Charter 2007 Annual Report Download - page 102

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A summary of the carrying value and fair value of the
Company’s debt and related interest rate agreements at Decem-
ber 31, 2007 and 2006 is as follows:
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
2007 2006
Debt
Charter convertible notes $ 402 $ 332 $ 408 $ 576
Charter Holdings debt 578 471 967 932
CIH debt 2,534 1,627 2,533 2,294
CCH I debt 4,083 3,225 4,092 4,104
CCH II debt 2,452 2,390 2,452 2,575
CCO Holdings debt 795 761 1,345 1,391
Charter Operating debt 1,870 1,807 1,870 1,943
Credit facilities 7,194 6,723 5,395 5,418
Interest Rate Agreements Assets
(Liabilities)
Swaps (169) (169) — —
The weighted average interest pay rate for the Company’s
interest rate swap agreements was 4.93% and 4.87% at Decem-
ber 31, 2007 and 2006, respectively.
18. OTHER OPERATING (INCOME) EXPENSES, NET
Other operating (income) expenses, net consist of the following
for the years presented:
2007 2006 2005
Year Ended December 31,
(Gain) loss on sale of assets, net $ (3) $8 $6
Hurricane asset retirement loss ——19
Special charges, net (14) 13 7
$(17) $21 $32
(Gain) loss on sale of assets, net
(Gain) loss on sale of assets represents the (gain) loss recognized
on the sale of fixed assets and cable systems.
Hurricane asset retirement loss
For the year ended December 31, 2005, hurricane asset retire-
ment loss represents the write off of $19 million of the
Company’s plants’ net book value as a result of significant plant
damage suffered by certain of the Company’s cable systems in
Louisiana as a result of hurricanes Katrina and Rita.
Special charges, net
Special charges, net for the year ended December 31, 2007
primarily represents favorable legal settlements of approximately
$20 million offset by severance associated with the closing of call
centers and divisional restructuring. Special charges, net for the
year ended December 31, 2006 primarily represent severance
associated with the closing of call centers and divisional restruc-
turing. Special charges, net for the year ended December 31,
2005 primarily represent severance costs as a result of reducing
workforce, consolidating administrative offices and executive
severance. For the year ended December 31, 2005, special
charges, net were offset by approximately $2 million related to
an agreed upon discount in respect of the portion of settlement
consideration payable under the settlement terms of class action
lawsuits.
19. GAIN (LOSS) ON EXTINGUISHMENT OF DEBT AND PREFERRED STOCK
2007 2006 2005
Year Ended December 31,
Charter Holdings and CCO Holdings debt
exchanges $ (22) $108 $500
Charter Operating credit facilities refinancing (13) (27) —
Charter convertible note repurchases / exchanges (113) 20 3
Charter preferred stock repurchase ——23
CC V Holdings notes repurchase —— (5)
$(148) $101 $521
See Note 9 for discussion of 2007 and 2006 debt
transactions.
In March and June 2005, Charter Operating consummated
exchange transactions with a small number of institutional hold-
ers of Charter Holdings 8.25% senior notes due 2007 pursuant to
which Charter Operating issued approximately $333 million prin-
cipal amount of new notes with terms identical to Charter
Operating’s 8.375% senior second lien notes due 2014 in
exchange for approximately $346 million of the Charter Holdings
8.25% senior notes due 2007. The Charter Holdings notes
received in the exchange were thereafter distributed to Charter
Holdings and cancelled. The exchanges resulted in a gain on
extinguishment of debt of approximately $10 million.
In March 2005, all of CC V Holdings, LLC’s outstanding
11.875% senior discount notes due 2008 were redeemed at a total
cost of $122 million, resulting in a loss of extinguishment of debt
of approximately $5 million.
In September 2005, Charter Holdings and its wholly owned
subsidiaries, CCH I and CIH, completed the exchange of approx-
imately $6.8 billion total principal amount of outstanding debt
securities of Charter Holdings in a private placement for CCH I
and CIH new debt securities. The Charter Holdings notes
received in the exchange were thereafter distributed to Charter
Holdings and cancelled. The exchanges resulted in a gain on
extinguishment of debt of approximately $490 million.
During the year ended December 31, 2005, the Company
repurchased, in private transactions, from a small number of
institutional holders, a total of $136 million principal amount of
its 4.75% convertible senior notes due 2006, resulting in a gain on
debt extinguishment of approximately $3 million.
F-24
CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2007 FORM 10-K
Notes to Consolidated Financial Statements (continued)