Charter 2005 Annual Report Download - page 81

CHARTER COMMUNICATIONS, INC. 2005 FORM 10-K
The table set forth below summarizes the fair values and contract terms of financial instruments subject to interest rate risk
maintained by us as of December 31, 2005 (dollars in millions):
Fair Value at
December 31,
2006 2007 2008 2009 2010 Thereafter Total 2005
Debt
Fixed Rate $20 $ 105 $ 114 $ 1,547 $1,693 $9,576 $13,055 $10,509
Average Interest Rate 4.75% 8.25% 10.00% 7.48% 10.29% 10.44% 10.04%
Variable Rate $30 $ 280 $ 630 $ 779 $1,762 $2,800 $ 6,281 $ 6,256
Average Interest Rate 7.94% 7.67% 7.67% 7.74% 8.14% 8.07% 7.99%
Interest Rate Instruments
Variable to Fixed Swaps $ 873 $ 975 $ —$—$—$—$ 1,848 $ 4
Average Pay Rate 8.23% 8.00% — ———8.11%
Average Receive Rate 7.83% 7.77% — ———7.80%
The notional amounts of interest rate instruments do not At December 31, 2005 and 2004, we had outstanding
represent amounts exchanged by the parties and, thus, are not a $1.8 billion and $2.7 billion and $20 million and $20 million,
measure of our exposure to credit loss. The amounts exchanged respectively, in notional amounts of interest rate swaps and
are determined by reference to the notional amount and the collars, respectively. The notional amounts of interest rate
other terms of the contracts. The estimated fair value approxi- instruments do not represent amounts exchanged by the parties
mates the costs (proceeds) to settle the outstanding contracts. and, thus, are not a measure of exposure to credit loss. The
Interest rates on variable debt are estimated using the average amounts exchanged are determined by reference to the notional
implied forward London Interbank Offering Rate (LIBOR) rates amount and the other terms of the contracts.
for the year of maturity based on the yield curve in effect at
December 31, 2005.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Our consolidated financial statements, the related notes thereto, and the reports of independent auditors are included in this annual
report beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS There was no change in our internal control over financial
AND PROCEDURES reporting during 2005 that has materially affected, or is
reasonably likely to materially affect, our internal control over
As of the end of the period covered by this report, management, financial reporting.
including our Chief Executive Officer and Chief Financial In designing and evaluating the disclosure controls and
Officer, evaluated the effectiveness of the design and operation procedures, our management recognized that any controls and
of our disclosure controls and procedures with respect to the procedures, no matter how well designed and operated, can
information generated for use in this annual report. The provide only reasonable, not absolute, assurance of achieving the
evaluation was based in part upon reports and affidavits desired control objectives and management necessarily was
provided by a number of executives. Based upon, and as of the required to apply its judgment in evaluating the cost-benefit
date of that evaluation, our Chief Executive Officer and Chief relationship of possible controls and procedures. Based upon the
Financial Officer concluded that the disclosure controls and above evaluation, Charter’s management believes that its con-
procedures were effective to provide reasonable assurances that trols provide such reasonable assurances.
information required to be disclosed in the reports we file or
submit under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods
specified in the Commission’s rules and forms.
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