Charter 2013 Annual Report Download - page 106

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CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013, 2012 AND 2011
(dollars in millions, except share or per share data or where indicated)
F- 24
The effect of interest rate derivative instruments on the Company’s consolidated balance sheets is presented in the table below:
December 31, 2013 December 31, 2012
Other long-term liabilities:
Fair value of interest rate derivatives designated as hedges $ — $ 67
Fair value of interest rate derivatives not designated as hedges $ 22 $ —
Accrued interest:
Fair value of interest rate derivatives designated as hedges $ — 8
Fair value of interest rate derivatives not designated as hedges $ 8 $ —
Accumulated other comprehensive loss:
Fair value of interest rate derivatives designated as hedges $ — $ (75)
Fair value of interest rate derivatives not designated as hedges $ (41)$ —
Changes in the fair value of interest rate derivative instruments that were designated as hedging instruments of the variability of
cash flows associated with floating-rate debt obligations, and that met effectiveness criteria were reported in accumulated other
comprehensive loss. The amounts were subsequently reclassified as an increase or decrease to interest expense in the same periods
in which the related interest on the floating-rate debt obligations affected earnings (losses).
Due to repayment of variable rate credit facility debt without a LIBOR floor, certain interest rate derivative instruments were de-
designated as cash flow hedges during the three months ended March 31, 2013, as they no longer met the criteria for cash flow
hedging specified by GAAP. In addition, on March 31, 2013, the remaining interest rate derivative instruments that continued to
be highly effective cash flow hedges for GAAP purposes were electively de-designated. On the date of de-designation, the
Company completed a final measurement test for each interest rate derivative instrument to determine any ineffectiveness and
such amount was reclassified from accumulated other comprehensive loss into gain on derivative instruments, net in the Company's
consolidated statements of operations. While these interest rate derivative instruments are no longer designated as cash flow
hedges for accounting purposes, management continues to believe such instruments are closely correlated with the respective debt,
thus managing associated risk. Interest rate derivative instruments not designated as hedges are marked to fair value, with the
impact recorded as a gain or loss on derivative instruments, net in the Company's consolidated statements of operations. The
balance that remains in accumulated other comprehensive loss for these interest rate derivative instruments will be amortized over
the respective lives of the contracts and recorded as a loss within gain on derivative instruments, net in the Company's consolidated
statements of operations. The estimated net amount of existing losses that are reported in accumulated other comprehensive loss
as of December 31, 2013 that is expected to be reclassified into earnings within the next twelve months is approximately $19
million.