receive or pay (excluding accrued interest) to terminate the contracts on the reporting date, thereby
taking into account the current unrealized gains or losses of open contracts. Dealer quotations are available
for the Company's interest rate hedge agreements.
Management believes that the sellers of the interest rate hedge agreements will be able to meet their
obligations under the agreements. The Company has policies regarding the financial stability and credit
standing of major counterparties. Nonperformance by the counterparties is not anticipated nor would it
have a material adverse effect on the results of operations or the financial position of the Company.
14. EMPLOYEE BENEFIT PLANS:
Stock Appreciation Rights Plan
^- - Certain employees of the Company participate in the 1995 Charter Communications, Inc. Stock
Appreciation Rights Plan (the "SAR Plan"), The SAR Plan permits the Company to grant 1,500,000 units to
certain key employees, of which 1,251,500 were outstanding at December 31, 1997. Units received by an
employee vest at a rate of 20% per year, unless otherwise provided in the participant's Stock Appreciation
Rights Unit Agreement The stock appreciation rights entitle the participants to receive payment, upon
termination or change in control of the Company, of the excess of the unit value over the base value
(defined as the appreciation value) for each vested unit The unit value is based on the Company's
adjusted equity, as defined in the SAR Plan. Deferred compensation expense recorded by the Company is
based on the appreciation value since the grant date and is being amortized over the vesting period.
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- 14 -
Res 1999-71
401 (k) Plan
The Company maintains the Charter Communications Inc. 401(k) Plan (the" 401(k) Plan") for the benefit of
its employees. All employees who have attained age 21 and completed two months of employment are
eligible to participate in the 401(k) Plan. The 401(k) Plan is a tax-qualified retirement savings plan to which
employees may elect to make pretax contributions up to the lessor of 10% of their compensation or dollar
thresholds established under the Internal Revenue Code. The Company contributes an amount equal to
50% of the first 5% contributed by each employee. During 1997, 1996 and 1995, the Company contributed
approximately $164,300, $164,500 and $75,000, respectively.
15. INCOME TAXES:
Under the liability method specified by SFAS No. 109, a deferred tax liability or asset is determined based
on the temporary differences between the financial reporting and tax basis of assets and liabilities as
measured by the enacted tax rates which are expected to be in effect when these differences reverse. A
valuation allowance must be established for any portion of a deferred tax asset for which it is more likely
than not that a tax benefit will not be realized.
Charter files a consolidated tax return with its wholly owned subsidiaries. Certain income and expense
items are accounted for differently for financial reporting purposes and income tax purposes. Significant
components of the Company's deferred tax assets and liabilities at December 31, 1997 and 1996, consist
primarily of investments in affiliates, accrued expenses and net operating loss carryforwards, resulting in a
net deferred tax asset. A valuation allowance has been recorded in an amount equal to the net deferred tax
asset as of December 31, 1997 and 1996.
The Company has net operating loss carryforwards of approximately $8,000,000 for federal income tax
purposes at December 31, 1997. The net operating loss carryforwards are available to offset future taxable
income and expire from 2000 through 2012. Utilization of the net operating loss carryforwards is subject to
certain limitations.
16. SIGNIFICANT NONCASH TRANSACTIONS:
In February 1997, Charter contributed the net assets of the cable television system to CharterComm II for an
additional interest in CharterComm II. Charter exchanged this interest in CharterComm II in settlement of
its $3,225,000 promissory note with a related party.
17. SUBSEOUENT EVENT:
During 1997, the Company signed a purchase agreement to acquire cable television systems serving
approximately 117,000 basic subscribers in California and Utah from Sonic Communications, Inc.
Management believes that the acquisition will take place in the second quarter of 1998_
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Res 1999-71
Federal Communications Commission
Approved by OMB
3060,0573
Washington. D.C. 20554
FCC 394
APPLICATION FOR FRANCHISE AUTHORITY
CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL
OF CABLE TELEVISION FRANCHISE
FOR FRANCHISE AUTHORITY USE DNL Y
SECTION I. GENERAL INFORMATION
March 1, 1999
1. Community Unit Identification Number.
CA0108
DATE
2. Application for.
o Assignment of Franchise
iBI Transfer of Control
3. Franchising authonty:
San Bemardino City
4. Identify community where the system/franchise that is the subject of the assignment or transfer of control is located:
San Bemardino, CA
5. Date system was acquired or (for system's constructed by the transferor/assignor) the date on which 9/30/98
service was provided to the first subscriber in the franchise area:
6. Proposed effective date of closing of the transaction assigning or transferring ownership of the 6/30/99
system to transferee/assignee:
7. Attach as an Exhibit a schedule of any and all additional information or material filed with this application that is
identified in the franchise as required to be provided to the franchising authority when requesting its approval of
the type of transaction that is the subject of this application.
Exhibit No.
See Tab C
PART I . TRANSFEROR/ASSIGNOR
1. Indicate the name, mailina address. and telephone number of the transferor/assignor.
Legal name of Transferor/Assignor (if individual, list last name first)
ACEC Holdinq Company, llC
Assumed name used for doing business (if any)
American Cable Entertainment
Mailing street address or P.O. Box
Four landmark Square, Ste 302
City I Slate I ZIP Code I Telephone No. (indude area code)
Stamford CT 06901 203-323-1100
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ExhiM No.
See 95
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2(a) Attach as an Exhibit a copy of the contract or agreement that provides far the assignment or transfer of control
(Including any exhibits or schedules thereto necessary in order to understand the terms thereof). If there is onty
;J:lA l"~~an oral agreement, reduce the terms to writing and attach. (Confidential trade. business. 'pricing,-;'- or -marketing ~.~I~~,"^"'''''''''''~_'A'~'
. information, or other infarmation not otherwise publidy available, may be redacted.)
(b)
Does the contract submitted in response to (a) above embody the full and complete agreement between the
.,. transferor/assignor and transferee/assignee? .... ..
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iBI
No
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Exhibit No.
See Tab 0
'~'_~'V'."
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September 1 996
Res 1999-71
PART II. TRANSFEREE/ASSIGNEE
1 (a) Indicate the name mailing address and telephone number of the transferee/assignee
Legal name of Transferee/Assignee (if individual, list last name first)
Charter Communications Entertainment II. LLC
Assumed name used for doing business (if any)
Charter Communications
Mailing street address or P.O. Box
12444 Powerscourt Drive, 5te. 400
City State ZIP Code Telephone No. (include area code)
51. Louis Missouri 63131-3660 314-965.0555
(b) Indicate the name, mailing address and telephone number of the person to contact. if other than the transferee/assignee.
Name of contact person (list last name first)
Joe Camicia
Firm or company name (if any)
Charter Communications
Mailing street address or P.O. Box
2215 W. Mission Road
City Slate ZIP Code Telephone No. (include area code)
Alhambra CA 91803 626-537--6100
(c) Attach as an Exhibit the name, mailing address, and telephone number of each additional person
who should be contacted, if any.
Exhibit No.
See Tab E
(d) Indicate the address where the system's records will be maintained.
Street address
City
12444 Powerscourt Drive, 5te 100
Tstate
51. Louis
MO
I ZIP Code
63131
2.
Indicate on an attached Exhibit any plans to change the current tenns and conditions of service
and operations of the system as a consequence of the transaction for which approval is sought.
Exhibit No.
N/A
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Res 1999-71
SECTION II. TRANSFEREE'S/ASSIGNEE'S LEGAL QUALIFICATIONS
1. Transferee/Assignee is:
D
Corporation
D Limited Partnership
D General Partnership
D Individual
GJ Other - Describe in an exhibit
3. Jurisdiction of incorporation:
b. Date of incorporation:
c. For profit or non-for-profit:
3. Jurisdiction in which formed:
b: Date of formation:
3. Jurisdiction whose laws govern formation:
d. Name and address of registered agent in
jurisdiction
C. Name and address of registered agent in
jurisdiction:
b. Date of formation:
Exhibit No.
F
2. List the transferee/assignee. and, II the transferee/assignee Is not a natural person, each of Its officers, directors, stockholders
beneficially holding more than 5% of the outstanding voting shares. general partners, and limited partners holding an equity interest of
more than 5%. Use only one column for each individual or entity. Attach additional pages if necessary. (Read carefully . the lettered
Items below refer to corresponding lines in the following table.)
(a) Name, residence, occupation or principal business, and principal place of business. (If other than an individual, also show name,
address and citizenship of natural person authorized to vote the yoting securities of the applicant that it holds.) Us! the applicant
first, officers next, then directors and, thereafter, remaining stockholders and/or partners.
(b) Cltlzenship.
(c) Relationship to the transferee/assignee (e.g., officer, director, etc.)
(d) Number of shares or nature of partnership interesL
(e) Number of votes.
(f) Percentage of votes.
(a)
See Tab G
.~"",-,.......; . ,,:;,.-..,......
(b)
(c)
(d)
(e)
(f)
'~
j:lamerican\394transfer\394APP.doc
Page 3
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Res 1999-71
3. If the applicant is a corporation or a limited partnership, is the transferee/assignee formed under the laws
of, or duly qualified to transact business in, the State or other jurisdiction in which the system operates?
If the answer is No, explain in an Exhibit
4. Has the transferee/assignee had any interest in or in connection with an application which has been
dismissed or denied by any franchise authority?
If the answer is Yes, describe circumstances in an Exhibit
5. Has an adverse finding been made or an adverse final action been taken by any court or administrative
body with respect to the transferee/assignee in a civil, criminal or administrative proceeding, brought
under the provisions of any law or regulation related to the following: any felony; revocation, suspension
or involuntary transfer of any authority (including cable franchises) to provide video programming
services; mass media related antitrust or unfair competition; fraudulent statements to another
governmental unit; or employment discrimination?
If the answer is Yes, attach as an Exhibit a full description of the persons and matter(s) involved,
including an Identification of any court or administrative body and any proceeding (by dates and file
numbers. if applicable), and the disposition of such proceeding.
6. Are there any documents, instruments, contracts or understandings relating to ownership or future
ownership rights with respect to any attributable interest as described in Question 2 (including, but not
limited to, non.voting stock interests, beneficial stock ownership interests, options, warrants,
debentures)?
If Yes, provide particulars in an Exhibit.
T. 00 documents, Instruments, agreements or understandings for the pledge of stock of the
transferee/assignee, as security for loans or contractual perfonnance, provide that: (a) voting rights will
remain with the applicant, even In the event of default on the obligation: (b) In the event of default, there
will be either a private or pUblic sale of the stock; and (c) prior to the exercise of any ownership rights by
a purchaser at a sale described In (b), any prior consent of the FCC and/or of the franchising authority, if
required pursuant to federal, state or local law or pursuant to the tenns of the franchise agreement will be
obtained?
If No, attach as an Exhibit a full explanation.
SECTION III - TRANSFEREE'S/ASSIGNEE'S FINANCIAL QUALIFICATIONS
'_''''.''~'''''~~'!II_h l. 'A~4:rr:. ~ ~,..,Ln"; 'iof/"t"JU"~;"'''''"'-''''''''''''''''._'''''-'
1. The transferee/assign_ 'Certifies that it has sufficient net liquid assets on hand or available from
committed resources to consummate the transaction and operate the facilities for three months.
2. Attach as an Exhibit the most recant financial statements, prepared In accordance with generally
accepted accounting principles, Including a balance sheet and income statement for at least one full year,
" for the transferee/assignee or parent entity that has been prepared In the ordinary course of business, if
any such financial statements are routinely prepared. Such statements, If not otherwise publicly
available, may be marked CONFIDENTIAL and will be maintained as confldentfal by the franchise
authority and its agents to the extent permissible under local law.
~~
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j:lamerican\394transfer\394APP.doc
Page 4"',"
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~ Yes
o No
Exhibit No.
See 92
~ Yes
o No
Exhibit No.
See Tab H
DYes
~ No
Exhibit No.
N/A
DYes
~ No
Exhibtt No.
N/A
~ Yes
o No
Exhibit No.
N/A
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See 93
Res 1999-71
SECTION IV. TRANSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS
Set forth in an Exhibit a narrative account of the transferee's/assignee's technical qualifications, experience and expertise
regarding cable television systems, including, but not limited to, summary information about appropriate management
personnel that will be involved in the system's management and operations. The transferee/assignee may, but need not,
list a representative sample of cable systems currently or formerly owned or operated.
SECTION V . CERTIFICA nONS
PART 1 - Transferor/Assignor
Exhibit No.
See 94
All the statements made in the application and attached Exhibits are considered material representations, and all the Exhibits are a material part hereof
and are incorporated herein as if set out in full in the application.
I CERTIFY that the statements in this application are true, complete
and correct to the best of my knowledge and belief and are made in
good faith.
WillFUL FALSE STATEMENTS MADE ON THIS FORM ARE
PUNISHABLE BY FINE AND/OR IMPRISONMENT. U.S. CODE, TITLE
18, SECTION 1001.
Check appropriate classification:
o Individual
o General Partner
PART II . Transferee/Assignee
Signatu~ \)
Date
March 1, 1999
Print full name
By: Day L. Patterson
Sr. Vice President and General Counsel
~ Officer
(Indicate TiUe)
o Other, Explain:
All the statements made in the application and attached Exhibits are considered material representations, and all the Exhibits are a material part hereof
and are incorporated herein as if set out in full in the application.
The transferee/assignee certified that he/she:
(a) Has a culTent copy of the FCC's Rules governing cabie television systems.
(b) Has a culTent copy of the franchise that is the subject of this application, and of any applicable state laws or local ordinances and related
regulations.
(c) Will use its best efforts to comply with the lenns of the franchise and applicable state laws or local ordinances and related regulations, and to
effect changes, as promptly as practicable, in the operation of the system, ~ any changes are necessary to cure any violations thereof or defaults
thereunder presently in effect or ongoingt
I CERTIFY that the statements In this application are true, complete
and correct to the best of my knowledge and belief and are made In
..".,,,' goodfalt/l. "...,,>, H....'.". ...' ..... ,. ....
WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE
PUNISHABLE BY FINE ANDlOR IMPRISONMENT. U.S. CODE, TITLE
18, SECTION 1001.
Check appropriate classification:
o Individual
o General Partner
j:\americanl394transfer\394APP .doc
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March 1, 199
Print full name .. ,.. ..
By: Trudi McCollum Foushee
Vice President and Senior Counsel
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September 1996
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CHARTER COMMUNICATIONS, INC.
The management team of Charter communications, Inc. ("Charter") has built
charter into one of the most highly respected Multiple Systems Operators
("MSO's") in the United States. The team's collective experience in the cable
and telecommunications industry, their receptivity to new ideas, creative thinking
and willingness to change, as well as their financial acumen, has proven a
successful combination.
Charter recognized the importance of rebuilding and reinforcing infrastructure
and invested heavily in strengthening its core business and upgrading plant in its
service areas. New video services, new modems and high speed services were
introduced to consumers and schools. By operating with an intrepreneurial spirit,
the management team at Charter set themselves apart with solid commitments
not only to technology, but to serving our customers, investing in education and
showing a strong interest in our communities.
Charter's management team saw to it that millions of dollars were invested in
construction of its cable plant fiber optics infrastructure. More than $200 million
was spent in 1998. In 1997, Charter introduced Charter Pipeline™, high speed
Internet service to customers in Califomia. The company was the first MSO to
commercially launch World Gate TM universal Intemet access and e-mail service
over cable television in Sl Louis, Missouri in the spring of 1998.
The cable systems are geographically clustered ~nd are divided into five regions.
The Clustering contributes to operational and marketing efficiencies as well as
improved employee morale and greater responsiveness to communities served
by Charter. Overseeing the regions are senior vice presidents to whom broad
operational authority is delegated. Senior vice presidents are in daily contact
with system managers, and together, they have significant decision-making
authority. Charter believes that the best results are achieved when operating
decisions are made as close to the customer as possible.
".
. Charter ranks at the top of the. cable industry in' all key performance standards . ..~
and has achieved customer growth that is twice the industry average. In five
years, . Charter acquired 22 cable systems and . successfully assimilated
employees into Charter's culture to provide service that exceeds the customers'
expectations. Charter has been honored many times for its fast growth and
management received the 1997 Emst & Young Entrepreneur of the Year award ...,
. in the category of Communications/Entertainment.
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Charter provides more than 2,800 public and private schools in the communities
we serve with fee monthly service as part of the Cable in the Classroom
program. Charter committed to equip one site in every consenting elementary
and secondary school passed in its service area with Charter Pipeline TM and
World Gate TM service. Charter's commitment to its communities means hundreds
of thousands of dollars in support each year for national charities and local civic
and charitable organizations. Charter maintains a special focus on our
communities' future leaders - the children - recognizing that television plays an
enormous role in influencing the lives and dreams of young people.
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Jerald L. Kent
President & Chief Executive Officer
Charter Communications, Inc.
Jerald L. Kent is a co-founder, President and Chief Executive Officer of Charter
Communications, Inc. and a Managing Partner of Charter Communications Group.
Prior to founding Charter, Mr. Kent was an executive officer of Cencom Cable
Associates, Inc.
He is charged with running the day-to-day activities of the company by directing the
operations, MIS, accounting, acquisition and finance activities of Charter. His
accomplishments include the engineering of nearly $3 billion of acquisitions during
Charter's five year history. Currently Charter serves more than 1.2 million
customers.
Mr. Kent served as Executive Vice President and Chief Financial Officer of Cencom
Cable Associates, Inc., and was responsible for locating, acquiring and financing
cable television properties, in addition to overseeing the accounting, finance,
management information systems and investor relations departments of the
company. Mr. Kent was also responsible for Cencom's Califomia operations. He
served Cencom Cable Associates, Inc. as Senior Vice President of Finance from
May 1987, Senior Vice President of Acquisitions and Finance from July 1988, and
Senior Vice President and Chief Financial Officer from January 1989, and Executive
Vice President and Chief Financial Officer in March 1990. He joined Cencom Cable
Associates, Inc. in 1983 as Senior Vice President of Corporate Development, to
lead the company's acquisition program. During his tenure, Cencom Cable
Associates, Inc, grew to a company providing service to over 550,000 subscribers.
In connection therewith, he directed acquisitions and related financings totaling over
$1 billion. During this time, Cencom was included among Inc. Magazine's list of 500
fastest growing private companies in the United States.
From 1979 to 1983, Mr. Kent served with Arthur Andersen & Co., certified public
accountants, where he attained the position of tax manager, His duties included
consulting on the analysis ,and structuring of limited partnerships with a major
emphasis' inseivil;g'the'ni8dia "industrY: lri"particular, Mr.' Kent developed an
expertise in structuring partnership and joint venture agreements. His clients .
included Telcom Engineering, Inc., T.C. Industries, Inc. and Cencom Cable
Associates, Inc.
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Mr. Kent, a certified public accountant. received his undergraduate and MBA
degrees with honors from Washington University, St. Louis, MO. He serves on the
Board of Directors of Charter Communications, Inc., CCA Acquisition Corp., CCT
Holdings Corp. and CCA Holdings Corp. He served on the board of CableMaxx,
Inc. Mr. Kent was honored in the St. Louis Business Journal's 40 Under 40 edition
Res 1999-71
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A Wired World Comoanv'
as one of the St. Louis area's outstanding business leaders under the age of 40.
He and Charter co-founders Barry Babcock and Howard Wood were honored as
1997 Regional Entrepreneurs of the Year in Telecommunications and
Entertainment. Mr. Kent is a member of the Young Presidents Organizations. He
serves on the board of directors of The Magic House, and is chairman of the finance
committee of Incarnate Word Church. He serves on the Alumni Association
Executive Committee at Washington University.
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Barry L. Babcock
Chairman of the Board
Charter Communications
Barry Babcock began his career in the cable industry more than twenty years ago.
He is a co-founder and Chairman of the Board Charter Communications, Inc.,
headquartered in St. Louis, Missouri. Prior to founding Charter, Mr. Babcock was
associated with Cencom Cable Associates, Inc.
Mr. Babcock was among the founders of Cencom Cable Associates in 1982,
serving as Executive Vice President and Chief Operating Officer. He managed the
company's in-house legal work, contracts, governmental relations and business
matters in the decade from its inception to its sale to Crown Media in 1992.
Mr. Babcock joined the cable industry in 1979 when he became Vice President of
Telcom Engineering, Inc. of St. Louis, directing Telcom's cable television
governmental consulting activities and preparing franchise agreements for
numerous municipalities. Prior to that, Mr. Babcock served as Assistant Municipal
Counselor in Oklahoma City, Oklahoma.
Throughout his . career in the cable television industry, Mr. Babcock has been
.involved in leadership roles with national telecommunications organizations. He is
currently Chairman of the Board of Directors of the Cable Telecommunications
Association (CATA). He serves on the board of directors of the National Cable
Television Association (NCTA), C-SPAN and is a member of the board of directors
of the Cable Advertising Bureau (CAB) and Cable in the Classroom. Mr. Babcock
and Charter co-founders Jerald Kent and Howard Wood were honored as 1997
Regional Entrepreneurs of the Year in Telecommunications and Entertainment.
He is active in many civic endeavors in the St. Louis metropolitan area as a member
of the Board of Directors of the Missouri Historical Society and the St. Louis Civic
Entrepreneurs Organization. He also serves on the boards of directors of
Mercantile Bank-St Louis and Charter Communications, Inc and various affiliates.
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Mr. Babcock, an attorney, received his-undergraduate and Juris Doctorate degrees
from the University of Oklahoma. He served four years as a line officer in the
United States Navy.
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Kent D. Kalkwarf
Senior Vice President & Chief Financial Officer
Charter Communications
Mr. Kalkwarf joined Charter Communications, Inc. in July 1995 as Vice President,
Finance & Acquisitions and was promoted to Senior Vice President of Mergers &
Acquisitions in 1996. He was named Senior Vice President & Chief Financial
Officer in 1997. He has been instrumental in Charter's acquisition of more than 1.2
million customers.
Prior to joining Charter, Mr. Kalkwarf was a senior tax manager for Arthur Andersen,
certified public accountants. With Arthur Andersen, Mr. Kalkwarf was primarily
involved in the consumer products and telecommunications service lines.
Throughout his career, his duties included extensive experience in the mergers and
acquisitions area. Mr. Kalkwarf has experience in the formation of partnerships,
both in the cable and real estate industries.
Mr, Kalkwarf also headed the international tax practice for Arthur Andersen in St.
Louis, Missouri where he was involved with international acquisitions and
divestitures, along with significant foreign tax credit planning.
Mr. Kalkwarf, a certified public accountant, received his undergraduate degree, with
honors, from Illinois Wesleyan University.
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Curtis S. Shaw
Senior Vice President, General Counsel & Secretary
Charter Communications
Curtis S. Shaw joined the Company in February 1997 as Senior Vice President,
General Counsel and Secretary, and is responsible for all legal aspects of Charter's
business, including major transactions and the duties of the corporate secretary.
Prior to joining Charter, Mr. Shaw served as corporate Counsel to NYNEX since
1988. From 1983 until 1988 Mr. Shaw served as Associate General Counsel for
Occidental Chemical Corporation, and, from 1986 until 1988, also as Vice President
and General Counsel of its largest operating division. Mr. Shaw has 24 years of
experience as a corporate lawyer, specializing in mergers and acquisitions, joint
ventures, public offerings, financings, and federal securities and antitrust law. Mr.
Shaw received a SA with honors from Trinity College and a JD from Columbia
Unive~ity School of Law.
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David G. Barford
Senior Vice President, Operations
Urban Regions
Charter Communications
David Barford is Senior Vice President-Operations, Urban Regions for Charter
Communications. Mr. Barford is the senior operating officer for Charter's systems in
California and St. Louis overseeing all facets of operations in those cities. He has
been with the company since July 1995.
Prior to joining Charter, Mr. Barford served in several senior marketing and
operation roles at Comcast Cablevision for eight years, His last position at Comcast
was Vice President of Operations in the International Division in Mexico, South
America, and new Business Development in Europe.
During his eighteen year career in the cable industry, Mr. Barford has been involved
in leadership roles with various telecommunications organizations. He has served
as board member and president of the Southern California Cable &
Telecommunications Association and board member of the Southern California
Cable Television Marketing Council.
Mr. Barford is a graduate of California State University, Fullerton, where he earned
his BA in Communications, He also holds an MBA from National University.
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Mary Pat Blake
Senior Vice President Marketing
Charter Communications
Mary Pat Blake joined Charter Communications as Senior Vice President of
Marketing in August 1995.
Prior to joining Charter, Ms. Blake created and operated, then sold Dakota Coffee &
Bakery Company. She was president of Blake & Associates, a marketing
consulting firm. Her 20 years' experience includes senior management positions in
marketing, sales, finance, systems and general management with companies such
as General Mills, Pepsico (Taco Bell), Brown Group, and the West Coast Group,
strategic marketing consultants.
Ms. Blake earned a B.S. degree in Business Administration from the University of
Minnesota, an M.BA from Harvard Business School and earned election to Phi
Beta Kappa.
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Ralph G. Kelly
Senior Vice President, Treasurer
Charter Communications
Ralph Kelly joined Charter Communications, Inc. in March 1993 as Vice President,
Finance, a position he held until April 1994 when he became Chief Financial Officer
of CableMaxx, Inc., a wireless cable television operator. Mr. Kelly returned to
Charter as Senior Vice President, Treasurer. His present responsibilities include
cash management financial reporting. He also assists with Charter's finance and
acquisition efforts.
Ralph Kelly has worked in the cable industry since 1984 when he joined Cencom
Cable Associates, Inc., as Controller. As Controller, Mr. Kelly was responsible for
all aspects of accounting and financial reporting for the cable company. Later he
served Cencom as Treasurer and was responsible for cash management, loan
compliance, budget administration, supervision of internal audit and filing SEC
reports. Mr. Kelly also assisted with projects relating to government relations,
franchise renewals, acquisitions and equity repurchases. He has served on the
accounting Committee of the Board of Directors for National Cable Television
Association.
.He is a certified public accountant. Mr. Kelly was in the audit division of Arthur
Andersen & Co. from 1979 until 1984. His clients included privately held
businesses, telephone clients and extractive industries.
Mr. Kelly received his undergraduate degree in accounting from the University of
Missouri-Columbia and his MBA degree from Saint Louis University.
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John C. Pietri
Senior Vice President, Engineering
Charter Communications
John C. Pietri joined Charter Communications in November 1998 as Senior Vice
President, Engineering. Mr. Pietri has more than 22 years' experience in the cable
industry. Throughout his career he has held a variety of technical management
positions.
Prior to joining Charter, Mr. Pietri was with Marcus Cable in Dallas, TX for eight
years, most recently as Senior Vice President and Chief Technical Officer. He was
responsible for the technical operations and standards for all of the company's
cable systems including; new construction and rebuild/upgrade projects; routine
maintenance and installation practices; capital control, purchasing; and regulatory
compliance and reporting.
Prior to Marcus, he served as Regional Technical Operations Manager for
WestMarc Communications headquartered in Denver, CO. He was responsible for
managing technical operations, budgeting and purchasing for the company's cable
systems in Minnesota, Iowa, North Dakota, and South Dakota. WestMarc served
550,000 customers. Before that, Mr. Pietri served as Operations Manager with
Minnesota Utility Contracting.
Mr. Pietri is a member of Society of Cable Television Engineers (SCTE) and Cable
Television Association for Marketers (CTAM). He has served on the National Cable
and Telecommunicantions Association committee for the past two years.
Mr. Pietri received his Bachelor of Arts degree in philosophy and mathematics from
the University of Wisconsin - Oshkosh,
Res 1999-71
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Thomas R. Schaeffer
Senior Vice President, Operations
Western Region
Charter Communications
Thomas R. Schaeffer joined Charter Communications in September 1997 as Senior
Vice President, Operations. He is responsible for all system operations for
Charter's Western Region which serves nearly 370,000 customers in the
communities of Alhambra, Azusa, Duarte, Long Beach, Norwalk, Pasadena, West
Covina and Riverside.
Mr. Schaeffer has nearly twenty-five years of experience in the cable industry. Prior
to joining Charter, he served as Vice President/General Manager for MEDIAONE
(formally Continental Cablevision) in Los Angeles, California, He was responsible
for complete profit and loss and capital expenditure for a 350,000 customer base.
Prior to MEDIAONE, Mr. Schaeffer served as Regional Vice President, Southern
California for CABLEVISION Industries, Chatsworth, CA. He was responsible for
CVl's two largest systems, West Valley and Long Beach, serving 180,000
customers with annual cash flow of more than $40 million dollars. He was actively
involved in upgrading both operations; increasing channel capacity and plant
capability,
Mr. Schaeffer earned his undergraduate degree in Marketing from Nichols College,
Dudley, Massachusetts and Masters of Business Administration from Claremont
College, Claremont, California.
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Trudi McCollum Foushee
Vice President and Senior Counsel
Charter Communications
Trudi M. Foushee has been practicing law in the telecommunications industry for
the past eight years. As a partner with Green and Foushee of St. Louis and
Washington, D.C., Ms. Foushee served as consultant and regulatory legal advisor
to Charter Communications before joining the company in 1996.
From 1993 to 1995, Ms. Foushee served as Vice President - Law and Regulatory
Affairs for Crown Media, Inc., Dallas, Texas, a division of Hallmark Cards, Inc. Ms.
Foushee was responsible for company compliance with the Consumer Protection &
Competition Act of 1992 which entailed a massive overhaul of all aspects of the
cable business. Ms. Foushee served as lead in-house counsel for Crown Media
following the acquisition and consolidation of Crown Media and Cencom Cable
Associates corporate headquarters in St. Louis, MO to Crown's headquarters in
Dallas, Texas from October 1992 to May 1993.
She served as Counsel and Assistant Secretary to Cencom Cable Associates, Inc.
of St. Louis, Missouri from May 1990 to September 1992 providing legal.support for
human resources, operations, govemment relations, accounting, customer service
and engineering for the INC 500 company.
Ms. Foushee was an attorney with Union Electric Company of St. Louis, Missouri
from 1987 until 1990, . She was a Litigation Associate with Danna, Soraghan,
Stockenberg & Shaw of St. Louis from 1986 to 1987 and an Associate with Miller,
Loewinger & Associates Chartered of Washington, D.C. from 1982 until 1985.
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M. Celeste Vossmeyer
Vice President, Government Relations
Charter Communications
M. Celeste Vossmeyer joined Charter Communications in 1995 as Legal Counsel.
She was promoted to Vice President and Senior Counsel in January 1997 and to
Vice President-Government Relations in October 1998. As Vice President-
Government Relations, Ms. Vossmeyer is responsible for local, state and federal
issues affecting operations and the cable industry generally.
Prior to joining Charter, Ms. Vossmeyer practiced law with Peper, Martin, Jensen,
Maichel and Hetlege for six years. She specialized in corporate and municipal law.
From 1986 to 1989 she worked as a political consultant specializing in issues
related to municipal and state government regulation. Her clients included
developers, small business owners, and the St. Louis Homebuilders Association.
From 1983 to 1986 she worked as a legislative representative for the St. Louis
Homebuilders Association.
Ms. Vossmeyer takes an active role in the community and is a member of the St.
Louis University Law School Dean's Advisory Committee, a precinct captain for the
28th Ward of the City of St. Louis, and serves on a number of nonprofit boards,
including as legal counsel for the St. Louis Art Museum.
Ms. Vossmeyer earned her A.B. (with honors) in political science from Washington
University and JD from Saint Louis University.
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Joseph A. Camicia
Director, Government Relations - Western Region
Charter Communications
Joseph A. Camicia joined Charter Communications, Inc. in November 1998 as
Director, Government Relations. Mr. Camicia has more than 18 years' experience
in the cable industry.
Prior to joining Charter, Mr. Camicia served as Director, Corporate Government and
Public Relations for Marcus Cable. He was responsible for all facets of government
and public relations including oversight of corporate communications, franchise
renewals, franchise transfers and advocacy at the state and federal levels of
government.
Prior to Marcus, Mr. Camicia served as Director Government Relations with Crown
Media, Inc. Prior to that, he was appointed Senior Consultant to the Assembly
Rules Committee of the California Legislature. His responsibilities included
development and distribution of Cal-SPAN, a statewide cable-delivered service not
unlike C-SPAN, During this time Mr. Camicia also produced the Assembly's first-
ever, statewide, interactive video legislative hearings,
Mr. Camicia takes an active role in the cable industry and serves on three different
'government or telephony related committees of the National Cable
Telecommunications Association (NCTA). He has been a speaker and panelist on
cable television issues at meetings of the National League of Cities, National
Association of Broadcasters, Cable Television Administration and Marketing
Society .
Mr. Camicia holds a BA degree in broadcasting from San Francisco State
University.
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Res 1999-71
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Rob Schwietz
Vice President, Operations-Long Beach, CA
Charter Communications
Robert Schwietz joined Charter Communications in September 1991 as Marketing
Manager. He has also held the positions of Director, Marketing and Vice President,
Marketing before being named Vice President, Operations. Mr. Schweitz is
responsible for managing operations for the company's Long Beach office which
serves more than 76,000 customers. Mr. Schweitz has more than 14 years'
experience working in the cable industry.
Prior to joining Charter, Mr. Schweitz was with Continental Cablevision for four
years, most recently as Direct Sales Supervisor. Prior to Continental, he was with
Copley/Colony for four years, most recently as Marketing Manager.
Mr. Schweitz holds a degree in communications from University of Minnesota.
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