Charter 2009 Annual Report Download - page 75

CCH II, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2009, 2008, AND 2007
(dollars in millions, except where indicated)
F-27
Based upon outstanding indebtedness as of December 31, 2009, the amortization of term loans, and the maturity
dates for all senior and subordinated notes, total future principal payments on the total borrowings under all debt
agreements as of December 31, 2009, are as follows:
Year Amount
2010 $ 70
2011 70
2012 1,170
2013 2,185
2014 8,248
Thereafter 1,766
$ 13,509
9. Loans Payable – Related Party
Loans payable-related party as of December 31, 2009 and 2008 consists of loans from Charter Holdco to Charter
Operating of $13 million.
10. Temporary Equity
Temporary equity on the consolidated balance sheets represented Mr. Allen’ s 5.6% preferred membership interest in
CC VIII, an indirect subsidiary of CCH II, of $203 million as of December 31, 2008. Mr. Allen’ s CC VIII interest
was classified as temporary equity as a result of Mr. Allen’ s ability to put his interest to the Company upon a change
in control. On the Effective Date, Mr. Allen’ s 5.6% preferred membership interest was transferred to Charter and is
now classified as noncontrolling interest. See Note 2 and Note 11.
11. Noncontrolling Interest
Noncontrolling interest represents Charter’ s 5.6% membership interest and CCH I’ s 13% membership interest in CC
VIII of $225 million as of December 31, 2009. As of December 31, 2008, noncontrolling interest of $473 million
represented only CCH I’ s 13% membership interest in CC VIII. As discussed above, on the Effective Date, Mr.
Allen transferred his 5.6% membership interest to Charter. Noncontrolling interest in the accompanying condensed
consolidated statements of operations represents the 2% accretion of the preferred membership interest in CC VIII
plus approximately 18.6% of CC VIII’ s income, inclusive of Mr. Allen’ s previous 5.6% membership interest
accounted for as temporary equity as of December 31, 2008.
12. Comprehensive Income (Loss)
The Company reports changes in the fair value of interest rate agreements designated as hedging the variability of
cash flows associated with floating-rate debt obligations, that meet effectiveness criteria in accumulated other
comprehensive loss. Comprehensive loss for the years ended December 31, 2008, and 2007 was $1.9 billion and
$712 million, respectively. Comprehensive income for the one month ended December 31, 2009 and eleven months
ended November 30, 2009 was $6 million and $2.7 billion, respectively.
13. Accounting for Derivative Instruments and Hedging Activities
The Company used interest rate swap agreements to manage its interest costs and reduce the Company’ s exposure to
increases in floating interest rates. The Company’ s policy is to manage its exposure to fluctuations in interest rates
by maintaining a mix of fixed and variable rate debt within a targeted range. Using interest rate swap agreements,
the Company agreed to exchange, at specified intervals through 2013, the difference between fixed and variable
interest amounts calculated by reference to agreed-upon notional principal amounts. At the banks’ option, certain
interest rate swap agreements could have been extended through 2014.