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Item 9A. Controls and Procedures

2021-01-29 compared with 2020-01-31 · 640 added, 889 removed, 1566 unchanged (49% of the section changed)

9 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) for the Company.

Our internal control system was designed to provide reasonable

assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.

Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the preparation and fair presentation of published financial statements.

Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2020.

3 unchanged sentences

Other Information.

On January 28, 2020, Charter’s board of directors approved an amendment to Charter's 2019 Stock Incentive Plan (the “Stock Plan”) to remove the ability under the Stock Plan for Charter to effect a repricing of stock options without stockholder approval.

The foregoing summary of the amendment to the Stock Plan does not purport to be complete and is qualified in its entirety by reference to the full text of such amendment, which is included as Exhibit 10.152 hereto.

Directors, Executive Officers and Corporate Governance.

10 unchanged sentences

Exhibits and Financial Statement Schedules.

The following documents are filed as part of this annual report:

(a) The following documents are filed as part of this annual report:

(1) Financial Statements.

16 unchanged sentences

and in the capacities and on the dates indicated.

Signature Title Date

/s/ Thomas M.

Chairman, Chief Executive Officer, Director

(Principal Executive Officer)

January 31, 2020

(Principal Executive Officer) January 29, 2021

/s/ Christopher L.

Christopher L.

Chief Financial Officer (Principal Financial Officer)

January 31, 2020

Executive Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)

January 31, 2020

Chief Financial Officer (Principal Financial Officer) January 29, 2021

Executive Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) January 29, 2021

Director January 21, 2021

Director January 27, 2021

Director January 21, 2021

/s/ Gregory Maffei

Gregory Maffei

January 31, 2020

Director January 26, 2021

Director January 22, 2021

Director January 28, 2021

Director January 21, 2021

/s/ Steven Miron

January 31, 2020

Director January 21, 2021

/s/ Balan Nair

January 31, 2020

Director January 21, 2021

/s/ Michael Newhouse

Michael Newhouse

January 31, 2020

Director January 21, 2021

/s/ Mauricio Ramos

Mauricio Ramos

January 31, 2020

Director January 21, 2021

Exhibit Index

Exhibits are listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K.

Exhibit Description

2.1 Agreement and Plan of Mergers, dated as of May 23, 2015, among Time Warner Cable Inc., Charter Communications, Inc., CCH I, LLC, Nina Corporation I, Inc., Nina Company II, LLC and Nina Company III, LLC (incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by Charter Communications, Inc.

11 unchanged sentences

filed on July 30, 2018 (File No.

Amended and Restated Stockholders Agreement, dated March 31, 2015, by and among Charter Communications, Inc., Liberty Broadband Corporation and Advance/Newhouse Partnership (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed by Charter Communications, Inc.

4.1(a) Amended and Restated Stockholders Agreement, dated March 31, 2015, by and among Charter Communications, Inc., Liberty Broadband Corporation and Advance/Newhouse Partnership (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed by Charter Communications, Inc.

on April 1, 2015 (File No.

Second Amended and Restated Stockholders Agreement, dated May 23, 2015, by and among Charter Communications, Inc., CCH I, LLC, Liberty Broadband Corporation and Advance/Newhouse Partnership (incorporated by reference to Annex C to the registration statement on Form S-4 filed by CCH I, LLC on June 26, 2015 (File No.

4.1(b) Second Amended and Restated Stockholders Agreement, dated May 23, 2015, by and among Charter Communications, Inc., CCH I, LLC, Liberty Broadband Corporation and Advance/Newhouse Partnership (incorporated by reference to Annex C to the registration statement on Form S-4 filed by CCH I, LLC on June 26, 2015 (File No.

333-205240)).

Indenture dated as of May 10, 2011, by and among CCO Holdings, LLC, and CCO Holdings Capital Corp., as Issuers, Charter Communications, Inc., as Parent Guarantor, and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K of Charter Communications, Inc.

filed on May 16, 2011 (File No.

Third Supplemental Indenture dated as of January 26, 2012 by and among CCO Holdings, LLC, and CCO Holdings Capital Corp., as Issuers, Charter Communications, Inc., as Parent Guarantor, and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 to the current report on Form 8-K of Charter Communications, Inc.

filed on February 1, 2012 (File No.

Fourth Supplemental Indenture dated August 22, 2012 relating to the 5.25% Senior Notes due 2022 by and among CCO Holdings, LLC, CCO Holdings Capital Corp.

and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.1 to the quarterly report on Form 10-Q of Charter Communications, Inc.

filed on November 6, 2012 (File No.

Fifth Supplemental Indenture dated December 17, 2012 relating to the 5.125% Senior Notes due 2023 by and among CCO Holdings, LLC, CCO Holdings Capital Corp.

and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.9 to the annual report on Form 10-K of Charter Communications, Inc.

filed February 22, 2013 (File No.

Sixth Supplemental Indenture relating to the 5.25% senior notes due 2021, dated as of March 14, 2013, by and among CCO Holdings, LLC, and CCO Holdings Capital Corp., as Issuers, Charter Communications, Inc., as Parent Guarantor, and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc.

filed March 15, 2013 (File No.

Seventh Supplemental Indenture relating to the 5.75% senior notes due 2023, dated as of March 14, 2013, by and among CCO Holdings, LLC, and CCO Holdings Capital Corp., as Issuers, Charter Communications, Inc., as Parent Guarantor, and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K of Charter Communications, Inc.

filed March 15, 2013 (File No.

Eighth Supplemental Indenture relating to the 5.75% senior notes due 2024, dated as of May 3, 2013, by and among CCO Holdings, LLC and CCO Holdings Capital Corp., as Issuers, Charter Communications, Inc., as Parent Guarantor, and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 10.7 to the quarterly report on Form 10-Q of Charter Communications, Inc.

filed on May 7, 2013 (File No.

10.1 Indenture dated as of November 5, 2014, by and among CCO Holdings, LLC, CCO Holdings Capital Corp.

1 unchanged sentence

filed on November 10, 2014 (File No.

Third Supplemental Indenture, dated as of April 21, 2015, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed by Charter Communications, Inc.

on April 22, 2015 (File No.

Fourth Supplemental Indenture, dated as of April 21, 2015, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the current report on Form 8-K filed by Charter Communications, Inc.

on April 22, 2015 (File No.

10.2 Fifth Supplemental Indenture, dated as of April 21, 2015, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.3 to the current report on Form 8-K filed by Charter Communications, Inc.

on April 22, 2015 (File No.

Exchange and Registration Rights Agreement, dated as of April 21, 2015 relating to the 5.125% Senior Notes due 2023, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co.

and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed by Charter Communications, Inc.

on April 22, 2015 (File No.

10.3 Exchange and Registration Rights Agreement relating to the 5.875% Senior Notes due 2027, dated as of April 21, 2015, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co.

1 unchanged sentence

on April 22, 2015 (File No.

Exchange and Registration Rights Agreement relating to the 5.875% Senior Notes due 2027, dated as of April 21, 2015, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co.

and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K filed by Charter Communications, Inc.

on April 22, 2015 (File No.

10.4 Indenture, dated as of July 23, 2015, among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp.

1 unchanged sentence

on July 27, 2015 (File No.

First Supplemental Indenture, dated as of July 23, 2015, among CCO Safari II, LLC, as escrow issuer, CCH II, LLC, as limited guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (incorporated by reference to Exhibit 4.2 to the current report on Form 8-K filed by Charter Communications, Inc.

on July 27, 2015 (File No.

10.5 Exchange and Registration Rights Agreement, dated July 23, 2015 relating to the 3.579% Senior Secured Notes due 2020, 4.464% Senior Secured Notes due 2022, 4.908% Senior Secured Notes due 2025, 6.384% Senior Secured Notes due 2035, 6.484% Senior Secured Notes due 2045 and 6.834% Senior Secured Notes due 2055, between CCO Safari II, LLC and Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank Securities Inc.

8 unchanged sentences

on November 25, 2015 (File No.

Sixth Supplemental Indenture, dated as of February 19, 2016, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed by Charter Communications, Inc.

on February 22, 2016 (File No.

Exchange and Registration Rights Agreement, dated February 19, 2016, relating to the 5.875% Senior Notes due 2024, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, UBS Securities LLC, Citigroup Global Markets Inc.

and Wells Fargo Securities, LLC, as representatives of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed by Charter Communications, Inc.

on February 22, 2016 (File No.

10.9 Seventh Supplemental Indenture, dated as of April 21, 2016, among CCO Holdings, LLC, CCO Holdings Capital Corp., Charter Communications, Inc., as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the current report on Form 8-K filed by Charter Communications, Inc.

119 unchanged sentences

on December 16, 2019 (File No.

10.58 Third Supplemental Indenture, dated as of February 18, 2020, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on February 21, 2020 (File No.

10.59 Form of 4.500% Senior Notes due 2030 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on February 21, 2020 (File No.

10.60 Exchange and Registration Rights Agreement, dated February 18, 2020, relating to the 4.500% Senior Notes due 2030, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and Deutsche Bank Securities, Inc., as representative of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on February 21, 2020 (File No.

10.61 Fourth Supplemental Indenture, dated as of March 18, 2020, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on March 23, 2020 (File No.

10.62 Form of 4.500% Senior Notes due 2032 (incorporated by reference to Exhibit 4.5 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on March 23, 2020 (File No.

10.63 2030 Exchange and Registration Rights Agreement, dated March 18, 2020, relating to the 4.500% Senior Notes due 2030, among CCO Holdings, LLC, CCO Holdings Capital Corp.

on March 23, 2020 (File No.

10.64 2032 Exchange and Registration Rights Agreement, dated March 18, 2020, relating to the 4.500% Senior Notes due 2032, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and Deutsche Bank Securities, Inc., as representative of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on March 23, 2020 (File No.

10.65 Underwriting Agreement, dated as of April 14, 2020, among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp., CCO Holdings, LLC, as parent guarantor, the subsidiary guarantors party thereto and BofA Securities, Inc., J.P.

Morgan Securities LLC and Morgan Stanley & Co.

LLC, as representatives of the several underwriters named in Schedule I thereto (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on April 17, 2020 (File No.

10.66 Sixteenth Supplemental Indenture, dated as of April 17, 2020, among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp., as issuers, CCO Holdings, LLC, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on April 17, 2020 (File No.

10.67 Form of 2.800% Senior Secured Notes due 2031 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on April 17, 2020 (File No.

10.68 Form of 3.700% Senior Secured Notes due 2051 (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on April 17, 2020 (File No.

10.69 Fifth Supplemental Indenture, dated as of July 9, 2020, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on July 13, 2020 (File No.

10.70 Form of 4.250% Senior Notes due 2031 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on July 13, 2020 (File No.

10.71 Exchange and Registration Rights Agreement, dated July 9, 2020, relating to the 4.250% Senior Notes due 2031, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and Morgan Stanley & Co.

LLC, as representative of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on July 13, 2020 (File No.

10.72 Exchange and Registration Rights Agreement, dated July 24, 2020, relating to the 4.250% Senior Notes due 2031, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and Morgan Stanley & Co.

LLC, as representative of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on July 28, 2020) (File No.

10.73 Exchange and Registration Rights Agreement, dated October 12, 2020, relating to the 4.500% Senior Notes due 2032, among CCO Holdings, LLC, CCO Holdings Capital Corp.

and Deutsche Bank Securities Inc., as representative of the several Purchasers (as defined therein) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on October 16, 2020 (File No.

10.74 Underwriting Agreement, dated as of November 19, 2020, among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp., CCO Holdings, LLC, as parent guarantor, the subsidiary guarantors party thereto and Deutsche Bank Securities Inc., J.P.

Morgan Securities LLC and Morgan Stanley & Co.

LLC, as representatives of the several underwriters named in Schedule I thereto (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on December 4, 2020 (File No.

10.75 Eighteenth Supplemental Indenture, dated as of December 4, 2020, among Charter Communications Operating, LLC, Charter Communications Operating Capital Corp., as issuers, CCO Holdings, LLC, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee and collateral agent (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on December 4, 2020 (File No.

10.76 Form of 2.300% Senior Secured Notes due 2032 (incorporated by reference to Exhibit 4.5 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on December 4, 2020 (File No.

10.77 Form of 3.850% Senior Secured Notes due 2061 (incorporated by reference to Exhibit 4.6 to the Current Report on Form 8-K filed by Charter Communications, Inc.

on December 4, 2020 (File No.

10.78 Indenture, dated as of April 30, 1992 (the “TWCE Indenture”), as amended by the First Supplemental Indenture, dated as of June 30, 1992, among Time Warner Entertainment Company, L.P.

30 unchanged sentences

10.97 Form of TWC 7.30% Debentures due 2038 (incorporated herein by reference to Exhibit 4.3 to the TWC June 16, 2008 Form 8-K).

Form of TWC 8.75% Notes due 2019 (incorporated herein by reference to Exhibit 4.2 to TWC’s current report on Form 8-K dated November 13, 2008 and filed with the SEC on November 18, 2008) (File No.

Form of TWC 8.25% Notes due 2019 (incorporated herein by reference to Exhibit 4.2 to TWC’s current report on Form 8-K dated March 23, 2009 and filed with the SEC on March 26, 2009 (File No.

10.98 Form of TWC 6.75% Debentures due 2039 (incorporated herein by reference to Exhibit 4.1 to TWC’s current report on Form 8-K dated June 24, 2009 and filed with the SEC on June 29, 2009 (File No.

Form of TWC 5.0% Notes due 2020 (incorporated herein by reference to Exhibit 4.2 to the TWC December 8, 2009 Form 8-K).

Form of TWC 4.125% Notes due 2021 (incorporated herein by reference to Exhibit 4.1 to TWC’s current report on Form 8-K dated November 9, 2010 and filed with the SEC on November 15, 2010 (File No.

1-33335) (the “TWC November 9, 2010 Form 8-K”)).

10.99 Form of TWC 5.875% Debentures due 2040 (incorporated herein by reference to Exhibit 4.2 to the TWC November 9, 2010 Form 8-K).

14 unchanged sentences

filed on August 28, 2015 (File No.

Restatement Agreement dated as of May 18, 2016, by and among Charter Communications Operating, LLC, CCO Holdings, LLC, the subsidiary guarantors party thereto, Bank of America, N.A., as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K of Charter Communications, Inc.

10.109(a) Restatement Agreement dated as of May 18, 2016, by and among Charter Communications Operating, LLC, CCO Holdings, LLC, the subsidiary guarantors party thereto, Bank of America, N.A., as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K of Charter Communications, Inc.

filed on May 24, 2016 (File No.

Amendment No.

10.109(b) Amendment No.

1 dated as of December 23, 2016, to the Amended and Restated Credit Agreement dated as of March 18, 1999, as amended and restated on May 18, 2016, by and among Chart Communications Operating, LLC, CCO Holdings, LLC, the Lenders Party thereto and Bank of America, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc.

filed on December 30, 2016 (File No.

Restatement Agreement dated as of December 21, 2017 to the Amended and Restated Credit Agreement dated as of March 18, 1999, as amended and restated on May 18, 2016, as amended by Amendment No.

10.109(c) Restatement Agreement dated as of December 21, 2017 to the Amended and Restated Credit Agreement dated as of March 18, 1999, as amended and restated on May 18, 2016, as amended by Amendment No.

1, dated as of December 23, 2016 and as further amended by that certain Incremental Activation Notice No.

1 unchanged sentence

filed on December 28, 2017 (File No.

Incremental Activation Notice, dated as of May 18, 2016, by and among Charter Communications Operating, LLC, CCO Holdings, LLC, the subsidiary guarantors party thereto, Bank of America, N.A., as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K of Charter Communications, Inc.

10.109(d) Incremental Activation Notice, dated as of May 18, 2016, by and among Charter Communications Operating, LLC, CCO Holdings, LLC, the subsidiary guarantors party thereto, Bank of America, N.A., as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K of Charter Communications, Inc.

filed on May 24, 2016 (File No.

48 unchanged sentences

on August 2, 2011 (File No.

Form of Notice of LTIP Award Agreement Changes (RSU Awards) (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K filed by Charter Communications, inc.

10.130+ Form of Notice of LTIP Award Agreement Changes (RSU Awards) (incorporated by reference to Exhibit 10.3 to the current report on Form 8-K filed by Charter Communications, I nc.

on January 22, 2014 (File No.

1 unchanged sentence

on January 22, 2014 (File No.

Form of Notice of LTIP Award Agreement Changes (Restricted Stock Awards) (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K filed by Charter Communications, inc.

10.132+ Form of Notice of LTIP Award Agreement Changes (Restricted Stock Awards) (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K filed by Charter Communications, I nc.

on January 22, 2014 (File No.

17 unchanged sentences

filed July 26, 2019 (File No.

Employment Agreement between Thomas Rutledge and Charter Communications, Inc., dated as of May 17, 2016 (incorporated by reference to Exhibit 10.5 to the current report on Form 8-K of Charter Communications, Inc.

filed on May 19, 2016 (File No.

Time-Vesting Stock Option Agreement dated as of December 19, 2011 by and between Charter Communications, Inc.

10.140(a)+ Amended and Restated Employment Agreement between Thomas Rutledge and Charter Communications, Inc., dated October 27, 2020 (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc.

filed on October 30, 2020 (File No.

10.140(b)+ Time-Vesting Stock Option Agreement dated as of December 19, 2011 by and between Charter Communications, Inc.

and Thomas M.

1 unchanged sentence

on December 19, 2011 (File No.

Performance-Vesting Stock Option Agreement dated as of December 19, 2011 by and between Charter Communications, Inc.

10.140(c)+ Performance-Vesting Stock Option Agreement dated as of December 19, 2011 by and between Charter Communications, Inc.

and Thomas M.

1 unchanged sentence

on December 19, 2011 (File No.

Employment Agreement dated effective as of November 2, 2016 by and between Charter Communications, Inc.

and John Bickham (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Charter Communications, Inc.

filed on November 3, 2016 (File No.

Time-Vesting Stock Option Agreement dated as of April 30, 2012 by and between Charter Communications, Inc.

10.141(a)+ Amended and Restated Employment Agreement between Charter Communications, Inc.

and John Bickham, dated December 23, 2020 (incorporated by reference to Exhibit 10.1 to the current report on Form 8-K of Charter Communications, Inc.

filed on December 28, 2020 (File No.

10.141(b)+ Time-Vesting Stock Option Agreement dated as of April 30, 2012 by and between Charter Communications, Inc.

and John Bickham (incorporated by reference to Exhibit 10.2 to the current report on Form 8-K filed by Charter Communications, Inc.

on May 1, 2012 (File No.

Performance-Vesting Stock Option Agreement dated as of April 30, 2012 by and between Charter Communications, Inc.

10.141(c)+ Performance-Vesting Stock Option Agreement dated as of April 30, 2012 by and between Charter Communications, Inc.

and John Bickham (incorporated by reference to Exhibit 10.4 to the current report on Form 8-K filed by Charter Communications, Inc.

35 unchanged sentences

10.154+ Amendment to the Charter Communications, Inc.

2019 Stock Incentive Plan, dated as of January 28, 2020.

2019 Stock Incentive Plan, dated as of January 28, 2020 (incorporated by reference to Exhibit 10.152 to the Annual Report on Form 10 -K of Charter Communications, Inc.

filed on January 31, 2020 (File No.

001-33664)) .

21.1* Subsidiaries of Charter Communications, Inc.

50 unchanged sentences

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted

accounting principles.

accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

5 unchanged sentences

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgment.

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of capitalization of installation direct labor and overhead costs

Capitalization of installation direct labor and overhead costs

As discussed in Note 2 to the consolidated financial statements, the Company capitalizes direct labor and overhead costs using standards developed from actual costs and applicable operational data associated with certain activities.

The Company calculates the standards annually (or more frequently when circumstances dictate) for items such as direct labor and overhead and the estimate of the average amount of time required to perform a capitalizable activity.

For the year ended December 31, 2019, the Company capitalized $1.6 billion of direct labor and overhead costs, which included costs relating to installation activities.

We identified the evaluation of capitalization of installation direct labor and overhead costs as a critical audit matter.

For the year ended December 31, 2020, the Company capitalized $1.6 billion of direct labor and overhead costs, a portion of which related to installation activities.

We identified the evaluation of the capitalization of certain installation direct labor and overhead costs as a critical audit matter.

Evaluating the Company’s determination of the relevant installation activities and the extent to which costs incurred are capitalized required complex and subjective auditor judgment.

Specifically, the complexity relates to the evaluation of the methodology, including the development and accumulation of data within the methodology, used by the Company to estimate the installation direct labor and overhead standards.

The subjectivity relates to estimating the average length of time to complete specific installation activities.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company's capitalization of installation direct labor and overhead costs process.

The controls tested related to the development and accumulation of data used within the methodology to estimate installation direct labor and overhead cost, and the estimation of the average amount of time required to perform a capitalizable activity.

We assessed the methodology, including the development and accumulation of data used within the methodology for the inclusion of certain costs in the installation direct labor and overhead standards.

We selected a sample of the data used to develop the installation direct labor standard and overhead standard to test the key data attributes used in the estimates by comparing such data to contracts with third parties and internal documentation of wages and costs.

We selected a sample to test the average length of time to complete specific installation activities by (1) evaluating underlying key attributes of the data through inquiry of personnel who supervise installation activities and (2) assessing the time required to complete certain activities through observation of personnel who perform installation activities.

Specifically, the evaluation of the methodology, the development and accumulation of data used by the Company to estimate the installation direct labor and overhead standards, and the estimated average length of time to complete specific installation activities required complex and subjective auditor judgment.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter.

This included controls related to the development and accumulation of data used to estimate certain installation direct labor and overhead costs and the estimation of the average amount of time required to perform a capitalizable activity.

We assessed the methodology, including the development and accumulation of data, for the inclusion of certain costs in the installation direct labor and overhead standards.

We tested a selection of the data used to develop the installation direct labor standard and overhead standard to test certain data attributes used in the estimates by comparing such data to contracts with third parties and internal documentation of wages and costs.

We tested the average length of time to complete specific installation activities by inquiring of personnel who supervise installation activities and selecting certain data to develop an expectation of the average length of time to complete certain installation activities.

(signed) KPMG LLP

14 unchanged sentences

Property, plant and equipment, net of accumulated depreciation of $ 31,639 and $ 27,656 , respectively

34,357 34,591

Customer relationships, net 5,615 7,453

Franchises 67,322 67,322

Goodwill 29,554 29,554

Total investment in cable properties, net 136,848 138,920

OPERATING LEASE RIGHT-OF-USE ASSETS

OTHER NONCURRENT ASSETS 3,449 2,731

Total assets $ 144,206 $ 148,188

LIABILITIES AND SHAREHOLDERS’ EQUITY

1 unchanged sentence

Accounts payable and accrued liabilities $ 8,867 $ 8,885

Operating lease liabilities

Current portion of long-term debt 1,008 3,500

2 unchanged sentences

DEFERRED INCOME TAXES 18,108 17,711

LONG-TERM OPERATING LEASE LIABILITIES

OTHER LONG-TERM LIABILITIES 4,198 3,703

13 unchanged sentences

Additional paid-in capital 29,000 31,405

Retained earnings

Accumulated other comprehensive loss

Retained earnings (accumulated deficit) ( 5,195 ) 40

Total Charter shareholders’ equity 23,805 31,445

8 unchanged sentences

Year Ended December 31,

2020 2019 2018

REVENUES $ 48,097 $ 45,764 $ 43,634

COSTS AND EXPENSES:

Operating costs and expenses (exclusive of items shown separately below)

29,930 29,224 27,860

Depreciation and amortization 9,704 9,926 10,318

Other operating expenses, net 58 103 235

39,692 39,253 38,413

Income from operations 8,405 6,511 5,221

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Interest expense, net

( 3,848 ) ( 3,797 ) ( 3,540 )

Loss on extinguishment of debt ( 143 ) ( 25 ) —

Gain (loss) on financial instruments, net

Loss on financial instruments, net ( 15 ) ( 54 ) ( 110 )

Other pension benefits (costs), net

( 66 ) ( 69 ) 192

Other expense, net

( 31 ) ( 135 ) ( 77 )

( 4,103 ) ( 4,080 ) ( 3,535 )

Income before income taxes 4,302 2,431 1,686

Income tax benefit (expense)

Income tax expense ( 626 ) ( 439 ) ( 180 )

Consolidated net income 3,676 1,992 1,506

Net income attributable to noncontrolling interests

( 454 ) ( 324 ) ( 276 )

Net income attributable to Charter shareholders $ 3,222 $ 1,668 $ 1,230

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:

$ 15.85 $ 7.60 $ 5.29

Diluted $ 15.40 $ 7.45 $ 5.22

Weighted average common shares outstanding, basic

203,316,483 219,506,735 232,356,665

Weighted average common shares outstanding, diluted 209,273,247 223,786,380 235,525,226

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(dollars in millions)

Class A Common Stock

Class B Common Stock

Additional Paid-in Capital

Retained Earnings

Accumulated Other Comprehensive Loss

Total Charter Shareholders’ Equity

Non-controlling Interests

Total Shareholders’ Equity

Class A Common Stock Class B Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Total Charter Shareholders’ Equity Non-controlling Interests Total Shareholders’ Equity

BALANCE, December 31, 2017 $ — $ — $ 35,253 $ 3,832 $ ( 1 ) $ 39,084 $ 8,447 $ 47,531

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Changes in accumulated other comprehensive loss, net — — — — ( 1 ) ( 1 ) — ( 1 )

Cumulative effect of accounting change

Cumulative effect of accounting changes — — — 62 — 62 7 69

Purchases and retirement of treasury stock — — ( 2,055 ) ( 2,344 ) — ( 4,399 ) — ( 4,399 )

Purchase of noncontrolling interest, net of tax — — ( 104 ) — — ( 104 ) ( 518 ) ( 622 )

Exchange of Charter Holdings units held by A/N, net of tax and TRA effects

Change in noncontrolling interest ownership, net of tax — — 54 — — 54 ( 72 ) ( 18 )

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Stock compensation expense — — 315 — — 315 — 315

Accelerated vesting of equity awards

Exercise of stock options — — 118 — — 118 — 118

Changes in accumulated other comprehensive loss, net — — — — 2 2 — 2

Cumulative effect of accounting changes

Purchases and retirement of treasury stock — — ( 2,465 ) ( 4,408 ) — ( 6,873 ) — ( 6,873 )

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Exercise of stock options — — 184 — — 184 — 184

Changes in accumulated other comprehensive loss, net

Issuance of equity — — 23 — — 23 — 23

Purchases and retirement of treasury stock — — ( 2,760 ) ( 8,457 ) — ( 11,217 ) — ( 11,217 )

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Year Ended December 31,

2020 2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES:

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Stock compensation expense 351 315 285

Accelerated vesting of equity awards

Noncash interest income, net ( 41 ) ( 106 ) ( 307 )

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Loss on extinguishment of debt 143 25 —

(Gain) loss on financial instruments, net

Loss on financial instruments, net 15 54 110

Deferred income taxes 465 320 110

Other, net ( 10 ) 158 180

Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:

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Change in accrued expenses related to capital expenditures ( 77 ) 55 ( 470 )

Purchases of wireless spectrum licenses ( 464 ) — —

Real estate investments through variable interest entities ( 183 ) ( 148 ) ( 21 )

Other, net ( 18 ) ( 43 ) ( 120 )

Net cash flows from investing activities ( 8,157 ) ( 7,331 ) ( 9,736 )

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Payments for debt issuance costs ( 125 ) ( 103 ) ( 29 )

Issuance of equity 23 — —

Purchase of treasury stock ( 11,217 ) ( 6,873 ) ( 4,399 )

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Distributions to noncontrolling interest ( 154 ) ( 154 ) ( 153 )

Borrowings for real estate investments through variable interest entities

Distributions to variable interest entities noncontrolling interest

Borrowings for real estate investments through variable interest entities, net 122 — 342

Other, net 16 ( 112 ) ( 112 )

Net cash flows from financing activities ( 8,953 ) ( 1,633 ) ( 1,887 )

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Charter Communications, Inc.

(together with its controlled subsidiaries, “Charter,” or the “Company”) is the second largest cable operator in the United States and a leading broadband communications services company providing video, Internet and voice services to residential and small and medium business customers.

The Company also offers mobile service to residential customers and recently launched mobile service to small and medium business customers.

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

The Company also owns and operates regional sports networks and local sports, news and community channels.

(together with its controlled subsidiaries, “Charter,” or the “Company”) is a leading broadband connectivity company and cable operator.

Over an advanced high-capacity, two-way telecommunications network, the Company offers 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.

The Company also distributes award-winning news coverage, sports and high-quality original programming to its customers through Spectrum Networks and Spectrum Originals.

Charter is a holding company whose principal asset is a controlling equity interest in Charter Communications Holdings, LLC (“Charter Holdings”), an indirect owner of Charter Communications Operating, LLC (“Charter Operating”) under which substantially all of the operations reside.

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Depreciation is recorded using the straight-line composite method over management’s estimate of the useful lives of the related assets as follows:

Cable distribution systems

Customer premise equipment and installations

Vehicles and equipment

Buildings and improvements

Furniture, fixtures and equipment

Cable distribution systems 6 - 22 years

Customer premise equipment and installations 3 - 8 years

Vehicles and equipment 6 - 21 years

Buildings and improvements 8 - 40 years

Furniture, fixtures and equipment 2 - 10 years

Asset Retirement Obligations

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Other Noncurrent Assets

Other noncurrent assets primarily include investments, trademarks, customer contract costs and other intangible assets.

Other noncurrent assets primarily include investments, wireless spectrum licenses, trademarks, customer contract costs and other intangible assets.

The Company accounts for its investments in less than majority owned investees under either the equity method or as equity securities.

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These amounts are amortized as a component of equity earnings (losses), recorded within other expense, net over the estimated useful life of the asset.

Trademarks have been determined to have an indefinite life and are tested annually for impairment.

Wireless spectrum licenses and trademarks have been determined to have an indefinite life and are tested annually for impairment.

Customer contract costs are deferred in other noncurrent assets for upfront costs incurred to obtain a customer contract and upfront costs to fulfill a customer contract, as further discussed below under the Customer Contract Costs accounting policy.

Revenue Recognition

Nature of Services

Residential Services

Residential customers are offered video, Internet, and voice services primarily on a subscription basis.

Residential customers may generally cancel their subscriptions at the end of their monthly service period without penalty.

Each subscription service provided

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(dollars in millions, except share or per share data or where indicated)

is accounted for as a distinct performance obligation and revenue is recognized ratably over the monthly service period as the subscription services are delivered.

Revenue Recognition

Nature of Services

Residential Services

Residential customers are offered Internet, video, and voice services primarily on a subscription basis.

Residential customers may generally cancel their subscriptions at the end of their monthly service period without penalty.

Each subscription service provided is accounted for as a distinct performance obligation and revenue is recognized ratably over the monthly service period as the subscription services are delivered.

Each optional service purchased is generally accounted for as a distinct performance obligation when purchased and revenue is recognized when the service is provided.

Residential video customers have the option to purchase additional tiers of services, as well as video-on-demand (“VOD”) programming and pay-per-view programming on a per-event basis.

Video revenues consist primarily of revenues from the selected programming service tier, as well as VOD fees, pay-per-view fees, retransmission fees, regulatory fees, equipment service fees and video installation fees.

Residential Internet customers receive data download and upload services with speeds dependent on the selected tier of service.

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Internet revenues consist primarily of data services, WiFi service fees and Internet installation fees.

Residential video customers have the option to purchase additional tiers of services, as well as video-on-demand (“VOD”) programming and pay-per-view programming on a per-event basis.

Residential voice customers receive unlimited local and long distance calling to United States, Canada, Mexico, and Puerto Rico, voicemail, call waiting, caller ID, call forward and other features.

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Small and Medium Business

Small and medium business customers are offered video, Internet and voice services similar to those provided to residential customers.

Small and medium business customers may generally cancel their subscriptions at the end of their monthly service period without penalty.

Small and medium business ("SMB") customers are offered Internet, video and voice services similar to those provided to residential customers.

SMB customers may generally cancel their subscriptions at the end of their monthly service period without penalty.

Each subscription service provided is accounted for as a distinct performance obligation and revenue is recognized ratably over the monthly service period as the subscription services are delivered.

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In other service areas, the Company has entered into representation agreements under which another operator in the area will sell advertising on the Company’s behalf.

For representation arrangements in which the Company controls the sale of advertising and acts as the principal to the transaction, the Company recognizes revenue earned from the advertising customer on a gross basis and the amount remitted to the distributor as an operating expense.

For other representation arrangements in which the Company does not control the sale of advertising and acts as an agent to the transaction, the Company recognizes revenue net of any fee remitted to the distributor.

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

Mobile services are sold under an unlimited data plan or a by-the-gig data usage plan and revenue is recognized ratably over the monthly service period as the services are delivered.

Customers can purchase mobile equipment, including devices and accessory products, and have the option to pay for devices under interest-free monthly installment plans.

The sale of equipment is a separate

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(dollars in millions, except share or per share data or where indicated)

performance obligation.

operating expense.

The Company also offers mobile service to residential and SMB customers.

Mobile services are sold under unlimited data plans or by-the-gig data usage plans and revenue is recognized ratably over the monthly service period as the services are delivered.

Customers can purchase mobile equipment, including devices and accessory products, and have the option to pay for devices under interest-free monthly installment plans.

The sale of equipment is a separate performance obligation.

Revenue is recognized from the sale of equipment upon delivery and acceptance by the customer, as this is when control passes to the customer.

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Year Ended December 31,

2020 2019 2018

Internet $ 18,521 $ 16,667 $ 15,181

Video 17,432 17,607 17,348

Voice 1,806 1,920 2,114

Residential revenue 37,759 36,194 34,643

Small and medium business 3,964 3,868 3,665

Enterprise 2,468 2,556 2,528

Commercial revenue 6,432 6,424 6,193

Advertising sales 1,699 1,568 1,785

Mobile 1,364 726 106

Other 843 852 907

$ 48,097 $ 45,764 $ 43,634

Fees imposed on the Company by various governmental authorities are passed through on a monthly basis to the Company’s customers and are periodically remitted to authorities.

Fees of $ 1.1 billion , $ 1.0 billion and $ 961 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, are reported in video, voice, mobile and commercial revenues, on a gross basis with a corresponding operating expense because the Company is acting as a principal.

Fees of $ 1.1 billion, $ 1.1 billion and $ 1.0 billion for the years ended December 31, 2020, 2019 and 2018, respectively, are reported in video, voice, mobile and commercial revenues, on a gross basis with a corresponding operating expense because the Company is acting as a principal.

Certain taxes, such as sales taxes imposed on the Company’s customers, collected and remitted to state and local authorities, are recorded on a net basis because the Company is acting as an agent in such situations.

A significant portion of our revenue is derived from customers who may generally cancel their monthly subscriptions at any time without penalty.

A significant portion of our revenue is derived from customers who may generally cancel their monthly subscriptions at the end of their monthly service period without penalty.

As such, the amount of revenue related to unsatisfied performance obligations is not necessarily indicative of the future revenue to be recognized from our existing customer base.

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The Company often provides multiple services to a customer.

Provision of customer premise equipment, installation services, and additional service tiers may have a significant level of integration and interdependency with the subscription video, Internet, voice, or connectivity services provided.

Provision of customer premise equipment, installation services, and additional service tiers may have a significant level of integration and interdependency with the subscription Internet, video, voice, or connectivity services provided.

Judgment is required to determine whether provision of customer premise equipment, installation services, and additional service tiers are considered distinct and accounted for separately, or not distinct and accounted for together with the subscription services.

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The transaction price for a bundle of residential services is frequently less than the sum of the standalone selling prices of each individual service.

The Company allocates the residential services bundle discount among the services to which the discount relates based on the relative standalone selling prices of those services.

Standalone selling prices for the Company’s residential video and Internet services are directly observable, while standalone selling price for the Company’s residential voice service is estimated using the adjusted market assessment approach which relies upon information from peers and competitors who sell residential voice services individually.

The Company believes residential and small and medium business non-refundable upfront installation fees charged to customers result in a material right to renew the contract as such fees are not required to be paid upon subsequent renewals.

The residential and small and medium business upfront fee is deferred over the period the fee remains material to the customer, which the Company has estimated to be approximately six months.

Estimation of the period the fee remains material to the customer requires

The Company allocates the residential services bundle discount among the services to which

CHARTER COMMUNICATIONS, INC.

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(dollars in millions, except share or per share data or where indicated)

consideration of both quantitative and qualitative factors including average installation fee, average revenue per customer, and customer behavior, among others.

the discount relates based on the relative standalone selling prices of those services.

Standalone selling prices for the Company’s residential Internet and video services are directly observable, while standalone selling price for the Company’s residential voice service is estimated using the adjusted market assessment approach which relies upon information from peers and competitors who sell residential voice services individually.

The Company believes residential and SMB non-refundable upfront installation fees charged to customers result in a material right to renew the contract as such fees are not required to be paid upon subsequent renewals.

The residential and SMB upfront fee is deferred over the period the fee remains material to the customer, which the Company has estimated to be approximately six months.

Estimation of the period the fee remains material to the customer requires consideration of both quantitative and qualitative factors including average installation fee, average revenue per customer, and customer behavior, among others.

Deferred Revenue Contract Liabilities

Timing of revenue recognition may differ from the timing of invoicing to customers.

Residential, small and medium business, and enterprise customers are invoiced for subscription services in advance of the service period.

Residential, SMB, and enterprise customers are invoiced for subscription services in advance of the service period.

Deferred revenue liabilities, or contract liabilities, are recorded when the Company collects payments in advance of performing the services.

Deferred revenue liabilities, or contract liabilities, are also recorded when the Company invoices customers upfront for installation services that are recognized as revenue over time.

Residential and small and medium business installation revenues are deferred over the period the fee remains material to the customer.

Residential and SMB installation revenues are deferred over the period the fee remains material to the customer.

Enterprise installation revenues are deferred using a portfolio approach over the average contract life of each enterprise service category.

As of December 31, 2020 and 2019, current deferred revenue liabilities consisting of customer prepayments of $ 363 million and $ 366 million, respectively, and upfront installation fees of $ 73 million and $ 94 million, respectively, were included in accounts payable and accrued liabilities.

As of December 31, 2019 and 2018 , long-term deferred revenue liabilities consisting of enterprise upfront installation fees of $ 34 million were included in other long-term liabilities.

As of December 31, 2020 and 2019, long-term deferred revenue liabilities consisting of enterprise upfront installation fees of $ 35 million and $ 34 million, respectively, were included in other long-term liabilities.

Customer Contract Costs

The Company recognizes an asset for incremental costs of obtaining a contract with a customer if the amortization period of those costs is expected to be longer than one year and the costs are expected to be recovered.

Enterprise sales commission costs meet the requirements to be deferred and, as a result, are recognized using a portfolio approach over a commission expense weighted-average enterprise contract period.

Enterprise sales commission costs meet the requirements to be deferred and, as a result, are recognized using a portfolio approach over a weighted-average contract period.

Deferred enterprise commission costs are included in other noncurrent assets in the consolidated balance sheet and totaled $ 138 million and $ 143 million as of December 31, 2020 and 2019, respectively.

As the amortization period of residential and small and medium business commissions costs is less than one year, the Company applies the practical expedient that allows such costs to be expensed as incurred.

The Company has determined that the amortization period associated with residential and small and medium business commission costs is less than one year based on qualitative and quantitative factors.

As the amortization period of residential and SMB commissions costs is less than one year, the Company applies the practical expedient that allows such costs to be expensed as incurred.

The Company has determined that the amortization period associated with residential and SMB commission costs is less than one year based on qualitative and quantitative factors.

The Company recognizes an asset for costs incurred to fulfill a contract when those costs are directly related to services provided under the contract, generate or enhance resources of the entity that will be used in performing service obligations under the contract, and are expected to be recovered.

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Deferred right-of-entry costs are included in other noncurrent assets in the consolidated balance sheet and totaled $ 320 million and $ 284 million as of December 31, 2020 and 2019, respectively.

Amortization expense of $ 67 million and $ 62 million was included in regulatory, connectivity and produced content within operating costs and expenses in the consolidated statements of operations for the year ended December 31, 2019 and 2018 , respectively.

Residential and small and medium business installation costs not capitalized into property, plant and equipment are expensed as incurred under cable industry-specific guidance.

Amortization expense of $ 71 million, $ 67 million and $ 62 million was included in regulatory, connectivity and produced content within operating costs and expenses in the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018, respectively.

Residential and SMB installation costs not capitalized into property, plant and equipment are expensed as incurred under cable industry-specific guidance.

Programming Costs

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Certain programming contracts contain cash and non-cash consideration from the programmers.

If consideration received does not relate to a separate product or service, the Company recognizes the consideration on a straight-line basis over the life of the programming agreement as a reduction of programming expense.

Programming costs included in the statements of operations were $ 11.3 billion , $ 11.1 billion and $ 10.6 billion for the years ended December 31, 2019 , 2018 and 2017 , respectively.

Advertising Costs

Advertising costs associated with marketing the Company’s products and services are generally expensed as costs are incurred.

If consideration received does not

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(dollars in millions, except share or per share data or where indicated)

relate to a separate product or service, the Company recognizes the consideration on a straight-line basis over the life of the programming agreement as a reduction of programming expense.

Programming costs included in the statements of operations were $ 11.4 billion, $ 11.3 billion and $ 11.1 billion for the years ended December 31, 2020, 2019 and 2018, respectively.

Advertising Costs

Advertising costs associated with marketing the Company’s products and services are generally expensed as costs are incurred.

Multiple-Element Transactions

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Restricted stock, restricted stock units, stock options as well as equity awards with market conditions are measured at the grant date fair value and amortized to stock compensation expense over the requisite service period.

The fair value of options is estimated on the date of grant using the Black-Scholes option-pricing model and the fair value of equity awards with market conditions is estimated on the date of grant using Monte Carlo simulations.

The fair value of stock options is estimated on the date of grant using the Black-Scholes option-pricing model and the fair value of equity awards with market conditions is estimated on the date of grant using Monte Carlo simulations.

The grant date weighted average assumptions used during the years ended December 31, 2020, 2019 and 2018, respectively, were:

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Defined Benefit Pension Plans

The Company sponsors 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 Time Warner Cable Inc.

The Company sponsors qualified and unqualified defined benefit pension plans that provide pension benefits to a majority of employees who were employed by Time Warner Cable Inc.

("TWC") before the merger with TWC.

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The impact on deferred taxes of changes in tax rates and tax law, if any, applied to the years during which temporary differences are expected to be settled, are reflected in the consolidated financial statements in the period of enactment.

In determining the Company’s tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions unless such positions are determined to be “more likely than not” of being sustained upon examination, based on their technical merits.

There is considerable judgment involved in making such a determination.

Interest and penalties are recognized on uncertain income tax positions as part of the income tax provision.

In determining the Company’s tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax

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(dollars in millions, except share or per share data or where indicated)

positions unless such positions are determined to be “more likely than not” of being sustained upon examination, based on their technical merits.

There is considerable judgment involved in making such a determination.

Interest and penalties are recognized on uncertain income tax positions as part of the income tax provision.

The Company’s operations are managed and reported to its Chief Executive Officer (“CEO”), the Company’s chief operating decision maker, on a consolidated basis.

The CEO assesses performance and allocates resources based on the consolidated results of operations.

Under this organizational and reporting structure, the Company has one reportable segment, cable services.

Under this organizational and reporting structure, the Company has one reportable segment.

Allowance for Doubtful Accounts

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Year Ended December 31,

2020 2019 2018

Balance, beginning of period $ 151 $ 129 $ 113

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Furniture, fixtures and equipment 7,219 6,491

65,996 62,247

accumulated depreciation ( 31,639 ) ( 27,656 )

$ 34,357 $ 34,591

The Company periodically evaluates the estimated useful lives used to depreciate its assets and the estimated amount of assets that will be abandoned or have minimal use in the future.

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For valuation purposes, they are defined as the future economic benefits of the right to solicit and service potential customers (customer marketing rights), and the right to deploy and market new services to potential customers (service marketing rights).

Management estimates the fair value of franchise rights at the date of acquisition and determines if the franchise has a finite life or an indefinite life.

The Company has concluded that all of its franchises qualify for indefinite life treatment given that there are no legal, regulatory, contractual, competitive, economic or other factors which limit the period over which these rights will contribute

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(dollars in millions, except share or per share data or where indicated)

to the Company's cash flows.

Management estimates the fair value of franchise rights at the date of acquisition and determines if the franchise has a finite life or an indefinite life.

The Company reassesses this determination periodically or whenever events or substantive changes in circumstances occur.

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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.

The Company performed a qualitative assessment in 2019 , which also 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").

After consideration of the qualitative factors in 2019 , including the results of the Appraisal, the Company concluded that it is more likely than not that the fair value of the franchise assets in each unit of accounting exceeds the carrying value of such assets and therefore did not perform a quantitative analysis at the assessment date.

The Company performed a qualitative assessment in 2020.

After consideration of the qualitative factors in 2020, the Company concluded that it is more likely than not that the fair value of the franchise assets in each unit of accounting exceeds the carrying value of such assets and therefore did not perform a quantitative analysis at the assessment date.

Periodically, the Company will elect to perform a quantitative analysis for impairment testing.

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The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value.

As with the Company’s franchise impairment testing, in 2019 the Company elected to perform a qualitative goodwill impairment assessment, which incorporated the results of the Appraisal and consideration of the same qualitative factors relevant to the Company's franchise impairment testing.

As a result of that assessment, the Company concluded that goodwill is not impaired.

As with the Company’s franchise impairment testing, in 2020 the Company elected to perform a qualitative goodwill

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impairment assessment, which incorporated consideration of the same qualitative factors relevant to the Company's franchise impairment testing.

As a result of that assessment, the Company concluded that goodwill is not impaired.

Customer relationships are recorded at fair value as of the date acquired less accumulated amortization.

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As with the Company’s franchise impairment testing, in 2020 the Company elected to perform a qualitative trademark impairment assessment and concluded that trademarks are not impaired.

In 2020, the Company purchased approximately $ 464 million of Citizens Broadband Radio Service ("CBRS") priority access licenses from the Federal Communications Commission in its effort to support its mobile network.

The wireless spectrum licenses are considered indefinite life intangible assets recorded in other noncurrent assets on the Company's consolidated balance sheets and payments (including deposits) are presented as an investing cash outflow on the Company’s statements of cash flows.

As of December 31, 2020 and 2019, indefinite-lived and finite-lived intangible assets are presented in the following table:

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Indefinite-lived intangible assets:

Franchises $ 67,322 $ — $ 67,322 $ 67,322 $ — $ 67,322

Goodwill 29,554 — 29,554 29,554 — 29,554

Wireless spectrum licenses 464 — 464 — — —

Trademarks 159 — 159 159 — 159

$ 97,499 $ — $ 97,499 $ 97,035 $ — $ 97,035

Finite-lived intangible assets:

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Other intangible assets 420 ( 159 ) 261 405 ( 122 ) 283

Amortization expense related to customer relationships and other intangible assets for the years ended December 31, 2019 , 2018 and 2017 was $ 2.2 billion , $ 2.4 billion and $ 2.7 billion , respectively.

$ 18,650 $ ( 12,774 ) $ 5,876 $ 18,635 $ ( 10,899 ) $ 7,736

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(dollars in millions, except share or per share data or where indicated)

Amortization expense related to customer relationships and other intangible assets for the years ended December 31, 2020, 2019 and 2018 was $ 1.9 billion, $ 2.2 billion and $ 2.4 billion, respectively.

The Company expects amortization expense on its finite-lived intangible assets will be as follows.

Thereafter 468

Actual amortization expense in future periods could differ from these estimates as a result of new intangible asset acquisitions or divestitures, changes in useful lives, impairments, adoption of new accounting standards and other relevant factors.

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Total investments $ 313 $ 330

The Company’s equity-method investments consist of investments in companies that develop sports programming services, develop applications to improve the security, control and privacy of connected devices in homes and businesses for broadband network operators, distribute multi-video programs to national advertisers, provide programming on a video on demand, pay-per-view and subscription basis and develop and deploy cloud-based software video user interfaces.

The Company’s equity-method investments consist of investments in companies that develop sports programming services;

develop applications to improve the security, control and privacy of connected devices in homes and businesses for broadband network operators;

sell national advertisements on behalf of multi-video program distributors;

provide programming on a video on demand, pay-per-view and subscription basis;

and develop and deploy cloud-based software video user interfaces.

The Company applies the equity method of accounting to these and other less significant equity-method investments, all of which are recorded in other noncurrent assets in the consolidated balance sheets as of December 31, 2020 and 2019.

For the years ended December 31, 2020, 2019 and 2018, net losses from equity-method investments were $ 31 million, $ 137 million and $ 77 million, respectively, which were recorded in other expense, net in the consolidated statements of operations.

Net losses from equity-method investments for the years ended December 31, 2020, 2019 and 2018 included impairments on equity investments of approximately $ 10 million, $ 121 million and $ 58 million, respectively.

The Company's equity-method investments balances reflected in the table above includes differences between the acquisition date fair value of certain investments acquired and the underlying equity in the net assets of the investee, referred to as a basis difference.

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The remaining unamortized basis difference was $ 186 million and $ 203 million as of December 31, 2020 and 2019, respectively.

For the years ended December 31, 2019 , 2018 and 2017 , net losses from equity-method investments were $ 137 million , $ 77 million and $ 18 million , respectively, which were recorded in other expense, net in the consolidated statements of operations.

Net losses from equity-method investments for the years ended December 31, 2019 and 2018 included impairments on equity investments of approximately $ 121 million and $ 58 million , respectively.

Real Estate Investments through Variable Interest Entities

In July 2018, the Company entered into a build-to-suit lease arrangement with a single-asset special purpose entity ("SPE Building 1") to build the first building in the building complex for the new Charter headquarters in Stamford, Connecticut.

The SPE Building 1 obtained a first-lien mortgage note to finance the construction with fixed monthly payments through July 15, 2035 with a 5.612 % coupon interest rate.

All payments of the mortgage note are guaranteed by Charter.

The initial term of the lease is 15 years commencing August 1, 2020, with no termination options.

At the end of the lease term there is a mirrored put option for the SPE to sell the property to Charter and call option for Charter to purchase the property for a fixed purchase price.

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Real Estate Investments through Variable Interest Entities

In July 2018, the Company's build-to-suit lease arrangement with a single-asset special purpose entity ("SPE") to build a new Charter headquarters in Stamford, Connecticut obtained all approvals and was made effective.

The SPE obtained a first-lien mortgage note to finance the construction with fixed monthly payments through July 15, 2035 with a 5.612 % coupon interest rate.

All payments of the mortgage note are guaranteed by Charter.

The initial term of the lease is 15 years commencing August 1, 2020, with no termination options.

At the end of the lease term there is a mirrored put option for the SPE to sell the property to Charter and call option for Charter to purchase the property for a fixed purchase price.

As the Company has determined the SPE is a VIE of which it became the primary beneficiary upon the effectiveness of the arrangement, the Company has consolidated the assets and liabilities of the SPE in its consolidated balance sheet as of December 31, 2019 and 2018 as follows.

Current assets

In April 2020, the Company entered into a build-to-suit lease agreement with a second special purpose entity (“SPE Building 2”) to build the adjoining building and atrium, in the building complex for the new Charter headquarters.

As of December 31, 2020, Charter does not guarantee the financing for SPE Building 2.

The initial term of the lease is 15 years commencing February 26, 2022, with no termination options.

At the end of the lease term there is a put option for the SPE Building 2 to sell the property to Charter for a fixed price.

If SPE Building 2 does not exercise the put option and Company exercises its first renewal term there is call option for Charter to purchase property for a fixed purchase price in year 3 of the first renewal term.

As the Company has determined that SPE Building 1 and SPE Building 2 (collectively, the "SPEs") are variable interest entities ("VIEs") of which the Company became the primary beneficiary upon the effectiveness of the arrangements in July 2018 and April 2020, respectively, the Company has consolidated the assets and liabilities of the SPEs in its consolidated balance sheets as of December 31, 2020 and 2019 as follows.

Restricted cash $ 3 $ 66

3 unchanged sentences

Property, plant and equipment includes land, a parking garage and building construction costs, including the capitalization of qualifying interest.

As of December 31, 2019 and 2018 , other long-term liabilities include $ 339 million and $ 342 million , respectively, in VIE's mortgage note liability and $ 11 million and $ 4 million , respectively, in liability-classified noncontrolling interest recorded at amortized cost with accretion towards settlement of the put/call option in the lease.

The consolidated statement of cash flows for the year ended December 31, 2019 includes a decrease to restricted cash of $ 148 million primarily related to building construction costs.

The consolidated statement of cash flows for the year ended December 31, 2018 includes an increase to restricted cash of $ 214 million as a result of activity in the VIE including borrowings of $ 342 million by the VIE on the mortgage note liability offset by distributions by the VIE to the noncontrolling interest of $ 107 million for the contributed land and parking garage and $ 21 million incurred by the VIE for building construction costs.

In October 2017, the Company acquired a defaulted mortgage loan issued to a single-asset SPE.

The consolidated statement of cash flows for the year ended December 31, 2017 includes $ 105 million related to the acquisition of the mortgage loan.

As the Company has determined the SPE is a VIE of which it is the primary beneficiary, the Company has consolidated the assets and liabilities of the SPE in its consolidated balance sheet which are primarily comprised of the building securing the mortgage loan.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Other long-term liabilities includes mortgage note liabilities and liability-classified noncontrolling interests for the SPEs recorded at amortized cost with accretion towards settlement of the put/call option in the leases.

As of December 31, 2020 and 2019, other long-term liabilities include $ 400 million and $ 339 million in SPE mortgage note liability, respectively.

Accounts Payable and Accrued Liabilities

4 unchanged sentences

Programming costs 1,940 2,042

Labor 1,374 1,028

Capital expenditures 1,227 1,441

Interest 1,083 1,052

Taxes and regulatory fees 555 537

Property and casualty 462 458

The components of lease related expenses, net are as follows.

Year Ended December 31, 2019

Operating lease expense (a)

Finance lease expense:

Amortization of right-of-use assets

Interest on lease liabilities

Total finance lease expense

Sublease income

Total lease related expenses, net

Includes short-term leases and variable leases costs of $ 130 million for the year ended December 31, 2019 .

Operating lease liabilities 235 214

Other 792 867

$ 8,867 $ 8,885

Operating lease expenses were $ 439 million and $ 428 million for the years ended December 31, 2020 and 2019, respectively, inclusive of $ 135 million and $ 130 million for the years ended December 31, 2020 and 2019, respectively, of both short-term lease costs and variable lease costs that were not included in the measurement of operating lease liabilities.

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Supplemental cash flow information related to leases is as follows.

Year Ended December 31, 2019

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Operating cash flows from finance leases

Financing cash flows from finance leases

Right-of-use assets obtained in exchange for lease obligations:

Operating leases

Finance leases

Cash paid for amounts included in the measurement of operating lease liabilities, recorded as operating cash flows in the statements of cash flows, were $ 300 million and $ 288 million for the years ended December 31, 2020 and 2019, respectively.

Operating lease right-of-use assets obtained in exchange for operating lease obligations were $ 378 million and $ 257 million for the years ended December 31, 2020 and 2019, respectively.

Supplemental balance sheet information related to leases is as follows.

December 31, 2019

Operating leases:

Operating lease right-of-use assets:

Current operating lease liabilities

Long-term operating lease liabilities

Total operating lease liabilities

Finance leases:

Finance lease right-of-use assets (included within property, plant and equipment, net)

Current finance lease liabilities (included within accounts payable and accrued liabilities)

Long-term finance lease liabilities (included within other long-term liabilities)

Total finance lease liabilities

Weighted average remaining lease term

Operating leases

Finance leases

Weighted average discount rate

Operating leases

Finance leases

Included within other noncurrent assets $ 1,214 $ 1,092

Operating lease liabilities:

Current portion included within accounts payable and accrued liabilities $ 235 $ 214

Long-term portion included within other long-term liabilities 1,110 979

$ 1,345 $ 1,193

Weighted average remaining lease term for operating leases 6.4 years 6.6 years

Weighted average discount rate for operating leases 3.9 % 4.4 %

Maturities of operating lease liabilities as of December 31, 2020 are as follows.

Thereafter 368

Undiscounted lease cash flow commitments

Reconciling impact from discounting ( 227 )

Lease liabilities on consolidated balance sheet as of December 31, 2020

The Company has $ 63 million and $ 62 million of finance lease liabilities recognized in the consolidated balance sheets as of December 31, 2020 and 2019, respectively, included within accounts payable and accrued liabilities and other long-term liabilities.

The related finance lease right-of-use assets are recorded in property, plant and equipment, net.

The Company’s finance leases were not considered material for further supplemental lease disclosures.

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Maturities of lease liabilities are as follows.

Operating leases

Finance leases

Undiscounted lease cash flow commitments

Reconciling impact from discounting

Lease liabilities on consolidated balance sheet as of December 31, 2019

The following table presents the Company’s unadjusted lease commitments as of December 31, 2018 as a required disclosure for companies adopting the lease standard prospectively without revising comparative period information.

Operating leases

Capital leases

Long-Term Debt

Long-term debt consists of the following as of December 31, 2020 and 2019:

Principal Amount

Accreted Value

Principal Amount

Accreted Value

Principal Amount Accreted Value Principal Amount Accreted Value

CCO Holdings, LLC:

5.250% senior notes due March 15, 2021

5.250 % senior notes due September 30, 2022

$ — $ — $ 1,250 $ 1,241

5.125 % senior notes due February 15, 2023

— — 1,000 995

4.000 % senior notes due March 1, 2023

500 498 500 497

5.125 % senior notes due May 1, 2023

— — 1,150 1,145

5.750 % senior notes due September 1, 2023

1 unchanged sentence

5.875 % senior notes due April 1, 2024

— — 1,700 1,690

5.375 % senior notes due May 1, 2025

5.750 % senior notes due February 15, 2026

2,500 2,475 2,500 2,471

5.500 % senior notes due May 1, 2026

1,500 1,492 1,500 1,491

5.875 % senior notes due May 1, 2027

800 796 800 796

5.125 % senior notes due May 1, 2027

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

3,250 3,225 3,250 3,222

5.000 % senior notes due February 1, 2028

2,500 2,472 2,500 2,469

5.375 % senior notes due June 1, 2029

1,500 1,501 1,500 1,501

4.750 % senior notes due March 1, 2030

3,050 3,042 3,050 3,041

4.500 % senior notes due August 15, 2030

2,750 2,750 — —

4.250 % senior notes due February 1, 2031

3,000 3,001 — —

4.500 % senior notes due May 1, 2032

2,900 2,928 — —

Charter Communications Operating, LLC:

3.579 % senior notes due July 23, 2020

— — 2,000 1,997

4.464 % senior notes due July 23, 2022

3,000 2,992 3,000 2,987

Senior floating rate notes due February 1, 2024 900 902 900 902

4.500 % senior notes due February 1, 2024

1,100 1,094 1,100 1,093

4.908 % senior notes due July 23, 2025

4,500 4,475 4,500 4,471

3.750 % senior notes due February 15, 2028

1,000 989 1,000 987

4.200 % senior notes due March 15, 2028

1,250 1,241 1,250 1,240

5.050 % senior notes due March 30, 2029

1,250 1,242 1,250 1,241

2.800 % senior notes due April 1, 2031

1,600 1,583 — —

2.300 % senior notes due February 1, 2032

1,000 991 — —

6.384 % senior notes due October 23, 2035

2,000 1,983 2,000 1,982

5.375 % senior notes due April 1, 2038

800 786 800 786

6.484 % senior notes due October 23, 2045

3,500 3,468 3,500 3,467

5.375 % senior notes due May 1, 2047

2,500 2,506 2,500 2,506

5.750 % senior notes due April 1, 2048

2,450 2,392 2,450 2,391

5.125 % senior notes due July 1, 2049

1,250 1,240 1,250 1,240

4.800 % senior notes due March 1, 2050

2,800 2,797 2,800 2,798

3.700 % senior notes due April 1, 2051

2,050 2,030 — —

6.834 % senior notes due October 23, 2055

500 495 500 495

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

3.850 % senior notes due April 1, 2061

1,350 1,339 — —

Credit facilities 10,150 10,081 10,427 10,345

1 unchanged sentence

5.000 % senior notes due February 1, 2020

8.250% senior notes due April 1, 2019

5.000% senior notes due February 1, 2020

— — 1,500 1,503

4.125 % senior notes due February 15, 2021

4.000 % senior notes due September 1, 2021

1,000 1,008 1,000 1,021

5.750 % sterling senior notes due June 2, 2031 (a)

854 911 828 886

6.550 % senior debentures due May 1, 2037

1,500 1,668 1,500 1,675

7.300 % senior debentures due July 1, 2038

1,500 1,763 1,500 1,772

6.750 % senior debentures due June 15, 2039

1,500 1,706 1,500 1,713

5.875 % senior debentures due November 15, 2040

1,200 1,254 1,200 1,255

5.500 % senior debentures due September 1, 2041

1,250 1,258 1,250 1,258

5.250 % sterling senior notes due July 15, 2042 (b)

889 859 861 831

4.500 % senior debentures due September 15, 2042

1,250 1,145 1,250 1,142

Time Warner Cable Enterprises LLC:

8.375 % senior debentures due March 15, 2023

1,000 1,104 1,000 1,148

8.375 % senior debentures due July 15, 2033

1,000 1,270 1,000 1,284

Total debt 82,143 82,752 78,416 79,078

Less current portion:

5.000% senior notes due February 1, 2020 — — ( 1,500 ) ( 1,503 )

8.250% senior notes due April 1, 2019

5.000% senior notes due February 1, 2020

3.579% senior notes due July 23, 2020 — — ( 2,000 ) ( 1,997 )

4.000% senior notes due September 1, 2021 ( 1,000 ) ( 1,008 ) — —

Long-term debt $ 81,143 $ 81,744 $ 74,916 $ 75,578

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Principal amount includes £ 625 million valued at $ 828 million and $ 796 million as of December 31, 2019 and 2018 , respectively, using the exchange rate at that date.

Principal amount includes £ 650 million valued at $ 861 million and $ 827 million as of December 31, 2019 and 2018 , respectively, using the exchange rate at that date.

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 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.

(a) Principal amount includes £ 625 million valued at $ 854 million and $ 828 million as of December 31, 2020 and 2019, respectively, using the exchange rate at that date.

(b) Principal amount includes £ 650 million valued at $ 889 million and $ 861 million as of December 31, 2020 and 2019, respectively, using the exchange rate at that date.

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.

5 unchanged sentences

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.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

During the years ended December 31, 2020 and 2019, the Company repurchased $ 10.7 billion and $ 1.35 billion, respectively, of various series of senior notes.

2 unchanged sentences

CCO Holdings notes redemption

$ ( 145 ) $ ( 22 )

Time Warner Cable, LLC notes redemption 2 —

Charter Operating credit facility refinancing

$ ( 143 ) $ ( 25 )

CCO Holdings Notes

The CCO Holdings notes are senior debt obligations of CCO Holdings and CCO Holdings Capital and rank equally with all other current and future unsecured, unsubordinated obligations of CCO Holdings and CCO Holdings Capital.

The CCO Holdings notes are senior debt obligations of CCO Holdings and CCO Holdings Capital Corp.

and rank equally with all other current and future unsecured, unsubordinated obligations of CCO Holdings and CCO Holdings Capital Corp.

They are structurally subordinated to all obligations of subsidiaries of CCO Holdings.

6 unchanged sentences

Limitation on Indebtedness.

The indentures governing the CCO Holdings notes contain certain covenants that restrict the ability of CCO Holdings, CCO Holdings Capital and all of their restricted subsidiaries to:

The indentures governing the CCO Holdings notes contain certain covenants that restrict the ability of CCO Holdings, CCO Holdings Capital Corp.

and all of their restricted subsidiaries to:

• incur additional debt;

• pay dividends on equity or repurchase equity;

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

• make investments;

• sell all or substantially all of their assets or merge with or into other companies;

• sell assets;

• in the case of restricted subsidiaries, create or permit to exist dividend or payment restrictions with respect to CCO Holdings, guarantee their parent companies debt, or issue specified equity interests;

• engage in certain transactions with affiliates;

• grant liens.

The above limitations in certain circumstances regarding incurrence of debt, payment of dividends and making investments contained in the indentures of CCO Holdings permit CCO Holdings and its restricted subsidiaries to perform the above, so long as, after giving pro forma effect to the above, the leverage ratio would be below a specified level for the issuer.

2 unchanged sentences

Charter Operating Notes

The Charter Operating notes are guaranteed by CCO Holdings and substantially all of the operating subsidiaries of Charter Operating.

In addition, the Charter Operating notes are secured by a perfected first priority security interest in substantially all of the assets of Charter Operating to the extent such liens can be perfected under the Uniform Commercial Code by the filing of a financing statement and the liens rank equally with the liens on the collateral securing obligations under the Charter Operating credit facilities.

The Charter Operating notes are guaranteed by CCO Holdings and substantially all of the subsidiaries of Charter Operating.

In addition, the Charter Operating notes are secured by a perfected first priority security interest in substantially all of the assets of Charter Operating and substantially all of its subsidiaries to the extent such liens can be perfected under the Uniform Commercial Code by the filing of a financing statement and the liens rank equally with the liens on the collateral securing

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

obligations under the Charter Operating credit facilities.

Charter Operating may redeem some or all of the Charter Operating notes at any time at a premium.

15 unchanged sentences

As of December 31, 2020, $ 41 million of the revolving loan was utilized to collateralize a like principal amount of letters of credit out of $ 367 million of letters of credit issued on the Company’s behalf.

Amounts outstanding under the Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or LIBOR ( 1.73 % and 2.50 % as of December 31, 2019 and December 31, 2018 , respectively), as defined, plus an applicable margin.

Amounts outstanding under the Charter Operating credit facilities bear interest, at Charter Operating’s election, at a base rate or LIBOR ( 0.14 % and 1.73 % as of December 31, 2020 and 2019, respectively), as defined, plus an applicable margin.

The Charter Operating credit facilities also allow us to enter into incremental term loans in the future, with amortization as set forth in the notices establishing such term loans.

Although the Charter Operating credit facilities allow for the incurrence of a certain amount of incremental term loans subject to pro forma compliance with its financial maintenance covenants, no assurance can be given that the Company could obtain additional incremental term loans in the future if Charter Operating sought to do so

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

or what amount of incremental term loans would be allowable at any given time under the terms of the Charter Operating credit facilities.

The obligations of Charter Operating under the Charter Operating credit facilities are guaranteed by CCO Holdings and substantially all of the operating subsidiaries of Charter Operating.

The obligations are also secured by (i) a lien on substantially all of the assets of Charter Operating and its subsidiaries, to the extent such lien can be perfected under the Uniform Commercial Code by the filing of a financing statement, and (ii) a pledge by CCO Holdings of the equity interests owned by it in any of Charter Operating’s subsidiaries, as well as intercompany obligations owing to it by any of such entities.

The obligations of Charter Operating under the Charter Operating credit facilities are guaranteed by CCO Holdings and substantially all of the subsidiaries of Charter Operating.

The obligations are also secured by (i) a lien on substantially all of the assets of Charter Operating and substantially all of its subsidiaries, to the extent such lien can be perfected under the Uniform Commercial Code by the filing of a financing statement, and (ii) a pledge of the equity interests directly or indirectly owned by Charter Operating in substantially all of its subsidiaries, as well as intercompany obligations owing to it and the guarantor subsidiaries by any of their affiliates.

Restrictive Covenants

3 unchanged sentences

Additionally, the Charter Operating credit facilities provisions contain an allowance for restricted payments with certain limitations.

The Charter Operating credit facilities permit Charter Operating and its subsidiaries to make distributions to pay interest on the currently outstanding subordinated and parent company indebtedness, provided that, among other things, no default has occurred and is continuing under the Charter Operating credit facilities.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

among other things, no default has occurred and is continuing under the Charter Operating credit facilities.

The Charter Operating credit facilities also contain customary events of default.

Time Warner Cable, LLC Notes and Debentures

The Time Warner Cable, LLC ("TWC, LLC") senior notes and debentures are guaranteed by CCO Holdings and substantially all of the operating subsidiaries of Charter Operating and rank equally with the liens on the collateral securing obligations under the Charter Operating notes and credit facilities.

The Time Warner Cable, LLC ("TWC, LLC") senior notes and debentures are guaranteed by CCO Holdings, Charter Operating and substantially all of the subsidiaries of Charter Operating (other than TWC, LLC) and rank equally with the liens on the collateral securing obligations under the Charter Operating notes and credit facilities.

Interest on each series of TWC, LLC senior notes and debentures is payable semi-annually (with the exception of the Sterling Notes, which is payable annually) in arrears.

6 unchanged sentences

TWCE Debentures

The TWCE senior debentures are guaranteed by CCO Holdings, substantially all of the operating subsidiaries of Charter Operating and TWC, LLC and rank equally with the liens on the collateral securing obligations under the Charter Operating notes and credit facilities.

The TWCE senior debentures are guaranteed by CCO Holdings, Charter Operating, and substantially all of the subsidiaries of Charter Operating (other than TWCE) and rank equally with the liens on the collateral securing obligations under the Charter Operating notes and credit facilities.

Interest on each series of TWCE senior debentures is payable semi-annually in arrears.

2 unchanged sentences

The TWCE indenture also contains customary events of default.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Limitations on Distributions

Distributions by the Company’s subsidiaries to a parent company for payment of principal on parent company notes are restricted under the indentures and credit facilities discussed above, unless there is no default under the applicable indenture and credit facilities, and unless each applicable subsidiary’s leverage ratio test is met at the time of such distribution.

As of December 31, 2019 , there was no default under any of these indentures or credit facilities and each subsidiary met its applicable leverage ratio tests based on December 31, 2019 financial results.

Distributions by the Company’s subsidiaries to a parent company for payment of principal on parent company notes are restricted under the CCO Holdings indentures and Charter Operating credit facilities discussed above, unless there is no default under the applicable indenture and credit facilities, and unless each applicable entity’s leverage ratio test is met at the time of such distribution.

As of December 31, 2020, there was no default under any of these indentures or credit facilities and each applicable entity met its applicable leverage ratio tests based on December 31, 2020 financial results.

There can be no assurance that they will satisfy these tests at the time of the contemplated distribution.

2 unchanged sentences

In addition to the limitation on distributions under the various indentures, distributions by the Company’s subsidiaries may be limited by applicable law, including the Delaware Limited Liability Company Act, under which the Company’s subsidiaries may make distributions if they have “surplus” as defined in the act.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

Liquidity and Future Principal Payments

4 unchanged sentences

Based upon outstanding indebtedness as of December 31, 2020, the amortization of term loans, and the maturity dates for all senior and subordinated notes, total future principal payments on the total borrowings under all debt agreements are as follows:

Charter’s Class A common stock and Class B common stock are identical except with respect to certain voting, transfer and conversion rights.

Holders of Class A common stock are entitled to one vote per share.

Charter’s Class B common stock represents the share issued to A/N.

One share of Charter’s Class B common stock has a number of votes reflecting the voting power of the Charter Holdings common units and Charter Holdings convertible preferred units held by A/N as of the applicable record date on an if-converted, if-exchanged basis, and is generally intended to reflect A/N’s economic interests in Charter Holdings.

Thereafter 63,568

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Charter’s Class A common stock and Class B common stock are identical except with respect to certain voting, transfer and conversion rights.

Holders of Class A common stock are entitled to one vote per share.

Charter’s Class B common stock represents the share issued to A/N.

The following table summarizes our shares outstanding for the three years ended December 31, 2020:

Class A Common Stock

Class B Common Stock

Class A Common Stock Class B Common Stock

BALANCE, December 31, 2017 238,506,059 1

Exchange of Charter Holdings units held by A/N (see Note 11)

Exercise of stock options 576,583 —

8 unchanged sentences

BALANCE, December 31, 2019 209,975,963 1

Issuance of equity 55,294 —

Exercise of stock options 3,160,065 —

3 unchanged sentences

BALANCE, December 31, 2020 193,730,992 1

In March 2020, pursuant to the terms of the Amended and Restated Stockholders Agreement with Liberty Broadband Corporation (“Liberty Broadband”), A/N and Charter, dated May 23, 2015, Charter, Liberty and A/N closed on transactions in which Liberty Broadband and A/N exercised their preemptive right to purchase 35,112 and 20,182 shares, respectively, of Charter Class A common stock for a total purchase price of approximately $ 23 million.

Share Repurchases

1 unchanged sentence

Year Ended December 31,

2020 2019 2018

Shares $ Shares $ Shares $

Share buybacks 18,444,203 $ 10,639 16,697,458 $ 6,734 14,108,919 $ 4,322

1 unchanged sentence

Exercise cost 752,475 307,845 24,469

20,219,461 $ 11,217 17,386,100 $ 6,873 14,357,707 $ 4,399

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

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.

2 unchanged sentences

The Company accounts for treasury stock using the cost method and includes treasury stock as a component of total shareholders’ equity.

Upon retirement, these treasury shares are allocated between additional paid-in capital and retained earnings based on the cost of original issue included in additional paid-in capital.

Upon retirement, these treasury shares are allocated between additional paid-in capital and retained earnings (accumulated deficit) based on the cost of original issue included in additional paid-in capital.

Noncontrolling Interests

Noncontrolling interests represents consolidated subsidiaries of which the Company owns less than 100 %.

The Company is a holding company whose principal asset is a controlling equity interest in Charter Holdings, the indirect owner of the Company’s

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

cable systems.

The Company is a holding company whose principal asset is a controlling equity interest in Charter Holdings, the indirect owner of the Company’s cable systems.

Noncontrolling interests on the Company’s balance sheet primarily includes A/N’s equity interests in Charter Holdings, which is comprised of a common ownership interest and a convertible preferred ownership interest.

As of December 31, 2020, A/N held 15.3 million Charter Holdings common units which are exchangeable at any time into either Charter Class A common stock on a one-for-one basis, or, at Charter’s option, cash, based on the then current market price of Charter Class A common stock.

Net income (loss) of Charter Holdings attributable to A/N’s common noncontrolling interest for financial reporting purposes is based on the weighted average effective common ownership interest of approximately 8 % , 8 % and 9 % and was $ 173 million , $ 125 million and $ 69 million for the years ended December 31, 2019 , 2018 and 2017 , respectively.

Net income of Charter Holdings attributable to A/N’s common noncontrolling interest for financial reporting purposes is based on the weighted average effective common ownership interest of approximately 8 % and was $ 303 million, $ 173 million and $ 125 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Charter Holdings is required to make quarterly cash tax distributions (with annual true-ups) on a pro rata basis to its partners based on the partner with the highest proportionate cash tax requirement.

To the extent such tax distributions would exceed Charter’s cash tax requirements, it may waive its entitlement to tax distributions and, instead, issue a non-pro rata "advance" to A/N, which will accrue interest at a money market rate and will reduce A/N’s exchange value into cash or Charter Class A common stock.

Charter Holdings distributed $ 2 million to A/N as a pro rata tax distribution on its common units during the year ended December 31, 2019 and $ 3 million during each of the years ended December 31, 2018 and 2017 .

Charter Holdings distributed $ 3 million, $ 2 million and $ 3 million to A/N as a pro rata tax distribution on its common units during the years ended December 31, 2020, 2019 and 2018, respectively.

The following table represents Charter Holdings' purchase of Charter Holdings common units from A/N pursuant to the Letter Agreement (see Note 20) and the effect on total shareholders' equity during the years ended December 31, 2020, 2019 and 2018.

Year Ended December 31,

2020 2019 2018

Number of units purchased 2,637,483 2,276,906 2,125,190

5 unchanged sentences

Year Ended December 31,

2020 2019 2018

Decrease in noncontrolling interest $ ( 534 ) $ ( 226 ) $ ( 72 )

Increase in additional paid-in-capital, net of tax $ 403 $ 170 $ 54

The following table represents the exchange of Charter Holdings common units held by A/N for shares of Charter Class A common stock pursuant to the Letter Agreement (see Note 20) and the effect on total shareholders' equity during the year ended December 31, 2017 .

The exchange of A/N common units resulted in a step-up in the tax-basis of the assets of Charter Holdings which is further discussed in Note 17.

Year Ended December 31, 2017

Number of units exchanged

Amount of units exchanged

Decrease in noncontrolling interest based on carrying value

Increase in additional paid-in-capital, net of tax and TRA effects

As of December 31, 2020, A/N also held 25 million Charter Holdings convertible preferred units with a face amount of $ 2.5 billion that pays a 6 % annual preferred dividend.

The 6 % annual preferred dividend is paid quarterly in cash, if and when declared, provided that, if dividends are suspended at any time, the dividends will accrue until they are paid.

Net income (loss) of Charter

The 6 % annual preferred dividend is paid quarterly in cash, if and when

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Holdings attributable to A/N's preferred noncontrolling interest for financial reporting purposes is based on the preferred dividend which was $ 150 million for each of the years ended December 31, 2019 , 2018 and 2017 .

declared, provided that, if dividends are suspended at any time, the dividends will accrue until they are paid.

Net income (loss) of Charter Holdings attributable to A/N's preferred noncontrolling interest for financial reporting purposes is based on the preferred dividend which was $ 150 million for each of the years ended December 31, 2020, 2019 and 2018.

Each convertible preferred unit is convertible into either 0.37334 of a Charter Holdings common unit (if then held by A/N) or 0.37334 of a share of Charter Class A common stock (if then held by a third party), representing a conversion price of $ 267.85 per unit, based on a conversion feature as defined in the Limited Liability Company Agreement of Charter Holdings.

After May 18, 2021, Charter may redeem the convertible preferred units if the price of Charter Class A common stock exceeds 130 % of the conversion price, or $ 348.205 per unit.

After May 18, 2021, Charter may redeem the convertible preferred units if the price of Charter Class A common stock exceeds 130 % of the conversion price, or $ 348.205 per unit for 20 days in a 30 day period.

These Charter Holdings common and convertible preferred units held by A/N are recorded in noncontrolling interests as permanent equity in the consolidated balance sheet.

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In April 2019, the Company entered into a collateral holiday agreement for 60 % of both the 2031 and 2042 cross-currency swaps, which eliminates the requirement to post collateral for three years , as well as a ten year collateral cap on the remaining 40 % of the cross-currency swaps which limits the required collateral posting on that 40 % of the cross-currency swaps to $ 150 million.

The fair value of the Company's cross-currency derivatives included in other long-term liabilities on the Company's consolidated balance sheets was $ 224 million and $ 237 million as of December 31, 2019 and 2018 , respectively.

The fair value of the Company's cross-currency derivatives was $ 184 million and $ 224 million and is included in other long-term liabilities on its consolidated balance sheets as of December 31, 2020 and 2019, respectively.

The Company’s derivative instruments are not designated as hedges and are marked to fair value each period, with the impact recorded as a gain or loss on financial instruments, net in the consolidated statements of operations.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Gain (Loss) on Financial Instruments, Net:

Change in fair value of cross-currency derivative instruments

$ 40 $ 13 $ ( 212 )

Foreign currency remeasurement of Sterling Notes to U.S.

( 55 ) ( 67 ) 102

$ ( 15 ) $ ( 54 ) $ ( 110 )

Fair Value Measurements

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• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Financial Assets and Liabilities

The Company has estimated the fair value of its financial instruments as of December 31, 2019 and 2018 using available market information or other appropriate valuation methodologies.

Considerable judgment, however, is required in interpreting market

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

data to develop the estimates of fair value.

Financial Assets and Liabilities

The Company has estimated the fair value of its financial instruments as of December 31, 2020 and 2019 using available market information or other appropriate valuation methodologies.

Considerable judgment, however, is required in interpreting market data to develop the estimates of fair value.

Accordingly, the estimates presented in the accompanying consolidated financial statements are not necessarily indicative of the amounts the Company would realize in a current market exchange.

The carrying amounts of cash and cash equivalents, restricted cash, receivables, payables and other current assets and liabilities approximate fair value because of the short maturity of those instruments.

Financial instruments accounted for at fair value on a recurring basis and classified within Level 2 of the valuation hierarchy include the Company's cross-currency derivative instruments and were valued at $ 224 million and $ 237 million as of December 31, 2019 and December 31, 2019 , respectively.

Financial instruments accounted for at fair value on a recurring basis and classified within Level 2 of the valuation hierarchy include the Company's cross-currency derivative instruments and were valued at $ 184 million and $ 224 million as of December 31, 2020 and 2019, respectively.

The estimated fair value of the Company’s senior notes and debentures as of December 31, 2020 and 2019 is based on quoted market prices in active markets and is classified within Level 1 of the valuation hierarchy, while the estimated fair value of the Company’s credit facilities is based on quoted market prices in inactive markets and is classified within Level 2.

1 unchanged sentence

A summary of the carrying value and fair value of the Company’s debt at December 31, 2020 and 2019 is as follows:

Carrying Value

Carrying Value Fair Value Carrying Value Fair Value

Senior notes and debentures $ 72,671 $ 84,163 $ 68,733 $ 74,938

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Year Ended December 31,

2020 2019 2018

Programming $ 11,401 $ 11,290 $ 11,124

Regulatory, connectivity and produced content 2,183 2,366 2,210

Costs to service customers 7,472 7,277 7,327

Marketing 3,031 3,044 3,042

Mobile 1,765 1,246 346

Other 4,078 4,001 3,811

$ 29,930 $ 29,224 $ 27,860

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

Regulatory, connectivity and produced content costs represent payments to franchise and regulatory authorities, costs directly related to providing video, Internet and voice services as well as payments for sports, local and news content produced by the Company.

Included in regulatory, connectivity and produced content costs is content acquisition costs for the Los Angeles

Regulatory, connectivity and produced content costs represent payments to franchise and regulatory

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Lakers’ basketball games and Los Angeles Dodgers’ baseball games, which are recorded as games are exhibited over the applicable season.

Costs to service customers include costs related to field operations, network operations and customer care for the Company’s residential and small and medium business customers, including internal and third-party labor for the non-capitalizable portion of installations, service and repairs, maintenance, bad debt expense, billing and collection, occupancy and vehicle costs.

authorities, costs directly related to providing video, Internet and voice services as well as payments for sports, local and news content produced by the Company.

Included in regulatory, connectivity and produced content costs is content acquisition costs for the Los Angeles Lakers’ basketball games and Los Angeles Dodgers’ baseball games, which are recorded as games are exhibited over the contract period.

Costs to service customers include costs related to field operations, network operations and customer care for the Company’s residential and SMB customers, including internal and third-party labor for the non-capitalizable portion of installations, service and repairs, maintenance, bad debt expense, billing and collection, occupancy and vehicle costs.

Marketing costs represent the costs of marketing to current and potential commercial and residential customers including labor costs.

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Year Ended December 31,

Merger and restructuring costs

2020 2019 2018

Special charges, net $ 90 $ 61 $ 150

Loss on sale of assets, net

Merger and restructuring costs

Merger and restructuring costs represent costs incurred in connection with merger and acquisition transactions and related restructuring, such as advisory, legal and accounting fees, employee retention costs and employee termination costs related to acquisitions.

Changes in accruals for merger and restructuring costs from January 1, 2017 through December 31, 2019 are presented below:

Employee Retention Costs

Employee Termination Costs

Transaction and Advisory Costs

Liability, December 31, 2016

Costs incurred

Liability, December 31, 2017

Costs incurred

Liability, December 31, 2018

Costs incurred

Remaining liability, December 31, 2019

In addition to the costs indicated above, the Company recorded $ 5 million and $ 49 million of expense related to accelerated vesting of equity awards of terminated employees for the years ended December 31, 2018 and 2017 , respectively.

(Gain) loss on sale of assets, net ( 32 ) 42 85

$ 58 $ 103 $ 235

Special charges, net

Special charges, net primarily includes employee termination costs not related to acquisitions and net amounts of litigation settlements.

During 2018, special charges, net also includes a $ 22 million charge related to the Company's withdrawal liability from a multiemployer pension plan.

In 2017, special charges, net also includes a $ 101 million benefit related to the remeasurement of the Tax Receivable Agreement ("TRA") liability as a result of the enactment of the Tax Cuts & Jobs Act (“Tax Reform”) in

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

December 2017 (see Note 17) offset by an $ 83 million charge related to the Company's withdrawal liability from a multiemployer pension plan.

Loss on sale of assets, net

Loss on sale of assets, net represents the net loss recognized on the sales and disposals of fixed assets including a $ 42 million and $ 75 million impairment of non-strategic assets during the years ended December 31, 2019 and 2018, respectively.

Special charges, net primarily includes employee termination costs and net amounts of litigation settlements.

During 2018, special charges, net also includes $ 97 million in merger and restructuring costs and a $ 22 million charge related to the Company's withdrawal liability from a multiemployer pension plan.

(Gain) loss on sale of assets, net

(Gain) loss on sale of assets, net represents the net gain or loss recognized on the sales and disposals of fixed assets including a $ 42 million and $ 75 million impairment of non-strategic assets during the years ended December 31, 2019 and 2018, respectively.

Stock Compensation Plans

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The stock incentive plan allows for the issuance of up to 16 million shares of Charter Class A common stock (or units convertible into Charter Class A common stock).

Charter Stock options and restricted stock units generally cliff vest upon the three year anniversary of each grant.

Stock options and restricted stock units generally cliff vest three years from the date of grant.

Certain stock options and restricted stock units vest based on achievement of stock price hurdles.

1 unchanged sentence

Restricted stock generally vests one year from the date of grant.

TWC restricted stock units that were converted into Charter restricted stock units in 2016 generally vest 50 % on each of the third and fourth anniversary of the grant date.

As of December 31, 2020, total unrecognized compensation remaining to be recognized in future periods totaled $ 241 million for stock options, $ 1.0 million for restricted stock and $ 213 million for restricted stock units and the weighted average period over which they are expected to be recognized is 2 years for stock options, 4 months for restricted stock and 2 years for restricted stock units.

The Company recorded $ 351 million, $ 315 million and $ 285 million of stock compensation expense for the years ended December 31, 2020, 2019 and 2018, respectively, which is included in operating costs and expenses.

The Company also recorded $ 5 million and $ 49 million of expense for the years ended December 31, 2018 and 2017 , respectively, related to accelerated vesting of equity awards of terminated employees which is recorded in merger and restructuring costs in other operating expenses, net in the consolidated statements of operations.

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

A summary of the activity for the Company’s stock options for the years ended December 31, 2019 , 2018 and 2017 , is as follows (shares in thousands, except per share data):

A summary of the activity for Charter’s stock options for the years ended December 31, 2020, 2019 and 2018, is as follows (shares in thousands, except per share data):

Year Ended December 31,

Weighted Average Exercise Price

Aggregate Intrinsic Value

Weighted Average Exercise Price

Aggregate Intrinsic Value

Weighted Average Exercise Price

Aggregate Intrinsic Value

2020 2019 2018

Shares Weighted Average Exercise Price Aggregate Intrinsic Value Shares Weighted Average Exercise Price Aggregate Intrinsic Value Shares Weighted Average Exercise Price Aggregate Intrinsic Value

Outstanding, beginning of period 10,549 $ 241.14 10,410 $ 225.53 9,649 $ 201.83

Granted 1,672 $ 536.27 1,847 $ 298.84 1,507 $ 350.40

Exercised ( 3,160 ) $ 191.43 $ 1,176 ( 1,271 ) $ 186.90 $ 247 ( 577 ) $ 133.35 $ 114

Canceled ( 219 ) $ 312.94 ( 437 ) $ 270.94 ( 169 ) $ 300.46

Outstanding, end of period 8,842 $ 312.95 $ 3,082 10,549 $ 241.14 10,410 $ 225.53

Weighted average remaining contractual life

Weighted average remaining contractual life 7 years 7 years 7 years

Options exercisable, end of period 2,940 $ 220.78 $ 1,296 3,119 $ 161.13 2,194 $ 122.19

1 unchanged sentence

Weighted average fair value of options granted $ 148.02 $ 84.39 $ 94.70

A summary of the activity for the Company’s restricted stock for the years ended December 31, 2019 , 2018 and 2017 , is as follows (shares in thousands, except per share data):

A summary of the activity for Charter’s restricted stock for the years ended December 31, 2020, 2019 and 2018, is as follows (shares in thousands, except per share data):

Year Ended December 31,

Weighted Average Grant Price

2020 2019 2018

Shares Weighted Average Grant Price Shares Weighted Average Grant Price Shares Weighted Average Grant Price

Outstanding, beginning of period 8 $ 359.33 10 $ 297.86 10 $ 343.10

Granted 6 $ 504.53 8 $ 359.33 10 $ 297.86

Vested ( 8 ) $ 359.33 ( 10 ) $ 297.86 ( 10 ) $ 343.10

Canceled — $ — — $ — — $ —

Outstanding, end of period 6 $ 504.53 8 $ 359.33 10 $ 297.86

4 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

A summary of the activity for the Company’s restricted stock units for the years ended December 31, 2019 , 2018 and 2017 , is as follows (shares in thousands, except per share data):

A summary of the activity for Charter’s restricted stock units for the years ended December 31, 2020, 2019 and 2018, is as follows (shares in thousands, except per share data):

Year Ended December 31,

Weighted Average Grant Price

2020 2019 2018

Shares Weighted Average Grant Price Shares Weighted Average Grant Price Shares Weighted Average Grant Price

Outstanding, beginning of period 2,059 $ 249.45 2,211 $ 219.61 2,391 $ 192.96

Granted 423 $ 509.64 704 $ 298.22 526 $ 348.75

Vested ( 753 ) $ 194.40 ( 729 ) $ 206.88 ( 619 ) $ 216.27

Canceled ( 78 ) $ 317.45 ( 127 ) $ 250.85 ( 87 ) $ 286.41

Outstanding, end of period 1,651 $ 337.82 2,059 $ 249.45 2,211 $ 219.61

14 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Income Tax Benefit (Expense)

For the years ended December 31, 2019 , 2018 , and 2017 , the Company recorded deferred income tax benefit (expense) as shown below.

Income Tax Expense

For the years ended December 31, 2020, 2019, and 2018, the Company recorded deferred income tax expense as shown below.

The tax provision in future periods will vary based on current and future temporary differences, as well as future operating results.

Year Ended December 31,

Current expense:

2020 2019 2018

Current benefit (expense):

Federal income taxes $ 7 $ ( 6 ) $ ( 23 )

4 unchanged sentences

State income taxes 71 38 94

Deferred income tax benefit (expense)

Income tax benefit (expense)

Income tax benefit for the year ended December 31, 2017 was recognized primarily as a result of the enactment of Tax Reform in December 2017.

Among other things, the primary provisions of Tax Reform impacting the Company are the reductions to the U.S.

corporate income tax rate from 35 % to 21 % and temporary 100 % bonus depreciation for certain assets.

The change in tax law required the Company to remeasure existing net deferred tax liabilities using the lower rate in the period of enactment resulting in an income tax benefit of approximately $ 9.3 billion to reflect these changes in the year ended December 31, 2017.

The Company’s effective tax rate differs from that derived by applying the applicable federal income tax rate of 21 % for the years ended December 31, 2019 and 2018 and 35 % for the year ended December 31, 2017 , respectively, as follows:

Deferred income tax expense ( 465 ) ( 320 ) ( 110 )

Income tax expense $ ( 626 ) $ ( 439 ) $ ( 180 )

On March 18, 2020, the Families First Coronavirus Response Act ("FFCR Act"), and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") were each enacted in response to the COVID-19 pandemic.

The FFCR Act and the CARES Act contain numerous tax provisions, such as deferring payroll tax payments, establishing a credit for the retention of certain employees, relaxing limitations on the deductibility of interest, and updating the definition of qualified improvement property.

This legislation currently has no material impact to income tax expense on the Company’s financial statements.

The Company’s effective tax rate differs from that derived by applying the applicable federal income tax rate of 21 % for the years ended December 31, 2020, 2019 and 2018 as follows:

Year Ended December 31,

2020 2019 2018

Statutory federal income taxes $ ( 903 ) $ ( 510 ) $ ( 354 )

6 unchanged sentences

Tax rate changes 33 15 107

Income tax benefit (expense)

Other 1 12 ( 9 )

Income tax expense $ ( 626 ) $ ( 439 ) $ ( 180 )

CHARTER COMMUNICATIONS, INC.

16 unchanged sentences

Net deferred tax liabilities $ ( 18,108 ) $ ( 17,711 )

The deferred tax liabilities on the investment in partnership above includes approximately $ 55 million net deferred tax liabilities and $ 3 million net deferred tax assets relating to certain indirect subsidiaries that file separate state income tax returns at December 31, 2019 and 2018 , respectively.

The deferred tax liabilities on the investment in partnership above includes approximately $ 53 million and $ 55 million net deferred tax liabilities relating to certain indirect subsidiaries that file separate state income tax returns at December 31, 2020 and 2019, respectively.

Valuation Allowance

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In evaluating the need for a valuation allowance, management takes into account various factors, including the expected level of future taxable income, available tax planning strategies and reversals of existing taxable temporary differences.

As of December 31, 2019 , approximately $ 9 million of the valuation allowance is associated with federal capital loss carryforwards and $ 37 million is associated with state tax loss carryforwards and other miscellaneous deferred tax assets.

As of December 31, 2018 , approximately $ 39 million of the valuation allowance is associated with federal tax net operating loss carryforwards acquired in acquisitions and approximately $ 50 million is associated with state tax loss carryforwards and tax credits.

As of December 31, 2020 and 2019, approximately $ 9 million and $ 9 million, respectively, of the valuation allowance is associated with federal capital loss carryforwards and $ 23 million and $ 37 million, respectively, is associated with state tax loss carryforwards and other miscellaneous deferred tax assets.

Net Operating Loss Carryforwards

1 unchanged sentence

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

These losses resulted from the operations of Charter Communications Holdings Company, LLC ("Charter Holdco") and its subsidiaries.

These losses resulted from the operations of Charter Communications Holdings Company, LLC ("Charter Holdco") and its subsidiaries and from loss carryforwards received as a result of the merger with TWC.

In addition, as of December 31, 2020, Charter had state tax net operating loss carryforwards, resulting in a gross deferred tax asset (net of federal tax benefit) of approximately $ 223 million.

4 unchanged sentences

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.

Since the limitation amounts accumulate for future use to the extent they are not utilized in any given year, Charter believes its loss carryforwards should become fully available to offset future taxable income.

Charter’s state loss carryforwards are subject to similar, but varying, limitations on their future

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Charter’s state loss carryforwards are subject to similar, but varying, limitations on their future use.

If Charter was to experience another “ownership change” in the future, its ability to use its loss carryforwards could be subject to further limitations.

2 unchanged sentences

(1) convert at any time some or all of its preferred units in Charter Holdings for common units in Charter Holdings, and (2) exchange at any time some or all of its common units in Charter Holdings for Charter’s Class A common stock or cash, at Charter’s option.

Pursuant to a TRA between Charter and A/N, Charter must pay to A/N 50 % of the tax benefit when realized by Charter from the step-up in tax basis resulting from any future exchange or sale of the preferred and common units.

Pursuant to a Tax Receivable Agreement ("TRA") between Charter and A/N, Charter must pay to A/N 50 % of the tax benefit when realized by Charter from the step-up in tax basis resulting from any future exchange or sale of the preferred and common units.

Charter did not record a liability for this obligation as of the acquisition date since the tax benefit is dependent on uncertain future events that are outside of Charter’s control, such as the timing of a conversion or exchange.

2 unchanged sentences

Factors impacting these calculations include, but are not limited to, the fair value of the equity at the time of the exchange and the effective tax rates when the benefits are realized.

In connection with the Letter Agreement between Charter and A/N (see Note 20) whereby 1.3 million Charter Holdings common units held by A/N during the year ended December 31, 2017 were exchanged for shares of Charter Class A common stock for an aggregate purchase price of $ 400 million , an immediate step-up of $ 487 million in the tax basis of the assets of Charter Holdings occurred.

As it relates to the exchange and tax step-up, a net deferred tax asset of approximately $ 85 million was recorded and a resulting TRA liability owed to A/N of $ 118 million which, as a transaction with a shareholder, was recorded directly to additional paid in capital, net of tax during the year ended December 31, 2017 .

The TRA liability is recorded on an iterative, undiscounted basis.

During the year ended December 31, 2017, the TRA liability was remeasured as a result of the enactment of Tax Reform resulting in a $ 101 million benefit recorded to other operating expenses, net.

Following such remeasurement, the TRA liability of $ 150 million and $ 151 million is reflected in other long-term liabilities on the consolidated balance sheets as of December 31, 2019 and 2018 , respectively.

Uncertain Tax Positions

15 unchanged sentences

Interest and penalties included in other long-term liabilities on the accompanying consolidated balance sheets of the Company were $ 63 million and $ 56 million as of December 31, 2020 and 2019, respectively.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

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 TWC and Bright House Networks, LLC transactions) 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 Networks, LLC ("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.

5 unchanged sentences

federal and certain state income tax returns of Time Warner.

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

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

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

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

4 unchanged sentences

Diluted earnings per common share considers the impact of potentially dilutive securities using the treasury stock and if-converted methods and is based on the weighted average number of shares used for the basic earnings per share calculation, adjusted for the dilutive effect of stock options, restricted stock, restricted stock units, equity awards with market conditions and Charter Holdings convertible preferred units and common units.

Charter Holdings common and convertible preferred units of 29 million and 31 million for the years ended December 31, 2019 and 2018 were not included in the computation of diluted earnings per share as their effect would have been antidilutive.

Charter Holdings common and convertible preferred units of 26 million, 29 million and 31 million for the years ended December 31, 2020, 2019 and 2018, respectively, were not included in the computation of diluted earnings per share as their effect would have been antidilutive.

The following is the computation of diluted earnings per common share for the years presented.

Year Ended December 31,

2020 2019 2018

Net income attributable to Charter shareholders $ 3,222 $ 1,668 $ 1,230

Effect of dilutive securities:

Charter Holdings common units

Charter Holdings convertible preferred units

Net income attributable to Charter shareholders after assumed conversions

Weighted average common shares outstanding, basic 203,316,483 219,506,735 232,356,665

1 unchanged sentence

Assumed exercise or issuance of shares relating to stock plans 5,956,764 4,279,645 3,168,561

Weighted average Charter Holdings common units

Weighted average Charter Holdings convertible preferred units

Weighted average common shares outstanding, diluted 209,273,247 223,786,380 235,525,226

1 unchanged sentence

Diluted earnings per common share attributable to Charter shareholders $ 15.40 $ 7.45 $ 5.22

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Comprehensive Income

1 unchanged sentence

Year Ended December 31,

2020 2019 2018

Consolidated net income $ 3,676 $ 1,992 $ 1,506

Net impact of interest rate derivative instruments

Foreign currency translation adjustment — 2 ( 1 )

Consolidated comprehensive income

3,676 1,994 1,505

Comprehensive income attributable to noncontrolling interests

( 454 ) ( 324 ) ( 276 )

Comprehensive income attributable to Charter shareholders

$ 3,222 $ 1,670 $ 1,229

Related Party Transactions

The following sets forth certain transactions in which the Company and the directors, executive officers, and affiliates of the Company are involved or, in the case of the management arrangements, subsidiaries that are debt issuers that pay certain of their parent companies for services.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

Charter is a party to management arrangements with one of its subsidiaries, Spectrum Management Holding Company, LLC ("Spectrum Management") and certain of their subsidiaries.

16 unchanged sentences

See Note 17 for more information.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

The Company is aware that Dr.

John Malone, a director emeritus of Charter and Chairman of the board of directors and holder of 49.0 % of voting interest in Liberty Broadband, may be deemed to have a 39.9 % voting interest in Qurate Retail, Inc.

("Qurate") and is on the board of directors of Qurate.

John Malone, a director emeritus of Charter and Chairman of the board of directors and holder of 45.8 % of voting interest in Liberty Broadband, also serves on the board of directors of Qurate Retail, Inc.

As reported in Qurate's SEC filings, Dr.

Malone owns approximately 1.2 million shares of the Series A common stock and approximately 27.7 million shares of the Series B common stock of Qurate and has a 40.9 % voting interest in Qurate for the election of directors.

Qurate wholly owns HSN, Inc.

3 unchanged sentences

Malone and Mr.

Steven Miron, a member of Charter’s board of directors, also serve on the board of directors of Discovery Communications, Inc., (“Discovery”).

The Company is aware that Dr.

Steven Miron, a member of Charter’s board of directors, also serve on the board of directors of Discovery, Inc., (“Discovery”).

As reported in Discovery's SEC filings, Dr.

Malone owns 1.2 % of the series A common stock, 93.6 % of the series B common stock and 3.6 % of the series C common stock of Discovery and has a 27.9 % voting interest in Discovery for the election of directors.

The Company is aware that Advance/Newhouse Programming Partnership (“A/N PP”), an affiliate of A/N and in which Mr.

As reported in Discovery's SEC filings, Advance/Newhouse Programming Partnership (“A/N PP”), an affiliate of A/N and in which Mr.

Miron is the CEO, owns 100 % of the Series A-1 preferred stock of Discovery and 100 % of the Series C-1 preferred stock of Discovery and has a 23.9 % voting interest for matters other than the election of directors.

5 unchanged sentences

The amount paid to Discovery represents less than 2 % of total operating costs and expenses for the years ended December 31, 2020, 2019 and 2018.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

Equity Investments

3 unchanged sentences

The following table summarizes the Company’s payment obligations as of December 31, 2020 for its contractual obligations.

Total 2021 2022 2023 2024 2025 Thereafter

Programming Minimum Commitments (a)

The Company pays programming fees under multi-year contracts ranging from three to ten years , 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 statement of operations were 11.3 billion , 11.1 billion and 10.6 billion for the years ended December 31, 2019 , 2018 and 2017 respectively.

$ 164 $ 130 $ 22 $ 12 $ — $ — $ —

15,317 5,162 920 800 566 580 7,289

$ 15,481 $ 5,292 $ 942 $ 812 $ 566 $ 580 $ 7,289

(a) The Company pays programming fees under multi-year contracts ranging from three to ten years , 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 statements of operations were $ 11.4 billion, $ 11.3 billion and $ 11.1 billion for the years ended December 31, 2020, 2019 and 2018 respectively.

Certain of the Company’s programming agreements are based on a flat fee per month or have guaranteed minimum payments.

The table sets forth the aggregate guaranteed minimum commitments under the Company’s 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.

(b) “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 obligation table due to various factors discussed below.

3 unchanged sentences

Rent expense incurred for pole rental attachments for the years ended December 31, 2020, 2019 and 2018 was $ 192 million, $ 180 million and $ 171 million, respectively.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

• The Company pays franchise fees under multi-year franchise agreements based on a percentage of revenues generated from video service per year.

6 unchanged sentences

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

• In December 2020, the Company won a bidding process for $1.2 billion in phase I of the Rural Digital Opportunity Fund (“RDOF”) auction to further extend its broadband services in states where it currently operate.

The Company expects to fund its multi-billion dollar fiber-based build-out over a six to eight-year period.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020, 2019 AND 2018

(dollars in millions, except share or per share data or where indicated)

Legal Proceedings

10 unchanged sentences

On December 19, 2011, Sprint Communications Company L.P.

(“Sprint”) filed a complaint in the U.S.

District Court for the District of Kansas alleging that TWC infringed certain U.S.

(“Sprint”) filed a complaint in the United States District Court for the District of Kansas alleging that TWC infringed certain U.S.

patents purportedly relating to Voice over Internet Protocol (“VoIP”) services.

At the trial, the jury returned a verdict of $ 140 million against TWC and further concluded that TWC had willfully infringed Sprint’s patents.

The court subsequently declined to enhance the damage award as a result of the purported willful infringement and awarded Sprint an additional $ 6 million , representing pre-judgment interest on the damages award.

The Company appealed the case to the United States Court of Appeals for the Federal Circuit where the Company lost the appeal.

The Company filed a petition for writ of certiorari with the United States Supreme Court which was denied on November 4, 2019.

The Company has now paid the verdict, interest and costs in full.

The Company continues to pursue indemnity from one of its vendors and has brought a patent suit against Sprint (TC Tech, LLC v.

Sprint) in the U.S.

District Court for the District of Delaware implicating Sprint's LTE technology.

The court subsequently declined to enhance the damage award as a result of the purported willful infringement and awarded Sprint an additional $ 10 million, representing pre- and post-judgment interest on the damages award and an additional $ 1 million in costs.

In November 2019, the Company paid the verdict, interest and costs in full.

The Company continues to pursue indemnity claims from two of its vendors for a portion of the judgment.

The Company has also brought a patent suit against Sprint (TC Tech, LLC v.

Sprint) in the United States District Court for the District of Delaware implicating Sprint's LTE technology and a similar suit against T-Mobile USA, Inc.

in the Western District of Texas.

The ultimate outcomes of the pursuit of indemnity against the Company’s vendor and the TC Tech litigation cannot be predicted.

The Company does not expect the outcome of its indemnity claim nor the outcome of the TC Tech litigation will have a material adverse effect on its operations or financial condition.

Sprint filed a second suit against Charter and Bright House Networks, LLC on December 2, 2017 in the United States District Court for the District of Delaware.

This suit alleges infringement of 15 patents related to the Company's provision of Voice over Internet Protocol (“VoIP”) services (ten of which were asserted against Legacy TWC in the matter described above).

Charter is vigorously defending this case.

While the Company is unable to predict the outcome of this Sprint suit, it does not expect that this litigation will have a material effect on its operations, financial condition, or cash flows.

Sprint filed a third suit against Charter on May 17, 2018 in the United States District Court for the Eastern District of Virginia.

This suit alleges infringement of three patents related to the Company's video on demand services.

The Company is vigorously defending this case.

The Company does not expect the outcome of its indemnity claims nor the outcome of the TC Tech litigation will have a material adverse effect on its operations or financial condition.

Sprint filed a second patent suit against Charter and Bright House on December 2, 2017 in the United States District Court for the District of Delaware.

This suit alleges infringement of 9 patents related to the Company's provision of VoIP services (eight of which were asserted against Legacy TWC in the matter described above).

Sprint filed a third patent suit against Charter on May 17, 2018 in the United States District Court for the Eastern District of Virginia.

This suit alleges infringement of two patents related to the Company's video on demand services.

The court transferred this case to the United States District Court for the District of Delaware on December 20, 2018 pursuant to an agreement between the parties.

While the Company is unable to predict the outcome of this litigation, it does not expect that this litigation will have a material effect on its operations, financial condition, or cash flows.

On February 18, 2020, Sprint filed a lawsuit against Charter, Bright House and TWC.

Sprint alleges that Charter misappropriated trade secrets from Sprint years ago through employees hired by Bright House.

Sprint asserts that the alleged trade secrets relate to the VoIP business of Charter, TWC and Bright House.

The case is now pending in the United States District Court for the District of Kansas.

While the Company is vigorously defending these suits and is unable to predict the outcome of the Sprint lawsuits, the Company does not expect that the litigation will have a material effect on its operations, financial condition, or cash flows.

In addition to the Sprint litigation described above, the Company is a defendant or co-defendant in several additional lawsuits involving alleged infringement of various intellectual property relating to various aspects of its businesses.

Other industry participants are also defendants in certain of these cases or related cases.

In the event that a court ultimately determines that the Company infringes on any intellectual property, the Company may be subject to substantial damages and/or an injunction that could require the Company or its vendors to modify certain products and services the Company offers to its subscribers, as well as negotiate royalty or license agreements with respect to the intellectual property at issue.

While the Company believes the

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Other industry participants are also defendants in certain of these cases.

While the Company believes the lawsuits are without merit and intends to defend the actions vigorously, no assurance can be given that any adverse outcome would not be material to the Company’s consolidated financial condition, results of operations, or liquidity.

lawsuits are without merit and intends to defend the actions vigorously, no assurance can be given that any adverse outcome would not be material to the Company’s consolidated financial condition, results of operations, or liquidity.

The Company cannot predict the outcome of any such claims nor can it reasonably estimate a range of possible loss.

4 unchanged sentences

Pension Plans

Changes in the projected benefit obligation, fair value of plan assets and funded status of the pension plans from January 1 through December 31 are presented below:

The Company sponsors qualified and nonqualified defined benefit pension plans that provide pension benefits to a majority of employees who were employed by TWC before the merger with TWC.

C hanges in the projected benefit obligation, fair value of plan assets and funded status of the pension plans from January 1 through December 31 are presented below:

Projected benefit obligation at beginning of year $ 3,361 $ 3,041

Interest cost 110 129

Actuarial (gain) loss

Actuarial loss 436 499

Settlement ( 166 ) ( 257 )

Benefits paid ( 53 ) ( 51 )

Projected benefit obligation at end of year (a)

$ 3,688 $ 3,361

Accumulated benefit obligation at end of year (a)

$ 3,688 $ 3,361

Fair value of plan assets at beginning of year $ 3,198 $ 2,943

1 unchanged sentence

Employer contributions 3 4

Settlement ( 166 ) ( 257 )

Benefits paid ( 53 ) ( 51 )

Fair value of plan assets at end of year (b)

$ 3,462 $ 3,198

Funded status $ ( 226 ) $ ( 163 )

As of December 31, 2019 and 2018, qualified pension plans represented $ 3.3 billion and $ 3.0 billion , respectively, of both the projected benefit obligation and accumulated benefit obligation while the Company’s nonqualified pension plan represented $ 35 million and $ 34 million , respectively.

The fair value of plan assets consists entirely of the Company’s qualified pension plans.

(a) As of December 31, 2020 and 2019, qualified pension plans represented $ 3.7 billion and $ 3.3 billion, respectively, of both the projected benefit obligation and accumulated benefit obligation while the Company’s nonqualified pension plan represented $ 36 million and $ 35 million, respectively.

(b) The fair value of plan assets consists entirely of the Company’s qualified pension plans.

CHARTER COMMUNICATIONS, INC.

10 unchanged sentences

Year Ended December 31,

2020 2019 2018

Interest cost $ ( 110 ) $ ( 129 ) $ ( 128 )

3 unchanged sentences

The remeasurement gains (losses) recorded during the years ended December 31, 2020, 2019 and 2018 were primarily driven by changes in the discount rate as well as gains or losses to record pension assets to fair value.

The remeasurement loss recorded during the year ended December 31, 2017 was also impacted by the adoption of the revised lump sum conversion mortality tables published by the IRS effective January 1, 2018.

The discount rates used to determine benefit obligations as of December 31, 2020 and 2019 were 2.70 % and 3.48 %, respectively.

The Company utilized the RP 2015/MP2015 mortality tables published by the Society of Actuaries to measure the benefit obligations as of December 31, 2019 and 2018 .

The Company utilized the Pri-2012/MP 2020 and RP 2015/MP 2015 mortality tables published by the Society of Actuaries to measure the benefit obligations as of December 31, 2020 and 2019, respectively.

Weighted average assumptions used to determine net periodic benefit costs consisted of the following:

Year ended December 31,

2020 2019 2018

Expected long-term rate of return on plan assets 5.00 % 5.75 % 5.75 %

1 unchanged sentence

In developing the expected long-term rate of return on plan assets, the Company considered the pension portfolio’s composition, past average rate of earnings and the Company’s future asset allocation targets.

The weighted average expected long-term rate of return on plan assets and discount rate used to determine net periodic pension benefit for the year ended December 31, 2020 are expected to be 5.00 % and 3.48 % , respectively.

The weighted average expected long-term rate of return on plan assets and discount rate used to determine net periodic pension benefit for the year ended 2021 are expected to be 5.00 % and 2.70 %, respectively.

The Company determined the discount rates used to determine benefit obligations and net periodic pension benefit based on the yield of a large population of high quality corporate bonds with cash flows sufficient in timing and amount to settle projected future defined benefit payments.

2 unchanged sentences

The investment policy for the qualified pension plans is to manage the assets of the Master Trust with the objective to provide for pension liabilities to be met, maintaining retirement income security for the participants of the plans and their beneficiaries.

The investment portfolio is a mix of pooled funds invested in fixed income securities, equity securities and certain alternative investments with the objective of matching plan liability performance, diversifying risk and achieving a

Pension assets are managed in a balanced portfolio comprised of two major components:

a return-seeking portion and a liability-matching portion.

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

target investment return.

Pension assets are managed in a balanced portfolio comprised of two major components:

a return-seeking portion and a liability-matching portion.

The Company uses an investment strategy designed to increase the fixed income allocation as the funded status of the qualified pension plans improves.

2 unchanged sentences

The target and actual investment allocation of the qualified pension plans by asset category consisted of the following:

December 31, 2019

December 31, 2018

Target Allocation

Actual Allocation

Target Allocation

Actual Allocation

December 31, 2020 December 31, 2019

Target Allocation Actual Allocation Target Allocation Actual Allocation

Return-seeking securities 60.0 % 57.1 % 60.0 % 56.2 %

2 unchanged sentences

The following tables set forth the investment assets of the qualified pension plans by level within the fair value hierarchy as of December 31, 2020 and 2019:

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

Fair Value Level 1 Level 2 Fair Value Level 1 Level 2

Cash $ 4 $ 4 $ — $ 4 $ 4 $ —

Commingled bond funds (a)

1,449 — 1,449 1,335 — 1,335

Commingled equity funds (a)

1,255 — 1,255 1,135 — 1,135

Collective trust funds (b)

178 — 178 139 — 139

Total investment assets 2,886 $ 4 $ 2,882 2,613 $ 4 $ 2,609

2 unchanged sentences

Fair value of plan assets $ 3,462 $ 3,198

Commingled funds include bond funds with corporate and U.S.

(a) Commingled funds include bond funds with corporate and U.S.

treasury debt securities and equity funds with global equity index, infrastructure and real estate securities that have a readily determinable fair value and are valued using the net assets provided by the administrator of the fund.

2 unchanged sentences

Debt securities within the funds are valued based on observable prices from the new issue market, benchmark quotes, secondary trading and dealer quotes.

Collective trust funds consist of short-term investment strategies comprised of instruments issued or fully guaranteed by the U.S.

(b) Collective trust funds consist of short-term investment strategies comprised of instruments issued or fully guaranteed by the U.S.

government and/or its agencies and multi-strategy funds, which are valued using the net assets provided by the administrator of the fund.

The value of each fund is based on the readily determinable fair value of the underlying assets owned by the fund, less liabilities, and then divided by the number of units outstanding.

As a practical expedient, certain investment classes which hold securities that are not readily available for redemption and are measured at fair value using the net asset value ("NAV") per share (or its equivalent) have not been classified in the fair value hierarchy.

(c) As a practical expedient, certain investment classes which hold securities that are not readily available for redemption and are measured at fair value using the net asset value ("NAV") per share (or its equivalent) have not been classified in the fair value hierarchy.

Investments Measured at Net Asset Value per Share Practical Expedient

The following table summarizes the investment classes for which fair value is measured using the NAV per share (or its equivalent) practical expedient as of December 31, 2020 and 2019.

These investment classes are not readily available for redemption.

The NAV of each fund is based on the fair value of underlying assets in the portfolio.

Certain investments report

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Investments Measured at Net Asset Value per Share Practical Expedient

The following table summarizes the investment classes for which fair value is measured using the NAV per share (or its equivalent) practical expedient as of December 31, 2019 and 2018.

These investment classes are not readily available for redemption.

The NAV of each fund is based on the fair value of underlying assets in the portfolio.

Certain investments report NAV per share on a month or quarter lag.

NAV per share on a month or quarter lag.

There are no material unfunded commitments with respect to these investment classes.

Redemption Frequency (if currently eligible)

Redemption Notice Period

December 31, Redemption Frequency (if currently eligible) Redemption Notice Period

Alternative funds (a)

weekly, monthly, quarterly

$ 283 $ 271 weekly, monthly, quarterly 1-180 days

Fixed income funds (b)

daily, monthly

148 177 daily, monthly 10-40 days

Real estate funds (c)

126 136 quarterly 45-90 days

Investments measured at NAV $ 557 $ 584

The alternative fund investment class includes funds with various securities selected to provide complimentary sources of return with our equity and bond portfolios that better manage risk.

(a) The alternative fund investment class includes funds with various securities selected to provide complimentary sources of return with our equity and bond portfolios that better manage risk.

The Company’s alternative fund investments include holdings such as public equities, exchange traded derivatives, and corporate bonds, among others.

A portion of the alternative funds cannot be redeemed until the one year anniversary of the purchase date.

Fixed income funds invest in residential and commercial mortgages, as well as global sovereign securities.

Real estate funds are not publicly traded and invest primarily in unlisted direct core real estate, including super-regional malls, shopping centers, and commercial real estate (e.g.

(b) Fixed income funds invest in residential and commercial mortgages, as well as global sovereign securities.

(c) Real estate funds are not publicly traded and invest primarily in unlisted direct core real estate, including super-regional malls, shopping centers, and commercial real estate (e.g.

education, healthcare and storage).

13 unchanged sentences

401(k) Savings Plan (the “401(k) Plan”).

Employees that qualify for participation can contribute up to 50 % of their salary, on a pre-tax basis, subject to a maximum contribution limit as determined by the Internal Revenue Service.

Employees that qualify for participation can contribute up to 50 % of their salary, on a pre-tax basis, subject to a maximum contribution limit as determined by the IRS.

The Company’s matching contribution is discretionary and is equal to 100 % of the amount of the salary reduction the participant elects to defer (up to 6 % of the participant’s eligible compensation), excluding any catch-up contributions and is paid by the Company on a per pay period basis.

The Company made contributions to the 401(k) plan totaling $ 331 million, $ 303 million and $ 290 million for the years ended December 31, 2020, 2019 and 2018, respectively.

For employees who are not eligible to participate in the Company’s long-term incentive plan and who are not covered by a collective bargaining agreement, the Company offers a contribution to the Retirement Accumulation Plan ("RAP"), equal to 3 % of eligible pay.

The Company made contributions to the RAP totaling $ 162 million, $ 152 million and $ 151 million for the years ended December 31, 2020, 2019 and 2018, respectively.

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

The Company made contributions to the RAP totaling $ 152 million , $ 151 million and $ 139 million for the years ended December 31, 2019 , 2018 and 2017 , respectively.

Recently Issued Accounting Standards

Accounting Standards Adopted in Prior Periods

ASU 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09")

Upon adoption of ASU 2016-09, the Company recorded a cumulative-effect adjustment which included an increase to total shareholders’ equity of $ 140 million as of January 1, 2017 and the recognition of excess tax benefits in deferred tax assets that were previously not recognized.

2014-09, Revenue from Contracts with Customers (“ASU 2014-09”)

3 unchanged sentences

The Company identified a $ 31 million increase to total shareholders' equity and corresponding increase to deferred tax assets related to the adoption of ASU 2016-16, which was recorded during the year ended December 31, 2018.

Accounting Standards Adopted January 1, 2019

2016-02, Leases (“ASU 2016-02”)

In February 2016, the FASB issued ASU 2016-02 which requires lessees to recognize almost all leases on their balance sheet as a lease asset and a lease liability.

For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance.

Classification is based on criteria largely similar to the criteria applied under legacy lease accounting, but without explicit bright lines.

The Company adopted ASU 2016-02 using the modified retrospective approach with a cumulative-effect adjustment recorded at the beginning of the period of adoption (January 1, 2019).

Therefore, the Company recognized and measured operating leases on the consolidated balance sheet without revising comparative period information or disclosure.

At transition, the Company elected the package of practical expedients permitted under the transition guidance within the standard, which eliminates the reassessment of past leases, classification and initial direct costs.

The Company did not elect to use hindsight to reassess lease terms or impairment at the adoption date.

The Company elected the land easements practical expedient which allows the Company not to retrospectively treat land easements as leases;

however, must apply lease accounting prospectively to land easements if they meet the definition of a lease.

The Company implemented internal controls and key system functionality to enable the preparation of financial information on adoption.

The new standard resulted in the recording of leased assets and lease liabilities for the Company’s operating leases of approximately $ 1.1 billion and $ 1.2 billion , respectively, as of January 1, 2019.

The difference between the leased assets and lease liabilities primarily represents the prior year end deferred rent liabilities balance, resulting from historical straight-lining of operating leases, which was effectively reclassified upon adoption to reduce the measurement of the leased assets.

The adoption of the standard did not have an impact on the Company’s shareholders' equity, results from operations and cash flows.

The adoption of the new standard resulted in additional interim and annual lease disclosures.

2018-13, Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13")

In August 2018, the FASB issued ASU 2018-13 which amends fair value measurement disclosure requirements to eliminate, add and modify certain disclosures to improve the effectiveness of such disclosure in the notes to the financial statements.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

will be effective for interim and annual periods beginning after December 15, 2019.

Early adoption is permitted.

The Company early adopted ASU 2018-13 on January 1, 2019.

The adoption of ASU 2018-13 did not have a material impact to the Company's consolidated financial statements.

2018-14, Changes to the Disclosure Requirements for Defined Benefit Plans ("ASU 2018-14")

In August 2018, the FASB issued ASU 2018-14 which amends defined benefit plan disclosure requirements to eliminate, add and modify certain disclosures to improve the effectiveness of such disclosure in the notes to the financial statements.

Accounting Standards Adopted in 2020

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”)

In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12 which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020.

Early adoption is permitted.

The Company early adopted ASU 2018-14 on January 1, 2019.

The adoption of ASU 2018-14 did not have a material impact to the Company's consolidated financial statements.

2017-04, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”)

In January 2017, the FASB issued ASU 2017-04 which eliminates step two from the goodwill impairment test.

Under the new standard, to the extent the carrying amount of a reporting unit exceeds the fair value, the Company will record an impairment charge equal to the difference.

The Company elected to early adopt ASU 2019-12 on January 1, 2020.

The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements.

Amendments to the financial disclosures requirements for guarantors and issuers of guaranteed securities under SEC Regulation S-X

In March 2020, the SEC adopted amendments to the financial disclosure requirements of Regulation S-X for guarantors and issuers of guaranteed securities.

The final rule streamlines disclosure obligations under the existing rules, including replacing condensed consolidating financial information with summarized financial information for the "obligor group" of issuers and guarantors to the extent material, no longer requiring subsidiary issuer and guarantor cash flow information, and no longer requiring financial information for non-guarantor subsidiaries.

It also permits presentation of the required disclosures to be included in the Management's Discussion and Analysis ("MD&A") section of quarterly and annual reports rather than the notes to the Company's consolidated financial statements.

The Company voluntarily complied with the new disclosure requirements beginning with its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 and concluded that amended Rule 3-10 and new Rule 13-01 of Regulation S-X did not apply to Charter because Charter does not guarantee the debt securities of CCO Holdings or any of its subsidiaries.

Accounting Standards Adopted in 2021

2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”)

In August 2020, the FASB issued ASU 2020-06, which reduces the number of accounting models for convertible instruments, amends diluted earnings per share calculations for convertible instruments and allows more contracts to qualify for equity classification.

ASU 2020-06 will be effective for interim and annual periods beginning after December 15, 2021.

The Company elected to early adopt ASU 2017-04 in connection with the completion of its November 30, 2019 annual impairment assessment.

The adoption of ASU 2017-04 did not have a material impact to the Company's consolidated financial statements.

Accounting Standards Adopted January 1, 2020

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”)

In June 2016, the FASB issued ASU 2016-13, which requires a financial asset (or a group of financial assets) measured at amortized cost basis to be assessed for impairment under the current expected credit loss model rather than an incurred loss model.

The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.

The primary financial assets of the Company in scope of ASU 2016-13 include accounts receivables and equipment installment plan notes receivables.

The Company adopted ASU 2016-13 on January 1, 2020.

The adoption of ASU 2016-13 did not have a material impact to the Company's consolidated financial statements.

2018-15, Customer’s Accounting for Implementation Costs in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15")

In August 2018, the FASB issued ASU 2018-15 which requires upfront implementation costs incurred in a cloud computing arrangement (or hosting arrangement) that is a service contract to be amortized to hosting expense over the term of the arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use.

The Company adopted ASU 2018-15 on January 1, 2020.

The adoption of ASU 2018-15 did not have a material impact to the Company's consolidated financial statements.

2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials ("ASU 2019-02")

In March 2019, the FASB issued ASU 2019-02 which aligns the accounting for production costs of an episodic television series with the accounting for production costs of films regarding cost capitalization, amortization, impairment, presentation and disclosure.

The Company adopted ASU 2019-02 on January 1, 2020.

The adoption of ASU 2019-02 did not have a material impact to the Company's consolidated financial statements.

Accounting Standards Not Yet Adopted

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”)

In December 2019, the FASB issued ASU 2019-12, which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

guidance to improve consistent application.

ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020 (January 1, 2021 for the Company).

Early adoption is permitted.

The Company is currently evaluating the impact the adoption of ASU 2019-12 will have on its consolidated financial statements.

adoption is permitted.

The Company elected to early adopt ASU 2020-06 on January 1, 2021.

The adoption of ASU 2020-06 did not have a material impact on the Company's consolidated financial statements.

Unaudited Quarterly Financial Data

1 unchanged sentence

Year Ended December 31, 2020

Second Quarter

Fourth Quarter

Quarter Second Quarter Third

Quarter Fourth Quarter

Revenues $ 11,738 $ 11,696 $ 12,039 $ 12,624

Income from operations $ 1,802 $ 1,969 $ 2,172 $ 2,462

1 unchanged sentence

Earnings per common share attributable to Charter shareholders:

Basic $ 1.91 $ 3.72 $ 4.01 $ 6.33

Diluted $ 1.86 $ 3.63 $ 3.90 $ 6.05

Weighted average common share outstanding:

Basic 207,831,305 205,777,438 202,826,502 196,906,511

Diluted 212,810,613 210,906,946 208,722,129 212,077,917

Year Ended December 31, 2019

Second Quarter

Fourth Quarter

Quarter Second Quarter Third

Quarter Fourth Quarter

Revenues $ 11,206 $ 11,347 $ 11,450 $ 11,761

Income from operations $ 1,425 $ 1,541 $ 1,586 $ 1,959

1 unchanged sentence

Earnings per common share attributable to Charter shareholders:

Basic $ 1.13 $ 1.41 $ 1.77 $ 3.36

Diluted $ 1.11 $ 1.39 $ 1.74 $ 3.28

Weighted average common share outstanding:

Consolidating Schedules

Each of Charter Operating, TWC, LLC, TWCE, CCO Holdings and certain subsidiaries jointly, severally, fully and unconditionally guarantee the outstanding debt securities of the others (other than the CCO Holdings notes) on an unsecured senior basis and the condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10, Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.

Certain Charter Operating subsidiaries that are regulated telephone entities only become guarantor subsidiaries upon approval by regulators.

This information is not intended to present the financial position, results of operations and cash flows of the individual companies or groups of companies in accordance with generally accepted accounting principles.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

The "Intermediate Holding Companies" column includes the assets and liabilities of the captive insurance company, a company wholly-owned by Charter outside of Charter Holdings and which does not, directly or indirectly, own any interest in Charter Holdings.

The “Charter Operating and Restricted Subsidiaries” column is presented to comply with the terms of the Credit Agreement.

Condensed consolidating financial statements as of December 31, 2019 and 2018 and for the years ended December 31, 2019 , 2018 and 2017 follow.

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Balance Sheet

As of December 31, 2019

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

CURRENT ASSETS:

Cash and cash equivalents

Accounts receivable, net

Receivables from related party

Prepaid expenses and other current assets

Total current assets

RESTRICTED CASH

INVESTMENT IN CABLE PROPERTIES:

Property, plant and equipment, net

Customer relationships, net

Total investment in cable properties, net

INVESTMENT IN SUBSIDIARIES

OPERATING LEASE RIGHT-OF-USE ASSETS

LOANS RECEIVABLE – RELATED PARTY

OTHER NONCURRENT ASSETS

LIABILITIES AND SHAREHOLDERS’/MEMBER’S EQUITY

CURRENT LIABILITIES:

Accounts payable and accrued liabilities

Operating lease liabilities

Payables to related party

Current portion of long-term debt

Total current liabilities

LONG-TERM DEBT

LOANS PAYABLE – RELATED PARTY

DEFERRED INCOME TAXES

LONG-TERM OPERATING LEASE LIABILITIES

OTHER LONG-TERM LIABILITIES

SHAREHOLDERS’/MEMBER’S EQUITY

Controlling interest

Noncontrolling interests

Total shareholders’/member’s equity

Total liabilities and shareholders’/member’s equity

Basic 224,630,122 222,392,274 218,499,213 212,648,072

Diluted 227,595,365 225,942,172 222,355,867 217,778,099

CHARTER COMMUNICATIONS, INC.

3 unchanged sentences

(dollars in millions, except share or per share data or where indicated)

Parent Company Only Financial Statements

As the result of limitations on, and prohibitions of, distributions, substantially all of the net assets of the consolidated subsidiaries are restricted from distribution to Charter, the parent company.

The following condensed parent-only financial statements of Charter account for the investment in Charter Holdco under the equity method of accounting.

The financial statements should be read in conjunction with the consolidated financial statements of the Company and notes thereto.

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Balance Sheet

As of December 31, 2018

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

CURRENT ASSETS:

Cash and cash equivalents

(Parent Company Only)

Condensed Balance Sheets

Accounts receivable, net $ 1 $ 1

1 unchanged sentence

Prepaid expenses and other current assets 20 10

Total current assets

RESTRICTED CASH

INVESTMENT IN CABLE PROPERTIES:

Property, plant and equipment, net

Customer relationships, net

Total investment in cable properties, net

Investment in subsidiaries 41,813 49,024

1 unchanged sentence

Other noncurrent assets 1 2

LIABILITIES AND SHAREHOLDERS’/MEMBER’S EQUITY

Total assets $ 42,138 $ 49,331

LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities $ 22 $ 18

Accounts payable and accrued liabilities

Payables to related party

Current portion of long-term debt

Total current liabilities

LONG-TERM DEBT

LOANS PAYABLE – RELATED PARTY

Deferred income taxes 18,030 17,641

Other long-term liabilities 281 227

SHAREHOLDERS’/MEMBER’S EQUITY

Controlling interest

Noncontrolling interests

Total shareholders’/member’s equity

Total liabilities and shareholders’/member’s equity

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Operations

For the year ended December 31, 2019

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

COSTS AND EXPENSES:

Operating costs and expenses (exclusive of items shown separately below)

Depreciation and amortization

Other operating (income) expenses, net

Income from operations

OTHER INCOME (EXPENSES):

Interest income (expense), net

Loss on extinguishment of debt

Loss on financial instruments, net

Other pension costs, net

Other expense, net

Equity in income of subsidiaries

Income before income taxes

Income tax expense

Consolidated net income

Net income attributable to noncontrolling interests

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Shareholder's equity 23,805 31,445

Total liabilities and shareholder's equity $ 42,138 $ 49,331

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Operations

For the year ended December 31, 2018

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

COSTS AND EXPENSES:

Operating costs and expenses (exclusive of items shown separately below)

Depreciation and amortization

Other operating expenses, net

Income from operations

OTHER INCOME (EXPENSES):

Interest income (expense), net

Loss on financial instruments, net

Other pension benefits, net

Other expense, net

(Parent Company Only)

Condensed Statements of Operations

Year Ended December 31,

2020 2019 2018

Revenues $ 64 $ 52 $ 46

Interest income 12 10 9

Equity in income of subsidiaries 3,771 1,998 1,377

Total income 3,847 2,060 1,432

Operating costs and expenses 64 52 46

Income before income taxes 3,783 2,008 1,386

Income tax expense ( 561 ) ( 340 ) ( 156 )

Consolidated net income

Net income attributable to noncontrolling interests

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Operations

For the year ended December 31, 2017

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

COSTS AND EXPENSES:

Operating costs and expenses (exclusive of items shown separately below)

Depreciation and amortization

Other operating (income) expenses, net

Income from operations

OTHER INCOME (EXPENSES):

Interest income (expense), net

Loss on extinguishment of debt

Gain on financial instruments, net

Other pension benefits

Other expense, net

Equity in income of subsidiaries

Income before income taxes

Income tax benefit (expense)

Consolidated net income

Net income attributable to noncontrolling interests

Net income $ 3,222 $ 1,668 $ 1,230

CHARTER COMMUNICATIONS, INC.

4 unchanged sentences

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Comprehensive Income

For the year ended December 31, 2019

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

Consolidated net income

Foreign currency translation adjustment

Consolidated comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive income

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Comprehensive Income

For the year ended December 31, 2018

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

Consolidated net income

Foreign currency translation adjustment

Consolidated comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive income

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Comprehensive Income

For the year ended December 31, 2017

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

Consolidated net income

Net impact of interest rate derivative instruments

(Parent Company Only)

Condensed Statements of Comprehensive Income

Year Ended December 31,

2020 2019 2018

Net income $ 3,222 $ 1,668 $ 1,230

Foreign currency translation adjustment — 2 ( 1 )

Consolidated comprehensive income

Comprehensive income attributable to noncontrolling interests

Comprehensive income $ 3,222 $ 1,670 $ 1,229

Charter Communications, Inc.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Cash Flows

For the year ended December 31, 2019

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

NET CASH FLOWS FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

Change in accrued expenses related to capital expenditures

Real estate investments through variable interest entities

Contribution to subsidiaries

Distributions from subsidiaries

Net cash flows from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of long-term debt

Repayments of long-term debt

Payment for debt issuance costs

Purchase of treasury stock

Proceeds from exercise of stock options

Purchase of noncontrolling interest

Distributions to noncontrolling interest

Contributions from parent

Distributions to parent

Net cash flows from financing activities

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Cash Flows

For the year ended December 31, 2018

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

(Parent Company Only)

Condensed Statements of Cash Flows

Year Ended December 31,

2020 2019 2018

NET CASH FLOWS FROM OPERATING ACTIVITIES $ ( 49 ) $ ( 36 ) $ ( 10 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

Change in accrued expenses related to capital expenditures

Real estate investments through variable interest entities

Contribution to subsidiaries ( 208 ) ( 119 ) ( 69 )

2 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of long-term debt

Repayments of long-term debt

Borrowings (repayments) of loans payable - related parties

Payment for debt issuance costs

Purchase of treasury stock

Proceeds from exercise of stock options 184 118 69

Purchase of noncontrolling interest

Distributions to noncontrolling interest

Contributions from parent

Distributions to parent

Borrowings for real estate investments through variable interest entities

Distributions to variable interest entities noncontrolling interest

Net cash flows from financing activities

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

CHARTER COMMUNICATIONS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019, 2018 AND 2017

(dollars in millions, except share or per share data or where indicated)

Charter Communications, Inc.

and Subsidiaries

Condensed Consolidating Statement of Cash Flows

For the year ended December 31, 2017

Non-Guarantor Subsidiaries

Guarantor Subsidiaries

Intermediate Holding Companies

Charter Operating and Restricted Subsidiaries

Charter Consolidated

NET CASH FLOWS FROM OPERATING ACTIVITIES:

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

Change in accrued expenses related to capital expenditures

Real estate investments through variable interest entities

Contribution to subsidiaries

Distributions from subsidiaries

Net cash flows from investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of long-term debt

Repayments of long-term debt

Borrowings (repayments) of loans payable - related parties

Payment for debt issuance costs

Issuance of equity 23 — —

Purchase of treasury stock ( 11,217 ) ( 6,873 ) ( 4,399 )

Proceeds from exercise of stock options

Purchase of noncontrolling interest

Distributions to noncontrolling interest

Contributions from parent

Distributions to parent

Repayments of loans payable - related parties ( 1 ) — ( 12 )

Net cash flows from financing activities ( 11,011 ) ( 6,755 ) ( 4,342 )

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

NET INCREASE IN CASH AND CASH EQUIVALENTS — — —

CASH AND CASH EQUIVALENTS, beginning of period — — —

CASH AND CASH EQUIVALENTS, end of period $ — $ — $ —

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 9A. Controls and Procedures