Charter 2007 Annual Report Download - page 98

kthe failure to comply with specified covenants, including but
not limited to a covenant to deliver audited financial
statements with an unqualified opinion from the Company’s
independent accountants,
kthe failure to pay or the occurrence of events that cause or
permit the acceleration of other indebtedness owing by
CCO Holdings, Charter Operating, or Charter Operating’s
subsidiaries in amounts in excess of $100 million in aggre-
gate principal amount,
kthe failure to pay or the occurrence of events that result in
the acceleration of other indebtedness owing by certain of
CCO Holdings’ direct and indirect parent companies in
amounts in excess of $200 million in aggregate principal
amount,
kPaul Allen and/or certain of his family members and/or
their exclusively owned entities (collectively, the “Paul Allen
Group”) ceasing to have the power, directly or indirectly, to
vote at least 35% of the ordinary voting power of Charter
Operating,
kthe consummation of any transaction resulting in any person
or group (other than the Paul Allen Group) having power,
directly or indirectly, to vote more than 35% of the ordinary
voting power of Charter Operating, unless the Paul Allen
Group holds a greater share of ordinary voting power of
Charter Operating, and
kCharter Operating ceasing to be a wholly-owned direct
subsidiary of CCO Holdings, except in certain very limited
circumstances.
CCO Holdings Credit Facility
The CCO Holdings credit facility contains covenants that are
substantially similar to the restrictive covenants for the CCO
Holdings notes. The CCO Holdings credit facility contains
provisions requiring mandatory loan prepayments under specific
circumstances, including in connection with certain sales of
assets, so long as the proceeds have not been reinvested in the
business. The CCO Holdings credit facility permits CCO Hold-
ings and its subsidiaries to make distributions to pay interest on
the CCI convertible senior notes, the Charter Holdings notes, the
CIH notes, the CCH I notes, the CCH II notes, the CCO
Holdings notes, and the Charter Operating second-lien notes,
provided that, among other things, no default has occurred and
is continuing under the CCO Holdings credit facility.
Based upon outstanding indebtedness as of December 31,
2007, the amortization of term loans, scheduled reductions in
available borrowings of the revolving credit facilities, and the
maturity dates for all senior and subordinated notes and deben-
tures, total future principal payments on the total borrowings
under all debt agreements as of December 31, 2007, are as
follows:
Year Amount
2008 $ 65
2009 302
2010 2,296
2011 347
2012 1,719
Thereafter 15,210
$19,939
For the amounts of debt scheduled to mature during 2008,
it is management’s intent to fund the repayments from borrow-
ings on the Company’s revolving credit facility. The accompany-
ing consolidated balance sheets reflect this intent by presenting
all debt balances as long-term while the table above reflects
actual debt maturities as of the stated date.
10. NOTE PAYABLE – RELATED PARTY
In October 2005, CCHC issued a subordinated exchangeable
note (the “CCHC Note”) to Charter Investment, Inc. (“CII”). The
CCHC Note has a 15-year maturity. The CCHC Note has an
initial accreted value of $48 million accreting at 14% com-
pounded quarterly, except that from and after February 28, 2009,
CCHC may pay any increase in the accreted value of the CCHC
Note in cash and the accreted value of the CCHC Note will not
increase to the extent such amount is paid in cash. The CCHC
Note is exchangeable at CII’s option, at any time, for Charter
Holdco Class A Common units at a rate equal to the then
accreted value, divided by $2.00 (the “Exchange Rate”). Custom-
ary anti-dilution protections have been provided that could cause
future changes to the Exchange Rate. Additionally, the Charter
Holdco Class A Common units received will be exchangeable by
the holder into Charter Class B common stock in accordance
with existing agreements between CII, Charter and certain other
parties signatory thereto. Beginning March 1, 2009, if the closing
price of Charter common stock is at or above the Exchange Rate
for 20 trading days within any 30 consecutive trading day period,
Charter Holdco may require the exchange of the CCHC Note
for Charter Holdco Class A Common units at the Exchange
Rate. Additionally, CCHC has the right to redeem the CCHC
note from and after February 28, 2009 for cash in an amount
equal to the then accreted value. CCHC has the right to redeem
the CCHC Note upon certain change of control events for cash
in an amount equal to the then accreted value, such amount, if
redeemed prior to February 28, 2009, would also include a make
whole up to the accreted value through February 28, 2009.
CCHC must redeem the CCHC Note at its maturity for cash in
an amount equal to the initial stated value plus the accreted
return through maturity. The accreted value of the CCHC Note
as of December 31, 2007 and 2006 is $65 million and $57 million,
respectively. If not redeemed prior to maturity in 2020, $380 mil-
lion would be due under this note.
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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 2007 FORM 10-K
Notes to Consolidated Financial Statements (continued)