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S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 04/30/1999
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<PAGE>   173
             CHARTER COMMUNICATIONS HOLDINGS, LLC AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
7.  FAIR VALUE OF FINANCIAL INSTRUMENTS:
 
     A summary of debt and the related interest rate hedge agreements at
December 31, 1998, is as follows:
 

<TABLE>
<CAPTION>
                                            CARRYING      NOTIONAL        FAIR
DEBT                                         VALUE         AMOUNT        VALUE
- ----                                       ----------    ----------    ----------
<S>                                        <C>           <C>           <C>
Charter:
  Charter Credit Agreements (including
     CCP, CCA Group and CharterComm
     Holdings)...........................  $1,726,500    $       --    $1,726,500
  Senior Secured Discount Debentures.....     138,102            --       138,102
  11 1/4% Senior Notes...................     137,604            --       137,604
Marcus:
  Senior Credit Facility.................     808,000            --       808,000
  13 1/2% Senior Subordinated Discount
     Notes...............................     425,812            --       418,629
  14 1/4% Senior Discount Notes..........     287,183            --       279,992
INTEREST RATE HEDGE AGREEMENTS
Swaps....................................     (22,092)    1,505,000       (28,977)
Caps.....................................          --        15,000            --
Collars..................................      (4,174)      310,000        (4,174)
</TABLE>

 
     As the long-term debt under the credit agreements bears interest at current
market rates, their carrying amount approximates market value at December 31,
1998. The fair values of the 11 1/4% Notes, the Debentures, the 13 1/2% Notes
and the 14 1/2% Notes are based on quoted market prices.
 
     The weighted average interest pay rate for the Company's interest rate swap
agreements was 7.1% at December 31, 1998. The weighted average interest rate for
the Company's interest rate cap agreements was 8.45% at December 31, 1998. The
weighted average interest rates for the Company's interest rate collar
agreements were 8.63% and 7.31% for the cap and floor components, respectively,
at December 31, 1998.
 
     The notional amounts of interest rate hedge agreements do not represent
amounts exchanged by the parties and, thus, are not a measure of the Company's
exposure through its use of interest rate hedge agreements. The amounts
exchanged are determined by reference to the notional amount and the other terms
of the contracts.
 
     The fair value of interest rate hedge agreements generally reflects the
estimated amounts that the Company would receive or pay (excluding accrued
interest) to terminate the contracts on the reporting date, thereby taking into
account the current unrealized gains or losses of open contracts. Dealer
quotations are available for the Company's interest rate hedge agreements.
 
     Management believes that the sellers of the interest rate hedge agreements
will be able to meet their obligations under the agreements. In addition, some
of the interest rate
 
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