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SEC Filings

S-4
CHARTER COMMUNICATIONS HOLDINGS CAPITAL CORP filed this Form S-4 on 04/30/1999
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million in 1997. This increase was primarily due to the acquisitions acquired in
1996 and 1997.
 
     DEPRECIATION AND AMORTIZATION.  Depreciation and amortization increased by
$44.4 million, or 28.8%, from $154.3 million in 1996 to $198.7 in 1997. There
was a significant increase in amortization resulting from the acquisitions of
several cable systems in 1996 and 1997. In connection, with such acquisitions,
the acquired franchises were recorded at fair market value, which resulted in a
stepped-up basis upon acquisition. The increase is also attributed to the
continued increases in capital expenditures.
 
     MANAGEMENT FEES/CORPORATE EXPENSE CHARGES.  Management fees/corporate
expense charges increased by $5.7 million, or 37.5%, from $15.1 million in 1996
to $20.8 million in fiscal 1997. This increase is primarily the result of an
increase in revenues from 1996 and 1997 and additional costs incurred by CCI to
provide the management services.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The cable television business has substantial ongoing capital requirements
for the construction, expansion and maintenance of plant. Expenditures are
primarily made to rebuild and upgrade our existing plants. We also spend capital
on plant extensions, new services, converters and system maintenance.
Historically, we have been able to meet our capital requirements through our
cash flows from operations, equity contributions, debt financings and available
borrowings under our existing credit facilities.
 
     Over the next three years, we plan to spend $1.8 billion for capital
expenditures, approximately $900 million of which will be used to upgrade our
systems to bandwidth capacity of 550 MHz or greater so that we may offer
advanced cable service and the remaining $900 million will be used for plant
extensions, new services, converters and system maintenance. Pro forma for the
Pending Acquisitions, over the next three years, we plan to spend an additional
$700 million for capital expenditures, approximately $300 million of which will
be used to upgrade our systems to bandwidth capacity of 550 MHz or greater so
that we may offer advanced cable service and the remaining $400 million will be
used for plant extensions, new services, converters and system maintenance. We
expect to finance the anticipated capital expenditures with distributions
generated from operations and additional borrowings under the Credit Facilities.
See "Description of the Credit Facilities."
 
     Subject to the availability of sufficient financing, we intend to continue
to pursue our business strategy, which includes selective strategic
acquisitions. We anticipate that future acquisitions could be financed through
borrowings, either presently available under the current facilities or as a
result of amending the facilities to allow for expanded borrowing capacity or
additional equity contributions or both. Although to date we have been able to
obtain financing on satisfactory terms, there can be no assurance that this will
continue to be the case in the future.
 
     We manage risks arising from fluctuation in interest rates through the use
of interest rate swaps and cap agreements required under the terms of our credit
facilities. Interest rate swaps and cap agreements are accounted for by us as a
hedge of the related debt obligations. As a result, the net settlement amount of
any such swap or cap agreement is recorded as an adjustment to interest expense
in the period incurred. The effects of our hedging practices on weighted average
borrowing rate and on reported interest were not material for the years December
31, 1996 and December 31, 1997 and for the period from January 1, 1998 to
December 23, 1998.
 
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