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EXHIBIT 99.4
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
MARKET RISK
The Company is exposed to various market risks, including changes in
foreign currency exchange rates and interest rates. Market risk is the potential
loss arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. The Company does not enter into derivative
financial instruments for trading or speculative purposes. The Company has
entered into derivative financial instruments to hedge exposure to movements in
the British pound/U.S. dollar exchange rate, and interest rates related to
certain of its floating interest rate debt. The counterparties are major
financial institutions.
FOREIGN EXCHANGE CONTRACTS
To the extent that the Company obtains financing in U.S. dollars and incurs
construction and operating costs in various other currencies, it will encounter
currency exchange rate risks. At December 31, 2000, the Company had
approximately $312.4 million in cash and cash equivalents denominated in foreign
currencies to reduce this risk. In addition, the Company's pound sterling and
Euro denominated Notes also reduce this risk. Furthermore, the Company's
revenues are generated in foreign currencies while its interest and principal
obligations with respect to most of the Company's existing indebtedness are
payable in U.S. dollars.
In October 2000, the Company entered into cross currency swaps to hedge
exposure to movements in the British pound to U.S. dollar exchange rate. The
notional amount of the cross currency swaps was L135.0 million at December 31,
2000.
INTEREST RATES
The fair market value of long-term fixed interest rate debt and the amount
of future interest payments on floating interest rate debt are subject to
interest rate risk. Generally, the fair market value of fixed interest rate debt
will increase as interest rates fall and decrease as interest rates rise.
In September 2000, the Company entered into zero cost collars to hedge
exposure to the floating interest rate indebtedness incurred under the Cablecom
term loan facility and revolving loan facility. The notional amount of the zero
cost collars was CHF 1,200.0 million at December 31, 2000.
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The following table provides information about the Company's long-term
fixed and floating interest rate debt and derivative financial instruments that
are sensitive to changes in interest rates and foreign currency exchange rates.
YEAR ENDING YEAR ENDING YEAR ENDING YEAR ENDING YEAR ENDING
12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 THEREAFTER
----------- ----------- ----------- ----------- ----------- -----------
Long-term Debt Including Current Portion
U.S. dollars
Fixed Rate -- -- -- $285.1 $808.8 $7,172.1
Average Interest Rate 13.25% 12.09% 9.74%
U.K. pound
Fixed Rate -- -- -- -- -- L890.0
Average Interest Rate 10.09%
Average Forward Exchange Rate 1.5097
Euro
Fixed Rate -- -- -- -- -- E810.0
Average Interest Rate 10.10%
Average Forward Exchange Rate .9717
U.K. pound
Floating Rate L4.8 L4.8 L4.8 L90.0 L2,187.2 --
Average Interest Rate LIBOR LIBOR LIBOR LIBOR LIBOR
Plus 2.04% plus 2.04% plus 2.04% plus 2.25% plus 2.25%
Average Forward Exchange Rate 1.4988 1.4995 1.5001 1.5009 1.5014
CHF
Floating Rate -- -- -- CHF128.8 CHF225.4 CHF2,865.8
Average Interest Rate Swiss LIBOR Swiss LIBOR Swiss LIBOR
plus 2.5% plus 2.5% plus 2.5%
Average Forward Exchange Rate .6509 .6588 .6961
Interest Rate Derivative Financial Instruments Related to Long-term Debt
Interest Rate Swaps
Notional CHF Amount CHF1,200.0 CHF1,200.0 CHF1,200.0 CHF1,200.0 -- --
Average Floor Strike Rate 3.27% 3.27% 3.27% 3.27%
Average Cap Strike Rate 5.15% 5.15% 5.15% 5.15%
Currency Swap Agreements Related to Long-term Debt
Receipt of U.S. Dollars
Notional U.K. Pound Amount L135.0 -- -- -- -- --
Average Contract Rate 1.4765
FAIR VALUE
TOTAL 12/31/00
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Long-term Debt Including Current Portio
U.S. dollars
Fixed Rate $8,266.0 $6,087.1
Average Interest Rate
U.K. pound
Fixed Rate L890.0 L516.7
Average Interest Rate
Average Forward Exchange Rate
Euro
Fixed Rate E810.0 E614.4
Average Interest Rate
Average Forward Exchange Rate
U.K. pound
Floating Rate L2,291.6 L2,291.6
Average Interest Rate
Average Forward Exchange Rate
CHF
Floating Rate CHF3,220.0 CHF3,220.0
Average Interest Rate
Average Forward Exchange Rate
Interest Rate Derivative Financial Inst
Interest Rate Swaps
Notional CHF Amount CHF1,200.0 CHF(11.0)
Average Floor Strike Rate
Average Cap Strike Rate
Currency Swap Agreements Related to Lon
Receipt of U.S. Dollars
Notional U.K. Pound Amount L135.0 L(1.5)
Average Contract Rate
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