Charter 2006 Annual Report Download - page 107

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2006 FORM 10-K
Notes to Consolidated Financial Statements (continued)
would it have a material adverse effect on the Company’s damage suffered by certain of the Company’s cable systems in
consolidated financial condition or results of operations. Louisiana as a result of hurricanes Katrina and Rita.
The estimated fair value of the Company’s notes and Special charges, net
interest rate agreements at December 31, 2006 and 2005 are Special charges, net for the year ended December 31, 2006
based on quoted market prices, and the fair value of the credit primarily represent severance associated with the closing of call
facilities is based on dealer quotations. centers and divisional restructuring. Special charges, net for the
A summary of the carrying value and fair value of the year ended December 31, 2005 primarily represent severance
Company’s debt and related interest rate agreements at Decem- costs as a result of reducing workforce, consolidating administra-
ber 31, 2006 and 2005 is as follows: tive offices and executive severance. For the year ended
December 31, 2005, special charges, net were offset by
2006 2005 approximately $2 million related to an agreed upon discount in
Carrying Fair Carrying Fair respect of the portion of settlement consideration payable under
Value Value Value Value
the settlement terms of class action lawsuits. Special charges, net
Debt for the year ended December 31, 2004 primarily represent the
Charter convertible notes $ 408 $ 576 $ 863 $ 647
Charter Holdings debt 967 932 1,746 1,145 settlement of the consolidated federal class action and federal
CIH debt 2,533 2,294 2,472 1,469 derivative action lawsuits and litigation costs related to the
CCH I debt 4,092 4,104 3,683 2,959 settlement of a 2004 national class action suit coupled with
CCH II debt 2,452 2,575 1,601 1,592 severance costs as a result of reducing workforce, consolidating
CCO Holdings debt 1,345 1,391 1,344 1,299
Charter Operating debt 1,870 1,943 1,833 1,820 administrative offices and executive severance.
Credit facilities 5,395 5,418 5,731 5,719 Unfavorable contracts and other settlements
Other ——115 114
Interest Rate Agreements The Company recognized $5 million of benefit for the year
Assets (Liabilities) ended December 31, 2004 related to changes in estimated legal
Swaps —— (4) (4) reserves established as part of previous business combinations,
Collars ————
which, based on an evaluation of current facts and circum-
The weighted average interest pay rate for the Company’s stances, are no longer required.
interest rate swap agreements was 10.23% and 9.51% at
18. GAIN (LOSS) ON EXTINGUISHMENT OF DEBT AND PREFERRED STOCK
December 31, 2006 and 2005, respectively.
17. OTHER OPERATING EXPENSES, NET Year Ended December 31,
2006 2005 2004
Other operating expenses, net consist of the following for the
years presented: Charter Holdings debt exchanges $ 108 $500 $ —
Charter Operating credit facility refinancing (27) — (21)
Year Ended December 31, Charter convertible note repurchases/exchanges 20 3 (10)
Charter preferred stock repurchase —23 —
2006 2005 2004
CC V Holdings notes repurchase —(5) —
(Gain) loss on sale of assets, net $8 $ 6 $(86) $ 101 $521 $(31)
Hurricane asset retirement loss —19 —
Special charges, net 13 7 104
Unfavorable contracts and other settlements —— (5) 19. OTHER INCOME, NET
$21 $32 $ 13
Other income, net consists of the following for years presented:
(Gain) loss on sale of assets, net Year Ended December 31,
(Gain) loss on sale of assets represents the gain or loss 2006 2005 2004
recognized on the sale of fixed assets and cable systems. For the Gain (loss) on derivative instruments and hedging
year ended December 31, 2004, the gain on sale of assets activities, net (Note 15) $6 $50 $ 69
includes the gain recognized on the sale of certain cable systems Minority interest (Note 11) (4) 119
in Florida, Pennsylvania, Maryland, Delaware, New York and Gain on investment (Note 3) 16 22 4
Loss on debt to equity conversion ——(23)
West Virginia to Atlantic Broadband Finance, LLC. Other, net 2— (1)
Hurricane asset retirement loss $20 $73 $ 68
For the year ended December 31, 2005, hurricane asset
retirement loss represents the write off of $19 million of the Loss on debt to equity conversion
Company’s plants’ net book value as a result of significant plant The Company recognized a loss of approximately $23 million
recorded as loss on debt to equity conversion on the accompa-
F-26