Charter Communications Reaches Agreement in Principle with Certain Debt Holders to Reduce Debt

ST. LOUIS--(BUSINESS WIRE)--Feb. 12, 2009-- Charter Communications, Inc. (NASDAQ: CHTR): Refinancing and New Capital to Total $3 Billion * Company has $800 Million in Cash and Cash Equivalents * Operations Expected to Continue As Usual

Charter Communications, Inc. (NASDAQ: CHTR) (“Charter,” the “Company”) and its subsidiaries announced that they have reached an agreement-in-principle with an ad hoc committee of certain of the Company’s debt holders on the terms of a financial restructuring to reduce the Company’s debt by approximately $8 billion. In the context of its agreement, Charter also announced that two of its subsidiaries, CCH I Holdings, LLC (“CIH”) and Charter Communications Holdings, LLC (“Charter Holdings”) will make within the allotted grace period, interest payments totaling approximately $74 million in the aggregate on certain of their outstanding senior notes that were due January 15, 2009.

“We are pleased to have reached an agreement with such a significant portion of our bondholders on a long-term solution to improve our capital structure,” said Neil Smit, President and Chief Executive Officer. “We are committed to continuing to provide our 5.5 million customers with quality cable, Internet and phone service, and through this agreement, we will be even better positioned to deliver the products and services our customers demand now and in the future. Moreover, the interest and support provided by our stakeholders with their new capital investment underscores their confidence in Charter and our business.”

Charter’s operations are strong and the Company remains focused on continuing to provide its customers with quality service and support today and going forward. Preliminary fourth quarter 2008 results reflect pro forma1 revenue growth of approximately 7% and pro-forma adjusted EBITDA2 growth of more than 10%, on a year-over-year basis. As of February 11, Charter had approximately $800 million in cash and cash equivalents available to it. Charter believes its liquidity, combined with its cash from operating activities, will be sufficient to meet its projected cash needs, including the payment of normal operating costs and expenses, as it proceeds with its financial restructuring.

The funding required by the financial restructuring contemplated by the agreement-in-principle is expected to be satisfied by cash on hand, an exchange of debt of CCH II, LLC (“CCH II”) and CCH I, LLC (“CCH I”) for new notes issued by CCH II, the issuance of additional debt, and the proceeds of an equity offering for which the Company has received a back-stop commitment from certain of its noteholders. The agreement further contemplates that (i) the notes and bank debt of Charter Communications Operating, LLC and CCO Holdings, LLC will remain outstanding, (ii) holders of notes issued by CCH II will receive new notes issued by CCH II or cash on account of their claims, (iii) holders of notes issued by CCH I will receive the new notes issued by CCH II and shares of common stock in Charter (iv) holders of notes issued by CIH will receive warrants to purchase shares of common stock in Charter (v) holders of notes of Charter Holdings will receive warrants to purchase shares of common stock of Charter, (vi) holders of convertible notes issued by Charter will receive cash and preferred stock issued by Charter, and (vii) holders of common stock will not receive any amounts on account of their common stock, which will be cancelled. In addition, as part of the financial restructuring, it is expected that consideration will be paid by CCH I noteholders to other entities participating in the financial restructuring. As part of the agreement, Paul Allen will continue as an investor, and will retain the largest voting interest in the Company.

The agreement-in-principle is subject to numerous closing conditions and there is no assurance that the treatment of creditors outlined above will not change significantly. Under the terms of the agreement, the Company intends to implement its financial restructuring through a Chapter 11 filing to be initiated on or before April 1, 2009. The purpose of Charter’s financial restructuring is to strengthen its balance sheet in order to fully support the Company’s operations and service its debt. As such, the agreement-in-principle contemplates paying trade creditors in full.