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S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 01/25/2000
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             CHARTER COMMUNICATIONS HOLDINGS, LLC AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
results of operations of the acquired businesses will be included in the
financial statements from the dates of acquisitions.
 
     In March 1999, concurrent with the issuance of $600.0 million 8.250% Senior
Notes due 2007, $1.5 billion 8.625% Senior Notes due 2009 and $1.475 billion
9.920% Senior Discount Notes due 2011 (collectively, the "CCH Notes"), the
Company extinguished substantially all long-term debt, excluding borrowings of
the Company under its credit agreements, and refinanced substantially all
existing credit agreements at various subsidiaries with a new credit agreement
(the "CCO Credit Agreement") entered into by Charter Operating. The Company
expects to record an extraordinary loss of approximately $8 million in
conjunction with the extinguishment of substantially all long-term debt and the
refinancing of its credit agreements.
 
     The CCO Credit Agreement provides for two term facilities, one with a
principal amount of $1.0 billion that matures September 2008 (Term A), and the
other with the principal amount of $1.85 billion that matures on March 2009
(Term B). The CCO Credit Agreement also provides for a $1.25 billion revolving
credit facility with a maturity date of September 2008. Amounts under the CCO
Credit Agreement bear interest at the Base Rate or the Eurodollar rate, as
defined, plus a margin up to 2.75%. A quarterly commitment fee of between 0.25%
and 0.375% per annum is payable on the unborrowed balance of Term A and the
revolving credit facility. On March 17, 1999, the Company borrowed $1.75 billion
under Term B and invested the excess cash of $1.0 billion in short-term
investments.
 
     Charter Communications Holdings Capital Corporation is a co-issuer of the
CCH Notes and is a wholly owned finance subsidiary of Charter Holdings with no
independent assets or operations.
 
     In accordance with an employment agreement between Charter and the
President and Chief Executive Officer of Charter and a related option agreement
between Charter Holdco and the President and Chief Executive Officer of Charter,
7,044,127 options to purchase 3% of the net equity value of CCHC were issued to
the President and Chief Executive Officer of Charter. The options vest over a
four year period from the date of grant and expire ten years from the date of
grant.
 
     In February 1999, the Company adopted an option plan providing for the
grant of options to purchase up to an 10% of the aggregate equity value of the
subsidiaries of Charter Holdco as of February 1999. The option plan provides for
grants of options to employees, and consultants of Charter Holdco and its
affiliates and consultants who provide services to Charter Holdco. Options
granted vest over five years from the date of grant. However, if there has not
been a public offering of the equity interests of Charter Holdco or an
affiliate, vesting will occur only upon termination of employment for any
reason, other than for cause or disability. Options not exercised accumulate and
are exercisable, in whole or in part, in any subsequent period, but not later
than ten years from the date of grant.
 
     Following the completion of an initial public offering by Charter
Communications, Inc. membership units received upon exercise of the options will
be automatically exchanged for shares of Class A common stock of CCI on a
one-for-one basis. Options outstanding as of March 31, 1999, are as follows:
 

<TABLE>
<CAPTION>
                                     OPTIONS OUTSTANDING                 OPTIONS EXERCISABLE
                        ----------------------------------------------  ----------------------
       EXERCISE               NUMBER OF           REMAINING CONTRACT          NUMBER OF
        PRICE                  OPTIONS             LIFE (IN YEARS)             OPTIONS
----------------------  ----------------------  ----------------------  ----------------------
<S>                     <C>                     <C>                     <C>
        $20.00                16,095,008                 9.8                  1,761,032
</TABLE>

 
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