What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-01-28 compared with 2021-01-29 · 124 added, 199 removed, 351 unchanged (48% of the section changed)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The COVID-19 pandemic significantly impacted how our customers use our products and services, how they interact with us, and how our employees provide services to our customers.

Customer activity levels remain below normal which contributed to lower operating expense from reduced service transactions and lower bad debt in 2021 along with lower growth in customer relationships.

We cannot predict when trends return to pre-COVID-19 levels as the economy returns to normal activities.

In October 2021, we announced and implemented new Spectrum Mobile multi-line pricing designed to drive more mobile line sales per customer, and in turn, drive more broadband sales and the associated retention benefits.

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

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

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

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

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

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

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

We intend to use CBRS PALs we purchased in 2020, along with unlicensed CBRS spectrum, to build our own 5G mobile data-only network on our existing infrastructure in targeted geographies where there is high outdoor cellular traffic volume.

This effort, in combination with our expanding WiFi network and continued 5G enhancements within the Verizon MVNO partnership agreement, should position our mobile product for continued customer experience and cost structure improvements.

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

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

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

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

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

During the years ended December 31, 2021 and 2020, our mobile product line increased revenues by $2.2 billion and $1.4 billion, respectively, reduced Adjusted EBITDA by approximately $311 million and $401 million, respectively, and reduced free cash flow by approximately $853 million and $1.1 billion, respectively.

We expect mobile Adjusted EBITDA will continue to be negative primarily as a result of growth-related sales and marketing and other customer acquisition costs for mobile services, and

depending on the pace of that growth.

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

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

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Income from operations $ 10,526 $ 8,405 25.2 %

Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, loss on extinguishment of debt, (gain) loss on financial instruments, net, other pension (benefits) costs, net, other (income) expense, net and other operating (income) expenses, net, such as merger and restructuring costs, special charges and (gain) loss on sale or retirement of assets.

Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets.

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

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

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

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

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

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

Approximately 91% of our revenues for each of the years ended December 31, 2021 and 2020 are attributable to monthly subscription fees charged to customers for our Internet, video, voice, mobile and commercial services as well as regional sports and news channels.

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

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

The remaining 9% of revenue is derived primarily from advertising revenues, franchise and other regulatory fee revenues (which are collected by us but then paid to local authorities), sales of mobile and video devices, processing fees or reconnection fees charged to customers to commence or reinstate service, installation, VOD and pay-per-view programming, and commissions related to the sale of merchandise by home shopping services.

Critical Accounting Policies and Estimates

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

These indirect costs are associated with the activities of personnel who assist in installation activities, and consist of compensation and overhead costs associated with these support functions.

These indirect costs consist of compensation and overhead costs associated with support functions.

While our capitalization is based on specific activities, once capitalized, we track these costs on a composite basis by fixed asset category at the cable system level, and not on a specific asset basis.

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The costs of disconnecting service and removing customer premise equipment from a dwelling and the costs to reconnect a customer drop or to redeploy previously installed customer premise equipment are charged to operating expense as incurred.

Costs for repairs and maintenance are charged to operating expense as incurred, while plant and equipment replacement, including replacement of certain components, betterments, and replacement of cable drops and outlets, are capitalized.

Costs for repairs and maintenance are charged to operating expense as incurred,

while plant and equipment replacement, including replacement of certain components, betterments, and replacement of cable drops and outlets, are capitalized.

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

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

We capitalized direct labor and overhead of $1.7 billion and $1.6 billion for the years ended December 31, 2021 and 2020, respectively.

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

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Valuation and impairment of franchises

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

The net carrying value of franchises as of both December 31, 2021 and 2020 was approximately $67.3 billion (representing 47% of total assets).

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

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Valuation and impairment of goodwill

The net carrying value of goodwill as of both December 31, 2020 and 2019 was approximately $29.6 billion (representing 20% of total assets).

The net carrying value of goodwill as of both December 31, 2021 and 2020 was approximately $29.6 billion (representing 21% and 20% of total assets, respectively).

We have determined that we have one reporting unit for purposes of the assessment of goodwill impairment.

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

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

Financial Statements and Supplementary

Data.” We perform our impairment assessment of goodwill annually as of November 30.

As with our franchise impairment testing, we elected to perform a qualitative assessment of goodwill in 2021.

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

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

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

As of December 31, 2021, Charter had approximately $714 million of federal tax net operating loss carryforwards resulting in a gross deferred tax asset of approximately $150 million.

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

Federal tax net operating loss carryforwards expire in the years 2034 through 2035.

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

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

realized when the position is ultimately resolved.

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

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

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

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

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

Charter is currently under examination by the Internal Revenue Service ("IRS") for income tax purposes for 2019.

Charter's 2016, 2018 and 2020 tax years remain open for examination and assessment.

Charter’s 2017 tax year remains open solely for purposes of loss and credit carryforwards.

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

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

Charter Holdings’ 2017 through 2020 tax years remain open for examination and assessment.

The IRS is currently examining Charter Holdings’ income tax return for 2016 and 2019.

Charter Holdings’ 2018 and 2020 tax years remain open for examination and assessment, while 2017 remains open solely for purposes of credit carryforwards.

The IRS is currently examining TWC’s income tax returns for 2011 through 2014.

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The 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.

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

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

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

Activity related to these state and local examinations did not have a material impact on our consolidated financial position or results of operations during the year ended December 31, 2021, nor do we anticipate a material impact in the future.

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

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

As of December 31, 2019, the accumulated benefit obligation and fair value of plan assets was $3.4 billion and $3.2 billion, respectively, and the net underfunded liability was recorded as a $1 million noncurrent asset, $4 million current liability and $160 million long-term liability.

As of December 31, 2021, the accumulated benefit obligation and fair value of plan assets was $3.4 billion and $3.5 billion, respectively, and the net funded asset was recorded as a $114 million noncurrent asset, $4 million current liability and $27 million long-term liability.

As of December 31, 2020, the accumulated

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

Pension benefits are based on formulas that reflect the employees’ years of service and compensation during their employment period.

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

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

We recognized net periodic pension benefit of $305 million and net periodic pension cost of $66 million in 2021 and 2020, respectively.

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

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Interest expense, net (4,037) (3,848)

Loss on extinguishment of debt (143) (25)

Loss on financial instruments, net

Other pension costs, net (66) (69)

Other expense, net (31) (135)

Other expenses, net (101) (255)

(4,138) (4,103)

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Weighted average common shares outstanding, diluted 193,042,948 209,273,247

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

Total revenues grew $3.6 billion or 7.5% during the year ended December 31, 2021 as compared to 2020 primarily due to increases in the number of residential Internet, mobile and commercial customers and price adjustments.

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

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2021 compared to 2020

Increase related to rate, product mix and bundle allocation changes $ 1,490

Increase in average residential Internet customers 1,083

Increase related to rate, product mix and allocation changes 587

The increase related to rate, product mix and bundle allocation changes was primarily due to price adjustments, promotional roll-off and higher bundled revenue allocation as well as $34 million of credits related to prior year's Keep Americans Connected ("KAC") Pledge and certain state-mandated programs which reduced revenue during the year ended December 31, 2020.

Residential Internet customers grew by 1,114,000 in 2021 compared to 2020.

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

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

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

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

2021 compared to 2020

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

Customer credits due to COVID-19 $ 223

Increase related to rate, product mix and bundle allocation changes 283

Decrease in average residential video customers (250)

Decrease in video on demand and pay-per-view (44)

Increase related to rate, product mix and allocation changes 359

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

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

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

Decrease in installation (14)

We recorded $39 million and $218 million of estimated customer credits related to canceled sporting events during the years ended December 31, 2021 and 2020, respectively, and $44 million of credits related to prior year's KAC program which reduced revenue during the year ended December 31, 2020.

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

Residential video customers decreased by 423,000 in 2021 compared to 2020.

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

2021 compared to 2020

Decrease related to rate and bundle allocation changes $ (132)

Decrease in average residential voice customers (76)

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

The decrease related to rate and bundle allocation changes was impacted by value-based pricing and changes in bundled revenue allocations.

Residential wireline voice customers decreased by 594,000 in 2021 compared to 2020.

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

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

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Increase in SMB customers $ 209

Increase related to COVID-19 programs which reduced prior year revenue 36

Decrease related to rate and product mix changes (39)

SMB customers increased by 92,000 in 2021 compared to 2020.

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

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

The decrease related to rate and product mix changes during the year ended December 31, 2021 as compared to 2020 was primarily due to value-based pricing related to SPP net of promotional roll-off and price adjustments.

Enterprise revenues increased $105 million during the year ended December 31, 2021 as compared to the corresponding period in 2020 primarily due to an increase in Internet PSUs, $18 million of impacts from COVID-19 related programs which reduced revenues in the year ended December 31, 2020 as well as a $16 million one-time benefit incurred during the year ended December 31, 2021 offset by lower wholesale PSUs.

Enterprise PSUs increased by 13,000 in 2021 compared to 2020.

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

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

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

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

Advertising sales revenues decreased $105 million during the year ended December 31, 2021 as compared to the corresponding period in 2020 primarily due to a decrease in political offset by an increase in advanced advertising revenues and local and national advertising revenues as well as the impacts of COVID-19 that lowered revenues in 2020.

During the years ended December 31, 2021 and 2020, mobile revenues included approximately $909 million and $658 million of device revenues, respectively, and approximately $1.3 billion and $706 million of service revenues, respectively.

The increases in revenues are a result of an increase of 1,189,000 lines from December 31, 2020 to December 31, 2021.

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

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

Other revenues remained relatively consistent during the year ended December 31, 2021 as compared to the corresponding period in 2020.

Operating costs and expenses .

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Costs to service customers (79)

Marketing (13)

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

Programming costs were approximately $11.8 billion and $11.4 billion for the years ended December 31, 2021 and 2020, respectively, representing 38% of operating costs and expenses.

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

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

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

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

Programming costs increased as a result of $124 million of more rebates in 2020 than 2021 from sports programming networks as a result of canceled sporting events due to COVID-19, as well as contractual rate adjustments, including renewals and increases in amounts paid for retransmission consent offset by fewer customers and a higher mix of lower cost video packages within our video customer base.

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

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

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

Regulatory, connectivity and produced content increased $311 million during the year ended December 31, 2021 compared to the corresponding period in 2020 primarily due to higher sports rights costs as a result of more National Basketball Association ("NBA") and Major League Baseball ("MLB") games during 2021 as compared to the corresponding period in 2020 as the prior period had cancelation of MLB games and the current period had additional games due to the delayed start of the 2020 - 2021 NBA season as a result of COVID-19.

Costs to service customers decreased $79 million during the year ended December 31, 2021 compared to the corresponding period in 2020 despite 3.0% customer growth primarily due to fewer transactions and a decrease in bad debt expense partly driven by government stimulus packages offset by the higher labor costs associated with our commitment to a minimum $20 per hour wage in 2022.

Mobile costs of $2.5 billion and $1.8 billion for the years ended December 31, 2021 and 2020, respectively, were comprised of mobile device costs and mobile service, customer acquisition and operating costs.

The increase is attributable to an increase in the number of mobile lines.

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

2021 compared to 2020

Corporate costs $ 118

Stock compensation expense $ 79

Advertising sales expense 10

Enterprise 21

Corporate costs 20

Property tax and insurance 17

Corporate costs increased primarily due to higher personnel costs.

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

Advertising sales expense (21)

Stock compensation expense increased primarily due to changes in certain equity award provisions that result in additional expense at the time of grant.

Depreciation and amortization.

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

Depreciation and amortization expense decreased by $359 million during the year ended December 31, 2021 compared to the corresponding period in 2020 primarily due to certain assets acquired in acquisitions becoming fully depreciated offset by an increase in depreciation as a result of more recent capital expenditures.

Other operating expenses, net.

The decrease in other operating expenses, net was attributable to the following (dollars in millions):

The increase in other operating expenses, net was attributable to the following (dollars in millions):

2021 compared to 2020

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

Special charges, net $ 159

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

(Gain) loss on sale of assets, net 112

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

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Net interest expense increased by $189 million in 2021 from 2020 primarily due to an increase in weighted average debt outstanding of approximately $7.1 billion primarily as a result of the issuance of notes in 2020 and 2021 for general corporate purposes including stock buybacks and debt repayments offset by a decrease in weighted average interest rates.

Loss on extinguishment of debt.

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

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

Financial Statements and Supplementary Data.”

Loss on financial instruments, net.

Gains and losses on financial instruments are recognized due to changes in the fair value of our interest rate and our cross currency derivative instruments, and the foreign currency remeasurement of the fixed-rate British pound sterling denominated notes (the “Sterling Notes”) into U.S.

For more information, see Note 12 to the accompanying consolidated financial statements contained in “Part II.

Financial Statements and Supplementary Data.”

Other pension costs, net.

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

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

Financial Statements and Supplementary Data.”

Other expense, net.

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

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

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

Financial Statements and Supplementary Data.”

Other expenses, net.

The decrease in other expenses, net is attributable to the following (dollars in millions):

2021 compared to 2020

Loss on extinguishment of debt (see Note 9) $ (1)

Loss on financial instruments, net (see Note 12) (71)

Net periodic pension benefit (cost) (see Note 23) 371

Loss on equity investments, net (see Note 6) (145)

See Note 16 and the Notes referenced above to the accompanying consolidated financial statements contained in “Item 1.

Financial Statements” for more information.

Income tax expense.

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

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

We recognized income tax expense of $1.1 billion and $626 million for the years ended December 31, 2021 and 2020, respectively .

Income tax expense increased during the year ended December 31, 2021 compared to the corresponding period in 2020 primarily as a result of higher pretax income.

For more information, see Note 18 to the accompanying consolidated financial statements contained in “Part II.

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Net income attributable to noncontrolling interest.

Net income attributable to noncontrolling interest for financial reporting purposes represents A/N’s portion of Charter Holdings’ net income based on its effective common unit ownership interest and the preferred dividend of $150 million for each of the years ended December 31, 2020 and 2019.

Net income attributable to noncontrolling interest for financial reporting purposes represents A/N’s portion of Charter Holdings’ net income based on its effective common unit ownership interest and the preferred dividend of $70 million and $150 million for the years ended December 31, 2021 and 2020, respectively.

For more information, see Note 11 to the accompanying consolidated financial statements contained in “Part II.

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generally accepted accounting principles (“GAAP”) to evaluate various aspects of our business.

Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income attributable to Charter shareholders and net cash flows from operating activities reported in accordance with GAAP.

reported in accordance with GAAP.

These terms, as defined by us, may not be comparable to similarly titled measures used by other companies.

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For the purpose of calculating compliance with leverage covenants, we use Adjusted EBITDA, as presented, excluding certain expenses paid by our operating subsidiaries to other Charter entities.

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

Our debt covenants refer to these expenses as management fees, which fees were in the amount of $1.3 billion for each of the years ended December 31, 2021 and 2020.

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

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Stock compensation expense 430 351

Loss on extinguishment of debt 143 25

Loss on financial instruments, net 15 54

Other pension costs, net 66 69

Other, net 89 238

Other expenses, net 430 313

Adjusted EBITDA $ 20,630 $ 18,518

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

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

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

Further, in 2022, Charter expects to become a meaningful federal cash tax payer as the majority of net operating losses will have been utilized.

Free cash flow was $8.7 billion and $7.1 billion for the years ended December 31, 2021 and 2020, respectively.

See table below for factors impacting free cash flow during the year ended December 31, 2021 compared to 2020.

As of December 31, 2020, the amount available under our credit facilities was approximately $4.7 billion and cash on hand was approximately $1.0 billion.

As of December 31, 2021, the amount available under our credit facilities was

approximately $3.9 billion and cash on hand was approximately $601 million.

We expect to utilize free cash flow, cash on hand and availability under our credit facilities as well as future refinancing transactions to further extend the maturities of our obligations.

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We believe we have sufficient liquidity from cash on hand, free cash flow and Charter Operating’s revolving credit facility as well as access to the capital markets to fund our projected cash needs.

We continue to evaluate the deployment of our cash on hand and anticipated future free cash flow including to invest in our business growth and other strategic opportunities, including expanding the capacity of our network, the expansion of our network through our rural broadband construction project, the build-out and deployment of our CBRS spectrum, and mergers and acquisitions as well as stock repurchases and dividends.

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

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

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

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

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

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

Excluding purchases from Liberty Broadband discussed below, during the years ended December 31, 2021 and 2020, Charter purchased in the public market approximately 15.9 million and 18.4 million shares, respectively, of Charter Class A common stock for approximately $10.9 billion and $10.6 billion, respectively.

Since the beginning of its buyback program in September 2016 through the year ended December 31, 2021, Charter has purchased in the public market approximately 125.6 million shares of Class A common stock and Charter Holdings common units for approximately $56.8 billion, including purchases from Liberty Broadband discussed below.

In February 2021, Charter and Liberty Broadband entered into a letter agreement (the “LBB Letter Agreement”).

The LBB Letter Agreement implements Liberty Broadband’s obligations under the Stockholders Agreement to participate in share repurchases by Charter.

Under the LBB Letter Agreement, Liberty Broadband will sell to Charter, generally on a monthly basis, a number of shares of Charter Class A common stock representing an amount sufficient for Liberty Broadband’s ownership of Charter to be reduced such that it does not exceed the ownership cap then applicable to Liberty Broadband under the Stockholders Agreement at a purchase price per share equal to the volume weighted average price per share paid by Charter for shares repurchased during such immediately preceding calendar month other than (i) purchases from A/N, (ii) purchases in privately negotiated transactions or (iii) purchases for the withholding of shares of Charter Class A common stock pursuant to equity compensation programs of Charter.

Charter purchased from Liberty Broadband 6.1 million shares of Charter Class A common stock for approximately $4.2 billion during the year ended December 31, 2021.

In January 2022, Charter purchased from Liberty Broadband an additional 0.5 million shares of Charter Class A common stock for approximately $341 million.

In December 2016, Charter and A/N entered into a letter agreement, as amended in December 2017 (the "A/N Letter Agreement"), that requires A/N to sell to Charter or to Charter Holdings, on a monthly basis, a number of shares of Charter Class A common stock or Charter Holdings common units that represents a pro rata participation by A/N and its affiliates in any repurchases of shares of Charter Class A common stock from persons other than A/N effected by Charter during the immediately preceding calendar month, at a purchase price equal to the average price paid by Charter for the shares repurchased from persons other than A/N during such immediately preceding calendar month.

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

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

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

During the years ended December 31, 2021 and 2020, Charter Holdings purchased from A/N 3.3 million and 2.6 million Charter Holdings common units, respectively, for approximately $2.2 billion and $1.5 billion, respectively.

As of December 31, 2021, Charter had remaining board authority to purchase an additional $1.9 billion of Charter’s Class A common stock and/or Charter Holdings common units, excluding purchases from Liberty Broadband.

Although Charter expects to continue to buy back its common stock consistent with its leverage target range, Charter is not obligated to acquire any particular amount of common stock, and the timing of any purchases that may occur cannot be predicted and will largely depend on market conditions and other potential uses of capital.

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Recent Events

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

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

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

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

jointly issued $8.65 billion aggregate principal amount of senior unsecured notes at varying rates, prices and maturity dates in 2020, and Charter Operating and Charter Communications Operating Capital Corp.

jointly issued $3.0 billion aggregate principal amount of senior secured notes at varying rates, prices and maturity dates in 2020.

In January 2022, CCO Holdings, LLC ("CCO Holdings") and CCO Holdings Capital Corp.

jointly issued $1.2 billion of 4.750% senior unsecured notes due February 2032 at par.

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

In addition to the debt issued in January 2022 as described above, CCO Holdings and CCO Holdings Capital Corp.

jointly issued $3.75 billion aggregate principal amount of senior unsecured notes in 2021 at varying rates, prices and maturity dates, and Charter Operating and Charter Communications Operating Capital Corp.

jointly issued $9.8 billion aggregate principal amount of senior secured notes in 2021 at varying rates, prices and maturity dates.

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Increase in Adjusted EBITDA $ 2,112

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

Decrease in cash paid for interest, net 83

Increase in capital expenditures (220)

Increase in cash paid for interest, net (193)

Change in working capital, excluding change in accrued interest (109)

Other, net 24

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

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

Contractual Obligations

The following table summarizes our payment obligations as of December 31, 2020 under our long-term debt and certain other contractual obligations and commitments (dollars in millions.)

Payments by Period

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

Long-Term Debt Principal Payments (a)

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

Long-Term Debt Interest Payments (b)

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

Finance and Operating Lease Obligations (c)

1,666 311 538 387 430

Programming Minimum Commitments (d)

164 130 34 — —

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

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

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

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

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

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

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

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

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

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

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

Certain of our 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 our programming contracts.

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

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

However, we incur these costs as part of our operations:

• We rent utility poles used in our operations.

Generally, pole rentals are cancelable on short notice, but we anticipate that such rentals will recur.

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

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

We also pay other franchise related costs, such as public education grants, under multi-year agreements.

Franchise fees and other franchise-related costs included in the accompanying statement of operations were $741 million and $750 million for the years ended December 31, 2020 and 2019, respectively.

• We have $367 million in letters of credit, of which $41 million is secured under the Charter Operating credit facility, primarily to our various casualty carriers as collateral for reimbursement of workers' compensation, auto liability and general liability claims.

• Minimum pension funding requirements have not been presented in the table above as such amounts have not been determined beyond 2020.

We made no cash contributions to the qualified pension plans in 2020;

however, we are permitted to make discretionary cash contributions to the qualified pension plans in 2021.

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

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

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

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

Free cash flow was reduced by $853 million and $1.1 billion during the years ended December 31, 2021 and 2020, respectively, due to mobile with impacts negatively affecting working capital, capital expenditures and Adjusted EBITDA.

Historical Operating, Investing, and Financing Activities

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We held $601 million and $1.0 billion in cash and cash equivalents as of December 31, 2021 and 2020, respectively.

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

See Note 6 to the accompanying consolidated financial statements contained in “Item 1.

Financial Statements.”

Operating Activities.

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

Net cash provided by operating activities increased $1.7 billion during the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to an increase in Adjusted EBITDA of $2.1 billion offset by changes in working capital, excluding the change in accrued interest and accrued expenses related to capital expenditures, that used $266 million more cash and $193 million higher cash paid for interest.

Investing Activities.

Net cash used in investing activities for the years ended December 31, 2021 and 2020 was $7.8 billion and $8.2 billion, respectively.

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

The decrease in cash used was primarily due the purchase of spectrum wireless licenses in 2020 offset by an increase in capital expenditures in 2021.

Financing Activities.

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

Net cash used in financing activities decreased $68 million during the year ended December 31, 2021 compared to the year ended December 31, 2020 primarily due to an increase in the amount by which borrowings of long-term debt exceeded repayments offset by an increase in the purchase of treasury stock and noncontrolling interest and a decrease in equity exercises.

Capital Expenditures

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Capital expenditures were $7.6 billion and $7.4 billion for the years ended December 31, 2021 and 2020, respectively.

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

The increase was primarily due to an increase in scalable infrastructure driven by augmentation of network capacity for customer growth and usage, with incremental spending to reclaim network headroom maintained prior to COVID-19.

See the table below for more details.

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

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

We currently expect full year 2022 cable capital expenditures, excluding capital expenditures associated with our rural construction initiative, to be between $7.1 billion and $7.3 billion.

The actual amount of our capital expenditures in 2022 will depend on a number of factors including further spend related to product development and growth rates of both our residential and commercial businesses as well as the pace of rural construction.

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

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

In addition, our accrued liabilities related to capital expenditures increased $80 million and decreased $77 million for the years ended December 31, 2021 and 2020, respectively.

The following tables present our major capital expenditures categories in accordance with National Cable and Telecommunications Association (“NCTA”) disclosure guidelines for the years ended December 31, 2021 and 2020.

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4.800% senior notes due 2050 2,800 2,797 3/1 & 9/1 3/1/2050

3.700% senior notes due 2051 2,050 2,031 4/1 & 10/1 4/1/2051

3.900% senior notes due 2052 2,400 2,322 6/1 & 12/1 6/1/2052

6.834% senior notes due 2055 500 495 4/23 & 10/23 10/23/2055

3.850% senior notes due 2061 1,850 1,809 4/1 & 10/1 4/1/2061

4.400% senior notes due 2061 1,400 1,389 6/1 & 12/1 12/1/2061

3.950% senior notes due 2062 1,400 1,379 6/30 & 12/30 6/30/2062

Credit facilities 10,723 10,668 Varies

Time Warner Cable, LLC:

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

5.750% sterling senior notes due 2031 (c)

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

What changed 10-K

Item 7. Management’s Discussion and Analysis