What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2021-01-29 compared with 2020-01-31 · 189 added, 136 removed, 361 unchanged (47% of the section changed)

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Financial Statements and Supplementary Data.”

We are the second largest cable operator in the United States and a leading broadband communications services company providing video, Internet and voice services to approximately 29.2 million residential and small and medium business customers at December 31, 2019 .

We also offer mobile service to residential customers and recently launched mobile service to small and medium business customers.

In addition, we sell video and online advertising inventory to local, regional and national advertising customers and tailored communications and managed solutions to larger enterprise customers.

We also own and operate regional sports networks and local sports, news and community channels.

We are a leading broadband connectivity company and cable operator serving more than 31 million customers in 41 states through our Spectrum brand.

Over an advanced high-capacity, two-way telecommunications network, we offer a full range of state-of-the-art residential and business services including Spectrum Internet, TV, Mobile and Voice.

For small and medium-sized companies, Spectrum Business delivers the same suite of broadband products and services coupled with special features and applications to enhance productivity, while for larger businesses and government entities, Spectrum Enterprise provides highly customized, fiber-based solutions.

Spectrum Reach delivers tailored advertising and production for the modern media landscape.

We also distribute award-winning news coverage, sports and high-quality original programming to our customers through Spectrum Networks and Spectrum Originals.

Business — Products and Services” for further description of these services, including customer statistics for different services.

In 2019, with the integration of TWC and Bright House substantially behind us, we are realizing the benefits of operating as one company, with a unified product, marketing and service infrastructure.

We remain focused on driving customer relationship growth

by deploying superior products and services packaged with attractive pricing.

We expect our insourced, high quality workforce will continue to drive an improved customer experience which will result in lower customer churn, longer customer lifetimes and, combined with our continued ramping of our self-installation program, improved productivity with fewer customer calls and truck rolls per customer relationship.

With approximately 85% of our residential customer base now in SPP packages, we expect additional benefits from lower legacy package migration activity, combined with SPP customers rolling off introductory pricing and price increases.

The COVID-19 pandemic and measures taken to prevent its spread impacted our business and presented significant challenges throughout 2020.

To reduce the transmission of COVID-19, federal, state and local governments implemented a wide range of restrictions on business and individual activities, including closures or limitations on the operations of businesses along with restrictions on large gatherings, travel and other actions to promote or enforce physical distancing.

Despite these restrictions, we have continued to deliver our services uninterrupted across our footprint.

The pandemic has significantly impacted how our customers use our products and services, how they interact with us, and how our employees work and provide services to our customers.

The impacts of COVID-19 have significantly impacted our results of operations during the year ended December 31, 2020 and we expect that there will continue to be impacts through 2021.

• Beginning in March 2020, we offered our customers a set of programs, including our Remote Education Offer (“REO”) pursuant to which new customers with students or educators in the household were eligible to receive our Internet service for free for 60 days;

and the Keep Americans Connected (“KAC”) pledge which paused collection efforts and related disconnects for residential and small and medium business (“SMB”) customers with COVID-19 related payment challenges through June 30, 2020.

These programs resulted in higher customer net additions in 2020 than prior year with retention rates for these customers similar to our average customer base.

In an effort to assist COVID-19 impacted customers with overdue balances at the end of the KAC and certain state-mandated programs, we waived approximately $102 million of receivables which was recorded as a reduction of revenue.

• The interruption of professional sports seasons resulted in $163 million lower programming expenses as a result of estimated sports rebates from sports programming networks as a result of canceled sporting events and a $217 million reduction in regulatory, connectivity and produced content costs as a result of a shortened 2020 baseball season and a delay to the start of the 2020-2021 basketball season which will push some expense that otherwise would have been recognized in 2020 to 2021 and beyond.

In the third quarter of 2020, we recognized $218 million of estimated credits that we intend to provide on our customers' invoices related to the rebates to be received from sports programming networks.

The difference between the estimated credits and the estimated rebates is due to an expected reduction in sports rights content costs which is being amortized over the life of the contract.

• Economic conditions and temporary closures or reductions in operations of businesses resulted in reduced advertising spend and lower revenues from seasonal plans offered to SMB and Enterprise hospitality customers that have requested a reduced level of service due to temporary business closure or because these customers have reduced their service offering to their own customers ("Seasonal Plan").

Despite the economic conditions, we saw improved collections of residential customer receivables which we believe were enhanced by government stimulus benefits.

We expect bad debt expense and churn in 2021 to return to pre-pandemic levels.

• We increased wages for all hourly field operations and customer service call center employees and gave our employees additional paid sick time for COVID-19-related illnesses and a flex time program to address other COVID-19 issues.

We also committed to raise our minimum starting wage for hourly employees to $20 an hour over the next 2 years.

• Through accelerated network capacity increases we have been able to respond to the significant increase in data demands on our network to enable social distancing through telecommuting and e-learning with usage by our Internet-only customers averaging over 600 gigabytes per month, up nearly 20% from the end of 2019.

• WiFi access points were opened across our footprint for public use.

• Requests from government, healthcare and educational institutions for new fiber connections, bandwidth upgrades and new services were prioritized.

• We have invested significantly in our self-service infrastructure, and customers have accelerated the adoption of our digital self-service capabilities and self-installation program with nearly 80% of installations using the program.

• A significant portion of our workforce was temporarily moved to remote work arrangements.

• We enhanced safety protocols for field and other employees working outside their home.

• We offered public access to our Spectrum News websites to ensure people have access to high-quality local news and information and donated significant airtime to run public service announcements to our entire footprint.

Our ability to successfully operate our business and deliver services during the COVID-19 pandemic is a result of investments we have made in our network, our employees and our systems.

Our operating and investment strategy has allowed us to sustain and accelerate our customer and financial growth during the pandemic.

We cannot predict the ultimate impact of COVID-19 on our business, including the depth and duration of the economic impact to household formation and growth, our residential and business customers’ ability to pay for our products and services including the impact of extended unemployment benefits and other stimulus packages and the long-term impact on our business, including from consumer behavior, after the pandemic is over.

Some of the COVID-19 programs discussed above may result in incremental churn and bad debt in 2021 and may have accelerated demand into 2020.

In addition, there is uncertainty regarding the impact of government emergency declarations, the ability of our suppliers and vendors to provide products and services to us, the pace of new housing construction, changes in business spend in our local and national ad sales

business, the effects to our employees’ health and safety and resulting reorientation of our work activities, and the risk of limitations on the deployment and maintenance of our services (including by limiting our customer support and on-site service repairs and installations).

Although the ultimate impact of the COVID-19 pandemic cannot be predicted, we remain focused on driving customer relationship growth by deploying superior products and services packaged with attractive pricing.

Further, we expect to continue to drive customer relationship growth through sales of bundled services and improving customer retention despite the expectation for continued losses of video and wireline voice customers.

With the completion of our all-digital conversion, roll-out of DOCSIS 3.1 technology across our footprint, and the integration of TWC and Bright House substantially complete, we have experienced a meaningful reduction in cable capital expenditures as a percent of revenue in 2019 and expect continued lower cable capital intensity in 2020.

We launched our mobile product, Spectrum Mobile, in the second half of 2018 under our MVNO reseller agreement with Verizon.

Our Spectrum Mobile service is offered to customers subscribing to our Internet service and runs on Verizon's mobile network combined with Spectrum WiFi.

In the second quarter of 2019, we expanded our Spectrum Mobile bring-your-own-device program across all sales channels to include a broader set of devices which we believe lowers the cost for consumers of switching mobile carriers, and reduces the short-term working capital impact of selling new mobile devices on installment plans.

We expect these developments, along with the launch of 5G service offerings in 2020, to contribute to the growth of our mobile business.

In 2020, we launched 5G service offerings and refreshed our device offerings with new 5G models which we expect will contribute to continued growth of our mobile business.

Our Spectrum Mobile BYOD program lowers the cost for consumers of switching mobile carriers, and reduces the short-term working capital impact of selling new mobile devices on installment plans.

We also continue to explore ways to drive even more mobile traffic to our network.

We plan to use our WiFi network in conjunction with additional unlicensed, and potentially licensed, spectrum to improve network performance and expand capacity to offer consumers a superior mobile service at a lower total cost to us. Further, we have experimental wireless licenses from the FCC that we are utilizing to test next generation mobile services in several service areas around the country.

In October 2020, we purchased approximately $464 million of CBRS PALs and intend to use the licenses along with unlicensed CBRS spectrum to build our own 5G mobile network which we plan to use in combination with our MVNO and WiFi network to enhance the customer’s experience and improve our cost structure.

We believe Spectrum-branded mobile services will drive higher sales of our core products, create longer customer lives and increase profitability and cash flow over time.

As a result of growth costs associated with our new mobile product line, we cannot be certain that we will be able to grow revenues or maintain our margins at recent historical rates.

During the years ended December 31, 2019 and 2018 , our mobile product line increased revenues by $726 million and $106 million , respectively, reduced Adjusted EBITDA by approximately $520 million and $240 million , respectively, and reduced free cash flow by approximately $1.2 billion and $594 million , respectively.

As we continue to grow our mobile service and scale the business, we expect continued negative impacts to Adjusted EBITDA, as well as negative working capital impacts from the timing of device-related cash flows when we sell the handset or tablet to customers pursuant to equipment installment plans.

The Company realized revenue, Adjusted EBITDA and income from operations during the periods presented as follows (in millions;

During the years ended December 31, 2020 and 2019, our mobile product line increased revenues by $1.4 billion and $726 million, respectively, reduced Adjusted EBITDA by approximately $401 million and $520 million, respectively, and reduced free cash flow by approximately $1.1 billion and $1.2 billion, respectively.

As we continue to grow our mobile services, we expect mobile Adjusted EBITDA will continue to be negative throughout 2021 primarily as a result of growth-related sales and marketing and other customer acquisition costs.

We also expect to continue to see negative free cash flow from the timing of device-related cash flows when we sell the handset or tablet to customers pursuant to equipment installment plans and capital expenditures related to retail store build-outs.

We realized revenue, Adjusted EBITDA and income from operations during the periods presented as follows (in millions;

all percentages are calculated using whole numbers.

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Years ended December 31,

2020 2019 2020 vs.

Revenues $ 48,097 $ 45,764 5.1 %

Adjusted EBITDA $ 18,518 $ 16,855 9.9 %

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See “—Use of Adjusted EBITDA and Free Cash Flow” for further information on Adjusted EBITDA and free cash flow.

Growth in total revenue was primarily due to growth in our residential Internet, mobile and commercial business customers.

Adjusted EBITDA and income from operations growth was impacted by growth in revenue and increases in operating costs and expenses, primarily mobile, programming and regulatory, connectivity and produced content.

Growth in total revenue was primarily due to growth in our residential Internet and mobile customers.

Adjusted EBITDA and income from operations growth was impacted by growth in revenue and increases in operating costs and expenses, primarily mobile, costs to service customers and programming offset by lower sports rights content costs as a result of a shortened 2020 baseball season and a delayed start to the 2020-2021 basketball season.

Income from operations was also affected by a decrease in depreciation and amortization expense.

Approximately 91% of our revenues for each of the years ended December 31, 2019 and 2018 are attributable to monthly subscription fees charged to customers for our video, Internet, voice, mobile and commercial services.

Approximately 91% of our revenues for each of the years ended December 31, 2020 and 2019 are attributable to monthly subscription fees charged to customers for our Internet, video, voice, mobile and commercial services as well as regional sports and news channels.

Generally, these customer subscriptions may be discontinued by the customer at any time subject to a fee for certain commercial customers.

The remaining 9% of revenue is derived primarily from advertising revenues, franchise and other regulatory fee revenues (which are collected

by us but then paid to local authorities), VOD and pay-per-view programming, installation, processing fees or reconnection fees charged to customers to commence or reinstate service, revenue from regional sports and news channels and commissions related to the sale of merchandise by home shopping services.

The remaining 9% of revenue is derived primarily from advertising revenues, franchise and other regulatory fee revenues (which are collected by us but then paid to local authorities), sales of mobile and video devices,

processing fees or reconnection fees charged to customers to commence or reinstate service, installation, VOD and pay-per-view programming, and commissions related to the sale of merchandise by home shopping services.

Critical Accounting Policies and Estimates

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• Valuation and impairment of franchises and goodwill

• Income taxes

• Defined benefit pension plans

Capitalization of labor and overhead costs

Costs associated with network construction or upgrades, placement of the customer drop to the dwelling and the placement of outlets within a dwelling along with the costs associated with the deployment of new customer premise equipment necessary to provide video, Internet or voice services, are capitalized.

Costs associated with network construction or upgrades, placement of the customer drop to the dwelling and the placement of outlets within a dwelling along with the costs associated with the deployment of new customer premise equipment necessary to provide Internet, video or voice services, are capitalized.

Costs capitalized include materials, direct labor and certain indirect costs.

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We make judgments regarding the installation and construction activities to be capitalized.

We capitalized direct labor and overhead of $1.6 billion and $1.8 billion, respectively, for the years ended December 31, 2019 and 2018 .

We capitalized direct labor and overhead of $1.6 billion for each of the years ended December 31, 2020 and 2019.

We capitalize direct labor and overhead using standards developed from actual costs and applicable operational data.

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• dispatching a “truck roll” to the customer’s dwelling or business for service connection or placement of new equipment;

• costs to package and ship new equipment to a customer's home for self-installation;

• verification of serviceability to the customer’s dwelling or business (i.e., determining whether the customer’s dwelling is capable of receiving service by our cable network);

customer premise activities performed by in-house field technicians and third-party contractors in connection with the installation, replacement and betterment of equipment and materials to enable video, Internet or voice services;

• customer premise activities performed by in-house field technicians and third-party contractors in connection with the installation, replacement and betterment of equipment and materials to enable Internet, video or voice services;

• verifying the integrity of the customer’s network connection by initiating test signals downstream from the headend to the customer premise equipment, as well as testing signal levels at the utility pole or pedestal.

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The net carrying value of franchises as of both December 31, 2020 and 2019 was approximately $67.3 billion (representing 47% and 45% of total assets, respectively).

Franchise assets are aggregated into essentially inseparable units of accounting to conduct valuations.

The units of accounting generally represent geographical clustering of our cable systems into groups.

For more information and a complete discussion of how we value and test franchise assets for impairment, see Note 5 to the accompanying consolidated financial statements contained in “Part II.

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We performed a qualitative assessment in 2020.

Our assessment included consideration of a fair value appraisal performed for tax purposes in the beginning of 2019 as of a December 31, 2018 valuation date (the "Appraisal") along with a multitude of factors that affect the fair value of our franchise assets.

Our assessment included consideration of a multitude of factors that affect the fair value of our franchise assets.

Examples of such factors include environmental and competitive changes within our operating footprint, actual and projected operating performance, the consistency of our operating margins, equity and debt market trends, including changes in our market capitalization, and changes in our regulatory and political landscape, among other factors.

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Financial Statements and Supplementary Data.” We perform our impairment assessment of goodwill annually as of November 30.

As with our franchise impairment testing, we elected to perform a qualitative assessment of goodwill in 2019 which included the Appraisal and other factors described above.

Based on the Appraisal, we determined that the fair value of the reporting unit significantly exceeded the net asset carrying value of the reporting unit.

As with our franchise impairment testing, we elected to perform a qualitative assessment of goodwill in 2020.

Given the completion of the assessment and absence of significant adverse changes in factors impacting our fair value estimates, we concluded that it is more likely than not that our goodwill is not impaired.

As of December 31, 2020, Charter had approximately $5.3 billion of federal tax net operating loss carryforwards resulting in a gross deferred tax asset of approximately $1.1 billion.

These losses resulted from the operations of Charter Holdco and its subsidiaries and from loss carryforwards received as a result of the merger with TWC in 2016.

These losses resulted from the operations of Charter Holdco and its subsidiaries and from loss carryforwards received as a result of the merger with TWC.

Federal tax net operating loss carryforwards expire in the years 2022 through 2035.

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After December 31, 2020, $676 million of Charter's federal tax loss carryforwards are subject to Section 382 and other restrictions.

Pursuant to these restrictions, Charter estimates that approximately $226 million annually over each of the next four years of federal tax loss carryforwards, should become unrestricted and available for Charter’s use.

Pursuant to these restrictions, Charter estimates that approximately $226 million annually over each of the next three years of federal tax loss carryforwards, should become unrestricted and available for Charter’s use.

Charter’s state tax loss carryforwards are subject to similar but varying restrictions.

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A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to be recognized in our financial statements.

The tax position is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized when the position is ultimately resolved.

There is considerable judgment involved in determining whether positions taken on the tax return are “more

likely than not” of being sustained.

The tax position is measured as the largest amount of benefit that has a greater than 50% likelihood of being

realized when the position is ultimately resolved.

There is considerable judgment involved in determining whether positions taken on the tax return are “more likely than not” of being sustained.

We adjust our uncertain tax reserve estimates periodically because of ongoing examinations by, and settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations.

No tax years for Charter are currently under examination by the IRS for income tax purposes.

No tax years for Charter are currently under examination by the Internal Revenue Service ("IRS") for income tax purposes.

Charter's 2016 through 2020 tax years remain open for examination and assessment.

Charter’s short period return dated May 17, 2016 (prior to the merger with TWC and acquisition of Bright House) remain subject to examination and assessment.

Years prior to 2016 remain open solely for purposes of examination of Charter’s loss and credit carryforwards.

Charter’s short period return dated May 17, 2016 (prior to the merger with TWC and acquisition of Bright House) and prior years remain open solely for purposes of examination of Charter’s loss and credit carryforwards.

The IRS is currently examining Charter Holdings’ income tax return for 2016.

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The IRS has examined Time Warner’s 2008 through 2010 income tax returns and the results are under appeal.

We do not anticipate that these examinations will have a material impact on our consolidated financial position or results of operations.

In addition, we are also subject to ongoing examinations of our tax returns by state and local tax authorities for various periods.

The Company does not anticipate that these examinations will have a material impact on the Company’s consolidated financial position or results of operations.

In addition, the Company is also subject to ongoing examinations of the Company’s tax returns by state and local tax authorities for various periods.

Activity related to these state and local examinations did not have a material impact on our consolidated financial position or results of operations during the year ended December 31, 2020, nor do we anticipate a material impact in the future.

Defined benefit pension plans

We sponsor three qualified defined benefit pension plans and one nonqualified defined benefit pension plan that provide pension benefits to a majority of employees who were employed by TWC before the merger with TWC.

We sponsor qualified and unqualified defined benefit pension plans that provide pension benefits to a majority of employees who were employed by TWC before the merger with TWC.

As of December 31, 2020, the accumulated benefit obligation and fair value of plan assets was $3.7 billion and $3.5 billion, respectively, and the net underfunded liability was recorded as a $1 million noncurrent asset, $5 million current liability and $222 million long-term liability.

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We use a December 31 measurement date for our pension plans.

We recognized net periodic pension costs of $69 million and net periodic pension benefits of $192 million in 2019 and 2018 , respectively.

We recognized net periodic pension costs of $66 million and $69 million in 2020 and 2019, respectively.

Net periodic pension benefit or expense is determined using certain assumptions, including the expected long-term rate of return on plan assets, discount rate and mortality assumptions.

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Year Ended December 31,

Revenues $ 48,097 $ 45,764

Costs and Expenses:

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Other operating expenses, net 58 103

39,692 39,253

Income from operations 8,405 6,511

Other Expenses:

Other Income (Expenses):

Interest expense, net (3,848) (3,797)

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Loss on financial instruments, net

Other pension benefits (costs), net

Other pension costs, net (66) (69)

Other expense, net (31) (135)

(4,103) (4,080)

Income before income taxes 4,302 2,431

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EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:

Basic $ 15.85 $ 7.60

Diluted $ 15.40 $ 7.45

Weighted average common shares outstanding, basic 203,316,483 219,506,735

Weighted average common shares outstanding, diluted 209,273,247 223,786,380

Total revenues grew $2.1 billion or 4.9% during the year ended December 31, 2019 as compared to 2018 primarily due to increases in the number of residential Internet and commercial business customers, price adjustments as well as the launch of our mobile service in the second half of 2018 offset by a decrease in video customers.

Total revenues grew $2.3 billion or 5.1% during the year ended December 31, 2020 as compared to 2019 primarily due to increases in the number of residential Internet and mobile customers, price adjustments and higher political advertising sales offset by lower local advertising revenues as a result of COVID-19, $218 million of estimated customer credits to be issued to our video customers due to canceled sporting events and $102 million of waived receivables related to the KAC and certain state-mandated programs.

Revenues by service offering were as follows (dollars in millions;

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Years ended December 31,

2020 2019 % Growth

Internet $ 18,521 $ 16,667 11.1 %

Video 17,432 17,607 (1.0) %

Voice 1,806 1,920 (5.9) %

Residential revenue 37,759 36,194 4.3 %

Small and medium business 3,964 3,868 2.5 %

Enterprise 2,468 2,556 (3.5) %

Commercial revenue 6,432 6,424 0.1 %

Advertising sales 1,699 1,568 8.3 %

Video revenues consist primarily of revenues from basic and digital video services provided to our residential customers, as well as franchise fees, equipment service fees and video installation revenue.

The increase in video revenues was attributable to the following (dollars in millions):

2019 compared to 2018

Increase related to rate changes

Decrease in average residential video customers

Decrease in VOD and pay-per-view

The increase related to rate changes was primarily due to price adjustments including annual increases and promotional roll-off.

Residential video customers decreased by 484,000 in 2019 compared to 2018 .

Mobile 1,364 726 87.9 %

Other 843 852 (0.9) %

$ 48,097 $ 45,764 5.1 %

The increase in Internet revenues from our residential customers was attributable to the following (dollars in millions):

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Increase in average residential Internet customers $ 1,267

Increase related to rate changes

Increase related to rate, product mix and allocation changes 587

Residential Internet customers grew by 2,115,000 in 2020 compared to 2019.

The increase related to rate changes was primarily due to price adjustments including promotional roll-off.

The increase related to rate, product mix and allocation changes was primarily due to price adjustments including promotional roll-off offset by a $34 million reduction related to the KAC and certain state-mandated program credits.

The decrease in video revenues was attributable to the following (dollars in millions):

2020 compared to 2019

Estimated customer credits due to COVID-19 $ (277)

Decrease in average residential video customers (229)

Decrease in video on demand and pay-per-view (28)

Increase related to rate, product mix and allocation changes 359

We recorded $218 million of estimated customer credits related to canceled sporting events during the year ended December 31, 2020 and $59 million of customer credits related to KAC and certain state-mandated programs.

The increase related to rate, product mix and allocation changes was primarily due to price adjustments including annual increases and promotional roll-off, partly offset by a higher mix of lower cost video packages within our video customer base.

Residential video customers increased by 19,000 in 2020 compared to 2019.

The decrease in voice revenues from our residential customers was attributable to the following (dollars in millions):

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Decrease in average residential voice customers $ (88)

Decrease related to rate changes

The decrease related to rate changes was primarily due to value-based pricing.

Decrease related to rate, product mix and allocation changes (26)

Residential wireline voice customers decreased by 228,000 in 2020 compared to 2019.

The increase in small and medium business commercial revenues was attributable to the following (dollars in millions):

The decrease related to rate, product mix and allocation changes was primarily due to value-based pricing and a $4 million reduction related to the KAC and certain state-mandated program credits

The increase in SMB commercial revenues was attributable to the following (dollars in millions):

2020 compared to 2019

Increase in small and medium business customers

Decrease related to rate changes

Small and medium business PSUs increased by 237,000 in 2019 compared to 2018 .

The decrease related to rate changes was primarily due to value-based pricing related to SPP, net of promotional roll-off and price adjustments.

Enterprise revenues increased $28 million during the year ended December 31, 2019 as compared to the corresponding period in 2018 primarily due to growth in customers offset by the sale of non-strategic assets.

Increase in SMB customers $ 199

Decrease related to rate and product mix changes (103)

SMB customers increased by 93,000 in 2020 compared to 2019.

The decrease related to rate and product mix changes during the year ended December 31, 2020 as compared to 2019 included reductions of $36 million related to COVID-19 programs.

Enterprise revenues decreased $88 million during the year ended December 31, 2020 as compared to the corresponding period in 2019 primarily due to the sale of non-strategic assets in the third quarter of 2019 and a reduction of $18 million related to the COVID-19 Enterprise hospitality seasonal program.

Enterprise PSUs increased by 7,000 in 2020 compared to 2019.

Advertising sales revenues consist primarily of revenues from commercial advertising customers, programmers and other vendors, as well as local cable and advertising on regional sports and news channels.

Advertising sales revenues decreased $217 million during the year ended December 31, 2019 as compared to the corresponding period in 2018 primarily due to a decrease in political revenue.

During the year ended December 31, 2019, mobile revenues included approximately $488 million of device revenues and approximately $238 million of service revenues.

During the year ended December 31, 2018, mobile revenues included approximately $97 million of device revenues and approximately $9 million of service revenues.

As of December 31, 2019 , we had 1,082,000 mobile lines compared to 134,000 mobile as of December 31, 2108.

Other revenues consist of revenue from regional sports and news channels (excluding intercompany charges or advertising sales on those channels), home shopping, late payment fees, wire maintenance fees and other miscellaneous revenues.

The decrease during the year ended December 31, 2019 as compared to the corresponding period in 2018 was primarily due to a decrease in late payment fees and home shopping revenue offset by the sale of video devices.

Advertising sales revenues increased $131 million during the year ended December 31, 2020 as compared to the corresponding period in 2019 primarily due to an increase in political revenue, partially offset by a decrease in local advertising revenues due to COVID-19.

During the years ended December 31, 2020 and 2019, mobile revenues included approximately $658 million and $488 million of device revenues, respectively, and approximately $706 million and $238 million of service revenues, respectively.

The increases in revenues are a result of increases in the number of lines from 1,082,000 as of December 31, 2019 to 2,375,000 as of December 31, 2020.

Other revenues consist of revenue from regional sports and news channels (excluding intercompany charges or advertising sales on those channels), home shopping, late payment fees, video device sales, wire maintenance fees and other miscellaneous revenues.

The decrease during the year ended December 31, 2020 as compared to the corresponding period in 2019 was primarily due to a decrease in late payment fees and home security revenue offset by an increase in the sale of video devices and regional sports and news revenue.

Operating costs and expenses .

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2020 compared to 2019

Programming $ 111

Regulatory, connectivity and produced content (183)

Costs to service customers 195

Marketing (13)

Programming costs were approximately $11.4 billion and $11.3 billion, representing 38% and 39% of operating costs and expenses for the years ended December 31, 2020 and 2019, respectively.

Programming costs consist primarily of costs paid to programmers for basic, digital, premium, VOD, and pay-per-view programming.

The increase in programming costs is primarily a result of contractual rate adjustments, including renewals and increases in amounts paid for retransmission consents partly offset by lower video customers and pay-per-view.

We expect programming rates will continue to increase due to a variety of factors, including annual increases imposed by programmers with additional selling power as a result of media consolidation, increased demands by owners of broadcast stations for payment for retransmission consent or linking carriage of other services to retransmission consent, and additional programming, particularly new services.

Programming costs consist primarily of costs paid to programmers for basic, digital, premium, video on demand, and pay-per-view programming.

Programming costs increased in 2020 as a result of contractual rate adjustments, including renewals and increases in amounts paid for retransmission consent as well as an increase in video customers.

The increase was offset by $163 million of estimated rebates from sports programming networks as a result of canceled sporting events due to COVID-19 and further benefited from a higher mix of lower cost video packages within our video customer base.

We expect programming rates per customer will continue to increase due to a variety of factors, including annual increases imposed by programmers with additional selling power as a result of media and broadcast station groups consolidation, increased demands by owners of broadcast stations for payment for retransmission consent or linking carriage of other services to retransmission consent, and additional programming, particularly new services.

We have been unable to fully pass these increases on to our customers and do not expect to be able to do so in the future without a potential loss of customers.

Regulatory, connectivity and produced content increased $156 million during the year ended December 31, 2019 compared to the corresponding period in 2018 primarily due to higher costs of video devices sold to customers, regulatory pass-through fees and original programming costs.

Costs to service customers decreased $50 million during the year ended December 31, 2019 compared to the corresponding period in 2018 primarily due to lower maintenance and labor costs driven by fewer customer calls and truck rolls with improved productivity and a higher number of self-installations.

Mobile costs of $1.2 billion and $346 million for the years ended December 31, 2019 and 2018 , respectively, were comprised of mobile device costs and mobile service and operating costs.

Regulatory, connectivity and produced content decreased $183 million during the year ended December 31, 2020 compared to the corresponding period in 2019 primarily due to deferred sports rights costs associated with the shortened 2020 baseball season and delayed start to the 2020-2021 basketball season as a result of COVID-19.

Costs to service customers increased $195 million during the year ended December 31, 2020 compared to the corresponding period in 2019 primarily due to higher labor costs resulting from COVID-19 related wage increases and flex time benefits along with 6.5% customer growth offset by a decrease in bad debt expense given the revenue write-off associated with the KAC program and better collections enhanced by government stimulus benefits.

Mobile costs of $1.8 billion and $1.2 billion for the years ended December 31, 2020 and 2019, respectively, were comprised of mobile device costs and mobile service, customer acquisition and operating costs.

The increase in other expense was attributable to the following (dollars in millions):

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Corporate costs $ 118

Property tax and insurance

Stock compensation expense 36

Sports and news

Advertising sales expense 10

Enterprise (63)

Property tax and insurance (48)

Corporate costs increased primarily due to higher personnel costs.

Enterprise costs decreased primarily due to the sale of non-strategic assets in the third quarter of 2019.

Depreciation and amortization.

Depreciation and amortization expense decreased by $392 million during the year ended December 31, 2019 compared to the corresponding period in 2018 primarily due to certain assets acquired from TWC and Bright House becoming fully depreciated offset by an increase in depreciation as a result of more recent capital expenditures.

Depreciation and amortization expense decreased by $222 million during the year ended December 31, 2020 compared to the corresponding period in 2019 primarily due to a decrease in depreciation and amortization as certain assets acquired in acquisitions become fully depreciated offset by an increase in depreciation as a result of more recent capital expenditures.

Other operating expenses, net.

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2020 compared to 2019

Merger and restructuring costs

Loss on sale of assets, net

(Gain) loss on sale of assets, net $ (74)

Special charges, net 29

The decrease in merger and restructuring costs is primarily due to lower employee retention and employee termination costs incurred during 2019 as compared to 2018.

The decrease in loss on sale of assets, net for the year ended December 31, 2019 as compared to the year ended December 31, 2018 is primarily due to a $42 million impairment of non-strategic assets incurred during 2019 compared to a $75 million impairment of non-strategic assets incurred during 2018.

The gain on sale of assets, net for the year ended December 31, 2020 as compared to a loss on sale of assets in 2019 is primarily due to a $42 million impairment of non-strategic assets incurred during 2019.

For more information, see Note 15 to the accompanying consolidated financial statements contained in “Part II.

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Loss on extinguishment of debt.

Loss on extinguishment of debt of $25 million for the year ended December 31, 2019 primarily represents losses recognized as a result of the repurchase of CCO Holdings notes and amendments to Charter Operating's credit facilities.

Loss on extinguishment of debt of $143 million for the year ended December 31, 2020 primarily represents losses recognized as a result of the redemption of CCO Holdings notes.

For more information, see Note 9 to the accompanying consolidated financial statements contained in “Part II.

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Financial Statements and Supplementary Data.”

Other pension benefits (costs), net.

Other pension benefits (costs), net increased by $261 million during the year ended December 31, 2019 compared to the corresponding period in 2018 primarily due to a remeasurement loss recorded in 2019 versus a remeasurement gain in 2018.

Other pension costs, net.

Other pension costs, net was consistent during the year ended December 31, 2020 compared to the corresponding period in 2019.

For more information, see Note 22 to the accompanying consolidated financial statements contained in “Part II.

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Other expense, net.

Other expense, net includes impairments on equity investments of approximately $121 million and $58 million for the years ended December 31, 2019 and 2018, respectively.

Other expense, net primarily represents equity losses on our equity investments.

Other expense, net also includes an impairment on equity investments of approximately $10 million and $121 million during the years ended December 31, 2020 and 2019, respectively.

For more information, see Note 6 to the accompanying consolidated financial statements contained in “Part II.

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We recognized income tax expense of $626 million and $439 million for the years ended December 31, 2020 and 2019, respectively .

Income tax expense increased during the year ended December 31, 2019 compared to the corresponding period in 2018 primarily as a result of higher pretax income and lower benefit from state tax rate changes.

Income tax expense increased during the year ended December 31, 2020 compared to the corresponding period in 2019 primarily as a result of higher pretax income offset by increased recognition of excess tax benefits resulting from share-based compensation during 2020.

For more information, see Note 17 to the accompanying consolidated financial statements contained in “Part II.

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Our debt covenants refer to these expenses as management fees, which fees were in the amount of $1.3 billion and $1.2 billion for the years ended December 31, 2020 and 2019, respectively.

A reconciliation of Adjusted EBITDA and free cash flow to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, is as follows (dollars in millions).

Years ended December 31,

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Loss on financial instruments, net 15 54

Other pension (benefits) costs, net

Other pension costs, net 66 69

Other, net 89 238

Adjusted EBITDA $ 18,518 $ 16,855

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Our projected cash needs and projected sources of liquidity depend upon, among other things, our actual results, and the timing and amount of our expenditures.

As we continue to grow our new mobile services, we expect an initial funding period to grow a new product as well as negative working capital impacts from the timing of device-related cash flows when we provide the handset or tablet to customers pursuant to equipment installment plans.

As we continue to grow our mobile services, we expect to continue to see negative mobile Adjusted EBITDA in 2021 as well as negative working capital impacts from the timing of device-related cash flows when we sell the handset or tablet to customers pursuant to equipment installment plans.

Free cash flow was $7.1 billion and $4.6 billion for the years ended December 31, 2020 and 2019, respectively.

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We continue to evaluate the deployment of our cash on hand and anticipated future free cash flow including to invest in our business growth and other strategic opportunities, including mergers and acquisitions as well as stock repurchases and dividends.

Charter's target leverage of net debt to the last twelve months Adjusted EBITDA remains at 4 to 4.5 times Adjusted EBITDA, and up to 3.5 times Adjusted EBITDA at the Charter Operating level.

Charter's target leverage of net debt to the last twelve months Adjusted EBITDA remains at 4 to 4.5 times Adjusted EBITDA, and up to 3.5 times Adjusted EBITDA at the consolidated first lien level.

Our leverage ratio was 4.4 times Adjusted EBITDA as of December 31, 2020.

As Adjusted EBITDA grows, we expect to increase the total amount of our indebtedness to maintain leverage within Charter's target leverage range.

We have used the proceeds from such borrowings for general corporate purposes and to buyback shares of Charter Class A common stock and Charter Holdings common units.

During the years ended December 31, 2020 and 2019, Charter purchased approximately 18.4 million and 16.7 million shares, respectively, of Charter Class A common stock for approximately $10.6 billion and $6.7 billion, respectively.

Since the beginning of its buyback program in September 2016 through the year ended December 31, 2020, Charter has purchased approximately 87.7 million shares of Class A common stock for approximately $34.6 billion.

In December 2017, Charter and A/N entered into an amendment to the letter agreement (the "Letter Agreement") that requires A/N to sell to Charter or to Charter Holdings, on a monthly basis, a number of shares of Charter Class A common stock or Charter Holdings common units that represents a pro rata participation by A/N and its affiliates in any repurchases of shares of Charter Class A common stock from persons other than A/N effected by Charter during the immediately preceding calendar month, at a purchase price equal to the average price paid by Charter for the shares repurchased from persons other than A/N during such immediately preceding calendar month.

A/N and Charter both have the right to terminate or suspend the pro rata repurchase arrangement on a prospective basis.

Charter Holdings purchased from A/N 2.3 million and 2.1 million Charter Holdings common

units at an average price per unit of $388.72 and $308.90 , or $885 million and $656 million , during the years ended December 31, 2019 and 2018 , respectively.

During the years ended December 31, 2020 and 2019, Charter Holdings purchased from A/N 2.6 million and 2.3 million Charter Holdings common units, respectively, for approximately $1.5 billion and $885 million, respectively.

As of December 31, 2020, Charter had remaining board authority to purchase an additional $1.5 billion of Charter’s Class A common stock and/or Charter Holdings common units.

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Recent Events

In December 2019, CCO Holdings and CCO Holdings Capital Corp.

jointly issued an additional $1.2 billion aggregate principal amount of 4.750% senior unsecured notes due 2030 at a price of 101.125% of the aggregate principal amount.

The net proceeds were or will be used to pay related fees and expenses and for general corporate purposes, including to fund buybacks of Charter Class A common stock and Charter Holdings common units as well as repaying certain indebtedness.

In December 2020, Charter Operating and Charter Communications Operating Capital Corp.

jointly issued an additional $1.3 billion aggregate principal amount of 4.800% senior secured notes due 2050 at a price of 101.964% of the aggregate principal amount.

jointly issued $1.0 billion aggregate principal amount of 2.300% senior secured notes due 2032 at a price of 99.786% of the aggregate principal amount, an additional $650 million aggregate principal amount of 3.700% senior secured notes due 2051 at a price of 100.791% of the aggregate principal amount and $1.35 billion aggregate principal amount of 3.850% senior secured notes due 2061 at a price of 99.882% of the aggregate principal amount.

The net proceeds were used to pay related fees and expenses and for general corporate purposes, including funding buybacks of Charter Class A common stock and Charter Holdings common units as well as repaying certain indebtedness including $700 million of Time Warner Cable, LLC 4.125% notes due February 2021.

In addition to the debt issued in December 2020 as described above, CCO Holdings and CCO Holdings Capital Corp.

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In 2019, Charter Operating also entered into an amendment to its Credit Agreement repricing $4.5 billion of its revolving loan and $4.0 billion of term loan A to LIBOR plus 1.25% and its existing term loan B to LIBOR plus 1.75%.

In addition, $4.5 billion of the revolving loan and $4.0 billion of term loan A maturities were extended to 2025 and $3.8 billion of term loan B maturities were extended to 2027.

Free Cash Flow

Free cash flow increased $2.4 billion during the year ended December 31, 2019 compared to the corresponding prior period due to the following.

Free cash flow increased $2.5 billion during the year ended December 31, 2020 compared to the corresponding prior period due to the following (dollars in millions).

2020 compared to 2019

Decrease in capital expenditures

Increase in Adjusted EBITDA $ 1,663

Change in working capital, excluding change in accrued interest 1,029

Increase in cash paid for interest, net

Free cash flow was reduced by $567 million during the year ended December 31, 2019 compared to the corresponding prior period due to mobile with impacts negatively affecting working capital, capital expenditures and Adjusted EBITDA.

Decrease in cash paid for interest, net 83

Increase in capital expenditures (220)

Other, net (93)

Free cash flow was reduced by $1.1 billion and $1.2 billion during the years ended December 31, 2020 and 2019, respectively, due to mobile with impacts negatively affecting working capital, capital expenditures and Adjusted EBITDA.

The increase in free cash flow resulting from changes in working capital was favorably impacted by one-time unfavorable impacts in 2019 from bill cycle standardization efforts as well as one-time net favorable impacts in 2020 related to COVID-19, including deferral of payroll tax payments.

Contractual Obligations

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Payments by Period

Less than 1 year

More than 5 years

Total Less than 1 year 1-3 years 3-5 years More than 5 years

Long-Term Debt Principal Payments (a)

$ 82,143 $ 1,277 $ 5,213 $ 12,085 $ 63,568

Long-Term Debt Interest Payments (b)

54,230 3,867 7,489 7,042 35,832

Finance and Operating Lease Obligations (c)

1,666 311 538 387 430

Programming Minimum Commitments (d)

The table presents maturities of long-term debt outstanding as of December 31, 2019 .

164 130 34 — —

15,317 5,162 1,720 1,146 7,289

$ 153,520 $ 10,747 $ 14,994 $ 20,660 $ 107,119

(a) The table presents maturities of long-term debt outstanding as of December 31, 2020.

Refer to Notes 9 and 21 to our accompanying consolidated financial statements contained in “Part II.

Financial Statements and Supplementary Data” for a description of our long-term debt and other contractual obligations and commitments.

Interest payments on variable debt are estimated using amounts outstanding at December 31, 2019 and the average implied forward LIBOR rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2019 .

(b) Interest payments on variable debt are estimated using amounts outstanding at December 31, 2020 and the average implied forward LIBOR rates applicable for the quarter during the interest rate reset based on the yield curve in effect at December 31, 2020.

Actual interest payments will differ based on actual LIBOR rates and actual amounts outstanding for applicable periods.

We lease certain facilities and equipment under noncancelable finance and operating leases.

Finance lease obligations represented $94 million of total finance and operating lease obligations as of December 31, 2020.

Lease and rental costs charged to expense for the years ended December 31, 2020 and 2019 were $452 million and $445 million, respectively.

We pay programming fees under multi-year contracts typically based on a flat fee per customer, which may be fixed for the term, or may in some cases escalate over the term.

(d) We pay programming fees under multi-year contracts typically based on a flat fee per customer, which may be fixed for the term, or may in some cases escalate over the term.

Programming costs included in the accompanying statement of operations were approximately $11.4 billion and $11.3 billion for the years ended December 31, 2020 and 2019, respectively.

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The table sets forth the aggregate guaranteed minimum commitments under our programming contracts.

“Other” represents other guaranteed minimum commitments, including rights negotiated directly with content owners for distribution on company-owned channels or networks, commitments related to our role as an advertising and distribution sales agent for third party-owned channels or networks, commitments to our customer premise equipment and device vendors and contractual obligations related to third-party network augmentation.

(e) “Other” represents other guaranteed minimum commitments, including rights negotiated directly with content owners for distribution on company-owned channels or networks, commitments related to our role as an advertising and distribution sales agent for third party-owned channels or networks, commitments to our customer premise equipment and device vendors and contractual obligations related to third-party network augmentation.

The following items are not included in the contractual obligations table because the obligations are not fixed and/or determinable due to various factors discussed below.

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For the nonqualified pension plan, we contributed $3 million during 2020 and will continue to make contributions in 2021 to the extent benefits are paid.

• In December 2020, we won a bidding process for $1.2 billion in phase I of the RDOF auction to further extend our broadband services in states where we currently operate.

We expect to fund our multi-billion dollar fiber-based build-out over a six to eight-year period.

Business — Commitments Related to the 2016 Merger with TWC and Acquisition of Bright House" for a listing of commitments as a result of the merger with TWC and acquisition of Bright House in 2016.

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Cash and Cash Equivalents.

We held $3.5 billion and $551 million in cash and cash equivalents as of December 31, 2019 and 2018 , respectively.

We held $998 million and $3.5 billion in cash and cash equivalents as of December 31, 2020 and 2019, respectively.

We also held $3 million and $66 million in restricted cash as of December 31, 2020 and 2019, respectively, representing escrowed funds of a consolidated variable interest entity.

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Operating Activities.

Net cash provided by operating activities decreased $19 million during the year ended December 31, 2019 compared to the year ended December 31, 2018 , primarily due to changes in working capital, excluding the change in accrued interest and accrued expenses related to capital expenditures, that used $780 million more cash and an increase in cash paid for interest, net of $75 million offset by an increase in Adjusted EBITDA of $796 million .

Net cash provided by operating activities increased $2.8 billion during the year ended December 31, 2020 compared to the year ended December 31, 2019, primarily due to an increase in Adjusted EBITDA of $1.7 billion and changes in working capital, excluding the change in accrued interest and accrued expenses related to capital expenditures, that used $1.2 billion less cash.

Investing Activities.

Net cash used in investing activities for the years ended December 31, 2020 and 2019 was $8.2 billion and $7.3 billion, respectively.

The decrease in cash used was primarily due to a decrease in capital expenditures and increase in accrued expenses related to capital expenditures.

The increase in cash used was primarily due to the purchase of spectrum wireless licenses and an increase in capital expenditures.

Financing Activities.

Net cash used in financing activities decreased $254 million during the year ended December 31, 2019 compared to the year ended December 31, 2018 primarily due to an increase in the amount by which borrowings of long-term debt exceeded repayments offset by an increase in the purchase of treasury stock and noncontrolling interest.

Net cash used in financing activities increased $7.3 billion during the year ended December 31, 2020 compared to the year ended December 31, 2019 primarily due to an increase in the purchase of treasury stock and noncontrolling interest and a decrease in the amount by which borrowings of long-term debt exceeded repayments.

Capital Expenditures

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Capital expenditures were $7.4 billion and $7.2 billion for the years ended December 31, 2020 and 2019, respectively.

The decrease was primarily due to lower customer premise equipment expenditures as a result of the completion of our all-digital conversion and fewer SPP migrations, lower scalable infrastructure as a result of the completion of the roll-out of DOCSIS 3.1 technology across our footprint and lower support spending with the substantial completion of the integration of TWC and Bright House.

The increase was primarily due to higher line extensions driven by continued network expansion, including to rural areas, higher support capital as a result of facility improvements and investments in back office systems and mobile store build-outs offset by lower customer premise equipment.

See the table below for more details.

We currently expect 2020 cable capital expenditures to decline as a percentage of cable revenue versus 2019.

We currently expect 2021 cable capital expenditures to be relatively consistent or lower as a percentage of cable revenue versus 2020.

The actual amount of our capital expenditures in 2021 will depend on a number of factors including further spend related to product development and growth rates of both our residential and commercial businesses.

Our capital expenditures are funded primarily from cash flows from operating activities and borrowings on our credit facility.

In addition, our accrued liabilities related to capital expenditures increased $55 million and decreased $470 million for the years ended December 31, 2019 and 2018 , respectively.

In addition, our accrued liabilities related to capital expenditures decreased $77 million and increased $55 million for the years ended December 31, 2020 and 2019, respectively.

The following tables present our major capital expenditures categories in accordance with National Cable and Telecommunications Association (“NCTA”) disclosure guidelines for the years ended December 31, 2020 and 2019.

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Customer premise equipment (a)

$ 2,002 $ 2,070

Scalable infrastructure (b)

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Commercial services $ 1,325 $ 1,314

All-digital transition

Customer premise equipment includes costs incurred at the customer residence to secure new customers and revenue generating units, including customer installation costs and customer premise equipment (e.g., set-top boxes and cable modems).

Scalable infrastructure includes costs not related to customer premise equipment, to secure growth of new customers and revenue generating units, or provide service enhancements (e.g., headend equipment).

Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).

Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.

Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles).

Mobile $ 508 $ 432

(a) Customer premise equipment includes costs incurred at the customer residence to secure new customers and revenue generating units, including customer installation costs and customer premise equipment (e.g., digital receivers and cable modems).

(b) Scalable infrastructure includes costs not related to customer premise equipment, to secure growth of new customers and revenue generating units, or provide service enhancements (e.g., headend equipment).

(c) Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).

(d) Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.

(e) Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles).

As of December 31, 2020, the accreted value of our total debt was approximately $82.8 billion, as summarized below (dollars in millions):

December 31, 2020

Principal Amount

Accreted Value (a)

Interest Payment Dates

Maturity Date (b)

Principal Amount Accreted Value (a)

Interest Payment Dates Maturity Date (b)

CCO Holdings, LLC:

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4.500% senior notes due 2032 2,900 2,928 5/1 & 11/1 5/1/2032

5.125% senior notes due 2027

Charter Communications Operating, LLC:

4.464% senior notes due 2022 3,000 2,992 1/23 & 7/23 7/23/2022

Senior floating rate notes due 2024 900 902 2/1, 5/1, 8/1 & 11/1 2/1/2024

4.500% senior notes due 2024 1,100 1,094 2/1 & 8/1 2/1/2024

4.908% senior notes due 2025 4,500 4,475 1/23 & 7/23 7/23/2025

Charter Communications Operating, LLC:

3.750% senior notes due 2028 1,000 989 2/15 & 8/15 2/15/2028

4.200% senior notes due 2028 1,250 1,241 3/15 & 9/15 3/15/2028

Senior floating rate notes due 2024

2/1, 5/1, 8/1 & 11/1

5.050% senior notes due 2029 1,250 1,242 3/30 & 9/30 3/30/2029

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3.850% senior notes due 2061 1,350 1,339 4/1 & 10/1 4/1/2061

Credit facilities

Credit facilities 10,150 10,081 Varies

Time Warner Cable, LLC:

4.000% senior notes due 2021 1,000 1,008 3/1 & 9/1 9/1/2021

4.125% senior notes due 2021

4.000% senior notes due 2021

5.750% sterling senior notes due 2031 (c)

854 911 6/2 6/2/2031

6.550% senior debentures due 2037 1,500 1,668 5/1 & 11/1 5/1/2037

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5.250% sterling senior notes due 2042 (d)

889 859 7/15 7/15/2042

4.500% senior debentures due 2042 1,250 1,145 3/15 & 9/15 9/15/2042

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8.375% senior debentures due 2033 1,000 1,270 7/15 & 1/15 7/15/2033

The accreted values presented in the table above represent the principal amount of the debt adjusted for original issue discount or premium at the time of sale, deferred financing costs, and, in regards to the TWC debt assumed, fair value premium adjustments as a result of applying acquisition accounting plus the accretion of those amounts to the balance sheet date.

$ 82,143 $ 82,752

(a) The accreted values presented in the table above represent the principal amount of the debt adjusted for original issue discount or premium at the time of sale, deferred financing costs, and, in regards to debt assumed in acquisitions, fair value premium adjustments as a result of applying acquisition accounting plus the accretion of those amounts to the balance sheet date.

However, the amount that is currently payable if the debt becomes immediately due is equal to the principal amount of the debt.

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We have availability under our credit facilities of approximately $4.7 billion as of December 31, 2020.

In general, the obligors have the right to redeem all of the notes set forth in the above table in whole or in part at their option, beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest.

Principal amount includes £625 million valued at $828 million as of December 31, 2019 using the exchange rate as of December 31, 2019 .

Principal amount includes £650 million valued at $861 million as of December 31, 2019 using the exchange rate as of December 31, 2019 .

(b) In general, the obligors have the right to redeem all of the notes set forth in the above table in whole or in part at their option, beginning at various times prior to their stated maturity dates, subject to certain conditions, upon the payment of the outstanding principal amount (plus a specified redemption premium) and all accrued and unpaid interest.

(c) Principal amount includes £625 million valued at $854 million as of December 31, 2020 using the exchange rate as of December 31, 2020.

(d) Principal amount includes £650 million valued at $889 million as of December 31, 2020 using the exchange rate as of December 31, 2020.

See Note 9 to the accompanying consolidated financial statements contained in “Part II.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis