2. Cautionary Statement Regarding
Forward Looking Statements
This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the
quot;Securities Actquot;) and Section 21E of the Securities Exchange Act of 1934, as amended (the quot;Exchange Actquot;), regarding, among other things,
our plans, strategies and prospects, both business and financial. Charter will not undertake to revise forward-looking projections to reflect
events after this date. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking
statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking
statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under “Risk
Factors” from time to time in our filings with the Securities and Exchange Commission (“SEC”). Many of the forward-looking statements
contained in this presentation may be identified by the use of forward-looking words such as quot;believe,quot; quot;expect,quot; quot;anticipate,quot; quot;should,quot;
quot;planned,quot; quot;will,quot; quot;may,quot; quot;intend,quot; quot;estimated,quot; quot;aim,quot; quot;on track,quot; quot;target,quot; quot;opportunityquot; and quot;potential,quot; among others. Important factors that
could cause actual results to differ materially from the forward-looking statements we make in this presentation are set forth in reports or
documents that we file from time to time with the SEC, and include, but are not limited to:
–the availability, in general, of funds to meet interest payment obligations under our debt and to fund our operations and necessary
capital expenditures, either through cash flows from operating activities, further borrowings or other sources and, in particular, our ability
to be able to provide under the applicable debt instruments such funds (by dividend, investment or otherwise) to the applicable obligor
of such debt;
–our ability to comply with all covenants in our indentures and credit facilities, any violation of which could trigger a default of our other
obligations under cross-default provisions;
–our ability to pay or refinance debt prior to or when it becomes due and/or refinance that debt through new issuances, exchange offers
or otherwise, including restructuring our balance sheet and leverage position;
–competition from other distributors, including incumbent telephone companies, direct broadcast satellite operators, wireless broadband
providers and DSL providers;
–difficulties in introducing and operating our telephone services, such as our ability to adequately meet customer expectations for the
reliability of voice services, and our ability to adequately meet demand for installations and customer service;
–our ability to sustain and grow revenues and cash flows from operating activities by offering video, high-speed Internet, telephone and
other services and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition;
–our ability to obtain programming at reasonable prices or to adequately raise prices to offset the effects of higher programming costs;
–general business conditions, economic uncertainty or slowdown; and
–the effects of governmental regulation, including but not limited to local and state franchise authorities, on our business.
All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary
statement. We are under no duty or obligation to update any of the forward-looking statements after the date of this presentation.
Unless otherwise stated, all results are pro forma which reflect the sales of certain systems in 2006 and 2007 as if such
transactions had occurred as of January 1, 2006. 2
3. Executing on Key Metrics
Double-digit revenue and
adjusted EBITDA growth for
Consistent Strategies
3 consecutive quarters
Best 2Q RGU net adds
in 5 years
Leveraging Foundation
12.6% ARPU growth
• Bundle driving ARPU
• Telephone supporting growth
Continuing Momentum in bundled customers
3
5. Advanced Services Support Video Growth
Total video RGUs
Advanced services expanding:
99,700
8,500,000
Net Gain Y/Y
50% Y/Y increase in customers
with advanced set top boxes
HD/DVR available to 85% digital
8,000,000
customers
2Q07 VOD revenue up 28% Y/Y
7,500,000
2Q06 3Q06 4Q06 1Q07 2Q07
HD OnDemand content launched
Video $52.69 $55.38
ARPU
2Q07 video ARPU increased 5.1% Y/Y
5
6. HSI Reinforces the Bundle Strategy
2Q07 HSI net adds
70,000
16% 60,300
HSI net adds increase nearly 16%
60,000
51,900
50,000
HSI revenues increase 21% Y/Y in 2Q07
40,000
5.6% ARPU increase Y/Y in 2Q07
30,000
2Q06 2Q07
HSI penetration increased to 24%
YTD HSI net adds
from 21% Y/Y
190,000 183,900
17%
Growth supported by increased speed
180,000
and content
170,000
157,100
75% of customers receive 5Mbps or higher
160,000
150,000
Integrating content across platform
140,000
130,000
2Q06 2Q07 6
7. Telephone Fueling RGU Growth
Telephone net gains and
penetration rates remain strong
150,000
125,000
2Q07 Telephone Stats
7.6M
Telephone Homes Passed
100,000
700K
Telephone Customers
75,000
9%
Telephone Penetration
(percent of Telephone HP)
50,000
9.5 – 10M
Homes Passed Guidance
for YE 2008
25,000
2Q06 3Q06 4Q06 1Q07 2Q07
2Q07 annualized penetration rate 7%
Annualized penetration rate: Represents annualized quarterly net telephone additions as a percentage of homes passed at the 7
beginning of that period.
8. Charter Bundle Catalyst for Success
2Q07 Bundle Customer Mix
42% 17.7% Y/Y growth in bundled
customers
Triple play ARPU of $125 - $130
Triple play penetration
2Q07 Bundle Revenue Mix
77% of telephone customers
10% of customer relationships
62%
62%
42% of customers contributing
nearly two-thirds revenue
8
9. 2Q07 Financial Performance
2Q07 Results
Revenue Summary 2Q Y/Y YTD
($ millions) 2Q07 Growth Growth
Double-digit revenue growth
Video $858 4% 4%
driven by HSI and telephone
High-Speed Internet 310 21% 22%
Telephone 80 176% 186%
ARPU increased 12.6%
Commercial 83 12% 14%
Other 167 4% 2%
HSI revenue driven by customer
Total Revenues $1,498 11% 11%
growth of 14.7% and a 5.6%
Operating Costs and
increase in ARPU
Expenses 959 11% 10%
Adj EBITDA $539 11% 12% Commercial revenue
continuing strong growth
Cap Ex 281 (6%) 7%
Consistent strategies generating improved results
9
10. Footnotes
Unless otherwise stated, all results are pro forma which reflect the acquisition of cable systems in January 2006 and the sales of
systems in 2006 and 2007 as if such transactions had occurred as of January 1, 2006.
Adjusted EBITDA and pro forma adjusted EBITDA are non-GAAP financial measures and should be considered in addition to, not as a
substitute for, net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by Charter, may not be
comparable to similarly titled measures used by other companies. Adjusted EBITDA is defined as income from operations before special
charges, depreciation and amortization, loss on sale or retirement of assets, asset impairment charges, and stock compensation expense.
As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the
Company’s businesses as well as other non-cash or non-recurring items, and is unaffected by the Company’s capital structure or investment
activities. Adjusted EBITDA and pro forma adjusted EBITDA are liquidity measures used by Company management and its Board of
Directors to measure the Company’s ability to fund operations and its financing obligations. For this reason, it is a significant component of
Charter’s annual incentive compensation program. However, this measure is limited in that it does not reflect the periodic costs of certain
capitalized tangible and intangible assets used in generating revenues and the cash cost of financing for the Company. Company
management evaluates these costs through other financial measures.
The Company believes that adjusted EBITDA and pro forma adjusted EBITDA provide information useful to investors in assessing Charter’s
ability to service its debt, fund operations, and make additional investments with internally generated funds. In addition, adjusted EBITDA
generally correlates to the leverage ratio calculation under the Company’s credit facilities or outstanding notes to determine compliance with
the covenants contained in the facilities and notes (all such documents have been previously filed with the SEC).
For a reconciliation of pro forma adjusted EBITDA and adjusted EBITDA to the most directly comparable GAAP financial measure see the
Appendix.
10
12. CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
(DOLLARS IN MILLIONS)
2005 2006 2007
Pro Forma Pro Forma Pro Forma
2nd Quarter (a) 2nd Quarter (a) 2nd Quarter (a)
Net cash flows from operating activities $ - $ (21) $ (149)
Less: Purchases of property, plant and equipment (319) (290) (281)
Less: Change in accrued expenses related to capital expenditures 30 (2) (7)
Free cash flow (289) (313) (437)
Interest on cash pay obligations (b) 379 424 452
Purchases of property, plant and equipment 319 290 281
Change in accrued expenses related to capital expenditures (30) 2 7
Other, net 3 9 18
Change in operating assets and liabilities 81 74 218
Adjusted EBITDA $ 463 $ 486 $ 539
(a) Pro forma results reflect certain sales of cable systems in the third quarter of 2006, January 2007 and May 2007 as if they occurred as of January 1, 2006.
(b) Interest on cash pay obligations excludes accretion of original issue discounts on certain debt securities and amortization of deferred financing costs that are
reflected as interest expense in our consolidated statements of operations.
The above schedules are presented in order to reconcile adjusted EBITDA and free cash flows, non-GAAP measures, to the most directly comparable GAAP
measures in accordance with Section 401(b) of the Sarbanes-Oxley Act.