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SEC Filings

S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 01/25/2000
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WE HAVE A HISTORY OF NET LOSSES AND EXPECT TO CONTINUE TO EXPERIENCE NET LOSSES.
CONSEQUENTLY, WE MAY NOT HAVE THE ABILITY TO FINANCE FUTURE OPERATIONS.
 
     We have had a history of net losses and expect to continue to report net
losses for the foreseeable future. We expect our net losses to increase as a
result of acquisitions completed in 1999, the recent transfer to us of the
Fanch, Falcon and Avalon cable systems and the Bresnan acquisition and transfer.
We reported net losses from continuing operations before extraordinary items of
$5 million for 1997, $23 million for 1998 and $380 million for the nine months
ended September 30, 1999. On a pro forma basis, giving effect to the merger of
Charter Holdings and Marcus Holdings, acquisitions completed in 1999, the recent
transfer to us of the Fanch, Falcon and Avalon cable systems and the Pending
Transactions, we had net losses from continuing operations before extraordinary
item of $1.4 billion for 1998. For the nine months ended September 30, 1999, on
the same pro forma basis, we had net losses from continuing operations before
extraordinary item of $1.0 billion. We cannot predict what impact, if any,
continued losses will have on our ability to finance our operations in the
future.
 
IF WE ARE UNSUCCESSFUL IN IMPLEMENTING OUR GROWTH STRATEGY, OUR FINANCIAL
CONDITION AND RESULTS OF OPERATIONS COULD BE ADVERSELY AFFECTED.
 
     If we are unable to grow our cash flow sufficiently, we may be unable to
repay the notes or our other debt, to grow our business or to fund our other
liquidity needs. We expect that a substantial portion of our future growth will
be achieved through revenues from new products and services and the acquisition
of additional cable systems. We may not be able to offer these new products and
services successfully to our customers and these new products and services may
not generate adequate revenues.
 
     In addition, we cannot predict the success of our acquisition strategy. In
the past year, the cable television industry has undergone dramatic
consolidation which has reduced the number of future acquisition prospects. This
consolidation may increase the purchase price of future acquisitions, and we may
not be successful in identifying attractive acquisition targets in the future.
Additionally, those acquisitions we do complete are not likely to have a
positive net impact on our operating results in the near future. If we are
unable to grow our cash flow sufficiently, we may be unable to fulfill our
obligations to you under the notes or obtain alternative financing.
 
OUR PROGRAMMING COSTS ARE INCREASING. WE MAY NOT HAVE THE ABILITY TO PASS THESE
INCREASES ON TO OUR CUSTOMERS, WHICH WOULD ADVERSELY AFFECT OUR CASH FLOW AND
OPERATING MARGINS.
 
     Programming has been, and is expected to continue to be, our largest single
expense item. In recent years, the cable industry has experienced a rapid
escalation in the cost of programming, particularly sports programming. This
escalation may continue, and we may not be able to pass programming cost
increases on to our customers. The inability to pass these programming cost
increases on to our customers would have an adverse impact on our cash flow and
operating margins. In addition, as we upgrade the channel capacity of our
systems, add programming to our basic and expanded basic programming tiers and
reposition premium services to the basic tier, we may face additional market
constraints on our ability to pass programming costs on to our customers. Basic
programming includes a variety of entertainment and local programming. Expanded
basic programming offers more services than basic programming. Premium service
includes unedited, commercial-free movies, sports and other special event
entertainment programming.
 
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