Charter 2007 Annual Report Download - page 51

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Other operating (income) expenses, net. The decreases in other operating expenses, net are attributable to the following (dollars in
millions):
2007 compared
to 2006
2006 compared
to 2005
Increases (decreases) in losses on sales of assets $(11) $2
Hurricane asset retirement loss —(19)
Increases (decreases) in special charges, net (27) 6
$(38) $(11)
For more information, see Note 18 to the accompanying
consolidated financial statements contained in “Item 8. Financial
Statements and Supplementary Data.”
Interest expense, net. Net interest expense decreased by $26 million
in 2007 from 2006 and increased by $59 million in 2006 from
2005. The decrease in net interest expense from 2006 to 2007
was a result of a decrease in our average borrowing rate from
9.5% in 2006 to 9.2% in 2007. This was offset by an increase in
average debt outstanding from $19.4 billion in 2006 to $19.6 bil-
lion in 2007. The increase in net interest expense from 2005 to
2006 was a result of an increase in our average borrowing rate
from 9.0% in 2005 to 9.5% in 2006, and an increase in average
debt outstanding from $19.3 billion in 2005 to $19.4 billion in
2006.
Change in value of derivatives. Certain provisions of our 5.875% and
6.50% convertible senior notes issued in November 2004 and
October 2007, respectively, were considered embedded deriva-
tives for accounting purposes and were required to be accounted
for separately from the convertible senior notes and marked to
fair value at the end of each reporting period. Other derivatives
are held to manage our interest costs and reduce our exposure to
increases in floating interest rates. Change in value of derivatives
consists of the following for the years ended December 31, 2007,
2006 and 2005.
2007 2006 2005
Year Ended December 31,
Embedded derivatives from convertible senior notes $98 $(10) $29
Interest rate swaps (46) 650
$52 $ (4) $79
Gain (loss) on extinguishment of debt and preferred stock. Gain (loss) on extinguishment of debt and preferred stock consists of the following for the years
ended December 31, 2007, 2006 and 2005.
2007 2006 2005
Year Ended December 31,
Charter 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
For more information, see Notes 9 and 19 to the accompa-
nying consolidated financial statements contained in “Item 8.
Financial Statements and Supplementary Data.”
Other income (expense), net. The decreases in other income, net are attributable to the following (dollars in millions):
2007 compared
to 2006
2006 compared
to 2005
Decreases in minority interest (3) (5)
Decreases in investment income (16) (6)
Other, net (3) 2
$(22) $(9)
CHARTER COMMUNICATIONS, INC. 2007 FORM 10-K
40