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S-1/A
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1/A on 11/04/1999
Entire Document
 
<PAGE>   670
                          FALCON COMMUNICATIONS, L.P.
                   (SUCCESSOR TO FALCON HOLDING GROUP, L.P.)
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
covenants under the New Credit Facility, which is described in (d) above. At
December 31, 1998, management believes that the Partnership was in compliance
with such covenants.
 
  (f) Other
 
     Other notes payable as of December 31, 1997 consisted of $7.5 million owed
by Enstar Finance Company, LLC ("EFC"). FHGLP's interest in EFC was not
contributed to FCLP on September 30, 1998. Consequently, EFC's obligations are
excluded from those of the Partnership as of December 31, 1998.
 
  (g) Interest Rate Hedging Agreements
 
     The Partnership utilizes interest rate hedging agreements to establish
long-term fixed interest rates on a portion of its variable-rate debt. The New
Credit Facility requires that interest be tied to the ratio of consolidated
total debt to consolidated annualized cash flow (in each case, as defined
therein), and further requires that the Partnership maintain hedging
arrangements with respect to at least 50% of the outstanding borrowings
thereunder plus any additional borrowings of the Partnership, including the
Debentures, for a two year period. As of December 31, 1998, borrowings under the
New Credit Facility bore interest at an average rate of 7.55% (including the
effect of interest rate hedging agreements). The Partnership has entered into
fixed interest rate hedging agreements with an aggregate notional amount at
December 31, 1998 of $1.485 billion, including contracts of $160 million assumed
from Falcon Video in connection with the TCI Transaction. Agreements in effect
at December 31, 1998 totaled $910 million, with the remaining $575 million to
become effective as certain of the existing contracts mature during 1999 through
October of 2004. These agreements expire at various times through October, 2006.
In addition to these agreements, the Partnership has one interest rate swap
contract with a notional amount of $25 million under which it pays variable
LIBOR rates and receives fixed rate payments.
 
     The hedging agreements resulted in additional interest expense of $1
million, $350,000 and $1.2 million for the years ended December 31, 1996, 1997
and 1998, respectively. The Partnership does not believe that it has any
significant risk of exposure to non-performance by any of its counterparties.
 
  (h) Debt Maturities
 
     The Partnership's notes payable outstanding at December 31, 1998 mature as
follows:
 

<TABLE>
<CAPTION>
                                                                        OTHER
                       8.375% SENIOR    9.285% SENIOR    NOTES TO    SUBORDINATED
        YEAR            DEBENTURES       DEBENTURES       BANKS         NOTES        OTHER      TOTAL
        ----           -------------    -------------    --------    ------------    -----    ----------
                                                    (DOLLARS IN THOUSANDS)
<S>                    <C>              <C>              <C>         <C>             <C>      <C>
  1999...............    $     --         $     --       $  5,000      $    --       $371     $    5,371
  2000...............          --               --          5,000           --         --          5,000
  2001...............          --               --          5,000       15,000         --         20,000
  2002...............          --               --          5,000           --         --          5,000
  2003...............          --               --          5,000           --         --          5,000
Thereafter...........     375,000          435,250        901,000           --         --      1,711,250
</TABLE>

 
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