Charter 2011 Annual Report Download - page 65

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actual amount of our capital expenditures depends on completion of an ambitious activity plan and will be subject to the growth
rates of both our residential and commercial businesses.
Our capital expenditures are funded primarily from free cash flow and borrowings on our credit facility. In addition, our liabilities
related to capital expenditures increased by $57 million and $8 million for the years ended December 31, 2011 and 2010, respectively,
and decreased by $10 million for the year ended December 31, 2009.
The following table presents our major capital expenditures categories in accordance with NCTA disclosure guidelines for the
years ended December 31, 2011, 2010 and 2009. The disclosure is intended to provide more consistency in the reporting of capital
expenditures among peer companies in the cable industry. These disclosure guidelines are not required disclosures under GAAP,
nor do they impact our accounting for capital expenditures under GAAP (dollars in millions):
Customer premise equipment (a)
Scalable infrastructure (b)
Line extensions (c)
Upgrade/rebuild (d)
Support capital (e)
Total capital expenditures (f)
Successor
2011
$ 538
346
117
27
283
$ 1,311
Successor
2010
$ 543
311
90
21
244
$ 1,209
Combined
2009
$ 593
216
70
28
227
$ 1,134
(a) Customer premise equipment includes costs incurred at the customer residence to secure new customers, revenue units and
additional bandwidth revenues. It also includes customer installation costs and customer premise equipment (e.g., set-top
boxes and cable modems).
(b) Scalable infrastructure includes costs not related to customer premise equipment or our network, to secure growth of new
customers, revenue units, and additional bandwidth revenues, or provide service enhancements (e.g., headend equipment).
(c) Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers,
electronic equipment, make-ready and design engineering).
(d) Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.
(e) Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological
and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles).
(f) Total capital expenditures includes $195 million, $138 million and $83 million of capital expenditures related to commercial
services for the years ended December 31, 2011, 2010 and 2009, respectively.
Description of Our Outstanding Debt
Overview
As of December 31, 2011 and 2010, the blended weighted average interest rate on our debt was 7.1% and 6.7%, respectively. The
interest rate on approximately 82% and 65% of the total principal amount of our debt was effectively fixed, including the effects
of our interest rate hedge agreements as of December 31, 2011 and 2010, respectively. The fair value of our high-yield notes was
$9.2 billion and $6.6 billion at December 31, 2011 and 2010, respectively. The fair value of our credit facilities was $4.2 billion
and $6.3 billion at December 31, 2011 and 2010, respectively. The fair value of our high-yield notes and credit facilities were
based on quoted market prices.
The following description is a summary of certain provisions of our credit facilities and our notes (the “Debt Agreements”). The
summary does not restate the terms of the Debt Agreements in their entirety, nor does it describe all terms of the Debt Agreements.
The agreements and instruments governing each of the Debt Agreements are complicated and you should consult such agreements
and instruments for more detailed information regarding the Debt Agreements.