Charter 2002 Annual Report Download - page 42

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Start Date
December 31, 2002 Semi-Annual for Interest
Accreted Interest Payment Payment on Maturity
Face Value Value(a) Dates Discount Notes Date(b)
Credit Facilities
Charter OperatingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,542 4,542
CC VI Operating ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 926 926
Falcon Cable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,155 1,155
CC VIII OperatingÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,166 1,166
$19,692 $18,671
(a) The accreted value presented above represents the face value of the notes less the original issue discount
at the time of sale plus the accretion to the balance sheet date.
(b) In general, we have the right to redeem all of the notes set forth in this table (other than the March 1999
Charter Holdings 8.250% Senior Notes, the January 2000 Charter Holdings 10.000% Senior Notes, the
January 2001 Charter Holdings 10.750% Senior Notes, the May 2001 Charter Holdings 9.625% Senior
Notes, and the January 2002 Charter Holdings 9.625% Senior Notes) in whole or part at our option
beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the
payment of the outstanding principal amount (plus a speciÑed redemption premium) and all accrued and
unpaid interest. We currently have no intention of redeeming any of these notes prior to their stated
maturity dates. For additional information, see Note 10 to our consolidated Ñnancial statements.
(c) The 5.75% convertible senior notes and the 4.75% convertible senior notes are convertible at the option of
the holder into shares of Class A common stock at a conversion rate of 46.3822 and 38.0952 shares,
respectively, per $1,000 principal amount of notes, which is equivalent to a price of $21.56 and $26.25 per
share, respectively, subject to certain adjustments. SpeciÑcally, the adjustments include anti-dilutive
provisions, which cause adjustments to occur automatically based on the occurrence of speciÑed events to
provide protection rights to holders of the notes. Additionally, the conversion ratio may be adjusted by us
when deemed appropriate.
(d) A $66 million principal payment is also due on December 1, 2003.
As of December 31, 2002 and 2001, long-term debt totaled approximately $18.7 billion and $16.3 billion,
respectively. This debt was comprised of approximately $7.8 billion and $6.7 billion of debt under our
subsidiaries' credit facilities, $9.5 billion and $8.2 billion of high yield debt and approximately $1.4 billion and
$1.4 billion of debt related to our convertible senior notes at December 31, 2002 and 2001, respectively. As of
December 31, 2002, we had unused total potential availability of $1.4 billion under the credit facilities of our
subsidiaries, although our Ñnancial covenants would have limited our availability to $944 million at
December 31, 2002. Continued access to these credit facilities is subject to our remaining in compliance with
the applicable covenants of these credit facilities.
As of December 31, 2002 and 2001, the weighted average interest rate on our bank debt was
approximately 5.6% and 6.0%, respectively, the weighted average interest rate on our high yield debt was
approximately 10.2% and 10.1%, respectively, and the weighted average rate on the convertible debt was
approximately 5.3%, resulting in a blended weighted average interest rate of 7.9% and 7.6%, respectively.
Approximately 79% of our debt eÅectively bore Ñxed interest rates including the eÅects of our interest rate
hedge agreements as of December 31, 2002 as compared to approximately 82% at December 31, 2001. The
fair value of our total Ñxed-rate debt was $4.4 billion and $9.5 billion at December 31, 2002 and 2001,
respectively. The fair value of variable-rate debt was $6.4 billion and $6.7 billion at December 31, 2002 and
2001, respectively. The fair value of Ñxed-rate debt and variable rate debt is based on quoted market prices.
Traditionally, we have accessed the high-yield bond market as a source of capital for our growth. Moody's
Investor Services downgraded our outstanding debt in October, 2002 and again in January, 2003. Moody's also
reduced its liquidity rating of Charter Communications, Inc. to its lowest level. In January, 2003, Standard &
Poor's downgraded our outstanding debt. We believe that as a result of our signiÑcant level of debt, current
40