Charter 2006 Annual Report Download - page 67

CHARTER COMMUNICATIONS, INC. 2006 FORM 10-K
Indebtedness under a single facility or agreement may be (Charter Operating: the sum of 100% of Charter Operating’s
incurred in part under one of the categories listed above and in Consolidated EBITDA, as defined, minus 1.3 times its
part under another, and generally may also later be reclassified Consolidated Interest Expense, as defined, plus 100% of
into another category including as debt incurred under the new cash and appraised non-cash equity proceeds received
leverage ratio. Accordingly, indebtedness under our credit by Charter Operating and not allocated to certain invest-
facilities is incurred under a combination of the categories of ments, cumulatively from April 1, 2004, plus $100 million.
permitted indebtedness listed above. The restricted subsidiaries In addition, each of the note issuers may make distributions
of note issuers are generally not permitted to issue subordinated or restricted payments, so long as no default exists or would be
debt securities. caused by transactions among other distributions or restricted
Restrictions on Distributions payments:
Generally, under the various indentures each of the note issuers (to repurchase management equity interests in amounts not
and their respective restricted subsidiaries are permitted to pay to exceed $10 million per fiscal year;
dividends on or repurchase equity interests, or make other
(regardless of the existence of any default, to pay pass-
specified restricted payments, only if the applicable issuer can
through tax liabilities in respect of ownership of equity
incur $1.00 of new debt under the applicable leverage ratio test
interests in the applicable issuer or its restricted subsidiaries;
after giving effect to the transaction and if no default exists or
or
would exist as a consequence of such incurrence. If those
conditions are met, restricted payments may be made in a total (to make other specified restricted payments including
amount of up to the following amounts for the applicable issuer merger fees up to 1.25% of the transaction value, repur-
as indicated below: chases using concurrent new issuances, and certain divi-
dends on existing subsidiary preferred equity interests.
(Charter Holdings: the sum of 100% of Charter Holdings’
Consolidated EBITDA, as defined, minus 1.2 times its Each of CCH I, CCH II, CCO Holdings, and Charter
Consolidated Interest Expense, as defined, plus 100% of Operating and their respective restricted subsidiaries may make
new cash and appraised non-cash equity proceeds received distributions or restricted payments: (i) so long as certain
by Charter Holdings and not allocated to the debt defaults do not exist and even if the applicable leverage test
incurrence covenant or to permitted investments, all cumu- referred to above is not met, to enable certain of its parents to
latively from March 1999, the date of the first Charter pay interest on certain of their indebtedness or (ii) so long as
Holdings indenture, plus $100 million; the applicable issuer could incur $1.00 of indebtedness under the
applicable leverage ratio test referred to above, to enable certain
(CIH: the sum of the greater of (a) $500 million or (b) 100%
of its parents to purchase, redeem or refinance certain
of CIH’s Consolidated EBITDA, as defined, minus 1.2 times
indebtedness.
its Consolidated Interest Expense, as defined, plus 100% of
new cash and appraised non-cash equity proceeds received Restrictions on Investments
by CIH and not allocated to the debt incurrence covenant Each of the note issuers and their respective restricted subsidiar-
or to permitted investments, all cumulatively from Septem- ies may not make investments except (i) permitted investments
ber 28, 2005; or (ii) if, after giving effect to the transaction, their leverage
(CCH I: the sum of 100% of CCH I’s Consolidated would be above the applicable leverage ratio.
EBITDA, as defined, minus 1.3 times its Consolidated Permitted investments include, among others:
Interest Expense, as defined, plus 100% of new cash and (investments in and generally among restricted subsidiaries
appraised non-cash equity proceeds received by CCH I and or by restricted subsidiaries in the applicable issuer;
not allocated to certain investments, all cumulative from
(For Charter Holdings:
September 28, 2005, plus $100 million;
(investments in productive assets (including through
(CCH II: the sum of 100% of CCH II’s Consolidated
equity investments) aggregating up to $150 million since
EBITDA, as defined, minus 1.3 times its Consolidated
March 1999;
Interest Expense, as defined, plus 100% of new cash and
appraised non-cash equity proceeds received by CCH II (other investments aggregating up to $50 million since
and not allocated to certain investments, cumulatively from March 1999; and
July 1, 2003, plus $100 million;
(investments aggregating up to 100% of new cash equity
(CCO Holdings: the sum of 100% of CCO Holdings’ proceeds received by Charter Holdings since March 1999
Consolidated EBITDA, as defined, minus 1.3 times its and not allocated to the debt incurrence or restricted
Consolidated Interest Expense, as defined, plus 100% of payments covenant;
new cash and appraised non-cash equity proceeds received
by CCO Holdings and not allocated to certain investments,
cumulatively from October 1, 2003, plus $100 million; and
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