Charter 2011 Annual Report Download - page 104

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2011, 2010 AND 2009
(dollars in millions, except share or per share data or where indicated)
F- 20
• A term C loan with a remaining principal amount of approximately $3.0 billion, which is repayable in equal quarterly
installments and aggregating $30 million in each loan year, with the remaining balance due at final maturity on September
6, 2016;
• A non-revolving loan with a remaining principal amount of approximately $199 million repayable in full on March 6,
2013; and
• A revolving loan with an outstanding balance of $435 million at December 31, 2011 and allowing for borrowings of
up to $1.3 billion.
Amounts outstanding under the Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or
LIBOR (0.30% as of December 31, 2011 (0.58% for term C) and 0.27% as of December 31, 2010 (0.31% for term C)), as defined,
plus a margin. The applicable LIBOR margin for the term loan A loans is currently 2.25%, and for the non-revolving loans and
the term B-1 loans is currently 1.75% and 2.00%, respectively. The LIBOR term B-2 loan bears interest at LIBOR plus 5.0%, with
a LIBOR floor of 3.5%, or at Charter Operating’s election, a base rate plus a margin of 4.00%. Charter Operating has currently
elected to pay based on the base rate. The applicable margin for the term C loans is currently 3.25% in the case of LIBOR loans,
provided that if certain other term loans are borrowed or certain extended loans are established, then the term C loans shall
automatically increase to the extent necessary to cause the yield for the term C loans to be 25 basis points less than the yield for
the other certain term loans. Charter Operating pays interest equal to LIBOR plus 3.0% on amounts borrowed under the revolving
credit facility and pays a revolving commitment fee of .5% per annum on the daily average available amount of the revolving
commitment, payable quarterly.
The Charter Operating credit facilities also allow the Company to enter into incremental term loans in the future with an aggregate,
together with all other then outstanding first lien indebtedness, including any first lien notes, of no more than $7.5 billion (less
any principal payments of term loan indebtedness and first lien notes as a result of any sale of assets), with amortization as set
forth in the notices establishing such term loans, but with no amortization greater than 1% per year prior to the final maturity of
the existing term loans. Although the Charter Operating credit facilities allow for the incurrence of a certain amount of incremental
term loans, no assurance can be given that the Company could obtain additional incremental term loans in the future if Charter
Operating sought to do so or what amount of incremental term loans would be allowable at any given time under the terms of the
Charter Operating credit facilities.
The obligations of Charter Operating under the Charter Operating credit facilities (the “Obligations”) are guaranteed by Charter
Operating’s immediate parent company, CCO Holdings, and subsidiaries of Charter Operating, except for certain subsidiaries,
including immaterial subsidiaries and subsidiaries precluded from guaranteeing by reason of the provisions of other indebtedness
to which they are subject (the “non-guarantor subsidiaries”). The Obligations are also secured by (i) a lien on substantially all of
the assets of Charter Operating and its subsidiaries (other than assets of the non-guarantor subsidiaries), to the extent such lien
can be perfected under the Uniform Commercial Code by the filing of a financing statement, and (ii) a pledge by CCO Holdings
of the equity interests owned by it in Charter Operating or any of Charter Operating’s subsidiaries, as well as intercompany
obligations owing to it by any of such entities.
Credit Facilities — Restrictive Covenants
CCO Holdings Credit Facility
The CCO Holdings credit facility contains covenants that are substantially similar to the restrictive covenants for the CCO Holdings
notes except that the leverage ratio is 5.50 to 1.0 and the change of control definition provides that a change of control occurs if
a holder becomes the beneficial owner of 35% or more of Charter’s voting stock unless Paul G. Allen (“Mr. Allen”) beneficially
owns a greater percentage. 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 Holdings and its subsidiaries to make distributions to pay interest
on 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.
Charter Operating Credit Facilities
The Charter Operating credit facilities contain representations and warranties, and affirmative and negative covenants customary
for financings of this type. The financial covenants measure performance against standards set for leverage to be tested as of the
end of each quarter. Additionally, the Charter Operating credit facilities contain provisions requiring mandatory loan prepayments