Charter 2007 Annual Report Download - page 54

In 2008, $65 million of our debt matures, and in 2009, an additional $302 million matures. In 2010 and beyond, significant additional
amounts will become due under our remaining long-term debt obligations. The following table summarizes our payment obligations as
of December 31, 2007 under our long-term debt and certain other contractual obligations and commitments (dollars in millions).
Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
Payments by Period
Contractual Obligations
Long-Term Debt Principal Payments
(1)
$19,939 $ 65 $2,598 $2,066 $15,210
Long-Term Debt Interest Payments
(2)
10,111 1,666 3,297 2,805 2,343
Payments on Interest Rate Instruments
(3)
155 44 91 20 —
Capital and Operating Lease Obligations
(4)
99 22 39 19 19
Programming Minimum Commitments
(5)
1,020 331 418 215 56
Other
(6)
475 374 99 2 —
Total $31,799 $2,502 $6,542 $5,127 $17,628
(1)
The table presents maturities of long-term debt outstanding as of December 31, 2007. Refer to Notes 9 and 24 to our accompanying consolidated financial statements
contained in “Item 8. Financial Statements and Supplementary Data” for a description of our long-term debt and other contractual obligations and commitments. Does not
include the $65 million CCHC accreting note which is included in note payable – related party. If not redeemed prior to maturity in 2020, $380 million would be due
under this note.
(2)
Interest payments on variable debt are estimated using amounts outstanding at December 31, 2007 and the average implied forward London Interbank Offering Rate
(LIBOR) rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2007. Actual interest payments will differ based on
actual LIBOR rates and actual amounts outstanding for applicable periods.
(3)
Represents amounts we will be required to pay under our interest rate hedge agreements estimated using the average implied forward LIBOR applicable rates for the
quarter during the interest rate reset based on the yield curve in effect at December 31, 2007.
(4)
We lease certain facilities and equipment under noncancelable operating leases. Leases and rental costs charged to expense for the years ended December 31, 2007, 2006,
and 2005, were $23 million, $23 million, and $22 million, respectively.
(5)
We pay programming fees under multi-year contracts ranging from three to ten years, typically based on a flat fee per customer, which may be fixed for the term, or may
in some cases escalate over the term. Programming costs included in the accompanying statement of operations were approximately $1.6 billion, $1.5 billion, and
$1.4 billion, for the years ended December 31, 2007, 2006, and 2005, respectively. Certain of our programming agreements are based on a flat fee per month or have
guaranteed minimum payments. The table sets forth the aggregate guaranteed minimum commitments under our programming contracts.
(6)
“Other” represents other guaranteed minimum commitments, which consist primarily of commitments to our billing services vendors.
The following items are not included in the contractual
obligations table because the obligations are not fixed and/or
determinable due to various factors discussed below. However,
we incur these costs as part of our operations:
kWe rent utility poles used in our operations. Generally, pole
rentals are cancelable on short notice, but we anticipate that
such rentals will recur. Rent expense incurred for pole rental
attachments for the years ended December 31, 2007, 2006,
and 2005, was $47 million, $44 million, and $44 million,
respectively.
kWe pay franchise fees under multi-year franchise agreements
based on a percentage of revenues generated from video
service per year. We also pay other franchise related costs,
such as public education grants, under multi-year agree-
ments. Franchise fees and other franchise-related costs
included in the accompanying statement of operations were
$172 million, $175 million, and $165 million for the years
ended December 31, 2007, 2006, and 2005, respectively.
kWe also have $136 million in letters of credit, primarily to
our various worker’s compensation, property and casualty,
and general liability carriers, as collateral for reimbursement
of claims. These letters of credit reduce the amount we may
borrow under our credit facilities.
Our business requires significant cash to fund debt service
costs, capital expenditures and ongoing operations. We have
historically funded these requirements through cash flows from
operating activities, borrowings under our credit facilities, pro-
ceeds from sales of assets, issuances of debt and equity securities,
and cash on hand. However, the mix of funding sources changes
from period to period. For the year ended December 31, 2007,
we generated $327 million of net cash flows from operating
activities after paying cash interest of $1.8 billion. In addition, we
used $1.2 billion for purchases of property, plant and equipment.
Finally, we had net cash flows from financing activities of
$826 million. We expect that our mix of sources of funds will
continue to change in the future based on overall needs relative
to our cash flow and on the availability of funds under the credit
facilities of our subsidiaries, our access to the debt and equity
markets, the timing of possible asset sales, and based on our
ability to generate cash flows from operating activities.
We expect that cash on hand, cash flows from operating
activities, and the amounts available under Charter Operating’s
credit facilities will be adequate to meet our projected cash needs
through the second or third quarter of 2009 and thereafter will
not be sufficient to fund such needs. Our projected cash needs
and projected sources of liquidity depend upon, among other
things, our actual results, the timing and amount of our capital
expenditures, and ongoing compliance with the Charter Operat-
ing credit facilities, including Charter Operating’s obtaining an
unqualified audit opinion from our independent accountants.
Charter will therefore need to obtain additional sources of
liquidity by early 2009. Although we and our subsidiaries have
CHARTER COMMUNICATIONS, INC. 2007 FORM 10-K
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